FINANCIALWEB COM INC, 10KSB, 2000-06-02

FINANCIALWEB COM INC
10KSB, 2000-06-02
BUSINESS SERVICES, NEC

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

Form 10-KSB
__________________________

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934. For the fiscal year ended December 31, 1999.

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934. For the transition period from ______________ to ______________.

Commission file number: 000-25799

FINANCIALWEB.COM, INC.
----------------------
(Name of Small Business Issuer in Its Charter)

Nevada 93-1202428
(State of Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

201 Park Place, Suite 321
Altamonte Springs, Florida 32701
--------------------------------
(Address of Principal Executive Offices including Zip Code)

(407) 834-4443
--------------
(Issuer's Telephone Number)

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

Common Stock, par value $.001 per share
(Title of Class)

Check whether the issuer (1) filed reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for past 90 days. Yes __ No X
---

Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in a definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. ___

State the issuer's revenues for its most recent fiscal year: $445,882.

The aggregate market value of the common stock of the registrant held by
non-affiliates as of April 25, 2000 was approximately $36,214,622 based on the
average bid and asked prices for such common stock as reported on the Over-The-
Counter Bulletin Board. The number of shares of common stock outstanding as of
April 25, 2000 was 8,881,697.

The Registrant meets the conditions set forth in General Instruction
G(1)(a) and (b) of Form 10-KSB and is therefore filing this form with the
reduced disclosure format.
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Table of Contents

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PART I
Item 1. Description of Business............................................................................... 1
Item 2. Description of Property............................................................................... 10
Item 3. Legal Proceedings..................................................................................... 10
Item 4. Submission of Matters to a Vote of Security Holders................................................... 11

PART II
Item 5. Market for Common Equity and Related Stockholder Matters.............................................. 12
Item 6. Management's Discussion and Analysis or Plan of Operation............................................. 15
Item 7. Consolidated Financial Statements..................................................................... 31
Item 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.................. 32

PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a)
of the Exchange Act................................................................................. 33
Item 10. Executive Compensation................................................................................ 37
Item 11. Security Ownership of Certain Beneficial Owners and Management........................................ 40
Item 12. Certain Relationships and Related Transactions........................................................ 42
Item 13. Exhibits, List and Reports of Form 8-K................................................................ 43
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PART I

Item 1. Description of Business.

Company Overview

FinancialWeb.com, Inc. (the "Company") is a business-to-business
aggregator, developer and distributor of e-financial content in English and
Spanish with other languages planned. The Company's objective is to become the
brand of choice in the multi-lingual aggregation development, and distribution
of Global Financial Information, news, tools and analysis to e-businesses in the
financial markets world-wide. The Company plans to achieve this objective by
building data relationships in key foreign financial markets, driving sales to
site partners around the world, through a multilingual Web environment which
delivers inter-related local and global content which connects world financial
markets.

The Company's common stock is traded on the Over the Counter Bulletin Board
("OTCBB") under the symbol "FWEB." It was originally incorporated in Utah as
Vital Technologies, Inc., in 1983, then redomiciled in Nevada in 1988. The
Company was inactive from 1991 through 1996. In 1996, the Company was returned
to active status under the corporate laws of Nevada and changed its name to
Peppermint Park Productions, Inc., an entertainment development stage company
with no significant assets.

In March 1997, the Company changed its name to Axxess, Inc. and focused its
operations on the development of Internet media publishing and communications.
On December 14, 1998, the Company adopted its current name in order to more
accurately reflect its core business.

Centrally hosted and served from the Company's Web servers, the
FinancialWeb site provides a wide range of financial content and services to e-
businesses that rely on third-party financial content and tools to attract,
serve and retain Web site visitors. Under the FinancialWeb brand, the Company is
rapidly expanding its international relationships and hopes to become a leading
brand in the aggregation and e-distribution of international, multi-lingual
financial content.

Focusing on the American and Latin American markets, with Asia in
development, the Company's content includes financial news, information, daily
articles and international and local editorial and analysis. With various
solutions, the Company also hosts and provides additional services and
technologies to businesses including real-time quotes, portfolio analysis tools,
charting tools, company research and stock screening tools. The Company is
currently hosting and serving the FinancialWeb site content in English and
Spanish, with other foreign languages planned.

The Company has a strategic partnership with StarMedia Network, Inc.
("StarMedia") and is providing financial information, news and tools in Spanish
to several of StarMedia media channels in an exclusive arrangement. StarMedia's
reports that its Web sites received approximately 2.1 billion page views in the
first quarter of 2000, the period when the Company began providing financial
information and tools to several of StarMedia's Web sites.

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Through December 31, 1999, the Company relied primarily on revenues from
banner advertising fees on the FinancialWeb site. Commencing January 1, 2000,
the Company shifted its revenue generation model to revenue from (i)
subscription fees for proprietary and redistributed content and tools; (ii)
subscription fees from partners' Web sites; (iii) licensing, development,
hosting, set-up and per page view fees; (iv) service fees for additional
consulting revenue when integrating the Company's technology into a business'
Web site; and (v) banner advertising fees.

The FinancialWeb Site

In October 1999, the Company upgraded its Web site and released
FinancialWeb version 3.0, which resulted in the enhancement of standard
navigation and design elements. Management believes this has resulted in the Web
site being easier to navigate, faster to load, and containing more logically-
ordered content which can be separated into two complementary categories:
editorial and market data.

Market data includes, but is not limited to, the following:

. Delayed stock, bond, options and mutual fund quotes for North American
exchanges;
. Real-time stock quotes for all U.S. exchanges during market hours;
. Portfolio tracking tools for stocks and options;
. Fundamental and technical stock screening tools;
. A variety of charting features including intra-day charts, one- and
five-year charts, plus a custom charting feature which allows for
overlaying charts of up to five securities at a time;
. Mutual fund reports and fund screening tools;
. Daily earnings announcements;
. Analyst recommendations and opinions;
. News on individual securities;
. General market news and wire stories;
. Major indices;
. Industry groupings;
. Stock market gainers and losers;
. Historical stock and options price and volume data;
. Economic announcements;
. Stock splits;
. SEC filings; and
. IPO Data.

The role of editorial content is considered equally important in attracting
and retaining site visitors. Proprietary editorial content is an important
ingredient for publicity and a principal attraction for branding, private
labeling, distribution and syndication. The Company provides such content
through its in-house research, reporting and editorial staff, as well as
independent contractors and contributors.

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Subsidiaries

Real TimeTranslators.com S.A.C. ("RTT.com") was incorporated in Lima, Peru
on January 25, 2000 for the purpose of providing daily translations of the
Company's editorial content from English to Spanish. Located in the Miraflores
commercial district of Lima, RTT.com employs eight (8) full time financial
translators and incurs total monthly operational costs of approximately $16,000.
RTT.com combines proprietary software, high speed Internet connections and
specially trained personnel to ensure timely and accurate translation of the
Company's financial content.

The Company has two other wholly owned subsidiaries, Stock Detective.com,
Inc. and SlugFest.com, Inc., both of which were incorporated in the State of
Nevada on February 3, 1999. These subsidiaries have remained inactive since
their formation, with no employees or assets.

Industry Overview

According to a report by Media Metrix, Internet usage around the world is
projected to grow from 304 million users in 2000 to 500 million users by 2003.
According to a study performed by Computer Economics, the majority of these new
users will be non-English speaking with compound annual growth rates of 60% for
English and 150% for non-English speakers through 2005.

In addition to the significant growth of the Internet, personal financial
management is reported to also be experiencing a significant increase with
online assets under management increasing from $374 million in 1999 to an
estimated $3.1 trillion by 2003 according to a Forrester Research report. A
study by VR International stated that there were 8 million online brokerage
accounts in the United States through March 1999 and forecasted that the number
of accounts would grow to over 17 million by 2002. In addition to the increase
in online brokerage business, online banking is achieving similar growth.
IDC/Deutsche Bank Alex. Brown estimates that by 2003, over 32 million people
will be performing some or all of their banking activities online. These users
represent activity on 86% of all United States banks having an online presence.
Finally, the Investment Company Institute estimates that in 1999, 48.2% of all
households owned equity securities in the form of individual stocks or mutual
funds.

While this trend has been predominant in the U.S., the Company anticipates
similar, if not accelerated, growth in the non-U.S. markets including Europe,
Latin America and Asia. According to Jupiter Communications, the number of users
in Latin America is projected to grow from 16 million users in 2000 to 66.6
million users by 2005. The Yankee Group estimates that over 374 million users
will be online in Asia by 2006.

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Online brokerage growth in these regions is increasing as well. According to the
European Wall Street Journal, Germany is adding 1,500 online accounts per day
while the United Kingdom is adding over 1,000 per day. Similar trends in Asia
and Latin America are occurring. According to Jupiter, over $520 million in
revenues were generated in online brokerage activities in Asia in 1999.

Combining the rising adoption of the Internet, rapid growth of online
financial services including banking, brokerage and insurance, and the trend
toward non-English Internet usage, investors are increasingly looking to the
Internet for their investment advice and information.

The Emerging Internet Financial Market

As a result of the rapid growth of the Internet, financially oriented
international businesses are increasingly recognizing the need to offer
information, tools and services on the Internet in the native languages of their
respective customers. Banks, brokerage houses, asset management companies,
financial publishers, insurance companies and 401(k) management companies are
aware that localized, relevant content, tools, news and information play an
important role in the maintenance of current customers as well as the
acquisition of new customers. The newly emerging online, pure-internet companies
represent a significant threat to these more traditional "bricks and mortar"
companies mentioned above. In response to this movement online, these
traditional companies are rapidly moving to the Internet to serve their
customers with timely and relevant financial content.

The quality and speed of access to online content and tools is rapidly
becoming a significant differentiator on the Internet. Due to the increasingly
interactive nature of Internet usage, financial oriented companies must keep
pace by providing their customers with an array of interactive features. Unlike
many Web site offerings, the Company believes that information provided by
traditional financial news providers is inadequate to satisfy the needs of the
customer because it is not interactive and does not provide tools that allow
customers to manipulate information to make investment decisions.

To create an environment where the individual investor has multi-lingual,
global information, tools and news, a company must contract with (i) outside
data stream providers in multiple languages and (ii) Web site, layout and
application developers to design, develop and deploy applications that allow the
user to manipulate the constantly changing underlying information provided by
the data providers. These outside data stream providers are important because
they can provide insight into current market conditions and activities.
Management believes that current information and content is critical to a Web
site's "stickiness" and relevance. The Company believes that in order to
succeed in this area, a Web site provider must evolve quickly with the global
financial markets, change as customers' needs change, continuously build the
data feeds, tools and information and provide a user-friendly environment.

Business of the Company

The Company offers its clients and users a menu of financial applications
and content in English and Spanish (with several other foreign languages
planned) that not only is available to users on the Internet, but also can be
framed and integrated into a client's Web site. In a turnkey manner, the
Company hosts and serves the clients' Web sites, pages and applications on the
Company's own Web servers. This architecture consists of a multi-language
database that currently offers global content and information in English and
Spanish. In addition to serving a client's capabilities, the Company provides
24x7 capabilities including partnerships with global caching and hosting
organizations. Finally, the Company has a mirror Web site which the Company
believes provides redundancy for its hosting capabilities.

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The Company's offerings have been specifically designed to support this
hosting and framing model, allowing the Company to integrate its products into a
businesses' Web site while the business maintains its overall image and Web site
design. The Company also provides consulting personnel and project management
teams to perform customized work, as needed.

The Company sells various levels of bundled financial content each with an
increasing range of news, tools and editorials. Each level expands the scope of
financial content in the bundle and can be served to the clients' Web site in a
range of technological configurations. This allows each client to have a broad
range of customization of content delivery, branded or unbranded.

The Company offers financial news, real-time and delayed quotes on U.S.
equity markets along with financial market information on U.S., Canadian and
international markets. In addition, the Company provides specialized financial
content, including StockDetective (TM), SmallCap Investor (TM) and a host of
articles produced daily that focus on specialized markets and information within
these markets.

The Company's editorial staff (consisting of four employees and several
outside contributors) includes those in the field of finance and investments
with experience in mutual funds, equities markets, options markets, small cap
stocks and a variety of other financial instruments. The Company's journalists
and contributors are well versed in each of the markets the Company enters. This
provides the Company's clients and users with timely and relevant local as well
as global content that the Company believes will keep its users and the client's
users interested, entertained and informed.

In addition to editorial, news, data and analysis, the Company has a set of
both proprietary and licensed interactive financial applications and tools.
These include charting capabilities, portfolio analysis, mutual fund research
and analysis, company research and analysis, options research and analysis
including quotes, email alerts and triggers for stock movement. Tools provide
interactivity to end users and opt-in opportunities for the Company to capture
user data for future integration. These tools are enhanced periodically and new
versions of tools can be integrated into current client Web sites without
interruption. Consistent with the Company's global expansion strategy, the
Company is focusing on the expansion of these tool sets to track, chart and
analyze inter market data and information.

In addition, the Company provides 24x7 global hosting and caching for its
content and tools. This provides turnkey solutions for regionalized businesses
which place FinancialWeb's content and tools on their Web site.

Business Strategy

The Company's principal objectives are to:

. Expand Sales and Marketing Coverage to Targeted Markets. The Company is
-------------------------------------------------------
building its management, sales and marketing teams to focus on targeted
markets in the United States, Latin America, Europe, and Asia. These
markets include banking, portals, 401(k) management companies,
brokerages, insurance companies, asset management companies and other
businesses that require a broad array of content, tools and information
on global financial markets in local languages.

. Leverage Current and Future Portal Relationships. Develop and leverage
------------------------------------------------
portal relationships in major world financial markets based on the model
the Company developed in connection with its exclusive agreement with
StarMedia to provide financial news, information, tools, content and
services to certain of StarMedia's Web properties. StarMedia is the
leading Internet network in Spanish and Portuguese across North and
South America, Mexico, the Caribbean,

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Spain and Portugal, with approximately 2.1 billion page views reported
for the first quarter of 2000 as reported by StarMedia. In addition to
StarMedia Web properties, a variety of pan-regional portals are of
interest to the Company. These pan-regional portals have pending and/or
developing relationships with other technology providers, including
wireless providers, content providers and financial services firms. The
Company hopes to leverage these providers to broaden its own
relationships.

. Find and Partner/Buy Best of Breed Content. Partner with "best of breed"
------------------------------------------
content, news and information providers in native languages in Latin
America, Europe, Asia and the United States. These partnerships can take
a variety of forms, including ownership, strategic investment, content
sharing and translation sharing services.

. Continue to Add Content Through Editorial. Increase the Company's
-----------------------------------------
content creation and focus on areas not covered by current journalists,
with an emphasis on areas of concern to investors within targeted
markets around the globe. Expand editorial content and tools to analyze
inter-relationships among major financial markets delivering unique and
locally relevant global perspective.

. Add Community Capabilities. In addition to current tools, the Company is
---------------------------
adding community capabilities in offerings such as StockDetective
(TM) to increase Web site stickiness and relevance for the
Company's clients. Community is key to increasing Web site stickiness
and, ultimately, Web site value.

. Expand Translation Capabilities. Leverage the Company's translation
--------------------------------
capabilities in RTT.com to provide timely and accurate financial
information in native languages by expanding in Latin America, Asia,
Europe and the United States.

. Expand The Company's Global Capabilities. By virtue of current
----------------------------------------
partnerships with leading caching and hosting organizations, the Company
believes that it is well positioned to support international expansion.
The Company will continue to expand its mirror Web site coverage and
caching relationships to enhance performance. In addition to the
technology, the Company plans to expand its operational capabilities in
Latin America, Asia and Europe through partnerships and staffing
additions.

. Supporting Emerging Technology Paradigm Shifts. Emerging technologies
----------------------------------------------
are extremely important to the Internet, particularly outside the United
States where the adoption of new technologies such as wireless and
personal digital assistants are expected to eclipse the penetration of
personal computers. The Company plans to support emerging standards such
as WAP (Wireless Application Protocol) and SMS (Short Messages Service)
to insure compatibility with a broad array of devices with differing
technology platforms across the globe.

Target Markets

The Company is focused on the penetration of market segments in the United
States that are mirrored in foreign markets. These segments include:

. Traditional Financial Service Firms. Non-Internet based banks,
-----------------------------------
brokerage houses and insurance companies are competing against online
financial service providers. The Company's tools and technologies
provide these traditional non-Internet based companies with the ability
to rapidly provide a broad array of content tools and information to
their

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customers. This allows them to keep both their current customers as well
as attract potential new customers who prefer online services from a
traditional "bricks and mortar" branded entity.

. Online Financial Service Firms. Online firms such as Ameritrade,
------------------------------
DLJDirect, Wingspan.com and others require content and tools to enhance
their online presence in order to compete with the traditional financial
services firms. These and other companies lack significant content and
presence in non-English speaking markets. The Company believes its
products and services can provide significant value to them by equipping
them with relevant local content in Latin America, Asia and Europe as
well as in the United States.

. Financial Media Firms. While these firms often have extensive content
---------------------
geared to a particular region, they often lack content and editorial in
secondary markets. In addition, they often do not provide tools that
allow users to manipulate the information they provide. This limits
their value to the investor who needs or prefers interactivity. The
Company believes it can provide these companies with tools and
localized, native language content for their constituent customers.

. Regionalized Portals. Pan-regional portals have unique needs, requiring
---------------------
content on global markets such as U. S. financial markets as well as
content that is focused and germane to locally served markets. Examples
include StarMedia, sina.com, europeonline.com and others. These
companies have significant traffic and users and are interested in
acquiring local content in native languages. The Company anticipates
that its strategy of providing localized and relevant content in native
languages as well as tools that give their customers an interactive
experience will provide an incentive for them to partner with the
Company.

. Financial Infomediaries Including ECNs. Current financial
--------------------------------------
infomediaries, including firms such as Knight/Trading, Instinet,
Archipelago and others, are providing significant online presence and
capabilities to both traditional brokers as well as other financial
service institutions. These and other companies lack significant content
and presence in non-English speaking markets. The Company believes its
products and services can provide significant value to them by equipping
them with relevant local content in Latin America, Asia and Europe as
well as in the United States.

. Regional Financial Services Firms. Firms that service particular
---------------------------------
regions of the world. These firms represent an opportunity for the
Company's tools and services in their native languages. Firms such as
Mexican or Brazilian banks and brokerage, Hong Kong financial service
firms and other Asian and European firms have a rapidly escalating need
to establish a strong online presence and brand. The Company believes
its products and services can provide a rapid, low cost approach to
accomplishing those needs.

Competition

The Company competes with a number of companies that offer editorial, news,
financial tools, charting and financial information, Web applications,
development and hosting services. Competition is rapidly increasing due to the
rapid adoption of the Internet and related technologies and capabilities. In
addition to these pure-internet based competitors, there are an increasing
number of quoting, tools, news and information offerings that compete for the
attention of users and advertisers that are sought by the Company's clients.
It is expected that both of these forms of competition will continue to
increase. The Company competes for Web site clients with a number of other
providers of real-time quotes,

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charting, tools and news applications, such as MarketWatch.com, Inc., Telescan
Inc., Reuters Group PLC, Stockpoint, Thompson Financial Services and S&P
Personal Wealth. The Company also competes with client Web site development
companies and the in-house development staff of large corporations.

The Company's ability to compete effectively depends on many factors,
including the originality and timeliness of the FinancialWeb site content, the
quality of the Company's tools and the Company's ability to properly define and
execute its business strategy. The Company believes its business strategy will
make it a competitive online company by focusing on business-to-business
licensing of products combined with ongoing services and continued expansion of
the range of the Company's services. The Company believes that by providing
turnkey solutions to deliver the FinancialWeb online products on a client's Web
site, the Company will create a significant "barrier to exit" for that client.
Finally, the Company expects that its delivery of global content in native
languages will provide a competitive advantage.

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty, Agreements and
Labor Contracts

The Company is engaged in an ongoing program to protect its intellectual
property on a worldwide basis through trademark applications which have been
filed for the brand names "FinancialWeb," "FinancialWeb.com", "StockDetective",
"StockDetective.com", "Quote Central", "StockWatcher", "OptionWatcher",
"MarketSnaposhot" and "InteractiveMovers", in the United States as well as in
Mexico, the principal countries of South and Central America, the fifteen
countries comprising the European Union, and the principal counties of Asia. The
domain name "FinancialWeb.com" as well as a series of other terms and names used
in conjunction with the Company's business are registered and domain name
registrations are in effect or being processed, where permitted, for
FinancialWeb.com in countries which have national registration systems, such as
FinancialWeb.com.mx in Mexico, FinancialWeb.com.br in Brazil, etc.

The Company signs agreements with its contributing syndicated authors which
provide for the distribution, redistribution, publication, republication,
translation and use in other mediums of their written works, and such
agreements, with respect to authors who provide written material on an exclusive
basis, additionally provide that all right, title and interest in such works is
to be transferred over and vested in the Company upon delivery to the Company.

All employees are required to enter agreements whereby all works of
authorship, programs, codes, methods, processes, inventions and the like are
property of the Company.

Perhaps the singular most important and costly part of developing Internet
publications is the acquisition of content. The Company's long-term goal is to
create increasing amounts of original, proprietary content for international and
domestic distribution. Currently, the Company has several licensing agreements
with owners of copyrighted published materials to add to the current content on
the FinancialWeb site. These include: (1) a Distributor Agreement with Media
General Financial Services ("MGFS") that grants the Company a non-exclusive
license to install, market and distribute selected elements of MGFS's database
of common stock information in the North American and Latin American markets in
exchange for monthly fees; (2) a Distributor Agreement with North American
Quotations, Inc. that grants the Company a non-exclusive license to receive and
redistribute real-time and delayed quote data from U.S. and Canadian exchanges
which currently appears on "Real Time Quotes" in exchange for monthly royalties
and fees; (3) a Distributor Agreement with Hyperfeed Technologies that grants
the Company a non-exclusive license to receive and redistribute real-time and
delayed quote data from U.S. and Canadian exchanges in exchange for monthly fees
which is scheduled for launch in the second quarter of 2000, and will replace
North American Quotes; (4) a Distributor Agreement with Comtex Scientific
Corporation that grants the Company a non-exclusive right to market and
distribute Comtex

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news data which currently appears on the FinancialWeb home page in exchange for
monthly fees; (5) a Distributor Agreement with CDA Weisenberger that grants the
Company a non-exclusive, non-transferable, worldwide license to promote,
distribute and market CDA Weisenberger in exchange for an annual fee; (6) an
Agreement with Internet Securities International ("ISI") that grants the Company
a non-exclusive license to distribute and redistribute selected elements of
ISI's database of common stock and related information on Latin American
markets; (7) Agreements permitting the publication, distribution and
redistribution of original and syndicated editorial content from a variety of
journalists and analysts in the United States and abroad; (8) a Linking
Agreement with Parties Corporation ("Parties") that grants the Company a non-
exclusive license and right to market and distribute Parties' SEC EDGAR data
exchange for a licensing fee; and (9) a Linking Agreement with IPO.com that
grants the Company a non-exclusive license and right to market and distribute
IPO data in exchange for a licensing fee.

Government Approval and Regulation

There are currently few laws or regulations specifically regulating the
Internet. However, the government is grappling with the effect of the emergence
of the Internet, and laws and regulations may be adopted in the future
addressing issues such as user privacy, pricing, usage and distribution. For
example, the Telecommunications Act sought to prohibit transmitting certain
types of information and content over the Web; the Federal Communications
Commission has been asked to regulate Internet services in a manner similar to
long distance telephone carriers and to impose access fees on these companies;
and the SEC has discussed the appropriateness of information distributed over
the Internet regarding publicly traded companies and has discussed problems
associated with chat rooms and message board services in particular. Regulation
in these and other areas could result in increased costs of transmitting data
over the Internet or the imposition of other restrictions adversely affecting
the Company. Moreover, it may take years to determine the extent to which
existing laws relating to issues such as property ownership, libel and personal
privacy are applicable to the Internet.

Research and Development

The Company's research and development team focuses on the creation,
integration and redistribution of financial information, news, market
commentary, tools and services in multiple languages. The Company's objective is
to provide value by supplying and supporting the financial information needs and
platforms of the Company's partners in the United States and Latin America and
its prospective clients in Asia, Canada and Europe.

The team develops proprietary investor-oriented editorial content such as
The Stock Detective(TM), The SmallCapInvestor(TM) as well as a variety of
tools and applications. The Company expects to expand these services and adapt
them to meet the needs of investors worldwide. Additional and enhanced services
are currently under development including investor education features, a
glossary of financial terms and more in-depth tools, analysis, market news and
commentary which the Company plans to offer in multiple languages.

The primary objective of the Company's research and development team is to
create innovative and increasingly personalized and interactive features and
applications. A parallel objective is to create an international dimension to
these features and applications, making them available to users worldwide, with
the ability to capture information from major world markets in multiple
languages. The Company believes that several of its products in the planning and
development stages, which will enable the user to do research on several world
markets, will generate revenues for the Company such as tools which permit the
user to do international stock screening, international interactive charting,
international sector analysis and analysis of international "interactive
movers." The Company also plans to enhance and expand the efficiency of its
translation capability through increased automation, more sophisticated
translation management programs and the addition of bilingual and multilingual
personnel.

The Company's investment in research and development increased from
$293,409 in 1998 to $1,122,491 in 1999, an increase of 283%. The Company expects
costs to increase as the Company develops additional product offerings.

Employees

As of December 31, 1999, the Company had twenty-two (22) full-time
employees, of which, eighteen (18) were located in Florida, three (3) were
located in New York (sales) and one in Connecticut (research specialist). As of
April 25, 2000, the Company had forty (40) full-time employees, of which twenty-
three (23) were located in Florida, three (3) were in New York (sales), two (2)
were in Pennsylvania (executive officers), two (2) were in Boston, Massachusetts
(business development officers), one in Illinois (vice president of partner
operations) and nine (9) at the Company's subsidiary in Lima, Peru
(translators).

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Item 2. Description of Property.

The Company's executive and development office is located at 201 Park
Place, Suite 321, Altamonte Springs, Florida 32701. The lease commenced on
October 1, 1998 and had a one-year term. The Company leases approximately
4,000 square feet of office space at $5,189 per month and the lease is currently
on a month-to-month basis. The total rent paid during 1999 was $52,883. The
Company is currently searching for a new location for the executive and
development office in the Orlando area to support the Company's growth of both
personnel and technology.

In addition, the Company has a sales and development office in Melville,
New York. The Company leases approximately 1,000 square feet of office space at
$2,500 per month that commenced on July 1, 1999 and continues on a month to
month basis.

On January 3, 2000, the Company opened a translation office in Lima, Peru
for the purpose of translating the content of the FinancialWeb site from English
to Spanish on a daily basis. The lease commenced on January 1, 2000 and has a
term of 2 years. The Company leases approximately 2,200 square feet of office
space at $1,200 per month.

On April 30, 2000, the Company opened an executive office in Boston,
Massachusetts. The lease commenced on April 30, 2000 and has a term of 5 years.
The Company leases approximately 5,400 square feet of office space at $15,525
per month.

The Company currently locates its servers in the executive and development
office in Altamonte Springs and at Sprint Advanced Network Service Center in
Winter Park, Florida. The Company leases rack space for its servers and related
equipment in the Sprint Advanced Network Service Center for $9,500 per month.
This lease commenced on October 1, 1999 and has a term of 25 months. The total
rent paid during 1999 was $19,000.

In addition, the Company currently leases rack space for its servers and
related equipment in the Exodus Internet Data Center in Sterling, Virginia for
$13,000 per month. This lease commenced on March 29, 2000 and has a term of 13
months.

The Company does not own any real estate.

Item 3. Legal Proceedings.

On June 3, 1999, a complaint was filed by ZiaSun Technologies, Inc.
("ZiaSun") against the Company in the Circuit Court for Seminole County, Florida
alleging defamation as the result of an article published on the Company's Web
site on April 28, 1999. The article stated that ZiaSun engaged in improper
conduct with respect to their investors. ZiaSun claims unspecified damages. The
case is in the discovery phase.

On August 15, 1999, Spencer Trask Securities filed a complaint against the
Company in the Federal District Court for the Southern District of New York
seeking the issuance of a warrant for 200,000 shares of common stock exercisable
at $.50 per share as well as damages to recover consulting fees and lost profits
allegedly owed to it pursuant to a consulting agreement with the Company dated
August 20, 1998. The case is in the discovery phase. Although the amount of the
ultimate settlement is uncertain, attorneys and management of the Company
estimate the most likely settlement is approximately $591,000, excluding
attorneys fees and other court costs. The Company has accrued this amount as of
December 31, 1999.

On September 22, 1999, Softcell Marketing Inc. and Gary Gould filed a
complaint in the U.S. District Court for the Southern District of New York,
claiming that the Company breached a one year consulting agreement it had with
Mr. Gould, wherein he was to provide Internet marketing consulting services in
return for the sum of $5,000 per month plus an option to purchase 10,000 shares
of common stock, the price and conditions for which were to be determined by the
Company. On April 27, 2000, a

10
<PAGE>

default judgement was erroneously entered, which the Company has moved to vacate
in order to have the case determined on the merits.

On October 28, 1999, Agora Inc. ("Agora") filed a complaint in the U.S.
District Court for the District of Maryland alleging defamation due to the
inclusion of one of Agora's publications on the list of promoters published by
the Company's Stock Detective Web site and is seeking compensatory damages in
the amount of $2 million as well as punitive damages. On March 28, 2000, the
court dismissed Agora's complaint with prejudice for failure to state a cause of
action. Agora has appealed the decision.

The Company may from time to time be involved in various claims, lawsuits
and disputes with third parties or breach of contract actions incidental to the
operation of its business. The Company is not currently involved in any such
litigation that it believes could have a materially adverse effect on its
financial condition or results of operations.

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

None.

11
<PAGE>

PART II

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

Market Information

The Company's common stock has been quoted on the OTCBB under the symbol
"FWEB" since January 7, 1999 and previously was quoted on the OTCBB under the
symbol "AXXS." The following table sets forth the range of high and low bid
quotations for the periods indicated. Such quotations reflect prices between
dealers, without retail mark-up, markdown or commission and may not represent
actual transactions:

<TABLE>
<CAPTION>
Bid Quotations
--------------
High Low
---- ---
<S> <C> <C>
Year Ended December 31, 1998
First Quarter..................................................................... $ 3.625 $0.312
Second Quarter.................................................................... $ 0.875 $ 0.25
Third Quarter..................................................................... $ 3.500 $0.375
Fourth Quarter.................................................................... $11.125 $ 2.25

Year Ended December 31, 1999
First Quarter..................................................................... $ 27.75 $10.25
Second Quarter.................................................................... $ 20.25 $12.25
Third Quarter..................................................................... $12.125 $4.875
Fourth Quarter.................................................................... $ 7.937 $ 5.00
</TABLE>

On April 25, 2000, the Company's common stock closed at $6.625 per share.
On such date, there were approximately 214 registered holders of common stock.

Dividend Policy

The Company has not declared or paid any cash dividends on its common stock
and does not intend to declare or pay any cash dividend in the foreseeable
future.

Recent Sales of Unregistered Securities.

All sales of unregistered securities occurring through April 15, 1999 in
private transactions have been previously reported on a Form 10-SB filed on
April 15, 1999, as amended. The following sales of unregistered securities have
occurred since April 15, 1999:

On May 18, 1999, the Company issued 100,000 shares of common stock to Mr.
Glenn Laken and 400,000 shares of common stock to Mr. John Katsock, Jr.
pursuant to a cashless exercise of outstanding warrants held by them. The
Company relied upon the private placement exemption under Section 4(2) of the
Securities Act of 1933, as amended (the "Act") including Rule 506 of Regulation
D for the above transactions. The original warrants were sold to "accredited
investors" as that term is defined by Rule 501 of Regulation D, for investment
purposes, without solicitation or advertisement by the Company. No underwriters
were involved and no commission was paid.

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<PAGE>

The warrants held by Mr. Katsock and Mr. Laken provide that upon the sale
of securities by the Company below the exercise price of $4.00 per share, not
only would the exercise price decrease to that sales price, but also that the
Company would be obligated to issue a warrant for additional shares to Messrs.
Laken and Katsock pursuant to a formula in their warrants. On January 18, 2000,
the Company issued warrant for 173,633 shares of common stock exercisable at
$3.00 per share to Mr. Katsock, and a warrant for 293,416 shares of common stock
exercisable at $3.00 per share to Mr. Laken.

On October 1, 1999, the Company issued a warrant for 100,000 shares of
common stock exercisable at $3.00 per share to Thomas Baldwin as part of his
compensation for having deposited the sum of $420,000 in an escrow account
required of the Company in order to engage in negotiations with StarMedia. The
warrant was issued to an "accredited investor" as that term is defined by Rule
501 of Regulation D, for investment purposes, without solicitation or
advertisement by the Company. No underwriters were involved and no commission
was paid. The securities were exempt from registration under Section 4(2) of the
Act.

On November 10, 1999, the Company subscribed 815,487 shares of Series A
Convertible Preferred Stock to 11 holders of one-year convertible promissory
notes as the consideration for canceling the principal and accrued interest on
such notes in the principal amount of $2,300,000. Such notes were convertible
into common stock of the Company at $4.00 or $4.50 per share. The principal and
accrued interest on such notes were converted into Series A Preferred Stock of
the Company ("Series A Stock") at $3.00 per share. The Series A Stock is
convertible into common stock on a one for one basis. The Series A Stock was
sold to "accredited investors" as that term is defined by Rule 501 of Regulation
D, for investment purposes, without solicitation or advertisement by the
Company. No underwriters were involved and no commission was paid. The
securities were exempt from registration under Section 4(2) of the Act.

On November 15, 1999, the Company issued two promissory notes in the
principal amount of $75,000, each, payable to Prime Equity Fund, L.P. ("Prime
Equity") and Mr. Glenn Laken at an annual interest rate of 9.75%. In addition to
the notes, the Company issued to Prime Equity and Mr. Laken a warrant for 15,000
shares of common stock exercisable at $3.00 per share. Mr. Laken is the managing
member of Prime Equity. The notes and warrants were sold to "accredited
investors" as that term is defined by Rule 501 of Regulation D, for investment
purposes, without solicitation or advertisement by the Company. No underwriters
were involved and no commission was paid. The securities were exempt from
registration under Section 4(2) of the Act.

On November 30, 1999, the Company issued a promissory note in principal
amount of $100,000 at an annual interest rate of 9.75%. In addition to the note,
the Company issued a warrant for 30,000 shares of common stock exercisable at
$3.00 per share to such note holder. The note and warrant was sold to an
"accredited investor" as that term is defined by Rule 501 of Regulation D, for
investment purposes, without solicitation or advertisement by the Company. No
underwriters were involved and no commission was paid. The securities were
exempt from registration under Section 4(2) of the Act.

On December 15, 1999, the Company issued a warrant for 25,000 shares of
common stock exercisable at $3.00 per share to First American Banking
Corporation as consideration for its participation in the Company's private
offering pursuant to its Private Offering Memorandum dated November 30, 1999 as
well as its participation in the lock up of certain shares in conjunction with
the offering and its assistance in the conversion of $300,000 of principal debt
plus interest to equity, in the form of Series A Stock. Mr. Frank Musolino is
the President of First American Banking Corporation. The warrant was sold to an
"accredited investor" as that term is defined by Rule 501 of Regulation D, for
investment purposes, without solicitation or advertisement by the Company. No
underwriters were involved and no commission was paid. The securities were
exempt from registration under Section 4(2) of the Act.

<PAGE>

On December 16, 1999, the Company issued a promissory note in principal
amount of $75,000 at an annual interest rate of 9.75%. In addition to the note,
the Company issued a warrant for 15,000 shares of the common stock exercisable
at $3.00 per share to such note holder. The note and warrant was sold to an
"accredited investor" as that term is defined by Rule 501 of Regulation D, for
investment purposes, without solicitation or advertisement by the Company. No
underwriters were involved and no commission was paid. The securities were
exempt from registration under Section 4(2) of the Act.

On December 20, 1999, the Company issued a promissory note in principal
amount of $100,000 at an annual interest rate of 9.75%. In addition to the note,
the Company issued a warrant for 20,000 shares of common stock exercisable at
$3.00 per share to such note holder. The note and warrant was sold to an
"accredited investor" as that term is defined by Rule 501 of Regulation D, for
investment purposes, without solicitation or advertisement by the Company. No
underwriters were involved and no commission was paid. The securities were
exempt from registration under Section 4(2) of the Act.

On December 23, 1999, the Company issued 1,123,000 shares of common stock
to Mr. Frank Musolino upon his conversion of an outstanding $500,000 convertible
promissory note. Pursuant to the terms of the note, the principal and accrued
interest thereon were converted into common stock at $.50 per share. Such note
was sold to an "accredited investor" as that term is defined by Rule 501 of
Regulation D, for investment purposes, without solicitation or advertisement by
the Company. No underwriters were involved and no commission was paid. The
securities were exempt from registration under Section 4(2) of the Act.

On December 30, 1999, the Company issued two promissory notes in total
principal amount of $75,000 at an annual interest rate of 9.75%. In addition to
the note, the Company issued two warrants for 15,000 shares of common stock, in
the aggregate, exercisable at $3.00 per share to such note holders. The notes
and warrants were sold to "accredited investors" as that term is defined by Rule
501 of Regulation D, for investment purposes, without solicitation or
advertisement by the Company. No underwriters were involved and no commission
was paid. The securities were exempt from registration under Section 4(2) of the
Act.

On January 18, 2000, the Company sold 563,569 shares of common stock at
$3.00 per share to 36 individuals in a private placement for cash consideration
of $1,690,711. The shares of common stock were sold to "accredited investors" as
that term is defined by Rule 501 of Regulation D, for investment purposes,
without solicitation or advertisement by the Company. Robb Peck McCooey Clearing
Corporation ("Robb Peck") was the principal placement agent for this private
placement. A total of $663,462 was paid to Robb Peck in commissions pursuant to
such sale of which $219,792 was paid by the Company in cash and $443,670 was
paid in the form of 147,890 shares of common stock sold at $3.00 per share. The
securities were exempt from registration under Section 4(2) of the Act.

The Company sold shares of common stock to individuals pursuant to private
placements at $3.00 per share as follows: 1,654,032 shares on March 31, 2000 to
52 investors, 115,167 shares on April 10, 2000 to 9 investors, and 275,573
shares on April 20, 2000 to 20 investors, for total

14
<PAGE>

cash consideration of $6,134,318. The shares of common stock were sold to
"accredited investors" as that term is defined by Rule 501 of Regulation D, for
investment purposes, without solicitation or advertisement by the Company. Robb
Peck was the principal placement agent for the private placement of March 31,
2000. A total of $1,048,388 was paid to Robb Peck in commissions pursuant to
such sale, of which $642,973 was paid by the Company in cash and $405,415 was
paid in the form of 135,138 shares of common stock sold at $3.00 per share.
Pinnacle Asset Management ("Pinnacle") was the principle placement agent for the
private placements of April 10 and April 20, 2000. A total of $119,322 was paid
in cash to Pinnacle as commissions for those sales. An additional $35,167 was
paid to Robb Peck as a consulting fee in connection with the Pinnacle sales. The
securities were exempt from registration under Section 4(2) of the Act.

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

The following discussion should be read in conjunction with the Company's
consolidated financial statements and related notes thereto set forth in Item 7
of this Annual Report. Except for the historical information contained herein,
this and other sections of this Annual Report contain certain forward-looking
statements that involve substantial risks and uncertainties. When used in this
Annual Report, the words "anticipate," "believe," "estimate," "expect", and
similar expressions, as they relate to the Company or its management, are
intended to identify such forward-looking statements. The Company's actual
results, performance, or achievements could differ materially from the results
expressed in, or implied by, these forward-looking statements.

Company Overview

The Company is a business-to-business aggregator, developer and distributor
of e-financial content in English and Spanish with other languages planned. It
was originally incorporated in Utah as Vital Technologies, Inc., in 1983, then
redomiciled in Nevada in 1988. The Company was inactive from 1991 through 1996.
In 1996, the Company was returned to active status under the corporate laws of
Nevada and changed its name to Peppermint Park Productions, Inc., an
entertainment development stage company with no significant assets.

During the first quarter of 2000, the Company hired a new management team
and added two new directors including a new chairman of the board. The new
management redirected the Company's primary focus toward being a business-to-
business aggregator, developer and distributor of e-financial content in English
and Spanish with other languages planned. The Company provides e-financial
content and services to e-businesses that require third-party financial content
and tools in order to attract, retain and serve Web site visitors. Under the
FinancialWeb brand, the Company plans to expand its international relationships
and enhance its position in the aggregation and e-distribution of international,
multilingual financial content.

Focusing on content from the American and Latin American markets, the
Company's content includes financial information, news, daily articles, delayed
and real-time quotes, portfolio analysis tools, charting tools, company
research, stock screening tools and proprietary editorial and analysis. The
Company is currently hosting and serving its content in English and Spanish
with other languages in development.

<PAGE>

The Company is shifting its revenue production from primarily banner
advertising fees to revenue derived from subscription fees for proprietary and
redistributed content and tool fees from partner sites.

The Company has yet to achieve significant revenues and its ability to
generate significant revenues is uncertain. Further, in view of the rapidly
evolving nature of the Internet industry and a limited operating history, the
Company has little experience forecasting its revenues. Therefore, the Company
believes that period-to-period comparisons of its financial results are not
necessarily meaningful and should not be relied upon as an indication of future
performance. To date, the Company has incurred substantial costs to create,
introduce and enhance its services, to develop content, and to grow its
business. Consequently, it has incurred operating losses in each fiscal quarter
since it was formed. The Company expects operating losses and negative cash
flows to continue for the foreseeable future as it intends on increasing its
operating expenses to expand its business. It may also incur additional costs
and expenses related to content creation, technology, marketing or acquisitions
of businesses and technologies to respond to changes in this rapidly changing
industry. These costs could have an adverse effect on the Company's future
financial condition or operating results. See "Liquidity and Capital Resources."

Results Of Operations

As further discussed in Note 3 to the accompanying consolidated financial
statements, subsequent to the issuance of the December 31, 1998 and 1997
consolidated financial statements, the Company's management determined that the
value of the common stock used to record assets acquired in 1998 and 1997, and
to measure expense related to stock, options, and warrants granted to employees,
directors and consultants should have been based on the value of the common
stock as determined by its quoted market price. Additionally, the Company
determined that certain expenses relating to employee benefits and trade
payables had not been properly recorded. As a result, the accompanying 1998 and
1997 consolidated financial statements information presented herein has been
restated from amounts previously reported to appropriately account for such
transactions.

1999 Compared to 1998

Revenues

Revenues were primarily derived from the sale of advertising on the
Company's Web site. Revenues were $445,882 and $159,529 for the years ended
December 31, 1999 and 1998, respectively. This increase of 180% was primarily
due to the increase in the number of banner and sponsorship ads placed on the
Company's Web site. Additionally, the increase was caused by an increase in the
number of advertisers as well as the number of users on the Company's Web site
and the resultant page views.

Typically, the Company's advertising customers purchase advertising under
short term contracts. Customers can cease advertising on short notice without
penalty. Advertising revenues would be adversely affected if the Company were
unable to renew advertising contracts with existing customers or obtain new
customers. The Company believes that future revenues will be less dependent on
the sale of advertising space on the Company's Web site as its emphasis shifts
to generating recurring revenues from subscription fees for its proprietary and
redistributed content and tools, as well as revenue sharing with partner Web
sites and to co-branding and private labeling services.

Cost Of Revenues

Cost of revenues primarily consist of the costs related to fees for data
feeds over telephone lines, cost of content providers, Web site infrastructure
costs and programming. Cost of revenues for the years ended December 31, 1999
and 1998 were $399,387 and $217,239, respectively. This 84% increase in cost of
revenues was due primarily to significant costs associated with the acquisition
of additional content contracted for and utilized on the Company's Web site. The
Company expects that future costs of revenues will increase due to the
additional network communication lines required to accommodate increased traffic
on the Company's Web site, increased equipment and programming costs

16
<PAGE>

associated with the Company's redundant back-up site, as described in the
"Liquidity and Capital Resources" section below.

As a percentage of revenues, cost of revenues declined to 90% of revenues
in 1999 from 136% in 1998. This decrease resulted primarily from the relatively
fixed nature of some of the Company's data costs and other fees while the number
of customers and related revenues increased.

Operating Expenses

Research and Development. Research and development expense consists
primarily of compensation and benefits for software programmers and developers.
Research and development costs increased 283% to $1,122,491 during 1999 from
$293,409 in 1998. The increase in these costs was due to increases in the level
of personnel necessary to develop and enhance the Company's Web site and
increases in outside consulting fees to assist in developing and designing the
Company's Web site. On an absolute dollar basis, the Company expects costs to
continue to increase as it expands the Company's infrastructure and develops
additional product offerings.

Selling, General and Administrative.

Other. Selling, general and administrative expenses include various costs
such as payroll, commissions, advertising, travel expenses, professional and
consulting fees, insurance, rent and depreciation and amortization. Other
selling, general and administrative expenses for the years ended December 31,
1999 and 1998 were $3,496,611 and $937,641, respectively. The $2,558,970
increase in other selling, general and administrative expenses for the year
ended December 31, 1999 over the comparable period in 1998 resulted primarily
from the following items: a) increases in professional fees paid for services
such as legal and accounting fees associated with the Company's filing of its
Form 10-SB with the Securities and Exchange Commission; b) increases in sales
force personnel to generate increased revenues; c) increases in advertising; d)
increases in rent due to the leasing of additional office facilities
necessitated by increases in personnel; e) increases in outside consulting fees
for assistance in developing and locating additional sources of funds to improve
the capitalization of the Company; f) the addition of directors and officers
liability insurance; g) the establishment of a provision for settlement of a
legal dispute; h) the addition of general and administrative personnel to
support the growth of the business; and i) non-cash stock-based compensation
expenses of $530,000 related to warrants issued for business brokers not
included in the categories described below.

The Company expects other selling, general and administrative expenses to
continue to increase in absolute dollars as the Company expands its staff and
incurs additional costs related to the planned growth of its business.

Stock-Based Non-cash Employee Compensation. In March and September 1999,
under the terms of separate Director Service Agreements, the Company issued
options to three new directors of the Company to purchase a total of 300,000
shares of common stock at an exercise price of $5.00 per share. At the time of
issuance, the Company recorded deferred non-cash stock-based employee
compensation expense of $1,931,200, based on the difference between the exercise
price and the closing price of the common stock on the date of grant. Upon
appointment to the Board of Directors, 25% of the shares of common stock vested
immediately with the remaining shares vesting on a quarterly basis over a one-
year period. During the year ended December 31, 1999, the Company amortized
$1,890,600 as non-cash stock-based employee compensation expense, relating to
these options. As of December 31, 1999, none of these options had been
exercised.

17
<PAGE>

In May 1999, the Company granted options to purchase 142,277 shares of
common stock to certain employees under the Company's 1999 Stock Incentive Plan.
The options vest over three or four years of continuous service. At the date of
grant, exercise prices ranged from $5.00 to $14.25. Of the 142,277 options
granted, 37,500 were at exercise prices below the Company's closing stock price
on the OTCBB on the date of grant. The Company recorded deferred stock based
employee compensation expense of $346,874 based on the difference between the
exercise price and the closing price of the common stock on the date of the
grant. During the year ended December 31, 1999, the Company amortized $143,086
as non-cash deferred stock-based employee compensation expense, relating to
these options. Compensation expense was not recorded on the remaining grants
since the exercise price equaled the Company's stock closing price on the date
of grant.

In December 1999, the Company granted, under the terms of an employment
agreement, options to purchase 60,000 shares of common stock to an employee who
is an officer and director of the Company at exercise prices ranging from the
par value of the Company's common stock of $.001 to $5.75. The Company
recognized stock-based employee compensation expense of $57,490 for the
difference between the exercise price and the closing price of common stock on
the date of the grant.

In April of 1999, an employee who is an officer and director of the Company
exercised an option to purchase 10,000 shares of common stock on a cashless
basis. The employee netted 9,454 shares of common stock. The Company recognized
compensation expense of $155,991 as a result of the exercise.

In June of 1999, the Company granted an option for 20,000 shares of common
stock at an exercise price of $5.00 per share to an employee who is an officer
and director of the Company. The Company recorded deferred compensation expense
of $200,000 which represented the excess of the exercise price of the options
over the closing price of the common stock on the OTCBB on the date of the
grant. As of December 31, 1999, $183,333 has been amortized to stock based non-
cash employee compensation expense.

Stock-Based Non-cash Consulting Fees.

The Company issued a warrant for 800,000 shares of common stock
exerciseable at $0.25 per share on July 1, 1998 to a partnership in exchange for
financial consulting services. In connection with this issuance, the Company
expensed to stock-based consulting fees $402,654, based on the fair value of the
warrants and on the date of grant. On December 28, 1998, the partnership
exercised the warrant and purchased 800,000 shares of common stock. The Company
recorded a stock subscription receivable for the exercise price. On March 7,
1999, the Company and the partnership modified the warrant to allow for the
cashless exercise of the warrant. To effect the cashless exercise, the original
stock certificate for 800,000 shares of common stock was canceled and a new
certificate for 775,385 shares of common stock was issued.

On January 6, and March 10, 1999, the Company entered into separate
agreements with two individuals to provide consulting services to the Company on
similar terms and conditions over a five-year period. The consulting agreements
do not provide for any specific level or value of services to be performed. As
consideration for their services, the Company issued to each of these
individuals a warrant for 1,000,000 shares of common stock, exercisable over
five years at a price of $4.00 per share. The warrants were nonforfeitable and
were vested upon issuance. In connection with the issuance of the warrants, the
Company recorded $27,599,287 in non-cash stock-based consulting fees expense,
based on the fair value of the warrants on the dates of issuance.

Also in March 1999, the Company retained the services of a financial
advisor for a one-year term to perform a variety of services, including matters
relating to entering into one or more strategic partnerships, joint ventures or
similar arrangements, possible mergers or stock sales or other dispositions,
sales or other dispositions of business assets and other similar or related
matters. The service agreement did not provide for any specific level or value
of services to be performed. In connection with this agreement, the Company
issued a warrant for 979,321 shares of common stock exercisable at $4.00 per
share. The warrant was nonforfeitable, vested upon issuance, and was exercisable
for a ten-year term. The Company

18
<PAGE>

recorded non-cash stock-based consulting fees expense of $16,296,659, which
represents the fair value of the warrant on the date of issuance. In November
1999, the Company and the financial advisor entered into a termination agreement
subject to certain conditions with respect to a private placement of its common
stock that was closed in the first quarter of 2000.

In March 1999, two major stockholders of the Company, including the chief
executive officer, agreed to issue a warrant to purchase 50,000 shares of common
stock held by them, to a financial advisor of the Company. The warrants are
nonforfeitable, vested upon issuance, and are exercisable at a price of $4.00
per share over a term of five years. In connection with the issuance of these
warrants, the Company, as beneficiary of the grants, recognized stock-based
consulting fees of $1,288,711 based on the fair value of the warrants at the
date of issuance. On December 15, 1999, these warrants were repriced at $3.00
per share. Additionally, the Company issued a warrant to purchase 25,000 shares
of common stock on December 15, 1999, to the financial advisor as an inducement
to participate in a private placement by the Company. This warrant was issued at
an exercise price of $3.00 per share, is nonforfeitable, vested upon issuance,
and can be exercised over five years. In connection with the issuance of the
warrant for the additional shares and the repricing of the March, 1999 warrants,
the Company recognized $154,360 in additional stock-based consulting fees on
December 15, 1999 based on the closing price of the common stock on the OTCBB on
that date.

Interest Expense. Interest expense consists primarily of non-cash items.
Interest expense increased to $4,075,304 in 1999 from $652,575 in 1998.
Components of the details are described below:

In December 1998, the Company entered into a one-year convertible note
agreement with an individual, pursuant to which the individual purchased a
secured promissory note for $500,000. The note was collateralized by all of the
intangible assets of the Company and bore interest at an annual rate of 12%. The
agreement contained a nondetachable beneficial conversion feature that allowed
the individual to convert the principal of the note and accrued interest thereon
into the common stock at a conversion rate of $0.50 per share at any time. The
fair value of the beneficial conversion feature, based on the difference between
the closing market price of common stock and the conversion price, amounted to
$6,000,000 and exceeded the value of the note. Since the note was convertible at
any time, the Company recorded debt discount of $500,000 as interest expense at
the date of the note. The conversion right was exercised in December 1999 and
the individual received 1,000,000 shares of common stock and the note was
cancelled. The individual received an additional 123,000 shares of common stock
as payment for interest on the note. The Company recorded interest expense of
$707,250 in connection with the issuance of the additional shares.

In November and December 1999, the Company issued to seven (7) individuals
detachable warrants for a total of 110,000 shares of common stock exercisable at
$3.00 per share in exchange for $500,000 in bridge loans. The warrants expire on
the fifth anniversary of the date of issuance of each warrant. Based on the
relative fair values of the debt and the detachable warrants on the issuance
dates, the Company recorded $283,525 attributed to the value of the warrants as
discounts on the notes. From the date of issuance of the notes through December
31, 1999, the Company recorded $154,557 in interests costs associated with the
amortization of the discounts.

Through several private placements during the year ended December 31,
1999, the Company issued $2,300,000 of one-year, convertible promissory notes.
The notes bore interest at a rate of prime plus 2% payable at maturity and had
maturities that ranged from February 2000 to April 2000. The notes contained
nondetachable beneficial conversion features that allowed the holders to convert
the notes into 566,667 shares of common stock at any time (conversion at $4.00
per share for $2,000,000 of the principal of the notes and $4.50 per share for
the remaining $300,000). At the date of issuance of these notes, the fair market
value of common stock was above the conversion prices. The fair value of the
beneficial conversion feature, based on the difference between the closing
market price of the common stock and the conversion price, amounted to
$6,883,333 and exceeded the value of the notes. Since the notes were convertible
at any time, the Company recorded aggregate debt discount as interest expense of
$2,300,000 upon issuance of the notes. Through November 10, 1999, no notes had
been converted. On that date, the holders of the convertible notes agreed to
convert their notes into new convertible preferred stock of the Company at a
conversion rate of $3.00 per share. As a result, 766,667 shares of Series A
Convertible Preferred Stock were issued. Each share of Series A Convertible
Preferred Stock is convertible into common stock on a one-to-one basis. On the
exchange date, the closing fair value of the common stock exceeded the $3.00
conversion price, resulting in a beneficial conversion feature. The fair value
of the Series A Convertible Preferred Stock subscribed with the beneficial
conversion feature exceeded the

<PAGE>

fair value of the notes by $1,475,000, resulting in an extraordinary loss on the
early extinguishment of the convertible notes. The note holders also received
48,820 additional shares of Series A Convertible Preferred Stock as
consideration for accrued interest on their notes. The Company recorded total
interest expense of $360,050 in connection with the issuance of the additional
shares, based on the estimated fair value of the Series A Convertible Preferred
Stock on the issuance date.

On October 12, 1999, an individual deposited $420,000 into an escrow
account as required by the Company in order to engage in negotiations with
StarMedia. As compensation, the Company granted him a warrant for 100,000 shares
of common stock exercisable at $3.00 per share and $50,000 in cash. The warrant
has an expiration date of five years from the date of grant. The deposit was
repaid by the Company prior to December 31, 1999 and the fair value of the
warrant on the date of grant of $485,866 was recorded as interest expense.

In addition, the Company had other interest expense in 1999 of $67,580,
$52,932 of which was paid in cash.

1998 Compared to 1997

Revenues

Revenues were primarily derived from the sale of advertising on the
Company's Web site. Revenues increased 131% to $159,529 from $68,978 for the
years ended December 31, 1998 and 1997, respectively. The increase was due
primarily to an increase in the number of banner and sponsorship ads placed on
the Company's Web site. The increase was also caused by an increase in the
number of advertisers, as well as increased users on the Company's Web site and
resultant page views.

Cost Of Revenues

Cost of revenues primarily consists of costs related to fees for data feeds
over telephone lines, cost of content providers, Web site infrastructure costs,
and programming. Cost of revenues for the years ended December 31, 1998 and 1997
were $217,239 and $19,612, respectively. The 1,008% increase in cost of revenues
for the year ended December 31, 1998 over the comparable period in 1997 was due
principally to significant costs associated with the acquisition of additional
data contracted and utilized on the Company's Web site.

Operating Expenses

The Company began its development efforts in March 1997, incurring costs
related to software and hardware engineering, graphic design and content
development of the Company's Web site.

Selling, General and Administrative.

Other. Selling, general and administrative expenses include various costs
such as management, accounting, legal, commissions, advertising, travel
expenses, professional and consulting fees, insurance,

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<PAGE>

rent and depreciation. Other selling, general and administrative expenses for
the years ended December 31, 1998 and 1997 were $937,641 and $325,536,
respectively. The $612,105 increase or 188% in selling, general and
administrative expenses for the year ended December 31, 1998 over the comparable
periods in 1997, resulted primarily from the following items: a) increases in
professional fees paid for services such as legal and accounting fees; b)
increases in depreciation for property and equipment expenditures; c) increases
in rent due to the leasing of additional office facilities necessitated by
increases in personnel; and d) increases in outside consulting fees for
assistance in developing and locating additional sources of funds to improve the
capitalization of the Company.

Stock-Based Non-cash Consulting Fees expense. In March 1997, the Company
recorded $2,400,000 in stock-based consulting fees expense upon issuing 400,000
shares of common stock in connection with engaging a financial consultant, who
the Company believes is affiliated with a promoter as defined by the Act, of the
Company, for a three-year term. The consulting agreement did not provide for any
specific level or value of services to be performed.

The Company issued a warrant for 800,000 shares of common stock exercisable
at $0.25 per share on July 1, 1998 to a partnership in exchange for financial
consulting services. In connection with this issuance, the Company expensed to
stock-based consulting fees $402,654, based on the fair value of the warrants on
the date of grant. On December 28, 1998, the partnership exercised the warrants
and purchased 800,000 shares of the stock. The Company recorded a stock
subscription receivable for the exercise price. On March 7, 1999, the Company
and the partnership modified the stock warrant agreement to allow the cashless
exercise of the warrants. To effect the cashless exercise, the original stock
certificate for 800,000 shares was canceled and a new certificate for 775,385
shares was issued

Interest Expense. Interest expense consists primarily of interest for
non-cash items. Interest expense increased to $652,575 for 1998 from $4,324 in
1997. In December 1998, the Company entered into a one-year Convertible Note
agreement with an individual, pursuant to which the individual purchased a
secured promissory note for $500,000. The note was collateralized by all
intangible assets of the Company and bore interest at an annual rate of 12%. The
agreement contained a nondetachable beneficial conversion feature that allowed
the individual to convert the note and accrued interest thereon into common
stock at a conversion rate of $ 0.50 per share at any time. The fair value of
the beneficial conversion feature, based upon the difference between the closing
market price of common stock and the conversion price, amounted to $6,000,000
and exceeded the value of the note. Since the note was convertible at any time,
the Company recorded debt discount of $500,000 as interest expense at the date
of the note.

Liquidity and Capital Resources

The Company's consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 2 to the
Consolidated Financial Statements, the Company has experienced net losses in
every year of its operations, which losses have caused a working capital
deficiency of $2,179,987 and a stockholders' deficiency of $1,694,703 as of
December 31, 1999. In addition, the Company has consumed cash in its operating
activities of $2,727,387, $1,002,429 and $156,670 for the years ended December
31, 1999, 1998 and 1997, respectively. These factors, among others, raise
substantial doubt about the Company's ability to continue as a going concern.

Management has been able thus far to finance the losses, as well as the
growth of the business, through a series of private placements and private
loans. The Company is continuing to seek other sources of financing. For
instance, the Company completed a private placement of its common stock in April
2000, resulting in net proceeds of approximately $6,808,000 which is net of
issuance costs of approximately $1,017,000. The Company is attempting to
increase revenues by shifting its emphasis to generate recurring revenues from
subscription fees for its proprietary and redistributed content and tools as
well as co-branding and private labeling services. In addition, the Company is
exploring alternate ways of generating revenues through partnerships with other
businesses. Conversely, the on-going development and maintenance of its Web site
along with international expansion is expected to result in operating losses for
the foreseeable future. There are no assurances that the Company will be
successful in achieving its goals.

In view of these conditions, the Company's ability to continue as a going
concern is dependent upon its ability to obtain additional financing or capital
sources, to meet its financing requirements and ultimately to achieve profitable
operations. Management believes that its current and future plans provide an
opportunity to continue as a going concern. The accompanying Consolidated
Financial Statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that may be necessary in the event that the
Company cannot continue in existence.

The Company used cash in investing activities of $184,850, $142,463 and
$122,070 for 1999, 1998 and 1997, respectively. This cash was used primarily to
fund the acquisition of computer hardware and software.

21
<PAGE>

The Company's notes payable totaled $675,436 ($546,468, net of discount) as
of December 31, 1999. All of the notes, with the exception of a $25,000 note
payable to a private company, were paid off with a portion of the proceeds of a
private placement offering completed in January 2000.

On December 31, 1999, the Company had cash on hand of $94,842.

The Company had commitments for capital expenditures as of December 31,
1999 to complete its project to make its systems redundant and to upgrade
computer systems. The Company has a bandwidth capacity of over 100 million page
views per month, as opposed to its previous monthly capacity of approximately 10
million page views per month. The Company believes this will enable it to
increase market share into the foreseeable future, as well as to offer co-
branded and private label Web sites and other services to larger entities within
the Internet information industry.

The cost to complete this project and upgrade its computer systems was
approximately $392,000. There were no other material commitments for capital
expenditures as of December 31, 1999.

In January of 2000, the Company received approximately $1,690,000 from its
financing activities. The proceeds from this financing were used to pay
commissions, legal and other fees of the private placement offering of $348,000,
to repay bridge loans of $506,000, to repay a promissory note and accrued
interest thereon of $166,000 and to repurchase stock from the former president
and chief executive officer of the Company, in the amount of $209,000, pursuant
to his termination agreement, resulting in $461,000 of net cash provided by such
financing activities.

In March and April of 2000, the Company received approximately $6.1 million
from its financing activities. After paying fees of the financing and the
repurchase of stock from the former president and chief executive officer of
$937,000, pursuant to his termination agreement, approximately $4.3 million was
available for working capital purposes. The Company has begun to use the net
proceeds of the financing to add key members to the management team and to add
sales and marketing personnel. The Company intends to continue development of
its Internet products, to invest in its international expansion and translation
capabilities, to increase the size of the office space currently available to
the Company and other general corporate purposes.

The Company anticipates that it will continue to experience an increase in
operating expenses. Operating expenses will continue to consume a material
amount of the Company's cash resources, including the net proceeds of the
Company's recent private placement offering.

Risk Associated with the Year 2000.

To date the Company has not experienced any problems associated with Y2K
issues. See Risk Factors - Year 2000 Complications.

Risk Factors

There are various risks associated with the Company and its business,
including the ones discussed below. Careful consideration of these risk factors
should be given, as well as the information contained in this Form 10-KSB, in
evaluating the Company and its business.

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<PAGE>

The Company's limited operating history makes evaluating the Company's business
difficult.

The Company commenced present operations in March 1997 and launched its
first Web site at that time. Accordingly, the Company has only a limited
operating history upon which one can evaluate the business and prospects. When
purchasing the Company's common stock, one must consider the risks, expenses and
difficulties frequently encountered by early stage companies in new and rapidly
evolving markets, including Web-based financial news and information companies.
See "Liquidity and Capital Resources" under Management's Discussion and Analysis
of Results of Operations for further discussion of substantial doubt about the
Company's ability to continue as a going concern.

If the Company is unable to attract or retain qualified editorial staff and
outside contributors, the business could be harmed.

The Company's success depends substantially upon the continued efforts of
the editorial staff and outside contributors to produce original, timely,
comprehensive and trustworthy content. If the Company loses the services of
members of the Company's editorial staff or outside contributors, the number of
Web site visitors may decrease, the Company's subscription and licensing fees
may decrease and could materially adversely affect the business, results of
operations and financial condition.

Intense competition could reduce the Company's market share and harm its
financial performance.

An increasing number of financial news and information sources compete for
consumers' and advertisers' attention and spending. The Company expects this
competition to continue to increase. The Company competes for advertisers,
readers, staff and outside contributors with many types of companies, including:

. online services or Web sites focused on business, finance and investing;
. publishers and distributors of traditional media, including print, radio
and;
. providers of terminal-based financial news and data;
. Web "portal" companies; and
. online brokerage firms, many of which provide financial and investment
news and information.

The Company's ability to compete depends on many factors, including the
originality, timeliness, comprehensiveness and trustworthiness of the content of
the Company's Web sites and those of the Company's competitors, the ease of use
of services developed either by the Company or the Company's competitors and the
effectiveness of sales and marketing efforts. Many of the Company's existing
competitors, as well as a number of potential new competitors, have longer
operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources. This may
allow them to devote greater resources than the Company can to the development
and promotion of their services. These competitors may also engage in more
extensive research and development, undertake more far-reaching marketing
campaigns, and make more attractive offers to existing and potential employees,
outside contributors, strategic partners and advertisers.

The Company's competitors may develop content that is equal to or superior
to the Company's content or that achieves greater market acceptance. It is also
possible that new competitors may emerge and rapidly acquire significant market
share. The Company may not be able to compete successfully for advertisers,
visitors, employees, strategic partners or outside contributors, which could
materially adversely affect the business, results of operations and financial
condition. Increased competition could result in price reductions, reduced
margins or loss of market share, any of which could materially

23
<PAGE>

adversely affect the Company's business, results of operations and financial
condition. The Company also competes with other Web sites, television, radio and
print media for a share of advertisers' total advertising budgets. If
advertisers perceive the Internet or the Company's Web sites to be a limited or
an ineffective advertising medium, they may be reluctant to devote a portion of
their advertising budget to Internet advertising or to advertising on the
Company's Web sites.

The Company is dependent on outside suppliers for information and applications
on the Web site.

One of the key components of the FinancialWeb site is the development of
new and proprietary products. The Company currently licenses a portion of the
Company's data and applications from external information vendors for
redistribution. These licensing agreements provide FinancialWeb publications
with sophisticated and extensive news and market data content. The expiration
without renewal or the loss of these licensing agreements before the development
of the Company's own content could have a material adverse effect on the
Company's results of operations.

Potential fluctuations in quarterly financial results make financial forecasting
difficult.

The Company's quarterly operating results may fluctuate significantly in
the future as a result of a variety of factors, many of which are outside of the
Company's control. For example, the Company believes that advertising sales in
traditional media, such as television and radio, generally are lower in the
first and third calendar quarters of each year. Similar seasonal or other
patterns may develop in this industry. In addition, as the Company transitions
its revenue away from banner ads, quarterly results may be even less
predictable. The Company believes that quarter-to-quarter comparisons of
operating results may not be a good indication of future performance, nor would
operating results for any particular quarter be indicative of future operating
results. In some future quarters operating results may be below the expectations
of public market analysts and investors. In such an event, the price of the
Company's common stock may decrease.

Failure to retain and integrate the Company's sales force could result in lower
revenues.

The Company depends on its internal sales department to maintain and
increase sales. As of December 31, 1999, the sales department consisted of three
(3) employees. The success of the sales department is subject to a number of
risks, including the competition in hiring and retaining sales personnel and the
length of time it takes new sales personnel to become productive. The Company's
business, results of operations and financial condition could be materially
adversely affected if the Company does not maintain an effective sales
department.

The Company may be unable to manage growth, which may harm the business.

The Company has experienced rapid growth in its operations. This rapid
growth has placed, and it is anticipated that future growth will continue to
take place, a significant strain on managerial, operational and financial
resources. To manage growth, the Company must continue to implement and improve
managerial controls and procedures and operational and financial systems. In
addition, the Company's success will depend on its ability to expand, train and
manage its workforce, in particular editorial, advertising sales and business
development staff. As of December 31, 1999, the Company had a total of twenty-
two (22) employees, as compared to nineteen (19) employees as of December 31,
1998 and six (6) employees as of December 31, 1997. The Company hired eleven
(11) employees since January 1, 2000 and expects that the number of employees
will continue to increase in the foreseeable future. The Company will need to
integrate these new employees into the workforce successfully. The Company
cannot assure that it has budgeted for the costs and risks associated with this
expansion,
24
<PAGE>

that the systems, procedures or controls will be adequate to support operations,
or that management will be able to successfully offer and expand services. If
the Company is unable to manage growth effectively, the business, results of
operations and financial condition could be materially adversely affected.

The Company's expansion effort into International markets may not be successful
because the Company's growth strategy is largely untested.

The Company's growth strategy includes building customer and partnering
relationships in areas outside of the U.S. and Spanish markets where the Company
has not operated. In each market, the Company will target Internet related and
non-Internet related businesses. Since the Company's growth strategy is largely
untested, the Company cannot give any assurance that the Company will be able to
successfully enter those target regions. The Company's ability to successfully
implement its business strategy, and the expected benefits to be obtained from
the strategy, may be adversely affected by a number of factors, such as
unforeseen costs and expenses, technological change, economic downturns,
competitive factors or other events beyond the Company's control.

If the Company is unable to successfully shift its revenue production, the
Company may need to modify its growth strategy.

The Company's business strategy depends on its ability to shift its revenue
production from solely banner advertising fees to (i) subscription fees for
proprietary and redistributed content and tools; (ii) subscription fees from
partners' Web sites; (iii) licensing, development, hosting fees, set-up fees and
per page view fees; (iv) service fees for additional consulting revenue when
integrating the Company's technology into a business' Web site; and (v) banner
advertising fees, which requires significant capital resources and execution of
its business strategy. As a result, the Company anticipates that it may use a
significant portion of its working capital to execute its growth strategy and in
addition, may require additional financing. There are many factors, however,
which may affect the Company's ability to shift its revenue focus, including
partnering with key international internet providers, expanding the sales force,
expanding executive management and translating the content of its Web site
accurately and quickly. Therefore, there can be no assurances that the Company
will be able to shift its revenue focus and business strategy effectively. If
the Company is unable to shift its revenue focus and execute on its business
strategy, the business and results of operations will be harmed.

The Company's success depends on the continued services and effective
integration of the Company's key management personnel.

A significant portion of the Company's senior management team has been in
place for a relatively short period of time. The Company's success will depend
to a significant extent on their ability to gain the trust and confidence of the
Company's other employees and to work effectively as a team.

The Company's success will also depend significantly on the Company's
ability to attract, integrate, motivate and retain additional highly skilled
technical, managerial, sales and marketing personnel. The loss of one or more
of these key management personnel could materially adversely affect the
business, results of operations and financial condition. These individuals will
have to be integrated into the then current management team successfully. It is
possible that the Company's employees may resign and work for competitors or
start their own competing business.

Unexpected increases in traffic on the FinancialWeb site may strain the current
server systems and cause delays or interruptions.

25
<PAGE>

In the past, the Company has experienced significant spikes in traffic on
the Web site when there has been important financial news events. In addition,
the number of Web site visitors has continued to increase over time and the
Company is seeking to increase its Web site visitor base further. Accordingly,
the FinancialWeb site must accommodate a high volume of traffic, and often at
unexpected times. Although improvements have recently been made to handle
larger traffic volume, the server systems have in the past, and may in the
future, experience slower response times than usual or other problems for a
variety of reasons. These occurrences could cause the Web site users and clients
of the Company to perceive the FinancialWeb site as not functioning properly
and, therefore, cause them to use other methods to obtain their financial news
and information. In such a case, the Company's business, results of operations
and financial condition could be materially adversely affected.

The Company faces a risk of system failure that may result in reduced traffic,
reduced revenue and harm to the Company's reputation.

The Company's ability to provide timely information and continuous news
updates depends on the efficient and uninterrupted operation of its computer and
communications hardware and software systems. Such systems and operations are
vulnerable to damage or interruption from human error, natural disasters,
telecommunication failures, break-ins, sabotage, computer viruses, intentional
acts of vandalism and other similar events. Although the Company does not have a
formal disaster recovery plan, the Company has established mirror Web sites to
support enhanced availability. Any system failure, including network, software
or hardware failure, that causes an interruption in the service or a decrease in
responsiveness of the FinancialWeb site could result in reduced traffic, reduced
revenue and harm to the Company's reputation, brand and relations with the
Company's advertisers or co-brand and private label users and clients. The
Company or the Company's third party insurance policies may not provide adequate
compensation for any losses that may occur because of any failures in the
systems or interruptions in the delivery of content. The Company's business,
results of operations and financial condition could be materially adversely
affected by any event, damage or failure that interrupts or delays our
operations.

Difficulties associated with the Company's brand name development may harm its
ability to attract subscribers and readers.

The Company believes that maintaining and growing awareness about the
FinancialWeb.com brand name is an important aspect of its efforts to continue to
attract Web site visitors, advertisers, partners and clients. The importance of
brand name recognition will increase in the future because of the growing number
of Web sites providing financial news and information. The Company cannot assure
investors that these efforts to build brand name awareness will be successful.
In addition, trademarks for the Company's brand name are in the application
process and there can be no assurance of issuance or if issued they won't be
contested.

Potential liability for information displayed on the Web site may require the
Company to defend against legal claims that may cause significant operational
expenditures.

The Company has been, and may be subject to, claims for defamation, libel
or copyright or trademark infringement or for claims based on other theories
relating to the information published on the FinancialWeb site. These types of
claims have been brought, sometimes successfully, against online services as
well as other print publications in the past. The Company could also be subject
to claims based upon the content that is accessible from the FinancialWeb site
through links to other Web sites. The Company's insurance may not provide
adequate compensation to defend or settle these claims. There may be other
litigation that the Company may have to defend which may have an adverse impact
on the Company's operations, business and financial condition.

<PAGE>

Year 2000 complications may disrupt the Company's operations and harm the
business.

The Company has not experienced any material internal Year 2000 problems to
date. The Company has not been advised of any material Year 2000 problems of the
Company's contributors to date. The Company relies on third party's Web site
information and content that may not be Year 2000 compliant. While the Company
has not been made aware of any material Year 2000 problems relating to the
FinancialWeb sites and content used by the Company's contributors in connection
with the FinancialWeb site to date, these problems may exist. Should any of
these problems develop, they may have a material adverse effect on the Company's
business, operating results and financial condition.

The Company's costs related to Year 2000 compliance, which thus far have
not been material, could ultimately be significant if Year 2000 problems
surface. In the event that the Company experiences disruptions as a result of
any Year 2000 problems, the business could be seriously harmed. The Company's
insurance coverage may not cover or be adequate to offset these and other
business risks related to the Year 2000.

Failure to protect intellectual property rights could harm the Company's brand-
building efforts and the Company's ability to compete effectively.

To protect the Company's rights to its intellectual property, the Company
relies on a combination of trademark and copyright law, trade secret protection,
confidentiality agreements and other contractual arrangements with Company
employees, affiliates, clients, strategic partners and others. The protective
steps may be inadequate to deter misappropriation of proprietary information.
In addition, the Company may be unable to detect the unauthorized use of, or
take appropriate steps to enforce the Company's intellectual property rights.
The Company has several applications pending for U.S. trademarks and is planning
to file additional applications for U.S. trademarks. Effective trademark,
copyright and trade secret protection may not be available in every country in
which the Company offers or intends to offer the FinancialWeb services. Failure
to adequately protect intellectual property could harm brand-building efforts,
devalue proprietary content and affect the ability of the Company to compete
effectively. Further, defending these intellectual property rights could result
in the expenditure of significant financial and managerial resources, which
could materially adversely affect the Company's business, results of operations
and financial condition.

The Company may have to defend against intellectual property infringement claims
that may cause significant operational expenditures.

Although the Company believes that its proprietary rights and the contents
of its Web site do not infringe on the intellectual property rights of others,
other parties may assert infringement claims against the Company or claims that
the Company has violated a patent or infringed a copyright, trademark or other
proprietary right belonging to them. The Company incorporates licensed third-
party content and technology. In these license agreements, the licensors have
generally agreed to defend, indemnify and hold the Company harmless with respect
to any claim by a third party that their licensed content and/or software
infringes any patent or other proprietary right. The Company cannot assure an
investor that these provisions will be adequate to protect the Company from
infringement claims. Any infringement claims, even if not meritorious, could
result in the expenditure of significant financial and managerial resources,
which could materially adversely affect the Company's business, results of
operations and financial condition.

Difficulties in developing new and enhanced services and features for the
FinancialWeb site could harm the business.

27
<PAGE>

The Company intends to introduce additional and enhanced services in order
to retain current visitors and clients, attract new visitors and clients and
partner with businesses. If the Company introduces a service that is not
favorably received, the Company's current visitors and partners may choose a
competitor's service. The Company may also experience difficulties that could
delay or prevent the introduction of new services. These difficulties may
include the loss of, or inability to obtain or maintain, third-party technology
license agreements. Furthermore, the new services could contain errors that are
discovered after these services are introduced. In these cases, the Company may
need to significantly modify the design or implementation of such services on
the FinancialWeb sites to correct these errors. The business, results of
operations and financial condition could be materially adversely affected if the
Company experiences difficulties in introducing any new services or if these new
services are not accepted by the FinancialWeb visitors.

The development of International operations associated with the FinancialWeb
site may cause the Company to face additional risks.

The Company is expanding its business into international markets. An
international Internet provider has developed a Web site intended for users in
North and South America, the Caribbean, Spain and Portugal and FinancialWeb is
the exclusive provider of financial services and financial information for that
Web site. However, there can be no assurance that this Web site will operate
successfully, and delays or operational difficulties by that Web site could
adversely affect the Company's business, results of operations and financial
condition. The success of such Web site depends on the Company's ability to find
and retain key personnel, attract advertisers, retain strategic partners,
prevent system failures; manage the Company's growth; successfully compete with
other well-financed news organizations and continue to finance ongoing
operations.

As the Company expands internationally, the Company will continue to incur
significant additional costs that will result in additional losses. Also, the
Company will continue to encounter many of the risks associated with
international business expansion, generally. These risks include, but are not
limited to, language barriers, changes in currency exchange rates, political and
economic instability, difficulties with regulatory compliance and difficulties
with enforcing contracts and other legal obligations.

International Operations

The Company's continued growth will require further expansion of its
international operations. To successfully expand international sales, the
Company must establish additional foreign operations, hire additional personnel
and recruit additional international resellers. Such international operations
are subject to certain risks, such as:

. difficulties in staffing and managing foreign operations;
. dependence on independent distributors and resellers;
. fluctuations in foreign currency exchange rates;
. compliance with foreign regulatory and market requirements;
. variability of foreign economic and political conditions;
. changing restrictions imposed by regulatory requirements, tariffs or
other trade barriers or by United States export laws;
. costs of localizing products and marketing such products in foreign
countries;
. longer accounts receivable payment cycles;
. potentially adverse tax consequences, including restrictions on
repatriation of earnings;
. difficulties in protecting intellectual property; and

28
<PAGE>

. burdens of complying with a wide variety of foreign laws.

Reliance Upon Strategic Relationship with StarMedia

StarMedia is a provider of a Spanish Web portal. The Company depends
upon its exclusive relationship with StarMedia, including name recognition and
number of users, revenues and leveraging this partnership to other
international providers. The Company's relationship with StarMedia is subject to
the following risks and uncertainties which may effect the business and revenues
of the Company:

. Dependence on StarMedia's Advertising Revenues. The Company's ability to
receive revenue and leverage the StarMedia relationship depends on
StarMedia's ability to advertise successfully and attract new users to
their Web site.
. Web Site Delays and Interruptions. StarMedia's Web site may experience
delays and interruptions due to high traffic, software errors or
hackers.
. Termination of Relationship. StarMedia may terminate the Agreement if
the Company does not meet certain Web visitor satisfaction guidelines or
match competitors' Web site offerings.

The Company may require additional financing, which may be difficult to obtain
and may dilute current ownership.

Over time, the Company may require additional financing for its operations.
Additionally, the Company periodically reviews other companies' Web sites for
potential acquisition. Any material acquisitions or joint ventures could require
additional financing. This additional financing may not be available to the
Company on a timely basis if at all, or, if available, on acceptable terms.
Moreover, additional financing may cause dilution to the Company's existing
stockholders. In recent months, the Company closed on approximately $7.8 million
in cash in a private placement from the sale of over 2.6 million shares of its
common stock. Also, existing stockholders may be diluted upon the exercise of
outstanding warrants and options currently held by, or the exercise of future
grants of such instruments to, consultants, directors and employees of the
Company.

Control by principal stockholders, officers and directors could adversely affect
stockholders.

The Company's officers, directors and greater-than-five-percent
stockholders (and their affiliates), in the aggregate, beneficially own more
than 50% of the Company's outstanding common stock. These persons, acting
together, have the ability to control substantially all matters submitted to
stockholders for approval (including the election and removal of directors and
any merger, consolidation or sale of all or substantially all of our assets) and
to control management and affairs. Accordingly, this concentration of ownership
may have the effect of delaying, deferring or preventing a change in control,
impeding a merger, consolidation, takeover or other business combination or
discouraging a potential acquirer from making a tender offer or otherwise
attempting to obtain control, which in turn could materially adversely affect
the market price of the Company's common stock.

Possible volatility of the stock price and resulting litigation could adversely
affect stockholders.

The stock market and the Company's common stock have experienced
significant price and volume fluctuations and the market prices of securities of
technology companies, particularly Internet-related companies, have been highly
volatile. In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted against that company. The institution of similar litigation against
us could result in substantial costs and a diversion of management's attention
and resources, which could materially adversely affect the business, results of
operations and financial condition.

29
<PAGE>

The Company does not intend to pay dividends.

The Company has never declared or paid any cash dividends on the common
stock. The Company intends to retain any future earnings for funding growth and,
therefore, does not expect to pay any dividends in the foreseeable future.

Forward looking statements; market data.

This Annual Report contains certain "forward-looking statements" based on
the Company's current expectations, assumptions, estimates and projections about
FinancialWeb.com. These forward-looking statements involve risks and
uncertainties. Actual results could differ materially from those anticipated in
such forward-looking statements as a result of factors more fully described in
this section. The Company is undertaking no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes
available or other events occur in the future. This Annual Report contains
market data related to the Company and the Internet. This market data includes
projections that are based on a number of assumptions. These assumptions include
that:

. no catastrophic failure of the Internet will occur;

. the number of people online will increase significantly over the next five
years;

. the value of online advertising dollars spent per online user hour will
increase; and

. Internet security and privacy concerns will be adequately addressed.

If any one or more of these assumptions turns out to be incorrect, actual
results may differ materially from the Company's projections based on these
assumptions.

Some anti-takeover provisions may affect the price of the Company's common
stock.

The board of directors has the authority to issue up to 10,000,000 shares
of preferred stock and to determine the preferences, rights and privileges of
those shares without any further vote or action by the stockholders. The rights
of holders of common stock may be disadvantaged by the rights of the holders of
any preferred stock that may be issued in the future.

These and other provisions of our certificate of incorporation and bylaws
could have the effect of making it more difficult for a third party to acquire a
majority of the Company's outstanding voting stock. These include provisions
that provide for a classified board of directors and permit cumulative voting
for directors. Cumulative voting permits a stockholder to cast votes for a
particular director up to an amount equal to the product of his amount of shares
eligible to vote times the number of directors up for election. Cumulative
voting may result in the holders of less than 50% of the shares voting for
election of directors being able to elect some of the Company's directors. The
Company is also subject to provisions of Nevada law that govern control share
acquisitions and that make it more difficult to make significant acquisitions of
the Company's common stock. This could have the effect of delaying or preventing
a change of control.

Future sales of the Company's common stock by existing stockholders may
adversely affect the market price of common stock.

30
<PAGE>

Future sales of the Company's common stock by existing stockholders may
adversely affect the market price of common stock.

The market place of the Company's common stock could decline as a result of
sales by existing stockholders or the perception that those sales may occur.
These sales could also make it more difficult for the Company to raise funds
through equity offerings in the future at a time and at a price that is
appropriate.

The current holders of most of the Company's common stock and preferred
stock, as well as the holders of outstanding warrants, will be entitled to
registration rights with respect to their common stock or the common stock
underlying their convertible securities. If these holders, by exercising their
registration rights, cause a large number of securities to be registered and
sold in the public market, these sales could have an adverse effect on the
market price for the common stock. If the Company were to include, in a
registration statement initiated by the Company, shares held by these holders
pursuant to the exercise of their registration rights, these sales may have an
adverse effect on our ability to raise capital.

Item 7. Consolidated Financial Statements.

The Company's financial statements listed below are contained herein
beginning at page F-1:

(a) Consolidated Financial Statements

<TABLE>
<CAPTION>
Page
<S> <C>
INDEPENDENT AUDITORS' REPORT F-1

CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Balance Sheets
as of December 31, 1999 and 1998 (As restated) F-2

Consolidated Statements of Operations
for the Years Ended December 31, 1999, 1998 (As restated), and 1997 (As restated) F-3

Consolidated Statements of Stockholders' Deficiency
for the Years Ended December 31, 1999, 1998 (As restated), and 1997 (As restated) F-4

Consolidated Statements of Cash Flows
for the Years Ended December 31, 1999, 1998 (As restated), and 1997 (As restated) F-5-F-6

Notes to Consolidated Financial Statements
for the Years Ended December 31, 1999, 1998 (As restated), and 1997 (As restated) F-7-F-26
</TABLE>

31
<PAGE>

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

The Company changed its independent auditors from Jere Lane, C.P.A. ("Jere
Lane") to Deloitte & Touche LLP ("Deloitte") on July 21, 1999. Deloitte was
engaged to audit the 1999 financial statements on March 16, 2000. In addition,
Deloitte was engaged to re-audit the Company's financial statements for the
years ended December 31, 1997 and December 31, 1998. This change was by mutual
consent due to the need for the Company's auditors to be familiar with the
requirements of financial statements for corporations that are reporting
companies under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").

The change was approved by the Company's board of directors. The Company
and Jere Lane have not, in connection with the audit of the Company's financial
statements for each of the prior two years ended December 31, 1997 and December
31, 1998 or for any subsequent interim period prior to and including July 21,
1999, had any disagreement on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreement, if not resolved to Mr. Lane's satisfaction, would have caused Mr.
Lane to make reference to the subject matter of the disagreement in connection
with his reports.

The reports of Mr. Lane on the Company's financial statements for the past
two fiscal years did not contain an adverse opinion or a disclaimer of opinion
and were not qualified or modified as to uncertainty, audit scope or accounting
principles, except that the report of Mr. Lane on the Company's financial
statements for the year ending December 31, 1998 included an explanatory
paragraph relating to an uncertainty about the Company's ability to continue as
a going concern. There were no disagreements with the former accountant on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure or any reportable events, as defined by Item 304 of
Regulation S-B, during the Company's 1997, 1998 and interim period thru July
21, 1999.

32
<PAGE>

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.

The following table sets forth information concerning the Company's
significant employees, executive officers and directors as of April 25, 2000.
Except as otherwise noted, none of the executive officers are directors or
officers of any publicly owned corporation or entity.

<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<S> <C> <C>
Kevin Leininger 36 President, Chief Executive Officer and
Director

Edward Mullen 46 Chairman of the Board

James Gagel 44 Executive Vice President, Chief Operating
Officer, General Counsel, Secretary and
Director

Martin Averbuch(1) 47 Director

John D. Bergen 57 Director

Andrew Hobbs 39 Director

Leonard von Vital 49 Chief Financial Officer

Ronald Guerriero 56 Senior Vice President of Business
Development

Jeffrey Rudman 33 Senior Vice President of Partner Operations

Susan Dempsey 53 Senior Vice President of Online Services
and Development

Lsyle Wickersham 43 Senior Vice President of Marketing

Javier Caneda 27 Vice President of Product Sales
</TABLE>
________________

(1) Effective May 26, 2000, Mr. Averbuch resigned as a director of the
Company.

KEVIN LEININGER has served as the Company's President and Chief Executive
Officer since January 1, 2000 and director of the Company since February 1,
2000. Before joining the Company, Mr. Leininger served as the Vice President of
global marketing for ESPS Inc. (Nasdaq: ESPS), a leading provider of enterprise
compound document publishing software and services. From March 1997 to June
1998, Mr. Leininger served as the Vice President of global business development
for NeoMedia Technologies

33
<PAGE>

(Nasdaq: NEOM), a provider of software and services linking the printed and
Internet worlds. From June 1994 to March 1997, Mr. Leininger served as a
Software Systems Leader at Fermi National Accelerator Laboratory, where he
created and led various technology groups. Mr. Leininger holds a B.S. in physics
and mathematics from Iowa State University and an M.B.A. in international
business and finance from the University of Chicago.

EDWARD MULLEN has served as Chairman of the Board of directors since March 1,
2000. Before joining the Company's board of directors, Mr. Mullen was President
and a director of Marketing Services Group Inc. (Nasdaq: MSGi), a holding
company with eleven Internet and marketing services companies in its portfolio.
Before joining MSGi, Mr. Mullen served as the President and Chief Executive
Officer of CMG Direct Corp, the original CMGi company (Nasdaq: CMGI). Mr.
Mullen serves on the boards of several Internet companies. He has also served on
the boards of non-profit organizations such as WGBH-TV's Business Executive
Council, The Massachusetts Interactive Media Council and Business and Technology
for Schools and Technology (BEST). Mr. Mullen is an adjunct professor at Boston
College's Graduate School of Management where he teaches courses on Venture
Capital and Mergers & Acquisitions.

JAMES GAGEL has served as General Counsel of Company since December 1, 1998.
Following Mr Lichtman's resignation on October 22, 1999, Mr. Gagel served as
acting President, Chief Executive Officer and Chairman of the Board of the
Company. In addition, Mr. Gagel has served as a director of the Company since
February 5, 1998 and has served as Executive Vice President since March 3, 1999
and Chief Operating Officer since September 9, 1999. Before joining the
Company, Mr. Gagel was in private practice in Washington, D.C., where he
specialized in representing companies entering new domestic and international
markets with an emphasis on Latin America. A former Fulbright Scholar, Mr.
Gagel is a graduate of Duke University and Rutgers University Law School. He is
a member of the bars of New York, New Jersey, the District of Columbia, and
Florida.

MARTIN AVERBUCH has served as a director of the Company since March 24, 1999.
He is currently President and Chief Executive Officer of Adirondack Trading
Partners, LLC, a consortium formed to finance the International Securities
Exchange. Mr. Averbuch is a founder of the International Securities Exchange,
the first fully electronic options exchange in the United States. From August
1993 to August 1988, Mr. Averbuch served as Vice President On-Line Ventures,
Vice President Special Projects, and President of E*TRADE Capital Inc. with
E*TRADE Group, Inc. Mr. Averbuch served as a professor at Hofstra University in
the Department of Finance from 1977 to 1978. He received a B.S. in Economics
from the Wharton School of Finance at the University of Pennsylvania in 1974 and
M.B.A. and J.D. degrees from the University of Chicago in 1977.

JOHN D. BERGEN has served as a director of the Company since March 24, 1999.
Mr. Bergen is currently President of the Council of Public Relations Firms. He
joined the Council from CBS Corporation, where he directed the company's
external and internal communications, including public and investor relations,
government affairs, corporate marketing, and employee communications. Mr.
Bergen previously served as President and Chief Executive Officer of GCI Group,
the International Public Relations and Government Affairs arm of Grey
Advertising. Mr. Bergen taught English, philosophy and ethics at West Point and
was a strategic planner in the Pentagon and chief speech writer to Secretary of
Defense Caspar Weinberger during the Reagan administration. Mr. Bergen
completed his master's degree in English at Indiana University and completed his
undergraduate work at West Point. He is the editor of the Corporate
Communications sections of the Management Handbook, published by the American
Management Association, and an author of a Test for Technology, a book on
electronic warfare and technology in the Vietnam War.

34
<PAGE>

ANDREW HOBBS has served as a director of the Company since September 9, 1999.
Mr. Hobbs is Managing Director of Six Plus, Inc., a private investment company
located in Wilmington, Delaware. He currently serves on the board of directors
of Hazox Corporation, an environmental health and safety software company in
Malvern, Pennsylvania, and Lenexa Industrial Park, Inc., a real estate
management and development company in Kansas City, Missouri. Mr. Hobbs also
serves as the general partner of numerous investment limited partnerships with
exposure to leveraged buyout and hedged funds. Mr. Hobbs holds an M.B.A. from
Pepperdine University and a B.A. from Syracuse University.

LEONARD VON VITAL has served as Chief Financial Officer of the Company since
March 16, 2000. Before joining the Company, Mr. von Vital was Chief Financial
Officer of ESPS, Inc. (Nasdaq: ESPS), a leading provider of enterprise compound
document publishing software and services. From May 1998 until October 1998, Mr.
von Vital was Vice President of Finance, vending operations for Real Time Data,
Inc., a consolidator of vending businesses and a provider of technology to the
vending industry. From November 1993 to May 1998, Mr. von Vital held the
positions of Chief Financial Officer and Senior Vice President of Product
Management at Astea International Inc. (Nasdaq: ATEA), a developer and vendor of
enterprise customer relationship management software. Mr. von Vital is a
certified public accountant and holds a B.S. in accounting from St. Francis
College.

RONALD GUERRIERO has served as Senior Vice President of Business Development of
the Company since March 7, 2000. As Senior Vice President of Business
Development, Mr. Guerriero is responsible for identifying key partnerships with
regional Internet portals, such as the previously announced partnership with
StarMedia's (Nasdaq: STRM) Periscopio, and online financial service providers on
a global basis. He will play an instrumental role in the Company's strategy to
become a leader in the international e-financial marketplace through initiating
these relationships. Before joining the Company, Mr. Guerriero served as Chief
Executive Officer of Sylvan International Inc., a consulting firm based in
Needham, Massachusetts. Before Sylvan, Mr. Guerriero served as Chief Executive
Officer of Damon Corporation, a biotechnology company. Mr. Guerriero is an
active member of the MIT Enterprise Forum and a member of the adjunct faculty at
the Carroll Graduate School of Management at Boston College, where he teaches
courses in Venture Capital and Entrepreneurship. Mr. Guerriero also serves on
the Board of Advisors for opholio.com, merlin-net.com, benext.com and the
Neuroaugmentation Laboratory at Massachusetts General Hospital.

JEFFREY RUDMAN has served as Senior Vice President of Partner Operations of the
Company since February 22, 2000. As Senior Vice President of Partner
Operations, Mr. Rudman is responsible for managing the Company's international
strategic alliances, including the recently announced partnership with StarMedia
(Nasdaq: STRM). Before joining the Company, Mr. Rudman served as a Manager of
Financial Services Consulting division from KPMG Consulting, delivering
strategic consulting services to retail brokerage firms, banks providing
personal trusts services, mutual fund organizations and investment mangers. From
March 1999 to November 1999, Mr. Rudman served as an advisor and member of the
Project Management Team of WingspanBank.com, the online banking division of
First USA Bank, N.A. From October 1995 to June 1996, Mr. Rudman served as a
commercial paper trader with Heller Financial, a commercial lender. Mr. Rudman
holds an MBA in Finance and International Business from the University of
Chicago and a Bachelor's degree in Finance from Boston University.

SUSAN DEMPSEY, has served as Senior Vice President of Online Services and
Development of the Company since March 21, 2000. Before joining the Company,
Ms. Dempsey was Vice President of Citigroup. Ms. Dempsey was the designer of
the user interface for Citibank's Direct Access, one of the first e-banking
solutions. Prior to Citigroup, Ms. Dempsey was the co-founder of the Digital
Broadcasting Company, the parent of "The Source," one of the first consumer-
focused information e-distribution systems. Ms. Dempsey holds a bachelor's
degree in English from the University of Denver.

35
<PAGE>

LSYLE WICKERSHAM, has served as Senior Vice President of Marketing of the
Company since April 6, 2000. Before joining the Company, Mr. Wickersham was the
Managing Partner of Wickersham Hunt Schwantner, a communications agency focused
on the dot com space. Mr. Wickersham holds a Bachelor's degree in
Communications and Advertising from Ithaca College.

Significant Employees

JAVIER CANEDA has served as Vice President of Product Sales of the Company since
November 8, 1999. From 1998 to 1999, Mr. Caneda was a Business Development
Manager at Hyperfeed Technologies, a company devoted to providing high speed
exchange information via satellite service. From 1997 to 1998, Mr. Caneda
served as a sales executive for PC Quote.com, Inc. From 1996 to 1997 Mr. Caneda
worked as a licensed stockbroker with Myers Pollack Robbins. He holds a
bachelor's degree in Computer Science with a minor in Business Administration
from St. John's University.

Section 16(a) Beneficial Ownership Reporting Compliance.

Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, among others, to file with the Securities and Exchange
Commission (the "SEC") an initial report of ownership of the Company's common
stock on Form 3 and reports of changes of ownership on Form 4 or Form 5.
Persons subject to Section 16 are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms that they file. Under SEC rules,
certain forms of indirect ownership and ownership of Company common stock by
certain family members are covered by these reporting rules.

Based solely on a review of copies of such forms furnished to the Company,
Mr. Kevin Lichtman, the former Chief Executive Officer, Mr. James Gagel, Mr.
Raymond Barton, the former Senior Vice President of Marketing and Technology,
Mr. Jeffrey Abbott, the former Chief Information Officer, Mr. John Keating, the
former Vice President of Marketing, Mr. Andrew Hobbs, Mr. Martin Averbuch, Mr.
John Bergen and certain stockholders known to beneficially own more than 10% of
the Company's common stock have not filed their Forms 3, 4 and/or 5 with the
SEC. Mr. Leininger is in the process of notifying these people of their Section
16 filing requirements with the SEC.

Schedule of Non-Compliance with Section 16(a) of the Exchange Act

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Number of Late Number of Transactions
Name Reports Not Reported
----------------------------------------------------------------------------------
<S> <C> <C>
Kevin Lichtman 1 1
----------------------------------------------------------------------------------
James Gagel 2 2
----------------------------------------------------------------------------------
Andrew Hobbs 1 --
----------------------------------------------------------------------------------
Martin Averbuch 1 --
----------------------------------------------------------------------------------
John Bergen 1 --
----------------------------------------------------------------------------------
Raymond Barton 2 --
----------------------------------------------------------------------------------
Jeffrey Abbott 2 --
----------------------------------------------------------------------------------
John Keating 2 --
----------------------------------------------------------------------------------
Glenn Laken 1 2
----------------------------------------------------------------------------------
John Katsock, Jr. 1 1
----------------------------------------------------------------------------------
Masada I, L.P. 1 --
----------------------------------------------------------------------------------
Allen & Company, Inc. 1 1
----------------------------------------------------------------------------------
Frank Musolino 1 1
----------------------------------------------------------------------------------
</TABLE>

36
<PAGE>

Item 10. Executive Compensation.

Summary Compensation Table

The table below summarizes the compensation paid to or earned by the
Company's Chief Executive Officer and all other executive officers whose salary
and bonus for services rendered in all capacities to the Company for the fiscal
year ended December 31, 1999 exceeded $100,000. The Company will use the term
"named executive officers" to refer collectively to these individuals in this
annual report.

<TABLE>
<CAPTION>
Annual Compensation
-------------------
Name and Other Annual
Principal Position Year Salary Bonus Compensation
------------------ ---- ------ ----- ------------
<S> <C> <C> <C> <C>
Kevin Lichtman, Chief 1999 $159,519 $ $ 7,450
Executive Officer and 1998 144,500 --- 1,862
President (1) 1997 90,000 ---

James Gagel, Executive 1999 83,333 --- 23,384
Vice President, Chief 1998 4,000 --- 6,337
Operating Officer and 1997 --- --- ---
General Counsel (2)
</TABLE>

________________________
(1) Mr. Lichtman served as the Company's President, Chief Executive Officer and
Director until October 22, 1999.

(2) Mr. Gagel became acting President and Chief Executive Officer on October
22, 1999.

Option Grants in Last Fiscal Year

The following table summarizes the options granted to each of the Company's
named executive officers during the fiscal year ended December 31, 1999.

<TABLE>
<CAPTION>
Number of Percent of Total
Shares Options Granted
Underlying to Employees in Exercise Price
Name Options Granted Fiscal Year per share Expiration Date
---- --------------- ----------- --------- ---------------
<S> <C> <C> <C> <C>
Kevin Lichtman --- --- --- ---

James Gagel 6,035 3.52% $14.25 5/20/09
20,000 11.67 5.00 6/13/04
25,000 14.58 7.13 11/30/09
10,000 5.83 0.001 12/22/09
50,000 29.17 5.75 12/22/09
</TABLE>

37
<PAGE>

Aggregated exercises in Last Fiscal Year and Fiscal Year-end Options Values.

The following table presents information with respect to stock options
owned by the named executive officers at December 31, 1999 and with respect to
stock options exercised by the named executive officers during the fiscal year
ended December 31, 1999.

The values of unexercised options set forth below have been calculated on
the basis of the closing price of $6.125 on the OTCBB on December 31, 1999, less
the applicable exercise price per share multiplied by the number of shares
underlying these options.

<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised
Acquired Value Underlying Unexercised Options In-the-Money Options
Name on Exercise Realized at December 31, 1999 at December 31, 1999
---- ----------- -------- -------------------- --------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kevin Lichtman -- -- -- -- -- --

James Gagel 9,454 $155,991 35,000 101,035 $115,875 $41,250
</TABLE>

Director Compensation

Each director upon their appointment to the Company's board of directors
enters a Directors Service Agreement. The agreement provides, among other
things, that each director will be:

. Issued an option for 100,000 shares of common stock at the closing price
on the date of the grant and which vest 25% per quarter beginning on the
date of the director's appointment;

. Reimbursed for all costs and travel expenses related to attending a
board or committee meeting;

. Covered by a $10 million directors liability insurance policy paid by
the Company; and

. Appointed for a three year term, subject to stockholder approval.

In addition to the above, non-employee directors shall be entitled to
$2,500 per year for their service as a director, including the attendance of
full board meeting and subcommittee meetings during the same session, and an
additional $1,000 for attendance at a subcommittee meeting only.

Employment Contracts

On April 1, 1997, the Company entered an Employment Agreement with Kevin A.
Lichtman, the former President and Chief of Executive Officer, who was a
promoter, as defined by the Act, of the Company, for a term of three (3) years
subject to renewal. On October 22, 1999, Mr. Lichtman resigned as part of a
global arrangement with the Company concerning his employment agreement and
related issues. His separation agreement provides, among other things, that the
Company will purchase 848,000 shares of Mr. Lichtman's total direct and indirect
stock holdings of 902,000 shares, at $1.35 per share. The shares acquired by the
Company from Mr. Lichtman will be retired and restored to the status of
authorized and unissued shares, in accordance with the Nevada Corporation Law.
In addition, Mr. Lichtman was entitled to receive 3 months severance pay. On
January 25, 2000, the Company repurchased 154,561 shares of common stock from
Mr. Lichtman. On April 18, 2000, the Company purchased an additional 291,349
shares of common stock from Mr. Lichtman and 360,863 shares of common stock from
Cacique Partners, L.P., a company controlled by Mr. Lichtman. As of May 25,
2000, 41,137 shares of common stock remains in escrow pending resolution of a
dispute in contractual terms between the parties.

38
<PAGE>

On December 1, 1998, the Company entered into an employment agreement with
James P. Gagel, as General Counsel of the Company, for a term of three years
subject to renewal. The agreement was amended on February 1, 1999. Pursuant to
the amendment, the Company paid Mr. Gagel a gross salary of $86,000 per annum
for the first year, $98,000 per annum for the second year, and $112,000 per
annum for each year thereafter. Mr. Gagel's employment agreement was further
amended on December 23, 1999 to provide Mr. Gagel with a base salary of
$135,000. In addition to the annual salary, the Company is to provide
hospitalization and medical coverage for Mr. Gagel and reimburse all reasonable
expenses incurred by him in the performance of his duties. Mr. Gagel is entitled
to 15 days paid vacation each year. In the event of an involuntary termination,
Mr. Gagel's salary and benefits are guaranteed for 18 months, regardless of
employment status. Mr. Gagel was also granted an option to purchase: 25,000
shares of common stock on December 1, 1998 at the closing price of $3.94 per
share, 25,000 shares of common stock at the closing price on December 1, 1999 of
$7.125 per share and 25,000 shares of common stock at the closing price on
December 1, 2000.

Stock Option Plan

On May 21, 1999, the board of directors adopted the FinancialWeb.com, Inc.
1999 Stock Incentive Plan (the "Option Plan"). The Option Plan is administered
by the Company's Board or a committee duly appointed by the Board (in either
case, the "Administrator"). The Option Plan permits the payment of the exercise
price to be in the form of cash, check, cashless exercise and such other
consideration and method of payment as the Administrator may, from time to time,
determine. Optionees are required to execute a stock purchase and restriction
agreement at the time he or she exercises any options.

As of December 31, 1999, a total of 1,000,000 shares of common stock were
authorized for issuance to directors, officers, employees and consultants
selected by the Administrator of the Option Plan. Of these shares, 496,433
shares of common stock were issuable upon the exercise of stock options granted
under the Option Plan as of December 31, 1999. On March 2, 2000 the Board of
Directors increased the number of shares authorized for issuance from 1,000,000
shares to 3,750,000 shares.

Until the Option Plan terminates, any unpurchased shares of common stock
underlying all options that expire, are terminated or become unexercisable for
any reason, are returned to the Option Plan and become available for future
grants. The number of shares of common stock underlying an option, the total
number of shares of common stock authorized under the Option Plan but for which
no options have been granted, and the exercise price per share of the common
stock underlying all outstanding options are proportionately adjusted for any
increase or decrease in the number of outstanding shares of common stock
resulting from stock splits, reverse stock splits, stock dividends,
reclassifications and recapitializations.

The Option Plan provides for the grant of either incentive stock options or
non-qualified stock options, except that consultants of the Company who are not
also employees are not entitled to receive incentive stock options under the
Option Plan. Exercise prices for incentive stock options may not be less than
the fair market value per share of common stock on the date of grant, or 110% of
the fair market value in the case of incentive stock options granted to any
person who owns the Company's common stock possessing 10% or more of the total
voting power of all of the outstanding capital stock. Exercise prices for non-
qualified stock options may be less than the fair market value per share, but
must be at least $.001 per share. With the exception of the non-qualified
options already granted, and the options granted pursuant to the director
service agreements and certain employment agreements, options granted under the
Option Plan vest at a rate of 25% of the shares underlying the option per year
during the consecutive four (4) year period beginning on the date of grant and
expire ten (10) years after the date of grant, or five

39
<PAGE>

(5) years after the date of the grant with respect to incentive stock options
granted to any person who owns the Company's common stock possessing 10% or more
of the total voting power of all of the Company's capital stock.

Limitation of Liability of Directors and Indemnification of Directors and
Officers

The Company is incorporated in Nevada. Under Sections 78.7502 and 78.751 of
the Nevada Revised Statutes, a Nevada Company may, under specified
circumstances, indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the Company, or is
or was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement, actually and reasonably incurred by a director,
officer, employee or agent of the Company in connection with the action, suit or
proceeding, provided that such provision shall not eliminate or limit the
liability of an individual applying for indemnification if, unless otherwise
ordered by a court, a final adjudication establishes that (i) his acts or
omissions involved intentional misconduct, fraud, or a knowing violation of the
law and (ii) the act or omission was material to the cause of action.

The Company's Articles of Incorporation and Bylaws provide that the Company
may indemnify its officers, directors, employees and agents to the fullest
extent permissible under Nevada law. Directors and officers shall be, and
employees and agents may be, upon adoption of a resolution of the Board,
indemnified if made a party or threatened to be made a party, or involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative, or any appeal of such an
action or any inquiry or investigation that could lead to such an action,
against judgments, penalties (including excise and similar taxes and punitive
damages), fines, settlements and reasonable expenses (including, without
limitation, attorneys' fees) actually incurred in connection with such action.
The Board has the option of making any indemnification payments in advance and
to purchase and maintain insurance to protect itself and its officers,
directors, employees and agents. These indemnification rights are non-exclusive,
but they will not eliminate or limit the liability of any director, officer,
employee or agent to the extent that such person is found liable for: (i) a
breach of a duty of loyalty to the Company or its members; (ii) an act or
omission not in good faith that constitutes a breach of duty to the Company or
involves intentional misconduct or a knowing or reckless violation of the law;
(iii) a transaction from which the director, officer, employee or agent received
an improper benefit, whether or not the benefit resulted from an action taken
within the scope of the individual's duties; or (iv) an act or omission for
which liability is expressly provided by an applicable statute.

Item 11. Security Ownership Of Certain Beneficial Owners And Management.

The following table sets forth certain information as of April 25, 2000
regarding the beneficial ownership of the Company's common stock by: (1) each
person, entity or group known by the Company to own beneficially more than 5% of
the Company's outstanding common stock; (2) each director; (3) each of the named
executive officers; and (4) all directors and executive officers as a group.
Unless otherwise indicated, the address of each person identified is c/o
FinancialWeb.com, Inc. 201 Park Place, Altamonte Springs, Florida 32701.

The percentages shown are based on 8,881,697 shares of common stock
outstanding as of April 25, 2000 as shown by the stock transfer agent, Alpha
Tech Stock Transfer Company. Pursuant to Rule 13d-3 under the Exchange
Act, shares of common stock which a person has the right to acquire pursuant to
the exercise of stock options and warrants held by that holder that are
exercisable within 60 days are deemed outstanding for the purpose of computing
the percentage ownership of that person,

40
<PAGE>

but are not deemed outstanding for computing the percentage ownership of any
other person.

<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percent
Name and Address of Beneficial Owner Ownership (1) Of Class
------------------------------------ ------------- --------
<S> <C> <C>
Glenn B. Laken 1,574,663(2) 15.7%

John J. Katsock, Jr. 1,397,572(3) 14.4%

Frank Musolino 848,000(4) 9.5%

Masada I, L.P. 670,685(5) 7.6%

Kevin E. Leininger 56,250(6) *

Edward Mullen 416,668(7) 4.5

James P. Gagel 71,489(8) *

Martin Averbuch 100,000(9) *

John D. Bergen 105,000(10) *

Andrew Hobbs 191,864(11) *

Kevin Lichtman 41,137(12) *

All directors and executive officers as 1,474,271(13) 14.3
a group (11 persons)
</TABLE>
______________________
* Represents less than 1% of the outstanding common stock.

(1) Beneficial ownership is determined in accordance with the rules of the SEC
and includes voting or investment power with respect to the securities. Unless
otherwise indicated by footnote, the persons named in the table have sole voting
and sole investment power with respect to all shares of common stock shown as
beneficially owned by them, subject to applicable community property laws. All
are U.S. citizens to the best of the Company's knowledge unless otherwise
indicated.

(2) Includes 1,173,663 shares of common stock underlying warrants. The address
for Mr. Laken is 30 S. Wacker, Suite 1606 Chicago, IL 60606.

(3) Includes 694,651 shares of common stock underlying warrants, 300 shares of
common stock which Mr. Katsock holds as custodian, 11,500 shares of common stock
held by Pinnacle Asset Management, Inc. of which Mr. Katsock is a Director and
majority shareholder (Mr. Katsock shares voting and investment powers with
respect to such shares), 43,861 shares of common stock held by Prime Equity
Fund, L.P., 15,000 shares of common stock underlying warrants held by Prime
Equity Fund, L.P. and 88,364 shares of common stock issuable upon the conversion
of Series A Convertible Preferred Stock held by Prime Equity Fund, L.P., of
which Mr. Katsock is the managing member of the general partner. The address for
Mr. Katsock is 277 Park Avenue, 27/th/ Floor New York, NY 10172.

41
<PAGE>

(4) Includes 100,000 shares of common stock and 125,000 shares of common
stock underlying warrants held by First American Investments Incorporated. Mr.
Musolino is the President of First American Investments Incorporated and Mr.
Musolino shares voting and investment powers with respect to such shares. The
address for Mr. Musolino is 1623 North Riverhills Drive Temple Terrace, FL
33617.

(5) The address for Masada I, L.P. is c/o Howard Schwartz, Esq. Boca Corp.
Center 2101 N.W. Corporate Blvd., Suite 414 Boca Raton, FL 33431.

(6) Includes shares of common stock issuable upon the exercise of stock options
which are currently exercisable or which are exercisable within 60 days after
April 25, 2000.

(7) Includes shares of common stock issuable upon the exercise of stock options
which are currently exercisable or which are exercisable within 60 days after
April 25, 2000.

(8) Includes 52,035 shares of common stock issuable upon the exercise of stock
options which are currently exercisable or which are exercisable within 60 days
after April 25, 2000.

(9) Represents the total number of shares of common stock issuable upon the
exercise of stock options which are currently exercisable or which are
exercisable within 60 days after April 25, 2000.

(10) Includes 100,000 shares of common stock issuable upon the exercise of stock
options which are currently exercisable or which are exercisable within 60 days
after April 25, 2000. Mr. Bergen also owns a limited partnership interest in
Prime Equity Fund, L.P., which is a beneficial owner of common stock and an
entity controlled by John J. Katsock, Jr. The address for Mr. Bergen is 1789
Wrightstown Road, Newtown, Pennsylvania 18940.

(11) Includes 500 shares of common stock, 100,000 shares of common stock
issuable upon the exercise of stock options which are currently exercisable or
which are exercisable within 60 days after April 25, 2000, 3,000 shares of
common stock owned by Dogwood Bonsai Opportunity Fund, L.P. of which Mr. Hobbs
is the general partner, and 88,364 shares of common stock issuable upon the
conversion of Series A Convertible Preferred Stock held by Dogwood Bonsai
Opportunity Fund, L.P.

(12) The address for Mr. Lichtman is c/o Larry Loftis, Esq., Zimmerman,
Shuffield, Orlando, FL 32802.

(13) Includes 1,437,817 shares of common stock issuable upon the exercise of
stock options which are currently exercisable or which are exercisable within 60
days after April 25, 2000.

Item 12. Certain Relationships and Related Transactions.

On December 14, 1998, the Company issued a promissory note for $500,000 in
principal amount, payable to Frank Musolino and was convertible into common
stock at an exercise price of $.50 per share, subject to adjustment. On December
23, 1999, Mr. Musolino converted such note and accrued interest thereon into
1,123,000 shares of common stock.

On January 6, 1999, and March 10, 1999, the Company issued two warrants for
1,000,000 shares of common stock each exercisable at $4.00 per share to Glenn B.
Laken and John J. Katsock, Jr., respectively, under the terms of their
consulting agreements. On April 16, 1999, Mr. Katsock and Mr. Laken exercised a
portion of their warrants and the Company issued 100,000 shares of common stock
to Mr. Laken (on a cashless basis, tendering 19,753 shares of common stock) and
400,000 shares of common stock to Mr. Katsock (on a cashless basis, tendering
79,012 shares of common stock).

The warrant held by Mr. Katsock and Mr. Laken provide that upon the sale of
securities by the Company below the exercise price of $4.00 per share, not only
would the exercise price decrease to that sales price, but also that the Company
would be obligated to issue a warrant for additional shares to Messrs. Laken and
Katsock pursuant to a formula in their warrants. On January 18, 2000, the
Company issued a warrant for 173,663 shares of common stock exercisable at $3.00
per share to Mr. Katsock and a warrant for 293,416 shares of common stock
exercisable at $3.00 per share to Mr. Laken.

<PAGE>

On October 22, 1999, the Company entered a Stock Repurchase Agreement with
Mr. Lichtman and Cacique Partners, L.P., a company controlled by Mr. Lichtman,
in connection with Mr. Lichtman's resignation. His separation agreement
provides, among other things, that the Company will repurchase 446,000 shares of
common stock from Mr. Lichtman at $1.35 per share and repurchase 402,000 shares
of common stock from Cacique Partners, L.P. of which Mr. Lichtman is general
partner, at $1.35 per share. On January 25, 2000, the Company repurchased
154,561 shares of common stock from Mr. Lichtman. On April 18, 2000, the Company
purchased an additional 291,349 shares of common stock from Mr. Lichtman and
360,863 shares of common stock from Cacique Partners, L.P.

On November 15, 1999, the Company issued two promissory notes in principal
amount of $75,000, each, payable to Prime Equity and Glenn Laken at a 9.75%
annual interest rate. In addition to the notes, the Company issued to Prime
Equity and Glenn Laken a warrant to purchase 15,000 shares of the common stock
at $3.00 per share. Mr. Laken is the managing member of Prime Equity. On
January 18, 2000, the Company repaid the principal and accrued interest on such
notes.

On January 23, 2000, the Company paid $150,436 in principal amount under a
promissory note to The Harmat Organization, Inc., which is an affiliate of
Barpointe.com, Inc.

On March 14, 2000, the Company issued a promissory note in the amount of
$65,000 to Susanne Mullen, the wife of Edward Mullen, the Chairman of the Board
of Directors. The note carries an interest rate of 8.75% per annum and is due
on demand.

Pursuant to the private placement conducted by the Company, in April 2000,
the Company paid $119,322 in commissions to Pinnacle Asset Management Inc. for
selling 390,740 shares of common stock to 29 investors. Mr. John J. Katsock, Jr.
is affiliated with Pinnacle Asset Management Inc.

Transactions with Promoters

On or about February 1997, Mr. Kevin Lichtman, the former Chief Executive
Officer and President and Mr. Jack Cabasso reorganized the Company and may be
deemed to be promoters within the meaning of the Act. The Company has become
aware that, prior to the reorganization, Mr. Lichtman and Mr. Cabasso had an
oral understanding that Mr. Cabasso would "own" one-half of the shares of common
stock issued to Mr. Lichtman pursuant to the reorganization of the Company. Mr.
Lichtman was issued 1,850,000 shares of common stock in connection with the
reorganization of the Company and on February 1, 1999, Mr. Lichtman transferred
907,000 shares of common stock to entities that the Company believes are
controlled by Mr. Cabasso.

On March 8, 1997, the Company entered a three year Consulting Agreement
with Alcott Simpson & Co. ("Alcott") for investment banking and consulting
services. In consideration of the services, the Company issued Alcott 400,000
shares of common stock and agreed to pay Alcott $10,000 per month. To the
Company's knowledge, Mr. Cabasso was a representative of Alcott.

Management of the Company has recently learned that Mr. Cabasso was found
to have violated the court-ordered terms of his federal supervised release on
September 22, 1995, which was imposed pursuant to a 1993 conviction. The Company
believes that Messrs. Lichtman and Cabasso have no current interest in the
Company, except for 41,137 shares of common stock held by Mr. Lichtman and
certain debt obligations of the Company to Alcott and The Rock Company, a
company the Company believes is controlled by Mr. Cabasso.

Item 13. Exhibits, List and Reports of Form 8-K

(a) Exhibits

Exhibit No. Description
---------- -----------

<PAGE>

3.1 Amended and Restated Articles of Incorporation of
FinancialWeb.com, Inc. (filed as Exhibit 3.1 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

3.2 Bylaws of FinancialWeb.com, Inc. (filed as Exhibit 3.2 to
the Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

4.1 Articles IV, VI & VII of the Amended and Restated Articles
of Incorporation of FinancialWeb.com, Inc. (filed as Exhibit
4.1 to the Company's Registration Statement on Form 10-SB
filed on April 16, 1999, as amended and incorporated herein
by reference)

4.2 Articles 2, 6, and 7 of the Bylaws of FinancialWeb.com, Inc.
(filed as Exhibit 4.2 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

4.3 Purchase Agreement with Jeffrey A. Grossman dated March 3,
1997 (filed as Exhibit 4.3 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

4.4 Registration Rights Agreement with Alcott Simpson & Co.,
Inc. dated March 10, 1997 (filed as Exhibit 4.4 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

4.5 Registration Rights Agreement with Stewart International
Investments, Ltd., dated March 10, 1997 (filed as Exhibit
4.5 to the Company's Registration Statement on Form 10-SB
filed on April 16, 1999, as amended and incorporated herein
by reference)

4.6 Warrant to Purchase Common Stock for Masada I, L.P. and
Registration Rights Agreement, dated July 1, 1998 (filed as
Exhibit 4.6 to the Company's Registration Statement on Form
10-SB filed on April 16, 1999, as amended and incorporated
herein by reference)

4.7 Warrant to Purchase Common Stock for The Harmat
Organization, Inc. and Registration Rights Agreement dated
July 13, 1998 (filed as Exhibit 4.7 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

4.8 Registration Rights Agreement with Alcott Simpson & Co.,
Inc. dated July 17, 1997 (filed as Exhibit 4.8 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

4.9 Registration Rights Agreement with Rock Company, Inc. dated
July 17, 1997 (filed as Exhibit 4.9 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

4.10 Convertible Note payable to Frank Musolino due December 14,
1999 (filed as Exhibit 4.10 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

4.11 Warrant Agreement with Glenn B. Laken dated January 6, 1999
(filed as Exhibit 4.11 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

<PAGE>

4.12 Warrant Agreement with John J. Katsock dated March 10, 1999
(filed as Exhibit 4.12 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

4.13 Convertible Note payable to Larry Riesberg dated February
12, 1999 (filed as Exhibit 4.13 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

4.14 Convertible Note payable to Donald Sliter dated February 12,
1999 (filed as Exhibit 4.14 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

4.15 Convertible Note payable to Steven Muslin dated February 12,
1999 (filed as Exhibit 4.15 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

4.16 Convertible Note payable to Dr. Thwack, an Illinois general
partnership dated February 12, 1999 (filed as Exhibit 4.16
to the Company's Registration Statement on Form 10-SB filed
on April 16, 1999, as amended and incorporated herein by
reference)

4.17 Convertible Note payable to Steven F. Story, Revocable Trust
of 8/9/95 dated March 25, 1999 (filed as Exhibit 4.17 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

4.18 Convertible Note payable to Banning Enterprises Ltd. dated
March 25, 1999 (filed as Exhibit 4.18 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

4.19 Convertible Note payable to Anson McCoy Beard, Jr, dated
March 30, 1999 (filed as Exhibit 4.19 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

4.20 Convertible Note payable to the Prime Equity Fund, L.P.
dated March 30, 1999 (filed as Exhibit 4.20 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

4.21 Convertible Note payable to Adel R.B. Kellel dated March 30,
1999 (filed as Exhibit 4.21 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

4.22 Convertible Note payable to Dogwood Bonsai Opportunity Fund,
L.P. dated March 30, 1999 (filed as Exhibit 4.22 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

4.23 Convertible Note payable to Adel R.B. Kellel dated March 30,
1999 (filed as Exhibit 4.23 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

4.24 Convertible Note payable to Bluewater Consulting, Inc. dated
March 30, 1999 (filed as Exhibit 4.24 to the Company's
Registration Statement on

<PAGE>

Form 10-SB filed on April 16, 1999, as amended and
incorporated herein by reference)

4.25 Consulting Agreement with registration rights, with Gary
Gould dated March 1, 1999 (filed as Exhibit 4.25 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

4.26 Director Services Agreement with Martin Averbuch dated March
24, 1999 (filed as Exhibit 4.26 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

4.27 Form of Certificate of Designations, Preferences and Rights
for Series A Convertible Preferred Stock (filed as Exhibit
4.27 to the Company's Current Report on Form 8-K filed on
April 12, 2000 and incorporated herein by reference)

10.1 Employment Agreement with Kevin Lichtman dated April 1,
1997, and amendment thereto, dated November 4, 1998 (filed
as Exhibit 10.1 to the Company's Registration Statement on
Form 10-SB filed on April 16, 1999, as amended and
incorporated herein by reference)

10.2 Employment Agreement with James P. Gagel dated December 1,
1998, and amendment thereto, dated February 1, 1999 (filed
as Exhibit 10.2 to the Company's Registration Statement on
Form 10-SB filed on April 16, 1999, as amended and
incorporated herein by reference)

10.3 Employment Agreement with Jeffrey Abbott dated October 1,
1998 (filed as Exhibit 10.3 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.4 Employment Agreement with John Keating dated February 9,
1998 (filed as Exhibit 10.4 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.5 Employment Agreement with Carl Surran dated July 21, 1997
(filed as Exhibit 10.5 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.6 Director Services Agreement with Martin Averbuch dated March
24, 1999 (filed as Exhibit 10.6 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.7 Asset Purchase Agreement with Jeffrey A. Grossman dated
March 3, 1997 (filed as Exhibit 10.7 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.8 Asset Purchase Agreement with Gene Homicki dated March 3,
1997 (filed as Exhibit 10.8 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.9 Asset Purchase Agreement with Randall Shepardson dated
January 11, 1998 (filed as Exhibit 10.9 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

<PAGE>

10.10 Asset Purchase Agreement with Patrick Welsh dated February
17, 1999 (filed as Exhibit 10.10 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.11 Asset Purchase Agreement with Michael Onghai and Daily
Stocks, Inc. dated April 7, 1999 (filed as Exhibit 10.11 to
the Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

10.12 License Agreement with Thomson Investors Network dated
September 15, 1997 (filed as Exhibit 10.12 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.13 License Agreement with Media General Financial Services,
Inc. dated September 17, 1997 (filed as Exhibit 10.13 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

10.14 License Agreement with Douglas Pike dated December 3, 1997
(filed as Exhibit 10.14 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.15 License Agreement with Nathaniel Cohen dated December 23,
1997 (filed as Exhibit 10.15 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.16 License Agreement with North American Quotations, Inc. dated
February 24, 1998 (filed as Exhibit 10.16 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.17 License Agreement with Comtex Scientific Corporation dated
February 25, 1998 (filed as Exhibit 10.17 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.18 License Agreement with Partes Corporation dated April 1,
1998 (filed as Exhibit 10.18 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.19 License Agreement with ValueLine Publishing, Inc. dated June
1, 1998 (filed as Exhibit 10.19 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.20 License Agreement with SportsTicker Enterprises, L.P, dated
August 13, 1998 (filed as Exhibit 10.20 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.21 License Agreement with InfoSeek Corporation dated August 28,
1998 (filed as Exhibit 10.21 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.22 License Agreement with S&P Comstock, Inc., dated October 4,
1998 (filed as Exhibit 10.22 to the Company's Registration
Statement on Form

<PAGE>

10-SB filed on April 16, 1999, as amended and incorporated
herein by reference)

10.23 License Agreement with Weathernews, Inc., dated December 1,
1998 (filed as Exhibit 10.23 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.24 Distribution Agreement with Pace Financial Network, LLC,
dated March 15, 1999 (filed as Exhibit 10.24 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

10.25 Consulting Agreement with Spencer Trask Securities Inc.
dated July 2, 1998, and amendment thereto, dated August 20,
1998 (filed as Exhibit 10.25 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.26 Consulting Agreement with Glenn B. Laken dated January 6,
1999 (filed as Exhibit 10.26 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.27 Consulting Agreement with John J. Katsock dated March 10,
1999 (filed as Exhibit 10.27 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.28 Consulting Agreement with Allen & Company Incorporated dated
March 31, 1999 (filed as Exhibit 10.28 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.29 Convertible Note payable to Larry Riesberg dated February
12, 1999 (filed as Exhibit 10.29 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.30 Convertible Note payable to Donald Sliter dated February 12,
1999 (filed as Exhibit 10.30 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.31 Convertible Note payable to Steven Muslin dated February 12,
1999 (filed as Exhibit 10.31 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.32 Convertible Note payable to Dr. Thwack, an Illinois general
partnership dated February 12, 1999 (filed as Exhibit 10.32
to the Company's Registration Statement on Form 10-SB filed
on April 16, 1999, as amended and incorporated herein by
reference)

10.33 Convertible Note payable to Steven F. Story, Revocable Trust
of 8/9/95 dated March 25, 1999 (filed as Exhibit 10.33 to
the Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

10.34 Convertible Note payable to Banning Enterprises Ltd. dated
March 25, 1999 (filed as Exhibit 10.34 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

<PAGE>

10.35 Convertible Note payable to Anson McCoy Beard, Jr. dated
March 30, 1999 (filed as Exhibit 10.35 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.36 Convertible Note payable to Prime Equity Fund, L.P. dated
March 30, 1999 (filed as Exhibit 10.36 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.37 Convertible Note payable to Adel R. B. Kellel dated March
30, 1999 (filed as Exhibit 10.37 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.38 Convertible Note payable to Dogwood Bonsai Opportunity Fund,
L.P. dated March 30, 1999 (filed as Exhibit 10.38 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

10.39 Convertible Note payable to Adel R.B. Kellel dated March 30,
1999 (filed as Exhibit 10.39 to the Company's Registration
Statement on Form 10-SB filed on April 16, 1999, as amended
and incorporated herein by reference)

10.40 Convertible Note payable to Bluewater Consulting, Inc. dated
March 30, 1999 (filed as Exhibit 10.40 to the Company's
Registration Statement on Form 10-SB filed on April 16,
1999, as amended and incorporated herein by reference)

10.41 Promissory Note payable to The Harmat Organization, Inc.
dated December 15, 1998 (filed as Exhibit 10.41 to the
Company's Registration Statement on Form 10-SB filed on
April 16, 1999, as amended and incorporated herein by
reference)

10.42 FinancialWeb.com, Inc. 1999 Stock Incentive Plan

10.43 Form of Conversion Notice to One Year Convertible Note
Holders (filed as Exhibit 10.1 to the Company's Current
Report on Form 8-K filed on April 12, 2000 and incorporated
herein by reference)

10.44 Agreement between FinancialWeb.com, Inc. and StarMedia,
dated November 19, 1999.

10.45 Employment Agreement with Kevin E. Leininger, dated January
1, 2000

10.46 Employment Agreement with Jeffrey A. Rudman dated February
21, 2000

10.47 Directors Service Agreement with Edward E. Mullen, dated
March 1, 2000

10.48 Employment Agreement with Ron Guerriero dated March 7, 2000

10.49 Employment Agreement with Leonard W. von Vital dated March
13, 2000

10.50 Employment Agreement with Susan Dempsey dated March 21, 2000

10.51 Employment Agreement with Lsyle Wickersham dated April 6,
2000

27.1 Financial Data Schedule

(b) Reports on Form 8-K.

<PAGE>

On December 8, 1999, the Company filed a Current Report on Form 8-K dated
October 22, 1999 reporting under Item 5, the resignation of Mr. Kevin Lichtman
as President, Chief Executive Officer and Chairman of the Board and director.
In addition, the Current Report discussed the terms of Mr. Lichtman's severance
agreement.

<PAGE>

FINANCIALWEB.COM, INC. AND SUBSIDIARIES

TABLE OF CONTENTS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Page
<S> <C>
INDEPENDENT AUDITORS' REPORT F-1

CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Balance Sheets
as of December 31, 1999 and 1998 (As restated) F-2

Consolidated Statements of Operations
for the Years Ended December 31, 1999, 1998 (As restated), and 1997 (As restated) F-3

Consolidated Statements of Stockholders' Deficiency
for the Years Ended December 31, 1999, 1998 (As restated), and 1997 (As restated) F-4

Consolidated Statements of Cash Flows
for the Years Ended December 31, 1999, 1998 (As restated), and 1997 (As restated) F-5-6

Notes to Consolidated Financial Statements
for the Years Ended December 31, 1999, 1998 (As restated), and 1997 (As restated) F-7-26
</TABLE>
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
FinancialWeb.com, Inc.:

We have audited the accompanying consolidated balance sheets of
FinancialWeb.com, Inc. and subsidiaries (the Company) as of December 31, 1999
and 1998 and the related consolidated statements of operations, stockholders'
deficiency, and cash flows for each of the three years in the period ended
December 31, 1999. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 1999 and 1998 and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in conformity
with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 2, the
Company's recurring losses from operations, working capital deficiency, negative
cash flow from operations, and net stockholders' deficiency raise substantial
doubt about its ability to continue as a going concern. Management's plans
relating to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

As discussed in Note 3, the accompanying 1998 and 1997 consolidated financial
statements have been restated.

Certified Public Accountants

Orlando, Florida
May 25, 2000

F-1
<PAGE>

FINANCIALWEB.COM, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ASSETS 1999 1998
(As restated -
see Note 3)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 94,842 $ 327,912
Accounts receivable (net of allowance for doubtful
accounts of $5,581 in 1999) 120,137 -
Prepaid expenses 16,576 20,738
------------ -----------

Total current assets 231,555 348,650

PROPERTY AND EQUIPMENT - Net 310,783 188,745

INTANGIBLE ASSETS - Net 166,023 228,747

OTHER ASSETS 8,478 5,580
------------ -----------

TOTAL $ 716,839 $ 771,722
============ ===========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 1,761,247 $ 385,109
Notes payable 546,468 750,436
------------ -----------

Total current liabilities 2,307,715 1,135,545
------------ -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY:
Preferred stock - $.001 par value, 10,000,000 shares authorized, zero issued
and 815,487 subscribed (with a liquidation preference of $3 per share) 816 -
Common stock - $.001 par value, 100,000,000 shares authorized,
6,580,839 and 4,973,000 shares, respectively, issued and outstanding 6,581 4,973
Additional paid-in capital 61,216,165 5,022,048
Accumulated deficit (63,083,383) (5,190,844)
Contractual obligation to issue shares 530,000 -
Deferred stock-based employee compensation (261,055) -
Stock subscription receivable - (200,000)
------------ -----------

Total stockholders' deficiency (1,590,876) (363,823)
------------ -----------

TOTAL $ 716,839 $ 771,722
============ ===========
</TABLE>

See notes to consolidated financial statements.

F-2
<PAGE>

FINANCIALWEB.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1999 1998 1997
(As restated -see Note 3)
<S> <C> <C> <C>
REVENUES $ 445,882 $ 159,529 $ 68,978

COST OF REVENUES 399,387 217,239 19,612
------------ ----------- -----------

Gross profit (loss) 46,495 (57,710) 49,366

RESEARCH AND DEVELOPMENT 1,122,491 293,409 56,729

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Stock-based (noncash) employee compensation 2,430,500 73,750 -
Stock-based (noncash) consulting fees 45,339,128 402,654 2,400,000
Other (inclusive of noncash stock-based expenses
of $530,000 in 1999) 3,496,611 937,641 325,536
------------ ----------- -----------

Operating loss (52,342,235) (1,765,164) (2,732,899)

INTEREST EXPENSE (inclusive of noncash interest
of $4,007,722, $645,627, and $0 for 1999, 1998,
and 1997, respectively) 4,075,304 652,575 4,324
------------ ----------- -----------

LOSS BEFORE EXTRAORDINARY ITEM (56,417,539) (2,417,739) (2,737,223)

EXTRAORDINARY ITEM - Loss on early extinguishment
of convertible notes 1,475,000 - -
------------ ----------- -----------

NET LOSS $(57,892,539) $(2,417,739) $(2,737,223)
============ =========== ===========

LOSS PER SHARE BEFORE EXTRAORDINARY
ITEM - Basic and diluted $ (10.56) $ (0.71) $ (1.29)

EXTRAORDINARY LOSS PER SHARE - Basic and diluted (0.28) - -
------------ ----------- -----------

NET LOSS PER SHARE - Basic and diluted $ (10.84) $ (0.71) $ (1.29)
============ =========== ===========
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE>

FINANCIALWEB.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED DECEMBER 31, 1999, 1998 (As restated - see Note 3), AND 1997 (As
restated - see Note 3)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Preferred Common Additional
---------------------------------------------- Paid-In Accumulated
Shares Amount Shares Amount Capital Deficit
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1997 - $ - 80,000 $ 80 $ 39,346 $ (35,882)
Issuance of founders' stock - - 1,989,000 1,989 (1,989) -
Private placement of stock - - 200,000 200 99,800 -
Stock issued for acquisition of assets - - 11,000 11 65,989 -
Stock issued for consulting services - - 400,000 400 2,399,600 -
Net loss - - - - - (2,737,223)
------- ------ --------- ------ ----------- -------------

BALANCE, DECEMBER 31, 1997 - - 2,680,000 2,680 2,602,746 (2,773,105)
Private placement of stock - - 1,000,000 1,000 699,000 -
Stock granted for employee compensation - - 118,000 118 73,632 -
Stock issued for acquisition of assets - - 100,000 100 99,900 -
Warrants granted for consulting services - - - - 402,654 -
Exercise of warrants issued for consulting
services - - 800,000 800 199,200 -
Warrants granted in connection with debt
financing - - - - 109,074 -
Stock issued to retire debt - - 275,000 275 335,842 -
Issuance of convertible debt with a beneficial
conversion feature - - - - 500,000 -
Amortization of employee stock-based compensation - - - - - -
Net loss - - - - - (2,417,739)
------- ------ --------- ------ ----------- -------------

BALANCE, DECEMBER 31, 1998 - - 4,973,000 4,973 5,022,048 (5,190,844)
Warrants granted for consulting services - - - - 45,339,128 -
Issuance of convertible debt with a beneficial
conversion feature - - - - 2,300,000 -
Retirement of and cashless reissuance of stock - - (24,615) (25) (199,975) -
Cashless exercise of warrants granted in
connection with consulting services - - 500,000 500 (500) -
Cashless exercise of employee options - - 9,454 10 155,981 -
Stock options granted for employee compensation - - - - 404,364 -
Stock options granted for director compensation - - - - 2,131,200 -
Warrants granted in connection with debt
financing - - - - 769,391 -
Conversion and extinguishment of convertible debt 815,487 816 1,123,000 1,123 5,294,528 -
Contractual obligation to issue shares - - - - - -
Amortization of employee stock-based compensation - - - - - -
Net loss - - - - - (57,892,539)
------- ------ --------- ------ ----------- -------------

BALANCE, DECEMBER 31, 1999 815,487 $ 816 6,580,839 $6,581 $61,216,165 $ (63,083,383)
======= ====== ========= ====== =========== =============

<PAGE>
<CAPTION>
Deferred Contractual Total
Stock Stock-Based Obligation Stockholders'
Subscription Employee to Issue (Deficiency)
Receivable Compensation Shares Equity
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1997 $ - $ - $ - $ 3,544
Issuance of founders' stock - - - -
Private placement of stock - - - 100,000
Stock issued for acquisition of assets - - - 66,000
Stock issued for consulting services - - - 2,400,000
Net loss - - - (2,737,223)
----------- ------------ ----------- ------------

BALANCE, DECEMBER 31, 1997 - - - (167,679)
Private placement of stock - - - 700,000
Stock granted for employee compensation - (73,750) - -
Stock issued for acquisition of assets - - - 100,000
Warrants granted for consulting services - - - 402,654
Exercise of warrants issued for consulting
services (200,000) - - -
Warrants granted in connection with debt
financing - - - 109,074
Stock issued to retire debt - - - 336,117
Issuance of convertible debt with a beneficial -
conversion feature - - - 500,000
Amortization of employee stock-based compensation - 73,750 - 73,750
Net loss - - - (2,417,739)
----------- ------------ ----------- ------------

BALANCE, DECEMBER 31, 1998 (200,000) - - (363,823)
Warrants granted for consulting services - - - 45,339,128
Issuance of convertible debt with a beneficial
conversion feature - - - 2,300,000
Retirement of and cashless reissuance of stock 200,000 - - -
Cashless exercise of warrants granted in
connection with consulting services - - - -
Cashless exercise of employee options - (155,991) - -
Stock options granted for employee compensation - (404,364) - -
Stock options granted for director compensation - (2,131,200) - -
Warrants granted in connection with debt
financing - - - 769,391
Conversion and extinguishment of convertible debt - - - 5,296,467
Contractual obligation to issue shares - - 530,000 530,000
Amortization of employee stock-based compensation - 2,430,500 - 2,430,500
Net loss - - - (57,892,539)
----------- ------------ ----------- ------------

BALANCE, DECEMBER 31, 1999 $ - $ (261,055) $ 530,000 $ (1,590,876)
=========== ============ =========== ============
</TABLE>

F-4
<PAGE>

FINANCIALWEB.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1999 1998 1997
(As restated - see Note 3)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(57,892,539) $(2,417,739) $(2,737,223)
Adjustments to reconcile net loss to net cash
used by operating activities:
Extraordinary loss 1,475,000 - -
Depreciation and amortization 125,536 89,343 23,698
Noncash interest expense 4,007,722 645,627 -
Noncash stock-based expenses 530,000 - -
Noncash stock-based consulting fees 45,339,128 402,654 2,400,000
Noncash stock-based employee compensation 2,430,500 73,750 -
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses 4,163 (17,793) (945)
Increase in other assets (2,898) (3,430) (2,150)
Increase in accounts receivable (120,137) - -
Increase in accounts payable and accrued expenses 1,376,138 225,159 159,950
------------ ----------- -----------

Net cash used in operating activities (2,727,387) (1,002,429) (156,670)
------------ ----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (184,850) (138,813) (48,070)
Purchase of intangible assets - (3,650) (74,000)
------------ ----------- -----------

Net cash used in investing activities (184,850) (142,463) (122,070)
------------ ----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 2,800,000 870,000 310,000
Repayment of notes payable (75,000) (180,000) (50,000)
Issuance of common stock - 700,000 100,000
Stock issuance costs (45,833) - -
------------ ----------- -----------

Net cash provided by financing activities 2,679,167 1,390,000 360,000
------------ ----------- -----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (233,070) 245,108 81,260

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 327,912 82,804 1,544
------------ ----------- -----------

CASH AND CASH EQUIVALENTS, END OF YEAR $ 94,842 $ 327,912 $ 82,804
============ =========== ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
Cash paid during the year for interest $ 2,932 $ - $ -
============ =========== ===========
</TABLE>

(Continued)

F-5
<PAGE>

FINANCIALWEB.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
--------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

<TABLE>
<CAPTION>
1998 1997
1999 (As restated - see Note 3) (As restated - see Note 3)
-------------------------- -------------------------- --------------------------
Assets Liabilities Assets Liabilities Assets Liabilities
<S> <C> <C> <C> <C> <C> <C>
Assets acquired for stock $ - $ - $100,000 $ - $66,000 $ -
Assets acquired for debt $ - $ - $100,000 $ 100,000 $10,000 $10,000
Retirement of debt pursuant to $ - $ -
warrant exercise $ - $ - $ - $ (43,750) $ - $ -
Common stock issued to retire debt $ - $ (561,500) $ - $(292,367) $ - $ -
Conversion of debt to preferred stock $ - $(2,446,461) $ - $ - $ - $ -
</TABLE>

See notes to consolidated financial statements.

(Concluded)

F-6
<PAGE>

FINANCIALWEB.COM, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
--------------------------------------------------------------------------------

1. ORGANIZATION

FinancialWeb.com, Inc. and its wholly owned subsidiaries (the Company)
design, develop, and distribute e-financial business publications. During
the first quarter of 2000, new management of the Company initiated a shift
in the Company's strategy to include a business-to-business component and
to provide e-financial content in multiple languages.

FinancialWeb.com, Inc. was incorporated on May 16, 1983 in the State of
Utah under the name of Vital Technologies, Inc., which was redomiciled in
Nevada in 1988. FinancialWeb.com, Inc. was inactive from 1991 through 1996.
On March 3, 1997, FinancialWeb.com, Inc. changed its name to Axxess, Inc.,
had a reverse stock split of the issued and outstanding common shares in a
one for twenty-five transaction, changed directors, and entered the
business of multimedia publishing and communications. On December 14, 1998,
FinancialWeb.com, Inc. adopted its current name in order to more accurately
reflect its core business.

2. BASIS OF PRESENTATION

The Company's consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has experienced net losses
in every year of its operations, which losses have caused a working capital
deficiency of $2,076,160 and a stockholders' deficiency of $1,590,876 as of
December 31, 1999. In addition, the Company has consumed cash in its
operating activities of $2,727,387, $1,002,429 and $156,670 for the years
ended December 31, 1999, 1998 and 1997, respectively. These factors, among
others, raise substantial doubt about the Company's ability to continue as
a going concern.

Management has been able, thus far, to finance the losses, as well as the
growth of the business, through a series of private placements and private
loans. The Company is continuing to seek other sources of financing. For
instance, the Company completed a private placement of its common stock in
April 2000, resulting in net proceeds of approximately $6,808,000, which is
net of issuance costs of approximately $1,017,000. The Company is
attempting to increase revenues by shifting its emphasis to generate
recurring revenues from subscription fees for its proprietary and
redistributed content and tools as well as co-branding and private labeling
services. In addition, the Company is exploring alternate ways of
generating revenues through partnerships with other businesses. Conversely,
the on-going development and maintenance of its website along with
international expansion is expected to result in operating losses for the
foreseeable future. There are no assurances that the Company will be
successful in achieving its goals.

In view of these conditions, the Company's ability to continue as a going
concern is dependent upon its ability to obtain additional financing or
capital sources, to meet its financing requirements and ultimately to
achieve profitable operations. Management believes that its current and
future plans provide an opportunity to continue as a going concern. The
accompanying consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classification of liabilities that may be
necessary in the event the Company cannot continue as a going concern.

F-7
<PAGE>

3. RESTATEMENT

Subsequent to the issuance of the Company's December 31, 1998 and 1997
consolidated financial statements, which had been audited by an auditor
other than the auditors of the accompanying consolidated financial
statements, the Company's management determined that the value of the
Company's common stock used to record assets acquired in 1998 and 1997, and
to measure expense related to stock, options, and warrants granted to
employees, directors, and consultants should have been based on the value
of the Company's common stock as determined by its quoted market price.
Additionally, the Company determined that certain expenses relating to
employee benefits and trade payables had not been properly recorded.

As a result, the accompanying 1998 and 1997 consolidated financial
statements have been restated from amounts previously reported to
appropriately account for such transactions. A summary of the significant
effects of the restatement on the consolidated financial statements is as
follows:

<TABLE>
<CAPTION>
As of As of
December 31, 1998 December 31, 1997
--------------------------------- --------------------------------
As Previously As As Previously As
Balance Sheet Data Reported Restated Reported Restated
<S> <C> <C> <C> <C>
Prepaid expenses $ 113,515 $ 20,738 $ - $ -
Intangible assets - net 186,947 228,747 - -
Accounts payable and accrued expenses 266,203 385,109 - -
Additional paid-in capital 2,070,395 5,022,048 336,746 2,602,746
Accumulated deficit (2,074,740) (5,190,844) (408,148) (2,773,105)
Total stockholders' deficiency (199,372) (363,823) (68,722) (167,679)
</TABLE>

<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1998 December 31, 1997
------------------------------ -------------------------------
As Previously As As Previously As
Statement of Operations Data Reported Restated Reported Restated
<S> <C> <C> <C> <C>
Research and development - $ 293,409 $ - $ 56,729
Selling, general, and administrative expenses:
Stock-based employee compensation - 73,750 - -
Stock-based consulting fees - 402,654 - 2,400,000
Other 1,564,058 937,641 382,465 325,536
Interest expense 43,501 652,575 - -
Net loss (1,666,592) (2,417,739) (372,266) (2,737,223)
Net loss per share (0.49) (0.71) (0.18) (1.29)
</TABLE>

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation - The consolidated financial statements include
Financialweb.com, Inc. and its wholly owned subsidiaries, SlugFest.com,
Inc., and Stock Detective.com, Inc. All significant intercompany accounts
and transactions have been eliminated in the consolidated financial
statements.

Cash and Equivalents - The Company considers all highly liquid financial
instruments with a maturity at time of purchase of ninety days or less to
be cash equivalents.

F-8
<PAGE>

Concentrations of Credit Risk - Cash and cash equivalents in excess of
federally insured levels potentially subject the Company to a concentration
of credit risk. The Company currently earns its revenues primarily from
advertising that is derived from companies in the financial services
industry.

Fair Value of Financial Instruments - The Company's financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable,
notes payable, and accrued expenses, are carried at cost, which approximates
fair value based on the short-term maturity of these instruments.

Property and Equipment - Property and equipment are stated at cost.
Depreciation is calculated on the various asset classes over their estimated
useful lives, which range from five to seven years.

Intangible Assets - Intangible assets consist primarily of Internet websites
acquired and are stated at cost. Amortization is computed using the
straight-line method over five years.

Stock-Based Compensation - The Company has elected to account for its stock-
based compensation granted to employees in accordance with the provisions of
Accounting Principles Board Opinion 25 (APB 25), Accounting for Stock Issued
to Employees. Under APB 25, compensation expense is based on the difference,
if any, on the date of the grant, between the fair value of the Company's
stock and the exercise price of the option. The Company discloses the
information required under Statement of Financial Accounting Standards
Statement No. 123, Accounting for Stock Based Compensation (Statement 123).
Stock issued to nonemployees is accounted for under the provisions of
Statement 123 and the Emerging Issues Task Force (EITF) Consensus in Issue
No. 96-18, Accounting for Equity Instruments that are Issued to Other than
Employees for Acquiring, or in Conjunction with, Selling Goods or Services
(EITF 96-18).

Under Statement 123, nonemployee stock-based compensation is accounted for
based on the fair value of the consideration received or equity instruments
issued, whichever is more readily determinable. However, Statement 123 does
not address the measurement date and recognition period. EITF 96-18 states a
consensus that the measurement date should be the earlier of the date at
which a commitment for performance by the counterparty is reached or the date
at which the counterparty's performance is complete.

The Company's nonemployee stock-based compensation is determined using the
Company's quoted closing market price as quoted on the Over-The-Counter
Bulletin Board (OTCBB) or the Black-Scholes option pricing model.

Debt Discount - Original issue debt discount associated with the value
assigned to detachable common stock warrants issued in connection with the
Company's bridge loans is being amortized as interest expense over the life
of the loans.

Long-Lived Assets - All long-lived assets and certain identifiable
intangibles held and used are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of such assets may
not be recoverable. The Company compares the carrying value of its long-
lived assets against projected undiscounted cash flow to determine any
impairment and to evaluate the reasonableness of the depreciation and
depreciation periods.

Revenue Recognition - The Company's revenues have been derived principally
from the sale of banner advertisements under short-term contracts. To date,
the duration of the Company's advertising commitments have generally averaged
from one to three months. Advertising revenues are recognized ratably in the
period in which the advertisement is displayed, provided that no significant
Company obligations remain and collection of the resulting receivable is
probable. Company obligations typically include the guarantee of a minimum
number of impressions or times that an advertisement appears in

F-9
<PAGE>

pages viewed by the users of the Company's online properties. During 1997,
the Company also designed websites for customers. Revenue from this source
was recognized when the design was complete.

Research and Development Costs - The Company's research and development
costs, which consist primarily of compensation and benefits for software
programmers and developers, are expensed as incurred.

Income Taxes - The Company accounts for income taxes under the liability
method. Under such method, deferred taxes are computed based on the tax
liability or benefit in future years of the reversal of temporary differences
in the recognition of income or deduction of expenses between financial and
tax reporting purposes. Deferred tax assets and liabilities are classified
as current or noncurrent based on the classification of the related asset or
liability for financial reporting purposes, or on the expected reversal date
for deferred taxes that are not related to an asset or liability. A
valuation allowance is provided to reduce deferred tax assets to the amount
considered more likely than not to be realizable.

Concentration and Sources of Content - The Company obtains financial data and
information, such as stock pricing information, financial news, and research
information from a limited number of content providers through nonexclusive
contractual relationships. The Company may not be able to renew these
contracts on favorable terms or a change in content providers could cause
significant service disruptions, which would adversely affect the business.

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 reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Recent Accounting Pronouncements - The Financial Accounting Standards Board
(FASB) recently issued Statement No. 137, Accounting for Derivative
Instruments and Hedging Activities - Deferral of Effective Date of FASB
Statement No 133. Statement 137 defers for one year the effective date of
FASB No. 133 (Statement 133), Accounting for Derivative Instruments and
Hedging Activities. The rule now will apply to all fiscal quarters of all
fiscal years beginning after June 15, 2000. Statement 137 permits early
adoption as of the beginning of any fiscal quarter after its issuance.
Statement 133 will require the Company to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges must be
adjusted to fair value through income. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of
derivatives will either be offset against the change in fair value of the
hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is recognized
in earnings. The ineffective portion of a derivative's change in fair value
will be immediately recognized in earnings. The Company has not yet
determined if it will early adopt this pronouncement. The Company does not
expect its adoption will have a material impact on its consolidated financial
statements, as it does not own any derivative instruments.

Net Loss Per Share Information - Basic and diluted loss per share is computed
based on the weighted average shares outstanding during the period. Diluted
net income per share includes the dilutive effect of potential common stock
issuances using the treasury stock method. Common equivalent shares are
excluded from the computation if their effect is anti-dilutive. The
Company's warrants, convertible preferred stock, and options have been
excluded from diluted loss per share since their effect is anti-dilutive.

F-10
<PAGE>

The following table sets forth the calculation of net loss per share for the
years ended December 31, 1999, 1998, and 1997:

<TABLE>
<CAPTION>
1999 1998 1997

<S> <C> <C> <C>
Net loss before extraordinary item $(56,417,539) $(2,417,739) $(2,737,223)
Extraordinary loss (1,475,000) - -
------------ ----------- -----------

Net loss $(57,892,539) $(2,417,739) $(2,737,223)
============ =========== ===========

Weighted average shares outstanding 5,342,529 3,418,660 2,115,616
============ =========== ===========

Net loss per share before extraordinary
item - basic and diluted $ (10.56) $ (0.71) $ (1.29)
Extraordinary loss per share - basic
and diluted (0.28) - -
------------ ----------- -----------

Net loss per share - basic and diluted $ (10.84) $ (0.71) $ (1.29)
============ =========== ===========
</TABLE>

For the years ended December 31, 1999, 1998, and 1997, the Company had
securities outstanding that could potentially dilute earnings per share in
the future. They were excluded in the periods presented since their effect
would have been anti-dilutive. The potential number of common shares into
which these outstanding securities are convertible are as follows as of
December 31:

1999 1998 1997

Convertible preferred stock 815,487 - -
Warrants outstanding 2,640,556 - -
Options outstanding 496,433 35,000 -

5. PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of December 31, 1999 and
1998:

1999 1998

Computer equipment $338,025 $177,608
Furniture, fixtures, and equipment 63,708 39,275
-------- --------

401,733 216,883
Less accumulated depreciation 90,950 28,138
-------- --------

$310,783 $188,745
======== ========

Amounts charged to depreciation expense were $62,812, $26,608, and $1,530 in
1999, 1998, and 1997, respectively.

F-11
<PAGE>

6. INTANGIBLE ASSETS

Intangible assets consist of the following as of December 31, 1999 and 1998:

1999 1998

Internet web sites $303,650 $303,650
Capitalized software 10,000 10,000
-------- --------

313,650 313,650
Less accumulated amortization 147,627 84,903
-------- --------

$166,023 $228,747
======== ========

Amounts charged to amortization expense were $62,724, $62,735, and $22,168 in
1999, 1998, and 1997, respectively.

Small Cap Investor - On March 3, 1997, the Company purchased the Small Cap
Investor Internet website and related assets from an individual. The
purchase price consisted of $60,000 in cash and 10,000 shares of the
Company's common stock with a fair market value of $60,000 (see Note 10).

Concurrent with the acquisition, the individual became an officer and
director of the Company until his resignation in February 2000.

Domain Name - On March 3, 1997, the Company purchased a domain name from an
individual for 1,000 shares of common stock (see Note 10) with a fair market
value of $6,000.

Stocktools - On January 11, 1998, the Company purchased the Stocktools
Internet website and related assets from an individual. The purchase price
consisted of a $100,000 non-interest bearing note and 100,000 shares of stock
with a fair market value of $100,000 (see Notes 8 and 10).

7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following at December
31, 1999 and 1998:

1999 1998

Accounts payable $ 875,347 $111,819
Accrued consulting fees (Note 10) 198,003 210,000
Accrued compensation and employee benefits 20,901 21,790
Accrued contingency (Note 11) 591,000 -
Other 75,996 41,500
---------- --------
$1,761,247 $385,109
========== ========

F-12
<PAGE>

8. NOTES PAYABLE

Notes payable consists of the following as of December 31, 1999 and 1998:

<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Note payable to a corporation, due December 15, 1999, interest
thereon at 9.75%. $150,436 $150,436

Bridge loans, bearing interest at 9.75%, payable to investors on
the sooner of closing of a private placement or dates ranging
through June 30, 2000, net of unamortized debt discount of $128,968
(See Note 10). 371,032 -

Note payable to a company, due on demand, interest thereon at
prime plus 2%, 9.75% at December 31, 1999. 25,000 25,000

Convertible note payable to an individual, due December 14, 1999,
interest thereon at 12%, converted into common stock during 1999
(see Note 10). - 500,000

Note payable to a partnership, due August 12, 1999, interest
thereon at 9.75% at December 31, 1998. Repaid in 1999. - 50,000

Note payable to an individual, original balance of $100,000 (see
Note 6), non-interest bearing, due on demand. Repaid in 1999. - 25,000
-------- --------

$546,468 $750,436
======== ========
</TABLE>

Subsequent to December 31, 1999, the Company repaid all outstanding notes
payable from the proceeds of a private placement of its common stock (see
Note 15) except the $25,000 demand note payable to a company.

9. INCOME TAXES

At December 31, 1999, the Company has net operating loss carryforwards
available to offset future taxable income of approximately $5,700,000
expiring at various dates from 2012 through 2019. The benefit of these
carryforwards has been fully offset by a valuation allowance. U.S. tax
rules impose limitations on the use of net operating losses and tax credits
following certain defined changes in ownership. The Company has not
completed the complex analysis required by the Internal Revenue Code to
determine if an ownership change has occurred. If such a change were deemed
to have occurred, the limitation could reduce or eliminate the amount of
these benefits that would be available to offset future taxable income each
year, starting with the year of ownership change.

F-13
<PAGE>

A reconciliation of the statutory federal income tax rate to the Company's
effective tax rate is as follows for the year ended December 31:

<TABLE>
<CAPTION>
1999 1998 1997
--------------------- ------------------ ------------------
Amount % Amount % Amount %
<S> <C> <C> <C> <C> <C> <C>
Statutory tax expense $ (19,683,463) (34.0) $ (822,031) (34.0) $ (930,656) (34.0)
State income taxes - net of federal tax effect (215,778) (0.4) (77,147) (3.2) (17,431) (0.6)
Stock-based compensation 16,537,903 28.6 136,902 5.7 816,000 29.8
Change in valuation allowance 1,490,080 2.6 533,016 22.0 120,892 4.4
Stock-based interest expense 1,291,919 2.2 170,000 7.0 - -
Other 579,339 1.0 59,260 2.5 11,195 0.4
------------- ----- ---------- ----- ---------- -----

$ - - $ - - $ - -
============= ===== ========== ===== ========== =====
</TABLE>

Significant components of the net deferred tax assets and liabilities were
as follows as of December 31:

<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Net operating loss carryforwards $ 2,162,775 $ 663,702 $ 109,659
Depreciation (18,788) (9,795) (801)
Organization expense and start-up costs - - 12,033
----------- --------- ---------

2,143,987 653,907 120,891
Valuation allowance (2,143,987) (653,907) (120,891)
----------- --------- ---------

Deferred tax assets - net $ - $ - $ -
=========== ========= =========
</TABLE>

10. STOCKHOLDERS' EQUITY

Founders' Shares - On March 3, 1997, 1,989,000 shares of common stock,
$.001 par value, considered founders' shares, were issued in the earliest
stages of the Company's current development (see Note 1) to officers and
directors of the Company in exchange for initial contributed services
rendered in forming the present business.

Preferred Stock - The Company is authorized to issue up to 10,000,000
shares of preferred stock, 815,487 of which, par value $.001 per share, was
designated by the Board of Directors on November 22, 1999 as Series A
Convertible Preferred Stock (Series A). Series A stock converts into common
stock on a share for share basis, initially, which amount is subject to
adjustment in the event of stock splits, recapitalizations, or issuances of
stock by the Company for less than the current conversion rate. The Series
A stock is subject to redemption at the option of the Company. The Series A
stock has no rights to dividends and no voting rights. Upon liquidation,
the Series A stock has a preference over the common stock to the extent of
the original issue price of $3.00 per share. Any additional shares or
series of preferred stock, if and when issued, may have a dividend, voting,
liquidation, and other rights superior to the common stock.

Private Placement of Common Stock - During the years ended December 31,
1998 and 1997, the Company issued 1,000,000 and 200,000 shares,
respectively, of its $.001 par value common stock through private
placements. The amounts raised through these issuances were $700,000 and
$100,000 in 1998 and 1997, respectively.

F-14
<PAGE>

Common Stock and Warrants Issued for Intangible Assets and Consulting
Services - On March 3, 1997, the Company issued 11,000 shares of its common
stock in exchange for an Internet website and domain names from two
individuals. The Company recorded intangible assets of $66,000 (see Note 6)
based on the fair value of the shares issued.

On March 8, 1997, the Company recorded $2,400,000 in stock-based consulting
fees expense upon issuing 400,000 shares of common stock in connection with
engaging a financial consultant for a three-year term. The consulting
agreement did not provide for any specific level or value of services to be
performed. The financial consultant was an affiliate of a founder and
significant shareholder of the Company. During 1999, the agreement was
terminated and all of the stock was retained by the consultant. The
agreement also provided for monthly cash payments of $10,000 over its term,
for which the Company expensed $30,000, $120,000, and $90,000 during 1999,
1998, and 1997, respectively. As of December 31, 1999, unpaid consulting
fees relating to this agreement of approximately $198,000 have been accrued
and are included in accounts payable and accrued expenses (see Note 7) in
the accompanying consolidated balance sheets.

On January 11, 1998, the Company purchased an Internet website and related
assets for 100,000 shares of its common stock with a fair value of $100,000
and a $100,000 non-interest bearing note (see Note 8). The Company
guaranteed the value of the common stock at a $1.00 per share for an
indefinite period. In connection with the purchase, the Company recorded an
intangible asset (see Note 6) of $170,000 and fixed assets of $30,000 based
on their relative fair values.

The Company issued 800,000 warrants to purchase shares of its common stock
at $0.25 per share on July 1, 1998 to a partnership in exchange for
financial consulting services provided. In connection with this issuance,
the Company expensed to stock-based consulting fees $402,654, based on the
fair value of the warrants on the date of grant. On December 28, 1998, the
partnership exercised the warrants and purchased 800,000 shares of the
stock. The Company recorded a stock subscription receivable for the
exercise price. On March 7, 1999, the Company and the partnership modified
the stock warrant agreement to allow the cashless exercise of the warrants.
To effect the cashless exercise, the original stock certificate for 800,000
shares was canceled and a new certificate for 775,385 shares was issued.

On January 6, 1999 and March 10, 1999, the Company entered into separate
agreements with two individuals, one of whom was a significant stockholder
of the Company, to provide consulting services to the Company on similar
terms and conditions over a five-year period. The consulting agreements do
not provide for any specific level or value of services to be performed. As
consideration for their services, the Company issued to each of these
individuals warrants to purchase 1,000,000 shares of the Company's common
stock, exercisable over five years at a price of $4.00. The warrants are
nonforfeitable and were vested upon issuance. In connection with the
issuance of the warrants, the Company recorded $27,599,387 in stock-based
consulting fees expense based on the fair value of the warrants on their
issuance. As of December 31, 1999, the individuals had exercised on a
cashless basis a total of 500,000 of these warrants. To effect the cashless
exercise, the individuals surrendered 98,765 warrants of the remaining
1,500,000 warrants. The warrants have anti-dilution features that adjust
the exercise price and the number of warrants should the Company issue
stock at a price less than $4.00 per share and less than the current market
price (see Note 15 - Exploding Warrants).

On March 31, 1999, the Company retained the services of a financial advisor
for a one-year term to perform a variety of services, including matters
relating to entering into one or more strategic partnerships, joint
ventures or similar arrangements, possible mergers or stock sales or other
dispositions, sales or other dispositions of business assets, and other
similar or related matters with which the Company may have required
assistance. In addition, the financial advisor had the right to act as the
Company's exclusive financial advisor and/or placement agent in connection
with the exploration

F-15
<PAGE>

of various financing alternatives, including, but not limited to, the
raising of debt or equity capital, both public and private. The financial
advisory agreement did not provide for any specific level or value of
services to be performed. In connection with this agreement, warrants were
issued to purchase 979,321 shares of the Company's common stock at an
exercise price of $4.00 per share. The warrants issued were nonforfeitable,
vested upon issuance, and were exercisable for a ten-year term. The Company
recorded stock-based consulting fees expense of $16,296,659, which
represents the fair value of the warrants at the date of issuance. On
November 29, 1999, the Company and the financial advisor entered into a
termination agreement subject to certain conditions (see Note 15 -
Consultant Agreement) with respect to a private placement of its common
stock that was closed in the first quarter of 2000.

On October 1, 1999, an individual deposited $420,000 into an escrow account
as required of the Company in order to engage in negotiations with
StarMedia (see Note 14). As compensation, the Company granted the
individual 100,000 irrevocable warrants for common stock exercisable at
$3.00 per share and $50,000 in cash. The warrant agreements have an
expiration date five years from the date of grant. The deposit was repaid
by the Company prior to December 31, 1999, and the fair value of the
warrant on the grant date of $485,866 was recorded as interest expense.

In March 1999, two major stockholders of the Company, including the chief
executive officer, each agreed to issue warrants to purchase 50,000 shares
of the Company's common stock held by them to a financial advisor to the
Company. The warrants are nonforfeitable, vested upon issuance, and were
exercisable at a price of $4.00 per share over a term of five years. In
connection with the issuance of these warrants, the Company, as beneficiary
of the grants, recognized stock-based consulting fees of $1,288,712 based
on the fair value of the warrants at the date of issuance. On December 15,
1999, these warrants were repriced at $3.00 per share. Additionally, the
Company issued warrants to purchase 25,000 shares of the Company's common
stock to the financial advisor as an inducement to participate in a private
placement on December 15, 1999 (see Note 15 - Private Placement). These
warrants were issued at an exercise price of $3.00 per share, are
nonforfeitable, vested upon issuance, and can be exercised over five years.
In connection with the issuance of the warrants for the additional shares
and the repricing of the March 1999 warrants, the Company recognized
$154,370 in additional stock-based consulting fees on December 31, 1999
based on the closing price of the common stock on the OTCBB on that date.
On October 15, 1999, in connection with the resignation of the chief
executive officer and founder, the Company assumed his obligation to
fulfill the warrant he granted in March 1999 to the financial advisor (see
Note 11 - Employment Agreements).

On November 19, 1999, the Company incurred an obligation to issue 80,000
shares of common stock to a company for negotiating the StarMedia Networks,
Inc. (StarMedia) agreement (see Note 14). The Company recorded stock-based
broker fees of $530,000, based on the fair value of the shares on November
19, 1999.

Common Stock Issued and Options Granted to Employees and Directors - On
February 5, 1998, the Company granted fully vested options to an officer
and director of the Company to purchase 10,000 shares of the Company's
common stock at a strike price equal to the Company's closing stock price
on the date of grant. Accordingly, no compensation expense was recorded for
this grant. On April 20, 1999, the officer and director exercised the
options using a cashless formula. As a result of the cashless exercise, a
new measurement date occurred and stock-based employee compensation expense
of $155,991 was recorded based on the net number of shares issued after the
cashless exercise, which was determined as the difference between the
strike price and the closing price of the Company's stock on the new
measurement date.

F-16
<PAGE>

On April 24, 1998, the Company granted 118,000 shares of common stock to
three employees of the Company under employment agreements. The Company
recorded stock-based employee compensation expense of $73,750, based on the
closing price of the Company's stock on the date of grant.

On December 1, 1998, the Company entered into an employment agreement with
an officer and director of the Company, which provides that options to
purchase 25,000 shares of the Company's common stock be granted on December
1, 1998, 1999, and 2000 under the Company's 1999 Stock Incentive Plan (see
Note 12). The Company has not recorded stock-based compensation expense
associated with these options since, under the terms of the agreement,
exercise prices are to equal the Company's closing stock price on each of
those dates. Through December 1, 1999, the Company had granted a total of
50,000 options under the terms of the agreement.

On March 24, 1999 and September 9, 1999, under the terms of separate
Director Service Agreements, the Company issued options to three new
directors to purchase a total of 300,000 shares of the Company's common
stock under the Company's 1999 Stock Incentive Plan (see Note 12) at an
exercise price of $5.00. At the time of issuance, the Company recorded
deferred stock-based employee compensation expense of $1,931,200, based on
the difference between the exercise price and the closing price of the
Company's common stock on the dates of grant. Upon appointment to the Board
of Directors, 25% of the shares vested immediately with the remaining
shares vesting on a quarterly basis over a one-year period. During the year
ended December 31, 1999, the Company amortized $1,890,600 as stock-based
employee compensation expense relating to these options. As of December 31,
1999, none of the options had been exercised.

On May 21, 1999, the Company granted options to purchase 142,277 shares of
its common stock to certain employees under the Company's 1999 Stock
Incentive Plan (see Note 12). The options vest over three to four years of
continuous service. At the date of grant, exercise prices ranged from $5.00
to $14.25. Of the 142,277 options granted, 37,500 were granted at exercise
prices below the Company's closing stock price on the date of grant. The
Company recorded deferred stock-based employee compensation expense of
$346,874, based on the difference between the exercise price and the
closing stock price of the Company's stock on the date of grant. During the
year ended December 31, 1999, the Company amortized $143,086 as deferred
stock-based employee compensation expense relating to these options.
Compensation expense was not recorded on the remaining grants since the
exercise price equaled or exceeded the Company's stock closing price on the
date of grant.

On June 14, 1999, an officer and director of the Company was granted 20,000
options as directors' fees to purchase the Company's common stock under the
Company's 1999 Stock Incentive Plan (see Note 12) at an exercise price of
$5.00. At the time of the issuance, the Company recorded deferred stock-
based compensation of $200,000, based on the difference between the
exercise price and the closing price of the Company's common stock on the
date of grant. These options vested immediately and can be exercised over a
five-year period. During the year ended December 31, 1999, the Company
amortized $183,333 as stock-based employee compensation expense relating to
this grant. As of December 31, 1999, none of these options have been
exercised.

On December 23, 1999, the Company granted to an officer and director, under
the terms of an employment agreement and the Company's 1999 Stock Incentive
Plan (see Note 12), options to purchase 60,000 shares of the Company's
common stock. Of the options granted, options to purchase 10,000 shares of
common stock immediately vested and were granted at par of $.001 on the
date of grant. The Company recognized stock-based employee compensation
expense of $57,490, which was based on the difference between the exercise
price and the closing stock price of the Company's stock on the date of
grant. Compensation expense was not recorded on the remaining 50,000
options, which

F-17
<PAGE>

vest over a three-year period, since the options were granted at an
exercise price equal to the Company's closing stock price on December 23,
1999.

Common Stock to Extinguish Debt - Under the terms of a subscription
agreement, on December 1, 1998, the Company issued 100,000 shares of its
common stock to a company as full payment for a $292,367 note payable.

On July 13, 1998, the Company granted warrants to a corporation to purchase
175,000 shares of the Company's common stock with an exercise price of $.25
in connection with a $175,000 note payable. The Company recorded a discount
on the note of $109,074 at the date of the grant, based on the fair value
of the warrants. On December 15, 1998, the corporation exercised all the
warrants in consideration for a reduction of the note and accrued interest
totaling $43,750. A new one-year note for the remaining principal of
$150,436 was issued and the entire debt discount was recorded as interest
expense in 1998.

Detachable Stock Warrants - During November and December 1999, the Company
issued to seven individual parties a total of 110,000 detachable
irrevocable warrants for the Company's common stock with an exercise price
of $3.00 in connection with $500,000 in bridge loans. The warrants vested
immediately and expire on the fifth anniversary of the agreement with the
individual warrant holders. The fair value of the detachable warrants was
$654,870 on the issuance dates. Based on the relative fair values of the
debt and the warrants on the issuance dates, the Company recorded $283,525
attributed to the value of the warrants as discounts on the notes (see Note
8). From the date of issuance through December 31, 1999, the Company
recorded $154,557 in interest costs associated with the amortization of the
discounts.

Convertible Promissory Notes Payable - On December 14, 1998, the Company
entered into a one-year convertible note agreement with an individual,
pursuant to which the individual purchased a secured promissory note for
$500,000. The note was collateralized by all intangible assets of the
Company and bore interest at an annual rate of 12%. The agreement contained
a nondetachable beneficial conversion feature that allowed the individual
to convert the note and accrued interest thereon into the Company's common
stock at a conversion rate of $0.50 per share at any time. The fair value
of the beneficial conversion feature, based on the difference between the
closing market price of the Company's common stock and the conversion
price, amounted to $6,000,000 and exceeded the value of the note. Since the
note was convertible at any time, the Company recorded debt discount of
$500,000 as interest expense at the date of the note. The individual
exercised the right of conversion of the note on December 23, 1999 and
received 1,000,000 shares of the Company's common stock and the note was
canceled. The individual received an additional 123,000 shares of the
Company's common stock as payment for interest on the note. The Company
recorded total interest expense of $707,250 in connection with the issuance
of the additional shares, based on the closing price of the Company's stock
on the issuance date.

Through several private placements during the year ended December 31, 1999,
the Company issued $2,300,000 of one-year, convertible promissory notes.
The notes, which bore interest at a rate of prime plus 2%, payable at
maturity, had maturities that ranged from February 2000 to April 2000. The
agreements contained nondetachable beneficial conversion features that
allowed the noteholders to convert the notes into 566,667 shares of the
Company's common stock at any time (conversion at $4.00 per share for
$2,000,000 of the notes and $4.50 per share for the remaining $300,000). At
the date of issuance of these notes, the fair market value of the Company's
common stock was above the conversion prices. The fair value of the
beneficial conversion feature, based on the difference between the closing
market price of the Company's stock and the conversion price, amounted to
$6,883,333 and exceeded the value of the notes. Since the notes were
convertible at any time, the Company recorded aggregate

F-18
<PAGE>

debt discount as interest expense of $2,300,000, upon issuance of the
notes. Through November 10, 1999, no notes had been converted. On that
date, the holders of the convertible debt agreed to exchange their notes
into convertible preferred stock at a conversion rate of $3.00 per common
share. As a result, 766,667 shares of Series A Convertible Preferred Stock
were subscribed. Initially, the Series A Preferred Stock is convertible to
common stock of the Company on a one-to-one basis. On the exchange date,
the closing fair value of the Company's common stock exceeded the $3.00
conversion price, resulting in a beneficial conversion feature. The fair
value of the preferred stock issued with the beneficial conversion feature
exceeded the fair value of the notes by $1,475,000, resulting in an
extraordinary loss on the early extinguishment of the convertible notes.
The note holders also received 48,820 additional shares of the Company's
preferred stock as consideration for accrued interest on their notes. The
Company recorded total interest expense of $360,050 in connection with the
issuance of the additional shares, based on the estimated fair value of the
preferred stock on the issuance date. Cash issuance costs of $45,833
associated with the conversion were charged against additional paid-in
capital.

11. COMMITMENTS AND CONTINGENCIES

Employment Agreements - At December 31, 1999, the Company had employment
agreements with three of its officers, providing for base salaries and the
continuation of salary for periods ranging from eight to eighteen months at
existing rates of pay if the Company terminates the officers under certain
circumstances.

The employment agreements also granted an officer options in 1998 and in
1999 to purchase 25,000 shares each of the Company's common stock with an
exercise price at market on the date of grant. Accordingly, no compensation
expense has been recorded associated with these grants. Additionally, the
agreements further grant the officer 25,000 options on December 1, 2000.
The grant price will be the closing price of the Company's stock on
December 1, 2000. These options will vest and be exercisable one year from
the grant date and do not restrict participation in the Company's stock
incentive plan (see Note 12).

On October 22, 1999, the former president and chief executive officer, who
was also a founder of the Company, resigned. His separation agreement
provided, among other things, that the Company will purchase 848,000 of his
Company common shares or common shares of third-party affiliates he
controls at $1.35 per share from the proceeds of up to 15% of any private
placement of the Company's debt or equity through April 18, 2000. On
January 25, 2000 and April 18, 2000, the Company purchased 154,600 and
693,400 Company common shares, respectively, for approximately $1,145,000.
Of the approximate 693,400 common shares purchased on April 18, 2000,
approximately 41,000 shares of common stock remain in escrow as of May 25,
2000 pending resolution of a dispute in contractual terms between the
parties.

Operating Leases - The Company leases office space on a month-to-month
basis for its corporate headquarters and sales offices in Orlando and New
York, pursuant to lease agreements. Rent expense for office space and
equipment rentals for the years ended December 31, 1999, 1998, and 1997 was
approximately $137,000, $51,000, and $11,000, respectively.

Litigation - The Company is defending a complaint seeking the issuance of a
warrant for 200,000 shares of common stock with an exercise price of $.50
per share, as well as damages to recover consulting fees and lost profits
allegedly owed to the plaintiff pursuant to an agreement with the Company
dated August 20, 1998. Although the amount of the ultimate settlement is
uncertain, attorneys and management for the Company estimate the most
likely settlement is approximately $591,000 (see Note 7), excluding
attorney fees and other court costs. Consequently, the Company has accrued
this amount as of December 31, 1999, but remains potentially liable to the
plaintiff for the additional

F-19
<PAGE>

unaccrued settlement fees plus attorney fees and other court costs, which
have not been accrued in the accompanying consolidated balance sheets.
Management believes that any potential settlement might be settled by
issuing shares of the Company's common stock. If any settlement occurs by
issuing common stock, the final expense of the settlement will be based on
the fair value of the Company's common stock on the date of issuance.

The Company is also involved from time to time in various claims and
litigation matters arising in the ordinary course of business. Management
believes that the ultimate outcome of these other matters will not have a
material effect on the Company's results of operations or financial
condition.

Computer System Upgrades and Website Design - At December 31, 1999, the
Company had commitments of approximately $394,000 to upgrade computer
systems to enhance security, provide for redundant systems, and to redesign
its website.

Other - The Company has entered into various agreements with various
providers for financial media and services for the purpose of acquiring
content for its website. The agreements generally range in terms of one to
two years and obligate the Company to approximately $26,000 in monthly base
payments.

12. STOCK INCENTIVE PLAN

Officers, employees, and directors of the Company are awarded options
periodically for the purchase of its common stock under the Company's 1999
Stock Incentive Plan (the Plan). The Plan covers officers, directors,
employees, consultants and advisors to the Company. It provides for the
award of stock options (both incentive and nonqualified), stock
appreciation rights, restricted stock, deferred stock, and performance
shares. Under the Plan, options have a maximum contractual life of ten
years and generally vest over one to four years from the date of grant and
are exercisable based on the determination of the Board of Directors.

The following table summarizes option activity for the years ended December
31, 1999 and 1998:

<TABLE>
<CAPTION>
Weighted
Average
Exercise Exercise
Shares Price Range Price
<S> <C> <C> <C>
Outstanding at December 31, 1997 - $ - $ -
Granted 35,000 0.75-3.94 3.03
Forfeited - - -
Expired - - -
Exercised - - -
-------

Outstanding at December 31, 1998 35,000 $ 0.75-$3.94 $ 3.03
Granted 547,277 0.001-14.25 6.17
Forfeited (75,844) 5.00-14.25 9.35
Expired - - -
Exercised (10,000) 0.75 0.75
-------

Outstanding at December 31, 1999 496,433 $ .001-14.25 $ 5.57
=======
</TABLE>

F-20
<PAGE>

Subsequent to December 31, 1999, the Company has granted officers and
directors approximately 2,520,000 options under the Plan.

At December 31, 1999, the Company had 528,567 shares available for granting
options under the Plan. On March 2, 2000, the Board increased the number of
shares available for future grants by an additional 2,750,000 shares.

The following table summarizes the information about stock options
outstanding and exercisable as of December 31, 1999:

<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------------- --------------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Exercise Number Contractual Exercise Number Exercise
Price Outstanding Life Price Outstanding Price

<S> <C> <C> <C> <C> <C>
$0.001-5.00 392,500 4.8 years $ 4.79 349,240 $4.75
5.01-7.125 75,000 5.0 years 6.21 - -
14.25 28,933 4.6 years 14.25 - -
------- ----------- ------

496,433 4.8 years $ 5.57
======= =========== ======
</TABLE>

The weighted average exercise prices and fair values of options at the date
of grant, whose exercise price equaled or was less than the market price on
the grant date, is as follows:

Years Ended December 31,
------------------- --------------------
1999 1998
------------------- --------------------
Exercise Fair Exercise Fair
Options Issued Price Value Price Value

Equals market price $8.45 $7.22 $3.03 $2.81
Less than market price 5.04 9.30 - -

Fair Value Disclosure - The Company applies the measurement principles of
APB No. 25 in accounting for its stock option plan. For purposes of
providing pro forma disclosures required by Statement 123, the estimated
fair value of the options is amortized to expense over the option-vesting
periods. The effect of applying Statement 123's fair value method to the
Company's stock options granted in 1999 and 1998, respectively, results in
the following pro forma amounts:

<TABLE>
<CAPTION>
December 31,
1999 1998
As restated
(see note 3)
<S> <C> <C>
Net loss - as reported $(57,892,539) $(2,417,739)
Net loss - pro forma $(59,081,389) $(2,430,892)
Basic and diluted loss per share - as reported $ (10.84) $ (0.71)
Basic and diluted loss per share - pro forma $ (11.06) $ (0.71)
</TABLE>

No options were granted during 1997.

F-21
<PAGE>

Pro forma information regarding net loss is required by Statement 123 and
has been determined as if the Company had accounted for its employee stock
options under the fair value method of that Statement. The fair value for
these options was estimated using the Black-Scholes options pricing model
at the date of grant using the following assumptions:

Year Ended Year Ended
December 31, December 31,
1999 1998

Risk-free interest rate 5.54% 5.15%
Expected life 3 years 3 years
Dividend yield 0.0% 0.0%
Volatility 156.0% 156.0%

13. 401(k) SAVINGS PLAN

During 1999, the Company established a qualified cash or deferred
compensation plan under Section 401(k) of the Internal Revenue Code. Under
the Plan, employees may elect to defer up to 15% of their eligible salary,
subject to Internal Revenue Service limits. The Plan covers all employees
of the Company who meet the minimum age and service requirements. The
Company may make a discretionary match, as well as discretionary
contributions. During 1999, the Company did not make a discretionary
contribution.

14. MAJOR CUSTOMERS

The Company operates within one segment as a provider of electronic
financial content over the Internet. Sales to major customers comprising
10% or more of total revenues were as follows:

Years Ended December 31,
----------------------------------
1999 1998 1997

Customer A 16% - -
Customer B 10% 24% -
Customer C - - 36%
Customer D - 13% -
Customer E - 12% -
Customer F - - 13%
Customer G - - 10%

On November 19, 1999, the Company entered into a contract with Advanced
Multimedia Group Inc. (Advanced Multimedia) and StarMedia Network, Inc.
(StarMedia) whereby Advanced Multimedia assigned its rights and
responsibilities to the Company under its agreement with StarMedia.
StarMedia operates various websites targeted at Spanish and Portuguese
speaking audiences, including a website, which contains, among other
channels, a financial services channel. The Company has agreed to provide
financial services and content in Spanish and Portuguese to the StarMedia
website. StarMedia has agreed to deliver no less than fifteen million
advertising impressions to the Company's website over a three-year period.
Under the terms of the agreement, the parties essentially share advertising
revenues. The Company is entitled to 60% and StarMedia is entitled to 40%.
The advertising revenue goal to be remitted to the Company is a minimum of
$14,250,000 over a three-year period commencing after Beta testing has been
completed in 2000. Minimum revenues in each of the three years of the
contract are approximately $3,000,000, $5,000,000 and $6,250,000,
respectively. In the event that StarMedia fails to

F-22
<PAGE>

make full payment due during any quarter, the Company has certain remedies,
which amount to a maximum of $4,000,000. The remedies consist of a larger
percentage of revenue sharing during a "cure" quarter and a reduction in
certain future payments as described below. The Company is required to
remit initial fees for production and advertising totaling $750,000 and
$150,000, respectively, on certain scheduled dates within 180 days after
execution of the agreement. The Company is also required, subject to the
remedies mentioned above, to make payments over a two-year period
commencing May 19, 2000 for production and advertising of $1,100,000 and
$4,000,000, respectively. Additionally, the Company is obligated to remit
royalty payments based on 2.5% to 3.0% of eligible revenue over a three-
year period. The Company has guaranteed a minimum royalty over the term of
the agreement of $2,050,000. At December 31, 1999, the Company has accrued
approximately $296,000 of expenses under the terms of this agreement, which
is included in accounts payable and accrued expenses in the accompanying
consolidated balance sheets.

15. SUBSEQUENT EVENTS

Employment Agreements - Between January 1 and April 19, 2000, the Company
entered into additional employment agreements with seven officers providing
for base annual salaries and, in some cases, providing for bonuses ranging
from 25% to 30% of base pay, depending on performance. The terms of the
agreements are generally for one year and in some cases, provide for
termination benefits of up to six months at existing rates of pay, if the
Company terminates the officers under certain circumstances.

The employment agreements with these seven officers included grants of
options to purchase shares of the Company's common stock. These officers
received options to purchase 1,280,000 shares of the Company's common stock
at the closing price of the Company's common stock at the date of grant.
Accordingly, no compensation expense has been recorded associated with
these grants.

Additionally, two of the officers were granted participation in a target
option share program for a total of 490,000 target option shares, which
become available when the Company's stock closing price closes for three
consecutive days over a certain price. Target option shares are exercisable
at market as of the date of grant and are available when the Company's
stock closes at the $9.00, $11.00, $17.00, and $25.00 levels.

On March 1, 2000, the Company entered into an option agreement with a
member of the Board of Directors to purchase 750,000 shares of common stock
at an exercise price of $4.50 per share. The options expire at the end of
seven years. At the date of grant, one-third of the options immediately
vested and the remaining options will vest in twelve equal monthly
installments on the first day of each calendar month commencing April 1,
2000. The agreement provides for accelerated vesting upon a change in
control of the Company, as defined. If the individual terminates the
service agreement, all options vested will be exercisable. If the Company
terminates the agreement, all unvested options will immediately vest. At
the date of grant, the Company recorded deferred stock-based compensation
of approximately $2,813,000, which is based on the difference between the
stock closing price on the date of grant and the exercise price.

Private Placement of Common Stock - Through April 30, 2000, the Company
privately placed 2,608,341 shares of common stock for approximately
$6,808,000, which is net of issuance costs of approximately $1,017,000.
Included in the issuance costs were approximately $119,000 paid to an
affiliate of a major stockholder of the Company for placing approximately
398,000 shares of common stock. In connection with this placement, the
Company agreed to issue approximately 313,000 shares of restricted common
stock as additional compensation valued at approximately $1,860,000 to the
placement agents.

F-23
<PAGE>

Exploding Warrants - As a result of the above private placement of common
stock, two consultants, both of whom are significant stockholders of the
Company, were issued approximately 467,000 additional warrants to purchase
common stock exercisable at $3.00 per share (see Note 10) on January 18,
2000, pursuant to anti-dilutive provisions of their warrant agreements. The
unexercised warrants remaining from their original agreements were also
repriced to allow exercise at $3.00 per share. The fair value of these
warrants and the repricing of approximately $2,448,000 was charged to
stock-based consulting fees expense on the issuance date. The additional
warrants issued expire concurrent with the initial warrants issued under
the consulting agreements.

Consultant Agreement - The Company retained the services of a financial
advisor on March 31, 1999 (see Note 10). This agreement granted the
financial advisor warrants. These warrants were terminated and a new
warrant agreement became effective as a result of the private placement of
common stock in January 2000. The new warrant agreement was dependent on
the amount raised by the placement agent. As a result of the amount raised
by the placement agent, the financial advisor was granted approximately
248,000 and 9,000 warrants for shares of common stock at strike prices of
$.01 and $3.00, respectively, as of March 31, 2000. Stock-based consulting
fees relating to these warrants, based on their fair value on the issuance
date, amounted to approximately $1,949,000.

New Subsidiary - On January 25, 2000, the Company formed a wholly owned
subsidiary in Lima, Peru to translate financial content in connection with
the StarMedia agreement (see Note 14). The Company has entered into a lease
for office space in Lima for approximately $14,400 per year for two years.

Stock Granted for Services - On January 31, 2000, the Company granted
25,000 shares of restricted common stock to an executive recruiting firm in
exchange for services rendered. The Company recorded recruiting expense of
$125,000, as determined by the stock's closing price on the grant date.

Loan from Related Party - On March 14, 2000, the spouse of an officer and
director of the Company loaned $65,000 to the Company pursuant to a note
bearing interest at 8.75%.

New Office Space - In April 2000, the Company deposited $145,000 for
approximately 5,400 square feet of office space in Boston, Massachusetts.
The term of the lease is for five years. The lease agreement obligates the
Company over the term of the lease to annual minimum lease payments
averaging approximately $190,600.

F-24
<PAGE>

16. QUARTERLY INFORMATION (UNAUDITED)

As a result of the restatement adjustments as discussed in Note 3, the
Company has restated the previously reported unaudited quarterly results of
operations for 1999 and 1998, where indicated, as follows:

<TABLE>
<CAPTION>
Quarter Ended March 31
--------------------------------------------------------------
As Previously Reported As Restated
----------------------------- -----------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues $ 67,335 $ 5,335 $ 67,335 $ 5,335
Cost of revenues 130,855 14,669 130,855 14,669
--------- --------- ----------- ---------

Gross profit (loss) (63,520) (9,334) (63,520) (9,334)
Research and development, selling,
general and administrative expenses 664,878 190,183 28,760,098 190,183
Interest expense 25,873 6,498 2,325,873 6,498
--------- --------- ----------- ---------

Net loss $(754,271) $(206,015) $(31,149,491) $(206,015)
========= ========= =========== =========

Net loss per share - basic and diluted * * $ (6.34) $ (.07)
=========== =========
</TABLE>

* Not previously reported

<TABLE>
<CAPTION>
Quarter Ended June 30
--------------------------------------------------------------
As Previously Reported As Restated
----------------------------- -----------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues $ 87,898 $ 36,595 $ 67,898 $ 36,595
Cost of revenues 104,738 49,700 84,738 49,700
----------- --------- ----------- ---------

Gross profit (loss) (16,840) (13,105) (16,840) (13,105)
Research and development, selling,
general and administrative expenses 994,783 341,487 17,980,374 341,487
Interest expense 69,245 5,426 69,245 5,426
----------- --------- ----------- ---------

Net loss $(1,080,868) $(360,018) $(18,066,459) $(360,018)
=========== ========= =========== =========

Net loss per share - basic and diluted * * $ (3.44) $ (.11)
=========== =========
</TABLE>

* Not previously reported

F-25
<PAGE>

<TABLE>
<CAPTION>
Quarter Ended September 30
--------------------------------------------------------------
As Previously Reported As Restated
----------------------------- -----------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues $ 131,770 $ 53,063 $ 91,770 $ 53,063
Cost of revenues 76,441 68,065 76,411 68,065
--------- --------- ----------- ---------

Gross profit (loss) 55,329 (15,002) 15,359 (15,002)
Research and development, selling,
general and administrative expenses 692,986 609,845 1,247,109 762,899
Interest expense 69,244 18,638 69,244 51,237
--------- --------- ----------- ---------

Net loss $(706,901) $(643,485) $(1,300,994) $(829,138)
========= ========= =========== =========

Net loss per share - basic and diluted $ (0.13) $ (0.23) $ (.24) $ (.23)
========= ========= =========== =========
</TABLE>

<TABLE>
<CAPTION>
Quarter Ended December 31
-------------------------------
As Restated
------------ ---------------
1999 1998
<S> <C> <C>
Revenues $ 218,879 $ 64,536
Cost of revenues 107,383 84,805
------------ -----------

Gross profit (loss) 111,496 (20,269)
Research and development, selling,
general and administrative expenses 4,401,149 412,885
Interest expense 1,610,942 589,414
------------ -----------

Loss before extraordinary item (5,900,595) (1,022,568)
Extraordinary item - loss on early
extinguishment of convertible notes 1,475,000 -
------------ -----------

Net loss $ (7,375,595) $(1,022,568)
============ ===========

Net loss per share - basic and diluted $ (1.31) $ (.26)
============ ===========
</TABLE>

F-26
<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized on this 2/nd/ day of June, 2000.

FINANCIALWEB.COM, INC.

By: /s/ Kevin Leininger
----------------------------------------
Chief Executive Officer and President

In accordance with the Exchange Act, this report has been signed below on
June 2, 2000 by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

Name Title

/s/ Kevin Leininger Chief Executive Officer, President and Director
-----------------------
Kevin Leininger

/s/ Leonard von Vital Chief Financial Officer
-----------------------
Leonard von Vital

/s/ James P. Gagel Chief Operating Officer, General Counsel and Director
-----------------------
James P. Gagel

/s/ Edward Mullen Director and Chairman of the Board
-----------------------
Edward Mullen

/s/ Martin Averbuch Director
-----------------------
Martin Averbuch

/s/ John D. Bergen Director
-----------------------
John D. Bergen

/s/ Andrew Hobbs Director
-----------------------
Andrew Hobbs