PACIFIC WEBWORKS INC, S-1, 2000-05-30

PACIFIC WEBWORKS INC
S-1, 2000-05-30
PREPACKAGED SOFTWARE

Previous: HEALTHCOMP EVALUATION SERVICES CORP, 10SB12G/A, EX-27, 2000-05-30

Next: PACIFIC WEBWORKS INC, S-1, EX-10.11, 2000-05-30

As filed with the Securities and Exchange Commission on May 30, 2000
Registration No. _____________

==============================================================================

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
---------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
PACIFIC WEBWORKS, INC.
(Name of issuer in its charter)
---------------

Nevada 7372 87-0627910
(State of incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)

180 South 300 West, Suite 400
Salt Lake City, Utah 84101
(801) 578-9020
(Address and telephone number of registrant's principal executive offices
and principal place of business)
---------------

Christian Larsen, President
180 South 300 West, Suite 400
Salt Lake City, Utah 84101
(801) 578-9020
(Name, Address and telephone number of agent for service)
---------------

Copies to:

Cindy Shy, Attorney
Cindy Shy, P.C.
525 South 300 East
Salt Lake City, Utah 84111
(801) 323-2392

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the registration statement becomes effective.

If the securities being registered on this Form are being offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933
check the following box. [ X ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
boxes and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following boxes and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

<PAGE>
<TABLE>
<CAPTION>
Calculation of Registration Fee
--------------------------------------------------------------------------------------

Proposed
Title of each class Amount Maximum Proposed Maximum Amount of
of Securities to Be to be Offering Price Aggregate Offering Registration
Registered (1) Registered (2) Per Unit(3) Price Fee
--------------------- --------------- ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Common Stock 1,800,000 $ 3.375 $ 6,075,000 $ 1,603.80
--------------------------------------------------------------------------------------

(1) This registration statement covers the resale by certain selling stockholders of
up to an aggregate of 1,800,000 shares of Common Stock, par value $0.001, of the
Company; 400,000 shares of which will be acquired by the selling stockholders; and
1,400,000 shares of which may be acquired by certain of the selling stockholders
upon the exercise of warrants.

(2) If there is a stock split, stock dividend or similar transaction involving the
Company's Common Stock, in order to prevent dilution, the number of shares
registered hereunder will automatically be increased to cover the additional
shares in accordance with Rule 416(a) under the Securities Act.

(3) Estimated solely for the purpose of calculating the registration fee in accordance
with Rule 457 under the Securities Act, based on the average of the high and low
prices of the Company's Common Stock on May 24, 2000.

</TABLE>

Pacific WebWorks hereby amends the registration statement on such date or
dates as may be necessary to delay its effective date until we shall file a
further amendment which specifically states that this registration statement
shall become effective in accordance with Section 8(a) of the Securities Acts
of 1933 or until the registration statement shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may determine.

<PAGE>
PROSPECTUS

SUBJECT TO COMPLETION
_____________________________________________________________________________

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
_____________________________________________________________________________

Pacific WebWorks, Inc.
a Nevada corporation

1,800,000 shares of common stock
______________

Prospectus dated May 30, 2000

1
<PAGE>

TABLE OF CONTENTS

PROSPECTUS SUMMARY.........................................................3

RISK FACTORS...............................................................4

TRANSACTIONS EFFECTED IN CONNECTION WITH THE OFFERING......................8

USE OF PROCEEDS............................................................9

DETERMINATION OF OFFERING PRICE............................................10

SELLING STOCKHOLDERS.......................................................10

PLAN OF DISTRIBUTION.......................................................10

DESCRIPTION OF SECURITIES..................................................11

INTEREST OF NAMED EXPERT AND COUNSEL.......................................11

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITY.................................................11

THE COMPANY

BUSINESS.............................................................12

MARKET FOR COMMON EQUITY.............................................18

FINANCIAL STATEMENTS.................................................19

MANAGEMENT'S DISCUSSION AND ANALYSIS.................................39

MANAGEMENT...........................................................45

No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained in this prospectus;
any information or representation not contained herein must not be relied upon
as having been authorized by Pacific WebWorks. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any
securities other than the securities covered by this prospectus; nor does it
constitute an offer to sell, or a solicitation of an offer to buy, any of the
securities covered by this prospectus by Pacific WebWorks or any person to
whom it is unlawful for Pacific WebWorks to make such offer or solicitation.
Neither the delivery of this prospectus nor any sale made hereunder shall,
under any circumstances, create an implication that there has been no change
in the affairs of Pacific WebWorks since the date of this prospectus.

2
<PAGE>

PROSPECTUS SUMMARY

Pacific WebWorks, Inc.
180 South 300 West, Suite 400
Salt Lake City, Utah 84101
(801) 578-9020

The Company. Pacific WebWorks, Inc. engineers business software
technology for the Internet based on our proprietary source code. Our premier
product Visual WebTools TM allows the small to medium sized business owners to
expand their business onto the Internet. Our product lets a business create,
manage, maintain and edit its own web site. We recorded our first operating
revenues in the first quarter of 1999. We have had recurring losses since our
inception and are dependent on financing to continue our operations. However,
management believes that our current and developing sales channels will be
sufficient to support our existing operations without requiring external
financing. Further discussions of our business and operations can be found in
the "Business" section starting on page 12.

The following table sets forth certain selected financial data of Pacific
WebWorks for the year ended December 31, 1999, and 1998. We have a short
operating history and have had recurring operating losses and we are dependent
on financing to continue operations. This fact is reported by our independent
auditors, Crouch, Bierwolf & Chisholm. The information contained in the
following table should be read in conjunction with the "Management's
Discussion and Analysis" starting on page 39 and the historical financial
statements and related notes included elsewhere in this prospectus.

YEAR ENDED DECEMBER 31,
1999 1998 1997
-------------- ------------ -------------

Revenues $ 305,628 $ 172,395 $ 94,014
Net loss (2,567,535) (150,465) (68,752)
Net loss per common share -
basic and diluted (0.27) (0.03) (0.01)
Total assets 630,559 55,970 61,092

The Offering. We are registering 1,800,000 common shares which will be
sold from time to time and at the total discretion of the selling stockholders
who are identified on page 10. 1,400,000 of the 1,800,000 common shares will
be issued to the selling stockholders pursuant to warrants. We have agreed to
register these shares as a result of a Registration Rights Agreement, dated
February 22, 2000, between us and the selling stockholders. The transactions
related to this registration and the terms of the agreements are described in
more detail in the "Transactions Effected in Connection with the Offering"
section starting on page 8. See, the "Plan of Distribution" on page 10 for
further details on the rights of the selling stockholders in regards to the
manner of any sales.

We will not receive any of the proceeds from the sale of the shares which
are being registered. However, we will receive proceeds when, and if, the
selling stockholders exercise warrants to purchase 1,400,000 common shares
which are being registered. If all of the warrants are exercised we will
receive proceeds of approximately $6,375,000. We intend to use the proceeds
from the exercise of any and all warrants for general corporate expenditures.

3
<PAGE>
RISK FACTORS

We have a limited operating history and we cannot be certain of future
progress or profitability. We were incorporated in 1987, but did not operate
as a business until 1997. Starting in 1999, we began to market our software
products through resellers. We may encounter financial, managerial,
technological or other difficulties as a result of our lack of operating
history. Although we anticipate that our operating revenue will increase in
the future based upon the continuing increases we have noted in our financial
statements during our most recent fiscal quarter, we cannot guarantee that our
revenues will exceed our operating expenses.

Our quarterly results could fluctuate and we cannot be certain that
future results will be similar to past results. We have consistently incurred
losses since our formation. As of March 31, 2000 our accumulated losses
totaled $3,330,495. We have financed ourselves through loans and sales of our
securities. During the coming year, we will have to seek additional equity or
debt financing from third parties to finance our operations, which may not be
available to us or on terms which are acceptable to us. Please refer to the
"Liquidity and Capital Resources" section on page 42 for a more detailed
description. We are not able to currently finance our operations through our
generated revenues. Our operating results in the future may vary
significantly, depending on factors such as revenue from product sales and
license fees, announcements and launches of new products and services, market
acceptance of new and enhanced versions of Visual WebTools TM and related
products, changes in our operating expenses, changes in our business strategy,
and general economic factors. Our revenues will also be difficult to forecast
because the markets for our products and services are evolving and our
revenues in any period could be significantly affected by new product
announcements or launches by our competitors, as well as by our competitors'
development of alternative technologies. We do not believe that
period-to-period comparisons of our results of operations will necessarily
provide investors with meaningful data for the foreseeable future because of
our lack of active operations in earlier periods.

Our industry is subject to rapid technological change with which we may
not be able to keep pace. Internet industries change rapidly. Accordingly,
our operating results will depend upon our ability to successfully compete.
Our ability to successfully compete, in turn, will depend upon a number of
factors, including our ability to successfully maintain and sell existing
products, our ability to conceive, develop, improve, and market new products,
our ability to identify and take advantage of emerging technological trends
within our target markets, and our ability to respond effectively to
technological changes or new product announcements by competitors. We believe
that we will need to make continuing significant expenditures for research and
development in the future. Risks exist that we may not be able to
successfully develop new products or, if we do, that those products may not be
accepted by the market.

We are subject to intense competition and we may not be able to compete
successfully in the market. Our markets are new, competitive, and subject to
rapid technological change. We face competition in the overall Internet
software market, as well as in the website building market. We expect
competition to persist, increase, and intensify in the future as the markets
for our products and services continue to develop and as additional
competitors enter our market.
Currently, in our estimation, few major competitors offer products
comparable to the Visual WebTools TM product family. We believe that "Yahoo!
Store" is our most significant competitor, with its brand name recognition and
significantly greater financial, technical, marketing, and managerial
resources. Yahoo! Store has significantly higher sales and customers than we
do and has entered into a significantly higher number of license agreements
with third parties than we have. Our success in our target market will depend
upon our ability to build name brand recognition and to provide cost-effective
products and services to our customers. We believe that our product provides
a comparable service for a lower price than that provided by Yahoo! Store. In
addition, because we have focused our efforts on small businesses, including
providing Internet tools which allow businesses to develop their own Web
sites, we believe that the generality of the Yahoo! Store may be inadequately
addressing potential customer needs and that we will be able to address site
development needs. However, we may be unable to compete effectively with
current and future competitors, including Yahoo! Store.

4
<PAGE>
We may not successfully identify new product opportunities, and develop
and bring new and enhanced products to market in a timely manner. Our success
is highly dependent on our ability to develop new and enhanced products that
meet changing customer requirements. There can be no assurance that our
products or technologies will develop or will be commercially successful, that
we will benefit from these developments or that products, or technologies
developed by others will not render our products noncompetitive or obsolete.
At present, our four principal products, Visual WebTools TM, ClipOn Commerce,
IntelliPay, and Placeto Vacation are available. As noted above, the market
for our products is characterized by rapid and substantial technological
change. We must be responsive to new developments in hardware and
semiconductor technology, operating systems, programming technology, and
computer capabilities to remain successful. In many instances, the new and
enhanced services, products, and technologies are in the emerging stages of
development and marketing, and are subject to the risks inherent in the
development and marketing of new software, services, and products.

We depend on our management, who may leave us at any time. We depend
upon the efforts and abilities of our officers, directors, and certain key
employees, including the officers and directors listed on pages 45 under the
heading "Directors and Executive Officers." Should we lose the services of
one or more of these persons, their loss could have a material adverse effect
on our operations.

Competition for employees in the electronic commerce industry is intense,
and there can be no assurance that we will be able to attract and retain
enough qualified employees. Our success depends to a large extent upon our
ability to retain and continue to attract highly skilled personnel. If our
business grows, it may become increasingly difficult to hire, train and
assimilate the new employees needed. Our inability to retain and attract key
employees could have a material adverse effect on our business, operating
results, and financial condition.

We depend upon our proprietary rights, none of which can be completely
safeguarded against infringement. Our ability to compete effectively will
depend, in part, upon our ability to protect our proprietary source code and
Visual WebTools TM through a combination of licenses and trade secrets.
Competition in our market is intense and our competitors may independently
develop or obtain patents on technologies that are substantially equivalent or
superior to those incorporated into Visual WebTools TM.
Intellectual property rights, by their nature, are uncertain and involve
complex legal and factual questions. We may unknowingly infringe upon the
proprietary rights of others, thereby exposing us to significant liability
and/or damages. We are not aware of any third party intellectual property
rights which would prevent us from marketing and developing Visual WebTools
TM, although such rights may exist. If we were to inadvertently infringe upon
the intellectual property of another party, we could be forced to seek a
license to those intellectual property rights, alter the products or processes
so they no longer infringe upon those rights, or engage in litigation. If we
were required to attempt to obtain a license to another party's proprietary
rights, our efforts would be expensive, and might be unsuccessful.
We also rely upon trade secrets with respect to our source code and
functionalities and other unpatented proprietary information in our product
development activities. To the extent we rely upon confidential information
to maintain our competitive position, other parties may independently develop
the same or similar information. We seek to protect trade secrets and
proprietary knowledge in part through confidentiality agreements with our
employees, resellers, and collaborators. These agreements may not effectively
prevent disclosure of our confidential information and may not provide us with
an adequate remedy in the event of unauthorized disclosure of such
information. If employees or collaborators develop products independently
that may be applicable to our products under development, disputes may arise
about ownership of proprietary rights to those products or services.
Protracted and costly litigation could be necessary to enforce and determine
the scope of our proprietary rights. It would be impossible to predict
whether litigation might be successful. Our failure to obtain patent and
trade secret protection, for any reason, could have a material adverse effect
on our business, financial position and results of operations.

We will need additional capital and may be unable to raise it. We
believe, based on our current expenditure rate, that we will need $ 1.5
million additional financing by the summer of 2000. Therefore, our success
will depend upon our ability to access equity capital markets and borrow on
terms that are financially advantageous

5
<PAGE>

to us. We rely upon revenues from resellers, license agreements, and product
sales. We may not be able to obtain additional funds on acceptable terms. If
we fail to obtain funds on acceptable terms, we might be forced to delay or
abandon some or all of our business plans, which could have a material adverse
effect on us. If we are unable to obtain additional capital, we may not have
sufficient working capital to develop products, finance acquisitions, pursue
business opportunities, or meet reporting requirements. If we borrow funds,
we could be forced to use a large portion of our cash reserves to repay
principal and interest on those funds. If we issue our securities for
capital, the interests of investors and shareholders could be diluted.

Our products are complex and may be subject to error complaints from our
customers. Visual WebTools TM is complex and may contain errors, defects, and
"bugs." We have detected errors, defects, and bugs in the past and have
corrected them as quickly as possible. Correcting any defects or bugs we may
discover in the future may require us to make significant expenditures of
capital and other resources. Despite our continuing tests, users may find
errors or defects in Visual WebTools TM which could cause additional
development costs or result in the loss of (or delays in) the market
acceptance of Visual WebTools TM. We believe that we follow industry-standard
practices relating to the identification and resolution of errors, defects, or
bugs encountered in the development of new software and in the enhancement of
existing features in our products. As we become aware of bugs, defects, or
errors, we may immediately work to correct them. As of this date we have not
experienced any material adverse effect by reason of an error, defect, or bug.

Our stock price is volatile and is not in our control. In recent years
the stock market in general, and the market for shares of high technology
Internet companies in particular, have each experienced extreme price
fluctuations. In many cases these fluctuations have been unrelated to the
operating performance of the affected companies. The trading price of our
common stock may be subject to extreme fluctuations in response to both
business related issues (such as quarterly variations in operating results,
announcements of new products developed by us, or announcements from our
competitors) and stock market-related influences (including, but not limited
to, changes in analysts' estimates, the presence or absence of short selling
of our common stock, and events affecting other companies which the market
believes might affect us).

The future sale of common stock could pose investment risks, including
substantial dilution to our shareholders. The market price of our common
stock could drop as a result of sales of the common stock in the market after
the effective date of this registration statement, or the perception that such
sales could occur. These factors could also make it more difficult for us to
raise funds through future offerings of our common stock. There will be a
total of 13,200,342 shares of common stock outstanding immediately after the
effective date of this registration statement . Four million four hundred
five thousand (4,405,000) shares of our common stock will be freely
transferable without restriction or further registration under the Securities
Act of 1933 (the "Securities Act"). Eight million seven hundred ninety-five
thousand three hundred forty-two (8,795,342) shares of our common stock will
be held by our "affiliates," as defined in Rule 144 under the Securities Act,
and will be "restricted securities," as defined in Rule 144. The common stock
may be sold in the future without further registration under the Securities
Act to the extent those sales are permitted by Rule 144 or any other exemption
under the federal securities laws.

Our directors and officers are able to exercise significant influence
over matters requiring stockholder approval. Currently, our directors and
executive officers and their affiliates collectively own approximately 29.6%
of our outstanding shares. This concentration of ownership may have the
effect of delaying or preventing a change in control. Pursuant to Nevada
corporate statutes, the holders of a majority of our common stock may
authorize or take corporate action without notice to or the consent of the
stockholders. Our minority stockholders may not have the opportunity to
approve or consent to our involvement in an acquisition or other transaction,
or to the terms of that transaction. A shareholder vote may not be made
available, and in any event, a shareholder vote would be controlled by the
majority stockholders.

Investors may have difficulty selling our shares. There has not been a
large public market for our equity securities and our common stock has traded
on the over-the-counter market only since January of 1999. We do not know the
extent to which investor interest in our stock will lead to the development of
an active trading market for

6
<PAGE>

our stock, or how liquid that market might be. Investors may be unable to
resell their common stock at or above the price they pay for the common stock.
Also, our stock may qualify as a "penny stock" under the Penny Stock
Suitability Reform Act of 1990. The liquidity of penny stock is affected by
specific disclosure procedures to be followed by all broker-dealers, including
but not limited to, determining the suitability of the stock for a particular
customer, and obtaining a written agreement from the customer to purchase the
stock.

We have not paid dividends. We have never paid a dividend on our common
stock. We intend to retain future earnings to finance our growth and
development and do not plan to pay cash dividends in the foreseeable future.

We have a new product in a developing market which may not work properly.
Visual WebTools TM is based on software technology which has been used for
approximately two years. We have refined Visual WebTools TM by adding
additional functions, including but not limited to e-commerce capabilities.
Our success will depend largely on its ability to further refine and continue
to develop Visual WebTools TM and other products. If Visual WebTools TM does
not achieve significant market acceptance and usage, we could suffer material
adverse effects in our business.
The primary markets for Visual WebTools TM have only recently begun to
develop and are rapidly evolving. As is typical of new and rapidly evolving
industries, demand for (and market acceptance of) products and services that
have been released recently or that are planned for future release are subject
to a high level of uncertainty. If Visual WebTools TM does not achieve market
acceptance, we could suffer material adverse effects.
Our markets are highly dependent on the use of the Internet. A number of
critical issues concerning the commercial use of the Internet, including
security, reliability, capacity, taxation, costs, ease of use, access, quality
of service, and acceptance of advertising, remain unresolved and may retard
the growth of the Internet for commercial applications.

We will need to manage our growth, even if we grow quickly. We hope to
achieve rapid growth, both with respect to our sales and operations and with
respect to the number and complexity of our products. Several members of our
key management team only recently joined us. See "Directors and Executive
Officers." Our growth, coupled with the rapid evolution of our markets, has
placed, and is likely to continue to place, significant strains on our
administrative, operational, technical, and financial resources and increased
demands on our internal management systems, procedures, and controls. If we
are unable to manage our growth effectively, our business and our financial
condition could suffer material adverse effects.

We will be dependent upon license renewal which cannot be assured to
occur. We expect to derive revenues from user licenses and license renewals
and to increase the brand recognition of Visual WebTools TM among users
through these types of relationships. In the event that a substantial number
of our customers were to decline to renew their contracts for any reason, we
could experience a substantial drop in revenues. Our success in establishing
Visual WebTools TM and our other products as a recognized brand name and
achieving their acceptance in the market will depend in part on our ability to
continually engineer and deliver new product technologies and superior
customer service, so that customers renew their licenses year after year.
As of March 31, 2000, twenty-two of our customers' licenses have been
up for renewal. Nine of our customers have already renewed their licenses.
All of our current contracts expire following the original one year term.
However, all customers may continue to use the software upon the payment of
their hosting fees, which is due on a monthly basis. Failure to pay the
monthly fee will result in a discontinuance of the license.

We may pursue acquisitions of complementary service product lines,
technologies or business which may adversely affect our operations. From time
to time, we evaluate potential acquisitions of businesses, services, products,
or technologies. These acquisitions may result in a potentially dilutive
issuance of equity securities, the incurrence of debt and contingent
liabilities, and amortization of expenses related to goodwill and other
intangible assets. In addition, acquisitions involve numerous risks,
including difficulties in the assimilation of the operations, technologies,
services, and products of the acquired companies, the diversion of
management's attention from other

7
<PAGE>

business concerns, risks of entering markets in which we have no or limited
direct prior experience and the potential loss of key employees of the
acquired company. We have no present commitment or agreement with respect to
any material acquisition of other businesses, services, products, or
technologies.

We may be subject to increased regulations and may be exposed to
liability for information retrieved from the Internet. Other than the laws
and regulations applicable to businesses generally, we are aware of few laws
and regulations which expressly apply to access and commerce on the Internet.
Due to the increased popularity and use of the Internet, however, it is
possible that new laws and regulations may be adopted with respect to the
Internet relating to issues such as user privacy, pricing and characteristics,
and content and quality of products and services. For example, we may be
subject to the provisions of the Communications Decency Act, which if found to
be constitutional, could expose us to substantial liability. The adoption of
any new laws or regulations could retard the growth or the use of the
Internet, which could adversely affect the demand for our products and
services. New laws or regulations could also result in significant additional
costs and technological challenges for us in complying with any mandatory
requirements. Further, several states have attempted to tax online retailers
and service providers, even when those parties have no physical presence in
the state. The federal government has imposed a three-year moratorium on
taxation of Internet commerce. We cannot predict what effect the lapse of
this three-year period will have on our business operations. In addition,
plaintiffs have brought claims, and sometimes obtained judgments, against
online service providers for defamation, negligence, copyright or trademark
infringement, or under other theories with respect to materials disseminated
through those the Internet. We may be subject to similar claims.

Given the expansion of the electronic commerce market, it is possible
that the Federal Reserve might revise Regulation E or adopt new rules for
electronic funds transfer affecting our commercial transactions. Federal or
state agencies may attempt to regulate providers of electronic commerce
services, such as Pacific WebWorks, which could impede our ability to do
business in the regulator's jurisdiction. Management believes that we are not
required to be licensed by the Office of the Comptroller of the Currency, the
Federal Reserve Board, or other federal or state agencies that regulate or
monitor banks or other types of providers of electronic commerce services. We
are subject to various laws and regulations relating to commercial
transactions generally, such as the Uniform Commercial Code, and may also be
subject to the electronic funds transfer rules embodied in Regulation E,
promulgated by the Federal Reserve Board. Because of growth in the electronic
commerce market, Congress has held hearings on whether to regulate providers
of services and transactions in the electronic commerce market, and it is
possible that Congress or individual states could enact laws regulating the
electronic commerce market.

We may be subject to risks associated with global operations, including
fluctuating currency exchange rates and political instability. We do not
currently have any operations outside of the United States. However, Visual
WebTools TM is designed for national and international markets and we plan to
include translation and localization support. As a result, we may derive
substantial portions of our future revenues from customers outside the United
States. Our ability to expand products and services internationally will be
limited by the general acceptance of the Internet in other countries. In
addition, international operations are subject to a number of risks, including
costs of localizing products and services for international markets,
dependence on independent resellers, multiple and conflicting regulations
regarding communications, restrictions on use of data and internet access,
longer payment cycles, unexpected changes in regulatory environments, import
and export restrictions and tariffs, difficulties in staffing and managing
international operations, greater difficulty or delay in accounts receivable
collection, potentially adverse recessionary environments and economies
outside the United States, and political and economic instability.
Furthermore, we expect that our export sales will be denominated predominately
in United States dollars. Therefore, an increase in the value of the United
States dollar relative to other currencies could make our products and
services more expensive and potentially less competitive in international
markets.

TRANSACTIONS EFFECTED IN CONNECTION WITH THE OFFERING

On February 22, 2000, we entered into a Registration Rights Agreement
which required Pacific WebWorks to file a registration statement with the
Securities and Exchange Commission to register for resale an aggregate of
1,800,000 common shares. 1,400,000 of those shares will be issued by exercise
of warrants. We agreed to register

8
<PAGE>

these shares in connection with separate transactions between us and the
selling stockholders.

In January of 1999 and again in January of 2000 we entered into a
Consultant Agreement with Columbia Financial Group, Inc. Columbia Financial
provides consulting and services for investor relations, public relations,
publishing, advertising, fulfillment, as well as, Internet related services.
Columbia Financial provides such services for a term of twelve (12) months for
a set fee. Either party may terminate the agreement with 60 days written
notice with certain conditional repayments. Columbia Financial agreed to
accept warrants to purchase 400,000 common shares in consideration for the
services they would provide to Pacific WebWorks as our investors relations
firm. In February of 2000 we agreed to grant registration rights to the
common shares which would be issued upon exercise of the warrants. The
warrants issued to Columbia Financial in consideration for their services were
exercisable on the date of each agreement. None of the warrants issued have
been exercised as of the date of this filing.

In February 2000 we entered into purchase agreement with two accredited
investors, Condiv Investment, Inc. and Midwest First National, Inc., for the
purchase by those investors of up to 400,000 units for $1,000,000. Each unit
consisted of one share of our common stock and one "A" Warrant and one "B"
Warrant. The "A" Warrant grants the investor the right to purchase one
additional share at an exercise price of $5.00 and the "B" Warrant grants the
investor the right to purchase 1/2 of one additional share at an exercise price
of $7.50. Upon closing each investor will acquire 200,000 common shares, one
"A" Warrant to purchase an additional 200,000 common shares and a "B" Warrant
to purchase an additional 100,000 common shares. Also, each investor has
promised not to acquire or own more than 4.99% of Pacific WebWorks'
outstanding common stock at any time.

The registration agreement requires Pacific WebWorks to file a
registration statement by April 15, 2000 and use our best efforts to cause the
registration statement to be effective by July 1, 2000. If we fail to file a
registration statement by May 30, 2000 we are liable for liquidated damages.
The registration agreement will terminate upon the earliest of the following:
* When all of the securities to be registered under the agreement
are registered
* When all of the registered common shares have been sold by the
selling stockholders;
* When these selling stockholders may sell the shares under the
provisions of Rule 144; or five years from the closing date.

The following chart describes the warrants issued in connection with the
transactions described above.

------------------------------------------------------------------------------
Selling Date Warrant Number Exercise Expiration
Stockholder Exercisable of Shares Price Date
------------------ --------------- --------- --------- -------------------

Columbia Financial January 26, 1999 150,000 $ 2.50 January 26,2004
" 100,000 3.50 "
" 100,000 4.50 "
" 50,000 6.00 "
------------------------------------------------------------------------------
Columbia Financial January 10, 2000 400,000 3.50 January 10, 2005
------------------------------------------------------------------------------
Condiv
Investments, Inc. February 22, 2000 200,000 5.00 February 22, 2005
" 100,000 7.50 "
------------------------------------------------------------------------------
Midwest First
National, Inc. February 22, 2000 200,000 5.00 February 22, 2005
" 100,000 7.50 "
------------------------------------------------------------------------------

USE OF PROCEEDS

We are registering the shares for the benefit of the selling stockholders
and they will sell the shares from time to time under this prospectus. We
will not receive any of the proceeds from the sale of the shares, but we will

9
<PAGE>

receive the proceeds from the exercise of the warrants. The selling
stockholders are not obligated to exercise their warrants, and there can be no
assurance that they will exercise all or any of them. If they exercise all of
the warrants we would receive $6,375,000. We intend to use the proceeds for
general corporate purposes and for working capital which may include payment
of salaries, rent, research and development, purchase of inventory and
marketing expenses. We will pay all the costs of this offering, with the
exception of the costs incurred by the selling stockholders for their legal
counsel and the costs they incur for brokerage commissions on the sale of
their shares.

DETERMINATION OF OFFERING PRICE

We relied on the current market price of our common stock in the
determination of the offering price of the units and the strike price for the
warrants when they were issued. Our common stock is traded over-the-counter
and is quoted on the OTC Electronic Bulletin Board under the symbol "PWEB".
The quotations for the Bulletin Board represent prices between dealers and may
not include retail markups, markdowns, or commissions and may not necessarily
represent actual transactions. The range of the high and low bid prices of
our stock as reported by the National Quotation Bureau, Inc. can be found on
page 18 in the "Market For Common Equity..." section.

SELLING STOCKHOLDERS

The following table sets forth the name, number of shares of common stock
and the number of shares which may be purchased by the warrants owned by each
Selling Stockholder. Since the selling stockholders may sell all, a portion
or none of their shares, no estimate can be made of the aggregate number of
shares that are being offered or that will be owned by each Selling
Stockholder upon completion of the offering to which this prospectus relates.
The shares offered by this prospectus may be offered from time to time by the
selling stockholders named below:

RELATIONSHIP NUMBER OF PERCENTAGE OF
NAME TO ISSUER SHARES (1) OWNERSHIP (2)
--------------------------- ---------------------- ---------- -------------
Columbia Financial Investor Relations firm 800,000 6.06%
Midwest First National, Inc. Accredited investor 500,000 3.79%
Condiv Investments, Inc. Accredited investor 500,000 3.79%

(1) Includes ownership of shares issuable upon exercise of warrants.
(2) Assumes ownership percentage of our outstanding shares after exercise of
all warrants.

PLAN OF DISTRIBUTION

We have agreed to register these shares, but the registration of these
shares does not necessarily mean that any of them will be offered or sold by
the selling stockholders. The selling stockholders will have absolute
discretion as to whether to exercise the warrants and then will have total
control of the manner and timing of sales of the shares acquired by the
warrants. They may sell all or a portion of the shares through the NASD OTC
Bulletin Board, in negotiated transactions or otherwise. The sales may be at
prevailing prices or related to the current market price or at negotiated
prices. The shares may be sold directly or through brokers or dealers, or in a
distribution by one or more underwriters on a firm commitment or best-efforts
basis. The methods by which the shares may be sold include
* a block trade, which may involve crosses, in which the broker or dealer
will attempt to sell the securities as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
* purchases by a broker or dealer as principal and resale by the broker
or dealer for its own account;
* ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
* privately negotiated transactions. The selling stockholders may
deliver all or a portion of the shares to

10
<PAGE>

cover a short sale or sales made after the date of this prospectus, or
a call equivalent position or a put equivalent position entered or
established after the date of this prospectus.

The selling stockholders and any broker-dealers participating in the
distribution of the shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of the shares by the
selling stockholders and any commissions received by any broker-dealers may be
deemed to be underwriting commissions or discounts under the Securities Act.

The selling stockholders may sell all or any portion of the shares in
reliance upon Rule 144 under the Securities Act. In the event a particular
offer of these shares is made we will distribute a prospectus supplement, if
required, that will identify the name of any dealers or agents and any
commissions and other terms constituting compensation from the selling
stockholders and any other required information. These shares may be sold at
varying prices determined at the time of sale or at negotiated prices. In
order to comply with the securities laws of certain states, if applicable,
these shares may be sold only through registered or licensed brokers or
dealers. In addition, in certain states, these shares may not be sold unless
they have been registered or qualified for sale in that state or an exemption
from the registration or qualification requirement of that state is available
and is complied with.

DESCRIPTION OF SECURITIES

Our Articles of Incorporation, as amended, authorize 50,000,000 shares of
common stock, par value $0.001. As of May 5, 2000, we had 12,800,342 shares
of common stock issued and outstanding held by approximately 29 record
holders. In addition, we have issued and have outstanding 800,000 warrants
convertible into 800,000 shares of common stock.

Each holder of common stock is entitled to one vote for each share owned
of record on all matters voted upon by stockholders, and a majority vote of
the outstanding shares present at a stockholders' meeting is required for most
actions to be taken by stockholders. Directors are elected by a majority vote.
The holders of the common stock do not have cumulative voting rights.
Accordingly, the holders of a majority of the voting power of the shares
voting for the election of directors can elect all of the directors if they
choose to do so. The common stock bears no preemptive rights, and is not
subject to redemption, sinking fund or conversion provisions. Holders of
common stock are entitled to receive dividends out of funds legally available
if, and when, declared by our Board of Directors. Any dividends declared with
respect to shares of common stock will be paid pro rata in accordance with the
number of shares of common stock held by each stockholder.

INTEREST OF NAMED EXPERT AND COUNSEL

We have not hired any "expert" or "counsel" on a contingent basis or that
will receive a direct or indirect interest in Pacific WebWorks, or who was a
promoter, director, officer or employee of Pacific WebWorks.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITY

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers or persons controlling us, we
have been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.

We have agreed to indemnify each Selling Stockholder for liabilities
arising under the Securities Act. We will indemnify each Selling Stockholder,
its officers, directors and constituent partners, if any, and each person

11
<PAGE>

controlling (within the meaning of the Securities Act) a Selling Stockholder,
against all claims, losses, damages, liabilities, actions suffered or incurred
by any of them, to the extent these claims, losses, damages or liabilities
arise out of or are based upon:
* any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus or any related registration statement
incident to this registration;
* any omission (or alleged omission) to state a material fact required to
be stated or necessary to make the statements not misleading; or
* any violation by us of any rule or regulation promulgated under the
Securities Act applicable to Pacific WebWorks and relating to actions or
inaction required of us in connection with any registration.

We have agreed to reimburse each Selling Stockholder, for any reasonable
legal and other expenses incurred in connection with investigating or
defending any action.

Each Selling Stockholder has agreed to indemnify and reimburse Pacific
WebWorks for any actions based on a material misstatement, an omission, or a
violation as described above. Each Selling Stockholder agreed to indemnify
each of our directors and officers, each placement agent and underwriter, if
any, of our securities covered by this prospectus, each person who controls us
or any underwriter within the meaning of the Securities Act, and each other
Selling Stockholder.

THE COMPANY

BUSINESS

General Development.

Asphalt Associates, Inc. was incorporated in the state of Nevada on May
18, 1987. Asphalt Associates never established commercial business
operations. On January 11, 1999 Asphalt Associates merged with Utah WebWorks,
Inc., a Utah corporation (the "Utah WebWorks"). Utah WebWorks, the accounting
acquirer, was organized on April 10, 1997. In conjunction with the merger,
Asphalt Associates changed its name to Pacific WebWorks, Inc.

Our Business.

Pacific WebWorks began as an Internet software engineering company which
provided engineering services for hire. In early 1998 we made a transition
from engineering services to Internet software applications. Now we are an
application service provider that develops business software technologies for
Internet merchants. We specialize in turn-key applications allowing small to
medium sized business owners to expand their business onto the Internet. Our
product family provides tools for web site creation, management and
maintenance, statistics, reporting, surveys, marketing, hosting and e-commerce
concerns within the small to medium size business niche.

Up to this point we have focused entirely on virtual retailing software
solutions, meaning merchants that do not have a physical store location and
would exist only on the Internet. Due to requests in the marketplace we are
expanding our technologies to include features for small to medium sized,
physical merchants in addition to our virtual merchants. Now we are expanding
our software family to include features that integrate their physical store
information systems with their Internet store information systems. This
expansion will include features such as Cashier/ POS (Point of Sale)
management, receiving, ordering, tender, store operations, human resources,
POS peripherals management, inventory and accounting. At the same time our
virtual software will be expanded to include features such as items and
benefits, catalog management, order development, advanced 1-to-1 marketing
methods, sophisticated item comparison and selection, and pre-sales
qualification. This gives the merchant a complete solution for all physical
store and Internet concerns and at the same time reduces costs of operations
and introduces new profit centers for the merchant.

12
<PAGE>

World Commerce Network, LLC was created in December 1999 as a marketing
company whose mission is to sell the products of the LLC members. World
Commerce Network sells Visual WebTools TM, merchant accounts, the IntelliPay
transaction gateway, and education and training. World Commerce Network
conducts seminars marketing to small business owners and home business users.
It is our intent to conduct seminars in over 150 cities in the United States
during calendar 2000.

Our Market.

We market our products to small and medium-sized businesses, which want
total, one-stop solutions to Internet advertising, marketing, and sales
concerns. Our typical "target" customers are businesses which would prefer to
invest in technologies which allow them to develop functional, interactive
Internet websites rather than hire internal employees or subcontract these
types of technologies to third parties.

The Internet software market is relatively large and continuing to
expand. In our opinion, the vast majority of businesses with successful web
strategies are those which have the financial resources to frequently update
and re-design their websites as information about their business changes.
These businesses either hire and retain information systems employees to
develop, support, and maintain their websites, or alternatively purchase
Internet services from multiple parties, have these services integrated, and
gather or purchase information on their customers and markets to facilitate
website updates. We believe these options to be cost prohibitive for the
small business owner. Our market, by contrast, consists of small to
medium-sized businesses which desire the capability to quickly re-design their
websites without incurring substantial costs or relying upon additional
employees or multiple vendors. We believe that our products provide small and
medium-sized businesses with flexibility, allowing them to update their
website and other business information by themselves.

Our Products.

We have developed software technology which we market under the name
Visual WebTools TM. Visual WebTools TM allows businesses to create websites,
generate statistics, reports, surveys, marketing information, as well as
complete e-commerce transaction. We believe that Visual WebTools TM is
powerful, yet easy and intuitive to use; it allows a small business to quickly
and easily create a website on the Internet, list itself with the major search
engines, set up e-mail, and facilitate domain name registration. We also
believe that Visual WebTools TM provides all the tools needed to edit and
maintain a website from most Internet-capable computers. It allows a user to
create an online store front, generate sales leads, process credit cards,
communicate with site visitors, and collect statistical information about who
visits the website and what they do while they are there. It allows a
business to create, manage, and maintain every aspect of its website at all
times. In our opinion this functionality, combined with our easy to use
visual interface, provides a point-and-click total Internet business solution
for less than three thousand dollars in the first year, and approximately six
hundred dollars per year for hosting and maintenance fees thereafter.

Visual WebTools TM incorporates the following features:

WebWizard. WebWizard allows businesses to quickly and easily create,
update, modify, or enhance their websites. Changes can be made 24 hours a
day, 7 days a week from anyplace in the world with an Internet terminal.
WebWizard includes an easy to use but powerful preview interface which is
referred to in the industry as WYSIWYG (What You See Is What You Get) which
uses familiar "drag and drop" functions and which allows businesses to make
website changes instantaneously. Changes are updated automatically and placed
online within minutes. WebWizard gives businesses the ability to manipulate
their website's layout, colors, and content, and to move, resize, and cut and
paste text, graphics, and tables. WebWizard also gives businesses a library
of hundreds of graphics to use throughout the website, and the ability to
upload graphics or files from a local hard drive directly into the website.
We have released and sold WebWizard Pro since late November 1998, and
WebWizard Express and WebWizard Retail since the first quarter of 1999. Sales
have been conducted primarily by two of our resellers.

13
<PAGE>

WebWizard and WebShopper, described below, are our basic products and
come in two progressive versions, Express, and Pro. The Pro version provides
additional product features and support options to the business. WebStats,
WebProfiler, and WebChannels are available to our customers for an additional
license fee.

We released WebWizard 2.0 in February 1999. WebWizard 2.0 simplifies the
tasks of creating and maintaining websites. It incorporated Microsoft's
ActiveX components directly into the interface, making WebWizard, in our
opinion, as easy to use as a word processor. WebWizard 2.0 supports online
"drag and drop" functions for editing images, tables, and text. It also
supports online text editing, as well as infinite-level "undo" and "redo"
functions. An extensive table editor was added which allows simple resizing
and quick editing of tables. The new import feature allowed current and older
websites to be converted into the Visual WebTools TM environment quickly and
easily. WebWizard 2.0 also included an updated graphics and animation
library, enhanced navigation support, and increased security.

WebShopper. WebShopper allows businesses to add "electronic storefronts"
to their websites. We assist businesses in setting up merchant accounts and
in facilitating secure credit card transactions. WebShopper also provides a
customizable product database. A business's products and all of its
variables, such as price, color and size, can be entered into a
password-protected product database, which can be updated or edited at any
time. Customizable price and shipping modifiers, receipt options, sale
flagging, product option variables and tax calculations are also available.

In February 1999, we released WebShopper Pro, which includes support for
merchant-account functionality, for real-time Internet credit card and
personal check settlement, and for fraud prevention features. WebShopper Pro
supports and accepts all major credit cards and optional electronic checks on
a real-time basis. We intend to expand the features of the Visual WebTools TM
family during the remainder of 2000 to include technologies that will allow a
physical retail store to integrate its business operations with an Internet
store.

We released Visual WebTools TM 3.0 on August 1, 1999. WebWizard 3.0
includes multiple features designed to make our product more powerful and
easier to use. These features include scriplets (an embedded code feature
which enhances the effect and appearance of a web page), frames (a function
which allows a user to display multiple pages or portions of pages at one time
on a computer screen). WebShopper 3.0 allows for products to be included in
MainStreetSquare.com TM.

WebChannels. WebChannels allows businesses to send e-mail to multiple
clients simultaneously, creating marketing channels directly to customers.
Businesses can send announcements, sales information, product updates,
promotions, newsletters, jokes, or any other correspondence to clients at any
time. WebChannels also allows subscribers to add or remove themselves from
the automated e-mail database.

WebProfiler. WebProfiler allows businesses to gather demographics on
site visitors by creating custom questionnaires which provide direct feedback
from site visitors. With WebProfiler, businesses can obtain information from
target audiences, including, for example, levels of customer satisfaction or
dissatisfaction and customer preferences with regard to new products or
services. We believe that WebProfiler assists businesses in obtaining the
information necessary to improve customer relations, improve products, run
surveys and product specials, and gather additional information.

WebStats. WebStats allows businesses to monitor website visits. It
creates detailed reports about visits to their websites. We believe these
reports may assist businesses in determining the effectiveness of changes to
their websites and identifying the pages on their sites which draw the most
interest. WebStats keeps a detailed two-year history of visits to and
activity within our subscribers' websites, and can generate detailed reports
of site activity. For example, it can generate reports which show year-long
sales trends, or track the effectiveness of sales and promotions during
specific time periods or from specific locations. WebStats retains this
information in database format. We intend to develop future versions of
WebStats which will allow our customers to download and manipulate this
information.

14
<PAGE>

ClipOn Commerce TM. ClipOn Commerce TM is a "Bolt on" e-commerce
solution designed to work with any existing website. Users receive a full
back-end storefront, and an integrated shopping cart application. We
anticipate in the future ClipOn Commerce TM" will become totally integrated
with the features of WebShopper and replace WebShopper in our suite of
products.

Place to Vacation TM. Place to Vacation TM is a marketing tool that helps
our users generate leads and attract Internet traffic to their website. A
website visitor enters his or her name and address information for a chance to
win a free vacation. Pacific WebWorks then gives away a free vacation
accommodation package every week. Our merchants then market to the lead
provided by the information received on the entry form.

FreeSiteNow.com TM FreeSiteNow TM is an affiliate program which gives the
non-sales oriented merchants the opportunity to generate leads for our inside
sales team by handing out free websites. If a sale is made by our sales team
the affiliate will receive a commission on the sale.

MainStreetSquare.com TM MainStreetSquare.com TM is an online shopping
mall, which promotes products and services and links of our merchants using
ClipOn Commerce TM or WebShopper. Consumers can easily shop from multiple
stores on MainStreetSquare.com TM and proceed with one quick check-out when
they are ready to complete their purchase.

Sales and Marketing.

We do not believe that our competitors are effectively targeting our
market niche: a totally Internet based, end-to-end business solution for
small and medium sized businesses. We believe that our products will allow
businesses to generate leads, sell products, run sales promotions, capture
demographic information about website visitors, communicate with website
visitors, and obtain intelligent information about who is visiting their
websites and what they are doing while they are there. Our products allow our
customers to stay in complete control of their websites and provide tools,
which can facilitate a successful Internet experience for them.

We market and sell our products through reseller channels, our internal
sales force, outside sales agents, and strategic partnerships. We sell our
products to partners at wholesale, who then mark the products up and sell them
at retail. We also sell our products through agents who are paid a commission
for each merchant who purchases our products. Each merchant must sign a
purchase agreement with the reseller, which the reseller must in turn provide
to us. We then provide software to the resellers' own merchants which allows
these users to create Internet projects. We provide the initial reseller with
training in the use of the software. The reseller is an independent
contractor and is obligated to pay the amounts due under the agreement even if
he does not receive payments from his merchant. For the period ended March
31, 2000, 19.6% of our sales are originated through our outside sales agents,
while our reseller channels account for approximately 26.4% of our sales.
Strategic partnerships, such as World Commerce Network, account for a total of
21.2% of our sales, and the balance, or 32.8% of our sales are originated by
our internal sales force.

We believe we may be able to develop a substantial presence in our target
market through a combination of marketing strategy, unique proprietary
technology, technical expertise, and early entry into our target market. We
have also developed a fourteen-day trial version of Visual WebTools TM, which
can be provided to a business for evaluation purposes free of charge. Our
products will allow a business to create, operate, and maintain a website for
an initial one-year term, after which our customer may maintain its license by
paying a monthly license fee of $49 or approximately $600 per year. We are
also pursuing a national advertising campaign, which may include television,
radio, and print media.

It is our opinion that in the past, businesses which have attempted to
maintain interactive websites and conduct business on the Internet have either
developed technical expertise themselves, paid employees to create and
maintain their websites, or retained contract "web professionals" to do so.
We believe that Visual WebTools TM will allow small businesses, at a
relatively small cost, to participate in Internet commerce by creating and
managing their own Internet websites and storefronts.

15
<PAGE>

Major Customers.

During 1997 we had 41 clients, two of whom accounted for more than 5% of
our revenue. During 1998 we had a total client base of 85, four of whom each
accounted for more than 5% of our revenues. During 1999 we have increased our
client base to several hundred with two of our sales channels providing 41% of
our revenue.

US Merchant Systems, Inc. supplies us with marketing expertise and
merchant accounts for our customers, and accounted for approximately $65,000,
or 21% of our revenue, for the twelve months ended December 31, 1999. While
we entered into a new Strategic Marketing Agreement with US Merchant Systems
on August 30, 1999, the loss of our relationship with US Merchant Systems
would create an immediate loss of revenue for us and could have a material
adverse effect on our operations. Lauman Enterprise, a reseller, accounted for
approximately $60,000 or 20% of total revenues for the twelve months ended
December 31, 1999.

During 1998 management changed our strategy to focus on mass marketing of
Internet tools and de-emphasized contract programming. We had four major
customers who individually accounted for 10% or more of our total revenues.
Internet Yellow Pages accounted for 26%, or $44,890, of total 1998 revenues.
Ex.Sight Co. accounted for 16%, $28,161, of total revenue. CUSA Technologies
accounted for 12%, or $21,271 of total revenues. American Home Business
contributed 14%, or $24,422, in sales.

World Commerce Network, LLC was created as a joint venture between
Pacific WebWorks and US Merchant Systems to market each companies' respective
products. World Commerce Network has an exclusive contract with Productive
Seminars, Inc. in St. George, Utah. Productive Seminars produces and runs
seminars throughout the country for World Commerce Network. From inception of
World Commerce Network approximately 100 seminars have been held in different
cities throughout the United States. In March of 2000 we acquired a
controlling interest in World Commerce Network (51%).

Our seminar workshops have been a great success. For example, during our
opening week we had a total of 509 attendees that participated in a two-hour
presentation learning about the companies involved and the products and
services offered by Pacific WebWorks. From those attendees we had 92 people
(18.1%) became affiliates of our FreeSightNow.com program and 44 people (8.7%)
became affiliates and clients for Pacific WebWorks, Inc and U.S. Merchant
Systems through World Commerce Network.

Product Development.

We acquired a large amount of source code from Innovative Research and
Animated Design, Inc. ("IRAD") in June of 1997. IRAD originally developed
this technology, which is a part of the underlying technology from which we
program. We believe that this code base provides us with a significant market
advantage with advancements in the areas of Internet business technologies,
including 3D animation and search engine technologies. We intend to
incorporate part or all of this technology into future versions of Visual
WebTools TM and our other products.

We are now working on V4, our next product evolution. We anticipate this
expansion will include features such as Cashier/ POS (Point of Sale)
management, receiving, ordering, tender, store operations, human resources,
POS peripherals management, inventory and accounting. At the same time our
virtual software will be expanded to include features such as items and
benefits, catalog management, order development, advanced 1-to-1 marketing
methods, sophisticated item comparison and selection, and pre-sales
qualification. We expect this new product to give the merchant a complete
solution for all physical store and Internet concerns and at the same time
reduce costs of operations and introduce new profit centers for the merchant.

Throughout 1999, we spent $320,479 on engineering costs, including
research and development expenses. During 1998 and 1997, we spent $11,949 and
$5,523, respectively, for engineering costs, including research and
development expenses. These costs are passed on to purchasers in the price of
the product.

16
<PAGE>

Material Contracts.

We are a party to the following material contracts:

In January 1998, we entered into an agreement with Electric Lightwave,
Inc. for telecommunications, facilities, and Internet access. We currently
pay $1,725.00 per month for this service. The contract is scheduled to expire
December 31, 2001. We believe that we will be able to extend this contract on
terms, which are acceptable to us, but have no assurances that we can do so.
However, we believe that we will be able to enter a new contract with a
different service provider if the contract is not extended.

In February of 1999, we entered into an agreement with U.S. Merchant
Systems, Inc. and IntelliPay, Inc., both located in Newark, California. U.S.
Merchant Systems, Inc. provides merchant accounts to our clients. IntelliPay
provides software, which enables merchant accounts to communicate with
Internet e-commerce applications. We integrated a merchant account and
transaction processing which allows purchasers of Visual WebTools TM to accept
all major credit cards and personal checks at point of sale from their
website. The term of this agreement is one year from the date of execution
and shall automatically renew each successive year thereafter, unless canceled
in writing. We are also leveraging a relationship with a provider of Internet
factoring, which will allow customers to make monthly payments on negotiated
terms.

Trademark, Licenses and Intellectual Property.

On October 9, 1998, Utah WebWorks filed a trademark application for
Visual WebTools TM which we acquired and became responsible for upon our
merger with Utah WebWorks. In December of 1998 the United States Patent and
Trademark Office assigned Serial No. 567,136 to this mark. The trademark is
currently pending. In 1999, we filed a Trademark application for
MainStreetSquare.com TM, Cyberhaggle TM, and Pricehunter TM, all features of
the online mall. Likewise, in 1999 we filed for trademarks on Pacific WebWorks
TM, ClipOn Commerce TM, FreeSiteNow TM, V4 TM, Overnet Express TM and IDDS TM.
Our success will depend, in part, on our ability to obtain and protect our
trademark and trade secrets and operate without infringing upon the
proprietary rights of others in the United States and other countries. If we
were to become involved in a dispute regarding our intellectual property, it
could become necessary for us to participate in interference proceedings
before the United States Patent and Trademark Office to determine whether we
have a valid claim to the rights involved. We could also be forced to seek a
judicial determination concerning the rights in question. These proceedings
could be costly and time consuming, even if we were to eventually prevail.
Should we not prevail, we could be forced to pay significant damages, obtain a
license to the technology in question, or stop marketing one or more of our
products.

All of our core technology was developed internally by our engineers and
by the engineers of Utah WebWorks. Our products do not rely on any third
party technology, although we have decided to include an upgrade to our
technology features developed by IntelliPay and U.S. Merchant Systems.

We also rely upon trade secrets, proprietary know-how, and
confidentiality provisions in agreements with employees, consultants, and
resellers to protect our intellectual property rights. There are risks that
these other parties may not comply with the terms of their agreements with us,
and that we may not be able to adequately enforce our rights against these
parties.

We have adopted a policy of requiring our employees and resellers to
execute confidentiality agreements when they commence employment with us or
resell our products. These agreements generally provide that all confidential
information developed or made known to the employees or resellers during the
course of their relationships with us is to be kept confidential and not
disclosed to third parties, except under certain specific circumstances. In
the case of employees, the agreements also provide that all inventions
conceived by the employees in the course of their employment will be our
exclusive property.

Employees.

We currently employ 57 people, 54 of whom are full-time employees and
three of whom are part-time. Our

17
<PAGE>

employees are not presently covered by any collective bargaining agreement.
We believe that our relations with our employees are good, and we have not
experienced any work stoppages.

Available Information.

We are subject to certain informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and,
accordingly, file reports, proxy statements and other information with the
Securities and Exchange Commission. These reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the SEC at Room 1024 of the SEC's office at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, DC 20549. Copies of these reports, proxy
statements and other information can be obtained from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, DC
20549 at prescribed rates. Additional updating information with respect to the
securities covered by this prospectus may be provided in the future to
purchasers by means of appendices to this prospectus.

This prospectus, filed as a part of the registration statement, does not
contain information in or attached as an exhibit to the registration
statement. Purchasers should refer to those exhibits to the registration
statement for the complete text. For further information concerning Pacific
WebWorks and the securities offered, refer to the registration statement and
its exhibits which may be inspected at the office of the SEC without charge.
A copy of the registration statement and exhibits may be accessed through the
SEC's Web site at http://www.sec.gov.

Reports to Security Holders.

We are required to comply with the reporting requirements of the
Securities Exchange Act of 1934 ( the "Exchange Act") and file annual,
quarterly, and other reports with the SEC. We are also subject to the proxy
solicitation requirements of the Exchange Act and, accordingly, furnish an
annual report with audited financial statements to our stockholders. We
currently use an investor relations firm, Columbia Financial Group, and
interested persons may call at (888) 301-6271. Also, interested persons may
visit our website at http://www.pacificwebworks.com.

PROPERTIES

We currently lease 8,500 square feet of commercial office space in the
Westgate Business Center in Salt Lake City, Utah. The building has a total of
200,000 square feet of office and common space and serves as our main office
and production facility. We pay $8,700 each month for our lease, which we
believe is typical for similar premises in the area currently available for
lease. The current lease is for a three year term and will expire on December
31, 2001.

LEGAL PROCEEDINGS

We are not aware that we are a party to any existing or threatened legal
or administrative proceedings as of the date of this filing.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information.

Our common stock is traded on the NASD OTC Bulletin Board under the
symbol "PWEB". There was no trading activity in our common stock during 1997
and 1998. The following table presents the range of the high and low bid
prices of our stock as reported by the NASDAQ Trading and Market Services.
Such quotations represent prices between dealers and may not include retail
markups, markdowns, or commissions and may not necessarily represent actual
transactions.
18
<PAGE>

Year Quarter Ended High Low
---- ------------- ----- -----
1999 March 31st 20.0 6.875
June 30th 9.875 5.625
September 30th 6.05 2.05
December 31st 5.00 1.25
2000 March 31st 6.125 2.3125

We have 13,200,342 shares of common stock outstanding, including the
400,000 shares issued and registered hereby; of this amount, 4,405,000 of our
shares are free trading; 8,795,342 of our shares are restricted pursuant to
Rule 144. As of May 5, 2000, we have approximately 29 shareholders of record.

In January of 1999, the SEC granted approval to the NASD OTC Bulletin
Board Eligibility Rule 6530 which requires a company listed on the OTC
Bulletin Board to be a reporting company and current in its reports filed with
the SEC. In July of 1999 we filed a registration statement on Form 10 in
order to become a fully reporting company and to maintain our listing on the
OTC Bulletin Board. Because the SEC did not reach a position of no comment
with regard to our registration statement prior to August 1999, we lost our
listing on the OTC Bulletin Board, which has had an adverse impact upon the
market for our common stock. Our listing returned to the OTC Bulletin Board
in November of 1999.

Dividend Policy.

We have not paid cash or stock dividends and have no present plan to pay
any dividends, intending instead to reinvest its earnings, if any. For the
foreseeable future, we expect to retain any earnings to finance the operation
and expansion of our business. In addition, it is anticipated that the terms
of future debt and/or equity financing may restrict the payment of cash
dividends. Therefore, the payment of any cash dividends on the common stock is
unlikely. However, payment of future dividends will be determined from time to
time by our board of directors, based upon our future earnings, financial
condition, capital requirements and other factors. We are not presently
subject to any restriction on our present or future ability to pay any
dividends.

FINANCIAL STATEMENTS

<PAGE> 19

Pacific Webworks, Inc.
And Subsidiary

Consolidated Financial Statements

March 31, 2000

<PAGE> 20
CROUCH, BIERWOLF & CHISHOLM
Certified Public Accountants
50 West Broadway, Suite 1130
Salt Lake City, Utah 84101
Office (801) 363-1175
Fax (801) 363-0615

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of
Pacific Webworks Inc.
Salt Lake City, Utah

We have reviewed the accompanying condensed consolidated balance sheet of
Pacific Webworks, Inc. and subsidiary as of March 31, 2000 and the related
condensed consolidated statements of income and cash flows for the period then
ended. These financial statements are the responsibility of the company's
management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.

We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of December 31, 1999, and the related
statements of income, retained earnings, and cash flows for the year then
ended (not presented herein); and in our report dated January 31, 2000, we
expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying condensed balance sheet
as of December 31, 1999, is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.

The accompanying statements of operations and cash flows for the period ended
March 31, 1999 were not audited or reviewed by us and, accordingly, we do not
express an opinion on them.

/s/ Crouch Bierwolf & Chisholm

Crouch, Bierwolf & Chisholm
May 3, 2000

<PAGE> 21

Pacific Webworks, Inc.
Consolidated Balance Sheets

Assets
March 31 December 31
2000 1999
------------- -------------
Current Assets (unaudited)
Cash and Cash Equivalents $ 127,087 $ 153,898
Accounts Receivable (net of allowance of
$12,798 and $3,798, respectively) 433,010 101,429
Employee Receivable 7,474 4,578
Prepaid Expenses 9,022 16,333
Accounts Receivable - Related Party - 6,800
Notes Receivable - Related Party - 166,046
Note Receivable 153,000 -
------------- -------------
Total Current Assets 729,593 449,084
------------- -------------

Property and Equipment 183,127 171,393
------------- -------------
Other Assets
Goodwill, net 237,687 -
Deposits 5,250 5,250
Computer Software Costs 4,333 4,832
------------- -------------
Total Other Assets 247,270 10,082
------------- -------------

Total Assets $ 1,159,990 $ 630,559
============= =============

Liabilities and Stockholders' Equity

Current Liabilities
Accounts Payable $ 415,152 $ 74,550
Accrued Expenses 127,123 70,177
Notes Payable 1,178,730 500,000
------------- -------------
Total Current Liabilities 1,721,005 644,727
------------- -------------

Minority Interest - -

Stockholders' Equity
Common Stock, authorized 50,000,000 shares of
no par value, issued and outstanding
10,400,342 and 10,395,679 shares 10,400 10,396
Deferred Compensation - (13,216)
Paid in Capital 2,759,080 2,775,404
Retained Deficit (3,330,495) (2,786,752)
------------- -------------
Total Stockholders' Equity (561,015) (14,168)
------------- -------------

Total Liabilities and Stockholders' Equity $ 1,159,990 $ 630,559
============= =============

The accompanying notes are an integral part of these financial statements.

<PAGE> 22

Pacific Webworks, Inc.
Consolidated Statements of Operations

For the three For the three
months ended months ended
March 31 March 31
2000 1999
-------------- -------------
SALES $ 1,992,032 $ 4,499

COST OF GOODS SOLD 266,893 1,276
-------------- -------------

GROSS PROFIT 1,725,139 3,223
-------------- -------------
OPERATING EXPENSES
General And Administrative Expenses 741,157 109,234
Sales 1,431,393 35,086
Research and Development 81,116 35,563
-------------- -------------

TOTAL OPERATING EXPENSES 2,253,666 179,883
-------------- -------------

OPERATING INCOME (LOSS) (528,527) (176,660)
-------------- -------------
OTHER INCOME AND (EXPENSES)
Interest Expense (15,215) -
Warrants Issued for Services - (1,062,317)
-------------- -------------
Total Other Income and (Expenses) (15,215) (1,062,317)
-------------- -------------

NET INCOME (LOSS) $ (543,742) $ (1,238,977)
============== =============

NET INCOME (LOSS) PER SHARE $ (.05) $ (.15)
============== =============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES 10,400,342 8,333,500
============== =============

The accompanying notes are an integral part of these financial statements.

<PAGE> 23

Pacific Webworks, Inc.
Consolidated Statements of Cash Flows

For the three For the three
months ended months ended
March 31 March 31
2000 1999
-------------- -------------
Cash Flows From Operating Activities

Net income (loss) $ (543,742) $ (1,238,977)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Used in Operating Activities:
Depreciation & Amortization 32,842 1,067,259
Bad Debt 9,000 -
Minority Interest - -
Loss on Investments (25,000) -
Change in Assets and Liabilities (Net of
effects of acquisition of WCN)
(Increase) Decrease in:
Accounts Receivable (297,373) (7,591)
Other Receivables (2,896) -
Prepaid Expenses 7,311 -
Increase/(decrease) in:
Accounts Payable and Accrued Expenses 380,202 (5,634)
-------------- -------------
Net Cash Provided (Used) by
Operating Activities (439,656) (184,943)
-------------- -------------
Cash Flows from Investing Activities
Cash paid for Notes Receivable (153,000) -
Purchase of Property and Equipment (18,788) (20,334)
Cash paid for deposits - (4,350)
Cash acquired in acquisition 5,628 750,000
-------------- -------------
Net Cash Provided (Used) by
Investing Activities (166,160) 725,316
-------------- -------------
Cash Flows from Financing Activities

Proceeds from debt financing 579,005 210,000
Principal payments on debt financing - (210,000)
-------------- -------------
Net Cash Provided (Used) by
Financing Activities 579,005 -
-------------- -------------
Net Increase (Decrease) in Cash and
Cash Equivalents (26,811) 540,373
-------------- -------------
Cash and Cash Equivalents
Beginning 153,898 9,306
-------------- -------------
Ending $ 127,087 $ 549,679
============== =============

Supplemental Disclosures of Cash Flow Information:
Cash payments for interest $ - $ -
============== =============
Cash payments for income taxes $ - $ -
============== =============

Supplemental Schedule of Noncash Investing and Financing Activities

Common shares issued for services $ - $ -
============== =============

The accompanying notes are an integral part of these financial statements.

<PAGE> 24
Pacific Webworks, Inc.
March 31, 2000

NOTES TO FINANCIAL STATEMENTS

Pacific Webworks, Inc. (the "Company") has elected to omit
substantially all footnotes to the financial statements for the three months
ended March 31, 2000, since there have been no material changes (other than
indicated in other footnotes) to the information previously reported by the
Company in their Annual Report filed on Form 10-KSB for the Fiscal year ended
December 31, 1999.

UNAUDITED INFORMATION

The information furnished herein was taken from the books and
records of the Company without audit. However, such information reflects all
adjustments which are, in the opinion of management, necessary to properly
reflect the results of the period presented. The information presented is not
necessarily indicative of the results from operations expected for the full
fiscal year.

ACQUISITION OF WORLD COMMERCE NETWORK, LLC

Effective January 1, 2000, the Company issued 4,663 shares of its
common stock to U.S. Merchant Systems, Inc. for 1% of the outstanding stock of
World Commerce Network, LLC. (WCN) The shares were valued at $9,180. The
issuance increases the Company's ownership in WCN to 51% and WCN therefore
becomes a subsidiary of the Company. The operations of WCN have been
consolidated with the Company's operations effective January 1, 2000. Prior
to the additional 1% purchase, the Company owned 50% of WCN and recorded its
investment using the equity method. The balance at December 31, 1999 was $0.

<PAGE> 25

Pacific WebWorks, Inc.

Financial Statements

December 31, 1999 and 1998

<PAGE> 26

C O N T E N T S

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . 3

Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . 5

Statements of Stockholders' Equity . . . . . . . . . . . . . . . . . . . . 6

Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . 7

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . 8

<PAGE> 27

CROUCH, BIERWOLF & CHISHOLM
Certified Public Accountants
50 West Broadway, Suite 1130
Salt Lake City, Utah 84101
Office (801) 363-1175
Fax (801) 363-0615

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of
Pacific WebWorks, Inc.

We have audited the accompanying balance sheets of Pacific WebWorks, Inc. as
of December 31, 1999 and 1998 and the related statements of operations,
stockholders' equity and cash flows for the years ended December 31, 1999,
1998 and 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pacific WebWorks, Inc. as of
December 31, 1999 and 1998 and the results of its operations and cash flows
for the years ended December 31, 1999, 1998 and 1997 in conformity with
generally accepted accounting principles.

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

/s/ Crouch, Bierwolf & Chisholm

Salt Lake City, Utah
January 31, 2000

<PAGE> 28

Pacific WebWorks, Inc.
Balance Sheets

Assets
December 31,
1999 1998
------------- -------------
Current assets
Cash and Cash Equivalents $ 153,898 $ 9,306
Accounts Receivable (net of allowance of
$3,798 and $6,600, respectively) 101,429 10,392
Employee Receivable 4,578 836
Prepaid Expenses 16,333 -
Accounts Receivable - Related Party (Note 8) 6,800 -
Notes Receivable - Related Party (Note 8) 166,046 -
------------- -------------
Total Current Assets 449,084 20,534
------------- -------------

Property and Equipment (Note 3) 171,393 23,353
------------- -------------
Other Assets
Deposits 5,250 5,250
Computer Software Costs (Note 5) 4,832 6,833
------------- -------------
Total Other Assets 10,082 12,083
------------- -------------
Total Assets $ 630,559 $ 55,970
============= =============

Liabilities and Stockholders' Equity

Current Liabilities
Accounts Payable $ 74,550 $ 11,261
Accrued Expenses 70,177 3,926
Notes Payable (Note 4) 500,000 250,000
------------- -------------
Total Current Liabilities 644,727 265,187
------------- -------------
Stockholders' Equity
Common Stock, authorized 50,000,000 shares of
no par value, issued and outstanding 10,395,679
and 5,000,000 shares, respectively 10,396 5,000
Deferred Compensation (Note 9) (13,216) -
Paid in Capital 2,775,404 5,000
Retained Deficit (2,786,752) (219,217)
------------- -------------
Total Stockholders' Equity (14,168) (209,217)
------------- -------------

Total Liabilities and Stockholders' Equity $ 630,559 $ 55,970
============= =============

The accompanying notes are an integral part of these financial statements.
4
<PAGE> 29

Pacific WebWorks, Inc.
Stements of Operations

For the
Years Ended
December 31,
1999 1998 1997
------------- ------------ -------------
Revenues: $ 305,628 $ 172,395 $ 94,014

Cost of Sales 42,874 188,974 107,332

Gross Profit 262,754 (16,579) (13,318)

Expenses:

Sales 406,917 30,180 13,987
Research & Development 320,479 11,949 5,523
General & Administrative 817,312 80,996 36,179
------------- ------------ -------------

Total Expenses 1,544,708 123,125 55,689
------------- ------------ -------------

Income (Loss) from Operations (1,281,954) (139,704) (69,007)

Other Income (Expenses)

Interest Expense (19,243) (10,761) (3,500)
Interest Income 1,246 - -
Other Income - - 3,755
Warrants issued for consulting
services (1,242,584) - -
Loss on Investment (Note 7) (25,000) - -
------------- ------------ -------------

Net Income (Loss) $ (2,567,535) $ (150,465) $ (68,752)
============= ============ =============

Net Loss Per Share $ (0.27) $ (0.03) $ (0.01)
============= ============ =============

Weighted average shares outstanding 9,632,500 5,000,000 5,000,000
============= ============ =============

The accompanying notes are an integral part of these financial statements.
5

<PAGE> 30
Pacific WebWorks, Inc.
Statement of Stockholders' Equity

Common Stock Paid in Retained
Shares Amount Capital Deficit
------------ ---------- ------------- -------------
Balance at Inception on
April 10, 1997 - $ - $ - $ -

April 1997, shares issued
for cash at $10 per share 5,000,000 5,000 5,000 -

Net loss December 31, 1997 - - - (68,752)
------------ ---------- ------------- -------------

Balance, December 31, 1997 5,000,000 5,000 5,000 (68,752)

Net loss December 31, 1998 - - - (150,465)
------------ ---------- ------------- -------------

Balance, December 31, 1998 5,000,000 5,000 5,000 (219,217)

Reverse merger &
reorganization adjustment 5,000,000 5,000 995,000 -

September 1999, shares
issued for insurance
policy at $1.43 per share,
valued at $20,000 14,000 14 19,986 -

December 1999, shares
issued for payment on
notes payable of $500,000
at $2.62 per share 381,679 382 499,618 -

Warrants issued for
consulting fees during 1999 - - 1,255,800 -

Net loss December 31, 1999 - - - (2,567,535)
------------ ---------- ------------- -------------

Balance, December 31, 1999 10,395,679 $ 10,396 $ 2,775,404 $ (2,786,752)
============ ========== ============= =============

The accompanying notes are an integral part of these financial statements.
6

<PAGE> 31
Pacific WebWorks, Inc.
Statement of Cash Flows
<TABLE>
<CAPTION>
For the
Years Ended
December 31,
1999 1998 1997
------------- ------------ -------------
<S> <C> <C> <C>
Cash Flows form Operating Activities:
Net Income (loss) $ (2,567,535) $ (150,465) $ (68,752)
Adjustments to reconcile
net (loss) to net cash
provided by operations
Depreciation & Amortization 30,572 13,151 5,473
Warrants issued for services 1,255,800 - -
Bad Debt - 4,055 2,545
Loss on Investment 25,000 - -
Change in assets and liabilities:
Accounts receivable (94,779) 13,828 (31,656)
Accounts Payable and accrued expenses 121,064 (755) 15,942
Prepaid expenses (29,549) - -
Common stock issued for insurance 20,000 - -
Accounts receivable - related party (6,800) - -
------------- ------------ -------------

Net Cash Flows used in Operating Activities (1,246,227) (120,186) (76,448)
------------- ------------ -------------
Cash Flows from Investing Activities:
Cash paid for property and equipment (148,135) (12,675) (22,014)
Cash paid for deposits - (5,250) -
Cash paid for technology - - (10,000)
Cash paid for investment (25,000) - -
Cash from escrow 750,000 - -
Cash paid to related party (166,046) - -
------------- ------------ -------------

Net Cash Paid for Investing Activities 410,819 (17,925) (32,014)
------------- ------------ -------------
Cash Flows from Financing Activities:
Cash from debt financing 980,000 381,300 108,802
Issuance of stock - - 10,000
Principle payments on Debt financing - (239,323) (4,900)
------------- ------------ -------------

Net Cash Flows from Financing Activities 980,000 141,977 113,902
------------- ------------ -------------

Net increase (decrease) in cash 144,592 3,866 5,440

Cash and Cash Equivalents,
beginning of period 9,306 5,440 -
------------- ------------ -------------

Cash and Cash Equivalents, end of period $ 153,898 $ 9,306 $ 5,440
============= ============ =============

Supplemental Cash Flow Information
Cash Paid for:
Interest $ 1,400 $ 14,262 $ -
Taxes $ - $ - $ -

7
(continued)

</TABLE>
<PAGE> 32

Pacific WebWorks, Inc.
Statement of Cash Flows
(continued)

Supplemental Non-Cash Disclosures:

During 1999, 14,000 shares of common stock were issued at $1.43 per share
for a $20,000 insurance policy.

During 1999, 381,679 shares of common stock were issued at $2.62 per
share in payment of a $500,000 notes payable.

During 1999, 400,000 warrants were issued for non-employee services
performed during the year. These warrants are valued at $1,255,800.

For 1999, the Company's share of the recognized loss in the joint venture
is $25,000.

The accompanying notes are an integral part of these financial statements.
8
<PAGE> 33

Pacific WebWorks, Inc.
Notes to The Financial Statements
December 31, 1999 and 1998

NOTE 1 - Summary of Significant Accounting Policies

a. Organization

Pacific WebWorks, Inc., ("the Company") was organized under the laws
of the state of Nevada on May 18, 1987 as Asphalt Associates, Inc. On
December 31, 1998 the board of directors changed the name of the Company to
Pacific Webworks, Inc. On January 11, 1999, the Company merged with Utah
Webworks, Inc., a Utah corporation organized April 10, 1997. The share
exchange with Utah Webworks was accounted for as a reverse merger, therefore
all financial information prior to January 11, 1999 is that of the accounting
survivor being Utah Webworks. Utah Webworks is currently engaged in
developing, selling and servicing computer and internet related software and
hardware products.

b. Accounting Method

The Company recognizes income and expenses on the accrual basis of
accounting.

c. Earnings (Loss) Per Share

The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements. Fully diluted earnings per share has not been presented because
it is anti-dilutive. 400,000 potentially issuable common shares were excluded
from the calculation because their effects were anti-dilutive.

d. Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities
of three months or less to be cash equivalents.

e. Provision for Income Taxes

At December 31, 1999, the Company has net operating loss
carryforwards totaling approximately $2,786,752 that may be offset against
future taxable income through 2013. No tax benefit has been reported in the
1999 financial statements since the loss carryforwards are offset by valuation
allowance of the same amount.

Deferred tax assets and the valuation account is as follows at
December 31, 1999 and 1998:

1999 1998
--------------- ---------------

Deferred tax asset
NOL carryforward $ 947,400 $ 74,500
Valuation allowance (947,400) (74,500)
--------------- ---------------
$ - $ -
=============== ===============

10
<PAGE> 34

Pacific WebWorks, Inc.
Notes to The Financial Statements
December 31, 1999 and 1998

NOTE 1 - Summary of Significant Accounting Policies (continued)

f. Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the financial statements
and revenues and expenses during the reporting period. In these financial
statements, assets involve extensive reliance on management's estimates.
Actual results could differ from those estimates.

g. Revenue Recognition

The Company recognizes income and expense on the accrual basis of
accounting. The Company receives revenues from services provided for internet
software design and engineering. Pursuant to SOP 97-2, revenue is recorded
when the services are completed. The Company also generates revenues from the
sale or access to their internet design software technology. This product is
sold separately without future performance such as upgrades or maintenance,
and is not sold with PCS services, therefore according to SOP 97-2 revenue is
recorded upon the sale and delivery of or access to the product once an
agreement exists, the price is fixed and collectability is probable.

Revenues generated from resellers are recorded in the same manner as
to the end user, except delivery is directly to the end user rather than to
the reseller. Revenue is recorded when all terms of SOP 97-2 as mentioned
above are achieved.

Trade receivables are due upon receipt of the invoice. An allowance
has been made from potentially uncollectable accounts in the amounts of
$3,798, $6,600 and $2,545 for the periods ended December 31, 1999, 1998 and
1997, respectively.

h. Depreciation

The provision for depreciation is calculated using the straight-line
method over the estimated useful lives of the assets. Depreciation expense
for the period ended December 31, 1999, 1998 and 1997 is $28,572, $11,151 and
$4,306, respectively.

i. Major Customers

During 1999 and 1998 the Company had major customers that
individually accounted for 10% or more of the annual sales. During 1998, four
customers generated sales in the amount of $118,744 or 68% of total sales as
follows:

Customer Sales %
---------- ---------- --------
A 28,161 16
B 21,271 12
C 24,422 14
D 44,890 26

During 1999, two customers generated sales in the amount of $124,344
or 41% of total sales as follows:

Customer Sales %
---------- ----------- --------
A 64,535 21
B 59,809 20

11
<PAGE> 35
Pacific WebWorks, Inc.
Notes to the Financial Statements
December 31, 1999 and 1998

NOTE 1 - Summary of Significant Accounting Policies (continued)

j. Impairment of Long Lived Assets

Fixed assets are evaluated annually by management and if impaired are
written down to the fair market value.

NOTE 2 - Going Concern

The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has had
recurring operating losses since inception and is dependent on financing to
continue operations. However, the Company believes that its current and
developing sales channels, including the World Commerce Network sales
operations will be sufficient to support its existing operations without any
requirements for external financing. The financial statements do not include
any adjustment that might result from the outcome of this uncertainty.

NOTE 3 - Property and Equipment

Property and Equipment consists of the following at December 31, 1999
and 1998:

December 31,
1999 1998
--------------- ------------
Computer Equipment $ 82,165 $ 32,990
Furniture and Fixtures 59,138 5,820
Equipment 39,558 -
Software 27,894 -
Leasehold improvements 6,667 -
--------------- ------------
Total 215,422 38,810
--------------- ------------
Less Accumulated Depreciation (44,029) (15,457)
--------------- ------------
171,393 23,353
=============== ============

NOTE 4 - Notes Payable-Current

During 1999, the Company received $980,000 cash and $20,000 of
equipment from a company. In December 1999, $500,000 of the note was
converted to 381,679 restricted shares of the company's common stock. The
remaining balance of $500,000 matures on December 31, 2000.

NOTE 5 - Computer Software Costs

On May 7, 1997, the Company entered into an agreement for assignment
of a security interest and judgement from a bank for various software service
codes and other technology they held. Pursuant to FASB 86, the Company
capitalized these costs because the purchased software had alternative future
use, being an integral part of the internet software design product sold to
the public. Costs of maintaining the product is charged to expense when
incurred. The Company paid $10,000 for the transfer of these software tools
and is amortizing them over a five year life. Amortization expense is $2,001,
$2,000 and $1,167 for the years ended December 31, 1999, 1998 and 1997,
respectively.

12
<PAGE> 36

Pacific WebWorks, Inc.
Notes to the Financial Statements
December 31, 1999 and 1998

NOTE 6 - Reverse Merger / Stock Split

Effective January 11, 1999, Pacific Webworks, Inc. (a public Company)
entered into an agreement and Plan of Reorganization with Utah Webworks, Inc.,
(a private company). The agreement provides for the merger of the Company
into Utah Webworks to be treated as a reverse merger, thus making Utah
Webworks the accounting survivor. Pursuant to the agreement the Company
issued 5,000,000 shares of common stock to the shareholders of Utah Webworks
for all shares of their Company. Because the historical financial information
in these financial statements prior to the reverse merger (January 11, 1999)
is that of the accounting acquirer (Utah Webworks), a 5,000 for 1 forward
stock split adjustment has been retroactively applied to the shares of Utah
Webworks, to show the effects of the reverse merger. The 5,000,000 share
reorganization adjustment represents the shares held by the shareholders of
the public company. The management of the Company resigned and the management
and board of Utah Webworks filled the vacancy. Utah Webworks is in the
business of software development for computer and internet systems. The
public company had cash in escrow of $750,000 and a note receivable from Utah
Webworks of $250,000 as its only assets. The cash and note receivable were
contributed to Utah Webworks as an investment in subsidiary advanced for
operations. This business combination was accounted for using the purchase
method.

NOTE 7 - Investment in Joint Venture

During 1999, the Company became a 50% member in World Commerce
Network, LLC. For 1999, World Commerce Network, LLC has a net loss of
$281,341, of which, $140,671 should be recognized by the Company. However,
since the Company contributed only $25,000 in capital, the loss on investment
is limited to this amount. The Company's book value in this investment at
December 31, 1999 is $0. In January 2000, the Company acquired an additional
1% interest and began accounting for this investment using the consolidation
method and changed from the equity method.

NOTE 8 - Related Party

During 1999, $166,046 has been recognized as a notes receivable from
World Commerce Network, LLC. There is no provision for interest and the
balance is due within the next twelve months.

As of December 31, 1999, there is an accounts receivable of $6,800
due from World Commerce Network, LLC.

Lamar Taylor, a previous officer and shareholder of the Company,
advanced funds to the Company for operating capital in the amount of $131,300
and $108,800 during the periods ended December 31, 1998 and 1997,
respectively. All advances were repaid during 1998.

NOTE 9 - Stock Warrants

At January 1999, the Company had outstanding warrants to purchase
400,000 shares of the Company's common stock at prices ranging from $2.50 to
$6.00 per share. The warrants became exercisable in January 1999 and expire
in January 2004. The warrants are exercisable as follows:

150,000 warrants at $2.50
100,000 warrants at $3.50
100,000 warrants at $4.50
50,000 warrants at $6.00

13
<PAGE> 37

Pacific WebWorks, Inc.
Notes to the Financial Statements
December 31, 1999 and 1998

NOTE 9 - Stock Warrants (continued)

The warrants were issued to a public relations firm for promotional
services to be provided for one year from issue date. To date, the warrant
holder has not exercised any of the warrants. We accounted for these warrants
per FASB 123 using the Black-Scholes model on the date the warrants became
measurable per EITF 96-18. The measurement dates are as follows: 133,000
warrants on January 28, 1999, 67,000 warrants of July 27, 1999 and the
remaining 200,000 on November 27, 1999. The resulting valuation for the
warrants is $1,255,800 of which $1,242,584 was amortized in 1999. The balance
of $13,216 will be amortized during the year 2000 and is recorded a deferred
compensation on the balance sheet. As of the audit report date, no options
have been exercised.

NOTE 10 - Commitments and Contingencies

The Company is committed to an operating lease for office space. The
lease requires the Company to pay monthly rent of $8,700 and expires in
December 2001.

Future minimum lease payments are as follows:

2000 $ 104,400
2001 104,400
----------------
Total $ 208,800
================

NOTE 11 - Fair Value of Financial Instruments

Unless otherwise indicated, the fair values of all reported assets
and liabilities which represent financial instruments (none of which are held
for trading purposes) approximate the carrying values of such instruments.

NOTE 12 - Incentive Stock Option Plan

On December 1, 1999, the Company established an Incentive Stock Option
Plan (the Plan). The Plan covers both current and prospective employees

The exercise price for each option shall be established by the Company
Board of Directors. The exercise price per share for an Incentive Stock
Option can not be less than the fair market value of a share of stock on the
effective grant date. Once granted 33% of the options vest after 1 year of
service and the remaining 67% vests after the second year.

As of December 31, 1999, there are 750,000 options granted and no
options have yet vested. Per SFAS 123, the Company does not record
compensation for the stock options until the employee performs the required
service and the options are issued (vest). No options are exercisable after
the expiration of 10 years after the effective grant date. The maximum number
of shares to be issued under the plan is 1,000,000.

14
<PAGE> 38

SELECTED FINANCIAL DATA

The financial information below summarizes our statements of operations
for the fiscal years ended December 31, 1999, 1998, and 1997. The accounting
acquirer, Utah WebWorks, Inc., had an inception date of April 10, 1997. The
following selected financial data should be read in conjunction with our
financial statements and notes thereto and "Management's Discussion and
Analysis."

Year Ended December 31,
1999 1998 1997
------------- ------------- -------------
Revenues: 305,628 172,395 94,014
Cost of Sales 42,874 188,974 107,332
Gross Profit 262,754 (16,579) (13,318)

Operating costs and expenses:
Sales 406,917 30,180 13,987
Research and Development 320,479 11,949 5,523
General and Administrative 817,312 80,996 36,179
Total costs and expenses 1,544,708 123,125 55,689

Income (loss) from operations (1,281,954) (139,704) (69,007)

Interest expense (19,243) (10,761) (3,500)
Interest income and other, net 1,246 - 3,775
Warrants Issued for Consulting
Services (1,242,584) - -
Loss on Investment in World Commerce (25,000) - -

Net income (loss) (2,567,535) (150,465) (68,752)

Net Loss Per Share (0.27) (0.03) (0.01)
Shares used in computing per
share amounts 9,632,500 5,000,000 5,000,000

Balance Sheet Data:
Cash and cash equivalents 153,898 9,306 5,440
Total Assets 630,559 55,970 61,092
Total Current Liabilities 644,727 265,187 119,844
Accumulated deficit (2,786,752) (219,217) (68,752)
Shareholders' equity (deficit) (14,168) (209,217) (58,752)

See notes to Financial Statements for information concerning the computation
of per share amounts.

MANAGEMENT'S DISCUSSION AND ANALYSIS

Overview.

Originally, our business focused on providing professional services for
the Internet. After April 1998 management shifted our focus to development
and sale of software products. This decision was based on management's vision
of our company, market conditions, and the type and amount of technology we
had already acquired or developed. We are currently structuring our
operations to focus on four principal revenue streams: Internet billing
services, Internet publishing of statements, customer care services through
Internet and traditional telephony technologies, and professional services
associated with the implementation and maintenance of these Internet
technologies.

39
<PAGE>

In November 1998 we released "Visual WebTools TM" and during 1998 and
1999 we introduced upgrades to this software as well as new products. We
intend to release a new product, V4 TM later this year which is a software
technology that allows small businesses to fully integrate their physical
store operations with their e-commerce operations.

As of March 31, 2000 we had an accumulated loss of $3,330,495, an amount
which primarily accrued during 1999 while we developed our technology.

Reverse merger treatment. We were incorporated in the state of Nevada on
May 18, 1987, as Asphalt Associates, Inc. On January 11, 1999, Asphalt
Associates completed a merger with Utah WebWorks, Inc., a Utah corporation.
We were the surviving entity in that transaction and, as part of the
transaction, changed our name to "Pacific WebWorks, Inc." At the time of the
merger, Utah WebWorks owned all of the intellectual property we currently use.
On January 1, 1999 we issued an aggregate of 5,000,000 common shares to the
stockholders of Utah WebWorks, Inc. As a result of the merger, the former
shareholders of Utah WebWorks obtained 50% of the voting power of the combined
companies. Accordingly, in conformance with generally accepted accounting
principles, the merger has been accounted for as a "reverse merger" and the
accounting survivor is Utah WebWorks. The financial statements for the
fiscal year ended December 31, 1998 are those of Utah WebWorks.

Stock Split and Change in Par Value. In December 1998, we authorized a
4-for-1 forward stock split. Unless otherwise noted in this registration
statement all share amounts reflect the forward stock split.

Acquisitions. In March of 2000 we acquired an additional 1% interest in
World Commerce Network LLC, which is a marketing company we formed to promote
and sell products from Pacific WebWorks, U.S. Merchant Systems, and IntelliPay
Inc. This additional 1% gave us a 51% total interest in World Commerce
Network. World Commerce Network has recently begun an Internet Business
Opportunity seminar series offering affiliate opportunities to distribute
products of Pacific WebWorks, U.S. Merchant Systems and IntelliPay. World
Commerce Network anticipates it will be able to present Pacific WebWork's
products to over 500 potential purchasers and affiliates each week.
Management believes World Commerce Network will continue to improve our
revenues through the acquisition of new merchants and resale opportunities to
existing merchants.

On April 4, 2000 we signed a reorganization agreement to acquire all of
the outstanding shares of IntelliPay, Inc., a Delaware corporation. We issued
2,400,000 common shares, valued at $8,400,000, in exchange for 1000 shares of
IntelliPay held by 18 shareholders. IntelliPay became our wholly owned
subsidiary. Prior to the acquisition we had been involved in a joint venture
with IntelliPay to establish MainStreetSquare.com, an online shopping portal.
Management believes this acquisition will combine the merchant bases of
Pacific WebWorks and IntelliPay, which opens up marketing and revenue
opportunities. In addition, we anticipate IntelliPay will become a key source
of payment technologies for future products of Pacific WebWorks.
Results of Operations.

The following table summarizes the results of our operations for first
quarter ended March 31, 2000 and 1999 and for the years ended December 31,
1999, 1998 and 1997.

March 31, March 31, Year ended December 31,
2000 1999 1999 1998 1997
------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Revenues $ 1,992,032 $ 4,449 $ 305,628 $ 172,395 $ 94,014
Cost of Sales 266,893 1,276 42,874 188,974 107,332

Gross Profit 1,725,139 3,223 262,754 (16,579) (13,318)

Operating Expenses

<PAGE> 40

General & Administrative 741,157 109,234 817,312 80,996 36,179
Expenses
Sales Expenses 1,431,393 35,086 406,917 30,180 13,987
Research and Development
Expenses 81,116 35,563 320,479 11,949 5,523

Total Operating Expense 2,253,666 179,883 1,544,708 123,125 55,689

Operating Income (Loss) (528,527) (176,660) (1,281,954) (139,704) (69,007)

Interest Expense (15,215) - (19,243) (10,761) (3,500)

Net Income (Loss) (543,742) (1,238,977) (2,567,535) (150,465) (68,752)

</TABLE>

Three Months Ended March 31, 2000 and 1999
---------------------------------------------

We receive revenues for sale or access to our software technology sold by
us or by our resellers. We also receive revenues from services provided for
website design. During the first quarter we began seeing significant revenues
from our joint venture with World Commerce Network. The success of the
initial seminars conducted early in the first quarter of 2000 led us to expand
our seminar funding to include a second team. Seminars conducted by our
second team began late in the first quarter of 2000. Recognized revenue
follows approximately three weeks after the sale is written at the seminar.
Only after merchant account approval and lease approval is revenue recognized.

We generated $1,992,032 in sales for the 2000 quarter, an increase of
$1,797,685 or 925% over the fourth quarter of 1999. This completes our fourth
straight quarter of over 100% per quarter growth. This growth is due to our
marketing efforts through World Commerce Network and the continued growth of
our existing sales channels.

Cost of goods sold for the 2000 quarter decreased to 13.3 % of revenues,
or costs of $ 266,993, in comparison to 28.4% of revenues in the 1999 quarter.
The decrease was primarily due to renegotiated lower prices for merchant
accounts. Accordingly our gross profit was 86.7 % of revenues for the 2000
quarter compared to 71.6 % of revenues for the 1999 quarter.

Total operating expenses were 113% of revenues, or $2,253,666, for the
2000 quarter as compared to $179,883, or 4043 %, of revenues in the 1999
quarter. The 2000 quarter includes $557,717 in expenses for Pacific WebWorks
and $1,695,949 in expenses for World Commerce Network. Because of the delay
in revenue recognition as discussed above, these costs appear abnormally high
as a percentage of revenues. Consolidated general and administrative costs
increased to $741,157 in the 2000 quarter from $109,234 in the 1999 quarter.
Growth in general and administrative costs is primarily attributed to the
overhead in World Commerce Network.

Sales expenses, which include both sales and marketing expenses, grew
$1,396,307 compared to the 1999 quarter. This included radio advertising on
the Utah Jazz radio network, and direct mail of approximately 100,000 mail
pieces per week. Sales expenses grew due to investments into World Commerce
Network seminar teams and increased commissions paid to existing Pacific
WebWorks sales channels. Over $300,000 of expenses in World Commerce Network
were dedicated to funding the second team.

Research and development expenses, including all costs for product
design, programming, and quality control, were $45,553 higher for the 2000
quarter compared to the 1999 quarter. As a percentage of sales, the actual
costs decreased from 790% in 1999 to 4% in the same quarter in 2000.

Our operating loss was 26.5% of revenues for the 2000 quarter compared to
3970% of revenues for 1999 quarter. The 1999 loss was primarily attributable
to $1,242,584 expense allocated to warrants issued to Columbia Financial for
investor relation services. The primary source of our losses for the 2000
quarter related to our investment in the growth of our marketing subsidiary,
World Commerce Network. The loss attributable to Pacific WebWorks operations
was $.01 per share, while the loss relating to World Commerce Network was $.04
per share.

41
<PAGE>

Fiscal Years Ended December 31, 1999, 1998 and 1997.
----------------------------------------------------

Our expenses have exceeded our revenues for each fiscal period since our
inception. We generated $305,628 in revenues from product sales and licensing
fees for our software technology during fiscal 1999 compared to $172,395 for
1998 and $94,014 for 1997. We expect our revenues will increase as a result
of our efforts to build a larger reseller network to market Visual WebTools
TM. As a result of our acquisition of our additional 1% ownership in World
Commerce Network and to our acquisition of IntelliPay, Inc., we expect our
revenues to continue significant growth as these entities expand our markets.
We expect that, as we implement our business plan, our revenues will grow,
along with the burdens generally associated with larger revenues, including
increased burdens on our managerial, accounting, and technical personnel.

From period to period there have been significant fluctuations in our
revenues and expenses. Total operating expenses were 59.2% of revenues in
1997, 71.4% of revenues in 1998 compared to 505.4% of revenues in 1999.
Revenues and expenses have increased each fiscal year as a result of the major
changes in the nature of our business operations. The $1,421,583 increase in
expenses from 1998 to 1999 was due to the change in the nature of our
operations from selling services to selling software products. Our expenses
increased primarily due to the expense related to execution of our new
development plan.

General and administrative costs increased $44,817 from 1997 to 1998 and
increased $736,315 from 1998 to 1999. These costs include all officer
salaries, general office expenses, production and shipping expenses. The
increases are primarily due to the growth in the number of employees and
general office expenses. Sales expenses increased $16,193 from 1997 to 1998
and increased $376,737 from 1998 to 1999. These expenses include both selling
and marketing expenses. Sales expenses for 1999 increased over the previous
years due to the development of an inside sales force, which included
experienced Internet sales people and equipment such as a predictive dialer.
Research and development expenses recorded an increase of $308,530 from 1998
to 1999. These costs included all costs for product design, programming, and
quality control and the increase was primarily due to development of our
software technologies.

As a percentage of revenues our net losses were 73.1% for 1997, 85.8% for
1998 and 840.0% for 1999. The increase in the 1999 loss was primarily due to
our investment in the growth of World Commerce Network.

Liquidity and Capital Resources.

Since our inception, we have funded our cash requirements through
issuances of our common stock and short-term notes. We have used the funds
from those transactions to fund our investments in and development of our
technology and to provide working capital for general corporate purposes. Due
to the fact significant sales did not take place until the third quarter of
1999, the majority of our working capital was derived from the issuance of
short-term notes.
The summaries of our audited balance sheets for the years ended December
31, 1999, 1998 and 1997 are as follows:

Year ended December 31,
1999 1998 1997
------------- ------------- -------------
Cash/Cash Equivalents............... $ 153,898 $ 9,306 $ 5,440
Current Assets...................... 449,084 20,534 34,551

Total Assets........................ 630,559 55,970 61,092

<PAGE> 42

Total Current Liabilities........... 644,727 265,187 119,844

Total Stockholder Equity ........... (14,168) (209,217) (58,752)

Total Liabilities & Stockholder
Equity............................ 630,559 55,970 61,092

For the quarter ended March 31, 2000, we had $127,087 cash on hand and
total current assets of $729,593, compared to $153,898 cash on hand and total
current assets of $449,084 for the year ended December 31, 1999. This
increase in total current assets was primarily due to the increase in accounts
receivable related to the increase in sales in that quarter. $433,010 was
recorded for accounts receivable and a $153,000 note receivable was recorded
from IntelliPay, Inc. The IntelliPay note receivable represents our
commitments to their operations during the period we were discussing the
potential acquisition of their operations. The acquisition was completed in
the second quarter of 2000, as discussed above.

Total current liabilities increased to $1,721,005 for the first quarter
compared to $644,727 for the 1999 year end. Of this total, $986,650 related
to notes payable to Capital Communications. An additional $192,080 of the
notes were with the minority partner in World Commerce Network. Trade
accounts payable of $415,152 made up 42.6% of these liabilities.

Cash used by operating activities for the year ended December 31, 1999
was $1,246,227. Net cash provided by investing activities was $410,819 and
was provided by $750,000 from the escrow account related to the merger with
Asphalt Associates. Net cash from financing activities for 1999 was $980,000
and reflects the $1 million loan from the merger with Asphalt Associates. Net
cash used by operating activities for the 2000 quarter was $439,656. Net cash
used by investing activities was $166,160, primarily due to cash paid on the
note receivable from IntelliPay, Inc. Net cash provided by financing
activities for the 2000 quarter was $579,005 and were proceeds from debt
financing.

In December 1998, Asphalt Associates sold 840,000 common shares to two
accredited investors for $1,000,000. As of the year ended December 31, 1998,
we posted current assets of $1,000,000, with no liabilities, resulting in a
positive net worth of $1,000,000. Our operating losses were $150,465 in 1998
and were funded primarily by equity transactions.

Pursuant to the merger agreement in January of 1999, Asphalt Associates
placed $1 million in escrow. Asphalt Associates subsequently loaned $250,000
of the $1 million to Utah WebWorks as a 30 day interest free loan. The entire
$1 million was subsequently converted into 840,000 shares of common stock in
the merged entity, at which time the $250,000 note was repaid from the
proceeds of the stock issuance. The remaining $750,000 was disbursed to us
over the first six months of 1999. Also, the management of Asphalt Associates
resigned and the management and board of directors of Utah WebWorks filled the
vacancies. As a result of these transactions, our financial statements show
total assets of $630,559 for the period ended December 31, 1999, which
includes cash or cash equivalents of $153,898. With total liabilities of
$644,727, we showed a negative net worth of $14,168. We recorded an
accumulated deficit of $786,752 for the twelve months ending December 31,
1999.

In September of 1999 we issued 14,000 restricted shares as payment for an
insurance policy to indemnify our officers and directors. The face value of
the policy was $1,000,000, and the cash premium was $20,000, had we elected to
pay for the policy in cash.

As of December 1999 we owed approximately $1 million to Capital
Communications based on several promissory notes. On December 28, 1999 we
converted $500,000 of the amount payable by issuing 381,679 common shares to
Capital Communications. We converted the remainder into a new promissory note
for $500,000 payable to the order of Capital Communications. The note is
secured by our accounts receivable and is due on or before December 31, 2000
and includes principal and interest. In the case of default on any payment,
the note and

43
<PAGE>

all accrued interest shall, at the holder's option, become immediately due and
payable. Interest is bearing on the principal amount of the note at a rate of
10% per annum.

In February 2000 we agreed to sell 400,000 common shares for $1,000,000
with warrants for the purchase of an additional 600,000 common shares at
strike prices ranging from $5.00 to $7.50 per share. Upon closing of this
transaction we will realize the $1 million and may also receive additional
proceeds from the exercise of the warrants. However, the holders of the
warrants have total discretion whether or not they exercise the warrants. We
cannot assure that all of the warrants will be exercised before their
expiration in 2004 and 2005. If all our outstanding warrants are exercised we
would realize $6,375,000 in proceeds.

Factors Affecting Future Performance

Actual development costs will depend on a number of factors, including:

* our ability to negotiate favorable licensing agreements with resellers;
* the number of our resellers;
* the software and services for which they subscribe;
* the nature and success of our products and services;
* establishing brand recognition of our products;
* regulatory changes; and
* changes in technology.

In addition, our actual expenses and revenues could vary materially from
the amounts we anticipate or budget, and such variations may affect the
additional financing needed for our operations. Accordingly, there can be no
assurance that we will be able to obtain the capital that we will require.

We currently estimate that we will require between $2,500,000 and
$3,500,000 to further and fully develop our products and services in
accordance with our business plan. To the extent that we acquire the amounts
necessary to fund our business plan through the issuance of equity securities,
our then-current shareholders may experience dilution in the value per share
of their equity securities. The acquisition of funding through the issuance
of debt could result in a substantial portion of our cash flows from
operations being dedicated to the payment of principal and interest on that
indebtedness, and could render us vulnerable to competition or economic
downturns.

While we may be able to fund our operations through our revenues for the
short term, we currently anticipate using private placements of our common
stock. We intend to issue such stock pursuant to exemptions provided by
federal and state securities laws. The purchasers and manner of issuance will
be determined according to our financial needs and the available exemptions.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

We have had no change in, or disagreements with, our principal
independent accountant during our last two fiscal years.

MANAGEMENT

Our directors and executive officers and key employees as of May 5, 2000,
and their respective ages and positions are listed below. Biographical
information for each of these persons is also presented below. Our Articles
of Incorporation provide for a board of directors consisting of at least 3,
but no more than 9 persons. Our directors serve for terms of one year. Our
executive officers are chosen by our Board of Directors and serve at its
discretion.

There are no family relationships between or among any of our directors
and executive officers.

44
<PAGE>

Directors and Executive Officers

Name Age Position Held
-------- ------ ------------------
Christian R. Larsen 25 President, Chief Executive Officer, Director
Mark S. Jensen 42 Chief Operating Officer, Acting Secretary
Mat Dastrup 37 Chief Financial Officer
Lamar P. Taylor 38 Director
Allan E. Oepping 25 Director
Eric K. Schmitter 25 Director
Benjamin A. Black 27 Director
Tom Hill 46 Director

Christian R. Larsen: Mr. Larsen serves as President, Chief Executive
Officer, and a Director of Pacific WebWorks, Inc. and has done so since April
1999. For the two years prior to this he served as Chief Operating Officer for
Pacific WebWorks, Inc. and as a consultant for Utah WebWorks. In July, 1993 he
started Innovative Research and Animated Design, Inc. (the "IRAD") which
developed custom and commercial software for animation and special effects.
He served as President of IRAD from October 1993 until February 1997. IRAD
grew to a Company employing 28 individuals. He has seven years' experience
providing computer consulting and business management services. Mr. Larsen
filed a Chapter 7 voluntary bankruptcy petition in May of 1997 in the District
of Utah Central Division of the United States Bankruptcy Court, which was
discharged in September of 1997.

Mark S. Jensen: Mr. Jensen has served as Chief Operations Officer since
he joined us in June, 1999, after spending eighteen years in sales,
operations, and services in the software industry. Prior to Joining Pacific
WebWorks, Inc., he served as Operations Manager for the western U.S. division
of GEAC Commercial Systems, a division of GEAC Computers, Inc., which
specializes in the development and sale of application software. There he
integrated the acquired operations of ProMation Inc. and Libra Signature
Software. He held this position from August 1996 to June 1999. Prior to his
employment with GEAC, he was the General Manager for ProMation Inc., a
construction application software provider. Mr. Jensen began his career with
ProMation as its Vice President of Sales, and held that position from 1990 to
1996. He graduated with a B.A. in Business Administration and Marketing from
Weber State University in 1981.

Mat Dastrup: Mr. Dastrup serves as Chief Financial Officer and has been
with Pacific WebWorks since July, 1999. He brings twelve years of experience
including three years with Price Waterhouse, which firm he left as a senior
accountant. He has over five years experience as CFO for North American Arms,
Inc. and for S & S Power, Inc. He graduated with a B.S. in Accounting and a
B.A. in Japanese Literature from Brigham Young University in 1987.

Lamar P. Taylor: Mr. Taylor was the founder of Utah WebWorks, Inc. He
currently serves as a Director. He served as President for Utah WebWorks from
April of 1997 until it merged with Pacific WebWorks in April, 1999. Mr.
Taylor then served as President and Chief Executive Officer of Pacific
WebWorks until May, 1999. From 1994 through 1997, Mr. Taylor worked as a
senior animator for IRAD, producing two dimensional and three dimensional
computer animation for television commercials, promotional videos and medical
simulations from 1994 to 1997. From 1991 through 1994, Mr. Taylor was
employed as the Freelance Technical Director for Shockwave Entertainment, Inc.
There he created interactive video graphics for feature films including True
Lies and Lawnmower Man. He received his B.A. with Honors from California
State University, Los Angeles in 1991.

Allan E. Oepping: Mr. Oepping serves as a Director and as Pacific
WebWorks' Vice President of Engineering. He is a Microsoft Certified
Professional (MCP) and has fourteen years' experience working with computer
hardware and software. He started with Utah WebWorks in November of 1997 as
an independent consultant, then became its Technical Director in August of
1998. He was the head programmer for IRAD for five

45
<PAGE>

years. While at IRAD, Mr. Oepping developed several new technologies,
including a spatial division/isolation technique which speeds up renderings
from 200% to 700%. He attended Salt Lake Community College in Salt Lake City,
Utah during 1994. Mr. Oepping filed a Chapter 7 voluntary bankruptcy petition
on March 2, 1998, in the District of Utah, Central Division of the United
States Bankruptcy Court. The petition was discharged on June 12, 1998.

Eric K. Schmitter: Mr. Schmitter serves as a Director. He started with
Utah WebWorks as the Creative Director in April of 1997. He has two years
experience in animation and two years experience in software sales. He
attended the University of North Texas during 1993 and the University of Utah
in 1994. In 1988, Mr. Schmitter filed a Chapter 13 voluntary bankruptcy
petition, which later converted to a Chapter 7, in the District of Utah,
Central Division, of the United States Bankruptcy Court. The petition was
subsequently discharged later that year.

Benjamin A. Black: Mr. Black serves as a Director. He has five years'
experience in software development programming. He has worked as Senior
Programmer for Utah WebWorks since April of 1997. He was lead programmer at
IRAD from 1994 through 1997. In 1995 he received his Associate of Science
degree in electronics technology from Salt Lake Community College in Salt Lake
City, Utah. He is a Microsoft Certified Professional (MCP) and is experienced
in advanced programming languages including C, C++, and Perl.

Tom Hill: Mr. Hill was appointed as a Director for Pacific WebWorks on
May 4, 2000. He has served as the President and CEO of IntelliPay, Inc., a
wholly owned subsidiary of Pacific WebWorks. He has held this position with
IntelliPay since February 98. Prior to his service with IntelliPay. He was
the sales and marketing manager for BobCAD-CAM Inc. in San Jose California.
Tom attended North Texas State University. While at North Texas State, Mr.
Hill studied Public Relations and Journalism.

EXECUTIVE COMPENSATION

None of our executive officers have received compensation in excess of
$100,000 during the past fiscal year. Our Chief Executive Officer's
compensation was $60,000 for 1999.

Each executive officer is compensated at a different level, however the
compensation structure for the officers is the same. Executive compensation
is based upon a base salary with bonuses being established upon a percentage
of gross sales. Total salaries and bonuses are also capped. There is also a
program under which executives are compensated in the form of stock options
which are awarded based on sales or performance milestones and can be executed
at $2.00 a share. We determine an executive's availability to participate in
the program by accomplishment of revenue milestones. Mark Jensen and Mat
Dastrup have options to purchase 260,000 and 240,000 shares, respectively, one
third of which are exercisable on December 31, 2000, and the remaining two
thirds of which are exercisable on December 31, 2001.

Upon reaching a specified milestone as determined by our Board, each
executive can receive a bonus which will not exceed $150,000 total
compensation when added to his or her base salary. Executive officers and
employees are treated equally with respect to sick time, paid holidays, and
medical insurance. We value these benefits at approximately $6,100 per year,
based upon an average annual salary of $35,000.

Compensation of Directors.

We do not have any standard compensation arrangements for our directors.

Employment Contracts.

In April of 1999 we adopted a policy to enter into employment agreements
with our senior management. Each agreement is effective for one year and will
be automatically renewed annually unless terminated. Mr. Larsen, our Chief
Executive Officer, will receive an annual base salary of $60,000 and bonuses
not to exceed an additional

46
<PAGE>

$65,000. Mr. Jensen, our highest paid officer, will receive a base salary of
$75,000 and bonuses not to exceed another $75,000. Each of our senior
managers receives medical insurance. Each may be terminated for cause if he
or she acts improperly or negligently in his position, engages in dishonest or
illegal conduct, and/or breaches our policies and procedures. Each may be
terminated for disability if he fails to perform duties for 90 consecutive
days for mental or physical health reasons. Each promises to not compete with
us for a period of one year after his or her employment expires or terminates,
unless he assures us in writing that confidential and proprietary information
will not be jeopardized. All inventions and improvements in our products or
methods of conducting business shall remain our property. Each agrees not to
solicit employees, customers or others for a period of two years after the
termination of his employment. After termination or resignation, each agrees
not to disclose or use confidential or proprietary information. The
agreements provide compensation if we have a change in control or if the
person resigns, or the employment is terminated.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the beneficial ownership of our
outstanding common stock of:
* each person or group known by us to own beneficially more than 5%
of our outstanding common stock;
* each of our executive officers;
* each of our directors; and
* all executive officers and directors as a group.

Beneficial ownership is determined according to the rules of the SEC and
generally includes voting or investment power with respect to securities.
Except as indicated by footnote, the persons named in the table below have
sole voting and investment power with respect to all shares of common stock
shown as beneficially owned by them. The inclusion of any shares as
beneficially owned does not constitute an admission of beneficial ownership of
those shares. The percentage of beneficial ownership is based on 13,200,342
shares of common stock.

CERTAIN BENEFICIAL OWNERS

Common Stock Beneficially Owned
--------------------------------
Name and Address of Number of Shares of
Beneficial Owners Common Stock Percentage of Class
-------------------------------- -------------------- --------------------
Net Strategic Investments LLC 1,017,500* 7.7%
1986 E. Falcon Hill Circle
Sandy, Utah 84092

LVT Associates, LLC
2247 Emerson 1,625,000** 12.3%
SLC, UT 84108

47
<PAGE>

MANAGEMENT

Common Stock Beneficially Owned
--------------------------------
Name and Address of Number of Shares of
Beneficial Owners Common Stock Percentage of Class
--------------------------------- -------------------- -------------------
Lamar P. Taylor 1,625,000** 12.3%
180 South 300 West, Suite 400
Salt Lake City, Utah 84101

Allan E. Oepping 725,000 5.5%
180 South 300 West, Suite 400
Salt Lake City, Utah 84101

Eric K. Schmitter 500,000 3.8%
180 South 300 West, Suite 400
Salt Lake City, Utah 84101

Benjamin A. Black 500,000 3.8%
180 South 300 West, Suite 400
Salt Lake City, Utah 84101

Tom Hill 553,056 4.1%
39899 Balentine Dr., Suite 218
Newark, California 94560

All executive officers and
directors as a group 3,903,056 29.6%

*Christian Larsen's father owns all of the outstanding stock of Net
Strategic Funding, Inc., the corporation which owns all of the interest of Net
Strategic Investments, LLC. Mr. Christian Larsen has disclaimed beneficial
ownership of these shares.

** Mr. Taylor is one of two members of LVT Associates, LLC and shares
voting and investment power with such LLC.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following information summarizes certain transactions we have either
engaged in during the past two years or propose to engage in involving our
executive officers, directors, 5% stockholders, or immediate family members of
such persons:

In December of 1998, Asphalt Associates issued an aggregate of 200,000
common shares valued at $20,000 for consulting services it received. Of these
shares, 120,000 common shares were issued to James R. Glavas, our president
prior to the merger with Utah WebWorks, and 80,000 shares were issued to Tony
Glavas, his son.

Lamar Taylor, an officer and shareholder of Utah WebWorks, advanced funds
to Utah WebWorks for operating capital in the amount of $131,300 during the
period ended December 31, 1998. All advances were repaid during 1998.

Pursuant to the merger agreement, $1,000,000 was placed in an escrow
account by Asphalt Associates to be disbursed to the merged entity. We were
loaned $250,000 of these funds by Asphalt Associates, Inc. as a 30 day
interest free loan in order to allow us to satisfy a debt pending the merger.
The note payable was credited to our value in determining the number of shares
each party's shareholders received. Accordingly, each group of shareholders
received 5,000,000 shares in the merged entity. The balance of the funds
($750,000) was distributed to us between January and June of 1999.

During 1999, $166,046 was recognized as a note receivable from World
Commerce Network, LLC, our subsidiary. There is no provision for interest and
the balance is due within the next twelve months. As of December 31, 1999,
there is an accounts receivable of $6,800 due from World Commerce Network,
LLC.

49
<PAGE>

_____________ Pacific WebWorks,Inc.

TABLE OF CONTENTS 1,800,000

Page
Prospectus Summary ............................ 3
Risk Factors................................... 4
Transactions Effected in Connection
with the Offering............................. 8
Use of Proceeds................................ 9
Determination of Offering Price................10 __________________
Selling Stockholders...........................10
Plan of Distribution...........................10
Description of Securities......................11 PROSPECTUS
Interest of Named Expert and Counsel...........11
Disclosure of Commission Position on __________________
Indemnification For Securities Act Liability..11

The Company
Business ...................................12
Market for Common Equity....................18
Financial Statements....................... 19
Management's Discussion and Analysis....... 39
Management..................................45

May 30, 2000

50
<PAGE>

PART II

ITEM 13: OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the expenses payable by us in connection
with the sale of the shares. All the amounts shown are estimates except for
the registration fee:

Securities and Exchange Commission Registration Fee ................$1,603.80
Printing and Engraving Expenses .................................... 500.00
Legal and Accounting Fees and Expenses ............................. 5,000.00
Transfer Agent and Registrar Fees and Expenses...................... 1,000.00
Miscellaneous ...................................................... 0.00
Total.......................................................... 8,103.80

ITEM 14: INDEMNIFICATION OF DIRECTORS AND OFFICERS

Neither our Articles of Incorporation nor our bylaws provide for the
indemnification of a present or former director or officer. However, pursuant
to Nevada Revised Statutes Section 78.750 and 78.751 we must indemnify a
director, officer, employee, or agent of the corporation who is successful on
the merits or otherwise in defense of any action or suit. This
indemnification shall include expenses, including attorney's fees actually or
reasonably incurred. Nevada law also provides for discretionary
indemnification for each person who serves as or at the request of the
corporation as our officer or director. We may indemnify these individuals
against all costs, expenses, and liabilities incurred in a threatened,
pending, or completed action, suit or proceeding brought because this
individual is our director or officer. The individual must have conducted
himself in good faith and reasonably believed that his conduct was in, or not
opposed to, our best interests. In a criminal action he must not have had a
reasonable cause to believe his conduct was unlawful.

ITEM 15: RECENT SALES OF UNREGISTERED SECURITIES

The following discussion describes all securities sold by Pacific
WebWorks within the past three years without registration:

On December 24, 1998, we issued an aggregate of 200,000 common shares
valued at $20,000 for services rendered to us. Of these shares, 120,000
common shares were issued to James R. Glavas and 80,000 shares were issued to
Tony Glavas, his son, for their services to Asphalt Associates, Inc. The
issuance of such shares was exempt from registration under the Securities Act
by reason of Section 4(2) as a private transaction not involving a public
distribution.

On December 28, 1998, we issued an aggregate of 840,000 common shares to
two accredited investors for $1,000,000, with 440,000 common shares issued to
Capital Communications, Inc. and 400,000 common shares to Mutual Ventures
Corporation. The issuance of such shares was exempt from registration under
the Securities Act by reason of Section 4(2) as a private transaction not
involving a public distribution.

On January 26, 1999, we issued warrants to Columbia Financial Group to
purchase 400,000 shares of our common stock at an aggregate exercise price of
$1,475,000 in consideration for their services as our investor relations firm.
Using a Black Scholes model the value of the warrants will change with the
changes in our stock price until the measurement date of the warrants is met.
The issuance of such warrants was exempt from registration under the
Securities Act by reason of Section 4(2) as a private transaction not
involving a public distribution.

In September, 1999, we issued 14,000 common shares valued at $20,000, to
Universal Business, an insurance agent, in exchange for directors and
officers' liability insurance policy in the amount of $1,000,000. The
issuance of such shares was exempt from registration under the Securities Act
of 1933 by reason of Section 4(2) as a private transaction not involving a
public distribution.

II-1
<PAGE> 51

On December 28, 1999, we issued 381,679 common shares valued at $500,000,
or approximately $1.31 per share, to Capital Communications. The shares
converted part of notes payable to Capital Communications. The issuance of
such shares was exempt from registration under the Securities Act of 1933 by
reason of Section 4(2) as a private transaction not involving a public
distribution.

On January 10, 2000, we issued warrants to Columbia Financial Group to
purchase 400,000 shares of our common stock at a exercise price of $3.50 per
share, or an aggregate exercise price of $1,400,000, in consideration for
their services as our investor relations firm. Using a Black Scholes model
the value of the warrants will change with the changes in our stock price
until the measurement date of the warrants is met. The issuance of such
warrants was exempt from registration under the Securities Act by reason of
Section 4(2) as a private transaction not involving a public distribution.

On February 22, 2000 we agreed to sell an aggregate of 400,000 units for
an aggregate price of $1 million. Condiv Investments, Inc. and Midwest First
National, Inc. each agreed to buy 200,000 common shares, an "A" Warrant for
200,000 common shares and a "B" Warrant for 100,000 common shares. The
issuance of such shares and warrants was exempt from registration under the
Securities Act by reason of Section 4(2) as a private transaction not
involving a public distribution.

In connection with each of these isolated issuance's of our securities,
we believe that each purchaser
* was aware that the securities had not been registered under
federal securities laws;
* acquired the securities for his/its own account for investment
purposes and not with a view to or for resale in connection
with any distribution for purposes of the federal securities
laws;
* understood that the securities would need to be indefinitely
held unless registered or an exemption from registration
applied to a proposed disposition; and
* was aware that the certificate representing the securities
would bear a legend restricting their transfer.

We believe that, in light of the foregoing, the sale of our
securities to the respective acquirers did not constitute the sale of an
unregistered security in violation of the federal securities laws and
regulations by reason of the exemptions provided under Sections 3(b) and 4(2)
of the Securities, and the rules and regulations promulgated thereunder.

ITEM 16: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
No. Exhibit Location
2.1 Agreement and Plan of Merger between Asphalt Associates,
Inc, and Utah WebWorks, Inc., dated January 11, 1999 (1)

2.2 Agreement and Plan of Reorganization between Pacific
WebWorks and IntelliPay, dated April 4, 2000 (2)

3.1 Articles of Incorporation of Asphalt Associates, Inc. (1)

3.2 Articles of Merger for Asphalt Associates, Inc.,
dated January 6, 1999 (1)

3.4 Amended and Restated Bylaws of Pacific WebWorks, Inc. (1)

4.1 Specimen of Common Stock Certificate To be filed by
amendment

4.2 Opinion of Cindy Shy, P.C. To be filed by
amendment

10.1 Master Service Agreement between Electric Lightware,
Inc., and Utah WebWorks, Inc., dated February 2, 1998. (1)

10.2 Internet Access Agreement, Addendum to Master Service
Agreement between Electric Lightwave, Inc., and Utah
WebWorks, Inc., dated February 2, 1998 (1)

10.3 Form of Employment Agreement (1)

10.4 Form of Reseller Agreement (1)

10.5 Lease Agreement between Utah WebWorks, Inc., and
Westgate Business Center, dated January 11, 1999 (1)

II-2
<PAGE> 52

10.6 Consultant Agreement between Columbia Financial Group
and Pacific WebWorks, Inc., dated January 26, 1999 (1)

10.7 Strategic Reseller Agreement with U.S. Merchant Systems (1)

10.8 Amended Form of Reseller Agreement (1)

10.9 Promissory Note issued to Capital Communications, Inc. (1)

10.10 Purchase Agreement between Pacific WebWorks and U.S.
Merchant Systems, dated February 22, 2000 (3)

10.11 Registration Rights Agreement between Pacific WebWorks
and Midwest First National, Inc. and Condiv Investments,
Inc. and Columbia Financial Group, dated February 22,
2000 See attached

10.12 Consultant Agreement between Pacific WebWorks and
Columbia Financial, dated January 10, 2000. (4)

11.1 Statement re computation of earnings per share (1)

21.1 Subsidiaries of Pacific WebWorks See attached

23.2 Consent of Crouch, Bierwolf & Chisholm See attached

24.1 Power of Attorney See signature page

27.1 Financial Data Schedule See attached

(1) Incorporated by reference to Pacific WebWork's Form 10, as amended,
file No. 0-26731, filed July 16, 1999.

(2) Incorporated by reference to Pacific WebWork's Form 8-K, filed April
19, 2000

(3) Incorporated by reference to Pacific WebWork's Form 10-K, filed March
10, 2000

(4) Incorporated by reference to Pacific WebWork's Form 10-Q, as amended,
filed May 15, 2000

ITEM 17: UNDERTAKINGS

Pursuant to Rule 415 the undersigned registrant hereby undertakes to
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement which will include any
prospectus required by Section 10(a)(3) of the Securities Act; Reflect in the
prospectus any facts or events which, individually or together, represent a
fundamental change in the information in the registrations statement; and
include any additional or changed material information on the plan of
distribution.

For the purpose of determining any liability under the Securities
Act, to treat each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at that time to be
the initial bona fide offering.

To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against these liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by any director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
this indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of this issue.

II-3
<PAGE> 53

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused the registration statement to be signed on its
behalf by the undersigned, duly authorized, in the city of Salt Lake City,
state of Utah.

PACIFIC WEBWORKS, INC.
a Nevada Corporation

/s/ Christian Larsen 5/26/00
By: _____________________________________ Date:________________
Christian Larsen
President, Chief Executive Officer, Director

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Christian Larsen and Mat Dastrup, and
each of them, his attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him in any and all capacities, to sign
any and all amendments (including post effective amendments) to this
registration statement, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully as to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents, or any of them,
or their or his substitute or substitutes, may do or cause to be done by
virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, the
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ Christian Larsen 5/26/ 2000
By:_________________________________________ Date: ________________
Christian Larsen
President, Chief Executive Officer, Director

/s/ Mat Dastrup 5/26/2000
By:_________________________________________ Date: _________________
Mat Dastrup
Chief Financial Officer

/s/ Mark Jensen 5/26/2000
By:_________________________________________ Date:___________________
Mark Jensen
Chief Operating Officer

II-4
<PAGE> 54

/s/ Allan E. Oepping 5/26/2000
By:_________________________________________ Date: __________________
Allan E. Oepping, Director

/s/ Erik K. Schmitter 5/26/2000
By:_________________________________________ Date: _________________
Erik K. Schmitter, Director

/s/ Benjamin A. Black 5/26/2000
By:_________________________________________ Date: __________________
Benjamin A. Black, Director