DYNCOM INC, 10SB12G/A, 2000-12-07

DYNCOM INC
10SB12G/A, 2000-12-07
BUSINESS SERVICES, NEC

Previous: ENTREPORT CORP, PRE 14A, 2000-12-07

Next: INFOCAST CORP /NV, 8-K, 2000-12-07

<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-SB
Amendment No. 1

General Form For Registration of Securities
of Small Business Issuers Under
Section 12(b) or (g) of
the Securities Exchange Act of 1934

DynCom Inc.
-----------
(Exact Name of Small Business Issuer as specified in its charter)

Colorado 84-1432066
--------------- --------------------------
(State or other (IRS Employer File Number)
jurisdiction of
incorporation)

2301 Research Blvd., Suite 203
Fort Collins, Colorado 80526-1825
---------------------------------------- ----------
(Address of principal executive offices) (zip code)

(970) 416-0001
--------------
(Registrant's telephone number, including area code)

Securities to be Registered Pursuant to Section 12(b) of the Act:

None

Securities to be Registered Pursuant to Section 12(g) of the Act:

Common Stock, no par value per share

<PAGE> 2

PART I

References in this document to "us," "we," "our" or "the Company" refer to
DynCom Inc.

RISK FACTORS

The ownership and investment in our securities involve substantial
risks, which are summarized below. Prospective investors should carefully
consider these risks relating to our Company.

NEWLY-FORMED COMPANY. Our Company was formed on July 2, 1997. Since
beginning operations, we have operated at a loss. Nevertheless, we have not
engaged in any substantial business activity over a sustained period of time,
and thus cannot be said to have a successful operating history. We expect to
incur losses in the near future. Further, we are likely to experience
undercapitalization shortages, setbacks and other risks common to emerging
businesses. We cannot give any assurance that we will ever be profitable. In our
most recent audit, our auditors questioned our ability to continue as a going
concern.

NEED FOR ADDITIONAL FINANCING. For the foreseeable future, we expect to
rely principally upon our cash flow. We cannot guarantee the success of this
plan. We believe that, from time to time, we may have to obtain additional
financing in order to conduct our business in a manner consistent with our
proposed operations. There can be no guaranty that additional funds will be
available when, and if, needed. If we are unable to obtain such financing, or if
the terms thereof are too costly, we may be forced to curtail proposed expansion
of operations until such time as alternative financing may be arranged, which
could have a materially adverse impact on our operations and our shareholders'
investment. At the present time, we have no definitive plans for additional
financing.

POTENTIAL INABILITY TO CONDUCT SUCCESSFUL OPERATIONS. The results of
our operations will depend, among other things, upon our ability to develop and
to market our technology products. Further, it is possible that our proposed
operations will not generate income sufficient to meet operating expenses or
will generate income and capital appreciation, if any, at rates lower than those
anticipated or necessary to sustain ourselves. Our operations may be affected by
many factors, some known by us, some unknown, and some which are beyond our
control. Any of these problems, or a combination thereof, could have a
materially adverse effect on our viability as an entity and might cause the
investment of our shareholders to be impaired or lost.

START-UP COMPANY-INHERENTLY RISKY-COMPETITION. Because we are a
start-up company with limited history, our operations will be extremely
competitive and subject to numerous risks. The technology business is highly
competitive with many companies having access to the same market. Substantially
all of them have greater financial resources and longer operating histories than
we do and can be expected to compete within the businesses in which we engage
and intend to engage. There can be no assurance that we will have the necessary
resources to be competitive. We are subject to risks, which are common to
start-up companies. Therefore, investors should consider an investment in us to
be an extremely risky venture.

DEPENDENCE UPON TECHNOLOGY. We are operating in a business which
requires extensive and continuing research efforts. There can be no assurance
that new products will not render our products obsolete at some time in the
future. In addition, there can be no guarantee that we will be able to protect
our technology from being copied or infringed upon. Therefore, there are no
assurances that we will ever be able to obtain and to maintain a profitable
position in the marketplace.

SUCCESS DEPENDENT UPON MANAGEMENT. Our success is dependent upon the
decision-making of our directors and executive officers. These individuals
intend to commit as much time as necessary to our business. The loss of any or
all of these individuals could have a materially adverse impact on our
operations. We have no employment agreement with any individuals and have not
obtained key man life insurance on the lives of any of these individuals.

ITEM 1. DESCRIPTION OF BUSINESS.

(a) General Development of Business

<PAGE> 3

We are a Colorado corporation. Our principal business address is 2301
Research Boulevard, Suite 203, Fort Collins, Colorado 80526-1825.

We were incorporated under the laws of the State of Colorado on July 2,
1997 as Dynamic Commerce, Inc. We restated our Articles of Incorporation on June
10, 1999, and changed our name at that time to DynCom Inc. We have begun limited
operations with a focus on "smart technology"-oriented products and services
that address specific needs of our current and prospective clients. Our stated
purposes include providing: network and Internet-based electronic solutions with
an emphasis on commerce applications, smart card and smart chip technology
solutions, technology-oriented solutions for business, professional, healthcare,
and other environments susceptible of benefitting from these applications of
technology, and consulting services.

We have not been subject to any bankruptcy, receivership or similar
proceeding.

(b) Narrative Description of the Business

General

We have had limited operations since inception. We are in the
development stage. No independent market surveys have ever been conducted to
determine demand for our current and projected products and services. We have
never been profitable. Our fiscal year-end is December 31.

Organization

We are comprised of one corporation with no subsidiaries or parent
entities.

We are filing this Form 10-SB on a voluntary basis because we plan to
engage in equity and/or debt financing in the foreseeable future and believe
that our fund-raising will be enhanced by having a record of regular disclosure
under the Securities Exchange Act of 1934 (the "1934 Act"). We have no plans in
the foreseeable future, under any circumstances, to terminate our registration
under the 1934 Act.

Current Operations

We began limited operations in July 1997 with a focus on
Internet-oriented products and services to address specific client needs. During
this period, we entered short-term, task specific contracts that complemented
our long-term strategy and generated a modest cash flow. We provided web
hosting, web design and construction, design of online catalogs, design of
on-line shopping carts, programming, registration forms, and database design and
construction. We also currently provide telecommunications services to two
clients located in the same office complex, the income from which has the effect
of modestly reducing our costs of operations.

Proposed Operations

Our initial operations will focus on the "smart technologies" industry.
The smart technologies industry is comprised of devices that incorporate a
computer chip, or memory chip, or both; an example is smart cards. We are in the
process of developing our smart technologies products. Our principal products
under development are: the "Black Box;" the EquinePassport(TM);
GamingPassport(TM). We are also in the process of developing a smart
technologies Innovation Laboratory, a smart technologies industry "Market Maker"
business-to-business ("B2B") e-commerce website (IQ2U(TM)), and one or more
unnamed products to be derived from Active Pixel Sensor Technology. Our primary
focus for the foreseeable future will be on the development and marketing of our
products, our Innovation Laboratory and our B2B e-commerce website, all of which
center on the smart technologies industry.

An essential component of smart technology is a smart device or smart
card. A smart device or smart card is a key to a lock. All of our products will
incorporate either a smart device, a smart card, or both. A smart card may be
the size and shape of a credit card with at least an embedded memory chip. Some
smart

<PAGE> 4

cards are smarter than others. An "intelligent" smart card contains one or more
central processing units (CPU) that offers a read/write capability, allowing
information to be added or deleted, and can do programmed tasks. A memory smart
card stores information only and lacks the processing power of the CPU-enabled
smart card. The memory smart card is used primarily for information storage such
as stored value, which the user can spend as needed. An important feature of
both cards is built-in security that protects information from damage or theft.
While smart cards resemble credit cards, a smart device has the same capability
but may not resemble a credit card; for example, a smart device may resemble any
kind of object such as a key ring, eyeglasses, or a postage stamp.

Memory capacity sets a limit on smart device/card functionality. We
believe that 32KB and 64KB chips will be commonplace in the near future, with
256KB and megabyte chips as the next generation of technology. As storage
capacity increases and costs decline, smart devices/cards will be able to handle
voice, video, and other processing capabilities.

The first patents for a chip in a card were granted in 1974. Because of
market circumstances, the smart card has gained its widest market acceptance in
France where today more than 20 million bank cards and millions more telephone
calling cards are in distribution. The U.S. market for smart cards has been
slower to develop due to lack of endorsement by banks and bank card associations
and a lack of agreement on standards. Further, America's telephone
infrastructure allows for quick and convenient credit and debit card processing,
so many in the financial and communications industries have viewed smart card
technology as being a solution to problems that do not exist in the U.S.

Those who have tried to implement smart technology solutions have
discovered that the smart technologies industry is comprised of many competing
and conflicting sectors, with sometimes incompatible specifications and
standards. These sectors include semiconductor manufacturers, smart card
manufacturers, reader or terminal manufacturers, software developers and
operating system manufacturers. Our goal is to be a single source for
information, expertise and products for providing effective and efficient
e-solutions.

We believe that smart technologies in general and specifically smart
cards will gain increased market acceptance in the U.S. for the following
reasons:

1. Bankcard associations are delivering technical specifications that
will lead to eventual interoperability among cards,

2. Card costs are declining and price/performance ratios are improving,

3. Market experience is accumulating,

4. Competitive challenges threaten control of traditional markets and
longer-term capability to enter new markets,

5. Networks/systems are being developed for electronic/remote access to
products/services, and

6. The ability of magnetic stripe technology to support the future
performance requirements of card systems is increasingly being questioned by
current issuers of magnetic stripe cards.

We believe that smart technologies devices (including smart cards,
smart telephones, etc.) will eventually become an integral part of electronic
data, communications, and commerce transactions for most Internet and intranet
applications. We see a trend toward smart devices being driven by common needs:

1. To offer multiple products/services on a single device, tailored to
the user/provider relationship needs,

2. To offer secure transaction services in existing markets, in new
geographical markets with poor telecommunications, data and financial services
infrastructures, and at new points of interaction such as the Internet, and

<PAGE> 5

3. To offer new products/services requiring additional security, such
as electronic purses.

We also believe that smart technology solutions will achieve
significant growth because of demands for security, privacy, authentication,
authorization, fraud management, user-friendly interface, trust and confidence,
and low cost.

We believe that our smart technologies products, smart technologies
industry Innovation Laboratory and smart technologies industry website will
allow us to generate significant revenue and provide the necessary backbone for
ongoing business operations.

Proposed Products and Services

Black Box. The "Black Box" is our working term for an Internet
appliance the size of a notebook that sits between the Internet and a PC (or
server). It will provide VPN (Virtual Private Network) encryption security,
digital certificates for authentication and authorization, and other software
enhancements depending on the market targeted by the particular product version.
It will also provide an enhanced level of security and privacy for
communications using public and private networks (i.e., the Internet, WANs and
LANs). While a number of useful technologies exist for this purpose, such as
fire walls, virtual private networks, and digital certificates, each of those
technologies address only a part of the problem. Further, the effective
application of present technology solutions depends to a large extent on the
expertise and diligence of the people entrusted with the tasks of installation
and maintenance. With the Black Box, we intend to consolidate and coordinate
these existing technologies to provide a higher level of security than is
usually achieved using piecemeal solutions, and to do it without requiring
extensive expertise on the part of its users.

The Black Box is scalable, from individual PCs to enterprise server
clusters. It will originally be offered as a solution for small to medium-sized
businesses, to target some of the recently publicized weaknesses of existing
e-commerce implementations. We believe that the Black Box will have the
potential, in a later version, to become a mass-market product as DSL, satellite
and cable connections to the Internet become more popular.

We have established a strategic partnership with Dynexus, Inc., of Fort
Collins, CO, which has developed the technology inside the Black Box. Our
agreement with Dynexus, Inc. calls for us to purchase the technology over a
specified period of time. Our current schedule calls for a prototype to be
completed in November 2000. The initial unit production is slated for beta
testing in late December 2000. Full production is planned for 6 weeks from beta
completion. Low volume manufacturing will be conducted in-house and full
production will be outsourced to a contract manufacturer.

E-commerce and Server. We, ourselves, or through a third party
service, plan to provide and maintain an e-commerce server to process data and
provide data access for our products and services, and for complementary
products and services developed by others. This service is designed to
complement other core products, projects, and derivative smart technologies
applications.

Innovation Laboratory. Our Innovation Laboratory, which now exists only
in embryonic form, is planned to become the starting place for our smart
technologies solutions. We plan this Laboratory to be an operation where we will
take a first look at new technologies and solution opportunities, and where
ideas will be nurtured, analyzed, prioritized and solutions developed. The
Innovation Laboratory will develop smart services and smart solutions for us and
others to commercialize. Pilot projects to prove a concept can be done entirely
in-house. We believe that potential consumers of smart technologies solutions
need our Innovation Laboratory for testing and evaluating smart technologies
solutions. To our knowledge, there is no comparable facility. Our current smart
technologies applications projects that have been derived from our Innovation
Laboratory, as it currently exists, are EquinePassport(TM), GamingPassport(TM),
Active Pixel Sensor Project, and IQ2U(TM):

<PAGE> 6

1. EQUINEPASSPORT(TM). Our EquinePassport(TM) product and service is
designed to facilitate equine ownership, transport, and healthcare. Horses that
are transported across state lines are required to have identification and
health papers. Currently, these documents are hard copy, and the system is prone
to breakdown with lost documents and/or lost records. We have discussed this
concept with the Colorado State Equine Veterinarian and State Brand Inspector.
We intend to solicit the support of numerous horse associations and the
appropriate officials in other jurisdictions. We believe that there is an
additional market for animal identification, based on the EquinePassport(TM)
product, for other animals such as prized cattle, dogs, and household pets. The
Black Box will be an integral part of the overall solution.

2. GAMINGPASSPORT(TM). Our GamingPassport(TM) product and service is
designed to facilitate the needs of the legal gaming community. DynCom will act
as a systems integrator, card issuer, card management service provider, and
account manager for a gaming solution application. The Black Box will be an
integral part of the overall solution. We have entered into two contracts
regarding the GamingPassport(TM).

3. ACTIVE PIXEL SENSOR (APS) PROJECT. In collaboration with Colorado
State University's Computer Science Department, we are utilizing a grant from
the Colorado Advanced Software Institute to explore certain APS technology
applications. Research will focus on exploration of the utility of APS in mobile
computing environments, e.g., smart cards, and will be conducted during the
current academic year. We would maintain all ownership and licensing rights of
the resulting technology.

4. IQ2U(TM). Our smart technologies market maker site has been
initially assigned the URL www.IQ2U.com. The initial phase (Phase 0, the
Blueprint) has been completed. Phase 1: Development, is now underway. The goal
of Phase 1: Development is to build core functionality, with key features being
interactive questionnaires, search engines, corporate/affiliate personalization,
corporate supervision of affiliates, document management, matching engines,
aggregation engines, security, transaction processing, order management, and
correspondence threading. In addition, the site will enable customers to
purchase our products from our unified catalog, inquire about sponsorship
opportunities, stay informed by having access to current industry news and
events, look for jobs, and conduct research by searching a library of industry
white papers. We contracted with IBM Global Services for our initial phase of
site construction, which produced a detailed Statement of Work and the
requirements of the website in story board format. To speed the IQ2U website to
market, we are developing a Foundation version of the site utilizing available
resources. We expect the rollout of the Foundation site, which we believe will
begin to generate a revenue stream, could occur during the first quarter of
2001.

(d) Markets

Because we are in the development stage, there are limited markets for
our present services and products. The possibility of expanding our
communications consulting services is limited to the few tenants in our existing
office building, and due to evolving technologies, such as increased access to
fiber optic, wireless and satellite infrastructure, it is unlikely that we will
continue to provide our communications consulting services beyond the near-term.
The possible market for our "Black Box" e-commerce Internet appliance product
includes a large number of Internet server sites and intranet servers. Based on
publicly reported information by actual and potential competitors, we believe
that the potential market for our "Black Box" and similar and less-capable
products will exceed $2 billion by 2002. We believe that market is presently
inadequately served by products that are substantially more limited in their
capabilities than our "Black Box."

The possible market for our EquinePassport(TM) product and
services is initially the several millions of owners of horses, and the
approximately 80 equine associations in the United States. The possible market
for our GamingPassport(TM) product and services is one or more gaming boats
operating out of Florida ports, and one or more projects involving Internet
gaming. While we believe that the gaming industry (land, boat and Internet) is
rapidly growing, the size of the market for our GamingPassport(TM) product and
services has not yet been ascertained.

<PAGE> 7

We believe that the possible market for out IQ2U(TM) B2B
service, which includes all aspects of the smart technologies industry, is
rapidly increasing. The extent to which we may be able to participate
successfully in this market will greatly depend upon our being able to
distinguish our services from other B2B websites that might encompass, or
expand, to include some or all of our target market.

(e) Raw Materials

The use of raw materials is not a material factor in our operations at
the present time or in the foreseeable future.

(f) Customers and Competition

We have entered into an agreement with Avanti Host Group, Inc., of
Tamarac, Florida, for services with respect to a gaming boat, and have entered
into a strategic alliance with another customer, MXM Media Services, Inc., of
Las Vegas, Nevada. In addition, we have two clients for our limited
communications services. We are actively pursuing other potential clients for
all of our products and services.

The technology industry is highly competitive. We expect to see
competition from a number of sources, including accounting organizations with
consulting operations, management and technology consultants, manufacturers of
hardware, software developers, Internet and intranet systems integrators, B2B
e-commerce providers, and Internet service providers, among others. There are a
number of companies, most of which are larger and better capitalized than we are
and/or have greater personnel resources and technical expertise. In view of our
extremely limited financial resources, rapidly expanding technology, and limited
management availability, we believe that we will be at a significant competitive
disadvantage compared to our competitors. There can be no guarantee that we will
continue to generate substantial revenues or to become profitable.

(g) Backlog

At September 30, 2000, we had no backlogs.

(h) Employees

We have six full-time employees and three part-time employees. We will
hire additional employees, on a temporary or ongoing basis, as circumstances
require.

(i) Proprietary Property

We own no proprietary property. We will have certain proprietary
rights, to be later defined, to property that is being developed in conjunction
with our agreement with Colorado State University pertaining to certain Active
Pixel Sensor technology, and in conjunction with our agreement with Dynexus,
Inc., pertaining to certain technologies employed in our "Black Box".

(j) Government Regulation

We are not subject to any material governmental regulation or
approvals.

(k) Research and Development

We have spent approximately $300,000 in research and development
activities since inception through the period ending September 30, 2000, and
have incurred an additional liability of approximately $150,000 pursuant to an
agreement with IBM Global Services for research and development activities.

(l) Environmental Compliance

We are not subject to any costs for compliance with any environmental
laws.

<PAGE> 8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward-Looking Statements

The following discussion contains forward-looking statements regarding
our Company, its business, prospects and results of operations that are subject
to certain risks and uncertainties posed by many factors and events that could
cause our actual business, prospects and results of operations to differ
materially from those that may be anticipated by such forward-looking
statements. Factors that may affect such forward-looking statements include,
without limitation: our ability to successfully develop new products for new
markets; the impact of competition on our revenues, changes in law or regulatory
requirements that adversely affect or preclude clients from using our products
for certain applications; delays in our introduction of new products or
services; and our failure to keep pace with emerging technologies.

When used in this discussion, words such as "believes", "anticipates",
"expects", "intends" and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. Our Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect our business.

Results of Operations

Our revenues were $2,962 for the nine months ended September 30, 2000.
Our revenues for the year ended December 31, 1999 were $4,852. From inception
through September 30, 2000, our revenues were $40,351.

Our operating expenses were $829,510 for the nine months ended
September 30, 2000. Our operating expenses were $391,311 for the year ended
December 31, 1999. From inception through September 30, 2000, we had operating
expenses of $1,257,664. Our most significant expense during the nine months
ended September 30, 2000 involved expenses relating to the IBM contract.
Otherwise, our major components of operating expenses are office salaries and
associated payroll costs, rent and telephone expenses.

Our net loss was $779,489 for the nine months ended September 30, 2000.
Our net loss was $386,284 for the year ended December 31, 1999. Our net loss
from inception through September 30, 2000, was $1,170,079. Earnings per share
were a negative $0.17 and $0.14 per share respectively for the nine months ended
September 30, 2000, and for the year ended December 31, 1999.

Our revenues have been minimal since inception since we are in the
development stage and have focused most of our activities on developing our
product and service lines. We believe that we may continue to see an increase in
revenue as the fiscal year progresses. However, we do not expect to be
profitable this year.

Liquidity and Capital Resources

Cash at the end of the period increased significantly to $158,538 for
the nine months ended September 30, 2000 compared to $515 at December 31, 1999.
Cash increased significantly because we sold shares of SCTN, which we had held
for investment. Most of the proceeds of those sales have been placed in an
escrow account according to the terms of a loan agreement. These proceeds are to
be applied to that loan.

Accounts receivable were $1,486 for the nine months ended September 30,
2000, compared to $1,828 for the nine months ended December 31, 1999.

Accounts payable increased for the nine months ended September 30, 2000
to $368,797, compared to $209,954 for the year ended December 31, 1999.

We have never been profitable. Our operating expenses increased
significantly during the successive reporting periods as we continue to build
our infrastructure and develop our products. Our revenues have been negligible.
Our primary activity will be to seek to launch our products, develop a customer
base, and, consequently, develop our revenues. If we succeed in launching our

<PAGE> 9

products, developing our customer base and generating sufficient revenues, we
will become profitable. We cannot guarantee that this will ever occur. Our plan
is to build our Company in any manner which will be successful.

We feel that we have inadequate working capital to pursue any business
opportunities other than developing our products and seeking customers. During
the next twelve months, we plan to investigate one or more offerings of our
securities, whether through a private placement or a public offering. At the
present time, we have no firm arrangements with regard to either type of
offering. We do not intend to pay dividends in the foreseeable future.

In addition we plan to expand through acquisition. We presently plan to
look only at our present industry, but, if we believe that there is an
opportunity, we reserve the right to investigate and, if warranted, merge with
or acquire the assets or common stock of an entity actively engaged in
businesses that generate revenues or have significant potential for such
revenues. We will seek opportunities for long-term growth potential as opposed
to short-term earnings. From time to time, other companies have approached us to
inquire about various kinds of business arrangements. However, as of the date
hereof, we have no business opportunities under investigation. Our officers and
directors are continually looking at various kinds of business arrangements,
including, but not limited to, those regarding the possibility of an acquisition
or merger between us and other companies and strategic alliances. However, at
this time, we have no such definitive plans or business arrangements.

ITEM 3. DESCRIPTION OF PROPERTIES

Our business office is located at 2301 Research Boulevard, Suite 203,
Fort Collins, Colorado 80526-1825. We pay $1,755.45 per month in rent for this
office space, subject to ordinary commercial lease escalations, to an
unaffiliated third party under a lease which expires thirty-six months from June
1999. We have no properties other than office equipment and furniture.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following sets forth the number of shares of our no par value
common stock beneficially owned by (i) each person who, as of September 30,
2000, was known by us to own beneficially more than five percent (5%) of our
common stock; (ii) our individual Directors and (iii) our Officers and Directors
as a group. As of September 30, 2000, we had 4,162,950 common shares issued and
outstanding.

<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1)(2) CLASS
------------------- --------------------------- ----------

<S> <C> <C>
Curt D. Jansen 776,300 18.6%
President and Chief Executive
Officer, and Director
2301 Research Blvd., Suite 203
Fort Collins, CO 80526

Fred Ziegler 210,000 5.0%
Chairman of the Board and Director
2301 Research Blvd., Suite 203
Fort Collins, CO 80526

Michael B. Maw 271,800 6.5%
Chief Financial Officer,
Secretary, Treasurer, and Director
2301 Research Blvd., Suite 203
Fort Collins, CO 80526

Herbert M. Goldman 349,500(3) 8.4%
Director
2301 Research Blvd., Suite 203
Fort Collins, CO 80526
</TABLE>

<PAGE> 10

<TABLE>
<S> <C> <C>
Jay D. Ellenby 116,000(4) 2.8%
Director
2301 Research Blvd., Suite 203
Fort Collins, CO 80526

Charles J. Caserta -0-
Director
2301 Research Blvd., Suite 203
Fort Collins, CO 80526

Andrew W. Tarbox -0-
Director
2301 Research Blvd., Suite 203
Fort Collins, CO 80526

David E. Breeding 40,000 1.0%
Chief Technology Officer
2301 Research Blvd, Suite 203
Fort Collins, CO 80526

James Dascalos 350,000 8.4%
6614 Stuart Court
Arvada, CO 80003

Alan Orshalick 325,000(5) 7.8%
3401 Westshore Drive
Rowlet, TX 75088

All Officers and Directors as a Group 1,763,600 42.4%
(eight persons)
</TABLE>

(1) All ownership is beneficial and on record, unless indicated
otherwise.

(2) Beneficial owners listed above have sole voting and investment
power with respect to the shares shown, unless otherwise indicated.

(3) Includes 250,000 owned in the name of the Herbert M. Goldman Trust
and 99,500 shares owned in the name of Quantum Venture Capital, Inc.

(4) Includes 84,000 shares owned directly by Mr. Ellenby and 32,000
shares owned in the name of the Jay D. Ellenby MD PA Profit Sharing Plan.

(5) Includes 300,000 shares owned directly by Mr. Orshalick and 25,000
shares owned in the name of the Alan Orshalick IRA.

ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

Our Directors and Executive Officers, their ages and present positions
held in us are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION HELD
------------------- --- -------------

<S> <C> <C>
Curt D. Jansen 55 President, Chief Executive Officer, Director
Fred Ziegler 54 Chairman, Director
Michael B. Maw 60 Chief Financial Officer, Secretary, Treasurer,
Director
Charles J. Caserta 44 Director
Jay D. Ellenby 64 Director
Herbert M. Goldman 58 Director
Andrew W. Tarbox 45 Director
David Breeding 61 Chief Technology Officer
</TABLE>

Our Directors will serve in such capacity until the next annual meeting
of our shareholders and until their successors have been elected and

<PAGE> 11

qualified. The officers serve at the discretion of our Directors. There are no
family relationships among our officers and directors, nor are there any
arrangements or understandings between any of our directors or officers or any
other person pursuant to which any officer or director was or is to be selected
as an officer or director.

CURT D. JANSEN. Mr. Jansen has been the President, Chief Executive
Officer and a director of our Company since inception. Prior to co-founding us
in 1997, he founded in 1995 an Internet Service Provider business in Fort
Collins and developed a new business that involved marketing and sales of
turnkey Internet Service Provider solutions to two communities in New Mexico.
Previously, in 1986 he was the founder and President of media publishing house
with print, video and CD-ROM multimedia titles to its credit, and he worked as
production manager for Sportsmen's video magazine where he was responsible for
planning and scheduling of segment hosts, scripts, and production coordination.
Mr. Jansen had experience in the creative as well as business side of this
enterprise. Education: B.S. and M.S. degrees in biology from Colorado State
University. Mr. Jansen will devote a minimum of forty hours a week as an
employee.

FRED ZIEGLER. Mr. Ziegler has been our Chairman of the Board since
July, 1999 and a director since January, 1998. Mr. Ziegler has been in the
business of brokering oil and gas properties since 1986. During 1986 and 1987,
Mr. Ziegler was employed by Cumberland Gas Corporation, serving as Executive
Vice President in charge of office and field personnel. From 1980 to 1984, Mr.
Ziegler was founder and president of Colorado Eastern Oil Company, which
conducted drilling operations in Colorado, Kansas, Kentucky and Oklahoma.
Following a severe but temporary medical problem, Mr. Ziegler filed for personal
bankruptcy in 1998; he has since returned to good health. Mr. Ziegler will
devote a minimum of forty hours a week as an employee.

MICHAEL B. MAW. Mr. Maw has been a director since May 1999 and has been
the Chief Financial Officer, Treasurer, Secretary of our Company since July
1999. Mr. Maw's major responsibilities include financial functions,
administration, corporate secretary functions, product development, project
management and planning. Mr. Maw is also an Instructor of Business Planning,
Division of Educational Outreach, Colorado State University. Prior to joining
the Company in May 1999, Mr. Maw was a financial consultant to Voice It
Worldwide, Inc. ("MEMO", OTC-BB) and served as its Acting Chief Financial
Officer. Voice It retained Mr. Maw after that Company had filed for Chapter 11
protection, and Mr. Maw left Voice It after the company had submitted its plan
of reorganization, had hired a permanent Chief Financial Officer and had adopted
a plan to relocate to California. Mr. Maw managed all aspects of the financial
affairs of Voice It and prepared the financial information of SEC filings and
Bankruptcy Court Reports. Mr. Maw prepared plans for Voice It to relocate to
California and for a new financial system. Earlier in his career, Mr. Maw was
General Counsel and Secretary of Interbank Card Association (now known as
MasterCard(R) International, "MasterCard"). He managed the Rules and Regulations
and structures that permitted MasterCard to grow from a few thousand US banks
exchanging paper, to over 18,000 international financial institutions engaged in
electronic interchange through complex computer networks. At MasterCard, he was
also the Chair of its Strategic Planning Committee and an ex officio member of
its Operations, Marketing and Security Committees. He thereafter joined the
Equitable Life Assurance Society as Managing Attorney. As such, he was the CAO
and CIO of the Law Department and designed and installed the first computer
systems and automation project in the Executive Office, achieving a 15%
reduction in the Law Department staff. Between 1981 and 1998, Mr. Maw consulted
to and advised software development companies, international enterprises,
professional firms and diverse businesses. He filed for personal bankruptcy in
1995 after the failure of a business in which he was a principal. Education:
B.A. Yale University, History. LL.B. Columbia University. MBA Fordham University
(distinction in Strategic Planning and International Business). Mr. Maw will
devote a minimum of twenty hours a week as an employee and plans to also have
outside teaching and consulting work.

CHARLES J. CASERTA. Mr. Caserta has been a director since July, 2000.
Mr. Caserta is a management and marketing consultant for start-up and early
development stage companies. Mr. Caserta founded IFS International in 1981 and
was its President and CEO. IFS developed systems for automated teller machines
(ATMs). He was responsible for company growth to 40% market share of NCR ATMs in
the U.S. and Canada and 100+ employees. Mr. Caserta has experience in building

<PAGE> 12

leading-edge systems, worldwide sales/distribution channels, and service
organizations in the Electronic Fund Transfer market for debit/credit/smart card
authorization and electronic commerce. He is an expert in identifying and
capturing market opportunities, building international alliances and sales
organizations for driving long-term revenue growth. Among many career
highlights: identified and captured chip smart card opportunities with VISA(R)
International to develop the strategic central host system for the launch of
VISACash(R), which resulted in a multi-million dollar license and services
agreement. The seven initial systems licensed were utilized by VISA(R)
International in various countries to support VISACash(R) implementations for
some of the largest banks in the world including Citibank, Sumitomo Credit,
Daiei OMC, Nippon Shinpan, Barclays, Nations Bank, Bank of America, Lloyds Bank,
Berliner Bank, Abbey National and others. Education: B.A. Villanova University.
Mr. Caserta will devote such time as may be necessary to carry out his
responsibilities as one of our directors.

JAY D. ELLENBY, M.D., F.A.C.S. Dr. Ellenby has been a director since
July, 2000. Dr. Ellenby is a physician and maintains a private practice in
plastic and reconstructive surgery in Aventura, Florida. He is also a Clinical
Instructor with the Department of Plastic and Reconstructive Surgery, University
of Miami School of Medicine in Miami, Florida. Dr. Ellenby is board certified
with the American Board of Plastic and Reconstructive Surgery and with the
American Board of General Surgery. His current professional memberships include
(1) American Society of Plastic and Reconstructive Surgery, (2) American Society
Aesthetic Plastic Surgeons, (3) International Society of Aesthetic Plastic
Surgery, (4) Florida Society of Plastic and Reconstructive Surgery, (5) Greater
Miami Society of Plastic and Reconstructive Surgery, (6) American College of
Surgeons, (7) Tord Skoog Society of Plastic and Surgery, (8) Southeastern
Society of Plastic and Surgery, (9) Florida Medical Association, and (10) Dade
County Medical Association. Dr. Ellenby is affiliated with the Aventura
Hospital, North Miami Beach Surgical Center, North Shore Medical Center,
Palmetto General Hospital & Parkway Regional Medical Center. He interned and was
Resident at Presbyterian St. Lukes Hospital, University of Illinois. Education:
B.S. and M.D. University of Illinois. Dr. Ellenby will devote such time as may
be necessary to carry out his responsibilities as one of our directors.

HERBERT M. GOLDMAN. Mr. Goldman has been a director since April, 2000.
He is also a part time employee. He worked as an investment advisor for
Prudential Bache Securities and a stock broker for J.D. Edwards for eight years,
from 1978 to 1986. He has also been a mortgage broker from 1986 to 1994. During
the last six years, he has assisted start-up companies, helping them to enter
the public market, performing investor relations and CFO functions. Education:
B.A. Hunter College, and MSW Yeshiva University. Mr. Goldman will devote such
time as may be necessary to carry out his responsibilities as one of our
directors and as an employee.

ANDREW W. TARBOX. Mr. Tarbox has been a director since July, 2000. Mr.
Tarbox formed Thornebrook Associates in 1985 to provide programming and smart
card technical expertise. The current focus of his company is fostering
relationships between financial institutions and technology companies. He has
also previously been Vice President, Chip Card Implementation for MasterCard(R)
International, Inc., International, Sales Manager for Quadrum
Telecommunications, Inc., and Executive Vice President of Telemediacarte. Mr.
Tarbox also holds a U.S. Patent for a system and method for processing a
customized financial transaction card. He was instrumental in the development
and global deployment of a joint smart card standard with VISA(R) International
and Europay. He has also managed the development of a series of multi-media
smart card education programs designed to educate member banks and the industry
on smart card issues. Education: B.S. Cornell University. Mr. Tarbox will devote
such time as may be necessary to carry out his responsibilities as one of our
directors.

DAVID BREEDING. Mr. Breeding joined our Company in September 1999 as
our Manager of Software Development and became our Chief Technology Officer in
July 2000. Prior to joining DynCom, he worked in the Design and development
organization of a multi-national telecommunications manufacturer, Ericsson Inc.,
where he was responsible for gathering user requirements, specifying products,
planning projects, and providing high-level designs. Before that, he worked in a
similar capacity for a multi-national data communications firm, Harris
Corporation, and for a major computer manufacturer, Control Data. He has had
extensive experience with using, improving, and leading the software development
process in both large

<PAGE> 13

and small organizations. Education: BA University of Houston. M.S. in Computer
Science, University of Texas at Dallas.

ITEM 6. EXECUTIVE COMPENSATION

None of our executive officers received compensation in excess of
$100,000 during the fiscal years ended December 31, 1999, 1998, or 1997.
Compensation does not include minor business-related and other expenses paid by
us. Such amounts in the aggregate do not exceed $10,000.

Our Board of Directors has authorized compensation for our President,
Curt Jansen, at $2,000 per month for the months of July and August 1999, at
$3,000 per month for the months September and October 1999, and at $4,000 per
month from November 1999 to date. Of the total amount payable through September
30, 2000, we paid Mr. Jansen $24,000, and issued demand notes to Mr. Jansen for
the balance which is $30,000. These notes bear a simple interest rate of 8%. In
addition, our Board has authorized the issuance to Mr. Jansen of 180,000 options
under our Officers and Advisors Option Plan (a non-qualified plan adopted on May
15, 2000, and which expired on July 25, 2000; these options, which are
exercisable at $0.10, expire on the business day prior to the 2001 Annual
Meeting of Shareholders). Further, our Board has authorized the issuance to Mr.
Jansen of 6,500 options pursuant to our Directors and Advisors Option Plan (a
non-qualified plan adopted on May 15, 2000, and which expired on July 25, 2000;
these options, which are exercisable at $0.10, expire on the business day prior
to the 2001 Annual Meeting of Shareholders).

Our Board of Directors has authorized compensation for our CFO,
Treasurer, and Secretary, Michael B. Maw, at $1,000 per month for the months of
July and August 1999, at $2,000 per month for the months September and October
1999, and at $3,500 per month from November 1999 to date. Of the total amount
payable through September 30, 2000, which is $44,500, we have paid Mr. Maw
$21,000, and issued demand notes to Mr. Maw for the balance of $23,500. These
notes bear a simple interest rate of 8%. In addition, our Board has authorized
the issuance to Mr. Maw of 310,000 options pursuant to our Officers and Advisors
Option Plan (a non-qualified plan adopted on May 15, 2000, and which expired on
July 25, 2000; these options, which are exercisable at $0.10, expire on the
business day prior to the 2001 Annual Meeting of Shareholders). Further, the
Board has authorized the issuance to Mr. Maw of 6,500 options pursuant to our
Directors and Advisors Option Plan (a non-qualified plan adopted on May 15,
2000, and which expired on July 25, 2000; these options, which are exercisable
at $0.10, expire on the business day prior to the 2001 Annual Meeting of
Shareholders).

Our Board of Directors has authorized compensation for our Chairman,
Fred D. Ziegler, at $3,500 per month from November 1999 to date. Of the total
amount payable through September 30, 2000, which is $38,500, we have paid Mr.
Ziegler $16,750, and have issued demand notes to Mr. Ziegler for the balance,
which is $21,750. These notes bear a simple interest rate of 8%. In addition,
our Board has authorized the issuance to Mr. Ziegler of 130,000 options pursuant
to our Officers and Advisors Option Plan (a non-qualified plan adopted on May
15, 2000, and which expired on July 25, 2000; these options, which are
exercisable at $0.10, expire on the business day prior to the 2001 Annual
Meeting of Shareholders). Further, the Board has authorized the issuance to Mr.
Ziegler of 6,500 options pursuant to our Directors and Advisors Option Plan (a
non-qualified plan adopted on May 15, 2000, and which expired on July 25, 2000;
these options, which are exercisable at $0.10, expire on the business day prior
to the 2001 Annual Meeting of Shareholders).

Our Board of Directors has authorized compensation for our Chief
Technology Officer, David E. Breeding, at $4,000 per month from September 13,
1999 to date. Of the total amount payable through September 30, 2000, which is
$49,733, we have paid Mr. Breeding $19,000, and issued demand notes to Mr.
Breeding for the balance, which is $30,733. These notes bear a simple interest
rate of 8%. In addition, our Board has authorized the issuance to Mr. Breeding
of 60,000 options pursuant to our Officers and Advisors Option Plan (a
non-qualified plan adopted on May 15, 2000, and which expired on July 25, 2000;
these options, which are exercisable at $0.10, expire on the business day prior
to the 2001 Annual Meeting of Shareholders).

We have no pension or health plans for the benefit of our employees. We
have no plans or agreements which provide compensation on the event of

<PAGE> 14

termination of employment or change in our control. We had a non-qualified stock
plan adopted on May 15, 2000, which expired on July 25, 2000. We granted stock
options as we have discussed in this document.

We do not pay members of our Board of Directors any fees for attendance
or similar remuneration, but Directors who attended and participated in meetings
of our Board of Directors from July 1999, to June 2000, received a total of 500
options for each such meeting pursuant to our Directors and Advisors Option Plan
(a non-qualified plan adopted on May 15, 2000, and which expired on July 25,
2000; these options, which are exercisable at $0.10, expire on the business day
prior to the 2001 Annual Meeting of Shareholders). We reimburse our Directors
for any out-of-pocket expenses incurred by them in connection with our business.
Mr. Herbert M. Goldman, one of our directors, is also a part time employee. His
annual compensation is $12,000.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Loan Transactions

Our Founders, Curt D. Jansen, Peder Halseide and Gary Prewett,
capitalized us at start-up with equipment and with $1,000 dollars from each of
the three founders. The actual cash invested differed from individual to
individual, and loans were written, both to and from us, in order to balance the
accounts. Curt D. Jansen loaned us an additional $3,430.82, Peder Halseide
loaned us an additional $2,206.33, and Gary Prewett owed us $270. All of these
obligations have been paid.

In addition, Mr. Jansen loaned us $3,000 in March 1999, $18,000 in
December 1999, of which $10,000 was repaid in January 2000. He also loaned us
$100,000 in February 2000, $9,500 in June 2000, and $3,000 in August 2000. We
issued Mr. Jansen promissory notes for each of these loans. The March 1999 and
February 2000 notes are due and payable 2-years from the date thereof, or
thereafter whenever demand shall be made, and bear an interest rate of 8% per
annum. The balance of the notes are demand notes and bear an interest rate of 8%
per annum. Since September 30, 2000, to the date hereof, Mr. Jansen has made
further loans to us, which loans total $11,700, and we have issued demand notes
to him for such loans (all such notes bear an interest rate of 8% per annum).
These loans are in addition to Mr. Jansen's deferrals of compensation, which are
disclosed above under Item 6.

Further, we received loans during the period from May 1999 through May
2000 from Michael B. Maw totaling $4,500, with notes payable on demand and
bearing an interest rate of 8% per annum (which notes were paid on May 15,
2000). In addition, Mr. Maw loaned us a total of $11,410 since May 2000 to the
date hereof, and we have issued demand notes to him for such loans (all such
notes bear an interest rate of 8% per annum). These loans are in addition to Mr.
Maw's deferrals of compensation, which are disclosed above under Item 6.

We received a loan in July 2000 from A-New Management Consultants for
$2,500. We issued a demand note for this loan, which note bears an interest rate
of 8% per annum.

We also received a loan from William Bazemore, a shareholder, in August
1999 for $10,000, a series of loans from Dr. Jay Ellenby, a Director and a
member of the Health Care Advisory Council, and his profit sharing plan,
totaling $31,000, on notes with a six month maturity, requiring the payment of
120% of the amount loaned, and one share of common stock for each dollar of the
amount of the note (all of these notes have been converted into stock purchases
pursuant to our 504 Private Placement Memorandum). In addition, Dr. Ellenby
loaned us $5,000 in February 2000, and $10,000 in September 2000, and we issued
to him demand notes which bear an interest rate of 8% per annum for these loans.

We received a loan in August 2000 from Dennis and Sharon Knutson (Mrs.
Knutson is an employee) for $20,000. We issued a note for this loan, payable in
November 2000, which note bears an interest rate of 14% per annum. Mr. and Mrs.
Knutson have agreed to an extension of the due date for this loan to February 1,
2001.

We borrowed $100,000 from a shareholder, Mr. John Moore, for the
purpose of paying an IBM invoice on February 2, 2000. The note calls for an

<PAGE> 15

interest rate of 6%, and the loan is being slowly retired through the sale of
collateral, our shares of Schimatic Technologies; as additional collateral for
this loan and a further loan of $100,000 to Mr. Jansen (which amount Mr. Jansen
then loaned to us. We have discussed this loan above). Curt Jansen sold his
residence to John Moore, with a right of repurchase upon the full payment of the
loans to us and to Mr. Jansen.

All loans have a higher priority on our assets than the priority of the
shareholders. From time to time, our officers and directors may advance further
funds to us.

Stock Transactions

At our inception, we issued 1,800,000 shares of our common stock to our
founders, which was 600,000 shares of such stock to each of Curt Jansen, Gary
Prewett and Peder Halseide. During the founding period, we also issued 350,000
shares of common stock to a director, Fred Ziegler, and also issued 345,000
shares of the common stock to a director, Michael B. Maw. Messrs. Halseide,
Jansen, Maw, Prewett and Ziegler have since distributed some of these shares to
unaffiliated third parties. In addition, our Board of Directors granted Curt
Jansen 3,000 shares as additional consideration for his March 1999 loan, and
granted him a further 160,000 shares in consideration of his person guarantee of
the lease for our office space at 2301 Research Boulevard, Fort Collins,
Colorado. Mr. Maw, a director, purchased 5,000 shares of our common stock for
$5,000 on May 19, 1999. Subsequently, Gary Prewett and Peder Halseide made a few
gifts of their shares to Mr. Jansen, Mr. Maw and Mr. Ziegler, thereby reducing
their personal holding to, in the case of Mr. Halseide, 106,500 shares, and in
the case of Mr. Prewett, to 200,000 in his name and 7,000 shares in the joint
names of Mr. and Mrs. Prewett.

On September 30, 1999, we entered into an agreement with Herbert M.
Goldman Trust for an exchange of stock, with that trust receiving 500,000 shares
of the common stock of DynCom in exchange for 160,000 shares of SCHIMATIC Cash
Transactions Network.com, Inc., ("SCTN", OTC-BB).

Other

Mr. Herbert M. Goldman, one of our directors, is also a part time
employee. His annual compensation is $12,000.

ITEM 8. DESCRIPTION OF SECURITIES.

We are authorized to issue 100,000,000 shares of Common Stock, no par
value per share, and 5,000,000 shares of non-voting Preferred Stock, no par
value per share. As of September 30, 2000, we had 4,162,950 shares of Common
Stock issued and outstanding. No Preferred Stock has ever been issued or
outstanding.

COMMON STOCK

The holders of Common Stock have one vote per share on all matters
(including election of Directors) without provision for cumulative voting. Thus,
holders of more than 50% of the shares voting for the election of directors can
elect all of the directors, if they choose to do so. The Common Stock is not
redeemable and has no conversion or preemptive rights.

The Common Stock currently outstanding is validly issued, fully paid
and non-assessable. In the event of liquidation of the Company, the holders of
Common Stock will share equally in any balance of our assets available for
distribution to them after satisfaction of creditors and the holders of our
senior securities, whatever they may be. We may pay dividends, in cash or in
securities or other property when and as declared by the Board of Directors from
funds legally available therefor, but have paid no cash dividends on our Common
Stock.

<PAGE> 16

PREFERRED STOCK

Under the Articles of Incorporation, the Board of Directors has the
authority to issue non-voting Preferred Stock and to fix and determine its
series, relative rights and preferences to the fullest extent permitted by the
laws of the State of Colorado and such Articles of Incorporation. As of the date
of this Registration Statement, no shares of Preferred Stock are issued or
outstanding. The Board of Directors has no plan to issue any Preferred Stock in
the foreseeable future.

PART II

ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON SHARES
AND OTHER SHAREHOLDER MATTERS.

(a) Principal Market or Markets

Our securities have never been listed for trading on any
market and are not quoted at the present time. At the present time, we do not
know where secondary trading will eventually be conducted. Because of our size,
we believe that we could potentially begin trading on the NASD's "Electronic
Bulletin Board." To the extent, however, that trading will be conducted in the
over-the-counter market in the so-called "pink sheets" or the NASD's "Electronic
Bulletin Board," a shareholder may find it more difficult to dispose of or
obtain accurate quotations as to price of our securities. In addition, The
Securities Enforcement and Penny Stock Reform Act of 1990 requires additional
disclosure related to the market for penny stock and for trades in any stock
defined as a penny stock.

(b) Approximate Number of Holders of Common Stock

As of September 30, 2000, a total of 4,162,950 shares of our Common
Stock were outstanding and the number of holders of record of our common stock
at that date was approximately 186.

Holders of common stock are entitled to receive such dividends as may
be declared by our Board of Directors. No dividends on the common stock were
paid by us during the periods reported herein nor do we anticipate paying
dividends in the foreseeable future.

(d) The Securities Enforcement and Penny Stock Reform Act of 1990

The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure and documentation related to the market for penny stock
and for trades in any stock defined as a penny stock. Unless we can acquire
substantial assets and trade at over $5.00 per share on the bid, it is more
likely than not that our securities, for some period of time, would be defined
under that Act as a "penny stock." As a result, those who trade in our
securities may be required to provide additional information related to their
fitness to trade our shares. These requirements present a substantial burden on
any person or brokerage firm who plans to trade our securities and would thereby
make it unlikely that any liquid trading market would ever result in our
securities while the provisions of this Act might be applicable to those
securities.

ITEM 2. LEGAL PROCEEDINGS.

No legal proceedings of a material nature to which we are a party were
pending during the reporting period, and we know of no legal proceedings of a
material nature pending or threatened or judgments entered against any of our
directors or officers in their capacity as such.

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

We did not have any disagreements on accounting and financial
disclosures with our accounting firm during the reporting period.

ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.

At our inception, we issued 1,800,000 shares of our common
stock to our founders, which was 600,000 shares of such stock to each of Curt

<PAGE> 17

Jansen, Gary Prewett and Peder Halseide. During the founding period, we also
issued 350,000 shares of common stock to a director, Fred Ziegler, and also
issued 345,000 shares of the common stock to a director, Michael B. Maw. Messrs.
Halseide, Jansen, Maw, Prewett and Ziegler have since distributed some of these
shares to unaffiliated third parties. In addition, our Board of Directors
granted Curt Jansen 3,000 shares as additional consideration for his March 1999
loan, and granted him a further 160,000 shares in consideration of his person
guarantee of the lease for our office space at 2301 Research Boulevard, Fort
Collins, Colorado. Mr. Maw, a director, purchased 5,000 shares of our common
stock for $5,000 on May 19, 1999. Subsequently, Gary Prewett and Peder Halseide
made a few gifts of their shares to Mr. Jansen, Mr. Maw and Mr. Ziegler, thereby
reducing their personal holding to, in the case of Mr. Halseide, 106,500 shares,
and in the case of Mr. Prewett, to 200,000 in his name and 7,000 shares in the
joint names of Mr. and Mrs. Prewett.

We believe that the offers and sales described above were
exempt from registration under Section 4(2) and/or 4(6) of the Securities Act
because those offers and sales met all the conditions of those sections as then
in effect.

The following shareholders acquired their respective shares in us under
a Rule 504 Private Placement Memorandum first issued on February 1, 1999, and
later updated on June 15, 1999, at a price of $1 per share of common stock:

<TABLE>
<CAPTION>
Name Number of Shares
------------------------------- ----------------

<S> <C>
Agresti, Thomas J 1,500
Alterman, Brett 1,500
Arends, Dennis 7,800
Augustine, Ronald J. & Sheila R 1,000
Bazemore, William 15,000
Bourdeau, Howard J 5,000
Breeding, James 1,000
Burton, Anthony C 20,000
Channey, Stephen 50,000
Cline, Virgil & Jan 500
Collins, James 500
</TABLE>

<TABLE>
<CAPTION>
Name Number of Shares
-------------------------------- ----------------

<S> <C>
Collins, Margaret M 500
Dunrud, Kevin & Tammy 500
Ehrlich, Donald 5,000
Ellenby, Jay D 10,000
Ellenby, Jay D 19,200
Ellenby, Jay D., MD PA Profit Share Plan 16,000
Feinstein, Rene E. Family Trust 5,000
Fields, Herbert M.D 5,000
Finnick, James B 2,000
Fortin, Bradley J 1,000
Frick, Rodney A 500
Goldblatt, Beatrice 1,000
Goldblatt, Jacob and Ethel 2,500
Guriel, Jane, Custodian, Dustin W. Guriel 5,000
Hammerly, Wayne M 1,500
Harris, Chany 500
Harris, Stephen J 500
Hayes, Margaret M 15,000
Hudelson, Kimberly S 500
Jacob, Thomas J 2,500
Johnston, Brian D 500
Jourgensen, Sharon 5,000
Jourgensen, Stacy 2,000
Keller, William C 500
Klein, Harold E. Jr. & Nancy Anne Collins 10,000
Knauer, Jim 1,000
Knutson, Bradford A. & Mary E 500
</TABLE>

<PAGE> 18

<TABLE>
<S> <C>
Knutson, Dennis & Sharon 4,500
Koehler, Janis Z 3,000
Koehler, Steven J 6,000
Koehler, Steven J., DMD, PC, MPPP 3,000
Koehler, Valerie 1,000
Koehler, Victor A 5,000
Krieg, Paul D 5,000
Kuhlman, B.J 1,000
Lemmon, Franklin A 3,000
Lemmon, Louise Marie 1,000
Lemmon, Stephen W 3,500
Loebner, Louise 2,000
Lotz, Robert J. and Marsha 15,000
Market Information Communication Inc. 5,000
Maw, Michael B 5,000
McCoy, Kathy 3,000
Moore, John H 20,000
Mueller, Denise A 500
Mueller, Timothy K 500
Nadzieja, Richard A 4,000
Nance, Nancy J 2,000
Navratil, Richard A 500
Patton, Randolph W 10,000
Pickle, Karyl Frank 2,000
Pollock, Ed 5,000
</TABLE>

<TABLE>
<CAPTION>
Name Number of Shares
-------------------------------------- ----------------

<S> <C>
Reed, Jonathan C 10,000
Reina, William 5,000
Rembold, Michael D 1,000
Russell, Glen E 10,000
Russell, Joe 5,000
Russell, Mark P 7,000
Russell, William E 1,000
Salbado, John B 10,000
Sanders, Craig R 1,000
Sanders, Russell & Goldblatt, Janis B 3,000
Shogun Investment Group, Ltd. 10,000
Stromer, Leo G 1,000
Studioso, Daniel 500
Studioso, John R 500
Vetter, Randy E. & Cindy S 500
Weiss, Kelly R 1,000
Wright, Jason A 1,000
Total Shares 333,500
</TABLE>

We believe that the offers and sales described above were exempt from
registration under Rule 504 of Regulation D under the Securities Act because
those offers and sales met all the conditions of Rule 504 as then in effect,
including the dollar limitation, and we were not at the time of such
transactions within any of the categories of issuers prohibited from using Rule
504.

<PAGE> 19

The following shareholders acquired their respective shares in us under
a Rule 504 Private Placement Memorandum first issued on June 15, 2000, at a
price of $2 per share of common stock:

<TABLE>
<CAPTION>
Name Number of Shares
------------------------- ----------------

<S> <C>
Billiot, Michael 500
Design Steel Systems, LLC 1,000
Krienke, Jackie 1,000
Orshalick, Alan IRA 25,000
Pirkl, Gerald & Barbara 1,500
Seaworth, Richard 1,000
ShookSayler, Deborah K. 500
Simmons, John Allen 250
Total Shares 30,750
</TABLE>

In addition to the transactions discussed above, we issued 12,000
shares of our common stock to William Bazemore on August 16, 1999, as additional
compensation for the making of a loan to us, 350,000 shares to James Dascalos on
October 29, 1999, in anticipation of services, 12,000 shares to Jay D. Ellenby
on October 7, 1999, as additional compensation for the making of a loan to us,
4,800 shares to Jay D. Ellenby on November 4, 1999, as additional compensation
for the making of a loan to us, 16,000 shares to Jay D. Ellenby MD PA Profit
Share Plan on December 31, 1999, as additional compensation for the making of a
loan to us, 2,000 shares to Anne Jansen on February 4, 2000, as additional
compensation for the making of a loan to us, 20,000 shares to Dennis and Sharon
Knutson on August 4, 2000, as additional compensation for the making of a loan
to us, 50,000 shares to John H. Moore on January 31, 2000, as additional
compensation for the making of a loan to us, 50,000 shares to Jon S. Moore on
January 31, 2000, as additional compensation for the making of a loan to us and
60,000 shares to Natalie Schanker-Hollis on August 16, 1999, as compensation for
serving on our Medial Advisory Council.

On October 20, 1999, we entered into an agreement with Omicron
Technologies, Inc. ("OGPS", OTC-BB) pursuant to which Omicron Technologies, Inc.
issued 200,000 shares of its common stock to us and agreed to provide to us
certain technologies which Omicron Technologies, Inc. represented that it owned,
and we issued 600,000 shares of our common stock, plus warrants to purchase
600,000 additional shares of our common stock. Omicron Technologies, Inc.,
subsequently failed to provide the agreed-upon technologies to us, and Omicron
Technologies, Inc., presently appears not to be a viable enterprise.
Accordingly, after due consideration on September 21, 2000, we terminated the
October 20 agreement and voided our shares and warrants. Management believes
that the shares and warrants have been validly cancelled and that we have no
liability to Omicron Technologies, Inc.

On June 14, 2000, we entered into an agreement with Shruti Misra
pursuant to which Ms. Misra agreed to sell certain real property located in
Australia to us in exchange for 640,000 shares, plus warrants for an additional
300,000 shares. The transaction was conditional upon the seller delivering an
appraisal certifying the value of the property was at least US$1,000,000. The
appraisal, when received, was for a substantial lesser amount, and Ms. Misra and
we agreed to void the transaction ab initio. Management believes that the
subject shares and warrants have been validly cancelled and that we have no
liability to Shruti Misra.

<PAGE> 20

ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Our Articles of Incorporation authorize the Board of Directors, on our
behalf and without shareholder action, to exercise all of our powers of
indemnification to the maximum extent permitted under the applicable statute.
Title 7 of the Colorado Revised Statutes, 1986 Replacement Volume ("CRS"), as
amended, permits us to indemnify our directors, officers, employees,
fiduciaries, and agents, as follows:

Section 7-109-102 of CRS permits a corporation to indemnify such
persons for reasonable expenses in defending against liability incurred in any
legal proceeding if:

(a) The person conducted himself or herself in good faith;

(b) The person reasonably believed:

(1) In the case of conduct in an official capacity with the
corporation, that his or her conduct was in the corporation's best interests;
and

(2) In all other cases, that his or her conduct was at least
not opposed to the corporation's best interests; and

(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe that his or her conduct was unlawful.

A corporation may not indemnify such person under this Section
7-109-102 of CRS:

(a) In connection with a proceeding by or in the right of the
corporation in which such person was adjudged liable to the corporation; or

(b) In connection with any other proceeding charging that such person
derived an improper benefit, whether or not involving action in an official
capacity, in which proceeding such person was adjudged liable on the basis that
he or she derived an improper personal benefit.

Unless limited by the Articles of Incorporation, and there are not such
limitations with respect to the Company, Section 7-109-103 of CRS requires that
the corporation shall indemnify such a person against reasonable expenses who
was wholly successful, on the merits or otherwise, in the defense of any
proceeding to which the person was a party because of his status with the
corporation.

Under Section 7-109-104 of CRS, the corporation may pay reasonable fees
in advance of final disposition of the proceeding if:

(a) Such person furnishes to the corporation a written affirmation of
the such person's good faith belief that he or she has met the Standard of
Conduct described in Section 7-109-102 of CRS;

(b) Such person furnishes the corporation a written undertaking,
executed personally or on person's behalf, to repay the advance if it is
ultimately determined that he or she did not meet the Standard of Conduct in
Section 7-109-102 of CRS; and

(c) A determination is made that the facts then known to those making
the determination would not preclude indemnification.

Under Section 7-109-106 of CRS, a corporation may not indemnify such
person, including advanced payments, unless authorized in the specific case
after a determination has been made that indemnification of such person is
permissible in the circumstances because he met the Standard of Conduct under
Section 7-109-102 of CRS and such person has made the specific affirmation and
undertaking required under the statute. The required determinations are to be
made by a majority vote of a quorum of the Board of Directors, utilizing only
directors who are not parties to the proceeding. If a quorum cannot be obtained,
the determination can be made by a majority vote of a committee of

<PAGE> 21

the Board, which consists of at least two directors who are not parties to the
proceeding. If neither a quorum of the Board nor a committee of the Board can be
established, then the determination can be made either by the Shareholders or by
independent legal counsel selected by majority vote of the Board of Directors.

The corporation is required by Section 7-109-110 of CRS to notify the
shareholders in writing of any indemnification of a director with or before
notice of the next shareholders' meeting.

Under Section 7-109-105 of CRS, such person may apply to any court of
competent jurisdiction for a determination that such person is entitled under
the statute to be indemnified from reasonable expenses.

Under Section 7-107(1)(c) of CRS, a corporation may also indemnify and
advance expenses to an officer, employee, fiduciary, or agent who is not a
director to a greater extent than the foregoing indemnification provisions, if
not inconsistent with public policy, and if provided for in the corporation's
bylaw, general or specific action of the Board of Directors, or shareholders, or
contract.

Section 7-109-108 of CRS permits the corporation to purchase and
maintain insurance to pay for any indemnification of reasonable expenses as
discussed herein.

The indemnification discussed herein shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under the Articles
of Incorporation, any Bylaw, agreement, vote of shareholders, or disinterested
directors, or otherwise, and any procedure provided for by any of the foregoing,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of
heirs, executors, and administrators of such a person.

Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expense incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

<PAGE> 22

PART F/S

DYNCOM INC.

Financial Statements
For the Nine Months Ended September 30, 2000

REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

To the Board of Directors
DynCom Inc.
Ft. Collin, Colorado

We have reviewed the accompanying balance sheet of DynCom Inc. as of September
30, 2000 and the related statements of operations for the nine month period
ended September 30, 2000 and the three month period ended September 30, 2000 and
1999, and the cash flows for the nine months ended September 30, 2000 included
in the accompanying Securities and Exchange Commission Form 10-Q for the period
ended September 30, 2000. These financial statements are the responsibility of
the Company's management.

We conducted our reviews 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 as a whole.
Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements 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 operations, stockholders' equity and cash flows for the year then ended (not
presented herein). In our report dated April 23, 2000, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying balance sheet as of September 30, 2000
is fairly stated in all material respects in relation to the balance sheet from
which it has been derived.

-- Signed --

Michael Johnson & Co., LLC.
Denver, Colorado
October 30, 2000

<PAGE> 23
DYNCOM INC.
(A Development Stage Company)
Balance Sheets
(Unaudited)

<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------

<S> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash $ 156,191 $ 515
Accounts receivable 1,486 1,828
Prepaid expense and deposits 1,674 1,300
----------- -----------
Total Current Assets 159,351 3,643
----------- -----------

INVESTMENTS: 122,850 300,000
----------- -----------

FIXED ASSETS:
Computer equipment 27,047 10,952
Office furniture and equipment 3,136 2,222
Leasehold improvements 2,155 2,155
----------- -----------
32,338 15,329
----------- -----------
Less: Accumulated depreciation (9,016) (4,249)
----------- -----------
Fixed assets - net 23,322 11,080
----------- -----------

TOTAL ASSETS $ 305,523 $ 314,723
=========== ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 368,797 $ 209,054
Accrued salaries payable 134,839 64,566
Interest payable 5,056 5,056
Notes payable - current portion 264,410 59,137
----------- -----------
Total Current Liabilities 773,102 337,813
----------- -----------

LONG-TERM DEBT:
Notes payable 3,000 3,000
----------- -----------
3,000 3,000
----------- -----------

TOTAL LIABILITIES 776,102 340,813
----------- -----------

STOCKHOLDERS' DEFICIT:
Common stock, no par value; 100,000,000 shares
authorized; 4,162,950 and 4,276,700 shares
issued and outstanding at September 30, 2000
and December 31, 1999, respectively 699,500 364,500
Preferred stock, non-voting, 5,000,000 shares
authorized, none issued and outstanding -- --
Share subscription receivable -- --
Deficit accumulated during the development stage (1,170,079) (390,590)
----------- -----------

TOTAL STOCKHOLDERS' DEFICIT (470,579) (26,090)
----------- -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 305,523 $ 314,723
=========== ===========
</TABLE>

See accountant's review report.

<PAGE> 24

DYNCOM INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)

<TABLE>
<CAPTION>
For the
Nine Months For the July 2, 1997
Ended Year Ended (Inception) thru
September 30, December 31, September 30,
2000 1999 2000
------------- ------------ ----------------

<S> <C> <C> <C>
REVENUES: $ 2,962 $ 4,852 $ 40,351

OPERATING EXPENSES:
Sales and marketing -- -- 9,875
General and administrative 829,510 391,311 1,247,789
----------- ----------- -----------
Total Operating Expenses 829,510 391,311 1,257,664
----------- ----------- -----------

----------- ----------- -----------
Net Loss from Operations (826,548) (386,459) (1,217,313)
----------- ----------- -----------

----------- ----------- -----------
Other Income 47,059 175 47,234
----------- ----------- -----------

NET LOSS $ (779,489) $ (386,284) $(1,170,079)
=========== =========== ===========

Weighted average number of
shares outstanding 4,200,866 2,656,671
=========== ===========

Basic and diluted net loss per share $ (0.19) $ (0.14)
=========== ===========
</TABLE>

See accountant's review report.

<PAGE> 25

DYNCOM INC.
(A Development Stage Company)
Statements of Changes in Stockholders' Equity
(Unaudited)

<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Share During the
------------------------- Subscription Development
Shares Amount Receivable Stage Totals
----------- ----------- ------------ ----------- -----------

<S> <C> <C> <C> <C> <C>
Balance - July 2, 1997 -- $ -- $ -- $ -- $ --

Stock issued for cash, equipment, and supplies 1,800,000 3,000 (270) -- 2,730
Net loss for period -- -- -- (357) (357)
----------- ----------- ----------- ----------- -----------
Balance - December 31, 1997 1,800,000 3,000 (270) (357) 2,373
----------- ----------- ----------- ----------- -----------

Stock issued to member of Board of Directors 200,000 -- -- -- --
Net loss for year -- -- -- (3,949) (3,949)
----------- ----------- ----------- ----------- -----------
Balance - December 31, 1998 2,000,000 3,000 (270) (4,306) (1,576)
----------- ----------- ----------- ----------- -----------

Stock issued for loan consideration 50,200 -- -- -- --
Stock issued for advisory council 60,000 -- -- -- --
Stock issued to members of Board of Directors 1,005,000 -- -- -- --
Stock issued for cash 61,500 61,500 270 -- 61,770
Stock issued for investments 1,100,000 300,000 -- -- 300,000
Net loss for year -- -- -- (386,284) (386,284)
----------- ----------- ----------- ----------- -----------
Balance - December 31, 1999 4,276,700 364,500 -- (390,590) (26,090)
----------- ----------- ----------- ----------- -----------

Stock issued for loan consideration 122,000 -- -- -- --
Stock cancelled for investments (600,000) (60,000) -- -- (60,000)
Stock issued for cash 364,250 395,000 -- -- 395,000
Net loss for nine month period -- -- -- (779,489) (779,489)
----------- ----------- ----------- ----------- -----------
Balance - September 30, 2000 4,640,950 $ 699,500 $ -- $(1,170,079) $ (470,579)
=========== =========== =========== =========== ===========
</TABLE>

See accountant's review report.

<PAGE> 26
DYNCOM INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
Indirect Method

<TABLE>
<CAPTION>
For the
Nine Months For the July 2, 1997
Ended Year Ended (Inception) thru
September 30, December 31, September 30,
2000 1999 2000
------------- ----------- ----------------

<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net loss to net cash
used in operating activities:
Net (Loss) $ (779,489) $ (386,284) $(1,155,257)
Depreciation and amortization 4,767 1,936 8,693
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable 342 (773) (1,486)
(Increase) in prepaid expenses (374) (1,300) (8,843)
Increase in accounts payables and accrued expenses 759,743 207,469 378,207
Increase in interest payable -- 5,056 5,056
Increase in accrued salaries payable 70,273 64,566 134,839
----------- ----------- -----------
232,751 276,954 516,466
----------- ----------- -----------
Net Cash Used in Operating Activities (544,738) (109,330) (638,791)
----------- ----------- -----------

CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (17,009) (8,823) (31,638)
Proceeds from sale of marketable securities 117,150 -- 117,150
----------- ----------- -----------
Net Cash Used In Investing Activities 100,141 (8,823) 85,512
----------- ----------- -----------

CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from notes payable 220,130 56,500 267,410
Proceeds from the issuance of common shares 395,000 61,770 458,800
----------- ----------- -----------
Net Cash Provided By Financing Activities 600,273 118,270 729,210
----------- ----------- -----------

Increase (Decrease) in Cash 155,676 117 156,191

Cash and Cash Equivalents - Beginning of period 515 398 --
----------- ----------- -----------

CASH AND CASH EQUIVALENTS - END OF PERIOD $ 156,191 $ 515 $ 156,191
=========== =========== ===========

Supplemental Cash Flow Information:
Cash paid during period for:
Interest paid $ -- $ -- $ --
=========== =========== ===========
Taxes paid $ -- $ -- $ --
=========== =========== ===========

Non-cash
</TABLE>

See accountant's review report.

<PAGE> 27

DYNCOM INC.
Statements of Operations
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------

<S> <C> <C> <C> <C>
INCOME $ 1,012 $ 1,130 $ 2,962 $ 6,040

OPERATING EXPENSES:
Sales and marketing -- -- -- --
General and administrative 199,806 51,941 829,510 90,712
---------- ---------- ---------- ----------
Total Operating Expenses 199,806 51,941 829,510 90,712
---------- ---------- ---------- ----------

NET LOSS FROM OPERATIONS (198,794) (50,811) (826,548) (84,672)
---------- ---------- ---------- ----------

OTHER INCOME:
Gain on sale of investments -- -- 47,059 --
---------- ---------- ---------- ----------

NET LOSS $ (198,794) $ (50,811) $ (779,489) $ (84,672)
========== ========== ========== ==========

Weighted average number of
shares outstanding $4,200,866 3,176,700 4,398,117 2,653,722

Net Loss Per Share $ (0.05) $ (0.02) $ (0.18) $ (0.03)
========== ========== ========== ==========
</TABLE>

* Less than $0.01 per share

See accountant's review report.

<PAGE> 28

DYNCOM INC.
NOTES TO FINANCIAL STATEMENTS

1. PRESENTATION OF INTERIM INFORMATION

In the opinion of the management of DynCom Inc., the accompanying unaudited
financial statements include all normal adjustments considered necessary to
present fairly the financial position as of September 30, 2000, and the
results of operations for the three months and nine months ended September
30, 2000 and 1999, and cash flows for the nine months ended September 30,
2000. Interim results are not necessarily indicative of results for a full
year.

The financial statements and notes are presented as permitted by Form 10-Q,
and do not contain certain information included in the Company's audited
financial statements and notes for the fiscal year ended December 31, 1999.
<PAGE> 29

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
DynCom Inc.
Ft. Collins, Colorado

We have audited the accompanying balance sheets of DynCom Inc. (A Development
Stage Company) as of December 31, 1999 and 1998, and the related statements of
operations, cash flows, and changes in stockholders' equity for the period July
2, 1997 (inception), through December 31, 1999, and the years ended December 31,
1999 and 1998. 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 DynCom Inc. at December 31,
1999 and 1998, and the results of its operations and its cash flows for the
period, July 2, 1997 (inception) through December 31, 1999 and the fiscal years
ended December 31, 1999 and 1998, 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 described in Note 1 to the
financial statements, the Company is in the development stage, conditions exist
which raise substantial doubt about the Company's ability to continue as a going
concern unless it is able to generate sufficient cash flows to meet its
obligations and sustain its operations. As of December 31, 1999, the Company has
lost $390,590 from operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ Michael Johnson & Co., LLC

Michael Johnson & Co., LLC
Denver, Colorado
April 23, 2000

<PAGE> 30

DYNCOM INC.
(A Development Stage Company)

Financial Statements
December 31, 1999 & 1998

<PAGE> 31

DYNCOM INC
(A Development Stage Company)
Balance Sheets
December 31,

<TABLE>
<CAPTION>
1999 1998
--------- ---------
ASSETS:
CURRENT ASSETS:
<S> <C> <C>
Cash $ 515 $ 398
Accounts receivable 1,828 1,055
Prepaid expense and deposits 1,300 --
--------- ---------
Total Current Assets 3,643 1,453
--------- ---------

INVESTMENTS: 300,000 --
--------- ---------

FIXED ASSETS:
Computer equipment 10,952 6,018
Office furniture and equipment 2,222 488
Leasehold improvements 2,155 --
--------- ---------
15,329 6,506
--------- ---------
Less: Accumulated depreciation (4,249) (2,313)
--------- ---------
Fixed assets - net 11,080 4,193
--------- ---------

TOTAL ASSETS $ 314,723 $ 5,646
========= =========

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 209,054 $ 1,585
Accrued salaries payable 64,566 --
Interest payable 5,056 --
Notes payable - current portion 59,137 --
--------- ---------
Total Current Liabilities 337,813 1,585
--------- ---------

LONG-TERM DEBT:
Notes payable 3,000 5,637
--------- ---------
3,000 5,637
--------- ---------

TOTAL LIABILITIES 340,813 7,222
--------- ---------

STOCKHOLDERS' DEFICIT:
Common stock, no par value; 100,000,000
shares authorized; 4,276,700 and 2,000,000 shares issued
and outstanding at December 31, 1999 and 1998, respectively 364,500 3,000
Preferred stock, non-voting, 5,000,000 shares
authorized, none issued and outstanding -- --
Share subscription receivable -- (270)
Deficit accumulated during the development stage (390,590) (4,306)
--------- ---------

TOTAL STOCKHOLDERS' DEFICIT (26,090) (1,576)
--------- ---------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 314,723 $ 5,646
========= =========
</TABLE>

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

<PAGE> 32

DYNCOM INC.
(A Development Stage Company)
Statements of Operations

<TABLE>
<CAPTION>
For the For the July 2, 1997
Year Ended Year Ended (Inception) thru
December 31, December 31, December 31,
1999 1998 1999
------------ ------------ ----------------

<S> <C> <C> <C>
REVENUES: $ 4,852 $ 19,296 $ 37,389

OPERATING EXPENSES:
Sales and marketing -- 9,875 9,875
General and administrative 391,311 13,370 418,279
----------- ----------- -----------
Total Operating Expenses 391,311 23,245 428,154
----------- ----------- -----------

----------- ----------- -----------
Net Loss from Operations (386,459) (3,949) (390,765)
----------- ----------- -----------

----------- ----------- -----------
Other Income 175 -- 175
----------- ----------- -----------

NET LOSS $ (386,284) $ (3,949) $ (390,590)
=========== =========== ===========

Weighted average number of
shares outstanding 2,656,671 1,983,333
=========== ===========

Basic and diluted net loss per share $ (0.14) $ (0.01)
=========== ===========
</TABLE>

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

<PAGE> 33

DYNCOM INC.
(A Development Stage Company)
Statements of Changes in Stockholders' Equity

<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Share During the
----------------------- Subscription Development
Shares Amount Receivable Stage Totals
--------- --------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C>
Balance - July 2, 1997 -- $ -- $ -- $ -- $ --

Stock issued for cash, equipment, and supplies 1,800,000 3,000 (270) -- 2,730
Net loss for period -- -- -- (357) (357)
--------- --------- --------- --------- ---------
Balance - December 31, 1997 1,800,000 3,000 (270) (357) 2,373
--------- --------- --------- --------- ---------

Stock issued to member of Board of Directors 200,000 -- -- -- --
Net loss for year -- -- -- (3,949) (3,949)
--------- --------- --------- --------- ---------
Balance - December 31, 1998 2,000,000 3,000 (270) (4,306) (1,576)
--------- --------- --------- --------- ---------

Stock issued for loan consideration 50,200 -- -- -- --
Stock issued for advisory council 60,000 -- -- -- --
Stock issued to members of Board of Directors 1,005,000 -- -- -- --
Stock issued for cash 61,500 61,500 270 -- 61,770
Stock issued for investments 1,100,000 300,000 -- -- 300,000
Net loss for year -- -- -- (386,284) (386,284)
--------- --------- --------- --------- ---------
Balance - December 31, 1999 4,276,700 $ 364,500 $ -- $(390,590) $ (26,090)
========= ========= ========= ========= =========
</TABLE>

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

<PAGE> 34

DYNCOM INC.
(A Development Stage Company)
Statements of Cash Flows
Indirect Method

<TABLE>
<CAPTION>
For the For the July 2, 1997
Year Ended Year Ended (Inception) thru
December 31, December 31, December 31,
1999 1998 1999
------------ ------------ ----------------

<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net loss to net cash
used in operating activities:
Net (Loss) $(386,284) $ (3,949) $(390,590)
Depreciation and amortization 1,936 1,274 4,249
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable (773) (1,055) (1,828)
(Increase) in prepaid expenses (1,300) -- (1,300)
Increase in accounts payables and accrued expenses 207,469 1,759 209,054
Increase in interest payable 5,056 -- 5,056
Increase in accrued salaries payable 64,566 -- 64,566
--------- --------- ---------
276,954 1,978 279,797
--------- --------- ---------
Net Cash Used in Operating Activities (109,330) (1,971) (110,793)
--------- --------- ---------

CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (8,823) -- (14,629)
--------- --------- ---------
Net Cash Used In Investing Activities (8,823) -- (14,629)
--------- --------- ---------

CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from notes payable 56,500 -- 62,137
Proceeds from the issuance of common shares 61,770 -- 63,800
--------- --------- ---------
Net Cash Provided By Financing Activities 118,270 -- 125,937
--------- --------- ---------

Increase (Decrease) in Cash 117 (1,971) 515

Cash and Cash Equivalents - Beginning of period 398 2,369 --
--------- --------- ---------

CASH AND CASH EQUIVALENTS - END OF PERIOD $ 515 $ 398 $ 515
========= ========= =========

Supplemental Cash Flow Information:
Cash paid during period for:
Interest paid $ -- $ -- $ --
========= ========= =========
Taxes paid $ -- $ -- $ --
========= ========= =========

Non-cash
</TABLE>

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

<PAGE> 35

DynCom Inc.
(A Development Stage Company)
Notes To Financial Statements
December 31, 1999

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

ORGANIZATION

Dynamic Commerce, Inc. (the Company) was incorporated on July 2, 1997
under the laws of the State of Colorado. On June 10, 1999, the Board of
Directors changed the name to DynCom Inc. The Company is primarily
engaged in developing internet commerce solutions and products for
businesses and consumers, and raising equity funding.

The Company's fiscal year end is December 31.

BASIS OF PRESENTATION - DEVELOPMENT STAGE COMPANY

The Company has not earned significant revenue from limited principal
operations. Accordingly, the Company's activities have been accounted
for as those of a "Development Stage Enterprise" as set forth in
Financial Accounting Standards Board Statement No. 7 ("SFAS 7"). Among
the disclosures required by SFAS 7 are that the Company's financial
statements be identified as those of a development stage company, and
that the statements of operations, stockholders' equity (deficit) and
cash flows disclose activity since the date of the Company's inception.

BASIS OF ACCOUNTING

The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting
principles.

ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considered all
cash and other highly liquid investments with initial maturities of
three months or less to be cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. The cost of ordinary
maintenance and repairs is charged to operations while renewals and
replacements are capitalized. Depreciation is computed on the
straight-line method over the following estimated useful lives:

<TABLE>
<S> <C>
Office furniture and equipment 5 years
Leasehold improvements 5 years
</TABLE>

REVENUE RECOGNITION

Product Sales are sales of on-line products. Revenue is recognized at
the time of sale. Accounts Receivable are written off when deemed
uncollectible.

<PAGE> 36

DynCom Inc.
(A Development Stage Company)
Notes To Financial Statements
December 31, 1999

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash, accounts receivable, accounts payable and
accrued expenses are considered to be representative of their
respective fair values because of the short-term nature of these
financial instruments. The carrying amount of the notes payable are
reasonable estimates of fair value as the loans bear interest based on
market rates currently available for debt with similar terms.

SOFTWARE DEVELOPMENT COSTS

The Company accounts for software development costs in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 86, Accounting
for the Costs of Computer Software to be Sold, Leased or Otherwise
Marketed, whereby costs for the development of new software products
and substantial enhancements to existing software products are expensed
as incurred until technological feasibility has been established, at
which time any additional costs are capitalized. Technological
feasibility is established upon completion of a working model. Through
December 31, 1999, all software development costs have been charged to
general and administrative expense in the accompanying statements of
operations.

NET EARNING (LOSS) PER SHARE

Basic and diluted net loss per share information is presented under the
requirements of SFAS No. 128, Earnings per Share. Basic net loss per
share is computed by dividing net loss by the weighted average number
of shares of common stock outstanding for the period, less shares
subject to repurchase. Diluted net loss per share reflects the
potential dilution of securities by adding other common stock
equivalents, including stock options, shares subject to repurchase,
warrants and convertible preferred stock, in the weighted-average
number of common shares outstanding for a period, if dilutive. All
potentially dilutive securities have been excluded from the
computation, as their effect is anti-dilutive.

NOTE 2 - INVESTMENTS:

OMICRON TECHNOLOGIES, INC.

On October 19, 1999, the Company exchanged 600,000 shares of its common
stock with Omicron Technologies, Inc., a publicly traded company
trading OTC on the Electronic Bulletin Board of the NASDAQ Stock
Exchange for 200,000 restricted common stock of Omicron Technologies,
Inc. valued at $.30 per share for an aggregate purchase price of
$60,000. Additionally, the Company granted Omicron 600,000 share
warrants at $1.00 per share for a period of one year expiring on
October 19, 2000.

SCHIMATIC CASH TRANSACTIONS NETWORK.COM, INC.

On September 30, 1999, the Company exchanged with 500,000 shares of its
common stock for 160,000 restricted common stock of Schimatic Cash
Transactions Network.Com, Inc held in trust by Herbert M. Goldman
Trust, valued at $1.50 per share for an aggregate purchase price of
$240,000. Schimatic Cash Transactions Network.Com, Inc is a publicly
traded company trading OTC on the Electronic Bulletin Board of the
NASDAQ Stock Exchange.

<PAGE> 37

DynCom Inc.
(A Development Stage Company)
Notes To Financial Statements
December 31, 1999

NOTE 3 - RELATED PARTY TRANSACTIONS:

NOTES PAYABLE - SHAREHOLDERS

Notes payable consist of the following at December 31, 1999:

<TABLE>
<S> <C>
Notes Payable to officers of Company, interest at 8%, due on
demand, unsecured $31,137
Notes Payable to individuals, interest at 8%, due on various dates
from February to June 2000, unsecured 31,000

Less: current portion of notes payable (3,000)
-------
$59,137
=======
</TABLE>

The President and other executive officers of the Company provided
services, equipment and furniture, and advanced cash to the Company for
operations. Certain of these transactions resulted in notes being
issued to such executive officers that were still outstanding at
December 31, 1999. Notes payable to officers are unsecured and bear
interest at 8%.

ACCRUED SALARIES PAYABLE

Accrued salaries payable to the employees of the Company bear interest
at the rate of 8% per annum until paid. The Company expects that funds
will be available to pay such salaries in the forthcoming year.

NOTE 4 - INCOME TAXES:

The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards Number 109 ("SFAS 109"), "Accounting for
Income Taxes", which requires a change from the deferred method to the
asset and liability method of accounting for income taxes. Under the
asset and liability method, deferred income taxes are recognized for
the tax consequences of "temporary differences" by applying enacted
statutory tax rates applicable to future years to differences between
the financial statement carrying amounts and the tax basis of existing
assets and liabilities.

The Company has deferred income tax assets that have been fully
reserved as follows:

<TABLE>
<S> <C>
Deferred tax assets
Net operating loss carryforwards $ 390,590
Valuation allowance for deferred tax assets (390,590)
---------
Net deferred tax assets $ --
=========
</TABLE>

At December 31, 1999, the Company had net operating loss carryforwards
of approximately $390,590 for federal income tax purposes. These
carryforwards, if not utilized to offset taxable income begin to expire
in 2013. Utilization of the net operating loss may be subject to
substantial annual limitation due to the ownership change limitations
provided by the Internal Revenue Code and similar state provisions. The
annual limitation could result in the expiration of the net operating
loss before utilization.

<PAGE> 38

DynCom Inc.
(A Development Stage Company)
Notes To Financial Statements
December 31, 1999

NOTE 5 - COMMITMENTS AND CONTINGENCIES:

During May 1999, the Company entered into a three year non-cancelled
operating lease for office space. The lease commenced June 1, 1999 and
expires May 31, 2002 and includes an option to renew the agreement for
an additional three-year period. Monthly payments are $1,269 and rental
lease payments for 1999 were $12,828.

Future minimum lease payments required under the non-cancelable
operating lease is as follows at December 31, 1999:

NOTE 6 - STOCK OPTIONS

On May 15, 1999, the Board of Directors approved the Directors and
Advisors Option Plan which provides for the issuance of options to
purchase up to 20,500 of the Company's common stock at an exercise
price of $.10 per share. Each of the Directors elected at the 1999
Annual Meeting of Shareholders, and advisors participating on advisory
boards or committees, are eligible to receive the options. Options may
be granted under the Directors and Advisors Option Plan for services
until the 2000 Annual Meeting of Shareholders. Options subject to
issuance under the plan expire on the business day prior to the 2001
Annual Meeting of Shareholders.

Additionally, on May 15, 1999, the Board of Directors approved the
Officers and Advisors Option Plan. This plan provides that the
Company's officers, who were elected by the Board of Directors
following the 1999 Annual Meeting of Shareholders, and the Company's
Advisors and Employees, may receive options to purchase up to a total
of 300,000 shares of the Company's common stock at an exercise price of
$.10 per share. Options issued under the plan are non-qualified and
expire on business day preceding the 2001 Annual Meeting of
Shareholders. No options have been granted under the plan as of
December 31, 1999.

On May 29, 1999, the Board of Directors approved the Shareholders
Option Plan. The Shareholders Option Plan is non-qualified and grants
an option to purchase one share of the Company's common stock for every
five shares held by shareholders of record on May 29, 1999. There are a
total of 533,600 common share subject to option under the plan. The
options expire on the business day preceding the Annual Meeting of
Shareholders in 2002. The options are exercisable at the lower of $.70
per share or, if the shares become publicly traded, at 70% of the
average price of shares traded on the day the option is exercised.
Options for the 533,600 shares of common share are outstanding at
December 31, 1999 and have a weighted average exercise price of $.70
per share.

Pursuant to the Directors and Advisors, and Officers and Advisors,
Options Plans, the Company has granted options to purchase shares of
common stock to employees, directors, consultants, and investors at
prices not less than 100% of the fair market value, as determined by
the Board of Directors, at date of grant. Options are immediately
exercisable and expire as indicated above. A summary of the Company's
stock options is presented below:

<PAGE> 39

DynCom Inc.
(A Development Stage Company)
Notes To Financial Statements
December 31, 1999

NOTE 6 - STOCK OPTIONS

<TABLE>
<CAPTION>
Weighted-Average
Number Exercise Price
of Shares per share
--------- ----------------
<S> <C> <C>
Balance, December 31, 1998............ 0 $.00
Granted............................... 854,100 .47
Exercised............................. 0 .00
Canceled.............................. 0 .00
-------- ----
Balance, December 31, 1999............ 854,100 $.47
======== ====
</TABLE>

NOTE 7 - GOING CONCERN:

The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. The Company operations
are in the development stage and the Company has experienced
significant losses from limited start-up operations. As shown in the
financial statements, the Company incurred a net loss of $386,284 in
1999.

The future success of the Company is likely dependent on its ability to
attain additional capital to develop its proposed products and
ultimately, upon its ability to attain future profitable operations.
There can be no assurance that the Company will be successful in
obtaining such financing, or that it will attain positive cash flow
from operations.

<PAGE> 40

PART III

ITEM 1. INDEX TO EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------

<S> <C>
3A * Articles of Incorporation

3B * Restated Articles of Incorporation

3C * Bylaws

10A * Avanti Agreement

10B * MXM Agreement

10C * IBM Agreement
</TABLE>

*Previously filed

ITEM 2. DESCRIPTION OF EXHIBITS.

3A Original Articles of Incorporation filed on July 2, 1997

3B Restated Articles of Incorporation filed on June 10, 1999

3C Our Bylaws, originally adopted on July 7, 1997, revised on
June 8, 1999, and republished and approved on July 25, 2000.

10A The Avanti Agreement was executed on August 11, 2000.

10B The MXM Agreement was executed in November, 2000.

10C The IBM Agreement was executed on October 6, 1999.

<PAGE> 41

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

DynCom Inc.

Dated: 12/6/2000 By: /s/ Curt D. Jansen
--------- -------------------------------------
Curt D. Jansen
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

CHIEF FINANCIAL OFFICER

Dated: 12/6/2000 By: /s/ Michael B. Maw
--------- -------------------------------------
Michael B. Maw
CFO, Secretary, Treasurer
and Director

Dated: 12/6/2000 By: /s/ Charles J. Caserta
--------- -------------------------------------
Charles J. Caserta
Director

Dated: By:
--------- -------------------------------------
Jay D. Ellenby
Director

Dated: 12/6/2000 By: /s/ Herbert M. Goldman
--------- -------------------------------------
Herbert M. Goldman
Director

Dated: 12/6/2000 By: /s/ Curt D. Jansen
--------- -------------------------------------
Curt D. Jansen
President, Chief Executive Officer,
and Director

Dated: 12/6/2000 By: /s/ Michael B. Maw
--------- -------------------------------------
Michael B. Maw
Chief Financial Officer, Secretary,
Treasurer and Director

Dated: By:
--------- -------------------------------------
Andrew W. Tarbox
Director

Dated: 12/6/2000 By: /s/ Fred D. Ziegler
--------- -------------------------------------
Fred D. Ziegler
Chairman of the Board and Director