CYBERFAST SYSTEMS INC, 10SB12G/A, 2000-08-21

CYBERFAST SYSTEMS INC
10SB12G/A, 2000-08-21
BUSINESS SERVICES, NEC

Previous: CHIPPAC INC, 10-Q, 2000-08-21

Next: CYBERFAST SYSTEMS INC, 10SB12G/A, EX-10.2, 2000-08-21

<PAGE>

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

FORM 10-SB /A No. 2

GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS

Under Section 12(b) or (g) of the Securities Exchange Act of 1934

Cyberfast Systems, Inc.
-----------------------------
(Name of small business issuer in its charter)

Florida 13-5398600
------------------------------ -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)

777 Yamato Road, Suite 105, Boca Raton, Florida 33431
-----------------------------------------------------------
(Address of principal executive offices)

Issuer's telephone number: (561) 995-6255
--------------

Securities to be registered under Section 12(b) of the Act: None
----

Securities to be registered under Section 12(g) of the Act:
Class A Common Stock, $.01 Par Value
------------------------------------
(Title of Class)
<PAGE>

PART I

ITEM 1. DESCRIPTION OF THE BUSINESS

Cyberfast Systems, Inc. ("Cyberfast" or the "Company") is an international
provider of digital data communications services. The Company operates
primarily between the United States and selected destination countries.
Depending on the quality of available circuitry, the Company's network can offer
international telecommunications services via Voice over the Internet ("VON") or
Voice over Internet Protocol ("VoIP"). In order to insure the highest quality
of service, most of the Company's services are handled through VoIP routing. In
addition to delivering voice services, Cyberfast can offer fax, data and video
capability, together known as Internet Protocol Telephony ("IP Telephony")
services. Cyberfast is building a network of Points of Presence ("POP") around
the world. This worldwide footprint can be used for transport of voice, data,
video, Internet access and multimedia by a variety of users. Cyberfast is able
to leverage Internet protocol technology to reduce the costs of providing
telecommunications services in traditionally high priced markets.

The Company's principal office is located at 777 Yamato Road, Suite 105,
Boca Raton, FL 33431 and its telephone number is (561) 995-6255.

History
-------

Budget-Calls Corporation ("BCC") was founded on August 10, 1995 by Edward
J. and Itir Stackpole, the Company's current majority shareholders, as a
predecessor to the Company. BCC operations were subsequently transferred into
Cyberfast Network Systems Corporation ("CNSC"), and incorporated August 7, 1996
as a Florida corporation. Pursuant to an Agreement and Plan of Reorganization
dated November 10, 1998 (the "Reorganization"), Smartfit Foundations, Inc., a
non-operating public shell corporation, acquired 100% of the common stock of
CNSC and BCC in exchange for 97.8% of its stock, and changed its name to
Cyberfast Systems, Inc.

On May 20, 1999, the Company formed Boca Data Services, Inc. ("BDSI") under
the laws of Florida, as a wholly owned subsidiary, to partner with the Company
on certain overseas ventures where the acquisition of circuits required two
entities. BCC, CNSC, and BDSI currently are non-operating wholly owned
subsidiaries of the Company.

In November, 1999, the Company acquired a Nevada corporation, Global Telcom
and Internet Ventures, Inc. ("Global") based in Denver Colorado in exchange for
180,000 restricted shares of Class A Common Stock of Cyberfast. A fee of 20,000
restricted shares of Class A Common Stock was issued to a broker-dealer which
acted as finder in the transaction. Global is currently a non-operating wholly
owned subsidiary of Cyberfast.

2
<PAGE>

("FATA"). Pursuant to the Agreement, on August 1, 2000, FATA subscribed to and
purchased from the Company a total of 1,466,276 shares of the Company's Class A
Common Stock for a total purchase price of $1,500,000 (the "First Closing"),
consisting of a $300,000 loan from FATA plus accrued interest that was converted
to equity, and cash from the internal funds of FATA. Previously, on May 5, 2000,
FATA made a $300,000 loan to the Company, which had an interest rate of 6% per
annum. Accordingly, on August 1, 2000, the Company received net proceeds of
$1,199,964 from FATA.

Prior to the First Closing of the Agreement, Edward J. Stackpole and Itir
Stackpole (the "Controlling Shareholders") beneficially owned approximately
30.2% of the Company's outstanding Class A Common Stock and approximately 77.3%
of the Company's Class B Common Stock. The Class B Common Stock is identical to
the Class A Common Stock in all respects except that each share of Class B
Common Stock has 10 votes in respect to each share of Class B Common Stock.
Because of the number of shares and voting power attributed to the Class B
Common Stock, the Controlling Shareholders controlled approximately 75.5% of the
total voting power of the company prior to the First Closing of the Agreement.
Immediately after the First Closing, FATA owned approximately 46.1% of the
outstanding shares of the Company's Class A common stock.

Upon satisfaction of all the conditions stated in the Agreement, but no
later than November 30, 2000, FATA may subscribe and agree to purchase from the
Company and the Company may issue and sell to FATA a combination of shares of
Class A Common Stock, Class B Common Stock and/or Preferred Stock for a total
purchase price of $3,500,000 (the "Second Closing"). The Second Closing would
give FATA an ownership interest in the Company of 45% and a voting interest in
the Company of 51%. Pursuant to the Agreement, if FATA does not proceed with the
Second Closing. FATA will have an option, exercisable in FATA's sole discretion
until November 30, 2000, to sell to the Company the number of Company shares
acquired by FATA at the First Closing for a fixed price of $1,500,000 plus any
additional sums or consideration as of such time loaned to or contributed into
the Company, plus an interest rate of 6% per year.

Industry Overview
-------------------

In addition to traditional voice communication transported via Public
Switched Telephone Networks ("PSTN"), the past few years have seen the
development of communications technologies using the Internet. Pre-Internet
telephony operated using analog and digital signals via a two-way point-to-point
communication network connecting copper lines, fiber optics and satellite
transmissions on a global basis. The Internet is a worldwide public network
enabling transfer and sharing of data information through a common
communications protocol called Transmission Control Protocol/Internet Protocol
("IP"). Data is transported over the Internet in the form of data packets on a
global computer network.

In 1995 a computer telephone was commercially introduced that allows a user
to connect to the Internet and speak to another similarly equipped user as
though it were a traditional telephone call. Regardless of the users'
locations, the connect cost for this "phone call" was minimal (ignoring the cost
of the necessary equipment). This was the beginning of a new industry. Further
refinements have enabled systems to be developed that integrate the Internet
routing into long distance telephone service without the necessity of having the
end user purchase any additional computer equipment. In fact, all that is
needed is their traditional telephone equipment. Referred to as IP Telephony,
it has not become an industry in itself, but

3
<PAGE>

rather a new method of communications transport paralleling the world shift
toward single, open network systems for all types of communications.

IP Telephony represents a break-through for worldwide communications. It
offers significant advantages over conventional telecommunications systems,
including reduced equipment costs, improved bandwidth efficiency, direct routing
of calls, lower transmission costs, improved ease of network administration, and
delivery of multi-media services over a single network infrastructure. IP
Telephony combines the low cost global reach of the Internet and the high
quality and security of private IP based networks with the public telephone
system's ease of access.

The dominant driver of IP Telephony today is the opportunity to make
inexpensive calls to domestic long distance and international destinations.
This is done through the routing of communications (voice, data, and video) over
the public Internet or privately managed networks rather than PSTNs. This
competitive advantage is based on the two major factors: (1) higher fees that
the traditional long-distance service providers are required to charge to
maintain their elaborate systems, and (2) government regulation. For every ten
cents that a traditional long-distance carrier collects, about four cents is
paid to a regional bell operating company at the origination and termination of
the connection. For international calls, that amount may be more, depending on
the policies of the non-US carriers. In addition, calls on the PSTN are subject
to a variety of taxes and surcharges. For example, some of those surcharges are
used to support the Universal Service Fund that subsidizes telephone services
for rural and low-income users. IP networks, on the other hand, are statutorily
defined as "information services" and are not presently subject to the same
regulations as the traditional "telecommunications services" providers.

Business
--------

Cyberfast utilizes state-of-the-art developments in IP technology to
provide toll quality voice and data services. IP technology allows for
effective and dynamic sharing of available bandwidth between many users. This
is achieved by digitizing voice signals (essentially, converting it to data),
segmenting the data stream into data units (packets), compression of voice data,
and dynamic multiplexing of channels over a single physical medium. These
methods yield more effective and flexible telecommunications models than current
land based or wireless models, particularly in less-developed or underserved
environments where the local population cannot support the communications
infrastructure.

The Company has developed a VoIP leased-line configuration as a primary
building block for its telecommunications infrastructure, and depending upon
system quality, may also use VoN as a delivery system. In most cases, the
Company will lease dedicated lines and place equipment at a POP in order to
provide quality service at peak load levels. Cyberfast is building an
international telecommunications network that seamlessly integrates circuit-
switched and packet-switched networks on a wholesale level to international long
distance carriers and retail distribution of low cost IP services directly to a
consumer.

4
<PAGE>

On the wholesale level, Cyberfast provides wholesale minutes to
international long distance carriers in the U.S., and targets destination
countries with state monopolized telecommunications companies ("Telcos"), low
personal income rates, and high population transfers to the United States. The
Company supplies minutes to these destination countries over a proprietary
network of gateways using IP Telephony rather than traditional, analog based
PSTNs. As a result, Cyberfast is able to sell wholesale minutes at a
dramatically reduced cost to secondary suppliers and still generate suitable
margins for itself.

Cyberfast locates its servers with "partners" (independent contractors) in
selected destination countries around the world, all of whom sign an exclusive
service agreement with the Company. Typically, these partners are paid 35-50%
of the revenue derived from terminating calls on a dedicated server for their
particular destination country. Cyberfast pays the entire cost of installing
the gateways, routers, switches, and international connections at these remote
sites. Ultimately, Cyberfast intends to negotiate directly with Telcos in
various destination countries to create a termination point for the whole
country to sell originated minutes from that country to the U.S. In foreign
countries with Telcos the arbitrage between IP and PSTN is even higher for
originated minutes from that country to the U.S.

The Company has entered into a strategic alliance with Royal Dutch Telecom
("KPN") that provides Cyberfast with high bandwidth access to Western Europe.
Through the alliance, the Company also gained access to KPN's state-of-the-art
satellite communications system with coverage throughout Europe, Asia, and
Africa. This access will enable the Company to deploy its toll quality services
quickly and efficiently in any geographic location within the KPN service area
without having to depend on expensive land-based systems.

On the retail level, the Company's primary mission is the development of
retail markets for international IP telecommunications. An agreement has been
signed with the Republic of Georgia to build and operate a wireless
telecommunications system, complete with wireless payphones. The Company will
develop programs that incorporate a wireless system's international long
distance business into Cyberfast's proprietary VoIP network, as well as, provide
enhanced retail services through the KPN/Qwest Euro-network as they come online.

Cyberfast System Operations
---------------------------

Cyberfast is an international provider of communications services operating
primarily between the United States and selected destination countries. The
Company leases capacity on private fiber optic and satellite-based circuits from
tier one telecommunications carriers that originate in the United States and
terminate in less developed, underserved countries where Cyberfast provides its
services. The Company then sells wholesale voice and data services to carriers
seeking to route calls to the underserved locations on a per-minute basis.

Cyberfast's customers sell VoIP and other IP Telephony services to other
carriers, network operators, and corporate end users. The Company's network
allows its customers to complete their calls in areas where it provides services
at lower cost than the traditional long-distance telephone providers. This is
partially due to the very long-term contracts the traditional

5
<PAGE>

long-distance telephone providers have entered into with countries around the
world at fixed settlement rates.

Cyberfast's facilities consist of state-of-the-art telecommunications
switching and routing equipment that enables reliable delivery of high quality
voice and data signals over IP based circuits. The Company's domestic
facilities are located in Boca Raton, Florida were it has developed proprietary
billing software. This billing system allows the Company to invoice its
customers weekly and semi-monthly, as the case may be. Payment is normally
required to be made in U.S. dollars via wire transfer within ten business days
of invoice.

Cyberfast researches and identifies selected destination countries
currently underserved by IP based network providers. Voice communications to
these underserved countries are generally completed using one of the traditional
long-distance networks, such as AT&T, MCI-WorldCom, and Sprint. These
traditional voice networks have long-term, higher-priced settlement contracts
with the primary telephone company in each of the destination countries. They
are regulated, and as a result, charge higher termination fees.

Destination countries are selected for several reasons:

. Traditional telephone communications costs from the US to the destination
country are significantly higher than a minimum threshold level.

. Company management has had prior relationships with entities in the
destination country that have strong business/political contacts and/or are
involved in the telecommunications industry in that country.

. The destination country has adopted and is implementing a plan of
deregulation of its telecommunications industry.

. A Cyberfast review of current services and prices offered by other data
service providers to the destination country indicates long term growth
potential.

After the Company has determined eligibility of a specific destination
country, a relationship with a local partner is established through an exclusive
service agreement. Cyberfast requires its partner provide the following
services:

. Obtain all required permits and/or licenses and otherwise complying with
local law.

. Staff a regional office twenty-four hours a day, seven days a week.

. Maintain facilities in the destination country that will provide proper
security and safely house Cyberfast equipment.

. Provide necessary services to maintain all equipment and assure
uninterrupted service.

6
<PAGE>

. Negotiate with all local authorities at the agreed upon destinations to
assure and maintain the continued transmission of communications on the
circuits.

The Cyberfast corporate objective is to have between two and four customers
for each country it serves. The Company currently limits the number of
customers accessing the network to optimize system quality. It is not uncommon
for other networks to frequently oversubscribe their networks resulting in a
degradation of service.

The higher quality of service demanded by Cyberfast customers requires the
transmission of VoIP rather than traditional data traffic. The Cyberfast system
configuration provides voice-quality transmissions. Until advancements in
technology allow a comparable level of quality to be achieved over a larger
subscriber base, we will continue limiting the number of customers we serve to
lower, optimal level. In addition, by having a minimum of two customers for
each country the Company continues to realize revenue should one customer
experience a service interruption.

Current Agreements to Provide Service in Selected Countries.
------------------------------------------------------------

Cyberfast has entered into agreements to provide services to over forty
cities in selected destination countries. In order to assist in the operation
of Company circuits, Cyberfast has entered into an agreement with KPN. As part
of this agreement, KPN has provided a fiber optic connection from its facilities
in the United States to its facilities in the Netherlands. Additionally, KPN has
provided Cyberfast with access to an earth station located in the Netherlands
that will permit the Company to serve Eastern Europe, Asia, and Africa where the
Company has agreements in place to provide services.

Business Risks
--------------

Cyberfast's business is subject to a number of significant risks.
Investors should carefully consider the risks described below and any additional
risks contained in subsequent filings with the Securities and Exchange
Commission and in the Company's press releases. If any of the following risks
actually occur, the Company's business, financial condition or results of
operations could be materially adversely affected. In that event, the trading
price of the Company's shares could decline and investors could lose part or all
of their investment.

1) Working Capital Deficiency.
---------------------------

Because Cyberfast has had insignificant revenues from November 1998 until
June, 2000 the Company has a working capital deficit. The principal stockholders
and The FATA Group, S.p.A. have provided loans since June 30, 1999 totaling over
$2,000,000. (See History discussion above.) Until the Company's operations
provide positive cash flow, it will require additional working capital, either
from additional stockholder or bank loans or access to equity capital markets,
the availability of which has no certainty.

7
<PAGE>

2) Doing Business in Foreign Countries.
------------------------------------

The Company operates in many foreign locations including underdeveloped or
developing countries where the customs and business practices are different than
those in the United States. The laws and regulations in these countries may
either be inadequately enforced or may be changed without notice resulting in an
interruption of the Company's service. These actions can include the
confiscation of Cyberfast's and/or its Local Contractor's equipment.
Furthermore, the judicial system in these countries may not provide the
preventive or remedial protections necessary to adequately protect the Company's
interests.

3) Reliance on Equipment.
----------------------

The Company's success depends on its ability to provide efficient and
uninterrupted, high-quality services. The systems and operations necessary to
provide this service are vulnerable to damage or interruption from natural
disasters, power loss, telecommunication failures, physical or electronic break-
ins, sabotage, intentional acts of vandalism and similar events that may or may
not be beyond the control of Cyberfast. The occurrence of any or all of these
events could have a material adverse effect on the Company's business.

4) Reliance on Third Parties.
--------------------------

In each of the foreign countries where Cyberfast provides service, the
Company establishes a contractual relationship with a Local Contractor. This
local entity is responsible for complying with the appropriate local laws and
regulations. In addition, the Contractor is required to obtain and keep current
the required licenses and permits, as well as maintain and keep the equipment
and circuits operational. To the extent that the Local Contractor does not
fulfill his contractual obligations, our business may be materially adversely
affected.

The Company leases circuits from primary telecommunications carriers such
as AT&T, MCI WorldCom, and Sprint. If these carriers are unable to provide or
expand their current levels of service to the Company, our operations could be
materially adversely affected. Although leased lines are usually available from
several alternative suppliers, there can be no assurance that the Company could
obtain substitute services from other providers at reasonable or comparable
prices or in a timely fashion. Cyberfast is subject to risks relating to
potential disruptions of such telecommunications services. No assurance can be
given that significant interruptions of telecommunications services to the
Company will not occur in the future. Changes in tariffs, regulations, or
polices by any of the Company's telecommunications providers may adversely
affect its ability to offer its services on a commercially reasonable or
profitable terms.

5) Reliance on a Small Number of Customers.
----------------------------------------

The Company sells its services to a limited number of customers. Each
customer generates more than ten percent of the revenues of the Company. For
example, in 1998 Star Telecom accounted for more than fifty percent of all the
Company's revenues. Cyberfast currently operates under an agreement with its
largest customer, IDT, Inc. that has accounted for

8
<PAGE>

all of the Company's 1999 revenues. Although Company management believes that
there are a number of customers to whom the Company can provide its services,
changing business conditions may adversely affect Cyberfast if it loses a major
customer.

6) Possible Regulation of IP Telephony.
------------------------------------

Cyberfast customers use the Internet and private IP networks for the
transmission of IP Telephony services. These services consist mainly of VoIP.
The FCC does not presently regulate service providers as common carriers or
telecommunications service providers. Any regulations that change the current
unregulated environment in which the Company operates would negatively affect
the profitability and/or competitive advantage of Cyberfast's customers in the
marketplace and may result in a material adverse effect on the Company's
business model and financial results.

7) Competition.
------------

Cyberfast's success depends on the Company's ability to provide its
customers a high-quality, lower cost method of completing international long
distance services. In recent years, the price of traditional long distance
calls has fallen. This trend could continue to a point where the Company's
customers no longer have a price advantage over the traditional long distance
services. Cyberfast's customers would then have to rely on factors other than
price to differentiate their service, which they may not be able to do. Any
resulting loss of business or reduction in margins for the Company's customers
may, in turn, lead to downward pressure on the price that can be competitively
charged for Cyberfast's services and may have a material adverse effect on its
business and financial results.

Some major long distance providers, such as AT&T, Deutsche Telecom, MCI
WorldCom, and Qwest Communications, Inc. have entered or plan to enter the
market for carrying VoIP. These companies are larger than Cyberfast and have
substantially greater resources than the Company. Furthermore, these long
distance providers may in the future plan to offer VoIP services to the
countries where Cyberfast provides services. The Company is not aware of any
traditional long distance provider's plans to offer VoIP services to the
countries where it is currently providing (or is planning to provide) services.
If these traditional long distance providers were to offer VoIP services to
these countries, the Company may not be able to compete successfully.

8) Need to Manage Growth.
----------------------

In 1998, Cyberfast experienced a substantial growth of its revenues. The
Company plans to continue to aggressively expand its operations. This planned
growth, if it occurs, will place a strain on the Company's administrative,
operational and financial resources. The Company's success depends, in part, on
its ability to manage its growth and to enhance its operational and financial
controls. If the Company continues to grow in the future, for which no
assurances can be given, it will need to be able to attract and retain highly
experienced executives and employees capable of providing the necessary support.

9
<PAGE>

9) Dependence on Management.
-------------------------

The Company's success to date has depended in large part on the skills and
efforts of Edward Stackpole, the Company's chairman and chief executive officer.
The Company has relied upon Mr. Stackpole to establish relationships with its
customers, service providers, and various parties in the underserved countries
where the Company provides service. If Mr. Stackpole were to become unavailable
or unwilling to serve in his present position, the business of the Company could
be materially and adversely affected.

10) Limited Capitalization and Operating History.
---------------------------------------------

The Company's growth since 1999 has been principally financed with personal
loans from Ed and Itir Stackpole. In order to fund its business plan the
Company needs substantial additional capital. In addition to its limited
operating history, the Company has limited capitalization. In the event the
Company is unable to raise additional funds through private equity financing, it
may not be able to fully implement its business plan. Companies with limited
operating history and limited capitalization make predicting its future
operating results difficult.

11) Possible Fluctuations in Operating Results.
-------------------------------------------

The Company has a limited operating history. Although revenues and
operating income increased rapidly in 1998, that growth rate is not indicative
of future growth rates. To the extent that the Company may experience
interruptions in its ability to transmit communications for any reason, the
results of operations for that period will be materially and adversely affected.

From September 1, 1998 through late December, 1999 Cyberfast had no
operational circuits and did not generate any revenues from operations. For
this reason, and in view of the Company's limited operating history, the Company
believes that period-to-period comparisons of its past or future operating
results are not meaningful.

Future results of operations may fluctuate significantly based upon
numerous factors, including any foreign or domestic regulation or FCC ruling,
pricing pressures which could lessen the competitive pricing advantage and
reduce the traffic usage of its network, the Company's ability to penetrate new
markets, and an increase in competition. There can be no assurances that the
Company will be profitable on a period-to-period basis or at all.

12) Control by Management.
----------------------

Edward J. Stackpole, the Company's chairman and chief executive officer,
and his wife, Itir Stackpole, the Company's co-chairman, beneficially own
approximately 26.15% of the Company's outstanding Class A Common Stock and
78.33% of the Company's Class B Common Stock. The Class B Common Stock is
identical to the Class A Common Stock in all respects except that each share of
Class B Common Stock has ten votes in respect to each share of Class A Common
Stock. Because of the number of shares and voting power attributed to the Class
B Common Stock, the Stackpoles control 73.97% of the total voting power and are
able to control
10
<PAGE>

the election of the Company's directors and thereby control the policies and
operations of the Company.

If the transaction as contemplated by the MOU with FATA is concluded, and
no assurances can be given this transaction will be finalized, FATA will then
exercise effective control of the Company through it's fifty-one percent
ownership, and the Stackpoles will thereafter become minority shareholders of
the Company. (See discussion of History above.)

13) Contractual Obligations to Management / No Dividends.
-----------------------------------------------------

Pursuant to employment agreements with the Company's key management
personnel, the Company is obligated to pay an aggregate of 13.3% of its
quarterly net pre-tax income to these persons as bonuses in addition to their
base salaries and stock options. There is no adjustment provision in the event
the Company has a unprofitable quarter following a profitable quarter.
Therefore, it is unlikely that the Company will be able to pay any dividends in
light of its obligation to pay bonuses to management. Investors requiring income
from dividends should not invest in the Company. In addition, the obligations to
pay bonuses to management may have a material adverse effect on the Company's
future results of operations.

Regulatory Matters
------------------

United States
-------------

The use of the Internet to provide telephone service is a recent market
development. Currently, the FCC is considering surcharges or other regulations
upon providers of Internet telephony services. On April 10, 1998, the FCC issued
a report to Congress concerning the implementation of the universal service
provisions of the Telecommunications Act. In the report, the FCC indicated that
it would examine the question of whether certain forms of phone-to-phone
Internet telephony are information services or telecommunications services. The
FCC noted that it did not have, as of the date of the report, an adequate record
on which to make a definitive pronouncement. It further stated that the record
suggested that certain forms of phone-to-phone Internet telephony appear to have
the same functionality as non-Internet telecommunications services and lack the
characteristics that would render them information services.

If the FCC determines that certain services are subject to FCC regulation
as telecommunications services, the FCC may require providers of Internet
telephony services to make universal service contributions, pay access charges
or be subject to traditional common carrier regulation. This could affect the
viability of Cyberfast's business and may have a material adverse effect on the
Company's ability to produce revenue from this business. In addition, the FCC
sets the access charges on traditional telephone traffic and if it reduces these
access charges, the cost of traditional long distance telephone calls will
probably be lowered, thereby decreasing the Company's pricing advantage in their
respective markets.

In February 1999, the FCC adopted an order concerning payment of reciprocal
compensation. This move could provide support for a possible finding by the FCC
that providers

11
<PAGE>

of Internet telephony must pay access charges for at least some Internet
telephony services. If the FCC were to make such a finding, the payment of
access charges could have a material adverse effect on the Company's business.

To the Company's knowledge, there are currently no domestic (and few
foreign) laws and/or regulations that prohibit voice communications over the
Internet. State public utility commissions may retain jurisdiction to regulate
the provision of intrastate Internet telephony services. A number of countries
that currently prohibit competition in the provision of voice communications
have also prohibited Internet telephony.

To Cyberfast's knowledge, there are no laws prohibiting Internet telephony
in the countries where it provides service. Other countries permit, but regulate
Internet telephony. If Congress, the FCC, state regulatory agencies, or foreign
governments begin to regulate or increase their regulation of Internet
telephony, such regulation may have a material and adverse effect on Cyberfast's
business.

Foreign Corrupt Practices Act
-----------------------------

Upon effectiveness of this Registration Statement, Cyberfast is subject to
the Foreign Corrupt Practices Act (the "Act"). The Act requires that all
companies that file reports with the SEC:

. Keep reasonably detailed books and records reflecting transactions and
dispositions of assets;

. Maintain a system of internal controls that include preparation of
financial statements in conformity with generally accepted accounting
principles and maintaining accountability for assets; and

. Cannot make any kind of payment, whether considered bribery or not, to
foreign government officials for the purpose of obtaining or retaining
business or securing any improper advantage.

The Act applies to companies directly and indirectly through
intermediaries. The Act does contain a "knowledge" requirement for payments to
or by an intermediary. However, the Act permits facilitating payments to foreign
officials for the purpose of expediting or securing routine governmental action
by a foreign official. Cyberfast's management believes that the Company fully
complies with the Act.

As a result of conducting business in foreign countries where the customs
and business practices are different from the U.S., the Company runs the risk of
business interruption for substantial periods of time, or even the termination
of the ability to conduct business. Many of the countries where Cyberfast
conducts business do not have judicial systems that provide the protection from
or expeditious resolution to certain unlawful actions that may be taken against
the Company or its local partner and, as a result, the business may be
materially and adversely affected. For example, at the end of the third quarter
of 1998 the Company experienced an

12
<PAGE>

interruption in its primary circuit to a foreign country and its equipment was
confiscated. The Company believes that it was acting within the legal guidelines
of the country and the confiscation was not justified. As a result, Cyberfast is
pursuing the return of its equipment and the restoration of its circuit. As a
result of the action, the Company experienced substantial and materially adverse
fluctuations in its revenues for the period in question and subsequent periods.

Reports to Security Holders
---------------------------

The Company is subject to the reporting requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934.

The public may read and copy any materials filed by the Company with the
SEC at the SEC's Public Reference Room at 450 5/th/ Street, N.W., Washington,
D.C. 20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The Company is an
electronic filer, and the SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the SEC. This site can be accessed at
(http://www.sec.gov). The Company's Internet site can be accessed at
-------------------
(http://www.cyberfast.net).
-------------------------

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS

The following discussion of the financial condition and results of
operation for the Company should be read together with the financial statements
and related notes included in another part of this registration statement. The
financial statements for the quarterly periods ended March 31, 1999 and March
31, 2000 are unaudited, but management believes they contain all accruals and
adjustments for fair presentation and the years ended December 31, 1998 and
1999 are audited.

13
<PAGE>

Results Of Operations
---------------------

Years Ended December 31, 1998 And 1999

Table 1 - Percentage Analysis of Yearly Results of Operations

================================================================================
PERCENTAGE CHANGE
------------------------------------------------ -----------------
1999 1998 Between Periods (Decrease)
---- ---- --------------------------
--------------------------------------------------------------------------------
Revenues 100.0% 100.0% (94.2%)
--------------------------------------------------------------------------------
Expenses
--------------------------------------------------------------------------------
COGS 146.2% 29.7% (71.3%)
--------------------------------------------------------------------------------
Gross Margin N/A 70.3% (103.8%)
--------------------------------------------------------------------------------
General & Administrative 321.2% 45.8% (59.1%)
--------------------------------------------------------------------------------
Common Stock 507.3% 0.6% 4,475.8%
--------------------------------------------------------------------------------
Total Op. Expenses 974.7% 46.5% (25.4%)
--------------------------------------------------------------------------------
Income (Loss) from operations (874.7%) 23.8% (314.2%)
--------------------------------------------------------------------------------
Other Income - - -
--------------------------------------------------------------------------------
Interest Expense, stockholder 18.0% - -
--------------------------------------------------------------------------------
Interest Income - 0.2% -
--------------------------------------------------------------------------------
Penalties and Interest 26.4% - -
--------------------------------------------------------------------------------
Proceeds/Contact Settlement - 11.2% -
--------------------------------------------------------------------------------
Income (Loss) before tax (919.1%) 31.6% (252.3%)
--------------------------------------------------------------------------------
Income Tax (Expense) Benefit 51.4% (3.1%) 186.2%
--------------------------------------------------------------------------------
Net Income (Loss) (867.7%) 28.5% (259.6%)
--------------------------------------------------------------------------------
Net Income (Loss)/share ($0.61) $0.39 (256.4%)
================================================================================

Table 1 above represents: (a) the relationship of income and expenses
relative to net revenues; and (b) the change between the comparable prior period
and current period. This table should be read in the context of the Company's
audited financial statements incorporated as part of this filing, elsewhere
herein.

For the year ended December 31, 1999, revenues were $0.436 million compared
to $7.475 million in the comparable prior period ended December 31, 1998. This
decrease in revenue of $7.911 million represented a 94.2% decline from the
comparable prior period ended December 31, 1998. The percentage change between
the periods was solely attributed to a governmental confiscation of the
Company's revenue producing assets in India during September, 1998. During this
period, substantially all of the Company's business operations were conducted in
India. As a result of this governmental intervention in India, the Company has
initiated policies to minimize exposure to politically motivated and retaliatory
actions by foreign governments on U.S. based businesses operating in the lesser
developed countries of the world. (Please see Item 1 - Description of Business,
"Cyberfast Business Operations" above and Note 3 to the accompanying Financial
Statements below for further discussion.) As a result of the extraordinary
nature of this governmental intervention, Company management believes the
financial information contained herein and the analysis thereof is not
indicative of either future operating results or future financial condition.

14
<PAGE>

The Company's cost of goods sold decreased 71.3% from $2.221 million for
the year ended December 31, 1998 to $0.637 million for the year ended December
31, 1999. As a percentage of revenues, cost of goods sold increased from 29.7%
for the year ended December 31, 1998 to 146.2% for the year ended December 31,
1999 resulting in a decrease in gross margin of 103.8% from $5.254 million for
the year ended December 31, 1998 to a deficit of $0.201 million for the year
ended December 31, 1999. The increase in cost of goods sold as a percentage of
revenues in fiscal year 1999 as compared to the fiscal year 1998 occurred as a
result of the Company's precipitous loss of revenues due to the governmental
action in India referenced above. Costs for developing new POPs during the
fiscal year ended December 31, 1999 in other areas of the world were not offset
by resulting revenue increases.

General and administrative expenses declined 59.1% from $3.426 million
during the period ended December 31, 1998 to $1.399 million in the comparable
subsequent period ended December 31, 1999. Notwithstanding a one time commission
fee of $1.620 for the period ended December 31, 1998, general and administrative
expenses would have decreased only 22.5% between the fiscal year periods. This
decrease was the result of the Company's actions to decrease costs in response
to the loss of revenues as discussed above. The cost cutting measures adopted by
the Company include the termination of employees; reduction of travel and
related entertainment expenses; and decrease in general overhead expenses.

The decline in general and administrative expenses was offset by a
substantial increase in expenses related to the issuance of common stock and
options to various vendors and employees of the Company. This expense increased
$2.162 million, or 4,475.8%, from $0.048 million for the fiscal year ended
December 31, 1998 to $2.210 for the comparable subsequent period ended December
31, 1999. The use of stock and options in settlement of services provided and as
an inducement to retain professional employment services from senior executives
was made possible by the Company's reverse merger into a public shell and
subsequent Reorganization in November, 1998. Until such time as the Company is
able to provide more standard compensation and benefit packages for the
retention of professionally qualified and competent employees or the Company
completes the second tranche of equity financing from FATA, the Company expects
to continue the use of stock and option grants for recruitment into the near
future. However, reliance on this method for financing working capital
requirements should diminish substantially during subsequent periods,
particularly since the Company completed the first tranche of equity financing
from FATA as of August 1, 2000. (For a discussion of the Stock based
compensation please see Note 8 to the accompanying audited financial statements
and PART I, Item 6 - Executive Compensation.)

As a consequence of the above factors, the Company experienced income from
operations of $1.780 million for the period ended December 31, 1998 compared to
a loss from operations of $3.811 million for the comparable subsequent period
ended December 31, 1999, or a decline of 314.2%.

As a result of the Company circuits in India and Pakistan and the Company's
inability to activate any new POPs, the controlling shareholders extended a
series of loans to the Company at various times during the fiscal year ended
December 31, 1999. The loans are in the form of a

15
<PAGE>

demand note with interest accruing at 9% per annum and payable quarterly.
Because of continuing working capital deficiencies, interest on these loans has
remained unpaid. Approximately $0.079 million has been accrued as interest on
the Company accounts for the fiscal year ended December 31, 1999. Further
interest accruals on this loan will occur during subsequent periods. Except for
$300,000 paid in August 2000 as part principal and interest payment, no
principal payments will be made against them until such time as FATA and the
controlling shareholders agree on a payback schedule based upon positive cash
flows of the Company.

Conversely, the Company earned interest of approximately $0.013 million
during the fiscal year ended December 31, 1998 on its outstanding bank balances
and cash equivalents. Similar interest earnings for the comparable subsequent
period ended December 31, 1999 did not occur for the above stated reasons.
Company management expects that once both tranches of equity funding due from
FATA are closed, sufficient revenues can be generated from newly commissioned
POPs that no additional shareholder loans will be necessary.

The Company was delinquent in the filing of various federal and state
income tax returns and the payment of 1998 federal and state income taxes.
Accordingly, estimated penalties and interest of $0.115 million have been
recorded on the Company's audited financial statements for the fiscal year ended
December 31, 1999. (See Note 5 to the accompanying audited financial
statements.) Employee payroll taxes associated with the delinquent filings were
completely discharged immediately after the receipt of FATA's first tranche of
equity investment. With respect to the payment of income taxes for the period
ended December 31, 1998, the Company expects those taxes to be offset by net
operating losses for the period ended December 31, 1999. Notwithstanding the
offset provided by the NOLs, the Company intends to negotiate with the various
taxing authorities to reduce the penalty assessments associated with non-payment
of the taxes for the period ended December 31, 1998, although no assurances can
be given that such negotiations will produce any reduction of these penalties.
Once the results of that negotiation have been determined, the Company will
promptly discharge these penalties.

In December 1998, the Company generated $0.836 million in Other Income as a
result of the disposition of the Company's rights to a potential income stream
in Pakistan. This receipt was recorded as Other Income since the disposition of
this resource was not done in the ordinary course of business.

As a result of the above reasons, the Company experienced a loss before
taxes of $4.004 million for the year ended December 31, 1999 compared to an
income before taxes of $2.629 million in the comparable prior period ended
December 31, 1998. A tax assessment of $0.260 million for the period ended
December 31, 1998 reduced the Company's net income for the period to $2.369
million, and a tax benefit accruing as a result of net operating loss carry
forwards decreased the net loss for the comparable subsequent period ended
December 31, 1999 to $3.781 million. Accordingly, the Company's results per
share of common stock declined from an income per share of $0.39 for the period
ended December 31, 1998 to a loss per share of $0.61 for the period ended
December 31, 1999. It should be noted, however, that the Company's income tax
liabilities for the fiscal year ended December 31, 1998 were assessed under
subchapter S provisions of the Internal Revenue Code through September 30, 1998.
Had the

16
<PAGE>

Company been taxed as a conventional corporation under those same Internal
Revenue Codes, the Company's tax liability would have been $0.989 million for
that same period, reducing the Company's net income to $1.640 million from
$2.369 million and it's per share earnings to $0.27 from $0.39. This proforma
presentation more accurately characterizes the Company's financial performance
and tax liability during the period ended December 31, 1998.

Three Month Periods Ended March 31, 1999 And 2000

Table 2 - Percentage Analysis of Quarterly Results of Operations

================================================================================
QUARTER PERCENTAGE
------- ----------
ENDED CHANGE
----- ------
--------------------------------------------------------------------------------
March 31, March 31, Between Periods
--------- -------- ---------------
2000 1999 (Decrease)
---- ---- ---------
--------------------------------------------------------------------------------
Revenues 100.0% 100.0% N/A
--------------------------------------------------------------------------------
Expenses
--------------------------------------------------------------------------------
COGS 206.0% N/A 123.2%
--------------------------------------------------------------------------------
Gross Margin N/A N/A 14.6%
--------------------------------------------------------------------------------
General & Administrative 244.4% N/A 26.9%
--------------------------------------------------------------------------------
Common Stock 301.6% N/A 328.7%
--------------------------------------------------------------------------------
Total Op. Expenses (546.0%) N/A 107.7%
--------------------------------------------------------------------------------
Income (Loss) from ops. (652.0%) N/A 83.5%
--------------------------------------------------------------------------------
Other Income - - -
--------------------------------------------------------------------------------
Int. Expense, stockholder 26.7% N/A N/A
--------------------------------------------------------------------------------
Interest Income - N/A N/A
--------------------------------------------------------------------------------
Penalties and Interest - - -
--------------------------------------------------------------------------------
Income (Loss) before tax (678.7%) N/A 91.0%
--------------------------------------------------------------------------------
Income Tax (Expense) Ben. - N/A N/A
--------------------------------------------------------------------------------
Net Income (Loss) (678.7%) N/A 171.3%
--------------------------------------------------------------------------------
Net Income (Loss)/share ($0.15) ($0.06) 150.0%
================================================================================

Table 2 above represents: (a) the relationship of income and expenses
relative to net revenues, and (b) the change between the comparable prior
quarterly period and current period. This table should be read in the context of
the Company's financial statements incorporated as part of this filing,
elsewhere herein.

For the three month period ended March 31, 2000, revenues increased from
$0.00 million for the comparable prior three month period ended March 31, 1999
to $0.135 million. The absence of sales for the three month period ended March
31, 1999 was the direct result of the government intervention in India (as
described above in the year to year comparisons). Insignificant revenues were
generated for the quarter ended March 31, 2000 as a result of the activation of
a circuit administered under new policy guidelines established by the Company in
response to the government intervention in India during September, 1998.

17
<PAGE>

The Company's cost of goods sold increased 123.2% from $0.125 million
during the three month period ended March 31, 1999 to $0.278 million during the
three month period ended March 31, 2000. Since there was no revenue for the
three month period ended March 31, 1999, comparisons between the comparable
periods as a percentage of revenues are meaningless. The increase in cost of
goods sold was due to increased costs associated with the start-up of POPs.
Resulting negative gross margins as a percentage of revenues are meaningless,
however, between the periods, the gross margin deficit increased 14.6% from
$0.125 million during the three month period ended March 31, 1999 to $0.143
million during the three month period ended March 31, 2000. These negative
margins are the result of equipment purchases and installation and maintenance
expenses that the Company normally incurs prior to the start-up of POPs.

General and administrative expenses increased 26.9% from the three month
period ended March 31, 2000 from the comparable prior period ended March 31,
1999 to $0.330 million from $0.260 million. These increases were associated with
activities by the Company in anticipation of the establishment of revenue
generating POPs. Since there were no revenues for the three month period ended
March 31, 1999, percentage of revenues analysis are meaningless. For the three
month period ended March 31, 2000, general and administrative expenses were
244.4% of revenues for the period. These general and administrative expenses
largely represent the Company's fixed costs, and while there was an increase of
26.9% between the three month periods, this increase was the result staffing and
support adjustments in anticipation of the start-up of revenue generating POPs.

The Company also continued to increase expenses related to the issuance of
common stock and options to various vendors and employees as a result of
obligations of the Company under various employment and service agreements. This
expense category increased 328.7% from $0.095 million in the quarter ended March
31, 1999 to $0.407 million in the comparable subsequent period ended March 31,
2000. However, with the completion of the first tranche of equity financing from
FATA as of August 1, 2000, and the expectation the second tranche will be
completed as scheduled, the Company expects its usage of this method to
compensate vendors will diminish in future periods.

As a result of the above reasons, during the three month period ended March
31, 2000, total operating expenses and loss from operations increased 107.7% and
83.5% respectively from $0.355 million and $0.331 million for the comparable
prior three month period ended March 31, 1999 to $0.737 million and $0.880
million for the three month period ended March 31, 2000.

Interest expense from stockholder loans increased from $0.00 during the
three month period ended March 31, 1999 to $0.036 million for the period ended
March 31, 2000, producing a net loss of $0.916 million for the current three
month period compared to a net loss of $0.480 for the comparable prior period.
An income tax benefit of $0.142 million was recorded for the three month period
ended March 31, 1999, producing a net loss for the period of $0.338 million
compared to a net loss of $0.916 million for the three month period ended March
31, 2000, with no income tax provision made. This increase in net loss
represented an increase of 171.3% between each three month period.

18
<PAGE>

Accordingly, net loss per share of the Company's common stock increased
from $0.08 during the three month period ended March 31, 1999 to $0.15 for the
comparable subsequent period ended March 31, 2000.

As a result of net operating loss carry forwards, the Company has
substantial tax benefits, eliminating the necessity for the calculation of any
tax provisions for the three month periods ended March 31, 1999 and 2000.

Liquidity And Capital Resources
-------------------------------

Years Ended December 31, 1998 And 1999

Net cash used in operating activities for the fiscal year ended December
31, 1999 was $0.946 million compared to $2.445 million provided by operations in
the comparable prior period ended December 31, 1998, representing a decline of
$3.391 million or 138.7%. This deficit in net cash was primarily the result of a
$3.781 million net loss for the fiscal year ended December 31, 1999 as compared
to net income of $2.369 for the comparable prior period. The net cash deficit
was partially offset by an increase in stock based contributions of $2.210
million and accounts payable of $0.640 million from the fiscal year ended
December 31, 1998 to the comparable period ended December 31, 1999.

Net cash used in investing activities was $0.362 million for the fiscal
year ended December 31, 1999 compared to net cash provided of $0.057 for the
comparable prior period in 1998. The major component in investing activities for
the period ended December 31, 1999 was the acquisition of equipment, while in
the comparable prior period ended December 31, 1998, the purchase of equipment
was largely offset by the repayment of loans to shareholders.

For the fiscal year ended December 31, 1999, net cash provided by financing
activities was $1.298 million, compared to $2.670 used in financing activities
during the comparable prior period ended December 31, 1998. The primary
components of the financing activity consisted of shareholder loans of $1.276
million during the fiscal year ended December 31, 1999 and distributions under
Subchapter S of the Internal Revenue Code of $2.741 million in the comparable
prior period ended December 31, 1998.

As of December 31, 1999, the Company had a working capital deficit of
$2.296 million and a cash overdraft of $0.023 million compared to a working
capital deficit of $0.367 million and a cash balance of $0.010 million in the
comparable prior period ended December 31, 1998. The working capital deficit was
largely due to substantial increases in shareholder loans and accounts payable
between the periods. For the fiscal year ended December 31, 1999, shareholder
loans and accounts payable totaled $1.346 million and $0.791 million
respectively compared to $0.071 million and $0.151 million respectively for the
comparable prior period ended December 31, 1998. The shareholder loans were
required as a result of continuing unprofitable operations of the Company, as
explained in the Results of Operations discussed above, and are evidenced by
promissory notes due on demand which bear 9% per annum interest.

19
<PAGE>

Company management expects the working capital deficit will be resolved
once both tranches of the FATA equity subscription is closed. The first tranche
of equity financing was closed on August 2, 2000, and the second tranche is
expected to close on or before November 30, 2000. In the event the second
tranche of the FATA investment does not close, the Company will remain largely
dependent on the extension of shareholder loans to finance its working capital
deficits or the recruitment of additional equity capital.

Three Month Periods Ended March 31, 1999 And 2000

Net cash used in operating activities decreased 16.8% to $0.164 million for
the three month period ended March 31, 2000 compared to $0.197 for the
comparable prior period ended March 31, 1999. This decrease was largely the
result of substantial increases in stock based compensation and accounts
payable. (Please see Results of Operations above for a discussion of these
items.)

Net cash from investing activities changed from a deficit of $0.026 million
for the period ended March 31, 1999 to a surplus of $0.005 million for the
subsequent period ended March 31, 2000, the deficit being caused by the purchase
of property and equipment and the surplus the result of repayments for cash
advances.

The Company's net cash provided by financing activities decreased 32.5%
from $0.241 million for the three month period ended March 31, 1999 to $0.163
million for the comparable subsequent period ended March 31, 2000. This decrease
was primarily the result of a decrease in loans from stockholders between the
periods.

The above factors combined to produce a decline in cash and cash
equivalents from $0.028 million for the three month period ended March 31, 1999
to $0.003 million for the subsequent comparable period ended March 31, 2000.

As of March 31, 2000, the Company had a working capital deficit of $2.782
million compared to a deficit of $2.296 million for the year ended December 31,
1999. The increase in the deficit was the result of continued increases in
stockholder loans, accounts payable, and stockholder compensation. All increases
were the result of normal operations of the Company's business.

On August 1, 2000 the Company received proceeds of approximately $1.200
million from the FATA subscription pursuant to an Investment Agreement executed
between FATA and the Company replacing the MOU (discussed elsewhere herein).
These proceeds include an investment of $1.500 million, offset by the repayment
of an earlier loan of $0.300 million plus accrued interest at 6% per annum. An
additional investment of $3.500 million is expected no later than November 30,
2000; however, the second tranche is conditional on the completion of due
diligence by FATA. Should FATA decline further investment for whatever reason,
the Company would be required to redeem the initial $1.500 million investment.
Said redemption is personally guaranteed by certain of the Company's
shareholders. Should the second tranche of the Investment Agreement fail to
materialize and the Company be required to redeem the initial investment, the
Company would be subject to material and adverse financial conditions that

20
<PAGE>

could threaten its ability to conduct normal business operations. The Company
would then be required to seek further stockholder loans or seek other sources
of equity financing, although no assurances can be made regarding the
availability of either sources for this financing.

Plan of Operations
------------------

During the succeeding twelve month period, Company management expects
to continue reliance on shareholder loans to finance it's working capital
deficit, but in addition, new equity subscriptions and the start-up of new POPs
currently under contract will provide sources of working capital sufficient to
restore working capital surpluses. In that regard, shareholder loans have
increased from a total of $1.346 million on December 31, 1999 to $1.488 million
on May 31, 2000. A bridge loan of $0.300 million was provided to the Company. As
stated previously, the Company entered into an Investment Agreement on July 26,
2000 that provides for an equity infusion of $5.0 million in exchange for a 45%
equity stake and 51% voting interest in the Company. The Investment Agreement
also grants FATA warrants to purchase an additional 6% equity stake (bringing
its equity stake to 51%, to equal its voting interest). The warrants are
exercisable at a price of $3.00 per share, further adding to the Company's
working capital position. These warrants must be exercised within one year of
the final closing.

Company management is mindful of the consequences of arbitrary
government action with respect to operations in foreign jurisdictions where the
Company may not have the benefit of legal due process, as was the case in India
in 1998. In an effort to mitigate interruption of the Company's business in
these foreign jurisdictions, Company management has implemented a program
whereby the Company is shielded from any direct governmental actions through
engagements with local partners. Each local partner will have the ultimate
responsibility of governmental and regulatory relations in each destination
country, thereby protecting Company assets from predatory seizures by hostile
governments. The process of identifying, recruiting, and engaging local
implementation partners is governed by the following principles:

. Traditional telephone communications costs from the US to the
destination country are significantly higher than a minimum threshold
level.

. Company management has had prior relationships with entities in the
destination country that have strong business/political contacts
and/or are involved in the telecommunications industry in that
country.

. The destination country has adopted and is implementing a plan of
deregulation of its telecommunications industry.

. A Cyberfast review of current services and prices offered by other
data service providers to the destination country indicates long term
growth potential.

Company management expects that the implementation of these policies
will safeguard both Company assets and important revenue streams, as well as,
further insulate the Company from the vagaries of international political
intrigues beyond the control of Company management.

21
<PAGE>

Forward Looking Statements
--------------------------

CERTAIN STATEMENTS MADE IN THIS REGISTRATION STATEMENT ARE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. THESE FORWARD-LOOKING STATEMENTS INCLUDE, AMONG OTHERS, OUR ANTICIPATION
THAT OUR PRINCIPAL STOCKHOLDERS WILL SUPPLY WORKING CAPITAL LOANS AND THAT THE
COMPANY WILL CONCLUDE THE EQUITY FINANCING CONTEMPLATED UNDER THE MOU WITH FATA.
THESE STATEMENTS ARE BASED ON MANAGEMENT'S BELIEFS AND ASSUMPTIONS AND ON
INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT. THESE STATEMENTS ARE SUBJECT TO
RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE CONTEMPLATED IN SUCH FORWARD-LOOKING STATEMENTS. OUR PRINCIPAL
STOCKHOLDERS MAY DISCONTINUE MAKING LOANS AND FATA MAY ELECT NOT TO COMPLETE ITS
PROPOSED EQUITY FUNDING.

ITEM 3. DESCRIPTION OF PROPERTY

Circuit Leases
--------------

The Company leases fiber optic and/or satellite-based circuits at fixed
rates from telecommunications carriers. These circuits terminate in the
destination countries where service is to be provided. Cyberfast, in turn, sells
access to these circuits to carriers on a per-minute basis.

The Company currently has four circuit leases in service with Qwest. On two
of the leases the monthly cost to the Company is $7,000 per lease, and the other
two leases are at a monthly cost of $4,000 per lease. The Company has one
circuit lease in service with KPN at a monthly cost of $10,000, one circuit
lease in service with MCI at a monthly cost of $23,000 and one circuit lease in
service with AT&T at a monthly cost of $28,000.

Equipment Leases
----------------

Cyberfast leases state-of-the-art carrier-class equipment manufactured by
Cisco (and others) for use in its facilities. This equipment consists of highly
scalable gateway servers, routers and switches capable of reliably transmitting
voice, data and video signals over an IP based network. Equipment leases are for
a three year term which automatically renew on a yearly basis unless Cyberfast
provides ninety days notice of the Company's decision not to renew. The lease
provides the Company with the option of purchasing the equipment for the fair
market value of used, well maintained equipment at the time the lease
terminates. The Company is required to maintain the equipment at its own
expense. Because it has in-house maintenance capability, the Company has not
entered into any service contracts for maintenance. Cyberfast bears the risk of
loss during the term of the lease and is required to maintain an insurance
policy for the full replacement value of the equipment. The Cisco equipment is
installed at the

22
<PAGE>

Company's Boca Raton, Florida facilities where it is available to transmit voice
and data traffic for customers on a 24 hours a day, 7 days a week basis.

Office Leases
-------------

The Company is a party to a five year lease for its corporate offices in
Boca Raton, Florida. The Company will also house and maintain its transmission
facilities at this location. The lease expires on June 14, 2004. The total lease
payment for year 1999 was approximately $25,000 and for year 2000 will be
approximately $100,000.

The Company is currently not a party to any other long-term leases for
office space either domestic or foreign.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table provides certain information (consisting of Class A and
Class B Common Stock) as of August 11, 2000 concerning the beneficial ownership
of the Company's voting stock held by each director and named executive officer;
each person known by us to be the beneficial owner of at least five percent of
the Company's voting stock; and all named executive officers and directors as a
group. The information is provided on a combined basis for Class A and Class B
Common Stock to reflect share ownership and voting power for the combined
classes.

23
<PAGE>

Name and Address Number of Percent of Number of Percent of Total of Class Percent of Voting
of Beneficial Class A Class A Class B Class B A and Class B Power (Combined
Owner Shares Shares Shares Shares Shares Classes)
---- ------ ------ -------------- -------------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Edward J. and Itir 1,069,394/(1)/ 26.15% 3,507,400 78.33% 4,576,744/(1)/ 73.97%/(1)/
Stackpole

N. Bruce Walko 207,358/(2)/ 6.03% -0- -0- 207,358/(2)/ 0.43%/(2)/

M. Dowell Stackpole 158,000/(3)/ 4.73% -0- -0- 158,000/(3)/ 0.33%/(3)/

Gerard Werner 101,471/(4)/ 3.04% -0- -0- 101,471/(4)/ 0.21%/(4)/

Bert Perez 210,000/(5)/ 6.11% -0- -0- 210,000/(5)/ 0.44%/(5)/

William Wollrab 300,988/(6)/ 8.56% -0- -0- 300,988/(6)/ 0.62%/(6)/

All officers and 2,022,161/(7)/ 40.94% 3,507,400 78.33% 5,529,561/(7)/ 74.62%/(7)/
directors as a
group (7 persons)

Oguz Stackpole 121,100 3.73% 965,200 21.56% 1,086,300 20.35%

The FATA Group Sp.A. 1,466,276 45.3% -0- -0- 1,466,276 3.05%
</TABLE>

_____________
(1) Includes options to acquire 425,000 shares held by Edward Stackpole of which
400,000 are exercisable at $3.50 per share for ten years from date of grant
and of which 25,000 are exercisable at $3.00 per share for ten years from
date of grant. Also includes options to purchase 425,000 held by Itir
Stackpole, of which 400,000 are exercisable at $3.50 per share from date of
grant and of which 25,000 are exercisable at $3.00 per share for ten years
from date of grant.
(2) Includes options to acquire 200,000 shares exercisable at $3.00 per share
for ten years from date of grant.
(3) Includes options to acquire 100,000 shares exercisable at $3.50 per share
for ten years from date of grant. Also includes 8,000 shares held by
M. Dowell Stackpole's wife and six children.
(4) Includes options to acquire 100,000 shares exercisable at $3.50 per share
for ten years from date of grant.
(5) Includes options to acquire 200,000 shares exercisable at $3.50 per share
for ten years from date of grant.
(6) Includes options to acquire 150,000 shares exercisable at $3.50 per share
for ten years from date of grant and options to acquire 125,000 shares
exercisable at $4.20 per share for ten years from date of grant.
(7) Includes footnotes 1 through 6.

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

Directors and Executive Officers
--------------------------------

Executive officers of the Company are elected by the Board of Directors and
serve for a term of one year and until their successors have been elected and
qualified or until their earlier resignation or removal by the Board of
Directors, except as otherwise provided in the employment agreements with Edward
J. Stackpole, Itir Stackpole and Bert Perez. There are no family relationships
among any of the directors and executive officers of the Company.

The following table sets forth names and ages of all executive officers and
directors of the Company:

24
<PAGE>

<TABLE>
<CAPTION>
Name Age Position Director Since
---- --- -------- --------------
<S> <C> <C> <C>
Edward J. Stackpole 56 Co-Chair of the Board of Directors, Chief 11/98
Executive Officer

Itir Stackpole 45 Co-Chair of the Board of Directors, Vice 11/98
President

N. Bruce Walko 60 President, Director 11/99

M. Dowell Stackpole 45 Director 11/98

Bert Perez 36 Chief Technical Officer, Director 12/99

William Wollrab 43 Vice President, Business Development N/A

Gerard Werner 27 Secretary, Director 11/99
</TABLE>

Edward J. Stackpole founded the operations of the Company through the BCC
and CNSC subsidiaries. Since August, 1995, Mr. Stackpole has served as president
the BCC and CNSC subsidiaries, and since the Company's Reorganization in
November, 1998, has been Chief Executive Officer and Chairman of the Company's
Board of Directors. For six years prior to that date, Mr. Stackpole was the
general partner of EJS Associates that distributed AT&T equipment in Turkey.
Edward and Itir Stackpole are husband and wife.

Itir Stackpole co-founded the operations of the Company through the BCC and
CNSC subsidiaries. Since August 1995, Mrs. Stackpole has served as vice
president of the BCC and CNSC subsidiaries, and, since the Company's
Reorganization in November, 1998, has held the office of vice president and co-
chairman of the Board of Directors. Mrs. Stackpole was also general partner of
EJS Associates in Turkey from 1989 through August 1995.

Mr. Bruce Walko has been President and a Director of the Company since
November, 1999 as a consequence of acquisition of Global by the Company. Mr.
Walko also serves as a Director of enhancement Technologies, Inc., a NASDAQ
small cap company located in Fremont, CA. He has a B.S. degree in Computer
Science from Purdue University and an MBA in Finance and Marketing from the
University of Southern California.

Mr. Bert Perez has been the Chief Technical Officer and a Directors since
June 1999. Mr. Perez was employed by Sprint Communications, Inc. in south
Florida from 1992 through 1999 as Data Support Manager and prior to that as an
MIS manager for ABC television. In his prior positions, Mr. Perez was
responsible for the design and implementation of network solutions and technical
support.

25
<PAGE>

Mr. Bill Wollrab was a Director of the Company as a consequence of
acquisition of Global by the Company. He has been involved in business
consulting since March, 1998. From 1986 to 1993 Mr. Wollrab was a commercial
real estate broker with Marcus & Millichap, Denver, Colorado. Mr. Wollrab
received his BA in German Literature in 1979 from Lake Forest College, Lake
Forest, Illinois. Effective August 2, 2000, Mr. Wollrab resigned from the
Company's Board of Directors to make a seat available for a nominee of FATA. As
consideration for this resignation, the Company accelerated the vesting of
certain options due to Mr. Wollrab during the forthcoming fiscal year ending
December 31, 2001.

Mr. Gerard Werner is a Director and Secretary of the Company as a
consequence of acquisition of Global by the Company. Mr. Werner is a member of
the District of Columbia Bar Association and received his A.B. in May 1994 from
Georgetown University, J.D. in May 1997 from Georgetown University Law Center.

Mr. M. Dowell Stackpole became a director in December, 1998. Mr. Stackpole
has been employed as an analyst for Taylor & Company, a private investment firm
since January 1994. Mr. Stackpole is the brother of Mr. Edward J. Stackpole,
Cyberfast's Chief Executive Officer.

Board of Advisors
-----------------

In addition to the Company's Board of Directors, it has added a Board of
Advisors as the result of the Global acquisition. The members on the Board of
Advisors include:

Lee W. McKnight

Dr. McKnight is a consultant of the Company and has been with the Company
since October of 1999 as a consequence of acquisition of Global by the Company.
Dr. McKnight is Associate Professor of International Communication and Director
of the Edward R. Murrow Center at the Fletcher School of Law and Diplomacy,
Tufts University; Research Affiliate at the MIT Center for Technology, Policy
and Industrial Development; founder of the Internet Telephony Consortium; and
President of Marengo Research, a consultancy. Professor McKnight received his
PhD from MIT in 1989, MA from Johns Hopkins University in 1981, and BA from
Tufts University in 1978.

William H. Lehr

Mr. Lehr is a consultant of the Company and has been with the Company since
October of 1999 as a consequence of acquisition of Global by the Company. From
1997 to present, Mr. Lehr has been an Assistant Professor of Finance and
Economics at the Graduate School of Business, Columbia University New York, NY.
From January of 19 97 to the present, Mr. Lehr has been an affiliate of Internet
Telephony and Interoperability Consortium, Center for Technology, Policy and
Industrial Development at Massachusetts Institute of Technology. Mr. Lehr
received his Ph.D. in Economics from Stanford University in 1992, his MBA from
The Wharton School, University of Pennsylvania in 1984.

26
<PAGE>

ITEM 6. EXECUTIVE COMPENSATION

Compensation and other Benefits of Executive Officers
-----------------------------------------------------

The following table sets out the compensation received for the fiscal years
end December 30, 1997, 1998, and 1999 in respect to each of the individuals who
were the Company's chief executive officer at any time during the last fiscal
year and the Company's four most highly compensated executive officers whose
total salary and bonus exceeded $100,000 (the "Named Executive Officers").

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

FISCAL YEAR COMPENSATION LONG TERM COMPENSATION

Awards Payouts
------ -------
Restricted
Shares
Other Securities or All Other
Annual under Restricted LTIP Compen-
Name and Salary Bonus Compen- Option/SARs Share Payouts sation
Principal Position Year ($) ($) sation Granted Units ($) ($)
--------------------- ---- ------ ----- ---------- ------------------- -------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edward J. Stackpole/ 1999 300,000 0 28,800/(1)/ 250,000 0 0 0
Co-Chair and CEO 1998 262,882 0 2,400/(1)/ 0 0 1,370,459/(2)/
1997 N/A 0 0 N/A 0 0 N/A

Itir Stackpole/ 1999 250,000 0 0 250,000 0 0 0
Co-and Vice President 1998 262,882 0 0 0 0 0 1,370,459/(2)/
1997 N/A 0 0 N/A 0 0 N/A

Ridvan Ali Gurkan/ 1999 0 0 0 0 0 0 0
Vice President, 1998 308,000/(3)/ 0 0 0 0 0 0
International Operations 1997 0 0 0 0 0 0 0

Alan T. Goldstein 1999 50,000 0 0 50,000 10,000 0 0
1998 N/A N/A N/A N/A N/A N/A N/A
1997 N/A N/A N/A N/A N/A N/A N/A

Bert Perez 1999 58,333 0 8,400/(1)/ 100,000 10,000 0 0
Chief Technical Officer 1998 N/A N/A N/A N/A N/A N/A N/A
1997 N/A N/A N/A N/A N/A N/A N/A
</TABLE>
___________________
(1) Represents car allowance.
(2) In 1998 CNSI was taxed under Subchapter S of the Internal Revenue Code.
Edward and Itir Stackpole, as holders of 100% of the stock of CNSI,
received distributions under Subchapter S of the Internal Revenue Code.
One-half is imputed to each as other compensation.
(3) Represents commissions.

27
<PAGE>

Agreements with Management
--------------------------

On January 1, 1999, Mr. Edward J. Stackpole entered into a three-year
employment agreement with the Company at an annual salary of $300,000 per year
and a quarterly bonus equal to 5% of the Company's net pre-tax quarterly income.
Mr. Stackpole was also granted 600,000 non-qualified stock options exercisable
at $3.50 per share over a 10-year period that will vest in increments of 50,000
options quarterly, provided that Mr. Stackpole is still employed on the last day
of each quarter.

On January 1, 1999 Mrs. Itir Stackpole entered into a three-year employment
agreement with the Company at an annual salary of $250,000 per year and a
quarterly bonus equal to 5% of the Company's net pre-tax quarterly income. Mrs.
Stackpole was also granted 600,000 non-qualified options at $3.50 per share over
a 10-year period that vest in increments of 50,000 options quarterly, provided
that Mrs. Stackpole is still employed on the last day of each quarter.

On June 1, 1999, Mr. Alan T. Goldstein entered into a three-year employment
agreement with the Company at an annual salary of $100,000 per year. Mr.
Goldstein's employment with the Company was terminated February 4, 2000. He
received a signing bonus of 10,000 shares of the Company's Class A Common Stock,
of which 5,000 vested immediately and 5,000 vested on December 1, 1999.
Furthermore, Mr. Goldstein was granted 300,000 non-qualified options exercisable
at $5.00 per share over a 10-year period, vesting in increments of 25,000
options quarterly. Mr. Goldstein and the Company are currently involved in an
arbitration proceeding regarding the termination of his employment and the
vesting of options relating thereto. (See PART II, Item 2 - Legal Proceedings,
below for a discussion.)

Effective on June 1, 1999, Mr. Bert Perez entered into a three-year
employment agreement with the Company at an annual salary of $100,000 per year.
Mr. Perez also receives a quarterly bonus equal to 3.3% of the Company's net
pre-tax quarterly income. He received a signing bonus of 10,000 shares of the
Company's Class A Common Stock, of which 5,000 vested immediately and 5,000
shares vested on December 1, 1999. Mr. Perez was granted 300,000 non-qualified
options exercisable at $3.50 per share over a 10-year period that vest in
increments of 25,000 options quarterly, provided that Mr. Perez is still
employed on the last day of each quarter.

The Company granted Mr. M. Dowell Stackpole 58,000 shares of Class A Common
Stock on in January 1999 as compensation for joining the board of directors.

From approximately the end of the third quarter of 1998 through the end of
the second quarter of 1999, Mr. Edward J. and Itir Stackpole, our chief
executive officer and vice-president respectively, held as nominees for
Cyberfast, approximately $538,097 in personal accounts. These funds are
reflected in the audited financial statements for the year ended December 31,
1999 as cash equivalents of Cyberfast. The funds including interest were used
subsequent to December 31, 1999 as Cyberfast's working capital.

28
<PAGE>

Option/Stock Appreciation Rights ("SAR") Grants during the most recently
------------------------------------------------------------------------
completed Fiscal Year
---------------------

The following table sets out the stock options granted by the Company
during the previous fiscal year to the Named Executive Officers of the Company.
The following amounts include options that were granted prior to the previous
fiscal year but were repriced during that year.

<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN PREVIOUS YEAR
INDIVIDUAL GAINS

Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base Market Price on
Name Granted (#) Fiscal Year Price ($/Sh) Date of Grant Expiration Date
---- ------------ ------------ ---------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Edward J. Stackpole 200,000 30.77% $3.50 $ 5.25 01/01/09
50,000 7.69% $3.50 $ 7.00 12/31/09

Itir Stackpole 200,000 30.77% $3.50 $ 5.25 01/01/09
50,000 7.69% $3.50 $ 7.00 12/31/09

Alan Goldstein 50,000 7.69% $3.50 $ 7.00 01/01/09

Bert Perez 50,000 7.69% $3.50 $ 9.19 06/01/09
50,000 7.69% $3.50 $ 7.00 12/31/09
</TABLE>
_______________

Aggregated Option/SAR Exercised in Last Financial Year and Fiscal Year-End
--------------------------------------------------------------------------
Option/SAR Values
-----------------

The following table sets out all Option/SAR exercised by the Named
Executive Officers during the most recently completed fiscal year and the
Option/SAR values for such persons as of the end of the most recently completed
fiscal year.

29
<PAGE>

Aggregated Option/SAR Exercised in Last Fiscal Year and FY-End Option/SAR Values

<TABLE>
<CAPTION>
Number of Securities
Underlying Value of
Unexercised Unexercised
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)

Shares Acquired on Exercisable/ Exercisable/
Name Exercise (#) Value Realized ($) Unexercisable Unexercisable
---- ------------------ ------------------ -------------- -------------
<S> <C> <C> <C> <C>
Edward J. Stackpole -0- -0- 250,000 $1,750,000

Itir Stackpole -0- -0- 250,000 $1,750,000

Alan T. Goldstein -0- -0- 50,000 $ 350,000

Bert Perez -0- -0- 100,000 $ 700,000
</TABLE>
_______________

Compensation of Directors
-------------------------

No salaries are paid to directors. However, each director receives options
to acquire 50,000 shares of Class A Common Stock for each year of service as a
director.

No pension or retirement benefit plan has been instituted by the Company
and none is proposed at this time and there is no arrangement for compensation
with respect to termination of the directors in the event of change of control
of the Company.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Edward and Itir Stackpole are husband and wife. M. Dowell Stackpole and
Edward Stackpole are brothers.

The following table describes the shares that the Company issued to
management and persons who were beneficial owners of more than five percent of
the Company's common stock as part of the November 1998 Reorganization:

<TABLE>
<CAPTION>
Shareholder Name Number and Class of Shares Issued
---------------- ---------------------------------
<S> <C>
Edward J. and Itir Stackpole 251,044 shares of Class A Common Stock
3,507,400 shares of Class B Common Stock

Oguz Stackpole/(1)/ 198,800 shares of Class A Common Stock
965,200 shares of Class B Common Stock

Ali Gurkan/(2)/ 67,450 shares of Class B Common Stock
</TABLE>

30
<PAGE>

Shareholder Name Number and Class of Shares Issued
---------------- ---------------------------------

49,806 shares of Class A Common Stock
Kenneth Greenberg/(3)//(4)/ 70,350 shares of Class A Common Stock
209,950 shares of Class B Common Stock

______________________
(1) Son of Mr. and Mrs. Stackpole.
(2) Mr. Gurkan was a director at the time of the Reorganization. Mr. Gurkan is
the brother of Itir Stackpole.
(3) Mr. Greenberg was an officer at the time of the Reorganization. Includes
50,350 shares of Class A Common Stock issued to Greengold International
Corp., of which Mr. Greenberg was an affiliate.
(4) Issued to Greengold International Corp. a corporation of which Mr. Greenberg
is an affiliate.

As of December 31, 1999 and March 31, 2000, the Company owed Edward and
Itir Stackpole $0.529 million and $0.666 million respectively, for accrued
salaries. Since that date, the salaries have continued to accrue.

The Company currently has outstanding loans to Mr. And Mrs. Stackpole
totaling approximately $1,700,000, including accrued interest. In August 2000,
the Company made a partial payment to the Stackpoles of $300,000 on the
outstanding principal and interest. The outstanding debt is evidenced by a
demand note which accrues interest at 9%, compounded quarterly.

ITEM 8. DESCRIPTION OF SECURITIES

General
-------

The authorized capital stock of Cyberfast consists of an aggregate of
50,000,000 shares, composed of: (i) 5,000,000 shares of preferred stock, $100.00
par value per share; (ii) 40,250,000 shares of Class A Common Stock, $0.01 per
share; and (iii) 4,750,000 shares of Class B Common Stock, $0.01 per share.

Class A Common Stock
--------------------

Holders of Class A Common Stock have one vote per share on each matter
submitted to a vote of the shareholders and a ratable right to the net assets of
Cyberfast upon liquidation. Holders of the Class A Common Stock do not have
preemptive rights to purchase additional shares of Class A common stock or other
subscription rights. The Class A Common Stock carries no conversion rights and
is not subject to redemption or to any sinking fund provisions. All shares of
Class A Common Stock are entitled to share equally in the dividends from legally
available sources as determined by the board of directors, subject to any
preferential dividend rights of the preferred stock. Upon dissolution or
liquidation of Cyberfast, whether voluntary or involuntary, holders of the Class
A Common Stock are entitled to receive assets of Cyberfast for distribution to
the shareholders, subject to any preferential right of the preferred stock. All
outstanding shares of Class A Common Stock are fully paid and non-assessable. As
of August 14, 2000, there were 3,239,176 shares of Class A Common Stock
outstanding.

31
<PAGE>

Class B Common Stock
--------------------

The Class B Common Stock and the Class A Common Stock are substantially
identical, except that:

. the holders of the Class B Common Stock have 10 votes per share and the
holders of the Class A Common Stock have one vote per share on each matter
considered by shareholders;

. upon sale, except a gift, the Class B Common Stock shall automatically be
converted into an equal number of fully-paid and non-assessable shares of
Class A Common Stock; and

. each share of Class B Common Stock is convertible into one share of Class A
Common Stock at the option of the holder at any time.

As of August 14, 2000, there were 4,477,600 shares of Class B Common Stock
outstanding. 78.33% of the authorized and outstanding Class B Common Stock is
held by Edward J. and Itir Stackpole. Because of the number of shares and voting
power attributed to the Class B Common Stock, the Stackpoles are able to control
the election of Cyberfast's directors and thereby control the policies and
operations of Cyberfast. Thus, the holders of the Class A Common Stock may be
deprived of an opportunity to sell their shares at a premium over prevailing
market prices to a party interested in effectuating a business combination with
Cyberfast because of the control of the Stackpoles.

Preferred Stock
---------------

Preferred stock may be issued from time to time in one or more series. The
board of directors is authorized to determine the rights, preferences,
privileges and restrictions granted to, and imposed upon any series of preferred
stock and to fix the number of such shares.

There are no shares of preferred stock outstanding.

PART II

ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.

Market Prices Of Securities
---------------------------

The Class A Common Stock of the Company is currently listed in the Pink
Sheets, and prior to December, 1999 was listed on the OTCBB under the symbol
"CYSI." From October through December 1998, the Class A Common Stock traded
under the symbol "SXFT." The

32
<PAGE>

following table sets forth the high and low bid prices of the Company's Class A
Common Stock during the periods indicated.

OTC Market

Calendar High Bid Price* Low Bid Price*
--------- --------------- --------------

2000 April 1 - June 30 $ 4.75 $ 2.00
January 1 - March 31 7.00 3.15

1999 October 1 - December 31 7.00 1.50
July 1 - October 31 12.00 7.375
April 1 - June 30 19.44 2.38
January 1 - March 31 5.25 2.13

1998 October 1 - December 31 5.38 2.25

__________
* Bid prices were provided by "www.bloomberg.com" via the internet. Quotations
reflect inter-dealer prices, without mark-up, mark-down or commission, and
may not represent actual transactions.

The closing bid price of the Class A Common Stock on August 15, 2000 was
$1.85 per share.

Holders
-------

As of August 14, 2000, there were approximately 166 beneficial holders of
the Company's common stock.

Dividends
---------

The Company did not pay dividends on its common stock in 1998 or 1999 and
it does not anticipate paying any dividends thereon in the foreseeable future.
The Company's subsidiaries did make subchapter S distributions to their former
shareholders.

ITEM 2. LEGAL PROCEEDINGS

In January, 2000 the Company was served with a grand jury subpoena, issued
by the U.S. Attorney for the Southern District of New York, to deliver to the
District Court copies of numerous corporate documents, contracts and
correspondence. Neither the Company nor any officer or director of the Company
was required to personally appear in connection with the subpoena and related
grand jury investigation. The Company was informed orally that the investigation
relates to an investigation of manipulation of certain securities traded in the
NASDAQ Over the Counter Bulletin Board, including trading in the Company's Class
A Common Stock that has occurred in the past two years. Although the Company
believes it is not the target of the investigation and that the targets of the
investigation are certain persons and entities not affiliated with the Company,
there can be no assurance that the investigation will not

33
<PAGE>

require the Company to expend the Company's resources on legal fees in
responding to additional requests for information and documents, including any
future subpoenas which may require that the Company's officers and directors be
deposed by the U.S. Attorney. Expending funds on legal fees for responding to
requests and, if necessary, in defending any action would usurp funds that could
otherwise be applied towards the Company's business.

The Company is involved in an arbitration with a former employee, Alan
Goldstein, who is alleging termination of his employment agreement without
cause. The dispute is in arbitration. Company management believes that
termination was for cause and is vigorously defending its actions before an
arbitration tribunal. The Company's exposure to loss (if the arbitration were to
be decided against the Company) is estimated to be approximately $300,000 and
options to purchase 300,000 Class A shares at a $5.00 per share exercise price.
The arbitration will be governed by rules of the American Arbitration
Association. The proceeding is currently pending and Company management expects
an arbitration hearing within sixty days and a ruling shortly thereafter.

No other legal proceedings are known to be pending, or in effect, against
the Company at this time.

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

On October 5, 1999 the Company engaged the firm of Rachlin Cohen & Holtz,
LLP to audit Company financial statements for the fiscal years ended December
31, 1998 and 1999. The Company's financial statements were previously audited by
Mr. Robert Jarkow, CPA. The Company learned that Mr. Jarkow was not independent,
could not act as Company auditor, and could not render any opinion on the
financial statements of the Company.

There were no disagreements with Mr. Jarkow on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure while he was engaged by the Company.

ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.

On May 5, 2000, the Company entered into a Memorandum of Understanding (the
"MOU") in connection with the sale of common stock of the Company to The FATA
Group Sp.A. ("FATA"). The MOU was replaced when the Company completed the first
closing of an investment agreement (the "Agreement") with The FATA Group Sp.A.,
an Italian corporation ("FATA"). Pursuant to the Agreement, on August 1, 2000,
FATA subscribed to and purchased from the Company a total of 1,466,276 shares of
the Company's Class A Common Stock for a total purchase price of $1,500,000 (the
"First Closing"), consisting of a $300,000 loan from FATA plus accrued interest
that was converted to equity, and cash from the internal funds of FATA.
Previously, on May 5, 2000, FATA made a $300,000 loan to the Company, which had

34
<PAGE>

an interest rate of 6% per annum. Accordingly, on August 1, 2000, the Company
received net proceeds of $1,199,964 from FATA.

During the past three years, the following persons and entities acquired
shares of stock and other securities from us as set forth in the table below.

<TABLE>
<CAPTION>
Class of Securities Amount of Securities
Shareholder Received Date Sold Consideration Sold
----------- -------- --------- ------------- ----
<S> <C> <C> <C> <C>
Edward J. Stackpole Class B Common Stock 11/10/1998 923 Shares of Cyberfast 1,753,700/(1)/
Network Systems, Inc. and 923
shares of Budget-calls Corp.

Itir Stackpole Class B Common Stock 11/10/1998 923 Shares of Cyberfast 1,753,700/(1)/
Network Systems, Inc. and 923
shares of Budget-calls Corp.

Oguz Stackpole Class B Common Stock 11/10/1998 508 Shares of Cyberfast 965,200/(1)/
Network Systems, Inc. and 508
shares of Budget-calls Corp.

Greengold International Class B Common Stock 11/10/1998 221 Shares of Cyberfast 209,950/(1)//(5)/
Corp. Network Systems, Inc.

Ali Gurkan Class B Common Stock 11/10/1998 71 Shares of Cyberfast 67,450/(1)/
Network Systems, Inc.

Edward J. Stackpole Class A Common Stock 11/10/1998 Services rendered 125,552/(1)/

Itir Stackpole Class A Common Stock 11/10/1998 Services rendered 125,552/(2)/
</TABLE>

35
<PAGE>

<TABLE>
<CAPTION>
Class of Securities Amount of Securities
Shareholder Received Date Sold Consideration Sold
----------- -------- --------- ------------- ----
<S> <C> <C> <C> <C>
Oguz Stackpole Class A Common Stock 11/10/1998 Services rendered 198,800/(2)/

Greengold International Class A Common Stock 11/10/1998 Services rendered 50,350/(2)/
Corp.

Ali Gurkan Class A Common Stock 11/10/1998 Services rendered 49,806/(2)/

Kenneth Greenberg Class A Common Stock 11/10/1998 Services rendered 20,000/(3)/

Peter Goldstein Class A Common Stock 11/10/1998 Services rendered 20,000/(3)/

Jeffrey Gerstein Class A Common Stock 11/10/1998 Services rendered 4,800/(3)/

Robert Weinberg Class A Common Stock 11/10/1998 Services rendered 10,000/(3)/

Marjorie Weinberg Trust Class A Common Stock 11/10/1998 Services rendered 28,000/(3)/

Bridgestone Capital Class A Common Stock 11/10/1998 Services rendered 127,900/(3)/
Group, LLC

Kading Companies, S.A. Class A Common Stock 11/10/1998 Services rendered 17,000/(3)/

Robert Koester Class A Common Stock 11/10/1998 Services rendered 3,500/(3)/

David Rakiec Class A Common Stock 11/10/1998 Services rendered 3,500/(3)/

Olympic Capital Group, Class A Common Stock 11/10/1998 Services rendered 115,735/(3)/
Inc. and Designees

Cosmo A. Palmieri Class A Common Stock 11/10/1998 Services rendered 41,100/(3)/

M. Dowell Stackpole Class A Common Stock 01/01/1999 Inducement to join board of 58,000/(3)/
directors

Douglas Blackwell Class A Common Stock 01/06/1999 Services rendered 7,500/(3)//(4)/

Advantage Marketing and Class A Common Stock 04/05/1999 Promissory Note 50,000/(3)/
Capital, Inc.

European Network Group Class A Common Stock 04/07/199 Fee 20,000/(3)/
Society

Alan T. Goldstein Class A Common Stock 06/01/1999 Signing bonus pursuant to an 10,000/(3)/
employment agreement with the
Company

Bert Perez Class A Common Stock 06/01/1999 Signing bonus pursuant to an 10,000/(3)/
agreement with the Company

Boru Enterprises, Inc. Class A Common Stock 08/13/1999 Services rendered 75,000/(3)/
____________
</TABLE>

36
<PAGE>

(1) The issuance of the 4,750,000 shares of Class B Common Stock to the
shareholders of Cyberfast Network Systems, Inc. and Budget-Calls
Corporation was exempt under Section 4(2) of the Securities Act of 1933 as
a non-public offering. The Class B Common Stock was sold to five persons
that exchanged their shares of Cyberfast Network Systems, Inc. for shares
of Cyberfast Systems, Inc. Each of these persons executed appropriate
investment letters and had access to information concerning Cyberfast so
that he could fend for himself.
(2) The issuance of 550,000 shares of Class A Common Stock to the management of
Cyberfast Network Systems, Inc. for services rendered was exempt under
Section 3(b) of the Securities Act of 1933 and Rule 504 promulgated
thereunder.
(3) The sale of shares of Class A Common Stock was exempt under Section 4(2) of
the Securities Act. Each person acquired the shares for investment and had
access to information concerning Cyberfast.
(4) The table does not include 10,000 shares issuable to Mr. Blackwell as a fee
as of June 30, 1999. The shares have not been issued as of the date of this
registration statement.
(5) All shares owned by Greengold International Corp. and 62,450 Class B shares
owned by Gurkan were converted into Class A.

The following Class A shares were issued in connection with the acquisition
of Global in November 1999. The shares were issued in reliance on Section 4(2)
of the Securities Act. In addition, 20,000 Class A shares were issued to J.W.
Genesis Capital Markets, Inc. as a finder's fee.

Name Global Shares Cyberfast Class A Shares
---- ------------- ------------------------

William Wollrab 1,766,102 25,988

Ken Greenberg a/c/f Stephanie Greenberg 200,000 2,943

Chatfield Capital Corp. 100,000 1,471

Green Capital, LLC 4,950,000 72,839

Ken Greenberg a/c/f Annette Greenberg 70,000 1,030

Sissel Greenberg 70,000 1,030

Dylan Linglebach 10,000 147

Chris and Ira Snare 100,000 1,471

Keith Galanti 2,500,000 36,788

Arnold Greenberg 434,640 6,396

Fiserv Correspondent Services, Inc. 500,000 7,358
Cust. f/b/o Bernard O'Donnell IRA

Michael L. Rose 400,000 5,886

Zenith Holdings, Ltd. 250,000 3,679

Gerard Werner 100,000 1,471

N. Bruce Walko 500,000 7,358

Lee McKnight 46,936 691

37
<PAGE>

Name Global Shares Cyberfast Class A Shares
---- ------------- ------------------------

Patrick Kelly 93,872 1,381

Stan Borin 46,936 691

William Lehr 46,936 691

Jahangir Boroumand 46,936 691
---------- -------
Total Shares 12,232,358 180,000
========== =======

ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Bylaws contain the following provisions regarding
indemnification of its directors and officers:

(a) Any person made a party to any action, suit or proceeding, by reason
of the fact that he, his testator or intestate representative is or was a
director, officer or employee of the Corporation, or of any Corporation in which
he served as such at the request of the Corporation, shall be indemnified by the
Corporation against the reasonable expenses, including attorney's fees, actually
and necessarily incurred by him in connection with the defense of such action,
suit or proceedings, or in connection with any appeal therein, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding, or in connection with any appeal therein that such officer, director
or employee is liable for negligence or misconduct in the performance of his
duties.

(b) The foregoing right of indemnification shall not be deemed exclusive
of any other rights to which any officer or director or employee may be entitled
apart from the provisions of this section.

(c) The amount of indemnity to which any officer or any director may be
entitled shall be fixed by the Board of Directors, except that in any case where
there is no disinterested majority of the Board available, the amount shall be
fixed by arbitration pursuant to the then existing rules of the American
Association.

PART F/S
--------

Financial Statements
--------------------

The Company's audited financial statements for fiscal years ended December
31, 1998 and 1999, the statements of operations and statements of cash flows for
the years then ended, and the unaudited financial statements for the quarter
ended March 31, 2000 are attached following the signature page of this Form
10-SB.

38
<PAGE>

PART III

ITEM 1. INDEX TO EXHIBITS

2.0 Plan of Reorganization.*
3.0 Articles of Incorporation.*
3.1 Articles of Amendment to the Articles of Incorporation of Smartfit
Foundations, Inc.*
3.2 Amendment to the Articles of Incorporation of Cyberfast Systems,
Inc.*
3.3 Bylaws.*
10.1 Cisco Equipment Lease*
10.2 Cyberfast/FATA Investment Agreement. Filed herewith.
10.3 Employment Agreement between the Company and Edward Stackpole.**
10.3 Employment Agreement between the Company and Itir Stackpole.**
10.3 Employment Agreement between the Company and Bert Perez.**
16.0 Form of letter to Mr. Robert Jarkow send pursuant to Item 304(a)(3) of
Regulation SB.*
21.0 Subsidiaries.*
27.1 Financial Data Schedule. Filed herewith.
27.2 Financial Data Schedule. Filed herewith.

___________________
* Previously filed
** To be filed by amendment
39
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

INDEX TO FINANCIAL STATEMENTS
-----------------------------

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS F-1

CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheet F-2

Statements of Operations F-3

Statements of Stockholders' Deficiency F-4

Statements of Cash Flows F-5

Notes to Consolidated Financial Statements F-6 - F-18
</TABLE>
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------

Board of Directors and Stockholders
Cyberfast Systems, Inc. and Subsidiaries
Boca Raton, Florida

We have audited the accompanying consolidated balance sheet of Cyberfast
Systems, Inc. and Subsidiaries as of December 31, 1999, and the related
consolidated statements of operations, stockholders' deficiency and cash flows
for each of the two years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Cyberfast Systems, Inc. and Subsidiaries as of December 31, 1999, and the
results of their operations and their cash flows for each of the two years then
ended in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As described in Note 2 to
the consolidated financial statements, the Company is subject to certain
significant risks and uncertainties, which conditions raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
with regard to these matters are also described in Note 2 to the consolidated
financial statements. The consolidated financial statements do not include any
adjustments that might result from the outcome of these significant risks and
uncertainties.

The accompanying balance sheet of Cyberfast Systems, Inc. and Subsidiaries as of
March 31, 2000 and the related consolidated statements of operations,
stockholders' deficiency, and cash flows for the three months ended March 31,
2000 and 1999 were not audited by us and, accordingly, we do not express an
opinion or any other form of assurance on them.

/s/ Rachlin Cohen & Holtz LLP

Fort Lauderdale, Florida
May 11, 2000, except for Note 9 as to
which the date is August 1, 2000

F-1
<PAGE>

Cyberfast Systems, Inc. And Subsidiaries
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 2000 1999
------ ---- ----
(Unaudited)
<S> <C> <C>
Current Assets:
Cash $ 3,666 $ -
Advances to officers/directors and others 10,000 15,000
------------ ------------
Total current assets 13,666 15,000

Property and Equipment, Net of Accumulated Depreciation
of $123,645 and $92,094 326,825 358,376

Deposits 8,521 -
------------ ------------
$ 349,012 $ 373,376
============ ============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------
Current Liabilities:
Accounts payable and accrued expenses:
Stockholder compensation $ 666,346 $ 528,826
Other 446,956 262,275
Majority stockholder/officer/director/loan 1,531,587 1,346,361
Income taxes payable 151,000 151,000
Bank overdraft - 22,566
------------ ------------
Total current liabilities 2,795,889 2,311,028
------------ ------------

Commitments, Contingencies, Other Matters and Subsequent Event - -

Stockholders' Deficiency:
Preferred stock, $100.par value; 5,000,000
shares authorized; 0 shares issued
Common stock
Class A, $.01 par value; 40,250,000 shares authorized;
1,710,450 shares issued and outstanding 17,105 17,105
Class B, $.01 par value; 4,750,000 shares authorized;
4,540,050 shares issued and outstanding 45,400 45,400
Additional paid-in capital 2,826,867 2,419,607
Deficit (5,336,249) (4,419,764)
------------ ------------
(2,446,877) (1,937,652)
------------ ------------
$ 349,012 $ 373,376
============ ============
</TABLE>

See notes to consolidated financial statements.

F-2
<PAGE>

CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Three Months Ended Year Ended
March 31, December 31,
---------------------------- ----------------------------
2000 1999 1999 1998
---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Data communications services $ 135,035 $ - $ 435,739 $ 7,474,685

Cost of Sales 278,182 124,789 637,191 2,220,941
---------- ---------- ----------- ------------

Gross Margin (143,147) (124,789) (201,452) 5,253,744
---------- ---------- ----------- ------------

Other Operating Expenses:
General and administrative 330,078 260,035 1,399,495 3,425,795
Common stock and options issued for services 407,260 95,000 2,210,410 48,306
---------- ---------- ----------- ------------
Total expenses 737,338 355,035 3,609,905 3,474,101
---------- ---------- ----------- ------------
Income (Loss) from Operations (880,485) (479,824) (3,811,357) 1,779,643
---------- ---------- ----------- ------------
Other Income (Expense):
Interest expense, stockholder (36,000) - (78,540) -
Interest income - - - 13,287
Penalties and interest - - (115,000) -
Proceeds from contract settlement - - - 836,000
----------
(36,000) - (193,540) 849,287
---------- ---------- ----------- ------------
Income (Loss) before Income Taxes (916,485) (479,824) (4,004,897) 2,628,930
Income Tax (Expense) Benefit - 142,000 224,000 (260,000)
---------- ---------- ----------- ------------
Net Income (Loss) $ (916,485) $ (337,824) $(3,780,897) $ 2,368,930
========== ========== =========== ============
Net Income (Loss) Per Common Share -
Basic and Diluted $ (0.15) $ (0.06) $ (0.61) $ 0.39
========== ========== =========== ============
Weighted Average Number of Common
Shares Outstanding 6,250,500 6,021,194 6,148,984 6,000,000
========== ========== =========== ============
</TABLE>

1998 Proforma Tax:

During 1998, through September 30, 1998 the Companies were taxed as subchapter S
Corporations.

The proforma tax is computed as if Cyberfast Systems, Inc. and Subsidiaries were
taxed for the entire calendar year 1998 as a conventional corporation under the
Internal Revenue Code.

<TABLE>
<S> <C>
Income from operations before income tax $ 2,628,930
Provisions for income tax 989,000
-----------
Net income $ 1,639,930
===========
Net income per share $ 0.27
======
Weighted average outstanding shares 6,000,000
===========
</TABLE>
See notes to consolidated financial statements.

F-3
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY

<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid-In Earnings
Shares Amount Capital (Deficit) Total
------ ------ ------- --------- -----
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1997 1,459,950 4,540,050 $ 14,600 $ 45,400 $ 211,702 $ (266,880) $ 4,822

Year ended December 31, 1998:

Net income - - - - - 2,368,930 2,368,930

Distributions to stockholders - - - - - (2,740,917) (2,740,917)
--------- --------- -------- -------- ----------- ------------ ------------
Balance, December 31, 1998 1,459,950 4,540,050 14,600 45,400 211,702 (638,867) (367,165)

Year ended December 31, 1999:

Issuance of common stock for
services 250,500 - 2,505 1,397,995 - 1,400,500

Options granted for services - - - - 809,910 - 809,910

Net loss - - - - - (3,780,897) (3,780,897)
--------- --------- -------- -------- ----------- ------------ ------------

Balance, December 31, 1999 1,710,450 4,540,050 17,105 45,400 2,419,607 (4,419,764) (1,937,652)

Three Months Ended March 31, 2000
(Unaudited):

Options granted for services - - - - 407,260 - 407,260

Net loss - - - - - (916,485) (916,485)
--------- --------- -------- -------- ----------- ------------ ------------

Balance, March 31, 2000 (Unaudited) 1,710,450 4,540,050 $ 17,105 $ 45,400 $ 2,826,867 $ (5,336,249) $ (2,446,877)
========= ========= ======== ======== =========== ============ ============
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Three Months Ended Years Ended
March 31, December 31,
------------------------ ---------------------------
2000 1999 1999 1998
---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ (916,485) $ (337,824) $ (3,780,897) $ 2,368,930
Adjustments to reconcile net income (loss) to net cash and
cash equivalents provided by (used in) operating activities:
Depreciation 31,551 6,613 90,094 2,000
Stock-based compensation 407,260 95,000 2,210,410 48,306
Loss on confiscated assets - - - 108,892
Changes in operating assets and liabilities:
(Increase) decrease in :
Customer deposits - - - (309,000)
Other (8,521) - 3,027 20,000
Increase (decrease) in:
Accounts payable 322,201 180,989 640,190 (54,023)
Income taxes payable - (142,000) (109,000) 260,000
---------- ---------- ------------ ------------
Net cash provided by (used in) operating activities (163,994) (197,222) (946,176) 2,445,105
---------- ---------- ------------ ------------

Cash Flows from Investing Activities:
Purchase of property and equipment - (26,001) (347,233) (93,237)
Repayment of stockholder loan receivable - - - 150,000
(Advances to) repayments from officers/directors and others 5,000 - (15,000) -
---------- ---------- ------------ ------------
Net cash provided by (used in) investing activities 5,000 (26,001) (362,233) 56,763
---------- ---------- ------------ ------------

Cash Flows from Financing Activities:
Bank overdraft (22,566) - 22,566 -
Loans from stockholders 185,226 241,093 1,275,861 70,500
Distributions to stockholders - - - (2,740,917)
---------- ---------- ------------ ------------
Net cash provided by (used in) financing activities 162,660 241,093 1,298,427 (2,670,417)
---------- ---------- ------------ ------------

Net Increase (Decrease) in Cash and Cash Equivalents 3,666 17,870 (9,982) (168,549)

Cash and Cash Equivalents, Beginning - 9,982 9,982 178,531
---------- ---------- ------------ ------------

Cash and Cash Equivalents, Ending $ 3,666 $ 27,852 $ - $ 9,982
========== ========== ============ ============

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ - $ - $ - $ -
========== ========== ============ ============
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2000 (UNAUDITED) AND DECEMBER 31, 1999 AND 1998

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Cyberfast Systems, Inc. (the "Company") is an international provider
of data communications services. The Company operates long distance
and voice communication services primarily between the United States
and under-served, under-developed or developing countries. All
transmissions originate in the United States.

Organization and Capitalization

The Company was originally incorporated as SmartFit Brassiera Co.,
Inc., a New York corporation, and was in the business of selling
women's undergarments. The Company changed its name to Smart Fit
Foundation, Inc. on September 8, 1995.

In October 1998, pursuant to an Agreement and Plan of
Reorganization, Smart Fit Foundation, Inc. (a non-operating public
shell), acquired 100% of the common stock of Cyberfast Network
Systems Corp., in exchange for 97.8% of Smart Fit Foundation, Inc.'s
common stock. On October 19, 1998, Smart Fit Foundation, Inc.
changed its name to Cyberfast Systems, Inc.

The Company's certificate of incorporation authorized the issuance
of 50,000,000 shares of capital stock consisting of 5,000,000 shares
of preferred stock with a $100.00 par value per share, 40,250,000
shares of Class A common stock with a $.01 par value per share and
one vote per share and 4,750,000 shares of Class B common stock with
a $.01 par value per share and ten votes per share.

In October 1999, the Company acquired 100% of the outstanding
capital stock of Global Telcom and Internet Ventures, Inc. (Global),
an unrelated entity, in exchange for 180,000 shares of Company Class
A common stock. The acquisition was accounted for as a pooling of
interest, and, as a result, the consolidated financial statements
give retroactive effect to the transaction. Global had minimal
assets, liabilities or operations as of the date of the acquisition
and for the periods included in these consolidated financial
statements.

Principles of Consolidation

The accompanying consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
material intercompany accounts and transactions have been
eliminated.

F-6
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Unaudited Financial Information

The accompanying financial statements as of March 31, 2000 and for
the three months ended March 31, 2000 and 1999 are unaudited.
However, in the opinion of management, such financial statements
contain all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of financial
position, results of operations and cash flows for such periods.
Results of interim periods are not necessarily indicative of results
to be expected for an entire year.

Revenue Recognition

Revenue is recognized when earned and recorded net of estimated
chargebacks.

Property and Equipment

Property and equipment are recorded at cost and depreciation is
provided using the straight-line method over the estimated useful
lives of the assets. Gain or loss on disposition of assets, if any,
is recognized currently. Repairs and maintenance of property and
equipment are charged to expense as incurred. Major replacements and
betterments are capitalized and depreciated over the remaining
useful lives of the assets.

Income Taxes

Cyberfast Network Systems Corp. was taxed under the provisions of
Subchapter S of the Internal Revenue Code up to the Plan of
Reorganization. Under the Subchapter S provisions, the Company
generally does not pay federal corporate tax, but rather, the
stockholders' share of income or loss is included in their
individual tax returns. The Company terminated the S Corporation
election effective September 30, 1998.

The Company accounts for its income taxes using Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes," which requires recognition of deferred tax
liabilities and assets for expected future tax consequences of
events that have been included in the financial statements or tax
returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement
and tax bases of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to
reverse.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash.

At certain times during the year the Company may have had cash
balances in excess of federally insured limits. The Company
maintains its cash balances with high quality financial institutions
that the Company believes limits these risks.

F-7
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash Equivalents

For purposes of the statement of cash flows, the Company considers
all highly liquid investments with an original maturity of three
months or less to be cash equivalents.

Use of Estimates

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

Stock-Based Compensation

The Company accounts for stock-based compensation issued to
employees using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees". Compensation cost for stock options, if any, is measured
as the excess of the estimated market price of the Company's stock
at the date of grant or agreement in principle to grant the option,
if earlier, over the amount the recipient must pay to acquire the
stock.

Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation," established accounting
and disclosure requirements using a fair-value-based method of
accounting for stock-based employee compensation plans. The Company
has elected to retain its current method of accounting as described
above, and has adopted the disclosure requirements of SFAS No. 123.
The Company follows SFAS No. 123 in accounting for stock options
issued to non-employees.

Advertising

Advertising costs are charged to expense as incurred. Advertising
costs incurred for the years ended December 31, 1999 and 1998 and
the three months ended March 31, 2000 (unaudited) were not material.

F-8
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board issued SFAS
No. 130, "Reporting Comprehensive Income" and No. 131, "Disclosures
about Segments of an Enterprise and Related Information." SFAS No.
130 establishes standards for reporting and displaying comprehensive
income, its components, and accumulated balances. SFAS No. 131
establishes standards for the way that public companies report
information about operating segments in annual financial statements
and requires reporting of selected information about operating
segments in interim financial statements issued to the public. Both
SFAS No. 130 and SFAS no. 131 are effective for periods beginning
after December 15, 1997. The Company adopted these new accounting
standards in 1998, and their adoption had no effect on the Company's
financial statements and disclosures.

In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 requires companies to recognize all
derivatives contracts as either assets or liabilities in the balance
sheet and to measure them at fair value. If certain conditions are
met, a derivative may be specifically designated as a hedge, the
objective of which is to match the timing of gain or loss
recognition on the hedging derivative with the recognition of (i)
the changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk or (ii) the earnings effect of
the hedged forecasted transaction. For a derivative not designated
as a hedging instrument, the gain or loss is recognized in income in
the period of change. On June 30, 1999, the FASB issued SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133." SFAS No.
133 as amended by SFAS No. 137 is effective for all fiscal quarters
of fiscal years beginning after June 15, 2000.

Historically, the Company has not entered into derivatives contracts
to hedge existing risks or for speculative purposes. Accordingly,
the Company does not expect adoption of the new standard on January
1, 2001 to affect its consolidated financial statements.

NOTE 2. GOING CONCERN CONSIDERATIONS

The accompanying consolidated financial statements have been presented
in accordance with generally accepted accounting principles, which
assume the continuity of the Company as a going concern. As reflected
in the consolidated financial statements, the Company incurred a net
loss of approximately $3,890,000 in 1999 and as of December 31, 1999
the consolidated financial position reflect a bank overdraft, minimal
current assets, and a stockholders' deficiency of approximately
$1,787,000. During 1998, the Company was operating almost exclusively
in India. In September 1998, India, alleging inappropriate use of the
telephone lines and non-payment of various taxes and tariffs,
confiscated all the Company's operating assets, including cash
accounts, in India (see Note 3). As a result, the Company had no active
operations and has spent 1999, continuing into 2000, reestablishing its
business operations.

F-9
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 2. GOING CONCERN CONSIDERATIONS (Continued)

Management's plans with regard to these matters include:

During 2000 the Company is building a network of Points of Presence
(POPs) around the world. This worldwide footprint will be used for
transport of voice, data, video, Internet access and multimedia by a
variety of users. The Company owns a switch center in Florida where it
receives and transmits all of the traffic between the U.S. and all
international gateway locations via a fiber optic link to a satellite
dish in Amsterdam, Holland. The Company plans to leverage IP technology
to reduce the costs of providing telecommunications services in
traditionally high priced markets.

The Company has gained access to a state of the art satellite
infrastructure through a lease with Royal Dutch Telecom (KPN) that has
a footprint in Europe, Asia, and Africa. This unique position enables
the Company to deploy its toll quality services quickly and efficiently
in any geographical location (in Europe, Asia and Africa) without
having to have access to expensive land-based infrastructure. To enable
the Company to build a presence in selected countries, management has
entered into a strategic alliance with KPN, which will provide the
Company with high bandwidth access to Western Europe.

To fund the Company's international development, management entered
into a Memorandum of Understanding (MOU) with FATA Group SpA, which
calls for a series of capital investments. (See note 9) The eventual
success of management's plans cannot be ascertained with any degree of
certainty.

The conditions described above regarding going concern considerations
raise substantial doubt as to the ability of the Company to continue as
a going concern. The accompanying consolidated financial statements do
not include any adjustments that might result from the outcome of these
significant risks and uncertainties.

NOTE 3. CONFISCATED ASSETS

In September 1998, India, the country in which the Company was
conducting substantially all of its business operations, issued an
injunction stopping the Company from operating and seized all Company
assets located in India. The primary assets confiscated were property
and equipment, which had a net book value of approximately $109,000 at
the time it was confiscated. In addition, the Company had three bank
accounts with minimal balances, which were also confiscated. All
confiscated assets have been expensed in the accompanying consolidated
financial statements.

F-10
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 4. STOCKHOLDER LOANS

At various times during 1999, the majority stockholders loaned a total
of $1,346,361 to the Company. A demand note was executed January 1,
2000, which provides for quarterly interest payments at 9%. Subsequent
to year-end, the stockholders loaned an additional approximately
$220,000 to the Company. During 1999 and the three months ended March
31, 2000 (unaudited), the Company incurred, but did not pay, interest
expense of approximately $78,000 and $36,000 in connection with these
loans.

NOTE 5. INCOME TAXES

The Company accounts for income taxes under the provisions of Statement
of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes." SFAS No. 109 is an asset and liability approach for
computing deferred income taxes.

A reconciliation of income tax computed at the statutory federal rate
to income tax expense (benefit) is as follows:

<TABLE>
<CAPTION>
Three Months Ended Years Ended
March 31, December 31,
2000 1999 1999 1998
---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C>
Tax provision at the statutory rate of 34% $ (312,000) $ (163,000) $ (1,296,000) $ 894,000
State income taxes, net of federal income tax (27,000) (14,000) (114,000) 95,000
Benefit of net operating loss carryback - - (224,000) -
Stock based compensation 151,000 35,000 370,000 -
Tax relating to subchapter S status - - - (729,000)
Change in valuation allowance 188,000 - 991,000 -
Other - - 49,000 -
---------- ---------- ------------ ----------
$ - $ (142,000) $ (224,000) $ 260,000
========== ========== ============ ==========
</TABLE>

The net tax effects of temporary differences between the carrying
amount of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes are reflected in deferred
income taxes. Significant components of the Company's deferred tax
assets are as follows:

<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
(Unaudited)
Benefit of net operating loss carry forward $ 809,000 $ 621,000
Stock and options issued for compensation 370,000 370,000
Less valuation allowance (1,179,000) (991,000)
---------- ---------
Net deferred tax asset $ - $ -
========== =========
</TABLE>

As of December 31, 1999 and March 31, 2000 (unaudited), sufficient
uncertainty exists regarding the reliability of these deferred tax
assets and, accordingly, a 100% valuation allowance has been
established.

F-11
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 5. INCOME TAXES (Continued)

The Company is delinquent in the filing of various federal and state
income tax returns. The Company is also delinquent in paying 1998
federal and state income taxes. Estimated penalties and interest
through December 31, 1999 have been recorded in these 1999 consolidated
financial statements in the amount of $151,000. The Company may also be
subject to possible review and examination of such tax returns by the
appropriate taxing authorities. Additional income taxes, including
penalties for non-compliance and interest, if any that may be assessed
will be charged to operations when determined.

In accordance with certain provisions of the Tax Reform Act of 1986, a
change in ownership of greater that 50% of a corporation within a three
year period will place an annual limitation on the corporation's
ability to utilize its existing tax benefit carryforwards. Such a
change in ownership is contemplated in the proposed sale of common
stock (see Note 9). Under such circumstances, the potential benefits
from utilization of the tax loss carryforwards as of that date may be
substantially limited or reduced on an annual basis. To the extent that
net operating loss carry forwards, when realized, relate to stock
option deductions, the resulting benefits will be credited to
stockholders' equity.

NOTE 6. COMMITMENTS, CONTINGENCIES, AND OTHER MATTERS

Litigation

The Company is involved in certain lawsuits arising in the ordinary
course of business. In the opinion of management, any liabilities
resulting from such litigation would not be material in relation to
the Company's consolidated financial position.

Employment Agreements

The Company has entered into employment agreements with its
executive officers, effective January 1999, the terms of which
expire at various times through June 2002. Such agreements, which
have been revised from time to time, provide for minimum salary
levels, as well as for incentive bonuses, payable quarterly. The
agreements also provide for the grant of 1,800,000 stock options at
$3.50 per share, 300,000 stock options at $5.00 per share and
300,000 stock options at market value pursuant to a vesting
schedule. The stock options vest quarterly over three-year periods
and expire after ten years. The aggregate commitment for future
salaries at December 31, 1999, excluding bonuses and stock options,
is approximately $1,350,000. During 1999 two
officer/director/employees agreed to defer payment of a large
portion of their compensation. Included in accrued expenses is
approximately $529,000 and $666,000 (unaudited) of compensation due
to these officer/director/employees at December 31, 1999 and March
31, 2000, respectively.

One agreement was terminated during 1999 with only 50,000 of the
300,000 options granted vested; the remainder were canceled. An
arbitration claim has been filed by the former employee against the
Company. The maximum exposure is the balance of wages due for the
remaining term of the agreement, approximately $300,000, and the
vesting of all stock options. The Company believes that the contract
was terminated for cause, that the Company has no financial
obligations to the previous employee, and is vigorously defending
this action.

F-12
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 6. COMMITMENTS, CONTINGENCIES, AND OTHER MATTERS (Continued)

Service Agreements

The Company has service agreements with several contractors that
provide service for circuits originating in the United States and
terminating in foreign countries. The agreements, which provide for
compensation based primarily on a percentage of income generated,
expire at various dates through December 2004. The contractors
provide the equipment, facilities, and related services required for
terminating data and voice calls, and otherwise receiving and/or
transmitting communications.

Satellite Service Agreement

The Company has two service agreements with a satellite provider.
The agreements, which provide for monthly payments totaling $28,800,
expire through August 2000. As of December 31, 1999 and March 31,
2000 (unaudited), approximately $106,000 and $86,000 was incurred,
but unpaid, under these agreements and is included in accounts
payable. The remaining payments due in 2000 under these agreements
total approximately $113,000.

Operating Leases

The Company leases certain of its facilities and equipment under
non-cancelable operating leases, which expire through June 2004. In
addition, the Company is responsible for all taxes, insurance,
maintenance and utilities.

Minimum future lease payments on these leases are as follows:

Year ending December 31:
2000 $293,000
2001 300,000
2002 154,000
2003 103,000
2004 52,000
--------
Total $902,000
=========

Rent expense for the facility was $46,585 and $128,698 for 1999 and
1998, respectively, and $8,116 for the three months ended March 31,
2000 (unaudited).

Foreign Operations

The Company conducts business operations in foreign countries where
the customs, laws and business practices are different from those in
the United States. The laws and regulations in these countries may
change without notice or may not be appropriately enforced,
resulting in the interruption of service or other consequences to
the Company. These consequences could have a material effect on the
Company.

F-13
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 6. COMMITMENTS, CONTINGENCIES, AND OTHER MATTERS (Continued)

Significant Customers and Suppliers

The Company sells its data communications services to a limited
number of customers. One customer accounted for 100% of the revenue
during the year ended December 31, 1999. Two customers accounted for
50% of the revenues each during the year ended December 31, 1998.

The Company leases long-distance networks, which the Company is
dependent on to connect and route calls. One supplier accounted for
100% of these services during the years ended December 31, 1999 and
1998.

Placement Agent Agreement

During September 1999, the Company entered into an agreement in
connection with placement services for proposed private placements
of equity or debt securities at any time within twelve months from
September 23, 1999. If one or more sales are consummated , the
Company will pay a placement fee equal to 10% of the purchase price
and issue placement agent warrants to purchase 2% of the fully
diluted shares of common stock of the Company at the closing bid
price on the date of the closing of the sale. The Company has also
agreed to pay reasonable out-of-pocket expenses not to exceed
$25,000.

Related Party Transactions

During 1998, approximately $310,000 of commissions were paid to two
consultants who are related by birth to a majority stockholder.
These agents resigned from providing services in the second quarter
of 1999. During the first half of 1999, there were no revenues and,
as a result, no commissions earned.

During 1999, the Company issued 58,000 shares of Class A common
stock and options to purchase an additional 50,000 shares at $3.50
per share (the fair value of the underlying shares on the date of
grant) to a member of the Company's Board of Directors who is
related by birth to a majority stockholder. The common shares and
options were issued in connection with services provided during 1999
as a member of the Board of Directors. Subsequent to December 31,
1999, this Board member received an additional 50,000 options to
purchase common stock, again in connection with services to be
rendered as a Board member.

NOTE 7. NET INCOME (LOSS) PER SHARE

The Company follows Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings Per Share" which requires the presentation of both
basic and diluted net income (loss) per share.

F-14
<PAGE>

Cyberfast Systems, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 7. NET INCOME (LOSS) PER SHARE (Continued)

Basic net income (loss) per common share has been computed based upon
the weighted average number of shares of common stock outstanding
during the period. The number of shares used in the computation was
6,148,984 and 6,000,000 for 1999 and 1998, respectively, and 6,250,500
and 6,021,194 for the three months ended March 31, 2000 and 1999
(unaudited), respectively. Diluted income (loss) per common share has
not been presented, since the effect of common share equivalents is not
material in 1998 and would be anti-dilutive in 1999.

NOTE 8. STOCK-BASED COMPENSATION

Stock Issued for Services

During 1999, the Company issued 250,500 shares of Class A common
stock to certain employees and consultants in exchange for services,
including 50,000 shares issued to a related party (see Note 6).
These shares have been accounted for as compensation/consulting
expense at the estimated fair value of the shares issued, unless the
value of the services was more reliably determined, with a
corresponding credit to additional paid-in capital. The total
expense recorded in connection with the issuance of these common
shares was $1,400,500.

Stock Options

In 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation" ("SFAS 123"). As permitted by SFAS No. 123, the
Company continues to apply the recognition and measurement
provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25").

Pursuant to SFAS No. 123, the Company has elected to account for its
employee stock options under APB Opinion No. 25. Compensation cost
has been recognized for any options for which the market value
exceeded the exercise price on the date of the grant or agreement in
principle to grant the option, if earlier. The Company granted
2,575,000 options to employees of which 900,000 and 1,050,000 were
vested as of December 31, 1999 and March 31, 2000 (unaudited).
Compensation expense of $340,750 and $137,500 has been recognized in
these consolidated financial statements for 1999 and March 31, 2000
(unaudited) relating to these vested options. Had compensation cost
for the plan been determined on the fair value at the grant date
consistent with SFAS No. 123, the Company's net earnings would have
been as follows:

F-15
<PAGE>

(continued)

NOTE 8. STOCK-BASED COMPENSATION (Continued)

Stock Options (Continued)

March 31, December 31,
2000 1999
---- ----
As Reported $ (916,485)
Pro Forma $ (5,107,735) $(7,446,397)

Basic Net Loss Per Share:
As Reported $ (0.15) $ (0.63)
Pro Forma $ (0.82) $ (1.21)

The Company accounts for stock-based compensation grants to non-
employees pursuant to the guidance of SFAS No. 123 using the fair-
value-based method. The Company granted 148,000 options to non-
employees as of December 31, 1999 and March 31, 2000 (unaudited),
all of which are vested. Expense of $469,160 and $269,760 has been
recorded in the accompanying consolidated financial statements for
1999 and the three months ended March 31, 2000 (unaudited).

The Company estimates the fair value of each stock option at the
grant date by using the Black-Sholes option-pricing model with the
following weighted-average assumptions used for grants; no dividend
yield; an expected life of ten years; 143% expected volatility, and
6.00% risk free interest rate.

The option valuation model was developed for use in estimating the
fair value of traded options that h restrictions and are fully
transferable. In addition, valuation models require the input of
highly subjective assumptions including the expected price
volatility. Since the Company's stock options have characteristics
significantly different from those of traded options, and since
variations in the subjective input assumptions can materially affect
the fair value estimate, the actual results can vary significantly
from estimated results.

A summary of the status of options as of December 31, 1999 and March
31, 2000 (unaudited) and changes during the period ended on that
date are presented below:
F-16
<PAGE>

CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 8. STOCK-BASED COMPENSATION (Continued)

Stock Options (Continued)

<TABLE>
<CAPTION>
Weighted
Number Average Expiration
of Shares Price Date
---------- ----- ----
<S> <C> <C> <C>
Balance, December 31, 1998 - $ - -
Year Ended December 31, 1999:
Granted 2,723,000 3.63 November 2004
Exercised - to December 2009
Expired 250,000
---------
Balance, December 31, 1999 2,473,000 3.63 November 2004
to December 2009

Three Months Ended March 31, 2000 (Unaudited):
Granted 48,000 5.00
Exercised -
---------
Balance, March 31, 2000 (Unaudited) 2,521,000 3.63 November 2004
=========
to December 2009
</TABLE>

The following table summarizes information about outstanding options
at December 31, 1999 and March 31, 2000 (unaudited):

<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
----------------------------------------------------------- -----------------------------------------------------
Number Number Weighted Number
Outstanding Outstanding Average Range Exercisable Exercisable Weighted
Range of at at Remaining of at at Average
Exercise December 31, March 31, Contractual Exercise December 31, March 31, Exercise
Prices 1999 2000 Life Price 1999 2000 Price
------ ---- ---- ---- ----- ---- ---- -----
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
$3.50 - $7.00 2,473,000 2,521,000 9 years $3.50 - $7.00 1,048,000 1,246,000 $3.63
============ ========= ========= ======= ============= ========= ========= ====
</TABLE>

Subsequent to December 31, 1999, 400,000 options were granted to
employees pursuant to employment agreements, and 148,000 options were
granted to certain board and advisory board members.

NOTE 9. SUBSEQUENT EVENT

On May 5, 2000, the Company entered into a Memorandum of Understanding
("MOU") in connection with the sale of common stock. The MOU provides
for a bridge loan of $300,000, repayable from the first capital funding
with interest at 6%, but in no case later than August 1, 2000. This
bridge loan, which is guaranteed by the majority stockholders, was
received by the Company in May, 2000.

F-17
<PAGE>

CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 9. SUBSEQUENT EVENT (Continued)

The purchaser, upon successful conclusion of preliminary due diligence,
has the right to contract to purchase 45% of the total outstanding
capital stock and 51% of the voting rights of the Company for
$5,000,000 payable in two tranches. Within seven days of the execution
of the contract, the purchaser must purchase $1,500,000 of Class A
common stock. The purchaser then has 150 days to complete any and all
due diligence. At that time, if the purchaser has decided to complete
the transaction, the remaining $3,500,000 is to be funded.

In addition to the 45% of outstanding capital stock, the purchaser will
receive a warrant to purchase at least an additional 6% of the
outstanding capital stock of the Company at $3.00 per share (based on
fair value at the date of the MOU).

In the event that the purchaser decides, pursuant to final due
diligence, not to purchase the second tranche, the purchaser will have
a put option in connection with the first tranche. The put option will
require the Company to buy back the shares acquired in the first
tranche for $1,500,000, plus interest at 6% per annum for the time the
shares were held. The Company must repurchase the shares within four
months from the time the purchaser makes the request. The transaction,
in its entirety, is personally guaranteed by the current majority
stockholders.

On July 26, 2000, the Company entered into an investment agreement
which contractually obligates the purchaser and the Company to the
terms of the MOU as outlined above. On August 1, 2000, the Company
received payment in full for the first tranche in exchange for the
issuance of 1,466,276 Class A common stock. After repayment of the
bridge loan, including interest, the Company received net proceeds of
$1,199,964.

F-18
<PAGE>

INDEX TO EXHIBITS

2.0 Plan of Reorganization.*
3.0 Articles of Incorporation.*
3.1 Articles of Amendment to the Articles of Incorporation of Smartfit
Foundations, Inc.*
3.2 Amendment to the Articles of Incorporation of Cyberfast Systems,
Inc.*
3.3 Bylaws.*
10.1 Cisco Equipment Lease*
10.2 Cyberfast/FATA Investment Agreement. Filed herewith
10.3 Employment Agreement between the Company and Edward Stackpole. **
10.3 Employment Agreement between the Company and Itir Stackpole. **
10.3 Employment Agreement between the Company and Bert Perez. **
16.0 Form of letter to Mr. Robert Jarkow send pursuant to Item 304(a)(3)
of Regulation SB.*
21.0 Subsidiaries.*
27.1 Financial Data Schedule. Filed herewith.
27.2 Financial Data Schedule. Filed herewith.

_________________
* Previously filed
** To be filed by amendment.
<PAGE>

SIGNATURE

In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this Form 10-SB/A No. 2 to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: August 21, 2000 CYBERFAST SYSTEMS, INC.

By: /s/ Edward J. Stackpole
----------------------------------------
Edward J. Stackpole, Chief Executive Officer
And Co-Chairman of the Board