##### Table of Contents



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

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2001

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number 0-25995

NEXTERA ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)

|                                                                        |  |                                                   
|----------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 95-4700410
(I.R.S. Employer
Identification Number)

343 Congress Street, Suite 2100, Boston, Massachusetts 02210-1215
(Address of principal executive office, including zip code)

(617) 603-3100
(Registrants telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]    No [   ]

As of July 31, 2001 there were 31,647,640 shares of $.001 par value Class
A Common Stock outstanding and 3,869,570 shares of $.001 par value Class B
Common Stock outstanding.



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TABLE OF CONTENTS



|                               |                                                                                               |                                                      |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | CONSOLIDATED BALANCE SHEETS                         
|                               |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS               
|                               |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS               
|                               |                                                                                               | NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|                               | Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risks                          
|PART II. Other Information    
|                               | Item 2. Changes in Securities and Use of Proceeds                                            
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                               | Item 6 Exhibits and Reports on Form 8-K                                                      
|SIGNATURES                    
|EXHIBIT 4.1                   



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##### Table of Contents



NEXTERA ENTERPRISES, INC.
Quarterly Report on Form 10-Q
for the Quarter Ended June 30, 2001

INDEX

|                              |                                                                                               |                                                                                         |  |          |    | 
|----------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- |  | -------- | -- | 
|                              |                                                                                               |                                                                                         |  | Page No.
|                              |                                                                                               |                                                                                         |  |         
|PART I. FINANCIAL INFORMATION |                                                                                               |                                                                                         |  |         
|                             
|                             
|                             
|                             
|                              | Item 1. Financial Statements                                                                  |                                                                                         |  |          |   
|                             
|                             
|                             
|                             
|                              |                                                                                               | Consolidated Balance Sheets as of June 30, 2001
and December 31, 2000                   |  |          | 3  | 
|                             
|                             
|                             
|                             
|                              |                                                                                               | Consolidated Statements of Operations for the
Three Months Ended June 30, 2001 and 2000 |  |          | 4  | 
|                             
|                             
|                             
|                             
|                              |                                                                                               | Consolidated Statements of Operations for the
Six Months Ended June 30, 2001 and 2000   |  |          | 5  | 
|                             
|                             
|                             
|                             
|                              |                                                                                               | Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2001 and 2000   |  |          | 6  | 
|                             
|                             
|                             
|                             
|                              |                                                                                               | Notes to Consolidated Financial Statements                                              |  |          | 7  | 
|                             
|                             
|                             
|                             
|                              | Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations |                                                                                         |  | 12       |   
|                             
|                             
|                             
|                             
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                         |  | 19       |   
|                             
|                             
|                             
|                             
|PART II. OTHER INFORMATION    |                                                                                               |                                                                                         |  |         
|                             
|                             
|                             
|                             
|                              | Item 2. Changes in Securities and Use of Proceeds                                             |                                                                                         |  | 21       |   
|                             
|                             
|                             
|                             
|                              | Item 4. Submission of Matters to a Vote of Security Holders                                   |                                                                                         |  | 21       |   
|                             
|                             
|                             
|                             
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                         |  | 22       |   
|                             
|                             
|                             
|                             
|                              |                                                                                               | Signatures                                                                              |  |          | 23 | 

2



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##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements




NEXTERA ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

|                                                                                                               |                                                                                                                                                                              |                                            |         |               |         |                       |         |         |         | 
|-------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------------- | ------- | --------------------- | ------- | ------- | ------- | 
|                                                                                                               |                                                                                                                                                                              |                                            |         | June 30, 2001 |         | December 31, 2000 (1)
|                                                                                                               |                                                                                                                                                                              |                                            |         |               |         |                      
|                                                                                                               |                                                                                                                                                                              |                                            |         | (unaudited)   |         |                       |         |        
|ASSETS                                                                                                         |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|CURRENT ASSETS:                                                                                                |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Cash and cash equivalents                                                                                                                                                    |                                            | $       | 1,042         |         |                       | $       | 4,322   |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Accounts receivable, net of allowance for
doubtful accounts of $4,219 at June 30, 2001
and $2,551 at December 31, 2000                                                       |                                            |         | 34,411        |         |                       |         | 36,890  |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Costs and estimated earnings in excess of billings                                                                                                                           |                                            |         | 788           |         |                       |         | 422     |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Due from affiliates                                                                                                                                                          |                                            |         | 775           |         |                       |         | 610     |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Due from officers                                                                                                                                                            |                                            |         |              |         |                       |         | 30      |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Prepaid expenses and other current assets                                                                                                                                    |                                            |         | 3,555         |         |                       |         | 7,153   |        
|                                                                                                               |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                               |                                                                                                                                                                              | Total current assets                       |         |               | 40,571  |                       |         |         | 49,427  | 
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Property and equipment, net                                                                                    |                                                                                                                                                                              |                                            | 13,993  |               |         |                       | 14,542  |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Intangible assets, net of accumulated amortization of $12,331
at June 30, 2001 and $9,417 at December 31, 2000 |                                                                                                                                                                              |                                            | 129,895 |               |         |                       | 159,459 |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Other assets                                                                                                   |                                                                                                                                                                              |                                            | 12,008  |               |         |                       | 10,674  |        
|                                                                                                               |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                               |                                                                                                                                                                              | Total assets                               |         | $             | 196,467 |                       |         | $       | 234,102 | 
|                                                                                                               |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                           |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Current liabilities:                                                                                           |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Accounts payable and accrued expenses                                                                                                                                        |                                            | $       | 21,533        |         |                       | $       | 18,140  |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Accrued restructuring costs, current portion                                                                                                                                 |                                            |         | 4,865         |         |                       |         | 4,093   |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Notes payable to bank                                                                                                                                                        |                                            |         |              |         |                       |         | 187     |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Deferred revenue                                                                                                                                                             |                                            |         | 1,749         |         |                       |         | 1,758   |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Senior credit facility                                                                                                                                                       |                                            |         | 44,972        |         |                       |         | 8,050   |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Debentures due to affiliates                                                                                                                                                 |                                            |         | 21,968        |         |                       |         | 2,503   |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Current portion of long-term debt and capital lease obligations                                                                                                              |                                            |         | 2,776         |         |                       |         | 3,222   |        
|                                                                                                               |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                               |                                                                                                                                                                              | Total current liabilities                  |         |               | 97,863  |                       |         |         | 37,953  | 
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Long-term debt and capital lease obligations                                                                   |                                                                                                                                                                              |                                            | 1,255   |               |         |                       | 3,516   |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Senior credit facility                                                                                         |                                                                                                                                                                              |                                            |        |               |         |                       | 37,972  |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Debentures due to affiliates                                                                                   |                                                                                                                                                                              |                                            |        |               |         |                       | 10,980  |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Accrued restructuring costs, net of current portion                                                            |                                                                                                                                                                              |                                            | 4,500   |               |         |                       | 377     |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Other long-term liabilities                                                                                    |                                                                                                                                                                              |                                            | 1,668   |               |         |                       | 1,327   |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Stockholders equity:                                                                                          |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Preferred Stock, $0.001 par value, 10,000,000 shares 600,000 authorized
shares designated Series A Preferred Stock, 210,000 Series A Preferred
shares issued and outstanding |                                            |         | 22,155        |         |                       |         | 21,098  |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Exchangeable shares, no par value, 2,500,000 shares authorized,
no shares issued and outstanding                                                                             |                                            |         |              |         |                       |         |        |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Class A Common Stock, $0.001 par value, 75,000,000 shares
authorized, 31,371,418 shares issued at June 30, 2001 and
December 31, 2000                                        |                                            |         | 31            |         |                       |         | 31      |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Class B Common Stock, $0.001 par value, 4,300,000 shares
authorized, 3,873,930 shares issued and outstanding at June 30, 2001
and December 31, 2000                          |                                            |         | 4             |         |                       |         | 4       |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Additional paid-in capital                                                                                                                                                   |                                            |         | 163,202       |         |                       |         | 163,263 |        
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Treasury Stock, at cost, 544,400 shares Class A Common
Stock at June 30, 2001 and 301,400 at December 31, 2000                                                               |                                            |         | (1,270        | )       |                       |         | (947    | )      
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Retained earnings (deficit)                                                                                                                                                  |                                            |         | (92,243       | )       |                       |         | (41,077 | )      
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Accumulated other comprehensive income (loss)                                                                                                                                |                                            |         | (698          | )       |                       |         | (395    | )      
|                                                                                                               |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                               |                                                                                                                                                                              | Total stockholders equity                 |         |               | 91,181  |                       |         |         | 141,977 | 
|                                                                                                               |                                                                                                                                                                              |                                            |         |               |         |                       |         |        
|                                                                                                               |                                                                                                                                                                              | Total liabilities and stockholders equity |         | $             | 196,467 |                       |         | $       | 234,102 | 
|                                                                                                               |                                                                                                                                                                              |                                            |         |               |         |                       |         |        



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|(1) |  | Derived from audited financial statements as of December 31, 2000. See
Notes to Consolidated Financial Statements
|--- |  | -----------------------------------------------------------------------------------------------------------------

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##### Table of Contents






NEXTERA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts; unaudited)

|                                                    |                                   |   |               |         |               |   |        |        |  
|--------------------------------------------------- | --------------------------------- | - | ------------- | ------- | ------------- | - | ------ | ------ | -
|                                                    |                                   |   | Three Months  |         | Three Months 
|                                                    |                                   |   | Ended         |         | Ended        
|                                                    |                                   |   | June 30, 2001 |         | June 30, 2000
|                                                    |                                   |   |               |         |              
|Net revenues                                        |                                   | $ | 33,024        |         |               | $ | 44,040 |       
|                                                   
|                                                   
|                                                   
|                                                   
|Cost of revenues                                    |                                   |   | 19,625        |         |               |   | 24,992 |       
|                                                    |                                   |   |               |         |               |   |        |       
|                                                    | Gross profit                      |   |               | 13,399  |               |   |        | 19,048 |  
|                                                   
|                                                   
|                                                   
|                                                   
|Selling, general and administrative expenses        |                                   |   | 10,861        |         |               |   | 14,240 |       
|                                                   
|                                                   
|                                                   
|                                                   
|Amortization expense                                |                                   |   | 1,361         |         |               |   | 1,365  |       
|                                                   
|                                                   
|                                                   
|                                                   
|Goodwill impairment                                 |                                   |   | 26,650        |         |               |   |       |       
|                                                   
|                                                   
|                                                   
|                                                   
|Special charges                                     |                                   |   | 8,045         |         |               |   | 1,870  |       
|                                                    |                                   |   |               |         |               |   |        |       
|                                                    | Income (loss) from operations     |   |               | (33,518 | )             |   |        | 1,573  |  
|                                                   
|                                                   
|                                                   
|                                                   
|Interest expense, net                               |                                   |   | (2,550        | )       |               |   | (1,828 | )     
|                                                   
|                                                   
|                                                   
|                                                   
|Other Expense                                       |                                   |   | (551          | )       |               |   |       |       
|                                                    |                                   |   |               |         |               |   |        |       
|                                                    | Income (loss) before income taxes |   |               | (36,619 | )             |   |        | (255   | )
|                                                   
|                                                   
|                                                   
|                                                   
|Provision (Benefit) for income taxes                |                                   |   | 361           |         |               |   | (110   | )     
|                                                    |                                   |   |               |         |               |   |        |       
|                                                    | Net income (loss)                 |   |               | (36,980 | )             |   |        | (145   | )
|                                                    |                                   |   |               |         |               |   |        |       
|Preferred Stock dividends                           |                                   |   | (539          | )       |               |   |       |       
|                                                    |                                   |   |               |         |               |   |        |       
|Net income (loss) applicable to common stockholders |                                   |   | (37,519       | )       |               |   | (145   | )     
|                                                    |                                   |   |               |         |               |   |        |       
|Net income (loss) per common share, basic           |                                   |   | ($1.08        | )       |               | $ | 0.00   |       
|                                                    |                                   |   |               |         |               |   |        |       
|Net income (loss) per common share, diluted         |                                   |   | ($1.08        | )       |               | $ | 0.00   |       
|                                                    |                                   |   |               |         |               |   |        |       
|Weighted average common shares outstanding, basic   |                                   |   | 34,704        |         |               |   | 35,118 |       
|                                                    |                                   |   |               |         |               |   |        |       
|Weighted average common shares outstanding, diluted |                                   |   | 34,704        |         |               |   | 35,118 |       
|                                                    |                                   |   |               |         |               |   |        |       

See Notes to Consolidated Financial Statements

4



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##### Table of Contents



NEXTERA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts; unaudited)

|                                                    |                                   |   |               |         |               |   |        |        | 
|--------------------------------------------------- | --------------------------------- | - | ------------- | ------- | ------------- | - | ------ | ------ | 
|                                                    |                                   |   | Six Months    |         | Six Months   
|                                                    |                                   |   | Ended         |         | Ended        
|                                                    |                                   |   | June 30, 2001 |         | June 30, 2000
|                                                    |                                   |   |               |         |              
|Net revenues                                        |                                   | $ | 67,262        |         |               | $ | 91,002 |       
|                                                   
|                                                   
|                                                   
|                                                   
|Cost of revenues                                    |                                   |   | 43,760        |         |               |   | 51,208 |       
|                                                    |                                   |   |               |         |               |   |        |       
|                                                    | Gross profit                      |   |               | 23,502  |               |   |        | 39,794 | 
|                                                   
|                                                   
|                                                   
|                                                   
|Selling, general and administrative expenses        |                                   |   | 25,894        |         |               |   | 27,628 |       
|                                                   
|                                                   
|                                                   
|                                                   
|Amortization expense                                |                                   |   | 2,719         |         |               |   | 2,717  |       
|                                                   
|                                                   
|                                                   
|                                                   
|Goodwill Impairment                                 |                                   |   | 26,650        |         |               |   |       |       
|                                                   
|                                                   
|                                                   
|                                                   
|Special charges                                     |                                   |   | 13,454        |         |               |   | 1,870  |       
|                                                    |                                   |   |               |         |               |   |        |       
|                                                    | Income (loss) from operations     |   |               | (45,215 | )             |   |        | 7,579  | 
|                                                   
|                                                   
|                                                   
|                                                   
|Interest expense, net                               |                                   |   | (4,313        | )       |               |   | (3,528 | )     
|                                                   
|                                                   
|                                                   
|                                                   
|Other expense                                       |                                   |   | (1,196        | )       |               |   |       |       
|                                                    |                                   |   |               |         |               |   |        |       
|                                                    | Income (loss) before income taxes |   |               | (50,724 | )             |   |        | 4,051  | 
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for income taxes                          |                                   |   | 442           |         |               |   | 1,711  |       
|                                                    |                                   |   |               |         |               |   |        |       
|                                                    | Net income (loss)                 |   |               | (51,166 | )             |   | $      | 2,340  | 
|                                                   
|                                                   
|                                                   
|                                                   
|Preferred Stock dividends                           |                                   |   | (1,057        | )       |               |   |       |       
|                                                    |                                   |   |               |         |               |   |        |       
|Net Income (loss) applicable to common stockholders |                                   |   | (52,223       | )       |               | $ | 2,340  |       
|                                                    |                                   |   |               |         |               |   |        |       
|Net income (loss) per common share, basic           |                                   |   | ($1.50        | )       |               | $ | 0.07   |       
|                                                    |                                   |   |               |         |               |   |        |       
|Net income (loss) per common share, diluted         |                                   |   | ($1.50        | )       |               | $ | 0.07   |       
|                                                    |                                   |   |               |         |               |   |        |       
|Weighted average common shares outstanding, basic   |                                   |   | 34,789        |         |               |   | 35,137 |       
|                                                    |                                   |   |               |         |               |   |        |       
|Weighted average common shares outstanding, diluted |                                   |   | 34,789        |         |               |   | 35,913 |       
|                                                    |                                   |   |               |         |               |   |        |       

See Notes to Consolidated Financial Statements

5



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##### Table of Contents






NEXTERA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |               |       |         |         |  
|------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------------- | ------------------------------------- | ------ | ------------- | ------ | ------------- | ----- | ------- | ------- | -
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        | Six Months    |        | Six Months   
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        | Ended         |        | Ended        
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        | June 30, 2001 |        | June 30, 2000
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|Cash flows from operating activities: |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|                                     
|                                     
|                                     
|                                     
|                                      | Net income (loss)                                                                                  |                                                                                   |                                                    | ($51,166                              | )      |               | $      | 2,340         |      
|                                     
|                                     
|                                     
|                                     
|                                      | Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: |                                                                                   |                                                    |                                       |        |               |        |               |      
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    | Depreciation and amortization                                                     |                                                    |                                       | 5,356  |               |        |               | 4,796 |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    | Goodwill write-off                                                                |                                                    |                                       | 26,650 |               |        |               |      |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    | Provision for bad debts                                                           |                                                    |                                       | 1,566  |               |        |               |      |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    | Non-cash charges, other                                                           |                                                    |                                       | 2,324  |               |        |               |      |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    | Non-cash compensation charges                                                     |                                                    |                                       | 1,070  |               |        |               |      |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    | Change in operating assets and liabilities, net of
effect of acquired businesses: |                                                    |                                       |        |               |        |               |       |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    |                                                                                   | Accounts receivable                                |                                       |        | 913           |        |               |       | (15,867 | )      
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    |                                                                                   | Due from affiliate                                 |                                       |        | (165          | )      |               |       | 103     |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    |                                                                                   | Due to affiliate                                   |                                       |        |              |        |               |       | (8      | )      
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    |                                                                                   | Prepaid expenses and other current assets          |                                       |        | 3,100         |        |               |       | (3,452  | )      
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    |                                                                                   | Accounts payable and accrued expenses              |                                       |        | 6,596         |        |               |       | (1,946  | )      
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    |                                                                                   | Costs and estimated earnings in excess of billings |                                       |        | (366          | )      |               |       | 4,227   |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    |                                                                                   | Deferred revenue                                   |                                       |        | (9            | )      |               |       | (485    | )      
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                                    |                                                                                   | Other                                              |                                       |        | 341           |        |               |       | 379     |        
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|                                      |                                                                                                    |                                                                                   |                                                    | Net cash used in operating activities |        |               | (3,790 | )             |       |         | (9,913  | )
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|Cash flows from investing activities: |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|                                     
|                                     
|                                     
|                                     
|                                      | Purchase of property and equipment                                                                 |                                                                                   |                                                    | (2,673                                | )      |               |        | (3,189        | )    
|                                     
|                                     
|                                     
|                                     
|                                      | Acquisition of businesses, net of cash acquired                                                    |                                                                                   |                                                    |                                      |        |               |        | (8,264        | )    
|                                     
|                                     
|                                     
|                                     
|                                      | Other investments                                                                                  |                                                                                   |                                                    |                                      |        |               |        | (415          | )    
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|                                      |                                                                                                    |                                                                                   |                                                    | Net cash used in investing activities |        |               | (2,673 | )             |       |         | (11,868 | )
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|Cash flows from financing activities: |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|                                     
|                                     
|                                     
|                                     
|                                      | Proceeds from issuance of Class A and Class B Common Stock                                         |                                                                                   |                                                    |                                      |        |               |        | 624           |      
|                                     
|                                     
|                                     
|                                     
|                                      | Due from officers                                                                                  |                                                                                   |                                                    | 30                                    |        |               |        |              |      
|                                     
|                                     
|                                     
|                                     
|                                      | Borrowings (repayments) under senior credit facility                                               |                                                                                   |                                                    | (1,050                                | )      |               |        | 23,814        |      
|                                     
|                                     
|                                     
|                                     
|                                      | Proceeds from debentures due to affiliates                                                         |                                                                                   |                                                    | 7,500                                 |        |               |        |              |      
|                                     
|                                     
|                                     
|                                     
|                                      | Repurchases of Class A Common Stock                                                                |                                                                                   |                                                    | (323                                  | )      |               |        | (821          | )    
|                                     
|                                     
|                                     
|                                     
|                                      | Repayments of long-term debt and capital lease obligations                                         |                                                                                   |                                                    | (2,707                                | )      |               |        | (631          | )    
|                                     
|                                     
|                                     
|                                     
|                                      | Other                                                                                              |                                                                                   |                                                    | (294                                  | )      |               |        |              |      
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|                                      | Net cash provided by financing activities                                                          |                                                                                   |                                                    | 3,156                                 |        |               |        | 22,986        |      
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|                                      | Effects of exchange rates on cash and cash equivalents                                             |                                                                                   |                                                    | 27                                    |        |               |        | (236          | )    
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|                                      | Net increase (decrease) in cash and cash equivalents                                               |                                                                                   |                                                    | (3,280                                | )      |               |        | 969           |      
|                                     
|                                     
|                                     
|                                     
|                                      | Cash and cash equivalents at beginning of period                                                   |                                                                                   |                                                    | 4,322                                 |        |               |        | 7,011         |      
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              
|                                      | Cash and cash equivalents at end of period                                                         |                                                                                   | $                                                  | 1,042                                 |        |               | $      | 7,980         |      
|                                      |                                                                                                    |                                                                                   |                                                    |                                       |        |               |        |              

See Notes to Consolidated Financial Statements

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NEXTERA ENTERPRISES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

The accompanying financial statements of Nextera Enterprises, Inc.
(Nextera or the Company) have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the three and six-month periods ended June 30, 2001 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2001.

The balance sheet as of December 31, 2000 has been derived from the
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

These financial statements should be read in conjunction with the
financial statements and notes thereto, together with managements discussion
and analysis of financial condition and results of operations, contained in the
Companys Annual Report on Form 10-K filed by the Company with the Securities
and Exchange Commission on April 17, 2001.

Acquisitions

The Company has used the purchase method of accounting for all
acquisitions. Operating results of acquired companies have been included in the
Companys results of operations only from the date of each respective
acquisition.

2000

Effective January 1, 2000, the Company acquired substantially all of the
assets and certain liabilities of Cambridge Economics, Inc. (Cambridge
Economics), a Massachusetts-based consulting firm that provides strategic,
economic and business transformation and other services to a diverse group of
domestic and international clients. Cambridge Economics was acquired for $8.4
million of cash and a $2.1 million promissory note due January 2002.

Note 2. Earnings (Loss) per Share

Basic net income (loss) per share (Basic EPS) is computed by dividing
net income applicable to common stockholders, by the weighted average number of
common shares outstanding. Diluted net income (loss) per common share
(Diluted EPS) is computed by dividing net income applicable to common
stockholders, by the weighted average number of common shares and dilutive
common share equivalents then outstanding.

Basic and diluted earnings (loss) per share were calculated as follows:

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(In thousands, except per share amounts; unaudited)

|                                                     |  |                    |         |                  |  |               |        |               |  |   |         |   |  |   |        | 
|---------------------------------------------------- |  | ------------------ | ------- | ---------------- |  | ------------- | ------ | ------------- |  | - | ------- | - |  | - | ------ | 
|                                                     |  | Three Months Ended |         | Six Months Ended
|                                                     |  |                    |         |                 
|                                                     |  | June 30, 2001      |         | June 30, 2000    |  | June 30, 2001 |        | June 30, 2000
|                                                     |  |                    |         |                  |  |               |        |              
|Net income (loss)                                    |  | $                  | (36,980 | )                |  | $             | (145   | )             |  | $ | (51,166 | ) |  | $ | 2,340  | 
|                                                    
|                                                    
|                                                    
|                                                    
|Preferred Stock dividends                            |  |                    | (539    | )                |  |               |       |               |  |   | (1,057  | ) |  |   |       | 
|                                                     |  |                    |         |                  |  |               |        |               |  |   |         |   |  |   |        | 
|Net Income (loss) applicable to common
stockholders  |  |                    | (37,519 | )                |  |               | (145   | )             |  |   | (52,223 | ) |  |   | 2,340  | 
|                                                    
|                                                    
|                                                    
|                                                    
|Weighted average common shares
outstanding  basic   |  |                    | 34,704  |                  |  |               | 35,118 |               |  |   | 34,789  |   |  |   | 35,137 | 
|                                                     |  |                    |         |                  |  |               |        |               |  |   |         |   |  |   |        | 
|Dilutive effect of options and warrants              |  |                    |        |                  |  |               |       |               |  |   |        |   |  |   | 776    | 
|                                                     |  |                    |         |                  |  |               |        |               |  |   |         |   |  |   |        | 
|Weighted average common shares
outstanding  diluted |  |                    | 34,704  |                  |  |               | 35,118 |               |  |   | 34,789  |   |  |   | 35,913 | 
|                                                     |  |                    |         |                  |  |               |        |               |  |   |         |   |  |   |        | 
|Basic net income (loss) per common share             |  | $                  | (1.08   | )                |  | $             | 0.00   |               |  | $ | (1.50   | ) |  | $ | 0.07   | 
|                                                     |  |                    |         |                  |  |               |        |               |  |   |         |   |  |   |        | 
|Diluted net income (loss) per common share           |  | $                  | (1.08   | )                |  | $             | 0.00   |               |  | $ | (1.50   | ) |  | $ | 0.07   | 
|                                                     |  |                    |         |                  |  |               |        |               |  |   |         |   |  |   |        | 

Note 3. Comprehensive Income (Loss)

Comprehensive income combines net income (loss) and other comprehensive
items, which represents certain amounts that are reported as components of
stockholders equity in the accompanying balance sheet, including foreign
currency translation adjustments and unrealized gains and losses on
available-for-sale investments, net of taxes and reclassification adjustments.
During the second quarter of 2001 and 2000, the Companys comprehensive loss
totaled $36.8 million and $0.3 million, respectively. For the first six
months of 2000 and 1999, the Companys comprehensive loss totaled $51.5 million
and $2.1 million, respectively.

Note 4. Senior Credit Facility

Effective March 30, 2001, the Senior Credit Facility was amended to waive
compliance with certain covenants through January 2002. In connection with this
waiver, the Company agreed to permanently reduce the borrowings outstanding
under the facility by $8.05 million between April 2001 and December 31, 2001.
Additionally, no further borrowings or Letters of Credit may be drawn or issued
under the facility. Borrowings under the amended facility will bear interest at
the lenders base rate plus 3.50%, with payment of 2% of this rate deferred
until January 2, 2002 and waived if the facility is fully repaid by December
15, 2001. The waiver requires the Company to pay a fee to the Senior Lenders of
$0.9 million and to issue the Senior Lenders warrants to purchase 1,418,351
shares of the Companys Class A Common Stock at an exercise price of $0.86 per
share, exercisable at the Senior Lenders sole discretion at any time prior to
18 months after payment in full of all of the Companys obligations due under
the amended Senior Credit Facility. The Company also agreed that upon the sale
or other disposition (or any series of sales or dispositions) by the Company of
any of the Companys assets with gross proceeds, in the aggregate, in excess of
$10,000,000, the Senior Lenders can elect in their sole discretion to require
the Company to redeem the warrants for a $500,000 cash payment by the Company
(except to the extent prohibited by a non-waiveable applicable law or
regulation). In addition, the Company has the right to call the warrants for

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a cash payment of $750,000, which payment may only be made from new financing
sources. Additionally, an affiliate of Knowledge Universe, an entity that
indirectly controls Nextera, guaranteed $2.5 million of the Companys
obligations under the Senior Credit Facility. This affiliate was granted a
security interest and lien in all of the Companys assets, junior and
subordinated to the security interest and lien of the Senior Lenders. Under the
provisions of the amendment, on January 15, 2002 the Company will be required
to deliver cash collateral for all outstanding letters of credit. The amended
Senior Credit Facility contains covenants related to the maintenance of
financial ratios, operating restrictions, partial payment of excess
consolidated EBITA to the lenders, and restrictions on the payment of dividends
and disposition of assets. The revised covenants were based on the Companys
operating plan for 2001. The Company was in compliance with its debt covenants
as of June 30, 2001. However, with the continued declining demand for
technology and human capital services, coupled with the escalation of the
financial covenant criteria and amount of the principal debt payments required
in future months, the Company believes it is likely that the Company will be
unable to comply with the financial covenants and debt repayment schedule under
the terms of the fourth amendment to the Senior Credit Facility without
significant additional accommodations from the Senior Lenders. The Company is
currently reviewing the Companys business plan with its financial advisors and
the Senior Lenders in order to determine what accommodations will be needed and
to evaluate the Companys ability to enhance liquidity and generate cash to
meet working capital and debt service requirements. The debt service
requirements are approximately $7.0 million for the remainder of 2001.

Note 5. Goodwill Impairment

In connection with the recurring losses and headcount reductions in the
Companys Technology Solutions Group, the Company evaluated the value of the
goodwill associated with the business unit. Based on the estimated fair value
of the Technology Solutions Group, goodwill was reduced by approximately $26.2
million in the quarter ending June 30, 2001. The fair value of the Technology
Solutions Group was based on estimated future undiscounted cash flows to be
generated by the business unit, as well as a review of comparable market prices
of similar businesses. Additionally, goodwill was further reduced in the
second quarter by $0.5 million due to the closure of specific offices.

Note 6. Special charges

During the quarter ended March 31, 2001, the Company approved actions to
re-align and re-size the Companys cost structure, primarily within the
Technology Solutions Group, as a result of softening market conditions and
reduced demand for technological services. As a result, the Company recorded
special charges totaling $5.4 million, consisting of $1.6 million for
severance, $0.6 million for the termination of certain Company initiatives,
$0.8 million related to the costs of exiting or reducing certain leased
premises, and $2.4 million related to certain employee incentives. The
headcount reductions included 48 consultants and 7 administrative personnel.

During the quarter ended June 30, 2001, the Company recorded special
charges to re-align and resize the Companys cost structure. As a result, the
Company recorded charges totaling $8.0 million, consisting of a $1.8 million
severance charge associated with the second quarters headcount

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reduction of 60 professional and support personnel, primarily in the Technology
Solutions Group, in order to re-align the Companys cost structure with demand
for services; a $5.1 million charge to provide for the expected costs of
exiting or reducing certain leased premises and an employee incentive-related
expense of $1.1 million. The Company expects to record additional employee
incentive expenses totaling $0.8 million during the remainder of 2001.

Also in July 2001, an additional charge of approximately $0.6 million was
incurred in connection with severance associated with additional headcount
reductions of 33 consultants and 5 administrative personnel.

As of June 30, 2001, cash outlays for restructuring actions during the six
months ended June 30, 2001 were $7.4 million. An additional $2.9 million cash
outlay is expected during the remainder of 2001, and the remaining cash outlay
of approximately $4.5 million, primarily related to real estate rental
obligations, is expected to occur over the next ten years.

The restructuring charges and their utilization as of June 30, 2001 are
summarized as follows (in thousands):

|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |   |        |   |  |   |       | 
|----------------------------------------------- |  | ------------ | ----- | ------- |  | ------- | ----- | -------- |  | ---- | ----- | -------- |  | --------------- | ------ | - |  | - | ------ | - |  | - | ----- | 
|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  | Utilized        |        |   |  |  
|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |  
|                                                |  | Balance at   |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |   |        |   |  |  
|                                                |  | December 31, |       | Q1 2001 |  | Q2 2001 |       |          |  |      |       |          |  | Balance at June
|                                                |  | 2000         |       | charge  |  | charge  |       | Non-Cash |  | Cash |       | 30, 2001
|                                                |  |              |       |         |  |         |       |          |  |      |       |         
|Severance                                       |  | $            | 1,301 |         |  | $       | 1,574 |          |  | $    | 1,834 |          |  |                 |       |   |  | $ | (2,957 | ) |  | $ | 1,752 | 
|                                               
|                                               
|                                               
|                                               
|Facilities                                      |  |              | 1,056 |         |  |         | 97    |          |  |      | 4,537 |          |  |                 |       |   |  |   | (1,260 | ) |  |   | 4,430 | 
|                                               
|                                               
|                                               
|                                               
|Employee Special
Incentives                     |  |              | 1,736 |         |  |         | 2,378 |          |  |      | 1,090 |          |  |                 | (1,070 | ) |  |   | (2,544 | ) |  |   | 1,590 | 
|                                               
|                                               
|                                               
|                                               
|Leasehold
improvement and
equipment
write-downs |  |              | 377   |         |  |         | 755   |          |  |      | 584   |          |  |                 | (123   | ) |  |   |       |   |  |   | 1,593 | 
|                                               
|                                               
|                                               
|                                               
|Other                                           |  |              |      |         |  |         | 605   |          |  |      |      |          |  |                 |       |   |  |   | (605   | ) |  |   |      | 
|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |   |        |   |  |   |       | 
|                                                |  | $            | 4,470 |         |  | $       | 5,409 |          |  | $    | 8,045 |          |  | $               | (1,193 | ) |  | $ | (7,366 | ) |  | $ | 9,365 | 
|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |   |        |   |  |   |       | 

Note 7. Other Expense

During the quarter ended June 30, 2001, the Company recorded Other Expense
of $0.6 million associated with the write down to fair market value of certain
available for sale investments. For the six months ended June 30, 2001, the
write down to fair market value of certain available for sale investments was
$1.2 million.

Note 8. Recent Accounting Pronouncement

In June 2001, the Financial Accounting Standards Board issued Statements
of Financial Accounting Standards No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning
after December 15, 2001. Under the new rules, goodwill will no longer be
amortized but will be subject to annual impairment tests in accordance with the
Statements. Other intangible assets will continue to be amortized over their
useful lives.

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The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
nonamortization provisions of the Statement is expected to result in an
increase in net income of $4.8 million ($0.14 per share) per year assuming no
tax provision or benefit. During 2002, the Company will perform the first of
the required impairment tests of goodwill and indefinite lived intangible
assets as of January 1, 2002 and has not yet determined what the effect of
these tests will be on the earnings and financial position of the Company.

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NEXTERA ENTERPRISES, INC.




Item 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The disclosure and analysis in this quarterly report contain forward-looking
statements. Forward-looking statements give our current expectations or
forecasts of future events. These statements can be identified by the fact that
they do not relate strictly to historic or current facts. They use words such
as anticipate, estimate, foresee, should,, expect, project,
intend, plan, believe, and other words and terms of similar meaning in
connection with any discussion of future operating or financial performance. In
particular, these forward-looking statements include statements relating to
future actions or the outcome of financial results. From time to time, we also
may provide oral or written forward-looking statements in other materials
released to the public. Any or all of the forward-looking statements in this
report and in any other public statements may turn out to be incorrect. They
can be affected by inaccurate assumptions or by known or unknown risks and
uncertainties. Consequently, no forward-looking statement can be guaranteed.
Actual results may vary materially.

Forward-looking statements are based on many factors that may be outside
our control, causing actual results to differ materially from those suggested.
These factors include, but are not limited to, those disclosed in the Companys
filings with the Securities and Exchange Commission, which include risks
associated with: our limited operating history; availability of credit and
capital resources; effects of economic uncertainty on client expenditures;
growth of the Internet; dependence on key personnel; attracting and retaining
qualified consultants; new business solicitation efforts; intense competition;
changes in technology; and the continued quotation of our Class A common stock
on the Nasdaq National Market System. New factors emerge from time to time, and
it is not possible for us to predict all these factors nor can we assess the
impact of these factors on our business or the extent to which any factor or
combination of factors may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and
uncertainties, you should not place undue reliance on forward-looking
statements as a prediction of actual results.

Overview

Nextera Enterprises is a distinctive consulting firm with deep expertise
in economics, business strategy, organizational structure, human capital and
technology. We understand how to leverage the intricate relationship of
knowledge, people and technology to drive corporate value, delivering powerful,
end-to-end solutions  from strategy through implementation. In our
highly-collaborative environment, our experienced, accomplished consultants
work closely with clients to develop and implement innovative, impactful
solutions for managing the complex network relationships companies have with
customers and employees. Through our CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
SOLUTIONS and our TALENT RELATIONSHIP/HUMAN CAPITAL MANAGEMENT (TR/HCM)
SOLUTIONS approaches we have the insights and capabilities needed to
strengthen anything and everything that touches our clients customers and
talent.

12



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Our approach integrates the deep competencies and industry experience of
our four central business groups:

LEXECON CONSULTING GROUP: Cutting-edge economic and financial analysis and
litigation support to board-level clientele on a myriad of complex business and
transactional issues. Lexecon consultants  comprising renowned economists,
academics, and Nobel laureates  provide unparalleled economic insights,
industry points-of-view and strategies.

STRATEGIC SERVICES GROUP: Provides clients with solutions to their most
complex corporate-level and business-unit strategy problems, developing
comprehensive frameworks that incorporates both external market perspectives
and internal organizational perspectives. Our approach couples deep expertise
in human capital strategies, channel and market strategies, pricing and
customer loyalty with on-the-ground management and operations experience.

SIBSON CONSULTING GROUP: The global leader in motivating and mobilizing
people and aligning their actions toward strategic goals, Sibson has been
providing human capital management services for more than 40 years. With a
client list that has included more than half of the Fortune 500, Sibson has a
powerful presence in key practice areas such as talent management, employee
performance and rewards, management performance and rewards, sales force
effectiveness and change management.

TECHNOLOGY SOLUTIONS GROUP: High value-added technology consulting that
emphasizes proven software packages in managing customers and talent, among
other applications. Our technology consultants are experts with proven track
records assembling, customizing and executing a wide range of software
solutions, as well as developing web-based applications and systems and
technical architecture design.

Nexteras integrated approach to relationship management blends aspects of
all of its core competencies:

ECONOMICS



| |  | Identifying the potential value and impact of relationship management
solutions on the business
|- |  | -----------------------------------------------------------------------------------------------
| 
| |  | Conducting pricing and cost structure analysis                                                 

STRATEGY



| |  | Developing effective corporate, business unit and channel strategies                 
|- |  | -------------------------------------------------------------------------------------
| 
| |  | Aligning relationship management structures and models with overall
business strategy

HUMAN CAPITAL



| |  | Developing programs that motivate and reward employees to maximize new
solutions                                                                       
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Aligning sales forces with incentive and structure strategies                                                                                          
| 
| |  | Creating appropriate behavior-driven employee communication and
leadership initiatives to ensure that new processes are adopted across
the organization

TECHNOLOGY



| |  | Defining appropriate systems specifications and strategies                                       
|- |  | -------------------------------------------------------------------------------------------------
| 
| |  | Integrating best-in-class package solutions into existing
organizational structures and processes
| 
| |  | Designing and supporting call centers                                                            

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The breadth of Nexteras practice portfolio also allows it to assist
clients across a broad spectrum of industries, while providing specific focus
and depth in financial services, insurance, utilities, professional services,
capital services, high technology, pharmaceuticals and hospitality.

In addition to the practice areas and service offerings noted above, Nextera
has made selective minority investments in independently managed companies that
it believes are well positioned to take advantage of opportunities created by
the connected economy. It has co-invested in these companies with other
well-known early-stage investors.

Series A Cumulative Convertible Preferred Stock

On December 14, 2000, the Company entered into a Note Conversion Agreement
with Knowledge Universe, Inc. (the Note Conversion Agreement). Under the terms
of the Note Conversion Agreement, Knowledge Universe, Inc. converted
$21,000,000 of debentures into 210,000 shares of $0.001 par value Series A
Cumulative Convertible Preferred Stock (Series A Preferred Stock). The Series A
Preferred Stock bears dividends at a 10% rate from issuance through June 30,
2001 and at a 7% rate thereafter. Such dividends are payable quarterly in
arrears in cash or, at the option of the Company, in additional nonassessable
shares of Series A Preferred Stock.

For the period through June 30, 2001, the Company could, at its option,
exchange the Series A Preferred Stock into a debenture (the Exchange Debenture)
with equivalent terms as those contained in the debentures exchanged for the
Series A Preferred Stock on December 14, 2000. Solely for purposes of
determining the principal amount of the Exchange Debenture, in the event of
such an exchange, the Series A Preferred Stock will be deemed to have accrued
dividends at a rate equal to 12%, retroactive to December 14, 2000.

On June 29, 2001, the Companys Board of Directors approved the exchange
of the Series A Preferred Stock to the Exchange Debenture subject to the
approval of the Lenders under the Senior Credit Facility. Such approval has
not yet been granted by the Lenders. Knowledge Universe, Inc. has agreed to
allow the Company to extend its right to exchange the Series A Preferred Stock
into the Exchange Debenture until ten (10) business days after the Companys
receipt of written approval from the Senior Lenders of such exchange. If
converted, Stockholders equity would decrease by $22,155,000 and Debentures due
to affiliates would increase by $22,389,000. The Debentures would accrue
interest at 10% and would be due on May 1, 2002. Principal and interest
amounts due under the Debentures would be subordinated to borrowings under the
Senior Credit Facility.

NASDAQ Listing

There are several requirements for the continued listing of the Companys
Class A Common Stock on the Nasdaq National Market including, but not limited
to, a minimum stock price of one dollar per share. On June 20, 2001, the
Company received notification from the Nasdaq Stock Market (Nasdaq) that the
Company had failed to maintain a minimum bid price of $1.00 for 30 consecutive
days and will be delisted from the Nasdaq National Market unless the Company
can comply with the minimum bid price requirement by September 18, 2001. If
Nasdaq, in its discretion, decides to delist the Class A Common Stock, the
Company would have the right to appeal this

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decision, however, there can be no assurances that such an appeal would be
successful. If a decision to delist the Companys Class A Common Stock is made,
the Company may apply for listing on the Nasdaq Smallcap Market, subject to
Nasdaqs approval. The Nasdaq Smallcap Market requires a minimum stock price of
one dollar per share, and there can be no assurance that the Company will be
able to meet this requirement. If not, the Companys Class A Common
Stock may trade only over-the-counter. Delisting from the Nasdaq National
Market could adversely affect the liquidity and price of the Class A Common
Stock and it could have a long-term impact on the Companys ability to raise
future capital.

COMPARISON OF THREE MONTHS ENDED JUNE 30, 2001 AND THREE MONTHS ENDED
JUNE 30, 2000

Net Revenues. Net revenues decreased $11.0 million, or 25%, to $33.0
million for the three months ended June 30, 2001 from $44.0 million for the
three months ended June 30, 2000. This increase was substantially attributable
to the decrease in technology services revenues which decreased $10.5 million.
Net revenues associated with human capital services also declined, however, the
amount of this decrease was primarily offset by an increase in revenues from
economic consulting services.

Gross Profit. Gross profit decreased to $13.4 million, or 30%, for the
three months ended June 30, 2001 from $19.0 million for the three months ended
June 30, 2000. Gross margin as a percentage of sales decreased to 40.6% for
the three months ended June 30, 2001 from 43.3% for the three months ended June
30, 2000. The decrease in gross margin was due to lower levels of utilization,
primarily in the technology and human capital service groups, as a result of
the continued weakened demand for such services. Contributing to the drop in
gross margin was increased compensation expense in the economic consulting
services group.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased 23.7% to $10.9 million for the three months
ended June 30, 2001 from $14.2 million for the three months ended June 30,
2000. The decrease is primarily due to lower travel and entertainment
expenses directly resulting from lower headcount, and reduced support staff
compensation expense. As a percentage of revenues, such expenses increased to
32.8% for the three months ended June 30, 2001 from 32.3% for the three months
ended June 30, 2000.

Interest Expense, Net. Interest expense, net increased to $2.6 million
for the three months ended June 30, 2001 from $1.8 million for the three months
ended June 30, 2000. This increase was primarily due to fees associated with
the March 30, 2001 amendment to the Senior Credit Facility.

Goodwill Impairment. During the three months ended June 30, 2001, the
Company recorded a $26.7 million goodwill impairment charge substantially
related to the Technology Solutions Group.

Special Charges. During the three months ended June 30, 2001, the Company
recorded special charges to re-align and re-size the Companys cost structure.
As a result, the Company recorded charges totaling $8.0 million, consisting of
a $1.8 million severance charge associated with the quarters headcount
reduction of 60 professional and support personnel, primarily in the Technology
Solutions Group, in order to re-align the Companys cost structure with demand
for services; a $5.1 million charge to provide for the

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expected costs of exiting or reducing certain leased premises and an employee
incentive-related expense of $1.1 million. The Company expects to record
additional employee incentive expenses totaling $0.8 million during the
remainder of 2001.

Also in July 2001, an additional charge of approximately $0.6 million was
incurred in connection with severance associated with additional headcount
reductions of 33 consultants and 5 administrative personnel.

During the three months ended June 30, 2000, the Company recorded a charge
of $1.9 million as a result of severance costs incurred in connection with
management changes at the Companys Interactive Technologies Services Group.

Other Expense. During the three months ended June 30, 2001, the Company
recorded Other Expense of $0.6 million associated with the write down to fair
market value of certain investments.

Income tax expense. No tax benefit was recorded during the three months
ended June 30, 2001 due to the potential inability of the Company to utilize
its net operating losses. The tax provision of $0.4 million for the three
months ended June 30, 2001 relates to foreign taxes. For the three months
ended June 30, 2000, the Company recorded an income tax benefit of $0.1
million, or 43.1% of pretax loss.

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2001 AND SIX MONTHS ENDED
JUNE 30, 2000

Net Revenues. Net revenues decreased 26.1% to $67.3 million for the six
months ended June 30, 2001 from $91.0 million for the six months ended June 30,
2000. This decrease was substantially attributable to the decrease in
Technology Solutions Group revenues which decreased $19.9 million. Net
revenues associated with human capital services also declined, however, were
partially offset from an increase in revenues from economic consulting
services.

Gross Profit. Gross profit decreased 40.9% to $23.5 million for the six
months ended June 30, 2001 from $39.8 million for the six months ended June 30,
2000. Gross margin as a percentage of sales decreased to 34.9% for the six
months ended June 30, 2001 from 43.7% for the six months ended June 30, 2000
due to a decline in utilization in the technology and human capital service
groups and increased compensation expense in the economic consulting services
group.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased 6.3% to $25.9 million for the six months
ended June 30, 2001 from $27.6 million for the six months ended June 30, 2000.
The decrease in expenses was primarily due to lower travel and entertainment
expenses and support staff compensation, both due to headcount reductions,
partially offset by increases in facility and bad debt expenses. As a
percentage of revenues, such expenses increased to 38.5% for the six months
ended June 30, 2001 from 30.4% for the six months ended June 30, 2000.

Interest Expense, Net. Interest expense, net increased to $4.3 million
for the six months ended June 30, 2001 from $3.5 million for the six months
ended June 30, 2000. This increase was primarily due to fees associated with
the March 30, 2001 amendment to the Senior Credit Facility.

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Goodwill Impairment. During the six months ended June 30, 2001, the
Company recorded a $26.7 million goodwill impairment charge substantially
related to the Technology Solutions Group.

Special Charges. During the six months ended June 30, 2001, the Company
recorded special charges to re-align and re-size the Companys cost structure.
As a result, the Company recorded charges totaling $13.4 million, consisting of
a $3.4 million severance charge associated with headcount reductions of 88
professional personnel and 27 support personnel, primarily in the Technology
Solutions Group, in order to re-align the Companys cost structure with demand
for services; a $0.6 million charge for the termination of certain Company
initiatives; a $5.9 million charge to provide for the expected costs of exiting
or reducing certain leased premises and an employee incentive-related expense
of $3.5 million. The Company expects to record additional employee incentive
expenses totaling $0.8 million during the remainder of 2001.

Also in July 2001, an additional charge of approximately $0.6 million was
incurred in connection with severance associated with additional headcount
reductions of 33 consultants and 5 administrative personnel.

As of June 30, 2001, cash outlays for restructuring actions during the six
months ended June 30, 2001 were $7.4 million. An additional $2.9 million cash
outlay is expected during the remainder of 2001, and the remaining cash outlays
of approximately $4.5 million, primarily related to real estate rental
obligations, are expected to occur over the next ten years.

The restructuring charges and their utilization as of June 30, 2001 are
summarized as follows (in thousands):

|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |   |        |   |  |   |       | 
|----------------------------------------------- |  | ------------ | ----- | ------- |  | ------- | ----- | -------- |  | ---- | ----- | -------- |  | --------------- | ------ | - |  | - | ------ | - |  | - | ----- | 
|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  | Utilized        |        |   |  |  
|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |  
|                                                |  | Balance at   |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |   |        |   |  |  
|                                                |  | December 31, |       | Q1 2001 |  | Q2 2001 |       |          |  |      |       |          |  | Balance at June
|                                                |  | 2000         |       | charge  |  | charge  |       | Non-Cash |  | Cash |       | 30, 2001
|                                                |  |              |       |         |  |         |       |          |  |      |       |         
|Severance                                       |  | $            | 1,301 |         |  | $       | 1,574 |          |  | $    | 1,834 |          |  |                 |       |   |  | $ | (2,957 | ) |  | $ | 1,752 | 
|                                               
|                                               
|                                               
|                                               
|Facilities                                      |  |              | 1,056 |         |  |         | 97    |          |  |      | 4,537 |          |  |                 |       |   |  |   | (1,260 | ) |  |   | 4,430 | 
|                                               
|                                               
|                                               
|                                               
|Employee Special
Incentives                     |  |              | 1,736 |         |  |         | 2,378 |          |  |      | 1,090 |          |  |                 | (1,070 | ) |  |   | (2,544 | ) |  |   | 1,590 | 
|                                               
|                                               
|                                               
|                                               
|Leasehold
improvement and
equipment
write-downs |  |              | 377   |         |  |         | 755   |          |  |      | 584   |          |  |                 | (123   | ) |  |   |       |   |  |   | 1,593 | 
|                                               
|                                               
|                                               
|                                               
|Other                                           |  |              |      |         |  |         | 605   |          |  |      |      |          |  |                 |       |   |  |   | (605   | ) |  |   |      | 
|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |   |        |   |  |   |       | 
|                                                |  | $            | 4,470 |         |  | $       | 5,409 |          |  | $    | 8,045 |          |  | $               | (1,193 | ) |  | $ | (7,366 | ) |  | $ | 9,365 | 
|                                                |  |              |       |         |  |         |       |          |  |      |       |          |  |                 |        |   |  |   |        |   |  |   |       | 

During the six months ended June 30, 2000, the Company recorded special
charges of $1.9 million as a result of severance costs incurred in connection
with management changes at the Companys Interactive Technologies Services
Group.

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Other Expense. During the six months ended June 30, 2001, the Company
recorded Other Expense of $1.2 million associated with the write down to fair
market value of certain investments.

Income tax expense. No tax benefit was recorded during the six months
ended June 30, 2001 due to the potential inability of the Company to utilize
its net operating losses. The tax provision of $0.4 million for the six months
ended June 30, 2001 relates to foreign taxes. Income tax expense of $1.7
million, or 42.2% of pretax income, was recorded for the six months ended June
30, 2000. The provision varies from the statutory rate primarily due state
income taxes and the unfavorable impact of nondeductible goodwill amortization.

LIQUIDITY AND CAPITAL RESOURCES

Consolidated working capital deficit was $57.3 million on June 30, 2001,
compared with working capital of $11.5 million on December 31, 2000. Included
in working capital were cash and cash equivalents of $1.0 million and $4.3
million on June 30, 2001 and December 31, 2000, respectively. The Company has
engaged an investment banking firm to assist the Company in reviewing a range
of strategic alternatives to strengthen the balance sheet and to maximize the
value of assets.

Net cash used in operating activities was $3.8 million for the six months
ended June 30, 2001. The primary components of net cash used in operating
activities were a net loss of $51.2 million offset by non-cash charges of $37.1
million (including a goodwill impairment charge of $26.7 million) a $6.6
million increase in accounts payable, and a $3.1 million increase in prepaid
expenses and other current assets.

Net cash used in investing activities was $2.7 million for the six months
ended June 30, 2001 representing expenditures for furniture, equipment, and
leasehold improvements.

Net cash provided by financing activities was $3.2 million for the six
months ended June 30, 2001. The primary components of cash provided by
financing activities were borrowings under debentures issued to an affiliate of
Knowledge Universe of $7.5 million, partially offset by $2.7 million of
long-term debt and capital leases payments and principal repayments of $1.1
million under the Senior Credit Facility.

The Companys Senior Credit Facility, as amended on March 30, 2001,
matures on March 29, 2002. Additionally, $10.4 million of debentures due to
affiliates are due upon demand, although neither principal nor interest can be
paid until the lenders of the Senior Credit Facility permit such payments to be
made, and $11.5 million of debentures due to affiliates are due May 1, 2002.
Accordingly, both the Senior Credit Facility and debentures due to affiliates
have been classified as current.

As of June 30, 2001, total borrowings outstanding under the Senior Credit
Facility were $45.0 million. Effective March 30, 2001, the Senior Credit
Facility was amended to waive compliance with certain covenants through January
2002. In connection with this waiver, the Company agreed to permanently reduce
the borrowings outstanding under the facility by $8.05 million between April
2001 and December 31, 2001. Additionally, no further borrowings or Letters of
Credit may be drawn or issued under the facility. Borrowings under the amended
facility will bear interest at the lenders base

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rate plus 3.50%, with payment
of 2% of this rate deferred until January 2, 2002 and waived if the facility is
fully repaid by December 15, 2001. The waiver requires the Company to pay a fee
to the Senior Lenders of $0.9
million and to issue the Senior Lenders warrants to purchase 1,418,351 shares
of the Companys Class A Common Stock at an exercise price of $0.86 per share,
exercisable at the Senior Lenders sole discretion at any time prior to 18
months after payment in full of all of the Companys obligations due under the
amended Senior Credit Facility. The Company also agreed that upon the sale or
other disposition (or any series of sales or dispositions) by the Company of
any of the Companys assets with gross proceeds, in the aggregate, in excess of
$10,000,000, the Senior Lenders can elect in their sole discretion to require
the Company to redeem the warrants for a $500,000 cash payment by the Company
(except to the extent prohibited by a non-waiveable applicable law or
regulation). In addition, the Company has the right to call the warrants for a
cash payment of $750,000, which payment may only be made from new financing
sources. Additionally, an affiliate of Knowledge Universe guaranteed $2.5
million of our obligations under the Senior Credit Facility. This affiliate was
granted a security interest and lien in all of the Companys assets, junior and
subordinated to the security interest and lien of the Senior Lenders. Under the
provisions of the amendment, on January 15, 2002 the Company will be required
to deliver cash collateral for all outstanding letters of credit. The amended
Senior Credit Facility contains covenants related to the maintenance of
financial ratios, operating restrictions, partial payment of excess
consolidated EBITA to the lenders, and restrictions on the payment of dividends
and disposition of assets. The revised covenants were based on the Companys
operating plan for 2001. The Company was in compliance with these covenants at
June 30, 2001. However, with the continued declining demand for technology and
human capital services, coupled with the escalation of the financial covenant
criteria and amount of the principal debt payments required in future months,
the Company believes that it is likely that the Company will be unable to
comply with the financial covenants and debt repayment schedule under the terms
of the fourth amendment to the Senior Credit Facility without significant
additional accommodations from the Senior Lenders. The Company is currently
reviewing the Companys business plan with its financial advisors and the
Senior Lenders in order to determine what accommodations will be needed and to
evaluate the Companys ability to enhance liquidity and generate cash to meet
working capital and debt service requirements. The debt service requirements
are approximately $7.0 million for the remainder of 2001.




Item 3. Quantitative and Qualitative Disclosures About Market Risks

Interest Rate Risk

The Company is exposed to changes in interest rates primarily from our
Senior Credit Facility. We do not currently use interest rate derivative
instruments to manage exposure to interest rate changes. A hypothetical 100
basis point adverse move in interest rates along the interest rate yield curve
would not have a material adverse effect on interest sensitive financial
instruments at June 30, 2001.

Foreign Currency Risk

Currently, the majority of the Companys sales and expenses are
denominated in U.S. dollars and as a result we have not experienced significant
foreign exchange gains and losses to date. While the Company is

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conducting some transactions in foreign currencies, no significant foreign exchange gains
or losses are anticipated. The Company has not engaged in foreign currency
hedging activities to date.

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##### Table of Contents






PART II. Other Information




Item 2. Changes in Securities and Use of Proceeds

(a)  The Companys stockholders approved an amendment and restatement of
our Amended and Restated Certificate of Incorporation at our Annual Meeting on
July 12, 2001. The amendment and restatement that was approved by the
stockholders increased the authorized number of shares of Class A Common Stock
from 75,000,000 to 95,000,000 shares. The total number of authorized shares of
Class B Common Stock and Preferred Stock remained unchanged. The Third Amended
and Restated Certificate of Incorporation of Nextera Enterprises, Inc. was
filed in the Office of the Secretary of State of the State of Delaware on July
16, 2001.

The principal purposes of this amendment and restatement, among others,
were to enable additional shares of Class A Common Stock to be issued under the
Companys stock option plans, to authorize additional shares of Class A Common
Stock that will be available if the Board of Directors determines to raise
additional capital through the sale of securities, to acquire another company
or its business or its assets or to establish a strategic relationship with a
corporate partner. The amendment and restatement that was approved by the
stockholders will allow an additional 20,000,000 shares of Class A Common Stock
to be available for issuance by the Companys Board of Directors without any
further stockholder approval, although in connection with certain transactions
the Company may by required to obtain stockholder approval in accordance with
the requirements of the Nasdaq National Market if the Companys Class A Common
Stock is listed on the Nasdaq National Market at the time of such transactions.




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

On July 12, 2001, an annual meeting of the stockholders of Nextera was
held in Boston, Massachusetts. At the meeting, each of the directors that was
a member of the Board of Directors immediately prior to the Annual Meeting was
re-elected, except for Michael D. Rose who chose not to stand for re-election.
Karl L. Sussman was the sole new director elected to serve on the Board of
Directors. The matters voted upon and the votes cast at the annual meeting
were as follows:

|                      |  |           |            |                |  |  |           | 
|--------------------- |  | --------- | ---------- | -------------- |  |  | --------- | 
|Election of Directors |  | Votes For |            | Votes Withheld
|                      |  |           |            |               
|Roger Brossy          |  |           | 59,581,954 |                |  |  | 823,212   | 
|                     
|                     
|                     
|                     
|Gregory J. Clark      |  |           | 59,824,557 |                |  |  | 580,609   | 
|                     
|                     
|                     
|                     
|Ralph Finerman        |  |           | 59,824,007 |                |  |  | 581,159   | 
|                     
|                     
|                     
|                     
|Steven B. Fink        |  |           | 59,229,713 |                |  |  | 1,175,453 | 
|                     
|                     
|                     
|                     
|Keith D. Grinstein    |  |           | 59,824,457 |                |  |  | 580,709   | 
|                     
|                     
|                     
|                     
|Stanley E. Maron      |  |           | 59,441,562 |                |  |  | 963,604   | 
|                     
|                     
|                     
|                     
|Vincent C. Perro      |  |           | 59,413,838 |                |  |  | 991,328   | 
|                     
|                     
|                     
|                     
|Richard V. Sandler    |  |           | 59,822,199 |                |  |  | 582,967   | 
|                     
|                     
|                     
|                     
|Richard L. Sandor     |  |           | 59,823,257 |                |  |  | 581,909   | 
|                     
|                     
|                     
|                     
|David Schneider       |  |           | 59,443,268 |                |  |  | 961,898   | 
|                     
|                     
|                     
|                     
|Karl L. Sussman       |  |           | 60,053,380 |                |  |  | 351,786   | 

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|                                                                                                                                                                                                                                                                                                                            |  |     |            |             |  |               |           |        |  |  |   | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- | ---------- | ----------- |  | ------------- | --------- | ------ |  |  | - | 
|                                                                                                                                                                                                                                                                                                                            |  |     |            |             |  | Votes Against |           |        |  | 
|                                                                                                                                                                                                                                                                                                                            |  |     |            |             |  | and           |           | Broker
|Other Matters Voted Upon                                                                                                                                                                                                                                                                                                    |  | For |            | Abstentions |  | Non-Votes    
|                                                                                                                                                                                                                                                                                                                            |  |     |            |             |  |              
|1. Approval of an amendment
and restatement of the
Amended and Restated
Certificate of Incorporation
increasing the number of
authorized shares of Class A
Common Stock from 75,000,000
to 95,000,000                                                                                                                       |  |     | 59,670,162 |             |  |               | 704,654   |        |  |  | 0 | 
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|2. Approval of an amendment
and restatement of the
Amended and Restated 1998
Equity Participation Plan of
Nextera Enterprises, Inc. to
increase the total number of
shares authorized for
issuance thereunder from
12,000,000 to 19,000,000 and
to increase the maximum
annual award limit from
850,000 to 3,000,000 shares |  |     | 49,900,299 |             |  |               | 1,276,685 |        |  |  | 0 | 
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|3. Approval of the Nextera
Enterprises, Inc. Employee
Stock Purchase Plan                                                                                                                                                                                                                                                   |  |     | 50,746,291 |             |  |               | 433,132   |        |  |  | 0 | 
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|4. Ratification of the
selection of Ernst & Young
LLP as the independent
auditors for the fiscal year
ending December 31, 2001                                                                                                                                                                                              |  |     | 60,270,612 |             |  |               | 98,639    |        |  |  | 0 | 




Item 6 Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------

|    |  |                                                                                  
|--- |  | ---------------------------------------------------------------------------------
|4.1 |  | Letter Agreement between Knowledge
Universe, Inc. and Nextera dated June 29, 2001



| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------

No reports on Form 8-K were filed by Nextera during the three months ended
June 30, 2001.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| | NEXTERA ENTERPRISES, INC.
(Registrant)
| | --------------------------------------



|Date: August 14, 2001 | By: /s/   David Schneider
|--------------------- | -------------------------

| | David Schneider
President and Chief Executive Officer
(Principal Executive Officer)
| | -----------------------------------------------------------------------------------



| | NEXTERA ENTERPRISES, INC.
(Registrant)
| | --------------------------------------



|Date: August 14, 2001 | By: /s/   Michael P. Muldowney
        
Michael P. Muldowney
Chief Financial Officer
(Principal Financial and Accounting
Officer)
|--------------------- | ---------------------------------------------------------------------------------------------------------------------------------

23