<PAGE>

                     U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   FORM 10-KSB

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934

      For the fiscal year ended December 31, 2000.

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the transition period from _________ to __________

      Commission file number: 000-27821

--------------------------------------------------------------------------------
                                2-INFINITY, INC.
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      4828 LOOP CENTRAL DRIVE, SUITE 150 HOUSTON, TEXAS                 77081
      (Address of principal executive offices)                        (Zip Code)

      Issuer's telephone number, including area code: (713) 838-8853

      Securities registered under Section 12(b) of the Exchange Act:

                                      None.

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

                           COMMON STOCK, NO PAR VALUE
                                (Title of class)

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

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

      Issuer's revenues for the fiscal year ended December 31, 2000 were
$641,356.

      As of March 31, 2001 the aggregate market value of the registrant's common
stock (based on the closing sales price for the common stock as reported on the
OTC Bulletin Board on such date) held by non-affiliates of the registrant was
approximately $2,155,000 (Aggregate market value has been estimated solely for
the purpose of this report. For the purpose of this report it has been assumed
that all officers and directors are affiliates of the registrant. The statements
made herein shall not be construed as an admission for the purposes of
determining the affiliate status of any person.) As of March 31, 2001, the
registrant had 138,543,091 shares of common stock issued and outstanding.

      Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

      Documents incorporated by reference:
                                     None.

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                                TABLE OF CONTENTS
<TABLE>
<S>                                                                         <C>
PART I..........................................................................
    ITEM 1.  DESCRIPTION OF BUSINESS...........................................1
    ITEM 2.  DESCRIPTION OF PROPERTY..........................................10
    ITEM 3.  LEGAL PROCEEDINGS................................................10
    ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF
             SECURITY HOLDERS.................................................11

PART II.........................................................................
    ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED
             STOCKHOLDER MATTERS..............................................11
    ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS
             OR PLAN OF OPERATION.............................................13
    ITEM 7.  FINANCIAL STATEMENTS ...........................................F-1
    ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
             ON ACCOUNTING AND FINANCIAL DISCLOSURE...........................17

PART III........................................................................
    ITEM  9. DIRECTORS AND EXECUTIVE OFFICERS.................................17
    ITEM 10. EXECUTIVE COMPENSATION...........................................19
    ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
             OWNERS AND MANAGEMENT............................................22
    ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
             TRANSACTIONS.....................................................23
    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.................................25

SIGNATURES....................................................................30
</TABLE>

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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

FORWARD-LOOKING INFORMATION

      In accordance with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company notes that certain statements in this
Form 10-KSB and elsewhere which are forward-looking and which provide other than
historical information, involve risks and uncertainties that may impact the
Company's results of operations. These forward-looking statements include, among
others, statements concerning the Company's general business strategies,
financing decisions, and expectations for funding capital expenditures and
operations in the future. When used herein, the words "believe," "plan,"
"continue," "hope," "estimate," "project," "intend," "expect," and similar
expressions are intended to identify such forward-looking statements. Although
the Company believes the expectations reflected in such forward-looking
statements are based on reasonable assumptions, no statements contained in this
Form 10-KSB should be relied upon as predictions of future events. Such
statements are necessarily dependent on assumptions, data or methods that may be
incorrect or imprecise and may be incapable of being realized. The risks and
uncertainties inherent in these forward-looking statements could cause actual
results to differ materially from those expressed in or implied by these
statements.

      Important risk factors that could cause actual results to differ
materially from the expectations reflected in any forward-looking statement
herein include among other things: (1) the ability of the Company to quickly
penetrate the market with its current method of technology against larger,
well-financed competitors within the marketplace; (2) the ability of the Company
to generate revenues is substantially dependent upon continued growth in the use
of the Internet and the infrastructure for providing Internet access and
carrying Internet traffic; (3) the ability of the Company to attract and retain
key officers, knowledgeable sales and marketing personnel and highly trained
technical personnel; (4) the ability of the Company to minimize expenses and
exposures related to oil and gas properties in which other companies had control
over the manner in which operations were conducted on such properties, including
compliance with safety and environmental standards; (5) the ability of the
Company to obtain additional financing from public and private equity markets to
fund operations and future growth; (6) the ability of the Company to generate
revenues to cover operating losses and position the Company to achieve positive
cash flow; and (7)conversion of the outstanding shares of the Company's Series A
Preferred Stock, no par value (the "Series A Preferred Stock"), could have a
substantially dilutive effect on the interests of the current holders of our
common stock.

      Readers are cautioned not to place undue reliance on the forward-looking
statements contained herein, which speak only as of the date hereof. The
information contained in this Form 10-KSB is believed by the Company to be
accurate as of the date hereof. Changes may occur after that date, and the
Company will not update that


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information except as required by law in the normal course of its public
disclosure practices.

THE COMPANY OVERVIEW

      The Company was incorporated in the state of Colorado on July 14, 1995 to
engage in the acquisition and exploration of oil and gas properties. Since
inception (November 1995) through May 1999, 2-Infinity's sole business activity
was investment in interests in oil and gas exploration projects. The Company
incurred net losses of $8,446,189 and $356,468 for the years ended December 31,
1999 and 1998, respectively. Accordingly, 2-Infinity's management made a
strategic decision to diversify into the technology sector and eventually
dispose of its oil and gas assets. The Company today is an end-to-end provider
of managed voice, data, and networking solutions, which reported a loss for the
year 2000 of $7,590,045.

History and Evolution of Business

      On November 14, 1995, Lakota Energy, Inc. was formed for the purpose of
engaging in oil and gas exploration and operations. On November 6, 1996, Lakota
Energy was merged with and into Chancellor Trading Group, Inc. As part of the
merger agreement, Chancellor issued 9,187,500 shares of its common stock to the
shareholders of Lakota Energy in exchange for 4,593,750 shares of Lakota
Energy's common stock. An additional 118,000 shares of Chancellor's common stock
were issued to third parties who assisted in closing the transaction. Chancellor
was a publicly traded corporation and had no significant operations prior to the
merger with Lakota Energy. As a result of the merger, Chancellor's name changed
to Lakota Energy, Inc.

      Historically, the strategic plan of Lakota Energy was to participate in
oil and gas exploration projects that have been developed by other successful,
well-financed companies. Lakota Energy focused on projects primarily in Texas
and Louisiana, where its consultants had specific geological expertise. However,
as a result of continued losses from these ventures, Lakota Energy decided to
diversify into emerging areas of the technology sector.

      On May 28, 1999, Lakota Energy acquired all of the outstanding capital
stock of 2-Infinity.com, Inc., a Texas corporation ("2-Infinity-Texas"). As
consideration for the acquisition, Lakota Energy issued 3,000,000 shares of its
common stock to Majed M. Jalali, the sole shareholder of 2-Infinity-Texas. At
the time of the acquisition, 2-Infinity-Texas focused on providing digital
subscriber line services, more commonly referred to as DSL, to residential
multi-dwelling unit customers such as hotels and apartment complexes. The
acquisition of 2-Infinity-Texas reinforced Lakota Energy's desire to diversify
into the technology and Internet markets.

      On June 8, 1999, Lakota Energy acquired all of the outstanding capital
stock of Voice Design, Inc., a Texas corporation that later changed its name to
AirNexus, Inc.("AirNexus"). As consideration for the acquisition, Lakota Energy
issued 3,000,000


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<PAGE>

shares of its common stock and $60,000 cash to the three owners of AirNexus, two
of whom were Patrick Cody Morgan and his spouse. The acquisition of AirNexus, a
provider of LAN-based (local area network) business telephony solutions,
furthered the Company's business strategy to enter the technology sector.

      On June 9, 1999, Lakota Energy organized a wholly owned Texas corporation
named Lakota Oil and Gas, Inc. ("Lakota Oil"). Subsequently, on June 14, 1999,
Lakota Energy transferred its interest in two oil exploration projects, which
constituted all of Lakota Energy's oil and gas related assets at the time, to
Lakota Oil. The purpose of forming Lakota Oil was to organize Lakota Energy's
oil and gas related business into one operating subsidiary, separate and
distinct from the other operating subsidiaries, in order to more accurately
reflect our diversified operations.

      On August 4, 1999, Lakota Energy changed its name to Lakota Technologies,
Inc. to promote its new diversified strategy with both the oil and gas and
technology sectors.

      On January 18, 2000, the Company entered into an agreement with the
shareholders of AGM, Inc., a Nevada corporation ("AGM"), pursuant to which the
Company issued 2,200,000 shares of its common stock to acquire all the
outstanding capital stock of AGM. The Company acquired AGM in order to become a
reporting company under the Securities Exchange Act of 1934. As part of the
acquisition, the Company elected to have successor issuer status under Rule
12g-3 of that Act.

      On January 27, 2000, 2-Infinity-Texas and AirNexus merged, with
2-Infinity-Texas surviving the merger. The merger began the reformation of the
Company's business strategy to consolidate its DSL and LAN-based telephony
offerings into a cohesive service package. Following that merger, the Company
hired a new management team and built a direct sales force to market both its
DSL services and the LAN-based telephony solutions. As of March 23, 2001,
2-Infinity-Texas had approximately 50 business customers.

      On April 18, 2000, the Company approved a plan to dispose of all remaining
assets relating to the oil and gas exploration projects and, where necessary, to
plug and abandon all other non-producing wells that could not be sold.

      On May 8, 2000, the Company changed its name from Lakota Technologies,
Inc. to 2-Infinity.com, Inc. to further distinguish its emphasis on the
technology sector.

      On June 28, 2000, the Company acquired all of the outstanding common stock
of Maximum Return & Development, Inc. a Pennsylvania corporation ("Maximum
Return"), a network hardware and service provider. The acquisition of Maximum
Return provided the Company with an additional set of products and services to
offer its existing customers as well as a new base of enterprise customers. As
consideration for the acquisition, the Company issued 900,000 shares of its
common stock to the owners of Maximum Return, of which 200,000 shares were
placed in escrow. Under the terms of the escrow agreement, if Maximum Return's
net assets were not equal to or greater than $47,500 as


                                       3
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of May 31, 2000, the Company would be entitled to the return of the number of
escrowed shares equal to two multiplied by the difference between the net asset
amount and $50,000. On August 31, 2000, the Company made a claim for the return
of all of the escrowed shares because, based on the information developed to
date, Maximum Return's net assets as of May 31, 2000 were less than $47,500. The
previous owners of Maximum Return have submitted a timely response to our claim
and the escrowed shares will continue to be held by the escrow agent pending a
resolution of the issue.

      On August 31, 2000, the Company changed its name from 2-Infinity.com, Inc.
to 2-Infinity, Inc. in order to eliminate public assumptions that it employed an
internet-based business model such as that of an online retailer or e-commerce
exchange.

Evolution of Business Strategy

      Since early 2000, 2-Infinity has evolved into an end-to-end provider of
voice, data, and networking solutions. We believe that the proliferation of
innovative communication technologies, especially in the areas of voice-over-IP
(VoIP) telephony and broadband Internet access, will continue to increase demand
among commercial customers for managed services offerings that streamline costs
and increase productivity. We also believe that increased attention on service
and support quality will drive commercial customers to consolidate the business
outsourced to providers with a strong customer focus and high performance
levels.

      To serve the needs of our business customers for cost-effective, reliable,
and fully managed communications, we have developed a comprehensive suite of
voice and data solutions and a high quality support infrastructure through
taking the following steps:

o     Obtained CLEC license in the State of Texas to offer voice and data
      communication services, collocate equipment in central offices, and
      anticipate future regulatory changes.

o     Built out our Houston collocation facility with MCI Worldcom, providing
      secure and redundant Tier-1 connectivity to the Internet backbone.

o     Built out our Network Management Center, the central hub of our network
      monitoring and technical support activities.

o     Launched our business-grade DSL service through partnering with Rhythms
      NetConnections and IP Communications.

o     Developed our suite of managed services, including web hosting, e-mail,
      virtual private networking, firewall, desktop support, network management,
      and consulting. These services were made available to customers in
      February 2001.

o     Developed our local and long distance services in the Houston market
      through partnering with Mpower Communications. These services were made
      available to customers in February 2001.


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<PAGE>

      In the fourth quarter of 2000, 2-Infinity engaged in a restructuring plan.
The motivation for this plan was to become less dependent on external financing
in the face of changing market conditions. The plan's objectives are to reduce
expenses and increase sales effectiveness in the Houston market in order to
achieve positive operating cash flows. The preliminary results of this
restructuring plan at the end of 2000 were as follows:

o     Reduction of monthly sales, general, and administrative expenses from an
      average of $500,000 per month during the last half of 2000, to
      approximately $275,000 per month during the first quarter of 2001, while
      reducing staff from 64 to the current level of 31.

o     Realignment of Company resources towards sales and marketing activities.
      Having reached a steady-state with our operational build out and product
      development activities, we are allocating a greater portion of our
      financial and human resources to increasing our sales performance in the
      Houston market.

Business Strategy

      2-Infinity's business strategy is to simplify communications for its
business customers through delivering a full spectrum of cost-effective,
reliable, and fully-managed voice and data solutions. The elements of our
business strategy are as follows:

o     Develop end-to-end, fully-managed voice and data solutions. We seek to
      minimize the cost and complexity of delivering high-performance
      communications to small- to mid-sized business customers. Our end-to-end
      solutions are fully-managed and can be tailored to meet the individual
      needs of our business customers.

o     Become the single point-of-contact for our business customers. Through
      providing a single source for all their voice, data, and networking needs,
      we intend to improve our customers' service and support levels and thereby
      gain a larger share of their business.

o     Provide best-in-class service and support. A critical part of our business
      strategy rests upon our strong customer focus. To ensure continuing
      customer satisfaction, we have developed a high quality support
      infrastructure through providing:

      o     Live technical support from our toll-free Help Desk, 24 hours a day
            and 7 days a week. Includes first, second, and third level
            escalation to technical and engineering resources and guaranteed
            response times for onsite dispatch.

      o     Continual monitoring of system and network components from our
            Network Management Center. Includes proactive service recovery,
            fault management, and performance guarantees.

      o     Project management approach for all design, implementation, and
            support services. Includes a dedicated client account manager (CAM)
            for each


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            customer, as well as project planning and reporting mechanisms.

o     Enter into strategic relationships. Leverage the innovative technologies
      and network resources of our industry-leading partners:

      o     Manufacturers: 3Com, Cisco, Nortel, Estech Systems, eSoft.

      o     Network providers: MCI Worldcom (and UUNET), Rhythms NetConnections,
            IP Communications, Mpower Communications.

o     Pursue capital efficient network strategy. We own and operate key network
      elements and lease certain other readily available network elements in
      order to be able to focus our resources on acquiring and retaining
      customers and expanding our product and service offerings.

Service Offerings

      We currently offer our customers a full spectrum of communication products
and services organized into the following four solutions:

o     Convergence. End-to-end business voice solution including LAN-based
      telephony system, local and long distance, network design and cabling,
      installation and support.

o     Broadband. High-speed Internet access solution based on a business-grade
      digital subscriber line (DSL) platform. Includes web hosting, email, and
      domain name registration services.

o     Secure Access. Integrated virtual private networking and firewall solution
      for businesses seeking to share and protect network resources. Includes
      security design, consulting, management and reporting services.

o     Network Manager. End-to-end design, implementation, and support services
      for system and network components. Includes desktop and network support,
      LAN design and implementation, WAN (wide area network) management,
      consulting and project management services.

Sales and Marketing

      2-Infinity's primary market is small to mid-sized businesses and
enterprise branch locations within Houston, Texas. In the future, we plan to
enter additional markets within Texas, such as Dallas and Austin. The Small
Business Administration estimates that there are roughly 370,000 businesses
within Texas with less than 500 employees, of which approximately 74,000 are
within the Houston metropolitan area. Our target customer segment is a business
site with between 20 to 200 employees, and where a local area network either
already exists or is planned to be installed. Our strategy for customer
acquisition consists of the following:

o     Direct sales force. We seek to retain experienced sales professionals with
      strong technology backgrounds. We also maintain an enterprise team to
      focus on larger sales opportunities across multiple branch locations.


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o     Business-to-business telemarketing. In order to effectively communicate
      our value proposition to business customers, we have engaged in external
      and internal telemarketing efforts to increase sales activity in the
      Houston market.

o     Bids for new building and construction projects. Our ability to design and
      implement an end-to-end voice, data, and networking solution from the
      ground up has made new building and construction projects an ideal source
      of new business. We have begun to actively bid for such projects, which
      typically have a six to nine month turnaround.

o     Referral marketing partnerships. We are seeking to sign up marketing
      partners in key vertical sectors to generate referrals for new business.
      This program is still within its early stages.

Competition

      The communications industry is highly competitive and currently is
dominated by the incumbents and the large, established long distance companies.
The comprehensive nature of our communication offerings makes it necessary for
us to compete across a number of specialized industry segments.

      We intend to compete in these areas by becoming a single point-of-contact
for business communications and delivering our customers end-to-end solutions
for voice, data, and networking. We primarily compete with:

o     Internet service providers (ISP). There is a wide variety of technology
      platforms to deliver Internet access services, including digital
      subscriber line (DSL), fixed wireless, cable modems, and fiber optics. In
      the target business market for our broadband services, we face competition
      from other DSL providers as well as fixed wireless companies. There is a
      wide range of pricing, network performance, service quality, and support
      levels among different ISPs. Our exclusive focus on business customers
      requires us to balance our pricing strategy with maintaining high levels
      of customer satisfaction through providing bandwidth guarantees, fast
      turnaround on service delivery, and high quality technical support. While
      we are vulnerable to aggressive pricing tactics from ISPs that command
      greater financial and marketing resources, we believe that such tactics
      are not sustainable over the long term.

o     Value-added resellers (VAR) of voice, data, and networking equipment. The
      telecom industry contains a large number of distributors and resellers of
      voice, data, and networking equipment. While these companies generally
      maintain a wide selection of products at competitive pricing, their
      services are limited to product delivery and basic warranty and
      maintenance programs. 2-Infinity provides end-to-end design, installation,
      and support services for the hardware components of its communication
      solutions. We face the risk of our business customers purchasing such
      components "off-the-shelf" and becoming disappointed when their systems do
      not function as anticipated due to unprofessional implementation.


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<PAGE>

o     Incumbent (ILEC) and Competitive Local Exchange Carriers (CLEC). Voice
      services such as local and long distance have to a large extent become
      commodities as increased competition has narrowed the margins for these
      services. While 2-Infinity provides such voice services at highly
      competitive rates in order to offer a complete voice solution to its
      business customers, we cannot guarantee that offering such services will
      generate sufficient returns independent of the sale of other higher margin
      products or services.

o     Information technology (IT) consultants. 2-Infinity's consulting, project
      management, and network design services places it in direct competition
      with a number of specialized IT consultants. These consultants typically
      focus on larger, enterprise clients and do not adequately price their
      services for small- to mid-sized businesses. 2-Infinity follows up on its
      design and consulting services with end-to-end voice and data solutions
      and high quality implementation and support capabilities.

Government Regulation

      A number of our communications services (such as local, long distance, and
Internet access) are regulated expensively by federal and state governments. The
Federal Communications Commission (FCC) regulates interstate communication
services, while state government (generally through its public utility
commission, or PUC) regulates intra-state communications. In addition, Congress
has begun to impose regulations on certain aspects of Internet-related
businesses.

o     Federal regulation of communication services. Although the FCC exercises
      jurisdiction over our communication facilities and services, we are not
      currently required to obtain FCC authorization for the installation,
      acquisition, or operations of our network facilities. We are not subject
      to many of the restrictions and obligations faced by incumbent or
      facilities-based carriers, such as price caps, rate of return regulation,
      or the filing of interstate tariffs. Our compliance with federal and state
      regulations is effectuated through our partners and suppliers to the
      extent that we provide interstate communication services.

o     State regulation of communication services. Some of our services are
      classified as intrastate and are subject to state regulation. While we
      have been granted a license by the public utility commission of the State
      of Texas to be a competitive local exchange carrier, the majority of our
      intra-state regulatory obligations are also effectuated by our partners
      and suppliers.

o     Regulation of Internet Service Providers (ISPs). To date the FCC has
      treated ISPs as "enhanced service providers" exempt from federal and state
      regulations governing common carriers, including the obligation to pay
      access charges and contributions to the universal service fund.
      Nevertheless, regulations governing the disclosure of confidential
      communications, copyright, excise tax and other requirements may apply to
      our Internet access services and future regulations may be imposed by
      federal or state governments.


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<PAGE>

      Our oil and gas operations were also subject to the Clean Water Act and
the Clean Air Act and comparable state statutes. In the past, we owned or leased
properties that have been used for oil and gas operations for many years.
Although we have utilized operating and disposal practices that were standard in
the industry at the time, hydrocarbons or other wastes may have been disposed of
or released on or under the properties owned or leased by us or on or under
other locations where such wastes have been taken for disposal. Many of these
properties have been operated by third parties whose operations were not under
our control. These properties and the wastes disposed thereon may be subject to
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
Resource Conservation and Recovery Act of 1976, and analogous state laws, and we
could be required to remove or remediate previously disposed wastes or property
contamination or perform remedial plugging operations to prevent future
contamination.

Risk Factors

      Risks Relating to Our Operations

o     We may not have sufficient customer interest to become profitable. If the
      markets for our communication technologies do not grow at a significant
      rate, or if we are unable to effectively capture market share, our
      business, operating results, and financial condition will be negatively
      affected. Future demand for our products and services is highly uncertain,
      and therefore we cannot guarantee that our business will grow as we
      expect.

o     We operate in highly competitive industry segments. We compete against
      companies with longer operating histories, larger customer bases, greater
      brand recognition, and significantly greater financial resources. There
      are numerous competitors offering similar services to us, and many of
      these competitors may be able to enter into strategic or commercial
      relationships on more favorable terms. In addition, increased competition
      may result in reduced operating margins and loss of market share.

o     We may incur substantial increased expenses if governmental regulations
      change. The communications industry is highly regulated at the federal,
      state, and local levels. Regulations that govern our business could change
      at any time, which could adversely affect the way in which we do business.
      We could incur substantial costs complying with these regulations, and our
      failure to comply could have serious financial and legal consequences.
      Lastly, changes in regulation could increase competition, which could have
      an adverse effect on our business.

o     We depend upon key individuals. Our future success depends on a large part
      on the skills, experience, and efforts of our management team and
      employees. The loss on the continued services of any of these individuals
      could have a significant negative effect on our business. We do not
      currently maintain a policy of key man life insurance on any of our
      management team or employees.


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<PAGE>

o     We depend on a number of partners and suppliers. We work with a number of
      partners and suppliers to deliver and support our services. The failure of
      any of these parties to provide adequate service and support or to
      efficiently deliver their products or services could lead to our loss of
      market share. In addition, the inability of these parties to maintain
      consistent pricing levels at the time of contract renewal could
      significantly narrow our margins.

Employees

      As of March 31, 2001, we had 31 full-time employees. None of our employees
are covered by a collective bargaining agreement. We believe that our relations
with our employees are good.

ITEM 2. DESCRIPTION OF PROPERTY

      2-Infinity's principal executive offices are located at 4828 Loop Central
Drive, Suite 150, Houston, Texas 77081, which is occupied under a lease ending
October 31, 2007. The current rent for the executive offices is $18,318 per
month. At the end of the term, we believe that we can lease the same or
comparable offices at approximately the same monthly rate.

      As a result of the acquisition of AirNexus, 2-Infinity is also responsible
for the rental payments related to office space located at 333 N. Sam Houston
Parkway East, Suite 870, Houston, Texas 77060. The current monthly rental under
the lease, which expires on October 1, 2004, is $5,492. 2-Infinity has currently
subleased the space to LynkTel, Inc. through May 2002 for the monthly rental
required under the lease.

      2-Infinity is also party to a lease for office space located at 2849 Paces
Ferry Road, Atlanta, Georgia, 30339. The current monthly rental under the lease,
which expires on January 31, 2003, is $2,130. Since January 2000, the monthly
rental due under the lease has been paid by NuQuest, Inc., an entity owned by
Robert Kent Honeyman, one of our former executive officers. We are currently
involved in negotiations with The Realty Associates Fund IV, L.P., the current
landlord on the lease, to assign the remaining term of the lease to NuQuest.

ITEM 3. LEGAL PROCEEDINGS

      2-Infinity filed a complaint in December 1999 in the 80th District Court
of Harris County, Texas against Tiger Petroleum, Inc. and Mr. Kenny Vincent.
This claim is based on a breach of a settlement agreement entered into by
2-Infinity and the defendants on March 25, 1999. 2-Infinity is seeking the
return of 300,000 shares of common stock, plus attorneys' fees and court costs.
Discovery has been commenced and it is anticipated that if this case is not
resolved in mediation, it will be docketed for trial during the second quarter
of 2001.

      2-Infinity is currently in the process of attempting to resolve a claim
alleged by


                                       10
<PAGE>

Pilares Oil & Gas, Inc. through arbitration. Pilares alleges that 2-Infinity,
known at the time as Lakota Energy, breached an agreement entered into in
November 1996 and a purported amendment entered into in December 1996 relating
to the purchase of 80% of Pilares' net revenue in approximately 1,600 acres
known as the Glass Mountain Lease "A West" Project. Pursuant to the agreement,
Lakota Energy was to acquire 99% of the outstanding capital stock of West Bolt
Energy, Inc., and Pilares was to transfer its interest in the Glass Mountain
Lease "A West" Project to West Bolt Energy. Lakota Energy issued 812,500 shares
of common stock to Pilares and was to pay $400,000 in cash to West Bolt Energy.
Pilares is seeking damages in the amount of $400,000 plus interest from
2-Infinity based on the purported amendment, which changes the payee of the
$400,000 to Pilares. 2-Infinity is challenging the effectiveness of the
purported amendment. Additionally, 2-Infinity is seeking, in a counterclaim
against Pilares, the return of the shares of the common stock issued to Pilares.
The counterclaim also alleges that Pilares fraudulently induced 2-Infinity to
enter into the original contract based on appraisals Pilares provided indicating
that its interest in the Glass Mountain Lease "A West" Project had a value of
approximately $30,000,000, which later proved to have a value of approximately
$300,000. The arbitration is expected to occur during April 2001.

         Partners Alliance Group, Inc., ("PAG") a former affiliate of Maximum
Return, has filed a suit against the Company in the amount of $59,515 for
services rendered and products sold to Maximum Return, prior to the Company's
acquisition of Maximum Return. The Company's position is that:

o     The consulting services that represent a substantial part of the claim
      were never provided to Maximum Return.

o     The products allegedly provided to Maximum Return had no market value and
      were actually taken back by PAG.

o     The existence of any or part of the invoices was not disclosed to the
      Company by Maximum Return and PAG at the time the Company acquired Maximum
      Return.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED MATTERS

      In October 2000, the Company issued 10,000 common shares at a purchase
price of $.25 per share, upon an accredited investor's exercise of their
outstanding warrants.

      In November 2000, the Company sold to two accredited investors, 13,714,285
shares of common stock, at a purchase price of $.044 per share, together with
warrants to purchase an additional 1,371,857 shares at $.069 per share within
one year.


                                       11
<PAGE>

      Common stock transactions during the nine months ended September 30, 2000
have been reported in the Company's Forms 10QSB that have been previously filed
with the U.S. Securities and Exchange Commission. For all security transactions
discussed above:

o     No underwriter or placement agent was used in connection with any of the
      above referenced securities transactions, and no underwriting commissions
      were paid.

o     No means of general solicitation were used in offering the securities.

o     The securities in each transaction were sold to a limited group of
      accredited investors in private placement transactions, exempt from
      registration under Section 4(2) of the Securities Act.

o     All purchasers of the Company's securities were sophisticated investors
      who qualified as accredited investors within the meaning of Rule 501(a) of
      Regulation D under the Securities Act.

      As of the date of this report, our common stock is quoted on the OTC
bulletin board under the symbol "TWIC."

      The market price of our common stock may be subject to significant
fluctuations in response to numerous factors, including: variations in our
annual or quarterly financial results or those of our competitors; conditions in
the economy in general or in the software and other technology industries;
announcements of key developments by competitors; loss of key personnel;
unfavorable publicity affecting our industry or us; adverse legal events
affecting us; and sales of our common stock by existing shareholders.

      The range of the high and low bid information for the common stock for
each full quarterly period within the two most recent fiscal years is shown on
the following table.

<TABLE>
<CAPTION>
Quarter Ended      Dec. 31,   Sept 30,  June. 30,   Mar. 31,   Dec. 31,   Sept 30,   June 30,   Mar. 31,
                    2000       2000       2000       2000       1999       1999       1999       1999
                    -----      -----      -----      -----      -----      -----      -----      -----
<S>                 <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
High Bid Price      $0.19      $0.51      $1.40      $2.55      $0.18      $0.34      $0.52      $0.15
Low Bid Price       $0.05      $0.18      $0.34      $0.09      $0.09      $0.14      $0.06      $0.07
</TABLE>

      The OTC bulletin board quotations represent inter-dealer prices, without
retail mark-ups, mark-downs, or commissions. The quotations may not represent
actual transactions.

      From time to time, the stock market experiences significant price and
volume fluctuations, which may affect the market price of our common stock for
reasons unrelated to our performance. Recently, such volatility has particularly
impacted the stock


                                       12
<PAGE>

prices of publicly traded technology companies. In the past, securities class
action litigation has been initiated against companies following periods of
volatility in the market price of the companies' securities. If similar
litigation were instituted against us, it could result in substantial costs and
a diversion of our management's attention and resources, which could have an
adverse effect on our business.

      As of December 31, 2000, there were 100,200,624 shares of our common stock
issued and outstanding, held of record and beneficially owned by approximately
12,000 persons.

      We have not paid or declared any dividends with respect to our common
stock, nor do we anticipate paying any cash dividends or other distributions on
our common stock in the foreseeable future. Any future dividends will be
declared at the discretion of our board of directors and will depend, among
other things, on our earnings, if any, our financial requirements for future
operations and growth, and such other facts as we may deem appropriate.
Additionally, the terms of our outstanding shares of Series A Preferred Stock
restrict our ability to declare dividends on our common stock.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

General

      Since inception in November 1995 through May 1999, 2-Infinity devoted
substantially all of its efforts to invest with joint partners in oil and gas
exploration projects. However, as a result of minimal revenue and continued
losses from these ventures, 2-Infinity decided to diversify into emerging areas
within the technology sector. In January 2000, new board members and senior
management were appointed to oversee operations and raise additional capital
through private placements. The new management adopted new strategies for
2-Infinity and developed a plan of action, which included:

o     Raising additional capital through private placements to cover costs
      associated with building the necessary operational infrastructure and a
      service and support platform to execute our business plan.

o     Forming strategic and technical alliances with leading manufacturers and
      facilities-based network providers in order to expand the development of
      our products and services.

o     Implementing an aggressive customer acquisition effort in our target
      market, consisting of a direct sales force approach and a comprehensive
      marketing program and public relations campaign.

o     Approving a plan to dispose of all remaining assets relating to the oil
      and gas exploration projects and, where necessary, to plug and abandon all
      other non-producing wells that could not be sold.


                                       13
<PAGE>

      In the fourth quarter of 2000, 2-Infinity engaged in a restructuring plan.
The motivation for this plan was to become less dependent on external financing
in the face of changing market conditions. The plan's objectives are to reduce
expenses and increase sales effectiveness in the Houston market in order to
achieve positive positive cash flows. The preliminary results of this
restructuring plan at the end of 2000 included a reduction of monthly sales,
general, and administrative expenses from an average of $500,000 per month
during the last half of 2000, to approximately $275,000 per month during the
first quarter of 2001, while reducing staff from 64 to the current level of 31.

      Management believes the completion of its plans will produce increased
revenues and cash flows. However, no assurances can be given that the Company
will be successful in the implementation of its plan or that the Company will be
able to raise additional funding in order to operate until it attains breakeven
cash flows from its operations.

Results of Operations

      The Company's revenues increased from $248,550 (1999) to $641,356 (2000)
reflecting a full year's activity for AirNexus and 2-Infinity-Texas, which were
acquired in mid 1999, and six months activity for Maximum Return, which was
acquired in mid 2000. Discontinuance of the oil and gas activities had no impact
on revenues as such revenues were diminimus during 1999.

      Cost of goods sold increased from $141,494 (1999) to $458,632 (2000). The
increase reflects the increased sales activity, as well as diminished margins
earned during the year 2000. The decrease in the gross margin earned from
43.1%(1999) to 28.5% (2000) is due primarily to the $40,000 inventory reserve
recorded at the end of the year, and expansion of products and services offered
to customers which yield a lower gross margin. The inventory reserve was
recorded to provide for potential restocking and obsolescence charges for
equipment that was purchased for a project which did not materialize.

      Selling, general and administrative expenses increased from $681,606
(1999) to $6,121,263 (2000) due primarily to the following factors:

o     selling, general & administrative salaries of approximately $900,000
      incurred during 1999 are included in the 1999 Loss from Discontinued
      Operations and excluded from the $681,606 of selling, general and
      administrative expenses from continuing operations.

o     selling, general & administrative salaries for continuing operations,
      increased by approximately $3,000,000, as the Company focused its efforts
      on expanding its technology sector business opportunities, and increased
      its marketing and operations staffs.


                                       14
<PAGE>

      Depreciation expense increased from $11,944 (1999) to $58,753 (2000)
reflecting the Company's expansion into the technology sector and its related
investment of $573,000 on equipment and furniture.

      As discussed in the notes to the consolidated financial statements, the
Company has written off all of the goodwill that was acquired as part of the
purchase of AirNexus, AGM, 2-Infinity-Texas and Maximum Return because there is
no assurance that the Company will be able to recover the cost of that goodwill.
The decrease in amortization of goodwill from $2,172,528 (1999) to $795,530
(2000) reflects the lower cost of goodwill acquired during 2000 as compared to
goodwill acquired during 1999.

      Interest expense reported for 2000 consists primarily of a $633,333
conversion discount included in the provisions of the Series A Preferred Stock,
which was issued beginning in August, 2000. Loss from Discontinued Operations
(1999) includes $404,500 of interest expense relating to the discount on the
conversion of the Company's 8% convertible debentures into common stock in
January 2000.

      The Loss from Discontinued Operations for the year 1999 consists primarily
of $4.0 million of compensation paid to former executives of Lakota Oil for
services rendered and pursuant to separation agreements between the former
executives and the Company, plus the aforementioned interest expense.
Approximately $3.1 million of the compensation was paid in shares of the
Company's common stock.

Liquidity and Capital Resources

      During 2000, the Company sold 37,694,285 shares of Common Stock for
$3,381,500, which included a private placement of 20 million shares for $2
million. The Company also raised $1.9 million from the sale of its Series A
Preferred Stock.

      The Company also issued 13,135,000 shares for $3,699,400 of services
rendered, of which $3.1 million was for separation agreements involving 3 former
oil and gas executive officers and directors. An additional 4,892,857 shares
were issued for repayment of its 8 % convertible debentures and related
interest.

      During January 2001, the Company sold to two accredited investors,
10,272,727 shares of common stock valued at $.027 per share. During February
2001, the Company sold to the same accredited investors, an additional
14,806,027 shares of common stock valued at $.022 per share.

      Subsequent to December 31, 2000, the Company issued 12,347,692 shares of
common stock valued at $.031 per share, to four executive officers, in lieu of
cash compensation.

      We expect to incur additional losses until our revised business strategy
results in sufficient revenues to offset operating expenses and infrastructure
costs. We believe that


                                       15
<PAGE>

this strategy, while initially requiring additional cash outlays, will result in
increased revenues and future profitability. We expect our existing operations
to continue to result in negative cash flow and working capital deficiencies.
These will require 2-Infinity to continue to obtain additional capital or
financing approximating $2 million to provide working capital until the Company
achieves operating levels that will result in breakeven operating cashflows. The
necessary financing may be unavailable to 2-Infinity or, if available, may not
be on satisfactory or favorable terms. It is possible that additional equity
financing will be highly dilutive to existing shareholders.

      As of March 31, 2001, the Company is required to have reserved for
issuance, 28,459,179 shares for outstanding options and warrants. Based on the
closing prices for its common stock during the week ended March 31, 2001, and
the floating conversion rate included in the Series A Preferred Stock
agreements, the Company is also required to have reserved for issuance an
additional 147,286,822 shares of common stock under those agreements. Since the
Company had 138,543,091 shares of common stock outstanding at March 31, 2001,
the outstanding shares plus the number of shares that are required to be
reserved for issuance under existing agreements exceeded the 300,000,000 shares
of common stock it is authorized to issue by 14,289,092 shares.


                                       16
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

                                    CONTENTS
<TABLE>
<S>                                                                          <C>
Independent Auditors' Report ................................................F-2
Independent Auditors' Report ................................................F-3
Consolidated Balance Sheet ..................................................F-4
Consolidated Statement of Operations ........................................F-5
Consolidated Statement of Cash Flows ........................................F-6
Consolidated Statement of Net Capital Deficiency ............................F-8
Notes to Consolidated Financial Statements ..................................F-9
</TABLE>


                                      F-1
<PAGE>

                          Independent Auditors' Report

To the Board of Directors and Stockholders
2-Infinity, Inc.
Houston, Texas

We have audited the accompanying consolidated balance sheet of 2-Infinity, Inc.
as of December 31, 2000 and the related consolidated statements of operations,
net capital deficiency, and cash flows for the year then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
2-Infinity, Inc. as of December 31, 2000, and the consolidated results of their
operations and their cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As shown in the consolidated
financial statements, the Company incurred a net loss of $7,590,045 during the
year ended December 31, 2000 and, as of that date, had a working capital
deficiency of $1,629,736 and net capital deficiency of $2,295,194. The Company
will require additional working capital to develop and support its technologies
and business until the Company either (1) achieves a level of revenues adequate
to generate sufficient cash flows from operations; or (2) obtains additional
financing necessary to support its working capital requirements. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


MANN FRANKFORT STEIN & LIPP CPAs, L.L.P.

Houston, Texas
March 23, 2001


                                      F-2
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Shareholders
2-Infinity, Inc
Houston, Texas

We have audited the accompanying statements of operations, changes in
stockholders' equity and cash flows of 2-Infinity, Inc. for the year ended
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of the operations and the cash flows of
2-Infinity, Inc. for the year ended December 31, 1999, in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has incurred losses since inception, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in the notes to
the financial statements. The financial statements do not include any
adjustments that might result fro the outcome of this uncertainty.


HJ & Associates, LLC
(Formerly Jones, Jensen & Company)
Salt Lake City, Utah
March 31, 2000


                                      F-3
<PAGE>

                       2 - INFINITY, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                   A S S E T S
<S>                                                                   <C>
Current Assets :
     Cash                                                             $     27,188
     Accounts receivable, less allowance for doubtful
          accounts of $ 46,623                                              50,969
     Accounts receivable from officer                                       31,250
     Inventory, less reserve for obsolesence of $ 40,000                   173,516
     Other current assets                                                   76,363
                                                                      ------------
                Total Current  Assets                                      359,286
                                                                      ------------

Furniture & Equipment :
     Equipment                                                             521,132
     Furniture & fixtures                                                  135,777
        Less accumulated depreciation                                      (71,014)
                                                                      ------------
                Furniture & Equipment, net                                 585,895
                                                                      ------------

     CLEC license, less accumulated amortization
          of $ 6,653                                                       380,647
     Other assets                                                          268,000
                                                                      ------------
                TOTAL ASSETS                                          $  1,593,828
                                                                      ============

            LIABILITIES, PREFERRED STOCK AND NET CAPITAL DEFICIENCY

Current Liabilities :

     Notes payable                                                    $     35,000
     Accounts payable                                                    1,379,956
     Accrued compensation                                                  454,972
     Other current liabilities                                             119,094
                                                                      ------------
                Total Current Liabilities                                1,989,022
                                                                      ------------

8 % Series A Convertible Preferred Stock
     No par value, 3,000 shares authorized; 1,900 shares
     issued and outstanding                                              1,900,000
                                                                      ------------

Net Capital Deficiency :
     Preferred stock, no par value, 24,997,000 shares
     authorized; no shares outstanding                                          --

     Common stock, no par value, 300,000,000 shares
     authorized; 100,200,624 shares, issued and outstanding             15,298,361
     Accumulated deficit                                               (17,593,555)
                                                                      ------------
                Net Capital Deficiency                                  (2,295,194)
                                                                      ------------

                                                                      ------------
     TOTAL LIABILITIES, PREFERRED STOCK AND NET CAPITAL DEFICIENCY    $  1,593,828
                                                                      ============
</TABLE>

          See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>

                       2 - INFINITY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                 YEAR ENDED DECEMBER  31,
                                               ----------------------------
                                                   2000            1999
                                               ------------    ------------
<S>                                            <C>                  <C>
REVENUE                                        $    641,356         248,550
COST OF GOODS & SERVICES                            458,632         141,494
                                               ------------    ------------

GROSS MARGIN                                        182,724         107,056
                                               ------------    ------------

EXPENSES
     Selling, general & administrative            6,121,263         681,606
     Depreciation                                    58,753          11,944
     Amortization, primarily goodwill               795,530       2,172,528
                                               ------------    ------------
     TOTAL EXPENSES                               6,975,546       2,866,078
                                               ------------    ------------

LOSS FROM CONTINUING OPERATIONS                  (6,792,822)     (2,759,022)

OTHER INCOME (DEDUCTIONS)
     Interest (expense) income, net                (647,637)            488
     Loss on disposal of assets                                      (3,520)
                                               ------------    ------------
NET LOSS FROM CONTINUING OPERATIONS              (7,440,459)     (2,762,054)
                                               ------------    ------------

LOSS FROM DISCONTINUED OPERATIONS
      Loss from operations                         (118,319)     (5,684,135)
      Loss on disposition of assets                 (31,267)             --
                                               ------------    ------------
           Loss from discontinued operations       (149,586)     (5,684,135)
                                               ------------    ------------

NET LOSS                                       $ (7,590,045)     (8,446,189)
                                               ============    ============

NET LOSS PER SHARE (Basic & Fully Diluted):
           Loss from continuing operations     $      (0.09)          (0.08)
           Loss from discontinued operations          (0.01)          (0.16)
                                               ------------    ------------

          Net loss per share                   $      (0.10)          (0.24)
                                               ============    ============

WEIGHTED AVERAGE SHARES OUTSTANDING:

          Basic & Fully Diluted                  78,526,467      34,569,693
                                               ============    ============
</TABLE>


                                      F-5
<PAGE>

                       2 - INFINITY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER  31,
                                                                --------------------------
                                                                    2000           1999
                                                                -----------    -----------
<S>                                                             <C>             <C>
CASH FLOWS (USED) PROVIDED BY OPERATING ACTIVITIES

   Net loss from continuing operations                          $(7,440,459)    (2,762,054)
   Adjustments to reconcile loss from continuing operations
     to net cash (used) provided by continuing operations :
       Common stock issued for services rendered                    332,000      8,570,476
       Discount on issuance of convertible instruments              633,334             --
       Amortization                                                 795,530      2,172,528
       Depreciation                                                  58,753         11,944
       Loss on disposal of assets                                                    3,520
   Changes in operating assets and liabilities :
       Increase in accounts receivable                              228,426        (19,339)
       Increase in inventories                                     (173,516)            --
       Increase in other current assets                             (60,172)        62,414
       Increase in other assets                                                   (268,000)
       Increase in accounts payable                                 962,242        108,691
       (Decrease) increase in accrued compensation                  454,873     (4,141,960)
       Increase in other current liabilities                         44,412
                                                                -----------    -----------
   Net cash flows (used) provided by continuing operations       (4,432,577)     4,006,220
                                                                -----------    -----------

   Net cash used by discontinued operations
       Net loss from discontinued operations                       (118,319)    (5,684,135)
       Loss on liquidation of assets and liabilities                (31,267)            --
   Adjustments to reconcile loss from discontinued operations
     to net cash (used) by discontinued operations :
       Depreciation                                                                  2,505
       Proceeds from sale of assets                                   5,168
                                                                -----------    -----------
   Net cash used by discontinued operations                        (144,418)    (5,681,630)
                                                                -----------    -----------

NET CASH FLOWS USED BY OPERATING ACTIVITIES                      (4,576,995)    (1,675,410)
                                                                -----------    -----------

CASH FLOWS USED BY INVESTING ACTIVITIES
   Purchase of furniture and equipment                             (572,818)       (84,397)
   Purchase of CLEC license                                        (217,000)
                                                                -----------    -----------
   Cash used by investing activities                               (789,818)       (84,397)
                                                                -----------    -----------

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
   Proceeds from sale of preferred stock                          1,900,000             --
   Proceeds from sale of common stock and options                 3,438,588        605,630
   Payment of notes payable                                         (10,000)       (60,000)
   Proceeds from notes payable/debentures                                        1,187,500
                                                                -----------    -----------
   Net  cash provided by financing activities                     5,328,588      1,733,130
                                                                -----------    -----------

NET DECREASE IN CASH                                                (38,225)       (26,677)

CASH AT BEGINNING OF PERIOD                                          65,413         92,090
                                                                -----------    -----------

                                                                -----------    -----------
CASH AT END OF PERIOD                                           $    27,188         65,413
                                                                ===========    ===========
</TABLE>

   See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>

                       2 - INFINITY, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER  31,
                                                                --------------------------
                                                                    2000           1999
                                                                -----------    -----------
<S>                                                             <C>             <C>
CASH PAID DURING THE PERIOD FOR INTEREST                       $     14,667          4,739

NON-CASH INVESTING AND FINANCING ACTIVITIES

   Issuance of common stock for acquired entities              $    717,182      2,100,000
   Issuance of common stock for payment of debt and interest   $  1,552,834        647,500
   Issuance of common stock for CLEC license                   $    170,300
   Issuance of common stock and debt for services rendered     $  3,699,400      8,570,476
</TABLE>

   See accompanying notes to consolidated financial statements.


                                      F-7
<PAGE>

                       2 - INFINITY, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF NET CAPITAL DEFICIENCY

<TABLE>
<CAPTION>
                                                COMMON  STOCK
                                         ----------------------------    ACCUMULATED    NET CAPITAL
                                            SHARES          AMOUNT         DEFICIT       DEFICIENCY
                                         ------------    ------------   ------------    ------------
<S>                                       <C>            <C>            <C>             <C>
BALANCE AT JANUARY 1, 1999                 20,678,733    $  1,650,389   $ (1,557,321)   $     93,068

Common stock issued for:
    cash                                    3,920,300         485,630                        485,630
    debt and interest                       8,870,797         654,091                        654,091
    services                                5,454,977         652,858                        652,858
    acquired companies                      6,000,000       2,100,000                      2,100,000
Cash received for 200,000 shares to be
    issued subsequent to year end             200,000          20,000                         20,000
Options issued for cash                                       100,000                        100,000
Common stock cancelled                     (3,846,325)

Net loss                                                                  (8,446,189)     (8,446,189)

                                         ------------    ------------   ------------    ------------
BALANCE AT DECEMBER 31, 1999               41,278,482       5,662,968    (10,003,510)     (4,340,542)
                                         ------------    ------------   ------------    ------------

Common stock issued for:
    cash                                   37,694,285       3,381,500                      3,381,500
    acquired companies                      3,100,000         831,360                        831,360
    debt and interest                       4,892,857       1,552,833                      1,552,833
    services rendered                      13,135,000       3,699,400                      3,699,400
    CLEC license                              100,000         170,300                        170,300

Net loss                                                                  (7,590,045)     (7,590,045)

                                         ------------    ------------   ------------    ------------
BALANCE AT DECEMBER 31, 2000              100,200,624    $ 15,298,361   $(17,593,555)   $ (2,295,194)
                                         ============    ============   ============    ============
</TABLE>

      See accompanying notes to consolidated financial statements


                                      F-8
<PAGE>

                        2-INFINITY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          YEAR ENDED DECEMBER 31, 2000

NOTE 1-HISTORY AND ORGANIZATION

      The Company was incorporated in the state of Colorado on July 14, 1995 to
engage in the acquisition and exploration of oil and gas properties. In 1999,
management diversified into the technology and internet markets, acquiring two
companies; 2-Infinity-Texas, and AirNexus. See Note - 4 Business Combinations.

      The accompanying consolidated financial statements include the accounts of
2-Infinity, Inc. (formerly 2-Infinity.com, Inc., Lakota Technologies, Inc.,
Lakota Energy, Inc., and Chancellor Trading Group, Inc.) (collectively, "the
Company") and it's wholly owned subsidiaries, 2-Infinity.com,
Inc.("2-Infinity-Texas"), AirNexus, Inc. ("AirNexus"), Lakota Oil and Gas, Inc.
("Lakota Oil"), Maximum Return and Development, Inc. ("Maximum Return") and AGM,
Inc. ("AGM"). AirNexus was merged into 2-Infinity-Texas on January 27, 2000.

NOTE 2-GOING CONCERN

      The Company has incurred net losses of $7,590,045 and $8,446,189 for the
years ended December 31,2000 and 1999, respectively. The Company's ability to
operate as a going concern is contingent upon its ability to obtain additional
equity financing to fund it's activities until positive operating cash flows are
achieved.

      In January 2000, new board members and senior management were appointed in
order to enhance operations and raise additional capital through equity
transactions. The new management adopted new strategies for the Company and
developed a plan of action which included:

            o     Completing it's plan to sell all remaining assets related to
                  previous oil and gas exploration projects, and where
                  necessary, to plug and abandon all other non-producing wells
                  that cannot be sold.

            o     Raising additional capital through private placements to cover
                  costs associated with building the necessary operational
                  infrastructure and service and support platform to execute our
                  business plan.

            o     Forming strategic and technical alliances with leading
                  manufacturers and facilities-based network providers in order
                  to expand the development and deployment of our products and
                  services.


                                      F-9
<PAGE>

            o     Implementing an aggressive customer acquisition effort in our
                  target market, consisting of a direct sales force approach and
                  a comprehensive marketing program and public relations
                  campaign.

      In the fourth quarter of 2000, 2-Infinity engaged in a restructuring plan.
The motivation for this plan was to become less dependent on external financing
in the face of changing market conditions. The plan's objectives were to reduce
expenses and increase sales effectiveness in the Houston market in order to
achieve positive operating cash flows. The preliminary results of this
restructuring plan at the end of 2000 were as follows:

            o     Reduction of monthly sales, general, and administrative
                  expenses from an average of $500,000 per month during the last
                  half of 2000, to approximately $275,000 per month in the first
                  quarter of 2001, while reducing staff from 64 to the current
                  level of 31.

            o     Realignment of Company resources towards sales and marketing
                  activities. Having reached a steady-state with our operational
                  build out and product development activities, we are
                  allocating a greater portion of our financial and human
                  resources to increasing our sales performance in the Houston
                  market.

      No assurance can be given that the Company will be successful in the
implementation of its plans or that the Company will be able to raise additional
funds. In the event the Company's activities do not result in increased revenues
and cash flows and the Company is not able to raise additional financing to meet
its operating needs, the Company may no longer be able to continue as a going
concern. The financial statements do not include any adjustments that might be
necessary should the Company be unable to continue as a going concern.

NOTE 3-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      a. Basis of Presentation

      The consolidated financial statements include the accounts of 2-Infinity,
Inc. and its wholly owned subsidiaries. All inter-company balances and
transactions have been eliminated in the consolidation.

      b. Revenue Recognition

      Revenues for 1999 include revenues from the Company's newly acquired
technology subsidiary, AirNexus, since June 8, 1999. 2-Infinity-Texas reported
no revenues in 1999. Revenue from business telephone and voice mail systems
products are recorded when shipped and any related services revenues are
recorded when the services are rendered to the customer. Revenues from the
Company's newly acquired subsidiary, Maximum Return, are included since the
acquisition date, June 28, 2000.


                                      F-10
<PAGE>

      c. Basic and Diluted Loss Per Share

      In accordance with Statement of Financial Accounting Standards No. 128,
("SFAS 128"), "Earnings per Share," basic and diluted loss per share were
computed by dividing net loss by the weighted average number of shares of common
stock outstanding during the period. Warrants and options outstanding as of
December 31, 2000, (45,974,571), and December 31, 1999, (5,002,500), were
excluded from the calculation because the effect would be anti-dilutive

      d. Use of Estimates

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts in the financial statements and the
accompanying notes. Actual results could differ from those estimates.

      e. Inventories

      Inventories consist of equipment and parts purchased for resale, and are
stated at the lower of average cost, or market.

      f. Furniture and Equipment

      Furniture and equipment are stated at cost. Expenditures for small tools,
ordinary maintenance and repairs are charged to operations as incurred. Major
additions and improvements are capitalized. Depreciation is computed using the
straight-line method over estimated useful lives of the assets of three to five
years, and totaled $58,753 (2000) and $14,449 (1999), respectively.

      g. Other Assets

      The CLEC license, which entitles the Company to resell Southwestern Bell
Telephone Company products and services at a 32% discount, is being amortized
over 15 years.

      Other assets consist of the cost of financial software which has been
purchased but has not been put into service.

      h. Advertising

      The Company follows the policy of charging the costs of advertising to
expense as incurred. Advertising expenses were not material for all periods
presented.

      i. Goodwill


                                      F-11
<PAGE>

      The Company assesses long-lived assets for impairment under SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be
Disposed Of". Under those rules, goodwill associated with assets acquired in
connection with the acquisitions discussed in Note 4 (below) was determined to
be impaired because circumstances exist that indicate the carrying amount of
those assets may not be recoverable. Accordingly, goodwill totaling $2,159,000
(1999) relating to the AirNexus and 2-Infinity-Texas acquisitions, and $788,879
(2000) relating to the AGM, Inc. and Maximun Return acquisitions, has been
charged to the operations for the period in which the acquisitions were made.

      j. Stock Options and Warrants

      The Company accounts for stock options and warrants issued to employees in
accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." For financial statement disclosure purposes and
issuance of options and warrants to non-employees for services rendered, the
Company follows Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation."

      k. Reclassifications

      Certain reclassifications have been made in the December 31, 1999
financial statements to conform to the presentation at December 31, 2000.

NOTE 4- DISCONTINUED OPERATIONS

      On April 18, 2000, the Company approved a plan to sell all remaining
assets relating to the oil and gas exploration projects. The Company sold its
interest in its remaining producing property Union Central Life Insurance Co.
Well No. 1, during May 2000. All other non-producing wells have been plugged and
abandoned. The Company has incurred losses from the sale and disposal of its oil
and gas assets totaling $31,267.

      At December 31, 1999, the Company's oil and gas net assets consisted of:

<TABLE>
<S>                                               <C>
      Interest in Oil and Gas properties          $57,225
      Accrued expenses                            (52,057)
                                                  -------
      Net assets of discontinued operations       $ 5,168
                                                  =======
</TABLE>

      The Company reported sales from oil and gas operations, which are included
in the Loss from Discontinued Operations, of $8,765 during 1999, and none during
2000.

NOTE 5-BUSINESS COMBINATIONS

      On May 28, 1999, the Company acquired all of the outstanding shares of
2-Infinity-Texas, a provider of high-speed Internet access products and
services, for 3,000,000 shares of the Company's common stock. 2-Infinity-Texas
had only been in existence for


                                      F-12
<PAGE>

a short period of time and had no prior operations. The acquisition has been
accounted for as a purchase.

      On June 9, 1999, the Company acquired all of the outstanding shares of
AirNexus, a retail provider of commercial voice and data products and services.
The Company issued 3,000,000 shares of common stock and $60,000 in cash in
exchange for all of the outstanding shares if AirNexus. The acquisition has been
accounted for as a purchase.

      In January 2000, the Company acquired all of the outstanding shares of
AGM, Inc., a Nevada corporation ("AGM"), a reporting public company with no
prior operations. The Company elected successor issuer status to become a
reporting public entity upon the acquisition of AGM. The purchase price was
2,200,000 shares of the Company's common stock at a fair market value of $.136
per share. The acquisition has been accounted for as a purchase. In connection
with this transaction, the Company also issued 1,500,000 shares of common stock,
also at a fair market value of $.136 per share, and $50,000 for consulting
services to another corporation that assisted in the negotiation and completion
of the transaction.

      On June 28, 2000, the Company completed the acquisition of Maximum Return,
a network hardware and service provider. The Company received all of the
outstanding common shares of Maximum Return in exchange for 900,000 shares of
its common stock, of which 200,000 shares are held in escrow. Under the terms of
the escrow agreement, if Maximum Return's net assets were not equal to or
greater than $47,500 as of May 31, 2000, the Company would be entitled to
receive the number of escrowed shares equal to two multiplied by the difference
between the net asset amount and $50,000. On August 31, 2000, the Company filed
a claim with the escrow agent for the return of all of the escrowed shares
because based on available information, the Company believed MRD's net assets as
of May 31, 2000 were less than $47,500. The claim is pending final resolution.
Maximum Return has two customers which account for 22.33% and 11.15% of its
sales.

Allocation of the purchase price for the acquisitions is as follows:

<TABLE>
<CAPTION>
                                       2- Infinity      Maximum
                          AirNexus        Texas          Return          AGM
                         -----------   -----------    -----------    -----------
<S>                      <C>             <C>             <C>             <C>
Goodwill                 $ 1,020,000     1,139,000        285,679        503,200
Cash                             515       104,479         57,090
Receivables                                               292,310
Furniture and fixtures                       5,731
Other assets                   9,238         1,669
Liabilities assumed         (129,753)      (50,879)      (306,919)            --
                         -----------   -----------    -----------    -----------
Total Purchase Price     $   900,000     1,200,000        328,160        503,200
                         ===========   ===========    ===========    ===========
</TABLE>


                                      F-13
<PAGE>

      The following pro forma financial information gives effect to acquisitions
as if they had been acquired at the beginning of fiscal year 1999. The pro forma
results were prepared for comparative purposes only and are not indicative of
the results of operations which actually would result had the acquisitions
occurred on the date indicated, or which may result in the future:

<TABLE>
<CAPTION>
                                                YEAR ENDED DECEMBER 31,
                                             ----------------------------
                                                 2000            1999
                                             ------------    ------------
<S>                                          <C>               <C>
      Revenues                               $  1,797,188         472,695
                                             ------------    ------------
      Loss from operations                   $ (6,782,515)     (2,745,461)
                                             ------------    ------------
      Net loss                               $ (7,579,738)     (8,428,226)
                                             ------------    ------------

      Basic & diluted loss per share         $      (0.10)          (0.24)
                                             ============    ============
      Basic & diluted weighted average
         common shares outstanding             78,898,796      35,513,638
                                             ============    ============
</TABLE>

NOTE 6-RELATED PARTY TRANSACTIONS

      In February 1999, the Company issued 1,000,000 shares of restricted common
stock to an entity controlled by the President of Lakota Oil, as consideration
for services valued at $100,000 related to the negotiation and consummation of a
transaction with an oil and gas project.

      In January and February 2000, the Company and three of its officers and
directors, (chief executive officer ("CEO'), and chief financial officer ("CFO")
and the President of Lakota Oil) mutually agreed to separation. The settlement
agreements with the former CEO, required the Company to issue 4,000,000 common
shares of the Company's stock and pay $100,000 as compensation for past service.
The Company also paid $40,000 for the execution of the settlement agreement and
consulting services during the transition to new management. Each party mutually
discharged any indebtedness owed to the other and Cam Am Resources, Inc, a
related party of the former CEO. Accordingly, the Company accrued $500,000 at
December 1999 as compensation of the aforementioned past services, based on the
fair market value of the shares and cash issued pursuant to the terms of the
agreement.

      The settlement agreements with the former CFO and the President of Lakota
Oil, required the Company to issue an aggregate of 5,500,000 common shares of
the Company's stock and pay $100,000 to compensate them for past service. The
Company


                                      F-14
<PAGE>

paid an aggregate of $65,000 for the execution of the agreements and consulting
services during the transition to new management. Consequently, the Company
accrued $2,760,500 at December 31, 1999, as compensation for the aforementioned
past services, based on the fair market value of the shares and cash issued
pursuant to the terms of the agreement

NOTE 7-PRIOR PERIOD ADJUSTMENT

      In April 2000, the board of directors approved the issuance of 4,240,000
common shares (fair market value of $1.156 per share ) to employees, officers
and directors of the Company as payment of compensation for services performed
from June 1999 through January 2000, and for which a liability was recorded as
of December 31, 1999.

      By August, 2000, the market value of the aforementioned common shares fell
substantially below the valuation determined for the related payroll taxes, and
the employees and directors cancelled the stock compensation agreements with the
Company and cancelled and returned all of their shares, without any Company
obligation to the employees or directors.

      The accompanying financial statements report the effect of such common
stock cancellation as a reduction of the related compensation that was accrued
at December 31, 1999. This restatement of the previously reported results of
operations for the year 1999, decreases the operating loss and net loss for the
year 1999 by $4,141,960, or $.12 per share. The operating loss and net loss
previously reported in the Company's unaudited third quarter report to
shareholders for the year 2000, were increased by the same amount, or $.05 per
share.


                                      F-15
<PAGE>

NOTE 8-NOTES PAYABLE

         Notes payable consisted of the following:

<TABLE>
<S>                                                                  <C>
            Notes payable, convertible into stock at the option of
            holder within one to three yes, interest payable
            quarterly at 9.75% until converted                       $10,000
            Notes payable upon demand, non-interest bearing           25,000
                                                                     -------

                                               Total Notes Payable   $35,000
                                                                     =======
</TABLE>

NOTE 9-LEASE COMMITMENTS

Operating Leases

      The Company leases two offices in Houston and one in Atlanta under lease
agreements which expire at varying dates through November 2007. Real estate
taxes, insurance and maintenance expenses are obligations of the Company.
Minimum rental payments under the non-cancelable operating leases are as
follows:

            Period ended December 31:

<TABLE>
<S>                                        <C>
                 2001                      $  317,571
                 2002                         324,609
                 2003                         335,240
                 2004                         293,273
                 2005                         250,486
                 Subsequent years             491,420
                                           ----------

                 Total Minimum Rentals     $2,012,599
                                           ==========
</TABLE>

      Rent expense was $232,253 and $89,652 for the years ended December 31,
2000 and 1999, respectively. Two of the properties are subject to sublease
agreements which represent approximately $350,000 of the minimum rentals through
the year 2004.


                                      F-16
<PAGE>

NOTE 10-INCOME TAXES

      At December 31, 2000, the Company had total net loss carryforwards
approximating $13,570,000 expiring as follows:

<TABLE>
<S>                      <C>
            2011         $   300,000
            2012             500,000
            2013             250,000
            2014           1,950,000
            2015          10,570,000
                         -----------

            Total        $13,570,000
                         ===========
</TABLE>

      The Company has a deferred tax asset related to the above net operating
loss carryforwards of approximately $4,880,000 as of December 31, 2000.

      The Company also has deferred tax assets approximating $1,250,000
resulting primarily from the write-off of goodwill (see Note 1) but which is
being amortized over 15 years for income tax purposes. The related benefits and
deferred tax assets have been offset by a valuation allowance due to historical
operating losses and the uncertainty concerning the Company's ability to utilize
the net loss carryforwards in future periods. The increase in the deferred tax
valuation reserve allowance amounts to approximately $2,330,000 for the year
ended December 31, 2000.

      Due to the change in ownership provisions of the Tax Reform Act of 1986,
net operating loss carryforwards for Federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur, net operating
loss carryforwards may be limited as to use in future years.

NOTE 11-CONVERTIBLE DEBENTURES

      In March 1999, the Company issued $550,000 of 8% convertible debentures
and incurred a fee of $44,000 on the issuance. All the debentures were converted
prior to December 31, 1999 into 7,685,581 shares of common stock.

      In August 1999, the Company issued $23,500 of 3% convertible debentures
and $74,000 of 1% convertible debentures. All the debentures were converted
prior to December 31, 1999 into 1,185,216 shares of common stock.

      In August 1999, the Company issued $750,000 of 8% convertible debentures
exercisable at 75% of fair market value of the Company's common stock on the
date of conversion. The Company also issued 5,000,000 warrants at an exercise
price of 50% of the fair market value of the Company's stock on the date of
exercise. The Company


                                      F-17
<PAGE>

incurred a fee of $40,000 for the transaction. Effective January 18, 2000, the
Company completed a settlement with the debenture holders, canceling all
previous agreements in exchange for 1,500,000 shares of the Company's common
stock and $324,750 of 8% convertible debentures exercisable at 50% of the fair
market value of the Company's stock. The debentures were subsequently converted
into 3,392,857 shares. Total cash received, net of the original $40,000 fee, was
$460,000 relating to the transaction. The Company has recorded the transaction
as if the settlement occurred prior to year-end. A charge to interest expense in
the amount of $404,500 has been recorded at December 31, 1999 relating to the
discount on the conversion of the debentures into common stock in January 2000.

NOTE 12-WARRANTS & OPTIONS

      On June 7, 2000, the board of directors approved the "2000 Long-term
Incentive Plan" reserving 30,000,000 shares of common stock for issuance under
the plan. The plan was approved by the Company's shareholders at the annual
shareholder meeting held on August 25, 2000. Under the plan, the board of
directors may grant incentive stock options, options which do not constitute
incentive stock options, stock appreciation rights, restricted stock awards,
performance share awards, stock value equivalent awards, or any combination of
the foregoing to eligible employees and consultants. All incentive stock options
must be granted at a price of not less than the fair market value at the time of
the grant. Total options granted to eligible employees under the plan are
26,436,000, at exercise prices ranging from $.03 to $.48 per share. The weighted
average exercise price of the outstanding options is $.19 per share. As of
December 31, 2000, 2,381,250 options were exercisable.


                                      F-18
<PAGE>

      The following table presents a summary of the Company's warrants
outstanding as of December 31, 2000 and December 31, 1999:

<TABLE>
<CAPTION>
                                                             AVERAGE
                                            SHARES        EXERCISE PRICE
                                         -----------    -------------------

<S>                                      <C>            <C>
      Outstanding, January 1, 1999                --    $              --

          Granted                         14,505,000                 0.21
          Expired                         (3,132,200)               (0.18)
          Exercised                       (1,370,300)               (0.13)
          Cancelled (Note 9)              (5,000,000)   50 % of share price
                                         -----------    -------------------

      Outstanding, December 31, 1999       5,002,500                 0.25

          Granted                         19,538,571                 0.30
          Expired                         (3,922,500)               (0.16)
          Exercised                       (1,080,000)               (0.14)
                                         -----------    -------------------

      Outstanding, December 31, 2000      19,538,571    $            0.29
                                         ===========    ===================
</TABLE>

NOTE 13-COMMON STOCK TRANSACTIONS

      In 1997, the Company issued approximately 4,500,000 shares for services.
In 1999, the Company renegotiated the number of shares since the services had
not been performed as anticipated. The Company received back and canceled
3,846,325 shares.

      In January 2000, the Company issued in exchange for prior services an
aggregate of 775,000 shares of common stock to four professionals and
consultants. The aggregate amount of $206,150, representing the fair market
value of the stock on the date of issuance, was expensed in the six months ended
June 30, 2000. In addition, the Company issued 605,000 shares of common stock to
a professional for legal services performed in 1999 and 2000. The total amount
of $160,930, representing the fair market value of the stock on the date of
issuance, was expensed half in 1999 and the remainder in the first quarter of
2000.

      In the first quarter of 2000, the Company completed a private placement
raising $2,000,000 by offering 20,000,000 shares of the Company's common stock
at $.10 per share. The offering also includes for every two shares purchased, a
warrant to acquire an additional share of common stock at $.50, exercisable for
a period of one year from the date of issuance.

      On March 22, 2000, the Company acquired a CLEC license, a contract that
entitles the Company to resell Southwestern Bell Telephone Company products and
services at a 32% discount, for $217,000 and 100,000 shares of common stock. In
August 2000, the Company received approval from the Texas Public Utilities
Commission to transfer the CLEC license to the Company.


                                      F-19
<PAGE>

      In April 2000, the Company sold to accredited investors, 100,000 shares of
common stock valued at $.40 per share. Additionally, the Company issued 200,000
shares to an individual for consulting services valued at $.69 per share,
representing the fair market value of the stock on the date of issuance.

      In May 2000, the Company issued 355,000 shares of common stock valued at
$.23 per share for public relations services performed by a services firm. On
May 2, 2000, the Company gave its 30-day notice to terminate the contract in
accordance with the agreement.

      In June 2000, the Company sold to accredited investors, 890,000 shares of
common stock valued at $.25 per share.

      In July 2000, the Company sold to accredited investors, 1,360,000 shares
of common stock valued at $.25 per share.

      In November 2000, the Company sold to two accredited investors, 13,714,285
shares of common stock valued at $.04 per share.

NOTE 14 - 8 % SERIES A CONVERTIBLE PREFERRED STOCK

      On August 14, 2000, the Company executed a financing arrangement whereby
the Company would issue 8% Series A Convertible Preferred Stock in order to
raise a minimum of $1,000,000, and a maximum of $3,000,000. Pursuant to the
agreement, the Company has sold 1,900 shares of the 8 % Series A Convertible
Preferred Stock and has issued warrants to acquire 760,000 shares of common
stock.

      The preferred stock must be converted into common stock by August 2002,
based on a conversion price per share equal to the lesser of $.50 or a 25%
discount to the five-day average closing bid price at the time of conversion.
Interest expense totaling $633,333 has been recorded by the Company to reflect
the conversion discount based on the market value of the Company's common stock
on the date the preferred shares were sold.

      For each $100,000 invested, the Company issued to the preferred
stockholder five-year warrants to acquire 20,000 shares of common stock with an
exercise price per share equal to the closing bid price of the common stock on
the date of purchase. The Company agreed to pay a 10% placement fee, and to
issue five-year warrants to acquire 200,000 shares of common stock for every
$1,000,000 raised in the convertible preferred stock offering. The Company has
certain rights to redeem the convertible preferred stock prior to its
conversion.

      The Company's articles of incorporation include various stipulations,
including a) no dividends shall be paid on common stock while the preferred
shares are outstanding, b) the preferred shares shall receive options or
warrants to purchase common stock on a


                                      F-20
<PAGE>

pro-rata basis when any such options and warrants are extended to common stock
shareholders, c) the preferred share holders may elect to have the Company
redeem their shares prior to the consummation of a major transaction and d) upon
liquidation, each preferred share shall receive a preferential distribution,
amounting to $1,000 plus an 8% per annum premium, before any distributions are
made to common shareholders.

      If all shares were converted into common stock at March 31, 2000, the
Company would issue approximately 147,287,000 shares of common stock.

      The Company has agreed to file a registration statement covering the
shares of the common stock underlying the foregoing warrants and convertible
preferred stock. If the registration is not filed within the stipulated
timeframe, the conversion discount would be increased by 3 % for each 30 day
period following the registration deadline date, until the registration
statement is declared effective by the Securities & Exchange Commission. The
registration effective date has been extended until May 31, 2001.

NOTE 15 - LEGAL MATTERS

      2-Infinity is currently in the process of attempting to resolve a claim,
alleged by Pilares Oil & Gas, Inc., through arbitration. Pilares is seeking
damages in the amount of $400,000 plus interest. 2-Infinity is seeking, in a
counterclaim, the return of the shares of the common stock issued to Pilares,
alleging that Pilares misrepresented the appraisal value of its interest in an
oil & gas lease. Arbitration is expected to be scheduled for April 2001.

      Partners Alliance Group, Inc.("PAG"), a former affiliate of Maximum
Return, has filed a suit against the Company in the amount of $59,515 for
services and products purportedly sold to Maximum Return, prior to the Company's
acquisition of Maximum Return. The Company believes the claim is without merit
and that PAG misrepresented Maximum Return's liabilities at date of acquisition,
as such liabilities were not included in Maximum Return's financial statements.

NOTE 16 - SUBSEQUENT EVENTS

      During January 2001, the Company sold to two accredited investors,
10,272,727 shares of common stock valued at $.027 per share. During February
2001, the Company sold to the same accredited investors, an additional
14,806,027 shares of common stock valued at $.022 per share.

      Subsequent to December 31, 2000, the Company issued 12,347,692 shares of
common stock valued at $.031 per share, to four executive officers, in lieu of
cash compensation.

      As of March 31, 2001, the Company is required to have reserved for
issuance, 28,459,179 shares for outstanding options and warrants. Based on the
closing prices for its common stock during the week ended March 31, 2001, and
the floating conversion


                                      F-21
<PAGE>

rate included in the Series A Preferred Stock agreements, the Company is also
required to have reserved for issuance an additional 147,286,822 shares of
common stock under agreements. Since the Company had 138,543,091 shares of
common stock outstanding at March 31, 2001, the outstanding shares plus the
number of shares that are required to be reserved for issuance under those
existing agreements, exceeded the 300,000,000 shares of common stock it is
authorized to issue by approximately 14,289,092 shares.


                                      F-22
<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL ISSUES

      The Company engaged Mann Frankfort Stein & Lipp, CPAs, L.L.P. of Houston,
Texas, as it's independent certified public accounting firm, on May 5, 2000. It
did not have any disagreements with its former independent certified public
accounting firm, Jones, Jensen & Company of Salt Lake City, Utah.

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS

      Set forth below are the individuals who served as directors and executive
officers of 2-Infinity during the year ended December 31, 2000, together with
their ages as of December 31, 2000.

<TABLE>
<CAPTION>
Name                 Age            Position                      Director Since
----                 ---            --------                      --------------
<S>                  <C> <C>                                                <C>
Majed M. Jalali       27 Chairman of the Board and
                         Chief Executive Officer                            2000
Patrick Cody Morgan*  33 President, Chief Operating Officer,
                         Secretary and Director                             2000
Kelly E. Nispel*      37 Chief Financial Officer, Treasurer
                         and Director                                       2000
Ahmed D. Alumran      24 Chief Information Officer and Director             2001
Michael L. Omer       46 Director                                           2000
</TABLE>

----------------------
o     * Mr. Morgan and Ms. Nispel resigned their respective positions and from
      the board of directors on January 1, 2001

      The members of our board of directors are subject to change from time to
time by the vote of the shareholders at special or annual meetings to elect
directors. The current board of directors consists of three directors as
described below. The number of directors may be fixed from time to time by
resolution duly passed by the board of directors. The directors hold office
until the next annual meeting of the shareholders and until their successors are
duly elected and qualified. Directors who are elected at an annual meeting of
shareholders, and directors elected in the interim to fill vacancies and newly
created directorships, will hold office for the term for which elected and until
their successors are elected and qualified or until their earlier death,
resignation or removal. Officers are elected annually by the directors. There
are no family relationships among our directors and officers.

      A description of the business experience during the past several years for
each of our directors and executive officers is set forth below.

      Mr. Jalali has been the chairman of the board of directors and chief
executive officer of 2-Infinity since January 2000. Prior to that, he served as
president of 2-Infinity-Texas. From January 1998 to March 1999, Mr. Jalali
served as chief executive officer of Infinity International School. Prior
thereto, Mr. Jalali was a university student.

      Mr. Morgan became 2-Infinity's vice president and secretary, and a
director of 2-Infinity, in January 2000, became 2-Infinity's chief operating
officer in May 2000 and


                                       17
<PAGE>

became 2-Infinity's President in November 2000. He resigned from all of the
foregoing positions on January 1, 2001. Prior to January 2000, he was the
president of AirNexus beginning in May 1998, as well as a member of that
company's board of directors. From October 1996 until May 1998, Mr. Morgan was a
partner in Digiphone, a Houston, Texas-based voice solution provider. From 1994
to October 1996, Mr. Morgan was the general manager of Digitech Business
Systems, a Houston, Texas-based company that provided business telephones and
voice mail systems.

      Ms. Nispel has been the chief financial officer and treasurer of
2-Infinity since March 2000. Ms. Nispel became a director of 2-Infinity in June
2000. Ms. Nispel resigned from all of the foregoing positions on January 1,
2001. From 1997 to 2000, Ms. Nispel was employed by Corporate Express Delivery
Systems, Inc., which was later acquired by United Shipping and Technology, Inc.,
in a variety of positions from director of finance to vice president of finance.
Her responsibilities included SEC financial reporting, senior lender reporting,
banking relations and other financial, tax and treasury matters. From 1996 to
1997, Ms. Nispel was employed by Corporate Express, Inc., the parent company of
Corporate Express Delivery Systems, as a regional assistant controller. From
1993 to 1996, Ms. Nispel was the chief financial officer for Ovation Data
Services, Inc., where she was responsible for all financial related matters.
From 1985 to 1993, Ms. Nispel was employed by Price Waterhouse in the middle
market and growth oriented division, where she became a manager in 1991. Ms.
Nispel is a certified public accountant in the states of Texas and Colorado.

      Mr. Alumran became our chief information officer in July 2000, and was
elected to serve as director, effective January 1, 2001. Prior to joining
2-Infinity, Mr. Alumran was a consultant at the Mitchell Madison Group, a global
management consulting firm that primarily served Fortune 500 companies in areas
such as business strategy, operations, sourcing and mergers and acquisitions.
From 1998 to early 2000, Mr. Alumran was involved in several consulting
relationships with the management of companies involved in the
telecommunications and banking sectors. Prior to 1998, Mr. Alumran was the
founder and president of AIT, an Internet consulting firm serving top executives
and government officials in the Middle East. Prior to that, Mr. Alumran was a
university student at the Massachusetts Institute of Technology, earning
Bachelor of Science and Master of Engineering degrees in electrical engineering.

      Mr. Omer has served as a corporate consultant to 2-Infinity since May 1999
and as a director of 2-Infinity since June 2000. Since 1989, Mr. Omer has been
employed by Aramco Services Company in various capacities, most recently as
general attorney and corporate secretary. Mr. Omer also serves as the corporate
legal and regulatory counsel to Aramco's North American affiliates, including
Saudi Refining, Inc., Saudi Petroleum International, Inc., Aramco Associated
Company and Aramco Financial Services Company, as well as other companies and
cooperatives affiliated with Aramco. From 1991 through 1994, Mr. Omer also
served as a director and as chairman of the legal committee for the Clean
Caribbean Corporation, a non-profit cooperative organized by numerous
multinational oil companies operating within the Caribbean Basin and South
America, and he served as chairman of the board of directors for the Clean
Caribbean


                                       18
<PAGE>

Corporation from 1994-1995. Mr. Omer is licensed to practice law in the states
of Texas and Hawaii.

ITEM 10. EXECUTIVE COMPENSATION

      Directors. The directors have not received any compensation for serving in
such capacity, and we do not currently contemplate compensating our directors in
the future for serving in such capacity.

      Executive Officers. The following summary compensation table shows
selected compensation information for services rendered in all capacities for
the fiscal year ended December 31, 2000. Other than as set forth below, no
executive officer's salary and bonus exceeded $100,000 in any of the applicable
years. The following information includes the dollar value of base salaries and
stock bonus awards, whether paid or deferred.

<TABLE>
<CAPTION>
                               Summary Compensation Table

                                               Annual Compensation(1)   Long Term Compensation
                                               ---------------------- --------------------------
Name and Principal Position            Year    Salary ($)   Bonus ($) Restricted Stock Awards($)
------------------------------------   ----    ----------   --------- --------------------------
<S>                                    <C>      <C>          <C>          <C>
Majed M. Jalali , Chairman of the      2000     219,692      18,750         125,000        (5)
  Board, Chief Executive Officer and   1999      59,422          --              --
  President                            1998          --          --              --

R. K. Honeyman, Former President       2000     143,700          --         400,000        (6)
  and Director (2)                     1999     222,328          --         134,114        (7)
                                       1998      96,240          --              --

Patrick Cody Morgan, Former Chief      2000     165,623      50,000          83,333        (8)
  Operating Officer, Secretary and     1999      44,232          --              --
  Director (3)                         1998          --          --              --

Ahmed D. Alumran, Chief
  Information Officer and Director     2000      56,692          --         134,615        (9)

Kelly E. Nispel, Former Chief          1998          --          --              --
  Financial Officer, Treasurer and     1998          --          --              --
  Director (3)                         2000     160,384                      42,307       (10)
                                       1999          --          --              --
                                       1998          --          --              --

John B. Hayes, Former President        2000       2,477          --       2,460,000       (11)
  of Lakota Oil & Gas (4)              1999      76,903          --         196,000       (12)
                                       1998          --          --              --
</TABLE>

----------------------
(1)   Excludes any perquisites and other benefits that do not exceed the lesser
      of $ 50,000 Or 10 % of the total annual salary and bonus for any executive
      officer.
(2)   Mr. Honeyman resigned as an executive officer and director of 2 - Infinity
      as of January 20, 2000.
(3)   Mr. Morgan and Ms. Nispel resigned from their positions as executive
      officers and directors of 2 - Infinity as of January 1, 2001.


                                       19
<PAGE>

(4)   Mr. Hayes resigned as president of Lakota Oil & Gas on February 3, 2000.
(5)   Consists of 4,006,410 shares of common stock issued subsequent to year
      end, which had a market value of $ .0312 per share on the date of the
      award.
(6)   Consists of 4,000,000 shares of common stock issued in January 2000, which
      had a market value of $.10 per share on the date of the award.
(7)   Consists of 1,676,429 shares of common stock which had a market value of
      $.08 per share on date of issue.
(8)   Consists of 2,670,940 shares of common stock issued subsequent to year
      end, which had a market value of $ .0312 per share on the date of the
      award.
(9)   Consists of 4,314,596 shares of common stock issued subsequent to year
      end, which had a market value of $ .0312 per share on the date of the
      award.
(10)  Consists of 1,356,016 shares of common stock issued subsequent to year
      end, which had a market value of $ .0312 per share on the date of the
      award.
(11)  Consists of 3,500,000 shares of common stock issued in January 2000, which
      had a market value of $.703 per share on the date of the award.
(12)  Consists of 1,000,000 shares of common stock which had a market value of
      $.10 per share on date of issue, and 300,000 shares of common stock which
      had a market value of $.32 per share on the date of issue.

2000 Long-Term Incentive Plan

      On August 25, 2000, our shareholders approved the 2-Infinity 2000
Long-Term Incentive Plan, which management believes will allow us to provide
additional incentive and reward opportunities to our employees that are designed
to enhance our long-term profitable growth. The relevant terms of the plan are
as follows:

o     The aggregate number of shares of common stock that may be awarded under
      the plan is limited to 30,000,000 shares, subject to adjustment due to the
      recapitalization or reorganization of 2-Infinity.

o     The plan is currently administered by our board of directors. However, the
      plan grants the board of directors authority to appoint a committee to
      administer the plan in the future.

o     The committee may grant the following types of awards under the plan:
      incentive stock options; options that do not constitute incentive stock
      options; stock appreciation rights; restricted stock awards; performance
      share awards; and stock value equivalent awards.

o     The committee will have the sole authority to determine and designate the
      individuals who will receive awards under the plan. However, incentive
      stock options and performance share awards may only be granted to
      employees of the Company.

o     Our board of directors may terminate or amend the plan, provided that any
      termination or amendment may not, without prior consent, impair the rights
      of any


                                       20
<PAGE>

      holder with respect to an award granted prior to the time of the
      termination or amendment.

      As of December 31, 2000, our board of directors had granted options to
purchase, in the aggregate, 26,436,000 shares of our common stock, net of
cancellations, under the plan.

Employment Contracts

      In June 1999, 2-Infinity entered into an employment agreement with Majed
Jalali. The agreement is for a term of three years and may be terminated at any
time for cause or good reason, as defined in the agreement. As of January 1,
2001, Mr. Jalali's annual salary under the agreement is $175,000.


                                       21
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table presents information regarding the beneficial
ownership of all shares of common stock at March 31, 2001 by:

o     Each person who owns beneficially more than five percent of the
      outstanding shares of common stock.

o     Each current director of the Company.

o     Each named current executive officer of the Company, and all current named
      executive officers and directors as a group.

<TABLE>
<CAPTION>
            NAME AND ADDRESS OF                   SHARES OF         PERCENT
            BENEFICIAL OWNER                     COMMON STOCK      OF CLASS(2)
            -------------------------------   ------------------  -----------
<S>                                            <C>                    <C>
            Cache Capital "USA" LP             147,666,822  (3)         51.6
             3343 Peachtree Road, Suite 500
             Atlanta, Georgia 30326

            Fahd Tammimi                       14,365,767   (4)         10.4
               P.O. Box 2341
               Riyadh, Saudi Arabia  11451

            Jeff Runner                        14,167,272               10.2
               13895 Hopewell Road
               Alpharetta, Ga.  30004

            Gaveran Trading Co. Ltd.           12,571,428   (5)          8.9
              P.O. Box 53562, Limassol
              Cyprus, Republic of Cyprus

            Majed Jalali (1)                    9,782,852   (6)          6.9

            Ahmed Alumran (1)                   6,100,654   (7)          4.3

            Michael Omer (1)                      475,000                  *

            All officers and directors
               as a group                      16,358,506               11.3
</TABLE>
------------------
            *     Less than 1 %.


                                       22
<PAGE>

            (1)   The address for each of these shareholders is:
                  c/o 2-Infinity, Inc.,
                  4828 Loop Central Drive, Suite 150
                  Houston, Texas 77081
            (2)   Based on 138,543,091 shares of common stock outstanding as of
                  March 31, 2001.
            (3)   Includes 147,286,822 shares issuable upon conversion of 1,900
                  shares of Series A Preferred Stock and 380,000 shares issuable
                  upon exercise of warrants with an average exercise price of
                  $.031 per share. The terms of the Series A Preferred Stock
                  offering documents, however, limit the number of shares of
                  common stock into which The Series A Preferred Stock may be
                  converted by any holder to 4.9% of the then outstanding shares
                  of common stock ( or 6,927,154 shares ).
            (4)   Includes warrants, which expire on November 29, 2001 to
                  purchase 228,571 shares of common stock at $.069 per share.
            (5)   Includes warrants, which expire on November 29, 2001, to
                  purchase 1,142,857 shares of common stock at $.069 per share.
            (6)   Includes options issued under the Company's "2000 Long-Term
                  Incentive Plan" to purchase 1,875,000 shares at $.41 per share
                  and an additional 901,442 shares at $.03 per share.
            (7)   Includes options issued under the Company's "2000 Long-Term
                  Incentive Plan" to purchase 750,000 shares at $.41 per share,
                  437,500 shares at $.48 per share and an additional 598,558
                  shares at $.03 per share.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      In February 1999, the Company issued 1,000,000 shares of restricted common
stock to an Entity controlled by the former president of Lakota Oil, and
director of the Company, John B. Hayes, as consideration for services valued at
$100,000 related to the negotiation and consummation of a transaction with an
oil and gas project.

      In January and February 2000, the Company mutually separated from Mr.
Hayes and its former president and director, R.K. Honeyman. Included in the
settlement agreements with Mr. Honeyman, the Company issued 4,000,000 shares and
$100,000 to


                                       23
<PAGE>

compensate him for past services and the Company paid $40,000 for execution of
the settlement agreement and consulting services during the transition to new
management. Each party mutually discharged any indebtedness owed to the other
and Cam Resources, Inc., a related party of Mr. Honeyman. As a result, the
Company accrued at December 31, 1999, $500,000 for compensation of past services
at the fair market value of the shares and cash issued as a result of this
agreement.

      In addition, included in the settlement agreement with Mr. Hayes the
Company issued an aggregate of 3,500,000 shares to compensate him for past
services and the Company paid an aggregate of $25,000 for the execution of a
consulting agreement during the transition to new management. As a result, the
Company accrued at December 31, 1999 $2,485,500 of compensation expense at the
fair market value of the shares and cash issued as a result of this agreement.

      In June 1999, the Company issued an aggregate of 3,000,000 shares at $.38
per share of restricted common stock to Majed Jalali, the sole shareholder of
2-Infinity-Texas, pursuant to the acquisition agreement between the Company and
Mr. Jalali.

      In June 1999, the Company issued an aggregate of 2,000,000 shares at $.32
per share of restricted common stock to Patrick Cody Morgan and Candus Morgan in
connection with the acquisition of AirNexus (formerly Voice Design, Inc.)

      In November 2000, the Company sold to Geveran Trading Co. Ltd., an
accredited investor, 11,428,571 shares of common stock at a market value of
$.044 per share. Geveran also purchased warrants, which expire in November 2001,
to purchase an additional 1,142,857 shares at $.069 per share.

      In November 2000, the Company sold to Fahd Tammimi, an accredited
investor, 2,285,714 shares of common stock at a market value of $.044 per share.
He also purchased warrants, which expire in November 2001, to purchase an
additional 228,571 shares at $.069 per share.

      During the first quarter of 2001, the Company also sold to Fahd Tammimi
7,727,727 shares of common stock at $.027 per share, and an additional 4,578,755
shares of common stock at $.022 per share.

      During the first quarter of 2001, the Company sold to Jeff Runner, an
accredited investor, 3,000,000 shares of common stock at $.027 per share, and an
additional 10,227,272 shares of common stock at $.022 per share.


                                       24
<PAGE>

Item 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits.

2.1*        Agreement and Plan of Reorganization dated November 6, 1996 between
            Lakota Energy, Inc. and Chancellor Trading Group, Inc. (incorporated
            herein by reference to Exhibit 2.1 of the Company's Registration
            Statement on Form SB-2 (File No. 333-88575) filed with the
            Commission on October 7, 1999 (the "Company's October 1999 SB-2")).
2.2*        Reorganization and Stock Purchase Agreement dated May 28, 1999
            between Lakota Energy, Inc., 2-Infinity.com, Inc., a Texas
            corporation, and Majed Jalali (incorporated herein by reference to
            Exhibit 2.2 of the Company's October 1999 SB-2).
2.3*        Reorganization and Stock Purchase Agreement dated June 8, 1999
            between Lakota Energy, Inc. and Voice Design, Inc. and its
            shareholders (incorporated herein by reference to Exhibit 2.3 of the
            Company's October 1999 SB-2).
2.4*        Stock Transfer Agreement dated June 14, 1999 between Lakota Energy,
            Inc. and Lakota Oil and Gas, Inc (incorporated herein by reference
            to Exhibit 2.4 of the Company's October 1999 SB-2).
2.5*        Exchange Agreement between Lakota Technologies, Inc. and certain AGM
            shareholders dated as of January 18, 2000 (incorporated herein by
            reference to the Company's Current Report on Form 8-K filed with the
            Commission on January 18, 2000).
2.6*        Agreement and Plan of Merger of 2-Infinity.com, Inc., a Texas
            corporation, and AirNexus, Inc., a Texas Corporation, dated January
            27, 2000 (incorporated herein by reference to Exhibit 1.1 of the
            Company's Current Report on Form 8-K filed with the Commission on
            February 8, 2000).
2.7*        Stock Purchase Agreement dated as of April 1, 2000 between
            2-Infinity.com, Inc. and the Shareholders of Maximum Return &
            Development, Inc., a Pennsylvania corporation (incorporated herein
            by reference to Exhibit 2.7 of the Company's Registration Statement
            on Form SB-2 (File No. 333-47962) filed with the Commission on
            October 13, 2000 (the "Company's October 2000 SB-2")).
3.1*        Articles of Incorporation of Chancellor Trading Group, Inc. filed
            July 14, 1995 (incorporated herein by reference to Exhibit 3.1 of
            the Company's October 1999 SB-2).
3.2*        Articles of Merger between Lakota Energy, Inc. and Chancellor
            Trading Group, Inc. filed December 27, 1996 (incorporated herein by
            reference to Exhibit 3.2 of the Company's October 1999 SB-2).
3.3*        Articles of Amendment to the Articles of Incorporation of Lakota
            Energy, Inc. filed August 4, 1999 (incorporated herein by reference
            to Exhibit 3.3 of the Company's October 1999 SB-2).
3.4*        Articles of Amendment to the Articles of Incorporation of Lakota
            Technologies, Inc. filed May 8, 2000 (incorporated herein by
            reference to Exhibit 3.5 of the Company's Quarterly Report on Form
            10-QSB for the quarter ended March 31, 2000).
3.5*        Articles of Amendment to the Articles of Incorporation of
            2-Infinity.com, Inc. filed August 17, 2000 (incorporated herein by
            reference to Exhibit 3.5 of the Company's October 2000 SB-2).


                                       25
<PAGE>

3.6*        Articles of Amendment to the Articles of Incorporation of
            2-Infinity.com, Inc. filed August 31, 2000 (incorporated herein by
            reference to Exhibit 3.6 of the Company's October 2000 SB-2).
3.7*        Bylaws, as amended (incorporated herein by reference to Exhibit 3.4
            of the Company's October 1999 SB-2).
4.1*        Text of Common Stock Certificate (incorporated herein by reference
            to Exhibit 4.1 of the Company's October 2000 SB-2).
4.2*        Text of Series A Preferred Stock Certificate (incorporated herein by
            reference to Exhibit 4.2 of the Company's October 2000 SB-2).
10.1*       Office Space Lease dated June 16, 1999 between W9/LWS II Real Estate
            Limited Partnership, a Delaware limited partnership, and
            2-Infinity.com,, Inc., a Texas corporation, for the premises located
            at 4828 Loop Central Drive, Suite 150, Houston, Texas
            77081(incorporated herein by reference to Exhibit 10.1 of the
            Company's October 2000 SB-2).
10.2*       License Agreement dated July 14, 1999 between W9/LWS II Real Estate
            Limited Partnership, a Delaware limited partnership, and
            2-Infinity.com,, Inc., a Texas corporation, related to the
            installation of a satellite dish (incorporated herein by reference
            to Exhibit 10.2 of the Company's October 2000 SB-2).
10.3*       First Amendment to Lease dated September 27, 1999 between W9/LWS II
            Real Estate Limited Partnership, a Delaware limited partnership, and
            2-Infinity.com,, Inc., a Texas corporation(incorporated herein by
            reference to Exhibit 10.3 of the Company's October 2000 SB-2).
10.4*       Second Amendment to Lease dated March 29, 2000 between W9/LWS II
            Real Estate Limited Partnership, a Delaware limited partnership, and
            2-Infinity.com,, Inc., a Texas corporation(incorporated herein by
            reference to Exhibit 10.4 of the Company's October 2000 SB-2).
10.5*       Lease Agreement dated July 12, 1999 between Harvard Property (333
            Sam Houston) L.P. and AirNexus, Inc., a Texas corporation, for the
            premises located at 333 N. Sam Houston Parkway E., Suite 820,
            Houston, Texas 77060(incorporated herein by reference to Exhibit
            10.5 of the Company's October 2000 SB-2).
10.6*       Sublease dated May 5, 2000 between 2-Infinity.com, Inc. and LynkTel,
            Inc., for the premises located at 333 N. Sam Houston Parkway E.,
            Suite 820, Houston, Texas 77060(incorporated herein by reference to
            Exhibit 10.6 of the Company's October 2000 SB-2).
10.7*       Lease Agreement dated December 17, 1996 between Lakota Energy, Inc.
            and Cigna Real Estate Fund T, Limited Partnership, for the premises
            located at 2849 Paces Ferry Road, Suite 710, Atlanta, Georgia, 30339
            (incorporated herein by reference to Exhibit 10.4 of the Company's
            October 1999 SB-2).
10.8*       First Amendment to Lease Agreement dated January 19, 2000 between
            The Realty Associates Fund IV, L.P., a Delaware limited partnership,
            and Lakota Technologies, Inc., for the premises located at 2849
            Paces Ferry Road, Suite 710, Atlanta, Georgia, 30339(incorporated
            herein by reference to Exhibit 10.8 of the Company's October 2000
            SB-2).


                                       26
<PAGE>

10.9*       Oil and Gas Lease dated October 23, 1995 for the Bernard project
            (incorporated herein by reference to Exhibit 10.1 of the Company's
            October 1999 SB-2).
10.10*      Assignment of Oil, Gas and Mineral Lease dated March 15, 1996 for
            the Bernard project (incorporated herein by reference to Exhibit
            10.2 of the Company's October 1999 SB-2).
10.11*      Oil Gas and Mineral Lease dated April 26, 1996 for the Glass
            Mountain project (incorporated herein by reference to Exhibit 10.3
            of the Company's October 1999 SB-2).
10.12*      Employment Agreement between 2-Infinity.com, Inc. and Majed Jalali,
            effective June 1, 1999 (incorporated herein by reference to Exhibit
            10.5 of the Company's October 1999 SB-2).
10.13*      Letter Agreement and Amendment to Employment Agreement dated as of
            March 1, 2000 between Lakota Technologies, Inc. and Majed Jalali
            (incorporated herein by reference to Exhibit 10.13 of the Company's
            Annual Report on Form 10-KSB for the year ended December 31, 1999
            (the "Company's 1999 10-KSB").
10.14*      Employment Agreement between Voice Design, Inc. and Patrick Cody
            Morgan effective June 14, 1999 (incorporated herein by reference to
            Exhibit 10.7 of the Company's October 1999 SB-2).
10.15*      Letter Agreement and Amendment to Employment Agreement dated as of
            March 1, 2000 between Lakota Technologies, Inc. and Patrick Cody
            Morgan (incorporated herein by reference to Exhibit 10.14 of the
            Company's 1999 10-KSB).
10.16*      Agreement and General Mutual Release dated January 6, 2000 for Ken
            Honeyman (incorporated herein by reference to Exhibit 10.1 of the
            Company's Registration Statement on Form S-8 (File No. 333-38304)
            filed with the Commission on June 1, 2000 (the "Company's June 2000
            S-8")).
10.17*      Addendum to Agreement and General Mutual Release and Escrow
            Agreement for Ken Honeyman dated January 20, 2000 (incorporated
            herein by reference to Exhibit 10.2 to the Company's June 2000 S-8).
10.18*      Agreement and General Mutual Release dated January 6, 2000 for
            Howard Wilson (incorporated herein by reference to Exhibit 10.3 to
            the Company's June 2000 S-8).
10.19*      Addendum to Agreement and General Mutual Release and Escrow
            Agreement for Howard Wilson dated January 20, 2000 (incorporated
            herein by reference to Exhibit 10.4 to the Company's June 2000 S-8).
10.20*      Escrow Agreement dated January 6, 2000 (incorporated herein by
            reference to Exhibit 10.5 to the Company's June 2000 S-8).
10.21*      Agreement and General Mutual Release dated February 3, 2000 for John
            B. Hayes. (incorporated herein by reference to Exhibit 10.6 to the
            Company's June 2000 S-8).
10.22*      Tut Systems, Inc. Value Added Reseller Agreement dated May 20, 1999
            (incorporated herein by reference to Exhibit 10.43 of the Company's
            October 1999 SB-2).
10.23*      Voice Solutions Reseller Agreement dated as of November 23, 1999,
            between 3Com Corporation and Air Nexus, Inc. (incorporated herein by
            reference to Exhibit 10.56 of the Company's October 1999 SB-2).


                                       27
<PAGE>

10.24*      Agreement for the Purchase and Sale of Assets dated as of March 22,
            2000, between 2-Infinity.com, Inc. and Afaneh, Inc. (incorporated
            herein by reference to Exhibit 10.16 of the Company's 1999 10-KSB).
10.25*      Warrant executed in favor of Dipak Bhatt to purchase 1,250,000
            shares of common stock, expiring November 30, 2000 (incorporated
            herein by reference to Exhibit 10.45 of the Company's October 1999
            SB-2).
10.26*      Warrant executed in favor of Dipak Bhatt to purchase 750,000 shares
            of common stock, expiring December 22, 2000 (incorporated herein by
            reference to Exhibit 10.47 of the Company's October 1999 SB-2).
10.27*      Warrant executed in favor of Michael A. Hancock and Steven D.
            Morrison to purchase 500,000 shares of common stock, expiring
            December 10, 2000 (incorporated herein by reference to Exhibit 10.49
            of the Company's October 1999 SB-2).
10.28*      Warrant executed in favor of Michael A. Hancock and Steven D.
            Morrison to purchase 250,000 shares of common stock, expiring
            December 17, 2000 (incorporated herein by reference to Exhibit 10.51
            of the Company's October 1999 SB-2).
10.29*      Stock Purchase Agreement dated September 28, 1999 by and between the
            Company and Matt Hensley (incorporated herein by reference to
            Exhibit 10.52 of the Company's October 1999 SB-2).
10.30*      Warrant dated September 28, 1999 by and between the Company and Matt
            Hensley (incorporated herein by reference to Exhibit 10.53 of the
            Company's October 1999 SB-2).
10.31*      Warrant executed in favor of H.L. Bolkema to purchase 22,800 shares
            of common stock, expiring February 2, 2001(incorporated herein by
            reference to Exhibit 10.31 of the Company's October 2000 SB-2).
10.32*      Form of one-year Warrant, exercisable at $0.50 per share of common
            stock, issued to investors in the Company's $2,000,000 private
            placement during the first six months of 2000(incorporated herein by
            reference to Exhibit 10.32 of the Company's October 2000 SB-2).
10.33*      Warrant executed in favor of Billy Sonnier to purchase 12,500 shares
            of common stock, expiring April 24, 2001(incorporated herein by
            reference to Exhibit 10.33 of the Company's October 2000 SB-2).
10.34*      Warrant executed in favor of John R. Weaver to purchase 12,500
            shares of common stock, expiring April 24, 2001(incorporated herein
            by reference to Exhibit 10.34 of the Company's October 2000 SB-2).
10.35*      Warrant exercised in favor of Forrest E. Singletary to purchase
            25,000 shares of common stock, expiring April 24, 2001(incorporated
            herein by reference to Exhibit 10.35 of the Company's October 2000
            SB-2).
10.36*      2000 Long-Term Incentive Plan (incorporated herein by reference to
            Appendix A to the Company's Proxy Statement on Schedule 14A filed
            with the Commission on July 11, 2000.


                                       28
<PAGE>

10.37*      Form of Securities Purchase Agreement entered into between Cache
            Capital "USA" LP and 2-Infinity.com, Inc. related to the sale of the
            Series A Preferred Stock(incorporated herein by reference to Exhibit
            10.37 of the Company's October 2000 SB-2).
10.38*      Form of Registration Rights Agreement entered into between Cache
            Capital "USA" LP and 2-Infinity.com, Inc. related to the sale of the
            Series A Preferred Stock(incorporated herein by reference to Exhibit
            10.38 of the Company's October 2000 SB-2).
10.39*      Placement Agency Agreement dated as of August 14, 2000 between J.P.
            Carey Securities, Inc. and 2-Infinity.com, Inc. related to the sale
            of the Series A Preferred Stock (incorporated herein by reference to
            Exhibit 10.39 of the Company's October 2000 SB-2).
10.40*      Escrow Agreement dated as of August 11, 2000 between The Bank of New
            York, J.P. Carey Securities, Inc. and 2-Infinity.com, Inc. related
            to the sale of the Series A Preferred Stock (incorporated herein by
            reference to Exhibit 10.40 of the Company's October 2000 SB-2).
10.41*      Form of Warrant executed in favor of Cache Capital "USA" LP relating
            to the sale of the Series A Preferred Stock (incorporated herein by
            reference to Exhibit 10.41 of the Company's October 2000 SB-2).
10.42*      Form of Warrant executed in favor of J.P. Carey Securities, Inc.
            relating to the sale of the Series A Preferred Stock (incorporated
            herein by reference to Exhibit 10.42 of the Company's October 2000
            SB-2).
10.43*      Notice of Approval of Transfer of CLEC License(incorporated herein
            by reference to Exhibit 10.43 of the Company's October 2000 SB-2).
10.44       Form of Warrant executed in favor of Fahd Tamimi to purchase 228,571
            shares of common stock, expiring November 2001.
10.45       Form of Warrant executed in favor of Geveran Trading Co. Ltd. To
            purchase 1,142,857 shares of common stock, expiring in November
            2001.
16*         Letter on change in certifying accountants (incorporated herein by
            reference to Exhibit 16 of the Company's October 2000 SB-2).
21*         Subsidiaries of 2-Infinity, Inc. (incorporated herein by reference
            to Exhibit 21 of the Company's October 2000 SB-2).
23.1        Consent of Mann Frankfort Stein & Lipp, CPAs, L.L.P.
23.2        Consent of HJ & Associates, L.L.C., CPA.

----------------------
*           Incorporated by reference herein as indicated.


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<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on April 17, 2001.

                                        2-INFINITY, INC.
                                        By:

                                           /s/ Majed Jalali
                                           -------------------------------------
                                           Majed Jalali, Chairman of the Board
                                           and Chief Executive Officer

      In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated:

     Signature                       Title                          Date
     ---------                       -----                          ----


/s/ Majed Jalali        Chairman of the Board and Chief          April 17, 2001
---------------------   Executive Officer (Principal Executive,
    Majed Jalali        Financial and Accounting Officer)


/s/ Ahmed D. Alumran                 Director                    April 17, 2001
----------------------
  Ahmed D. Alumran


/s/ Michael L. Omer                  Director                    April 17, 2001
---------------------
  Michael L. Omer


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