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

                                   FORM 10-KSB

            ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999

                        Commission file number 000-26337
                              NETIVATION.COM, INC.
        (Exact name of small business issuer as specified in its charter)

           Delaware                                             82-0514605
 (State or jurisdiction of                                 (I. R. S. Employer
incorporation or organization)                              Identification No.)

             806 West Clearwater Loop, Suite N, Post Falls, ID 83854
                                 (208) 777-4203
        (Address and telephone number of principal executive offices and
                          principal place of business)

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

    Title of each class               Name of each exchange on which registered
Common Stock, $.01 par value                     Nasdaq National Market

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 there is no 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. [ ]

Registrant's revenues for the fiscal year ended December 31, 1999 were $1.0
million.

Based on the stock's average bid and asked price of $6.3205 on March 27,
2000, non-affiliated market capital was approximately $57 million.

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:

As of March 27, 2000, there were 10,832,883 shares of the registrant's $.01
par value common stock outstanding.

Transitional Small Business Disclosure Format:  Yes [  ]; No [X]


<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

         Netivation.com is an Internet company founded in 1997 and
incorporated in the state of Delaware. Netivation.com develops and operates
topic specific Internet communities designed to permit people who share a
common interest to access its suite of services and the resources of the
Internet in the political and medical arenas. Netivation.com's public policy
and political community, Votenet.com, includes content, products, and
services designed for candidates for political office, voters, political
organizations, political action committees and lobbyists. MEDMarket.com is a
business to business e-commerce community that provides products and services
to physicians, hospitals, and medical professionals. In addition,
MEDMarket.com is a venue used by manufacturers and distributors of medical
equipment and supplies for the promotion and distribution of their products
and services.

GENERAL.

         Since its inception in 1997, Netivation.com has grown into one of
the world's top 500 e-commerce sites on the Internet, as noted in INTERACTIVE
WEEK, a weekly Internet trade journal, and develops and operates topic
specific Internet communities with foundations in web-based software
solutions.

         Netivation.com's public policy and politics community, Votenet.com,
provides many tools for e-politics. Votenet.com provides content, products, and
services designed for political organizations, candidates for political office,
political action committees, lobbyists, media companies, associations, and large
corporations. Votenet.com's suite of products include:

         -    GOVERNET CAMPAIGN MANAGEMENT SOFTWARE, a PC-based software sold to
              candidates that automates the critical aspects of a campaign
              including volunteer coordination, online fundraising, FEC
              reporting, and database management.

         -    VOTENET TODAY E-MAIL NEWS SERVICE, a free daily, political
              newsletter emailed directly to subscribers that includes
              top political stories, exclusive information, proprietary
              content, and congressional voting summaries.

         -    CAPWEB ON-LINE LEGISLATIVE DIRECTORY AND GRASSROOTS MOBILIZATION
              TOOLS, an Internet based product sold on an annual subscription
              basis that provides associations, political action committees
              (PACs), lobbyists, and companies the ability to identify
              Congressional delegations, state legislators and media
              contacts, as well as being able to correspond with them
              immediately via e-mail, fax, or mailgram.

         -    ON-LINE FUNDRAISING, a campaign tool that allows candidates to
              raise funds on the Internet. A percentage of each transaction is
              charged as a fee.

         -    FECINFO CAMPAIGN DONATION INFORMATION, a powerful relational
              database that tracks every federal campaign contribution over the
              last ten years and is sold as an annual subscription to news
              media, Internet portals, corporations, lobbyists, PACs, and
              associations.

         -    POLICYVOICE INTERACTIVE VOICE RESPONSE SERVICES, a grassroots
              lobbying tool for associations, PACs, and corporations that allows
              access to legislative information from any phone, at any time.
              Charges are based on a setup fee, a monthly base fee, and a usage
              charge.

         -    POLITICALLYBLACK.COM FOR MINORITY POLITICS, an Internet site
              focusing on political issues important to African Americans.
              Politicallyblack.coms original content can be sold to other
              Internet Communities.

         Netivation.com's healthcare focused community, MEDMarket.com, is a
developer of web-based solutions that provides e-commerce, content, products,
and services for physicians, nurses, hospitals, pharmaceutical and insurance
companies, medical supply providers and others involved in the healthcare
market. MEDMarket.com's suite of products includes:

         -    MEDMARKET.COM LEAD PAGES, one-page websites that develop leads
              for medical providers and manufacturers. There is a set-up fee, as
              well as an annual subscription charge.

         -    DISCOUNTMEDMARKET.COM, a medical supplies and equipment e-commerce
              store.



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<PAGE>

         -    DISCOUNTMEDBOOKS.COM, a medical bookstore.

         -    PRACTIX MEDICAL OFFICE MANAGEMENT SOFTWARE WITH E-COMMERCE
              LINKAGE, a web-based, physician's management system providing the
              front-office, back-office, and Internet-office solution for
              medical professionals sold to Application Service Providers
              (ASPs). There is an annual license fee, as well as a monthly
              charge per healthcare provider on the ASP network using the
              system.

         -    MEDMARKETAUCTION.COM, a medical equipment auction site providing a
              fee for each item that is sold.

         Netivation.com completed its initial public offering in June 1999 and
is listed on the Nasdaq National Market under the symbol NTVN.

ACQUISITIONS.

         Acquisitions play a major part in Netivation.com's growth strategy.
Netivation.com acquired seven (7) companies during 1999. All acquisitions
were accounted for by the purchase method of accounting, so they were
accounted for at their fair market values and included prospectively in the
financial statements from the respective acquisition dates. The acquired
companies represented a substantial portion of Netivation.com's growth during
the second half of 1999 as compared to the first half of 1999.

         In June 1999, Netivation.com acquired both Interlink Service, Inc., and
The Online Medical Bookstore, Inc. Interlink Services was acquired for 126,429
shares of Netivation.com common stock and $50,000 and The Online Medical
Bookstore was acquired for 192,857 shares and $250,000. Interlink Services
provides website design and hosting services and The Online Medical Bookstore
sells medical books and supplies via e-commerce. Both companies became
wholly-owned subsidiaries of Netivation.com.

         In October 1999, Netivation.com acquired the following companies, which
are now wholly-owned subsidiaries of Netivation.com:

         -    MEDMarket, Inc., a developer of Internet e-commerce websites for
              medical manufacturers and suppliers for $100,000 and 100,000
              shares of Netivation.com common stock.

         -    PoliticallyBlack.com, the leading political information center for
              African Americans for $55,000 and 30,000 shares of Netivation.com
              common stock.

         -    Raintree Communications Corporation, a provider of automated voice
              and data services for grassroots lobbying for $100,000 and 150,000
              shares of Netivation.com common stock, plus up to another 60,000
              shares based on performance criteria.

         -    Public Disclosure, Inc., the provider of FECInfo a comprehensive
              website of Federal Election Commission information on federal
              candidates and interest groups for $190,000 and 300,000 shares of
              Netivation.com common stock.

         On December 15, 1999, Netivation.com acquired 100 percent of the
outstanding stock of Net.Capitol, Inc., a leading provider of Internet-based
products for public affairs and political organizations, including the AFL-CIO,
IBM, the National Association of Realtors and the United States Senate.
Netivation.com received all of the outstanding shares of Net.Capitol's capital
stock in exchange for 1,544,730 shares of Netivation.com common stock, options
to acquire 105,270 additional shares, plus payment of $410,220 to the
Net.Capitol preferred shareholders. With the completion of the acquisition,
Net.Capitol, Inc., became a wholly owned subsidiary of Netivation.com.

CLIENTS.

         Netivation.com has numerous and varied clients due to its focus on the
political and healthcare communities. As such, the Company is not materially
dependent on any specific clients. The list below provides details regarding
some of Netivation.com's historical clients.



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<TABLE>
<CAPTION>
ASSOCIATIONS                              MEDIA                                      POLITICAL CAMPAIGNS
------------                              -----                                      -------------------
<S>                                       <C>                                        <C>
Air Conditioning Contractors of America   ABCNews.com                                Alaska Republican Party
American Insurance Association            Associated Press                           Arkansas Democratic Party
American Society of Association           Atlanta Constitution                       Asa Hutchinson for Congress
Executives                                Bloomberg LLP                              Delaware Democratic Party
Association for Advanced Life             Bureau of National Affairs                 Delaware Republican Party
Underwriting Catholic Relief Services     Gannett News Service                       Phyllis Taliaferro for Congress
National Association of REALTORS          Radio & Television News Directors          South Carolina Republican Party
National Rural Electric Cooperative       Foundation                                 Virginia Democratic Party
       Association                        Washington Post                            Virginia Republican Party
</TABLE>

<TABLE>
<CAPTION>
CORPORATE                                 MEDICAL GROUPS                             POLITICAL GROUPS
---------                                 --------------                             ----------------
<S>                                       <C>                                        <C>
BASF                                      American College of Emergency Physicians   Campaign Reform Project
Decision Strategies/Fairfax               American College of Physicians/American    National Conference of Black
International                             American Gastroenterological Association   Mayors
Edison Electric Institute                 American Hospital Association              Preston Gates Ellis & Rouvelas
ITT Hartford Insurance Group              American Medical Association               Senior Coalition
Microsoft Corporation                     American Psychological Association         The Cassidy Companies
Northwestern Mutual Life Insurance        College of American Pathologists           The Retired Enlisted Association
Triad Communications                      Health Insurance Association of America    US Chamber of Commerce
                                                                                     US Senate
                                                                                     Vietnam Veterans of America
</TABLE>

REVENUE SOURCES.

         Due to the fast paced and ever changing environment of the Internet,
Netivation.com believes it is imperative to have multiple sources of revenue.
Netivation.com is currently positioned to capitalize on several revenue sources
such as the following:

         -    INTERNET BASED SOFTWARE APPLICATIONS have been a source of
              revenue in our Votenet.com division and are expected to be a
              future source of revenue in our MedMarket.com division.

         -    E-COMMERCE SALES have been and will continue to be a primary
              source of revenue.

         -    ON-LINE FUNDRAISING FEES may become a source of revenue in
              2000 and are expected to be a source of revenue in the future.

         -    LEAD PAGE SALES TO PROFESSIONALS, SUPPLIERS AND MANUFACTURERS
              have been and will continue to be a source of revenue.

         -    CONTENT SUBSCRIPTIONS have been and should continue to be a
              source of revenue.

         -    ADVERTISING AND SPONSORSHIP SALES have been and are expected
              to be a source of revenue in the future.

         -    INTERNET CONSULTING SERVICES have been and may continue to be
              a source of revenue.

BRANDING.

         Differentiation through branding is critical in the Internet industry.
Much like revenue, it is important to have multiple avenues working
simultaneously to create brand recognition. Netivation.com is utilizing several
branding techniques to enhance its brand recognition including the following:

         -    Domain Name Recognition with brands such as MEDMarket.com and
              Votenet.com
         -    Portal Partnerships with multiple portals like MSN, Yahoo!, and
              MyWay.com
         -    Daily newsletter subscriptions
         -    Direct marketing through print media and mailers
         -    Sponsoring industry conferences
         -    On-line advertising
         -    Exchanging links with other Internet sites
         -    Media and Press Releases

FUTURE COMMUNITIES.

         Netivation.com believes that the business strategies and resources
developed for Netivation.com's political and healthcare communities can be used
in additional communities. Significant portions of Netivation.com's



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technology can be applied to the development of new communities. Netivation.com
will consider developing additional communities when it identifies appropriate
new market opportunities and concludes that Netivation.com has sufficient
resources to achieve market leadership in a prospective community.

TECHNOLOGY.

         Netivation.com's strategy is to apply existing technologies in new
ways to deliver content, products and services to individuals who access
Netivation.com's Internet communities. Netivation.com has developed and
implemented a broad array of products and services for Netivation.com's
communities by using a combination of its own proprietary technologies as well
as technologies and content purchased or licensed from third parties.

         Netivation.com maintains all of its Internet servers at Exodus
Communications Inc.'s facilities in Seattle, Washington and outside Washington
D.C. Exodus provides professional data center hosting facilities and redundant
high-speed Internet connectivity. Exodus also provides monitoring and support 24
hours a day, seven days a week. By utilizing two locations with Exodus,
Netivation.com is able to provide backup services to help prevent short-term or
long-term failures.

EMPLOYEES.

         As of December 31, 1999, Netivation.com had 131 employees. Of those
employees, approximately 51 were in marketing and sales, 8 were in senior
management, 17 were in development and 55 were in operations and administration.
Of Netivation.com's 131 total employees, all are full-time. By the end of 2000,
Netivation.com anticipates employing approximately 275 people with the greatest
increases in employees in sales, technology, and operations positions.

         As Netivation.com continues to grow and introduce more products and
services, it expects to hire additional personnel. Netivation.com's future
success will depend, in part, on its ability to continue to attract, retain
and motivate highly qualified personnel. Netivation.com believes that its
relations with its employees are satisfactory. Netivation.com is not a party
to any collective bargaining agreements and Netivation.com has never
experienced any work stoppage. The Company believes it has management
personnel and processes in place to effectively manage the risks associated
with a quickly growing headcount. "See Part III, Item 9, Directors, Executive
Officers, Promoters and Control Persons and Compliance with Section 16(a) of
the Exchange Act" for details on executive officers.

PATENTS AND TRADEMARKS.

         Netivation.com owns no patents on its technology or products.
Netivation.com has federally registered the following trademarks: "GOVERNET"
(Reg. No. 2,255,611) and "VOTENET" (Reg. No. 2,294,773). Netivation.com has
applied for federal registration of each of the following trademarks:
"NETIVATION.COM," "VOTENET," "VOTENET.COM," "VOTENET (AND DESIGN),"
"CAPITOLWATCH," "MEDINEX" and "MEDINEX.COM." Under common law, these trademarks
have an unlimited duration. But, if Netivation.com receives the federal
registration for these trademarks, the trademark will be effective for ten (10)
years and may be renewed every ten (10) years indefinitely. In addition,
Netivation.com has received a federal copyright registration for its "GOVERNET"
software.

         Netivation.com may not be successful in obtaining federal registration
of its trademarks. Netivation.com has also been asked to cease and desist its
use of the "CAPITOLWATCH" mark by CapitolWatch, a nonprofit organization.
Netivation.com's federal trademark application for "CapitolWatch" in
International Class 42 has been refused by the examining attorney on the basis
that the mark, when used on or in connection with the identified services, so
resembles a registered mark held by another party as to be likely to cause
confusion, to cause mistake, or to deceive. Netivation.com has also been asked
to cease and desist its use of the "Netivation" mark by NetOvations Creative
Internet Services. Netivation.com has responded to NetOvation Creative
Internet Services that Netivation.com does not believe that there is any
likelihood of confusion because of the differences in appearances and
connotation of the marks. Additionally, the federal trademark applications
for "VOTENET" and "VOTENET.COM" in Classes 38 and 42, and "VOTENET (AND
DESIGN)" in classes 35, 38, and 42, have been refused by the examining
attorney on the basis that use of the mark, when used on or in connection with
the identified services, so resembles a mark held by another party as to be
likely to cause confusion, to cause mistake, or to deceive. As a result of
these activities, Netivation.com is reviewing whether to appeal such actions
or to develop and apply for different trademarks and change its brand names.

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         As a result of the acquisition of seven companies in 1999,
Netivation.com has obtained rights to the following tradenames, trademarks, and
domain names: "MEDMarket," "medmarket.com," "medmarket.net,"
"medmarketnetwork.com," "medicom.com," "webdestinations.com," "rainfo.com,"
"rainfo.org,""politicallyblack.com," "Raintree Communications Corporation,"
"Policy Voice," the Raintree logo, "publicdisclosure.org,"
"joycecommission.org," "fecinfo.com," "fecinfo.org," "tray.com,"
"Netcapitol.com," "CapWeb," "Cabweb.net," "CapWeb Custom," "Stardot.com,"
"VoxPop," "Voxpop.com," "The Message Center," "SpinMaster," "Pro & ConText,"
"The Jefferson Project," "Emagine," "Bonzo," and "Net.Capitol Services,"

COMPETITION.

         The markets for developing Internet communities and providing Internet
services and products are relatively new, intensely competitive and rapidly
changing. Since the Internet's commercialization in the early 1990's, the number
of websites on the Internet competing for users' attention has proliferated.
Barriers to entry on the Internet are minimal, and competitors can launch new
websites or new products and services at a relatively low cost. As a result,
Netivation.com expects that competition in the Internet industry will continue
to intensify.

         Netivation.com competes, directly and indirectly, for members,
consumers, subscribers, content and service providers, advertisers, e-commerce
partners and acquisition candidates with the following categories of companies:

         -        On-line services or websites targeted to the political and
                  healthcare markets;

         -        General-purpose consumer online services providing access to
                  political and healthcare content and services;

         -        website search and retrieval services and other high-traffic
                  websites; and

         -        Vendors and distributors of political and healthcare
                  information, products and services distributed through other
                  means, including direct sales, mail and other offline media.

         Netivation.com believes there are key factors to developing successful
Internet communities. The primary factors in creating competitive Internet
communities and in attracting key participants to those communities are
functionality, brand recognition, member affinity and loyalty, demographic
focus, variety of value-added services, and critical mass. Other important
factors to consider in developing a competitive Internet community include
ease-of-use, quality of site and information, and reliability of the
communities' services and products. Netivation.com also believes that the
principal competitive factors in attracting advertisers and e-commerce partners
include price, the number of community members, the aggregate traffic to the
communities, the demographics of the community membership base, and the creative
implementation of advertising placements and e-commerce transaction
opportunities.

         Netivation.com currently offers many of the same individual services,
products and combinations of the services and products as offered by other
Internet providers:

         -        Netivation.com's e-mail delivery service competes against
                  other e-mail and `'push'` technology providers;

         -        Netivation.com's search engine competes against other website
                  directories and search engine providers;

         -        Netivation.com's free website based e-mail products compete
                  against products offered by other website based e-mail
                  providers;

         -        Netivation.com's website design and hosting services compete
                  against numerous other companies providing such capabilities;
                  and

         -        Netivation.com's online fundraising system competes against
                  traditional campaign fund raising methods, such as direct
                  mail, fundraising events and personal solicitation.

         Although Netivation.com faces a broad range of competition from a
variety of Internet service and product providers, Netivation.com believes that
it can compete more effectively by targeting specific communities and offering
greater depth of products, information and services than its competitors. For
example, management believes that competitors for Netivation.com's MEDMarket.com
community such as the websites provided by Healtheon/WebMD and Neoforma do not
bring the physicians office together with the healthcare community as



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effectively as Netivation.com. Netivation.com's MEDMarket.com community offers
advanced search engine capabilities and consulting services to physician's
offices for website development. By assisting the physician's office with
website development and increasing physicians' access to advanced medical search
engines, Netivation.com believes its MEDMarket.com site can more effectively
link physician's offices with the rest of the healthcare industry.

         With respect to the Votenet community, Netivation.com faces
competition from news services and organizations such as ABC News and other
online services specializing in politics, such as Grassroots.com, C-Span.org
and Roll Call. However, Netivation.com is not aware of any competitor that
offers all of the services and products of Votenet. For example,
Netivation.com offers website development services, e-mail accounts, and
real-time congressional voting information to politicians and other
politically active persons. Netivation.com believes that the robust nature of
the products and service offerings through Votenet.com positions
Netivation.com to compete in its markets.

         With respect to Votenet's Governet software program, Netivation.com
competes with existing campaign management software products, the largest of
which has approximately 2,500 users according to the 1998 Campaign and Elections
software buyers' guide. Netivation.com believes that most campaigns are managed
using Excel and Microsoft Access or standard personal computer based business
accounting packages. Netivation.com's Governet software program enables campaign
managers to use Internet based technologies to track various aspects of a
candidates campaign. Netivation.com's challenge will be to convince campaigns to
switch to Votenet's Governet software program from the more traditional manual
and semi-manual methods of campaign management.

         Similarly, with respect to MEDMarket's physician's office management
software, Netivation.com believes its primary competition will be manual
processes, standard personal computer based business accounting and billing
packages, as well as single or limited payer functions. These systems include
those offered by Medisoft, KIP Medical Office Software, Techsoft Medical Systems
and CCA Medical Practice Software. Most of these systems are based on desktop PC
applications offering limited access to information managed by the system. Only
users directly networked to the system and running the software can access or
update information on these systems. Netivation.com believes that its
Internet-based physician's office management software, Practix, offers the
convenience of remote access without special equipment or software, other than a
PC and a standard web browser. Since the systems software application components
and `'backbone'` are managed on Netivation.com's servers remotely,
Netivation.com believes that Practix will be attractive to physician offices
concerned with the cost of implementing and maintaining information technology
solutions. Netivation.com believes that many physicians and small physicians'
offices have been reluctant to invest in information technology solutions and
Netivation.com's primary competitive challenge will be to convince these groups
to switch to the Practix Internet-based solution.

         Many of Netivation.com's competitors have greater brand recognition and
greater financial support, marketing plans and other resources. Netivation.com's
competitors may develop products and services that are superior to
Netivation.com's or that achieve greater market acceptance. These factors may
place Netivation.com at a disadvantage in responding to its competitors' pricing
strategies, technological advances, advertising, sponsorship and e-commerce
efforts and other initiatives. As result, Netivation.com may not compete
successfully against its current or future competitors. Netivation.com's
inability to successfully respond to competitive pressures could have a material
adverse effect on Netivation.com's business, financial condition, operating
results, and cash flows.

GOVERNMENTAL REGULATION AND LEGAL UNCERTAINTIES.

         Netivation.com is currently subject to various laws and regulations
relating to its business. But there are few laws or regulations currently
directly applicable to the Internet and Netivation.com's current and expected
activities on the Internet. However, new laws and regulations relating to the
following areas may be adopted because of the Internet's popularity and growth:

         -        online content;
         -        user privacy;
         -        taxation;
         -        access charges;


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         -        copyrights;
         -        characteristics and quality of products and services; and
         -        consumer protection.

         Such government regulation may impose additional burdens on
Netivation.com's business. These regulations may impede the growth in Internet
use and thereby decrease the demand for Netivation.com's products and services
or otherwise have a material adverse effect on Netivation.com's business,
operations and financial condition.

         Additionally, U.S. and foreign laws relating to e-commerce or Internet
communications are becoming more prevalent. These laws have recently been
enacted and there is uncertainty in the Internet community regarding their
impact on the marketplace. Any new legislation or regulation regarding the
Internet, or the application of existing laws and regulations to the Internet,
could materially adversely affect Netivation.com. If Netivation.com were alleged
to violate federal, state or foreign civil or criminal laws, even if these
claims could be successfully defended, Netivation.com could be materially
adversely affected.

         Several telecommunications carriers are supporting regulation of the
Internet by the Federal Communications Commission ("FCC") in the same manner
that the FCC regulates other telecommunications services. These carriers have
alleged that the growing popularity and use of the Internet has burdened the
existing telecommunications infrastructure, resulting in interruptions in phone
service. Local telephone carriers such as Pacific Bell, a subsidiary of SBC
Communications Inc., have petitioned the FCC to regulate Internet service
providers in a manner similar to long-distance telephone carriers and to impose
access fees on Internet service providers. Any such regulations could
substantially increase the costs of communicating on the Internet. This could
slow the growth in Internet use and thereby decrease the demand for
Netivation.com's products and services or otherwise have a material adverse
effect on Netivation.com's business, financial condition and operating results.

         Political campaigns and campaign fundraising efforts are subject to
numerous regulatory restrictions and reporting obligations at the federal, state
and local levels. There have recently been numerous proposals under
consideration by federal, state, local and other organizations regarding changes
to the existing campaign regulations, including proposals addressing Internet
fundraising. Since Netivation.com expects to provide fundraising services to
political campaigns and candidates, Netivation.com's activities, as well as the
use of Netivation.com's products and services, may be governed by federal and
state campaign finance laws and regulations. As these policies continue to
develop, it is possible that Netivation.com may be exposed to future regulation.
Any such regulation may increase Netivation.com's cost of doing business, cause
Netivation.com to modify its fundraising services, decrease the demand for
Netivation.com's fundraising services or otherwise have a material adverse
effect on Netivation.com's business, results of operations and financial
condition.

         Given that laws and government regulations are complex, vary widely
from state to state, and are frequently changed, Netivation.com's products and
services may not be legal or practical in all jurisdictions. For example,
Netivation.com may not be able to ensure that its products and services keep
pace with these frequently changing regulations. Netivation.com could be subject
to liability under Federal Election Commission regulations if it were found to
have participated in a prohibited campaign fund raising effort. Such liability
may place Netivation.com's activities under increased regulation, increase
Netivation.com's cost of doing business, decrease the use of the Internet for
campaign or fundraising efforts and thereby decrease the demand for
Netivation.com's products and services or otherwise have a material adverse
effect on Netivation.com's business, its results of operations and its financial
condition.

HISTORY OF INCORPORATION.

         Netivation.com, formerly named Nelloro Corporation, was a Nevada
corporation formed in 1993. Nelloro owned interests in mineral properties from
September 1993 until 1996, near Nelson, Nevada. No mineral extraction or
processing of the mining claims occurred, and, in 1996, Nelloro abandoned the
claims and did not conduct any other business operations. Netivation.com began
its current operations as a Nevada corporation in September 1997 after acquiring
the technology developed by Netivation.com's existing management team in
consideration for 2,500,000 shares of common stock of Nelloro. On May 14, 1999,
Netivation.com merged with and into



                                       8
<PAGE>

Netivation.com Merger, Inc., a Delaware corporation, leaving Netivation.com
Merger, Inc. as the surviving corporation. On June 28, 1999, Netivation.com
Merger, Inc. filed a restated certificate of incorporation in which it renamed
the corporation Netivation.com, Inc.

RESEARCH AND DEVELOPMENT.

         Our research and development expenses consist principally of
technical engineering personnel costs, equipment depreciation, consulting and
supplies. Product development expenses were $171,000 in 1998 and increased to
$1.1 million in 1999. Costs related to research, design and product
development have been charged to research and development expense as
incurred. We believe that a significant level of research and development
expenses is required to remain competitive. Accordingly, management expects
research and development expenses should continue to increase in 2000 due to
growth in technical staff required to develop and enhance our products and
services.

DISTRIBUTION

         Netivation.com distributes its products and services through the
development and maintenance of applications via the Internet, on-site consulting
and development, e-commerce, and through acting as a transaction manager between
customer and distributor.

         Netivation.com offers a variety of Internet based products and services
that are customized, hosted and maintained by Netivation.com. Netivation.com
maintains multiple e-commerce sites that market products to the consumer.
Netivation.com ships these products utilizing a third party distributor. In
addition, Netivation.com manages auction transactions between customer and
supplier and receives a fee from the maintenance of this transaction site.

PREVIOUSLY ANNOUNCED PRODUCTS

         Netivation.com is officially launching the enhanced Application
Service Provider (ASP) based physician office management solution, Practix,
at the Internet World trade show on April 5 - 7, 2000. Practix is a web based
management system that provides a front-office, back-office, and
internet-office solution for medical professionals. Although the product is
officially being rolled out at the Internet World trade show, it is currently
being marketed to the medical community. Practix was originally introduced as
MedinexPro in August 1999.

ITEM 2. DESCRIPTION OF PROPERTY

FACILITIES.

         Netivation.com relocated to its current headquarters at 806 West
Clearwater Loop, Suite N, Post Falls, Idaho, in 1999, where it leases
approximately 16,500 square feet. Additionally, Netivation.com leases
approximately 9800 square feet of office space at 11th and G Streets, Suite 1100
and subleases 3,800 square feet at 1100 New York Avenue, in Washington, D.C. In
addition, the Company maintains one month-to-month lease at 6878 Fleetwood Road,
McLean, Virginia for approximately 1,100 square feet. The lease for each of
these locations is paid current and the properties are in good working
condition.

INVESTMENT POLICIES.

         Netivation.com has developed some general investment policy guidelines,
but did not develop a formal policy during the 1999 fiscal year. However,
Netivation.com is considering the adoption of a formal policy during the 2000
fiscal year in which Netivation.com would limit the amount of assets to be
invested in any type of investment to ten percent (10%). The investment policy
guidelines may be changed by the board of directors ("Board of Directors") and
do not require stockholder vote. Netivation.com is focusing its investments
primarily for income, though it has made an investment in MoneyZone.com,
formerly known as EBONLINE, for possible capital gain. The Company purchased
175,000 shares of MoneyZone.com for $3.00 per share. As of December 31, 1999,
MoneyZone.com was trading at $5.25 per share. At this time, Netivation.com, does
not invest in real estate, real estate mortgages or the securities of parties
engaged in real estate activities.



                                       9
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

LEGAL PROCEEDINGS.

         On October 25, 1999, a legal proceeding was filed against
Netivation.com by Lawrence L. and Nancy D. Burch, husband and wife. Lawrence L.
Burch ("Burch") was Netivation.com's former Chief Financial Officer and
Treasurer. The complaint was filed with the First Judicial District of the State
of Idaho in and for the County of Kootenai.

         Netivation.com and Burch entered into an employment agreement effective
February 25, 1999, by which Burch accepted employment as Netivation.com's Chief
Financial Officer. On October 6, 1999, Netivation.com terminated Burch's
employment for what it believes to have been good cause. The Burches filed the
lawsuit against Netivation.com alleging breach of contract, among other things,
and sought monetary damages in an unspecified amount in excess of the district
court's $10,000 jurisdictional minimum, as well as their court costs and
attorney's fees.

         On December 27, 1999, the Burches and Netivation.com signed a
Settlement Agreement and Release, the terms of which are immaterial in nature.
There is no further action required in this matter.

         Netivation.com is not aware of any other outstanding or pending
litigation.

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

         Netivation.com stockholders were not asked to vote on any matters
during the quarter ended December 31, 1999.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Netivation.com's Common Stock is registered on the Nasdaq National
Market System. The table below shows the high and low sales prices per share of
the Common Stock since Netivation's Initial Public Offering on June 22, 1999:

                           Netivation.com Common Stock

<TABLE>
<CAPTION>
                                                               HIGH                      LOW
                                                             --------                  --------
         <S>                                                  <C>                       <C>
         Quarter Ended June 30, 1999                          10.1875                   7.5000
         Quarter Ended September 30, 1999                     12.9375                   4.0625
         Quarter Ended December 31, 1999                      9.00000                   4.3125
</TABLE>

         As of December 31, 1999, Netivation.com had approximately 288 holders
of record for 9,197,555 shares of issued and outstanding common stock.

         Netivation.com has paid $209,000 in dividends to preferred stock
shareholders. Netivation.com does not expect to pay dividends in the
foreseeable future. Netivation.com intends to use future earnings for
reinvestment in its business. The Board of Directors will determine whether
any future cash dividends will be paid and payment of any dividends will be
dependent on Netivation.com's financial condition, results of operations,
capital requirements and other such factors as the Board of Directors deems
relevant.

         Since January 1, 1996, Netivation.com has issued and sold securities
that were not registered under the Securities Act of 1933 ("Securities Act") as
follows:



                                       10
<PAGE>

         1. During the period, Netivation.com authorized the grant of stock
options to employees, consultants, directors and officers of Netivation.com as
provided below:

<TABLE>
<CAPTION>
                                                                     EXERCISE
                                                    NUMBER OF        PRICE PER
DATE                                                 GRANTS             SHARE
----                                                --------         ---------
<S>                                                 <C>              <C>
June 1998 ................................          125,000          $   0.03
August 1998 ..............................           75,000          $   0.10
August 1998 ..............................           12,000          $   1.25
August 1998 ..............................           62,500          $   2.50
January 1999 .............................           77,625          $   1.25
January 1999 .............................           86,750          $   2.50
March 1999 ...............................           15,000          $   1.25
March 1999 ...............................           25,000          $   2.50
                                                    -------          ---------
                                   Total =          478,875
                                                    =======
</TABLE>


         2. During the period, Netivation.com sold to employees, consultants,
directors and affiliates of Netivation.com an aggregate of 505,000 shares of
Common Stock pursuant to restricted stock purchase agreements.

         3. On September 27, 1997, Netivation.com issued an aggregate of
2,015,000 shares to two accredited investors in consideration for the transfer
of technology to Netivation.com. No value was assigned to the technology as it
had no cost basis and the common stock was deemed to have minimal value.

         4. On October 24, 1997 Netivation.com issued 150,000 shares of its
Common Stock at a cash price of $.70 per share to one accredited investor.

         5. On February 23, 1998, Netivation.com issued 105,000 shares of its
Common Stock at a cash price of $1.20 per share to six accredited investors.

         6. In March and July 1998, Netivation.com issued an aggregate of
150,000 shares of its Common Stock to one accredited investor in consideration
of its entering into a bridge loan with Netivation.com.

         7. Commencing in November 1998 and ending in January 1999,
Netivation.com sold an aggregate of 2,325,000 shares of its Series A Preferred
Stock at a purchase price of $2.50 per share to accredited investors.

         8. Upon completion of Netivation.com's initial public offering,
Netivation.com sold warrants to purchase 250,000 shares of common stock at an
exercise price of $16.50 per share to the underwriters involved in the
initial public offering. The total price of the warrants was $25.00.

         The sales and issuance of securities in the transactions described in
paragraphs (1) and (2) above were deemed to be exempt from registration under
the Securities Act by virtue of Rule 701 promulgated thereunder in that they
were offered and sold either pursuant to written compensatory benefit plans or
pursuant to a written contract relating to compensation, as provided by Rule
701.

         The sales and issuances of securities in the transactions described in
paragraphs (3) through (8) above were deemed to be exempt from registration
under the Securities Act by virtue of Section 4(2) thereof and/or Regulation D
promulgated under the Securities Act. The purchasers in each case represented
their intention to acquire the securities for investment only and not with a
view to the distribution thereof. Appropriate legends are affixed to the stock
certificates issued in such transactions. All recipients either received
adequate information about the Company or had access, through employment or
other relationships, to such information.

         No underwriters were used in connection with these sales and issuances.



                                       11
<PAGE>

         After Netivation.com, Inc.'s initial public offering on June 22, 1999,
Netivation.com, Inc. had a total of 8,660,070 shares of outstanding stock. Of
these shares, 2,500,000 shares were freely tradeable on the public market
without restriction under the Securities Act, except for any shares held by
"affiliates" of Netivation.com.

         During 1999 Netivation.com sold 2,549,286 shares of common stock
without registering the stock under the Exchange Act. Netivation.com sold the
unregistered shares to each of the companies listed below under the terms of
separate Agreements and Plans of Merger dated between June 22, 1999 and December
15, 1999. Under these Agreements and Plans of Merger Netivation.com purchased
all of the issued and outstanding stock of these companies and these companies
became wholly-owned subsidiaries of Netivation.com:

<TABLE>
<CAPTION>
                               TYPE OF              NUMBER OF                                    EXEMPTION
NAME OF COMPANY               SECURITIES           SHARES GIVEN                  DATE            RELIED ON
---------------              ------------          ------------             ------------       -------------
<S>                          <C>                  <C>                       <C>                <C>
Interlink Services, Inc.     Common Stock         126,429                   June 22, 1999      Section 4(2)

The Online Medical           Common Stock         192,857                   June 22, 1999      Section 4(2)
Bookstore, LLC

MEDMarket, Inc.              Common Stock         100,000                   October 18, 1999   Section 4(2)

Politicallyblack.com         Common Stock         30,000                    October 19, 1999   Section 4(2)

Raintree Communications      Common Stock         150,000, plus up to       October 21, 1999   Section 4(2)
Corporation                                       another 60,000 based on                      Section 4(6)
                                                  performance criteria;                        Rule 506
                                                  see Exhibit 2.3

Public Disclosure, Inc.      Common Stock         300,000                   October 22, 1999   Section 4(2)
                                                                                               Section 4(6)
                                                                                               Rule 506

Net.Capitol, Inc.            Common Stock         1,544,730, plus options   December 15, 1999  Section 3(a)(10)
                                                  to acquire 105,270                           Rule 506
                                                  additional shares; see
                                                  Exhibit 2.5
</TABLE>

         Each selling stockholder was given the opportunity to review and
discuss Netivation.com's business with the directors, officers, and
management of Netivation.com. Each selling stockholder represented their
intention to acquire the securities for investment only and not with a view
to the distribution thereof. Appropriate legends are affixed to the stock
certificates issued in such transactions. No underwriters were used in
relation to these transactions.

         On June 22, 1999, Netivation.com's Registration Statement on Form
SB-2 covering the offering of 2,500,000 shares of Netivation.com's Common
Stock, Commission file number 333-74569 was declared effective. The offering
commenced on June 23, 1999, and terminated upon the sale of all 2,500,000
shares of Netivation.com common stock. The offering was managed by EBI
Securities Corporation and Millennium Financial Group, Inc. The total price
to the public for the shares offered and sold by Netivation.com was
$25,000,000. The amount of expenses incurred by Netivation.com in connection
with the offering is as follows:

<TABLE>
<S>                                                           <C>
         Underwriting discounts and commissions               $   2,625,000
         Finders fees                                               136,000
         Expenses paid to or for the Underwriter                  1,431,000
                                                              -------------
         Total expenses                                       $   4,192,000
</TABLE>

         All of the foregoing expenses were direct or indirect payments to
persons other than (i) directors, officers or their associates; (ii) persons
owning ten percent (10%) or more of Netivation.com's common stock; or (iii)
affiliates of Netivation.com.


                                       12
<PAGE>

         The net proceeds of the offering to Netivation.com (after deducting the
Underwriter's discounts and commissions and offering expenses) was $20,808,000.
From the settlement date, the net proceeds have been used in the following
manner, in the following reasonably estimated amounts:

         -    Investments in debt instruments of the United States Government
              and its agencies and investments in marketable equity
              securities: 15,500,000; and investments in other
              securities: $500,000
         -    Acquisition of other businesses: $855,000
         -    Loan to Oron Strauss, Votenet General Manager: $133,000
         -    Working Capital: $3,820,000

ITEM 6.  MANAGEMENT'S  PLAN OF OPERATION

GENERAL.

         Netivation.com is an Internet company incorporated in the State of
Delaware. Its strategy is to build significant revenues by developing leading
Internet communities for large, targeted markets. Netivation.com commenced
current operations in September 1997 and began generating revenues on the
sale of advertising and sponsorships in January 1999.

         Acquisitions play a major part in Netivation.com's growth strategy.
Netivation.com acquired seven (7) companies during 1999. All acquisitions
were accounted for by the purchase method of accounting, so they were
accounted for at their fair market values and included prospectively in the
financial statements from the respective acquisition dates. The acquired
companies represented a substantial portion of Netivation.com's growth during
the second half of 1999 as compared to the first half of 1999.

         In June 1999, Netivation.com acquired both Interlink Services, Inc.,
and The Online Medical Bookstore, Inc. Interlink Services was acquired for
126,429 shares of Netivation.com common stock and $50,000 and The Online
Medical Bookstore was acquired for 192,857 shares and $250,000. Interlink
Services provides website design and hosting services and The Online Medical
Bookstore sells medical books and supplies via e-commerce. Both companies
became wholly-owned subsidiaries of Netivation.com.

         In October 1999, Netivation.com acquired the following companies,
which are now wholly-owned subsidiaries of Netivation.com:

               -   MEDMarket, Inc., a developer of Internet e-commerce
                   websites for medical manufacturers and suppliers for
                   $100,000 and 100,000 shares of Netivation.com common stock.

               -   PoliticallyBlack.com, the leading political information
                   center for African Americans for $55,000 and 30,000 shares
                   of Netivation.com common stock.

               -   Raintree Communications Corporation, a provider of
                   automated voice and data services for grassroots lobbying
                   for $100,000 and 150,000 shares of Netivation.com common
                   stock, plus up to another 60,000 shares based on
                   performance criteria.

               -   Public Disclosure, Inc., the provider of FECInfo, a
                   comprehensive website of Federal Election Commission
                   information on federal candidates and interest groups for
                   $190,000 and 300,000 shares of Netivation.com common stock.

         On December 15, 1999, Netivation.com acquired 100 percent of the
outstanding stock of Net.Capitol, Inc., a leading provider of Internet-based
products for public affairs and political organizations, including the
AFL-CIO, IBM, the National Association of Realtors and the United States
Senate. Netivation.com received all of the outstanding shares of
Net.Capitol's capital stock in exchange for 1,544,730 shares of
Netivation.com common stock, options to acquire 105,270 additional shares,
plus payment of $410,220 to the Net.Capitol preferred shareholders. With the
completion of the acquisition, Net.Capitol, Inc. became a wholly-owned
subsidiary of Netivation.com.

         Revenues are generated from e-commerce merchandise sales, website
development and hosting, Internet access, software licenses and advertising.

         Sales of products directly to customers through e-commerce are
recognized when shipped. In these transactions the Company acts as
merchant-of-record. Accordingly, the Company records as revenue the full
sales price of the product sold and records the full cost of the product to
the Company as cost of revenues, upon shipment of the product.

         Software licensing costs and website development revenues are
generally recognized when all elements essential to the functionality of the
software or the website have been delivered. Where the Company has
significant continuing involvement with the licensee, revenues are deferred
and recognized over the term of the agreement. Hosting contracts typically
have a term of one year, with fees charged on a monthly basis.

         Advertising consists of the sale of impressions on one or more of
the Company's network of websites for cash or barter. Advertising revenues
are recognized ratably over the term of the applicable agreement.

         Internet access is billed on a monthly basis and is earned as
billed. Hosting contracts typically have a term of one year, with fees
charged on a monthly basis.

         Deferred revenue consists primarily of prepaid licensing and hosting
fees that are being amortized over their contract life.

REVENUES.

         In 1999, the Company generated revenues of $1.0 million. The Company
did not recognize any revenues from its inception through December 31, 1998.
Revenues expanded significantly the second half over the first half of 1999,
with over 87% of the year's annual revenues occurring in the second half.
Most of the revenue growth was the result of companies acquired during the
year. The Company ended 1999 with $0.6 million in deferred revenues. We
expect that some of our revenues will be seasonal. We may experience
seasonality in its advertising, membership traffic, and some e-commerce
revenues. We also expect that business usage of the Internet, and of our
products and services, may typically decline during the summer and year-end
vacation and holiday periods.

COST OF REVENUE.

         Cost of revenue primarily consists of the cost of books and medical
supplies sold over the Internet as well as some of the payroll costs for
technology employees. In 1999, cost of revenue and payroll costs for services
provided represented sixty-nine percent (69%) of revenues.

GROSS MARGINS.

         Gross margins dollars were $0.3 million or thirty-one percent (31%)
of revenues. The Company offers discounts on certain items as promotional
opportunities. These promotions lower gross margin percentages on the specific
items offered, but are intended to attract more customers.

         In the future, our gross margin will be affected by the mix of
products and services sold. Because of our lack of experience in predicting
revenues and product mix, we are not able to predict the gross margin we may
generate in future years. Periodically, we may sell our products and services
at a loss and experience negative gross margins as we attempt to develop
market share and attract members to our communities. Further, we expect to
experience significant fluctuations in our operating results in the future as
a result of our early stage of development.

OPERATING EXPENSES.

         In 1999, operating expenses totaled $9.0 million, compared with $2.1
million in 1998. Product development expenses grew from $0.2 million in 1998
to $1.1 million in 1999. Sales and marketing expenditures increased in 1999
to $2.3 million compared to $0.6 million in 1998. General and administrative
expenses grew from $0.8 million in 1998 to $3.3 million in 1999. Amortization
expenses due to acquisitions were $1.1 million in 1999 which compares to no
amortization in 1998. In 1999, stock compensation was $1.2 million in
relation to $0.6 million in 1998. Operating expenses grew mostly from a
growth in head count, as well as increasing expenditures for advertising,
marketing programs, and professional services fees. The increase in operating
expenses primarily reflects our transition to the stage of marketing and
offering our services. For example, the number of employees increased from 29
in December 1998 to 131 as of December 31, 1999. We believe that expansion of
our operations is essential to achieve a strong market position. As a
consequence, we intend to continue to increase our expenditures in all
operating areas for the foreseeable future.

LOSS FROM OPERATIONS.

         The Company's loss from operations in 1999 was $8.7 million, compared
with $2.1 million in 1998. The Company has, and will continue to incur
substantial costs to create, introduce, and enhance its products and services,
to develop content, to build brand awareness, and to grow its business.

RECENT ACCOUNTING PRONOUNCEMENTS.

         In March 1998, the American Institute of Certified Public
Accountants issued Statement of Position 98-1 (SOP 98-1), "Accounting for the
Cost of Computer Software Developed or Obtained for Internal Use." SOP 98-1
is effective for financial statements for years beginning after December 15,
1998. SOP 98-1 provides guidance over accounting for computer software
developed or obtained for internal use including the requirement to
capitalize specified costs and amortization of such costs. The implementation
of SOP 98-1 did not have a material impact on the Company's financial
position or results of operations.

         In April 1998, the American Institute of Certified Public
Accountants issued Statement of Position 98-5 (SOP 98-5), "Reporting on the
Costs of Start-Up Activities." SOP 98-5, which is effective for fiscal years
beginning after December 15, 1998, provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs of
start up activities and organization costs to be expensed as incurred. The
implementation of SOP 98-5 did not have a material impact on the Company's
financial position or results of operations.

         In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." It
requires the recognition of all derivatives as either assets or liabilities
and the measurement of those instruments at fair value. The required adoption
period is effective for the issuance of Netivation's March 31, 2001 quarterly
financial statements. The implementation of SFAS No. 133 is not expected to
have a material impact on Netivation's financial position or results of
operations. SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133"
issued in August 1999, postpones for one year the mandatory effective date
for adoption of SFAS No. 133 to January 1, 2001.

         In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements," to provide guidance on the recognition, presentation and disclosure
of revenues in financial statements. The Company believes its revenue
recognition practices are in conformity with the guidelines prescribed in SAB
No. 101.

TOTAL INTEREST AND OTHER INCOME.

         Interest and other income net of expense for 1999 totaled $0.3
million, compared with interest expense of $0.2 million in 1998. The change
was primarily due to the use of proceeds from the Company's June 1999 initial
public offering that were invested in United States Government debt
securities.

INCOME TAXES.

         We have not paid income taxes as we have lost money since inception.

         As of December 31, 1999, we had net operating loss, or "NOL,"
carryforwards of approximately $2.6 million that expire between 2012 and
2019. In accordance with the Internal Revenue Code of 1986, as amended,
change in ownership of greater than 50% within a three year period results in
an annual limitation of our ability to utilize our NOL carryforwards to
offset future taxable income.

                                       13
<PAGE>

NET LOSS AND LOSS PER SHARE.

         The Company's net loss applicable to common shareholders in 1999 was
$8.6 million, compared with $2.3 million in 1998. The loss per basic and diluted
share was $1.35 in 1999 versus $0.69 in 1998. Management expects continuing
losses for the foreseeable future and there is no assurance that profitability
will be achieved.

YEAR 2000.

         No material costs were incurred and operations were not materially
impacted by the Year 2000 issue.

LIQUIDITY AND CAPITAL RESOURCES.

         On June 22, 1999, Netivation.com completed its initial public offering
of 2,500,000 shares of common stock, resulting in net proceeds of $20,808,000.
As of December 31, 1999, Netivation.com had cash and cash equivalents totaling
$15.5 million, compared to $1.9 million as of December 31, 1998.

         Since its June 1999 IPO, Netivation.com acquired seven companies that
enhance and extend the range of the Company's products and services. The Company
paid total consideration of 2,549,286 shares of Netivation.com common stock and
$1,105,220 cash to acquire the outstanding stock of these companies.

         In 1999, cash used in operating activities was $6.6 million. Cash used
in operating activities consisted mostly of funding the Company's net operating
losses.

         Capital expenditures for 1999, consisting primarily of the seven
acquisitions and the purchase of additional computer equipment, were $1.2
million.

         For 1999, cash provided by financing activities of $21.4 million was
primarily due to Netivation.com's private placement and initial public offering,
which raised net proceeds of $20.8 million.

         Netivation.com estimates that its current cash balance will be
sufficient to fund its operations, working capital, capital expenditures, and
business growth through the year 2000. At its current stage of business
development, Netivation.com's quarterly revenues and results of operations may
be materially affected by, among other factors, development and introduction of
products, time to market, market acceptance, demand for Netivation.com's
products, the effects of competition, and general economic conditions. As a
result, there can be no assurance that Netivation.com will be sufficiently
funded beyond 2000. At this time, Netivation.com has no debt or established
lines of credit.

         Subsequent to December 31, 1999, the Company has entered into
multiple marketing agreements whereby the Company will work with Internet
content providers to provide political content and public affairs services.
These contracts require the payment of approximately $3,400,000 during the
year 2000, plus warrants to purchase shares of the Company's stock.


                                       14

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Netivation.com, Inc.:

         We have audited the accompanying consolidated balance sheets of
Netivation.com, Inc. (a Delaware corporation) and Subsidiaries as of December
31, 1998 and 1999, and the related consolidated statements of operations,
stockholders' equity and cash flows for the period ended December 31, 1997 and
for each of the years in the two year period 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 audits.

         We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether these 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 our audits provide a
reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Netivation.com,
Inc. and Subsidiaries as of December 31, 1998 and 1999, and the results of
their operations and their cash flows for the period ended December 31, 1997
and for each of the years in the two year period ended December 31, 1999, in
conformity with generally accepted accounting principles.

         Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed in the index
of financial statements is presented for purposes of complying with the
Securities and Exchange Commissions rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

                                    s / Arthur Andersen LLP

Seattle, WA
March 21, 2000

<PAGE>

ITEM 7.  FINANCIAL STATEMENTS
NETIVATION.COM, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                           As of December 31,
                                                        =======================
                                                           1998          1999
                                                        -----------------------
<S>                                                     <C>            <C>
ASSETS

Current assets:
  Cash and cash equivalents                                $1,907      $15,504
  Short term investments                                      880        -
  Subscriptions receivable                                  1,183        -
  Accounts receivable, net of allowance
  of $172 in 1999                                           -              295
  Prepaids and other                                           35          388
                                                        ----------    ---------

    Total current assets                                    4,005       16,187


Equipment and furniture, net                                   94          815
Investments                                                                918
Goodwill, net                                               -            5,116
Intangible assets, net                                      -           10,225
Other assets                                                -              182
                                                        ----------    ---------

Total assets                                               $4,099      $33,443
                                                        ==========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
  Accounts payable                                           $172      $ 1,293
  Accrued compensation                                        163          163
  Other accrued expenses                                       28          738
  Convertible note to stockholder, net                        501        -
  Advances from stockholders                                   95        -
  Deferred revenue                                          -              619
                                                        ----------    ---------

    Total current liabilities                                 959        2,813
                                                        ----------    ---------


Mandatorily redeemable common stock option                    391        -
Other long-term liabilities                                    24           75
                                                        ----------    ---------
                                                              415           75
                                                        ----------    ---------

Stockholders' equity
  8% Convertible preferred stock, $.01 par value
  3,500,000 shares authorized 2,325,000 and no
  shares issued and
  outstanding, respectively, preference in liquidation
  of $3,938 at December 31, 1998                            3,317
  Subscriptions receivable for 5,840,770 shares of
  preferred stock                                           1,183
  Common stock and additional paid-in capital,
  $.01 par value, 25,000,000 shares authorized,
  3,473,270 and 10,890,056 shares issues and
  outstanding                                                 628       41,187
  Accumulated other comprehensive income                                   393
  Accumulated deficit                                      (2,403)     (11,025)
                                                        ----------    ---------
    Total stockholders' equity                              2,725       30,555
                                                        ----------    ---------

Total liabilities and stockholders' equity                 $4,099      $33,443
                                                        ==========    =========
</TABLE>


          The accompanying notes are an integral part of these balance sheets.


                                       15
<PAGE>

NETIVATION.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                           Year ended December 31,
                                                      =================================
                                                         1997       1998        1999
                                                      ---------------------------------
<S>                                                   <C>         <C>         <C>
Revenues:
Electronic commerce merchandise sales                                          $    548
Website development, consulting and hosting                -           -            450
                                                      ---------   ---------   ---------
                                                           -           -            998
                                                      ---------   ---------   ---------

Cost of revenues:
Electronic commerce merchandise sales                                               567
Website development, consulting and hosting                -           -            117
                                                      ---------   ---------   ---------
                                                           -           -            684
                                                      ---------   ---------   ---------
Gross margin                                               -           -            314
                                                      ---------   ---------   ---------
Operating expenses

  General and administrative                           $     43    $    837       3,351
  Sales and marketing                                        18         551       2,274
  Research and development                                              171       1,054
  Amortization of intangible assets                                               1,068
  Stock-based compensation                                              586       1,232
                                                      ---------   ---------   ---------
                                                             61       2,145       8,979
                                                      ---------   ---------   ---------

Loss from operations                                        (61)     (2,145)     (8,665)
                                                      ---------   ---------   ---------

Interest (expense) income, net                             -           (183)        252
                                                      ---------   ---------   ---------

Loss before income taxes                                    (61)     (2,328)     (8,413)

Provision for income taxes                                 -           -         -
                                                      ---------   ---------   ---------

Net loss                                                    (61)     (2,328)     (8,413)

Preferred stock dividends earned                           -            (14)       (209)
                                                      ---------   ---------   ---------

Net loss available to common stock                     $    (61)   $ (2,342)   $ (8,622)
                                                      =========   =========   =========

Historical basic and diluted loss per share               (0.02)      (0.69)      (1.35)
                                                      =========   =========   =========

Historical weighted average shares
outstanding used to compute loss per share            3,168,270   3,417,377   6,385,080
                                                      =========   =========   =========
</TABLE>


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

                                       16
<PAGE>

NETIVATION.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                      COMMON STOCK AND
                                    8% CONVERTIBLE                    ADDITIONAL PAID-
                                   PREFERRED STOCK                       IN CAPITAL                     ACCUMULATED
                                  ------------------   SUBSCRIPTIONS   ----------------                    OTHER
                                   NUMBER OF           RECEIVABLE FOR  NUMBER OF          ACCUMULATED  COMPREHENSIVE
                                    SHARES    AMOUNT  PREFERRED STOCK   SHARES    AMOUNT    DEFICIT        INCOME       TOTAL
                                  ----------  ------  ---------------  ---------  ------  -----------  -------------  ---------
<S>                               <C>         <C>     <C>              <C>        <C>     <C>          <C>            <C>
Issuance of shares in
  September 1999 in exchange for
  technology rights and
  previously existing corporate
  entity (Note 1)                         --  $   --      $   --       3,068,270  $   --    $    --                    $     --
Issuance in October 1997 of
  shares for cash
  at $.70 per share                       --      --          --         150,000     105         --                         105
Net loss                                  --      --          --              --      --        (61)                        (61)
                                  ----------  ------  -------------   ----------  ------  -----------  -------------  ----------
Balance at December 31, 1999              --      --          --       3,218,270     105        (61)                         44
Issuance in February 1998 of
  shares for cash
  at $1.20 per share                      --      --          --         105,000     126         --                         126
Issuance in March 1998 of shares
  in connection with issuance of
   8% convertible debenture               --      --          --         137,500     165         --                         165
Issuance in July 1998 of shares
  in connection with modification
  of terms of 8% convertible
  debenture                               --      --          --          12,500      15         --                          15
Grant in August 1998 of 75,000
  common stock options at $.10
  per share                               --      --          --              --     180         --                         180
Grant in August 1998 of 12,000
  common stock options at $1.25
  per share                               --      --          --              --      15         --                          15
Issuance in November and December
  1998 of 8% convertible preferred
  stock at $2.50 per share, net
  of issuance costs of $621        1,575,000   3,317          --              --      --         --                       3,317
Subscriptions to 543,948 shares
  of preferred stock, net of
  issuance costs of $177                  --      --        1,183             --      --         --                       1,183
Preferred stock dividend                  --      --          --              --      --        (14)                        (14)
Imputed interest on advances from
  stockholders                            --      --          --              --      22         --                          22
Net loss                                  --      --          --              --      --     (2,328)                     (2,328)
                                  ----------  ------  -------------   ----------  ------  -----------  -------------  ----------
Balances at December 31, 1998      1,575,000  $3,317      $ 1,183      3,473,270  $  628    $(2,403)                    $ 2,725
Issuance in January 1998 of 8%
  convertible preferred stock
  at $2.50 per share, net of
  issuance costs of $116             750,000   1,582      $(1,183)            --      --         --                         399
Issuance in January 1999 of
  restricted stock as
  compensation for directors              --      --          --          30,000      19         --                          19
Grant of stock options                    --      --          --              --   1,249         --                       1,249
Preferred stock converted to
  common stock on initial
  public offering                 (2,325,000) (4,899)         --       2,325,000   4,899         --                          --
Issuance of common stock on
  initial public offering                 --      --          --       2,500,000  23,250         --                      23,250
Issuance of shares
  in satisfaction of services
  rendered                                --      --          --          12,500      31         --                          31
Preferred stock dividend                  --      --          --              --      --       (209)                       (209)
Issuance of stock for businesses
  acquired                                                             2,549,268  11,111                                 11,111
Unrealized gain on marketable
  equity securities                                                                                             393         393
Net loss                                  --      --          --              --      --     (8,413)                     (8,413)
                                  ----------  ------  -------------   ----------  ------  -----------  -------------  ----------
Balances at December 31, 1999             --      --           --     10,890,038  41,187   $(11,025)            393    $ 30,555
                                  ----------  ------  -------------   ----------  ------  -----------  -------------  ----------
                                  ----------  ------  -------------   ----------  ------  -----------  -------------  ----------

</TABLE>

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

<PAGE>

NETIVATION.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
DOLLARS IN THOUSANDS

<TABLE>
<CAPTION>

                                                                          Year ended December 31,
                                                                =============================================
                                                                  1997             1998                1999
                                                                --------         --------            --------
<S>                                                            <C>              <C>                 <C>
Cash flows from operating activities:
    Net loss                                                    $    (61)        $ (2,328)           $ (8,413)
Adjustments to reconcile net loss to net cash used
by operating activities:
    Depreciation                                                      --               17                  86
    Amortization of intangible assets                                 --               --               1,068
    Expense associated with issuance of stock options                 --              586               1,232
    Imputed interest  on advances from stockholders                   --               22                  --
    Amortization of Debt Discount                                     --              131                  --
Changes in assets and liabilities, net of amounts acquired:
    Accounts receivable                                               --               --                 (56)
    Prepaids/Other                                                    --              (35)               (568)
    Long-Term Receivables                                             --               --                (133)
    Deposits                                                          13               --                 (49)
    Accounts payable                                                  --              159                (198)
    Other Current Liabilities                                         --              177                  (2)
    Deferred Revenues                                                 --               --                 474
                                                                --------         --------            --------
Net cash used by operating activities                                (48)          (1,271)             (6,559)
                                                                --------         --------            --------
Cash flows from investing activities:
    Purchase of equipment and furniture                              (10)             (77)               (540)
    Investment in MoneyZone                                           --               --                (525)
    Purchase of short-term investments                                --             (880)                  0
    Proceeds from short-term investments                              --               --                 880
    Acquisition cost of Businesses, net of cash acquired              --               --              (1,033)
                                                                --------         --------            --------
Net cash flows from investing activities                             (10)            (957)             (1,218)
                                                                --------         --------            --------
Cash flows from financing activities:
    Proceeds from Britannia Holdings Loan                             --              550                  --
    Repayment of Britannia Holdings Loan                              --               --                (550)
    Equipment Loans and Leases                                        --               --                  --
    Issuance of common stock for cash                                105              126              25,000
    Cost of common stock issuance                                     --               --              (4,192)
    Proceeds from sale of 8% preferred stock                          --            3,938               1,582
    Proceeds from advances from shareholders                          --              189                  --
    Preferred Stock offering costs                                    --             (621)                 --
    Repay advances from shareholders                                  --              (94)                (95)
    Repurchase preferred shares                                       --               --                (113)
    Payment of Interest on Convertible Note                           --               --                 (49)
    Payment of Preferred Dividends                                    --               --                (209)
                                                                --------         --------            --------
Net cash provided by financing activities                            105            4,088              21,374
                                                                --------         --------            --------
Net increase in cash and equivalents                                  47            1,860              13,597
Cash and cash equivalents at beginning of period                      --               47               1,907
                                                                --------         --------            --------
Cash and cash equivalents at end of period                      $     47         $  1,907            $ 15,504
                                                                ========         ========            ========
</TABLE>

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


                                       17
<PAGE>


NETIVATION.COM, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 1999
(Dollars in thousands, except per share data)

NOTE 1--ORGANIZATION AND DESCRIPTION OF BUSINESS

         Netivation.com, Inc. ("Netivation" or the "Company"), a Delaware
corporation, formerly named Nelloro Corporation (Nelloro), was originally
formed in 1993 for the purposes of acquiring interests in mineral properties.
The Company, which has its headquarters in Post Falls, Idaho, commenced its
current operations after acquiring the technology developed by the existing
management team in exchange for 2,500,000 shares of Nelloro common stock on
September 26, 1997. No value was assigned to the technology as it had no net
book value at the time of the transaction and the common stock was deemed to
have minimal value. The transaction has been accounted for as a reverse
acquisition with Netivation as the acquiror. Netivation's existing business
operations commenced upon the acquisition of the technology. Therefore,
historical financial statements prior to September 26, 1997 are not
presented. Additionally pro forma financial information for Nelloro is not
presented as the assets and results of operations for Nelloro were not
significant.

         The Company develops, designs and markets software and websites
focused on the political and medical communities. These communities, known
as vertical portals, are for individuals, groups and businesses sharing a
common interest.

         The Company emerged from the development stage during 1999. The Company
is subject to the risks and challenges associated with other companies at a
similar stage of development including dependence on key individuals, successful
development and marketing of its products and services, the acceptance of the
Internet as a medium for advertising, competition from substitute services and
larger companies with greater financial, technical, management and marketing
resources. Further, during the period required to develop commercially viable
products, services and sources of revenues, the Company may require additional
funds.

         On June 23, 1999, the Company closed its initial public offering
(IPO) of 2,500,000 shares of common stock at $10.00 per share, for net
proceeds of $23.2 million. At closing, all of the Company's issued and
outstanding shares of convertible preferred stock were converted into
2,325,000 shares of common stock. As discussed in Note 3, Netivation
completed

                                       18
<PAGE>

the acquisition of Interlink Services, Inc. and The Online Medical Bookstore,
Inc. simultaneous with the effectiveness of the IPO.

NOTE 2 --SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION.

         The Company's consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries. All significant intercompany
accounts have been eliminated in consolidation.

STOCK SPLIT AND REINCORPORATION.

         On May 17, 1999, the Company effected a one-for-two reverse stock
split of its common and preferred stock and reincorporated in Delaware. All
share and per share amounts in the accompanying financial statements have
been adjusted retroactively to give effect to this reverse stock split.

ESTIMATES AND ASSUMPTIONS.

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

CASH EQUIVALENTS.

         The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

INVESTMENTS.

         Investments consist of equity securities of publicly held companies.
The Company classifies investments as available for sale under Statement of
Financial Accounting Standards No. 115. Investments are carried at fair
market value, with unrealized holding gains and losses reported as a separate
component of stockholders' equity. Fair market value is based on quoted
market prices. The Company's short-term investments consist solely of
investments in the common stock of publicly-traded companies and are recorded
at fair market value. Unrealized holding gains and losses, net of tax effect,
are reported as a separate component of other comprehensive income until
realized. Realized gains and losses from the sale of available-for-sale
securities are determined on a specific identification basis. Dividend and
interest income is recognized as earned. Investments have been classified as
non-current assets in the accompanying financial statements due to
management's current intent to hold such investments.

EQUIPMENT AND FURNITURE.

         Equipment and furniture are recorded at cost. Major additions and
improvements are capitalized. Minor replacements, maintenance and repairs that
do not increase the useful life of the assets are expensed as incurred.
Depreciation is determined using the straight-line method over the expected
useful lives of the assets which range from three to five years.

GOODWILL AND OTHER INTANGIBLE ASSETS.

         Intangible assets consist primarily of acquired technology, assembled
workforce, customer base and goodwill related to acquisitions accounted for
under the purchase method of accounting. Amortization of these purchased
intangibles is provided on the straight-line basis over the respective useful
lives of the assets, primarily three years. The Company identifies and records
impairment losses on intangible and other assets when events and circumstances
indicate that such assets might be impaired. The Company considers factors such
as significant changes in the regulatory or business climate and projected
future cash flows from the respective asset. As of December 31, 1999,
intangible assets consisted of the following:

<TABLE>
<CAPTION>
<S>                          <C>
Acquired technology           $4,955

Assembled workforce            3,299

Customer base                  2,439

Goodwill                       5,716
                             --------
Less:  Accumulated
        Amortization           1,068
                             --------

                              $15,341
                             ========

</TABLE>

FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

         Financial instruments that potentially subject the Company to
concentrations of credit risk consist of cash and cash equivalents,
short-term investments, accounts receivable and accounts payable. Fair values
of cash and cash equivalents and short-term investments approximate cost due
to the short period of time to maturity. The fair values of financial
instruments that are short-term and/or that have little or no market risk are
considered to have a fair value equal to book value. Assets and liabilities
that are included in this category are accounts receivable and accounts
payable.

         The Company performs initial and ongoing evaluations of its
customers' financial position, and generally extends credit on open account,
requiring collateral as deemed necessary. The Company maintains allowances
for potential credit losses.

INCOME TAXES.

         The Company recognizes deferred income tax assets and liabilities for
the expected future income tax consequences, based on enacted laws, of temporary
differences between the financial reporting and tax bases of assets, liabilities
and tax carryforwards. Deferred tax assets are then reduced, if deemed
necessary, by a valuation allowance for the amount of any tax benefits which,
more likely than not based on current circumstances, are not expected to be
realized.

REVENUE RECOGNITION.

         Revenues are generated from e-commerce merchandise sales, website
development and hosting, internet access, software licenses and advertising.

         Sales of products directly to customers through e-commerce are
recognized when shipped. In these transactions the Company acts as
merchant-of-record. Accordingly, the Company records as revenue the full
sales price of the product sold and records the full cost of the product to
the Company as cost of revenues, upon shipment of the product.

         Software licensing costs and website development revenues are generally
recognized when all elements essential to the functionality of the software or
the website have been delivered. Where the Company has significant continuing
involvement with the licensee, revenues are deferred and recognized over the
term of the agreement. Hosting contracts typically have a term of one year, with
fees charged on a monthly basis.

         Internet access is billed on a monthly basis and is earned as
billed. Hosting contracts typically have a term of one year, with fees
charged or a monthly basis.

         Advertising consists of the sale of impressions on one or more of
the Company's network of websites for cash or barter. Advertising revenues
are recognized ratably over the term of the applicable agreement.

         Deferred revenue consists primarily of prepaid licensing and hosting
fees that are being amortized over their contract life.

STOCK-BASED COMPENSATION.

         The Company has adopted the disclosure provisions of Statement of
Financial Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based
Compensation." In accordance with the provisions of SFAS 123, the Company
applies Accounting Principles Board Opinion No. 25 (APB 25), "Accounting for
Stock Issued to Employees," and related interpretations in accounting for its
stock option plan.

ADVERTISING COSTS.

         The cost of advertising is expensed as incurred. During the periods
ending December 31, 1997, 1998 and 1999, the Company incurred advertising
expense of $0, $50, and $364, respectively.

RESEARCH AND DEVELOPMENT.

         Research and development costs are expensed as incurred and consist
primarily of salaries, supplies and contract services.

SOFTWARE DEVELOPMENT COSTS

         Under the criteria set forth in Statement of Financial Accounting
Standards No. 86, "Accounting for the Costs of Computer Software to Be Sold,
Leased, or Otherwise Marketed," capitalization of software development costs
begins upon the establishment of technological feasibility of the product,
which the Company has defined as the completion of beta testing of a working
product. The establishment of technological feasibility and the ongoing
assessment of the recoverability of these costs require considerable judgment
by management with respect to certain external factors, including, but not
limited to, anticipated future gross product revenue estimated economic life
and changes in software and hardware technology. Amounts that could have been
capitalized under this statement after consideration of the above factors
were immaterial and, therefore, no software development costs have been
capitalized by the Company to date.

STATEMENTS OF COMPREHENSIVE LOSS

There were no reclassification adjustments as defined in SFAS 130 "Reporting
Comprehensive Income" or income tax provision related to the unrealized gain
on investment during the year ended December 1, 1999.

                                       19

<PAGE>

LOSS PER SHARE

         In accordance with SFAS No. 128, "Computation of Earnings Per
Share," basic earnings per share is computed by dividing net loss available
to common stock (net loss less preferred stock dividend requirements) by the
weighted average number of shares of common stock outstanding during the
period. Dilutive earnings per share is computed by dividing net loss by the
weighted average number of common and dilutive common equivalent shares
outstanding during the period. Common equivalent shares consist of the shares
of common stock issuable upon the conversion of the convertible preferred
stock (using the if-converted method) and shares issuable upon the exercise
of stock options and warrants (using the treasury stock method); common
equivalent shares are excluded from the calculation if their effect is
antidilutive. The company has not had any issuances or grants for nominal
consideration as defined under Staff Accounting Bulletin 98.

         Diluted net loss per share for all periods shown does not include
the effects of the convertible preferred stock and shares issuable upon the
exercise of stock options and warrants as the effect of their inclusion is
antidilutive during each period.

RECENT ACCOUNTING PRONOUNCEMENTS.

         In March 1998, the American Institute of Certified Public
Accountants issued Statement of Position 98-1 (SOP 98-1), "Accounting for the
Cost of Computer Software Developed or Obtained for Internal Use." SOP 98-1
is effective for financial statements for years beginning after December 15,
1998. SOP 98-1 provides guidance over accounting for computer software
developed or obtained for internal use including the requirement to
capitalize specified costs and amortization of such costs. The implementation
of SOP 98-1 did not have a material impact on the Company's financial
position or results of operations.

         In April 1998, the American Institute of Certified Public
Accountants issued Statement of Position 98-5 (SOP 98-5), "Reporting on the
Costs of Start-Up Activities." SOP 98-5, which is effective for fiscal years
beginning after December 15, 1998, provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs of
start up activities and organization costs to be expensed as incurred. The
implementation of SOP 98-5 did not have a material impact on the Company's
financial position or results of operations.

         In June 1998, the Fiancial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." It
requires the recognition of all derivatives as either asets or liabilities
and the measurement of those instruments at fair value. The requried adoption
period is effective for the issuance of Netivation's March 31, 2001 quarterly
financial statements. The implementation of SFAS No. 133 is not expected to
have a matereial impact on Netivation's financial position or results of
operations. SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133"
issued in August 1999, postpones for one year the mandatory effective date
for adoption of SFAS No. 133 to January 1, 2001.

         In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements," to provide guidance on the recognition, presentation and disclosure
of revenues in financial statements. The Company believes its revenue
recognition practices are in conformity with the guidelines prescribed in SAB
No. 101.

NOTE 3 - ACQUISITIONS

         On June 22, 1999, simultaneous with the IPO, the Company acquired
Interlink Services, Inc., a website design and hosting services company and
The Online Medical Bookstore, Inc., (collectively referred to as the
"Companies") a discount medical book and medical supply e-commerce company.
Netivation paid aggregate cash consideration for the two acquisitions of $300
and 319,286 shares of its common stock. The acquisition of the Companies has
been accounted for using the purchase method of accounting. The excess
purchase price of approximately $3.6 million, was allocated to goodwill, and
is being amortized over a three-year life.

         In October 1999, the Company acquired MEDMarket, Inc. (MEDMarket),
politicallyblack.com, Inc. (politicallyblack) and Raintree Communications
Corporation (Raintree). MEDMarket develops Internet e-commerce websites for
medical manufacturers and supplier companies. Politicallyblack is an Internet
website focusing on political issues important to African Americans. Raintree
developed an automated voice response and data service for grassroots
lobbying. The Company paid aggregate consideration of $255 and issued
280,000 unregistered shares of the Company's common stock for a total
purchase price of $1,710. The acquisitions were accounted for using the
purchase method of accounting. Of the excess purchase price of approximately
$1,760, $359 of was allocated to acquired technology, $252 was allocated to
assembled workforce, $115 was allocated to customer base and $1,034 was
allocated to goodwill, all of which are being amortized over a three-year
life.

                                       21
<PAGE>

         In October 1999, the Company acquired Public Disclosure, Inc.
(Public Disclosure). Public Disclosure developed FECInfo, a relational
database that takes every federal campaign contribution over the last ten
years and is sold as an annual subscription. Netivation paid aggregate
consideration of $190 and 300,000 unregistered shares of the Company's common
stock for a total purchase price of $1,337. The acquisition was accounted for
using the purchase method of accounting. Of the excess purchase price of
approximately $1,333, $800 was allocated to acquired technology, $200 was
allocated each to assembled workforce and customer base and $133 was
allocated to goodwill, all of which are both being amortized over a
three-year life.

         In December 1999, the Company acquired NetCapitol, Inc.,
(NetCapitol). NetCapitol develops and hosts websites for special interest
groups to effect grass roots lobbying efforts for national, state and local
political issues. Netivation paid consideration of $410 and 1,544,730
unregistered shares of the Company's common stock for a total purchase price
of $8,909. The acquisition was accounted for using the purchase method of
accounting. Of the excess purchase price of approximately $9,491, $3,797 was
allocated to acquired technology, $2,847 was allocated each to assembled
workforce, $1,898 was allocated to customer base and $949 was allocated to
goodwill, all of which are both being amortized over a three-year life.

         In connection with the acquisitions, net assets acquired were as
follows:

<TABLE>
<CAPTION>
<S>                   <C>
Cash                        $   57
Accounts receivable             33
Property and equipment         131
Other assets                    32
Liabilities                   (873)
                         ----------
                            $ (620)
                         ==========
</TABLE>

UNAUDITED PRO FORMA COMBINED RESULTS

         The following summarizes the unaudited pro forma results of the
Company's operations for the years ended December 31, 1998 and 1999 assuming
all of the business combinations occurred as of January 1, 1998. The pro
forma results are presented for the purposes of additional analysis only and
do not purport to present the results of operations that would have occurred
for the periods presented or that may occur in the future.

<TABLE>
<CAPTION>
Years ended:
                                                          December 31, 1998       December 31, 1999
                                                          -----------------       -----------------
<S>                                                     <C>                    <C>
Revenues................................................    $  1,495                  $  2,132
Net loss before taxes...................................      (2,427)                   (9,151)
Net loss per share......................................       (0.38)                    (1.43)
</TABLE>

NOTE 4--FEDERAL INCOME TAXES

         The Company did not provide an income tax benefit for any of the
periods presented because it has experienced operating losses since inception.
The Company's total tax net operating loss carryforwards were approximately
$7.6 million at December 31, 1999 which expire between 2012 and 2019. The
significant components of the deferred tax asset at December 31, 1998 and 1999,
were as follows:

<TABLE>
<CAPTION>
                                                         1998            1999
                                                        -----           -------
   <S>                                                  <C>             <C>
   Net operating loss carryforward                      $ 609           $ 2,580
   Stock compensation..                                   199               618
   Other                                                   --               216
                                                        -----           -------
   Deferred tax asset.                                    808              3414
   Deferred tax asset valuation allowance                (808)            (3414)
                                                        -----           -------
                                                        $  --           $    --
                                                        =====           =======
</TABLE>

         The valuation allowance on deferred tax assets increased by $787 and
$2,606 during 1998 and 1999, respectively.

         In accordance with certain provisions of the Internal Revenue Code, as
amended, a change in ownership of greater than 50% of a company within a three
year period results in an annual limitation on the Company's ability to utilize
its net operating loss ("NOL") carryforwards from tax periods prior to the
ownership change.


                                       22
<PAGE>

NOTE 5--DEBT

CONVERTIBLE NOTE PAYABLE TO STOCKHOLDER.

         At December 31, 1998, the Company had an 8% convertible note (the
"Note") with a principal balance of $550, and accrued interest payable
quarterly. The Note was due on March 16, 1999, and was paid in full by the
Company in January 1999. The Company issued 137,500 shares of the Company's
common stock to the lender in connection with the granting of the loan in March
1998 and issued an additional 12,500 shares of common stock in July 1998 in
exchange for a modification of the escrow requirements. The fair market value of
these shares at the date of issuance has been reflected as a debt discount in
the accompanying financial statements and is being accreted to interest expense
over the original one year life of the agreement, using the effective interest
rate method.

         As of December 31, 1998, the unamortized debt discount on the Note was
$49. Amortization expense related to the debt discount was $131 and $49 for the
periods ended December 31, 1998 and 1999, respectively.

ADVANCES FROM STOCKHOLDERS.

         During 1998, the Company obtained advances totaling $189 from principal
stockholders for working capital purposes. These loans were payable on demand.
The advances were non-interest bearing, and were not collateralized. Interest
totaling $22 was imputed on these advances based on an effective interest rate
consistent with the convertible note payable discussed above. The balance of
these advances to stockholders at December 31, 1998 was $95. In January 1999,
all advances were paid in full by the Company.

NOTE 6--STOCKHOLDERS' EQUITY

CONVERTIBLE PREFERRED STOCK.

         In June 1999, the Company's IPO became effective and all issued and
outstanding shares of preferred stock converted into shares of common stock on a
1:1 basis.

         In January 1999 the Company increased the authorized amount of
preferred stock to 3,500,000 shares, with a par value of $.01. Shares of
preferred stock may be issued from time to time in one or more series, with
designations, rights, preferences and limitations established by the Company's
Board of Directors.

         The company has designated shares of preferred stock as Series A
Convertible preferred stock (Series A). Holders of Series A are entitled to
annual dividends at 8% of the original issue price of the shares held. No
distributions may be made to holders of common stock until all cumulative
dividends on Series A have been paid.

         If the net profits in any year are not sufficient to pay this dividend,
either in whole or in part, then any unpaid portion of the dividend will become
a charge against the net profits of the Company, and will be paid in full out of
the net profits of the Company in subsequent years before any dividends are paid
on the common stock of the Company in those years. For a period of three (3)
years from the issue date at the Company's option, the Company may satisfy any
accrued preferred stock dividend, or portion thereof, with preferred stock in
lieu of cash. After three (3) years from the date hereof, if the Company has a
positive cash flow in sufficient amount to pay accrued preferred stock
dividends, ("Sufficient Positive Cash Flow"), then any accrued preferred stock
dividend will be payable in cash. If, after three (3) years from the date
hereof, the Company does not have Sufficient Positive Cash Flow, then any
accrued preferred stock dividend will be payable in preferred stock. To account
for the preferred stock


                                       23
<PAGE>

dividend, the Company has recorded $14 as a charge to deficit accumulated in the
development stage in the accompanying 1998 statement of stockholders' equity.

         The shares of preferred stock are not entitled to vote at meetings of
the stockholders of the Company and are not entitled to participate in the
profits of the Company beyond the fixed, preferential annual dividend provided
herein. Each share of Series A is convertible, at the option of the holder, into
one half share of common stock, subject to adjustment to prevent dilution. Each
share of Series A is automatically convertible into common stock upon the
closing of a public offering or other change in control that meets certain
conditions.

         During 1998, the Company issued 1,575,000 shares of Series A
preferred stock and received subscriptions for 543,948 shares of Series A
preferred stock at $2.50 per share. The cash from these subscriptions was
received in January 1999. The Company has reflected these subscriptions
receivable in the accompanying December 31, 1998 financial statements net of
offering costs. In January 1999, the Company received net proceeds of
approximately $450 related to the sale of 206,052 additional shares of Series
A preferred stock.

STOCK OPTION PLAN.

         In July 1998, the stockholders and Board of Directors approved a
Nonqualified Stock Option and Restricted Stock Plan. In March 1999, the Company
amended and restated this plan as the 1999 Equity Incentive Plan (the "Plan").
The Board of Directors has the authority to determine all matters relating to
incentive and non-qualified stock options and restricted stock to be granted
under the Plan, including the selection of individuals to be granted options,
number of shares to be subject to each option, the exercise price and the term
and vesting period, if any. Options generally vest over periods ranging up to
five years and have lives up to ten years from date of grant. Options
outstanding at December 31, 1999 have an average remaining contractual life of
nine (9) years. At December 31, 1999, exercise prices ranged from $1.25 to
$10.00 per share.

         The Company also has a non-qualified stock plan (the "Non-Qualified
Plan") for the benefit of employees and consultants. The Company has 1,000,000
shares authorized under the Non-Qualified Plan. As of December 31, 1999, the
Company issued 105,270 shares and there are 894,730 shares remaining.

         The following table summarizes the Company's stock option activity:


<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------
                                                        1998                      1999
----------------------------------------------------------------------------------------
                                          OPTIONS     WEIGHTED     OPTIONS      WEIGHTED
                                                       AVERAGE                  AVERAGE
                                                      EXERCISE                  EXERCISE
                                                        PRICE                    PRICE
----------------------------------------------------------------------------------------
<S>                                       <C>          <C>         <C>           <C>
Outstanding at beginning of period          --                     274,500        $ .66
----------------------------------------------------------------------------------------
Granted                                   274,500       $.66       653,225        $6.21
----------------------------------------------------------------------------------------
Exercised                                                            1,250        $1.25
----------------------------------------------------------------------------------------
Canceled                                                            23,750        $1.78
----------------------------------------------------------------------------------------
Outstanding at end of period              274,500       $.66       902,725        $4.75
----------------------------------------------------------------------------------------
Exercisable at the end of the period      274,500       $.66       415,956        $2.64
----------------------------------------------------------------------------------------

</TABLE>

         The Company had reserved a total of 750,000 shares of common stock
for issuance to its stock option holders under the plan and has 53,525 shares
remaining in the Plan available for future grant as of December 31, 1999.
There were 415,956 stock options exercisable at December 31, 1999 including
those issued outside of the Plan. The following table summarizes information
about all stock options, including those issued outside of the Plan,
outstanding at December 31, 1999:

                                       24
<PAGE>

<TABLE>
<CAPTION>

                        Options Outstanding                               Options Exercisable
     -----------------------------------------------------------        -------------------------
                                      Weighted
                                       Average         Weighted-                         Weighted
     Range of                         Remaining         Average                           Average
     Exercise     Number             Contractual        Exercise          Number         Exercise
     Prices       Outstanding           Life             Price          Outstanding       Price
     --------     -----------       -------------     -----------       -----------      --------
     <S>          <C>               <C>              <C>                <C>              <C>
     $  .03          125,000         Indefinite          $ .03             125,000       $    .03
        .10           75,000                3.8            .10              75,000            .10
       1.25          143,375                9.0           1.25              40,375           1.25
       2.50          161,750                7.7           2.50              88,081           2.50
       5.38           48,850                9.9           5.38                   0             --
       6.00           40,000                9.9           6.00                   0             --
      10.00          310,000                9.5          10.00              87,500          10.00
</TABLE>

         Under APB 25, the Company records compensation expense over the vesting
period for the difference between the exercise price and the deemed fair market
value for financial reporting purposes of stock options granted. In conjunction
with grants made in 1998, the Company recorded $586 as stock compensation
expense in the accompanying 1998 statement of operations.

         The Company has adopted the disclosure-only provisions of SFAS No. 123.
Had compensation expense been recognized on stock options issued based on the
fair value of the options at the date of grant and recognized over the vesting
period, the Company's net loss would have been increased to the pro forma
amounts indicated below:

<TABLE>
<CAPTION>

------------------------------------------------------------------------------
                                             DECEMBER 31,         DECEMBER 31,
                                                 1998                 1999
------------------------------------------------------------------------------
<S>                                            <C>                <C>
Net Loss:
------------------------------------------------------------------------------
   As reported                                 $(2,342)            $(8,622)
------------------------------------------------------------------------------
   Pro forma                                   $(2,342)            $(9,131)
------------------------------------------------------------------------------
Basic and diluted loss per share
------------------------------------------------------------------------------
   As reported                                 $  (.69)            $ (1.35)
------------------------------------------------------------------------------
   Pro forma                                   $  (.69)            $ (1.43)
------------------------------------------------------------------------------

</TABLE>

         The weighted average grant date fair value of options granted in
1999 and 1998 was $1.93 and $3.19. The fair value of each options estimated
using the Black-Scholes option pricing model that takes into account: (1) the
fair value stock price at the grant date, (2) the exercise price, (3)
estimated life of three years, (4) no dividends, (5) risk-free interest rates
of 5.5% and (6) volatility of 110%. The initial impact on pro forma net loss
may not be representative of compensation expense in future years when the
effect of the amortization of multiple awards would be reflected in results
of operations.

STOCK OPTIONS ISSUED OUTSIDE OF THE PLAN.

         In June 1998, the Company issued an option to purchase 125,000 shares
(option shares) of common stock at a price of three cents ($.03) per share in
exchange for consulting services. These options are fully vested and have no
expiration date. The optionee has the right to tender all of its option shares
back to the Company for cash and notes payable five years from the date of the
original grant. The price to repurchase the option shares is equal to the number
of shares multiplied by the fair market value of the underlying common stock,
multiplied by 1.25. The right to tender the option shares back to the Company
will expire if the Company's stock becomes publicly traded.

         As a measurement date was not known at December 31, 1998, the Company
recorded stock compensation expense and a long-term liability of $391 in the
accompanying 1998 financial statements. The compensation expense is based on the
difference between the exercise price of the option and the estimated underlying
fair market value of the common stock at December 31, 1998. The measurement date
became known upon the effectiveness of the Company's IPO and, accordingly,
compensation expense of $1,232 has been recorded in the 1999 statement of
operations.


                                       25
<PAGE>

         In August 1998, the Company issued an option to purchase 75,000 shares
of common stock at a price of ten cents ($.10) per share in exchange for
consulting services. The Company has recorded stock compensation expense of $180
in the accompanying statement of operations based on the fair market value of
the stock option on the date of the grant.

EMPLOYEE STOCK PURCHASE PLAN.

         In March 1999, the Board of Directors adopted the 1999 Employee Stock
Purchase Plan ("Purchase Plan"), to provide employees of the Company and its
affiliates with an opportunity to purchase common stock through payroll
deductions. The Purchase Plan will terminate at the Board of Directors'
discretion. Under the Purchase Plan, 500,000 shares of common stock have been
reserved for issuance.

         The Purchase Plan is intended to qualify as an employee stock Purchase
Plan within the meaning of Section 423 of the Internal Revenue Code. The Board
of Directors may authorize participation by eligible employees, including
officers, in periodic offerings following the adoption of the Purchase Plan. A
new offering period begins every 12 months. The Board of Directors has currently
authorized an offering commencing on December 10, 1999, of the Company's common
stock and ending December 9, 2000, with sequential 12-month offerings
thereafter.

         The Company issued 30,000 shares of restricted stock to three
non-employee directors in exchange for services performed during 1999. The
shares of restricted stock are fully vested as the non-employee directors
continued to serve the Company as of December 31, 1999.

STOCK WARRANTS.

         In connection with the Company's initial public offering, the Company
agreed to issue warrants to purchase 250,000 shares of common stock at $16.50
per share. The warrants expire in 2004.

RESERVED FOR FUTURE ISSUANCE.

         The following common shares have been reserved for future issuance as
of December 31, 1999:

<TABLE>
     <S>                                              <C>
     Employee stock options..........................   902,725
     Warrants........................................   250,000
                                                      ---------
                                                      1,152,725
                                                      =========

</TABLE>


NOTE 7--RELATED PARTY TRANSACTIONS

         For the period ended December 31, 1997, two principal stockholders of
the Company were entitled to receive base compensation totaling $42. These
salaries were not paid, if the officers had received their 1997 salary, it would
have increased loss per share by $.01 for the period ended December 31, 1997.
(Also see Note 4.)

         During 1999, the Company loaned an employee and the former principal
shareholder of an acquired entity $133 pursuant to the business combination. The
loan accrues interest at 6.25% per annum, with 23 equal payments and a final
balloon payment of $108.


                                       26
<PAGE>

NOTE 8--COMMITMENTS

INTERNET ACCESS.

         During 1999, the Company entered into an agreement with a third
party for the provision of internet access and services. This agreement
expires annually. Under the terms of this agreement, the Company is
obligated to pay a total of $3.3 per month.

LEASES.

         The Company has entered into noncancelable operating lease
agreements involving equipment and facilities through the year 2000. Rent
expense totaled $0, $16 and $80 for the years ended December 31, 1997, 1998
and 1999, respectively.

Future minimum payments under the operating leases, as of December 31, 1999
are as follows:

<TABLE>
<CAPTION>

Year Ended
December 31,
------------
<S>                                             <C>
2000........................................... $440
2001...........................................  406
2002...........................................  406
2003...........................................  406
2004...........................................  330
Thereafter.....................................   19
                                              ------
                                              $2,007

</TABLE>

NOTE 9: SEGMENT INFORMATION

         The Company adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," during the second quarter of 1999. SFAS No.
131 established standards for reporting information about operating segments in
annual financial statements and requires selected information about operating
segments in interim financial reports issued to stockholders. It also
established standards for related disclosures about products and services and
geographic areas. Operating segments are defined as components of an enterprise
about which separate financial information is available, evaluated regularly by
the chief operating decision makers, or a decision making group, in deciding how
to allocate resources and in assessing performance. The Company's chief
operating decision making group is comprised of the chief executive officer and
various executive vice presidents and general managers of the Company. The
Company has identified two distinct reportable segments: political line of
business and medical line of business. While the decision making group evaluates
results in a number of different ways, the line of business management structure
is the primary basis for which it assesses financial performance and allocates
resources. The accounting policies of the line of business operating segments
are the same as those described in the summary of significant accounting
policies.

         The following table represents the Company's segment information for
the year ended December 31, 1999:

<TABLE>
<CAPTION>


                                                      December 31,
                                                          1999
                                                   -----------------
<S>                                                <C>
Revenue from Divisions:
MEDMarket.com, Medical Division                           $717
Votenet.com, Public Policy and Politics Division           281
                                                   -----------------
                                                           998

Cost of Revenues:
MEDMarket.com, Medical Division                           $622
Votenet.com, Public Policy and Politics Division            62
                                                   -----------------
                                                           684

Gross Margin:
MEDMarket.com, Medical Division                             95
Votenet.com, Public Policy and Politics Division           219
                                                   -----------------
                                                          $314

Profit Reconciliation:
Gross Profit for reportable segments                       314
Operating Expenses                                      (8,979)
Non Operating Expenses, net                                252
                                                   -----------------
Net Loss                                               ($8,413)

</TABLE>

         The Company does not track assets by operating segments.
Consequently, it is not practicable to show assets by operationing segments.

NOTE 10 SUBSEQUENT EVENTS

         Subsequent to December 31, 1999, the Company has entered into
multiple marketing agreements whereby the Company will work with Internet
content providers to provide political content and public affairs services.
These contracts require the payment of approximately $3,400 during the
year 2000, plus 50,000 warrants to purchase shares of the Company's stock.

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

         Netivation.com did not change accountants within the last two fiscal
years, nor were there any reportable disagreements with its independent public
accountants on any matter of accounting principles or practices, financial
statement disclosures, or auditing scope or procedure.


                                       27
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

EXECUTIVE OFFICERS AND DIRECTORS

         The following table describes certain information about
Netivation.com's executive officers ("Executive Officers") and directors.

<TABLE>
<CAPTION>

         NAME                       AGE              POSITION
         <S>                        <C>     <C>
         Anthony J. Paquin          41      Chairman of Board of Directors, President and Chief
                                            Executive Officer

         Gary S. Paquin             48      Chief Marketing Officer, Secretary and Director

         James B. Arnold            33      Chief Financial Officer

         Michael R. Paquin          53      MEDMarket.com General Manager

         Oron Strauss               27      Votenet General Manager

         Kelly M. McCarthy          30      Vice President of Mergers and Acquisitions

         Donna L. Weaver            56      Director

         T. A. (Drew) Wahlin        52      Director

         Douglas K. Carnahan        58      Director

</TABLE>

DESCRIPTION OF DIRECTORS

         Netivation.com's Board of Directors is divided into three classes of
directors. Each director serves a staggered three-year term which expires at an
annual meeting of stockholders. Each director is to serve on the Board of
Directors until his or her term expires and until a successor is elected and has
qualified, or until a director's earlier death, resignation, or removal.

         The current classes of directors are as follows:

         o        Class I Directors: Gary S. Paquin and T. A. (Drew) Wahlin. The
                  term of office for the Class I Directors expires as of the
                  2000 annual meeting.

         o        Class II Director: Douglas K. Carnahan. The term of office for
                  the Class II Director expires as of the 2001 annual meeting.

         o        Class III Directors: Anthony J. Paquin and Donna L. Weaver.
                  The term of office for the Class III Directors expires as of
                  the 2002 annual meeting.


                                       28
<PAGE>

CLASSES OF DIRECTORS

     CLASS I -- DIRECTORS

         GARY S. PAQUIN - Mr. Paquin (48) has served as Netivation.com's Chief
         Marketing Officer since January 1999, as Netivation.com's Secretary
         since August 1998, and as a director of Netivation.com since September
         1997. From August 1998 to January 1999, he served as Netivation.com's
         Chief Operating Officer. From August 1998 to February 1999, he served
         as Netivation.com's Treasurer. From 1997 to July 1998, Mr. Paquin
         served as Netivation.com's Vice President of Sales and Corporate
         Development. Mr. Paquin co-founded Agency One Corporation in 1989 and
         served as its Vice President until 1997. Previously, Mr. Paquin served
         as a regional manager for Computer Associates International, Inc.
         (NYSECCA), a software, support and integration services company, and
         held various management and marketing positions with International
         Business Machines Inc. (NYSECIBM). Mr. Paquin serves on the local
         United Way board of directors and served as chairman of the 1998 fund
         drive. Mr. Paquin is the brother of Anthony J. Paquin, Netivation.com's
         President and Chief Executive Officer, David C. Paquin,
         Netivation.com's Vice President of Human Resources, Michael R. Paquin,
         Netivation.com's MEDMarket.com General Manager, and brother-in-law to
         Kelly M. McCarthy, Netivation.com's Vice President of Mergers and
         Acquisitions.

         T. A. (DREW) WAHLIN - Mr. Wahlin (52) has served as a member of
         Netivation.com's Board of Directors since August 1998. Mr. Wahlin has
         served as the chairman of Netivation.com's audit committee and as a
         member of the compensation committee since March 1999. Mr. Wahlin has
         served as the managing principal of Idaho Consulting International, a
         consulting firm, since January 1994. Previously, Mr. Wahlin served as
         President and Chief Operating Officer of White Cloud Mountain Company,
         Inc., a wholesaler of coffee products, from January 1991 to March 1993.
         He holds a B.A. from the University of California, Davis and an M.B.A.
         from the University of Puget Sound. Mr. Wahlin is a Certified Public
         Accountant.

     CLASS II -- DIRECTOR:

         DOUGLAS K. CARNAHAN - Mr. Carnahan (58) has served as a member of
         Netivation.com's Board of Directors since 1998. Mr. Carnahan has served
         as the chairman of Netivation.com's compensation committee and as a
         member of the audit committee since March 1999. Mr. Carnahan served as
         Senior Vice President of Hewlett-Packard Company, a computer
         manufacturing company, from 1995 to 1998. He also served as general
         manager of the Measurement Systems Organization from 1993 to 1998.
         Currently, Mr. Carnahan serves on the board of directors of Molex, Inc.
         (Nasdaq MOLX), an electronic components company. Mr. Carnahan holds a
         B.S. from San Jose State University and an M.B.A. from Santa Clara
         University.

     CLASS III -- DIRECTORS:

         ANTHONY J. PAQUIN - Mr. Paquin (41) has served as Netivation.com's
         Chairman of the Board of Directors, President and Chief Executive
         Officer since September 1997. Mr. Paquin was a candidate in the primary
         elections for the United States House of Representatives in Idaho's
         First Congressional District during 1997 and 1998. Mr. Paquin
         co-founded Agency One Corporation, a company that developed software
         for the insurance industry in 1989, and served as its president and
         chief executive officer until 1993. Agency One Corporation was acquired
         in 1993 by Agency Management Services, an insurance software company
         ("AMS"), and a subsidiary of CNA Financial Corporation. Mr. Paquin
         served as the senior vice president of marketing of AMS from 1993 to
         March 1997. Mr. Paquin founded and is the president of the Idaho
         Technology Association. Mr. Paquin serves on the board of directors of
         MoneyZone.com, formerly known as EBONLINE. Mr. Paquin is the husband of
         Kelly M. McCarthy, Netivation.com's Vice President of Mergers and
         Acquisitions, and the brother of Gary S. Paquin, Netivation.com's Chief
         Marketing Officer and Secretary, David C. Paquin, Netivation.com's Vice
         President of Human Resources, and Michael R. Paquin, Netivation.com's
         MEDMarket.com General Manager.


                                       29
<PAGE>

         DONNA L. WEAVER - Ms. Weaver (56) has served as a member of
         Netivation.com's Board of Directors since August 1998. Ms. Weaver has
         also served as a member of Netivation.com's audit and compensation
         committees since March 1999. In 1985, Ms. Weaver founded Weaver, Field
         & London, Inc., an investor relations and corporate communications
         firm, and has served as its chairman since the firm's inception. Ms.
         Weaver currently serves as a director of Ross Stores Inc.
         (NasdaqCROST), a retail store chain, Crown Vantage Inc. (NasdaqCCVAN),
         a producer of paper products, and Hancock Fabrics Inc. (NYSECHKF), a
         retail and wholesale fabric company. Ms. Weaver served as volunteer
         campaign chairman of the successful 1996 Congressional Term Limits
         Initiative and the 1998 Congressional Term Limits Pledge Initiative in
         Idaho. She holds a B.S. from the University of Arizona and an M.S. from
         the Stanford Graduate School of Business.

DESCRIPTION OF EXECUTIVE OFFICERS AND KEY EMPLOYEES

         Below are descriptions for each of the Executive Officers and key
employees.

JAMES B. ARNOLD (33) joined Netivation.com in October 1999 as its Chief
Financial Officer. Previously, he served as the Chief Financial Officer of
Imagination Software, Inc. in Silver Spring, Maryland. Prior to his
employment at Imagination Software, he was Chief Financial Officer for AT&T
Solutions, based in Chantilly, Virginia. From January to November of 1996,
Mr. Arnold was Director of Corporate Financial Planning and Analysis at AT&T
Solutions in Washington, D.C. From August 1994 to January 1996, he served as
Business and Financial Director at AT&T Solutions. Prior to his employment at
AT&T, Mr. Arnold held various financial positions with NCR Corporation in
Dayton, Ohio and Rockville, Maryland. Mr. Arnold holds two bachelor's degrees
in finance and accounting from Miami University and a master's degree in
finance from The Johns Hopkins University.

DAVID C. PAQUIN (44) joined Netivation.com in June 1998 as a General Manager and
currently serves as Netivation's Vice President of Human Resources. From March
1999 through August 1999 Mr. Paquin served as part of Netivation.com's executive
officers and served as the Chief Operating Officer for Netivation.com. From
April 1994 to June 1998, Mr. Paquin served as the Manager of Customer Service,
Human Resources and Sales at AMS. From April 1989 to April 1994, he served as
the Manager of Technical and Manager Training at Mohawk Power Corporation, an
electric power utility in Oswego, New York. Mr. Paquin holds a B.S. from the
State University of New York and an M.S. from the New York Institute of
Technology. Mr. Paquin is the brother of Anthony J. Paquin, Netivation.com's
President and Chief Executive Officer, Gary S. Paquin, Netivation.com's Chief
Marketing Officer and Secretary, Michael R. Paquin, Netivation.com's
MEDMarket.com General Manager, and brother-in-law to Kelly M. McCarthy,
Netivation.com's Vice President of Mergers and Acquisitions.

MICHAEL R. PAQUIN (53) is MEDMarket.com General Manager. Mr. Paquin has 15
years of senior management-level experience with Ingersoll Naxos and Western
Atlas, Inc., both in Illinois, and with General Motors, Buick Motor Division,
in Flint, Michigan. His experience includes international strategic and
tactical planning, foreign trade and investment negotiation, sales management
and service, and workforce management.

ORON STRAUSS (27) has served as Netivation.com's Votenet General Manager
since December 1999. Prior to that, he was Chief Executive Officer and a
Director of Net.Capitol from October 1996 to December 1999 and President of
Net.Capitol from January 1998 to December of 1999. Oron graduated from
Dartmouth College in 1995, where he graduated cum laude and majored in
History and Government. He was Editor-in-Chief of The Dartmouth Review from
1993 to 1994 and served on the Board of Directors of the Hanover Review, Inc.
from 1993 to 1995.

KELLY M. MCCARTHY (30) recently joined Netivation.com as Vice President of
Mergers and Acquisitions. She is an investment and corporate financial
specialist with experience in diverse areas of investment banking, including
initial public offerings, secondary offerings, private placement funding, and
mergers and acquisitions. Ms. McCarthy was previously employed at EBI Securities
Corp. in Denver, Colorado as syndicate manager and in 1996 was promoted to
executive vice president of investment banking. Prior to 1993, she worked as an
investment specialist in EBI Securities Corp.'s Spokane, Washington branch. Ms.
McCarthy is the wife of Anthony J. Paquin, Netivation.com's President and Chief
Executive Officer and the sister-in-law to Gary S. Paquin, Netivation's Chief
Marketing Officer and Secretary, David C. Paquin, Netivation's Vice President of
Human Resources, and Michael R. Paquin, Netivation.com's MEDMarket.com General
Manager.


                                       30
<PAGE>

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

         Section 16(a) of the Securities Exchange Act of 1934 requires
Netivation.com's executive officers, directors, and persons owning more than 10%
of a registered class of Netivation.com's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Executive officers, directors, and greater than 10% stockholders are
required by SEC regulations to furnish Netivation.com with copies of all Section
16(a) forms they file. Based solely on its review of such forms and written
representations from certain reporting persons that they have complied with the
relevant filing requirements, Netivation.com believes that all filing
requirements applicable to its executive officers, directors, and greater than
10% stockholders were complied with as of December 31, 1999, with the exception
of a Form 3 Initial Statement of Beneficial Ownership for James B. Arnold which
was filed one day late and two Form 5 annual statement of beneficial
ownership, one for Donna L. Weaver and one for Oron Strauss.

ITEM 10.  EXECUTIVE COMPENSATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

     This table details certain summary information concerning compensation paid
to or accrued by Netivation.com on behalf of Netivation.com's chief executive
officer and each of Netivation.com's other executive officers, as of the end of
the last fiscal year ("Named Executive Officers") and for the fiscal years ended
December 31, 1997, December 31, 1998, and December 31, 1999.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                                    Long-Term
                                                                                  Compensation
                                                                                 ---------------
                                                Annual Compensation                 Awards(3)
-----------------------------------------------------------------------------------------------------------------
                                                                  Other Annual     Securities        All Other
Name and Principal          Year    Salary ($)     Bonus ($)(1)  Compensation(2)   Underlying    Compensation ($)
Position                                                                           Options (#)
-----------------------------------------------------------------------------------------------------------------
<S>                         <C>      <C>            <C>               <C>            <C>              <C>
Anthony J. Paquin,          1999     $150,000       $50,000           ----           62,500           $ 1,309(4)
Chairman of the Board       1998     $100,600         ----            ----            ----            $   432(4)
and President, Chief        1997        N/A           N/A             N/A              N/A              N/A
Executive Officer
-----------------------------------------------------------------------------------------------------------------
Michael R. Paquin,          1999     $ 41,666(5)      ---             ----            ----            $18,000(6)
MEDMarket.com General       1998        N/A           N/A             N/A              N/A              N/A
Manager                     1997        N/A           N/A             N/A              N/A              N/A
-----------------------------------------------------------------------------------------------------------------
Gary S. Paquin,             1999     $125,000       $50,000           ----           43,750           $ 1,309(4)
Chief Marketing Officer     1998     $100,200         ----            ----            ----            $   817(4)
and Secretary               1997        N/A           N/A             N/A              N/A              N/A
-----------------------------------------------------------------------------------------------------------------
James B. Arnold,            1999     $ 28,125(5)      ----            ----           40,000           $45,185(6)
Chief Financial Officer     1998        N/A           ----            ----             N/A              N/A
                            1997        N/A           N/A             N/A              N/A              N/A
-----------------------------------------------------------------------------------------------------------------
Kelly M. McCarthy,          1999     $ 41,666(5)      ----                           16,180(7)        $90,518(5)
Vice President of           1998        N/A           N/A             N/A              N/A              N/A
Mergers and Acquisitions    1997        N/A           N/A             N/A              N/A              N/A
-----------------------------------------------------------------------------------------------------------------
Oron Strauss,               1999     $ 5,208(5)     $20,000(8)        ----            ----             ----
Votenet General             1998        N/A           ----            ----            ----             ----
Manager                     1997        N/A           ----            ----            ----             ----


-----------------------------------------------------------------------------------------------------------------

</TABLE>

See footnotes below and on next page.


                                       31
<PAGE>

(1)  For the fiscal year ended December 31, 1999, Netivation.com did not have a
     formal bonus plan. The Board of Directors and The Compensation Committee
     determined the size of the bonus for the Chief Executive Officer and for
     The Chief Marketing Officer.

(2)  Consists of gains on the exercise of options equal to the difference
     between the exercise price and the market price on the exercise date. No
     options were exercised by the Named Executive Officers during the 1999
     fiscal year. Certain incidental personal benefits that are furnished to
     Netivation.com's executive officers may result from expenses incurred in
     attracting and retaining qualified personnel. For fiscal year 1999,
     Netivation.com did not provide any incidental benefits to any of the
     Named Executive Officers not otherwise noted on the Summary Compensation
     Table.

(3)  Netivation.com has no stock appreciation rights (SARs). The awards consist
     of stock options granted under the 1999 Equity Incentive Plan. Options vest
     at a rate of 1/3 per year over a period of three years beginning on
     December 31, 1999, unless pursuant to the terms of the stock option grants,
     the vesting schedule is accelerated.

(4)  Netivation.com pays the premiums for a combined life-insurance policy on
     Anthony J. Paquin and Gary S. Paquin of which Netivation.com is the
     beneficiary. The total annual premium is $2,168.04 or $1,309.02 each for
     these Named Executive Officers.

(5)  Several Named Executive Officers joined Netivation.com during the 1999
     fiscal year. Michael R. Paquin joined Netivation.com in August 1999 as the
     MEDMarket.com General Manager. Mr. Paquin's salary represents his earnings
     from August 1, 1999 through December 31, 1999.

     James B. Arnold joined Netivation.com in October 1999 as the Chief
     Financial Officer. Mr. Arnold's salary represents his earnings from October
     1999 through December 31, 1999.

     Kelly M. McCarthy joined Netivation.com in August 1999 as the Vice
     President of Mergers and Acquisitions. Ms. McCarthy's salary represents her
     earnings and her commission from August 1999 through December 31, 1999.

     Oron Strauss became President and Chief Executive Officer of Net.Capitol,
     Inc., a Delaware corporation and wholly-owned subsidiary of Netivation.com
     on December 15, 1999. He currently serves as Votenet General Manager.
     Votenet is a division of Netivation.com. Mr. Strauss' salary represents
     his earnings from December 15, 1999 through December 31, 1999.

     Netivation.com signed employment agreements with Mr. Arnold and Mr.
     Strauss. See the section entitled "Executive Employment Agreements"
     for details.

(6)  Netivation.com paid the relocation expenses for Mr. Paquin and Mr. Arnold
     for their moves from Chicago and Virginia, respectively.

(7)  Ms. McCarthy received a Warrant Agreement to purchase 16,180 shares of
     Netivation.com common stock as part of her compensation in assisting with
     Netivation.com's initial public offering when she worked at EBI Securities
     Corp.

(8)  Mr. Strauss' bonus was negotiated as part of the acquisition of
     Net.Capitol, Inc.

STOCK OPTION GRANTS IN THE LAST FISCAL YEAR

         In 1999, the Board of Directors granted stock options under
Netivation.com's 1999 Equity Incentive Plan ("Equity Incentive Plan"). For
1999, Netivation.com reserved 750,000 shares of common stock to issue as
stock awards to directors, executive officers, and employees. The number of
shares of common stock available under the Equity Incentive Plan is adjusted
annually on January 1 based on 15% of the aggregate of (i) the total shares
of common stock outstanding and (ii) the number of shares of stock
Netivation.com is obligated to issue under specific contracts, as of such
date.

         Netivation.com also has a non-qualified stock plan (the
"Non-Qualified Plan") for the benefit of employees and consultants.
Netivation.com has 1,000,000 shares authorized under the Non-Qualified Plan.
As of December 31, 1999, Netivation.com issued 105,270 shares and there are
894,730 shares remaining under the Non-Qualified Plan.

         The Equity Incentive Plan and the Non-Qualified Plan are
administered by the Compensation Committee. The Compensation Committee makes
recommendations to the Board of Directors as to who receives options or other
stock awards, the number of shares in each option or award, when the options
may be exercised, and the exercise price of the option. The table below
details

                                       32
<PAGE>

information about the stock options granted during 1999 to the Named Executive
Officers under the Equity Incentive Plan and the Non-Qualified Plan.

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------
                                   OPTION GRANTS IN LAST FISCAL YEAR
                                           INDIVIDUAL GRANTS
----------------------------------------------------------------------------------------------------
                            Number of Securities  % of Total Options
                                 Underlying       Granted to Employees  Exercise Price    Expiration
             Name              Options Granted     in Fiscal Year(4)     ($/SH)(5)           DATE
             ----              ---------------     -----------------     ---------           ----
     <S>                           <C>                <C>              <C>            <C>
     Anthony J. Paquin             25,000(1)           3.65%            $2.50         12/31/08
                                   37,500(2)           5.47%            $1.25         12/31/08

     Michael R. Paquin               ---               - 0 -             ---             ---

     Gary S. Paquin                25,000(1)           3.65%            $2.50         12/31/08
                                   18,750(2)           2.73%            $1.25         12/31/08

     James B. Arnold               40,000(3)           5.84%            $6.00         12/01/09

     Kelly M. McCarthy               ---               - 0 -             ---             ---

     Oron Strauss                    ---               - 0 -             ---             ---
----------------------------------------------------------------------------------------------------
</TABLE>

(1)  Options vest at a rate of 1/3 a year over a period of three (3) years
     beginning on December 31, 1999, unless the vesting schedule is accelerated
     according to the terms of the stock option grant. In the event of a change
     of control, as defined in the 1999 Equity Incentive Plan, all outstanding
     options become exercisable immediately. Options expire three (3) months
     after an optionee's employment with Netivation.com is terminated for any
     reason, unless the termination results from optionee's permanent
     disability, or death.

     In the case of an optionee's disability, a vested option does not expire
     until one (1) year after optionee's disability. In the case of an
     optionee's death, a vested option does not expire until eighteen (18)
     months after an optionee's death. Options expire ten (10) years from the
     grant date. Options cease vesting upon termination of employment for any
     reason. As of December 31, 1999, one-third (1/3) of the options granted
     to executive officers and employees in the last fiscal year vested and are
     fully exercisable.

(2)  Options under the Equity Inventive Plan consist of regular stock options
     and bonus stock options which vest in full on December 31, 2003, with
     accelerated vesting on December 31, 1999, if certain revenue goals were
     met. Of the Named Executive Officers, Mr. Anthony Paquin holds 25,000
     regular options and 12,500 bonus options and Mr. Gary Paquin holds
     12,500 regular options and 6,250 bonus options. As of December 31, 1999,
     50% of the regular options vested as Netivation.com's revenue was
     between $500,000 and $999,000. As of December 31, 1999, none of the bonus
     options vested.

(3)  Under the Equity Incentive Plan one-third of Mr. Arnold's shares vest
     annually beginning on October 11, 2000 and continuing each year
     thereafter, based on continued service to the Company. In the event
     Netivation.com is acquired, all of Mr. Arnold's shares vest immediately.

(4)  During the 1999 fiscal year, 85 of Netivation.com's 131 employees were
     granted options under the 1999 Equity Incentive Plan. During the 1999
     fiscal year, the total number of shares granted to Named Executive
     Officers was: 146,250 shares from the 1999 Equity Incentive Plan. During
     the 1999 fiscal year, the total number of shares granted to
     Netiviation.com employees was 579,475 shares from under the Equity
     Incentive Plan. During the 1999 fiscal year, the total number of shares
     granted under the Non-Qualified Plan was 105,270 shares, for a total of
     684,745 shares granted from both plans granted to Netiviation.com
     employees or employees of the subsidiaries. None of the named executive
     officers received options under the Non-Qualified Plan.

(5)  Represents the exercise price of Netivation.com's common stock as
     determined by the Board of Directors under the Equity Incentive Plan.

AGGREGATED STOCK OPTIONS

         The table below provides information concerning aggregated unexercised
stock options held as of the 1999 fiscal year-end and the stock options
exercised during the 1999 fiscal year by the Named Executive Officers under
the Equity Incentive Plan.


                                       33
<PAGE>

    AGGREGATED OPTIONS/EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
                                                      Number of Securities Underlying      Value of Unexercised
                                                          Unexercised Options at         In-the-Money Options at
                                                           December 31, 1999(1)          December 31, 1999(1), (2)
                          Shares
                        Acquired on       Value
        Name           Exercise (#)    Realized ($)   Exercisable     Unexercisable    Exercisable   Unexercisable
        ----           ------------    ------------   -----------     -------------    -----------   -------------
<S>                        <C>             <C>           <C>              <C>            <C>                 <C>
Anthony J. Paquin            -              -            20,833           41,667         $83,332.25           -0-

Michael R. Paquin            -              -              -                -               -                 -

Gary S. Paquin               -              -            14,583           29,167         $55,207.25           -0-

James B. Arnold              -              -            - 0 -            40,000          - 0 -               -0-

Kelly M. McCarthy            -              -              -                -               -                 -

Oron Strauss                 -              -              -                -               -                 -

</TABLE>


(1)  The table includes regular options and bonus options vested under
     Netivation.com's 1999 Equity Incentive Plan as of December 31, 1999.

(2)  The values in these columns are the aggregate amount by which the market
     price per share at closing of $5.75 on December 31, 1999, exceeded the
     exercise price for each of the options.

DIRECTOR COMPENSATION

         FEES PAID FOR SERVICES. In 1999, Netivation.com paid its non-employee
directors a $150 fee for their services at each Board of Directors meeting they
attended and a per diem fee to reimburse their travel and lodging expenses.

         In November 1999, the Compensation Committee agreed to increase
non-employee director's compensation to $1,000 for each Board of Directors
meeting attended, $500 for each committee meeting attended and $500 for each
telephonic Board of Directors or telephonic committee meeting the
non-employee director attended. The non-employee directors will continue to
receive reimbursement for travel and lodging expenses based on each
director's location.

         STOCK RECEIVED FOR SERVICES FOR 1999. In January 1999, each
non-employee director received a stock grant and a stock option grant under
the 1999 Equity Incentive Plan. The stock grant was for 10,000 shares of
Netivation.com common stock which became fully vested on December 31, 1999.
The option grant was for 2,500 shares of Netivation.com common stock of which
1/3 vested on December 31, 1999.

         In February 22, 2000, the Compensation Committee agreed that each
non-employee director receive a 10,000 share stock option grant for their
efforts in assisting Netivation.com with its IPO. The exercise price for
these shares was $6.31, the fair market value of the stock, as of January 3,
2000. These stock options are fully vested.

EMPLOYMENT AGREEMENTS

         EXECUTIVE EMPLOYMENT AGREEMENTS. In 1999, Netivation.com signed
employment agreements with several of its executive officers. These employment
agreements were with Anthony J. Paquin, Gary S. Paquin, David C. Paquin, James
B. Arnold, and Oron Strauss. Additionally, Netivation.com has key-man life
insurance policies in the amount of $1,000,000 each on Mr. Anthony J. Paquin
and Mr. Gary S. Paquin.


                                       34
<PAGE>

         In January 1999, Netivation.com signed an employment agreement with
Anthony J. Paquin as Netivation.com's President and Chief Executive Officer. Mr.
Paquin's employment agreement expires on December 31, 2001. During 1999, Mr.
Paquin received an annual base salary of $150,000 plus stock options. In
addition, due to Mr. Paquin's efforts during 1999, the Compensation Committee
decided to grant Mr. Paquin a bonus of $50,000. In November 1999, the
Compensation Committee also agreed to increase Mr. Paquin's annual base salary
to $225,000.

         In January 1999, Netivation.com signed an employment agreement with
Gary S. Paquin, which expires on December 31, 2001. During 1999, Mr. Gary
Paquin received an annual base salary of $125,000 plus stock options. In
November 1999, the Compensation Committee agreed to give Mr. Paquin a bonus
of $50,000 for his services during 1999.

         In January 1999, Netivation.com also signed an employment agreement
with David C. Paquin, Chief Operations Officer, with a base salary of $80,000
plus stock options. Mr. Paquin resigned from this position and as an
executive officer in September 1999 to become Netivation.com's Vice President
of Human Resources. The terms of Mr. Paquin's employment agreement remained
the same.

         On September 23, 1999, Netivation.com signed an employment agreement
with James B. Arnold as Netivation's Chief Financial Officer. Mr. Arnold's
employment agreement expires October 11, 2002. In 1999, Mr. Arnold received an
annual base salary of $112,500 plus stock options. In November 1999, the
Compensation Committee adjusted Mr. Arnold's base compensation to $140,000 and
decided he will be eligible to receive a bonus in subsequent years.

         On December 15, 1999, Netivation.com signed an employment agreement
with Oron Strauss as the President and Chief Executive Officer of Net.Capitol.
Mr. Strauss's employment agreement expires December 14, 2002. Subsequently, Mr.
Strauss's job title has been changed to Votenet General Manager.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     This table details the amount of Netivation.com's common stock owned as of
March 27, 2000, by each person who is known by Netivation.com to beneficially
own more than 5% of Netivation.com's common stock. The table also shows
information concerning beneficial ownership by all directors, each executive
officer named in the Summary Compensation Table, and by all directors and
executive officers as a group.




                                       35
<PAGE>



                          BENEFICIAL OWNERSHIP TABLE

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
TITLE OF CLASS: COMMON STOCK
--------------------------------------------------------------------------------------------------------------------
                                                                                        Amount &
                        Name and Address                                               Nature of          Percent
                       of Beneficial Owner                                          Beneficial Owner(1)  of Class(2)
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                 <C>
BENEFICIAL OWNERS:

  Gary S. Paquin, (3),(5) Chief Marketing Officer and Secretary                      992,733           9.16%
  806 Clearwater Loop, Suite N
  Post Falls, Idaho 83854

  Oron Strauss, (3),(5) Votenet General Manager                                      729,620           6.74%
  666 11th Street N.W.
  Washington, D.C. 20001


DIRECTORS, EXECUTIVE OFFICERS AND MANAGEMENT: (4)

  Anthony J. Paquin, (3),(6) Chairman of the Board of Directors,
  President and Chief Executive Officer                                              512,408           4.73%

  James B. Arnold, (3) Chief Financial Officer                                         2,000              *

  David C. Paquin, (3),(7) Vice President of Human Resources                         256,875           2.37%

  Michael R. Paquin, (3) MEDMarket.com General Manager                                 2,000              *

  Kelly M. McCarthy, (3),(8) Vice President of Mergers and Acquisitions               16,180              *

  Donna L. Weaver, (3),(4),(9) Director                                              248,333           2.29%

  T.A. (Drew) Wahlin, (3),(4),(10) Director                                           83,333              *

  Douglas K. Carnahan, (3),(4) Director                                               20,833              *

All directors, executive officers and management as a group                        2,864,315          25.29%
    (10 persons): (11),(12)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

--------------------

*  Represents holding of less than 1%

1  For purposes of this table, shares are considered to be "beneficially"
   owned if the person holds them either directly or indirectly.
   "Beneficially" owned includes the shares a person has the right to
   acquire within 60 days of December 31, 1999. Unless otherwise indicated
   in the footnotes to this table and subject to the community property
   laws where applicable, each of the stockholders named in this table has
   sole voting and investment power regarding the shares beneficially owned
   by the shareholder.

2  The percentage of stock ownership is based on 10,832,883 outstanding
   shares of Netivation.com common stock, adjusted as required by the rules
   promulgated by the SEC.

3  Includes the shares which certain Netivation.com executive officers,
   directors and management have the right to acquire pursuant to outstanding
   options as of the date of this table. The shares which these executive
   officers and directors are eligible to acquire are as follows: Mr. Anthony
   Paquin 20,833; Mr. Gary Paquin 14,583; Mr. Arnold -0-; Mr. David Paquin
   6,875; Mr. Michael R. Paquin -0-; Mr. Strauss 23,333; Ms. McCarthy -0-;
   Ms. Weaver 10,833; Mr. Wahlin 10,833; and Mr. Carnahan 10,833; all directors
   and executive officers as a group 159,998. Netivation.com's executive
   officers, directors, and management will not receive and options within 60
   days after the date of this table.

4  Includes the shares granted to Netivation.com's non-employee directors for
   1999 compensation and for which there are no restrictions, as follows: Ms.
   Weaver 10,000, Mr. Wahlin 10,000; and Mr. Carnahan 10,000.


                                       36

<PAGE>

5  Gary S. Paquin and Oron Strauss are considered executive officers. Mr.
   Paquin serves as the Chief Marketing Officer and Secretary of
   Netivation.com and owns 978,150 shares individually. Mr. Strauss serves as
   Votenet General Manager and owns 706,287 shares individually.

6  Mr. Anthony Paquin owns 491,575 shares individually.

7  Mr. David Paquin owns 250,000 shares individually.

8  Ms. McCarthy holds warrants to purchase 16,180 shares of Netivation.com
   common stock.

9  Ms. Weaver holds 227,500 shares jointly with her husband, C.R. Weaver, in
   a family trust.

10 Idaho Consulting International, a sole proprietorship owned by Mr. Wahlin,
   holds an option to purchase 62,500 shares of Netivation.com common stock
   at an exercise price of $.03 per share.

11 Includes shares described in the notes above.

12 Netivation.com is not aware of any transaction or arrangements which would
   result in a change in control of the Company.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On October 31, 1998, Anthony J. Paquin and Gary S. Paquin loaned
Netivation.com $88,300 and $88,800 through unsecured promissory notes which did
not bear interest. In January 1999, Netivation.com paid the notes in full.

         In September, 1999, Netivation.com invested $525,000 in MoneyZone.com,
formerly known as EBONLINE, an Internet company. Mr. Anthony Paquin serves as a
director on MoneyZone.com's Board of Directors but does not receive compensation
for his services.

         In December, 1999, Netivation.com made a personal loan to Oron Strauss
for $132,774.00. The interest rate on this loan is 6.25% and the loan is to be
paid over the next two (2) years.

         Until August 31, 1999, Kelly McCarthy served as the Vice President of
Corporate Finance for EBI Securities Corporation ("EBI"). EBI was the
underwriter of Netivation.com's initial public offering which became effective
June 22, 1999. Ms. McCarthy also is an NASD member for Series 7 and Series 24
securities.

         Netivation.com believes these transactions were obtained with terms
similar to those agreements Netivation.com could have obtained through third
parties.

INDEMNIFICATION OF EXECUTIVE OFFICERS AND DIRECTORS

         Netivation.com's Bylaws provide that Netivation.com will indemnify
its directors and Executive Officers and may indemnify its other officers,
employees, and other agents to the fullest extent not prohibited by law.
Netivation.com believes that indemnification under its Bylaws covers at least
negligence by indemnified parties, and requires Netivation.com to advance
litigation expenses in the case of shareholder derivative actions or other
actions against an undertaking by the indemnified party to repay such
advances if it is ultimately determined that the indemnified party is not
entitled to indemnification. Netivation.com is also empowered under its
Bylaws to enter into indemnification contracts with its directors and
officers and to purchase insurance on behalf of any person whom it is
required or permitted to indemnify. In accordance with this provision,
Netivation.com has entered into indemnity agreements with its directors and
officers. Netivation.com also has in effect directors and officers liability
insurance coverage.

                                       37
<PAGE>

         Netivation.com's Certificate of Incorporation provides that, under
Delaware law, its directors will not be liable for monetary damages for breach
of the directors' fiduciary duty of care to Netivation.com and its stockholders.
This provision in the Certificate of Incorporation does not eliminate the duty
of care, and in appropriate circumstances, equitable remedies such as injunctive
or other forms of nonmonetary relief will remain available under Delaware law.
In addition, each director will continue to be subject to liability for breach
of the director's duty of loyalty to Netivation.com, for acts or omissions not
in good faith or involving intentional misconduct, for knowing violations of
law, for actions leading to improper personal benefit to the director, and for
payment of dividends or approval of stock repurchases or redemptions that are
unlawful under Delaware law. The provision also does not affect a director's
responsibilities under any other laws, such as the federal securities laws or
state or federal environmental laws.

         Currently, there is no pending litigation or proceeding involving a
director, Executive Officer, employee, or other Netivation.com agent where
indemnification is sought. Netivation.com is not aware of any threatened
litigation that may result in indemnification claims by any director, Executive
Officer, employee, or other agent.

         Any future transactions between Netivation.com and its Executive
Officers, directors, and affiliates will be on terms no less favorable to
Netivation.com than can be obtained from unaffiliated third parties, and any
material transactions with such persons will be approved by a majority of
Netivation.com's disinterested directors.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)       EXHIBITS

The following documents are filed as Exhibits to this Form 10-KSB:

          2.1     Agreement and Plan of Merger and Reorganization, dated as of
                  September 17, 1999, among Netivation.com, Inc., Netivation.com
                  Merger Two Corp., MEDMarket, Inc., and MEDMarket's selling
                  shareholders; incorporated by reference to Exhibit 2.1 to the
                  Registrant's form 8-K filed November 10, 1999 (Commission File
                  No. 000-26337).

          2.2     Agreement and Plan of Merger, dated as of October 12, 1999,
                  among Netivation.com, Inc., Netivation.com Merger Six Corp.,
                  Politicallyblack.com, Inc. and the Selling Stockholders of
                  Politicallyblack.com, Inc.; incorporated by reference to
                  Exhibit 2.2 to the Registrant's form 8-K filed November 10,
                  1999 (Commission File No. 000-26337).

          2.3     Agreement and Plan of Merger, dated as of October 19, 1999,
                  among Netivation.com, Inc., Netivation.com Merger Four Corp.,
                  Raintree Communications Corporation and the Selling
                  Stockholders of Raintree Communications Corporation;
                  incorporated by reference to Exhibit 2.3 to the Registrant's
                  form 8-K filed November 10, 1999 (Commission File No.
                  000-26337).

          2.4     Agreement and Plan of Merger, dated as of October 22, 1999,
                  among Netivation.com, Inc., Netivation.com Merger Five Corp.,
                  Public Disclosure, Inc., and the Selling Stockholders of
                  Public Disclosure, Inc.; incorporated by reference to Exhibit
                  2.4 to the Registrant's form 8-K filed November 10, 1999
                  (Commission File No. 000-26337).

          2.5     Agreement and Plan of Merger, dated as of November 17, 1999,
                  among Netivation.com, Inc., Netivation.com Merger Corp.,
                  Net.Capitol, Inc. and the Representing Stockholders of
                  Net.Capitol, Inc.; incorporated by reference to Exhibit 2.0 to
                  the Registrant's Form 8-K filed December 29, 1999 (Commission
                  File No. 000-26337).

         3.(i)1   Articles of Incorporation of the Registrant, as amended, as
                  filed with the Secretary of State of the State of Nevada;
                  incorporated by reference to Exhibit 3.(i)1 to the
                  Registrant's Form SB-2 Registration Statement filed March 17,
                  1999, as amended May 18, 1999, June 14, 1999, and June 16,
                  1999 (Commission File No. 000-26337).


                                       38
<PAGE>

         3.(i)2   Certificate of Incorporation of the Registrant, as filed with
                  the Secretary of State of the State of Delaware; incorporated
                  by reference to Exhibit 3.(i)2 to the Registrant's Form SB-2
                  Registration Statement filed March 17, 1999, as amended May
                  18, 1999, June 14, 1999, and June 16, 1999 (Commission File
                  No. 000-26337).

         3.(i)3   Form of Restated Certificate of Incorporation of the
                  Registrant, effective upon the closing of Registrant's initial
                  public offering; incorporated by reference to Exhibit 3.(i)3
                  to the Registrant's Form SB-2 Registration Statement filed
                  March 17, 1999, as amended May 18, 1999, June 14, 1999, and
                  June 16, 1999 (Commission File No. 000-26337).

         3.(ii)1  Nevada Bylaws of the Registrant; incorporated by reference to
                  Exhibit 3.(ii)1 to the Registrant's Form SB-2 Registration
                  Statement filed March 17, 1999, as amended May 18, 1999, June
                  14, 1999, and June 16, 1999 (Commission File No. 000-26337).

         3.(ii)2  Delaware Bylaws of the Registrant; incorporated by reference
                  to Exhibit 3.(ii)2 to the Registrant's Form SB-2 Registration
                  Statement filed March 17, 1999, as amended May 18, 1999, June
                  14, 1999, and June 16, 1999 (Commission File No. 000-26337).

         3.(ii)3  Form of Restated Bylaws of the Registrant, effective upon the
                  closing of Registrant's initial public offering; incorporated
                  by reference to Exhibit 3.(ii)3 to the Registrant's Form SB-2
                  Registration Statement filed March 17, 1999, as amended May
                  18, 1999, June 14, 1999, and June 16, 1999 (Commission File
                  No. 000-26337).

         10.1     Employment Agreement for James B. Arnold

         10.2     Employment Agreement for Oron Strauss

         10.3     Lease Agreement for location at 11th and G Streets, Suite 1100
                  in Washington, D.C.

         10.4     Non-Qualified Stock Plan

         21.1     List of Subsidiaries of Registrant

         23.1     Consent of Arthur Andersen

         27.1     Financial Data Schedule

(b)      REPORTS ON FORM 8-K.

Registrant's form 8-K filed November 10, 1999, as amended (Commission File No.
000-26337):

         -        Agreement and Plan of Merger and Reorganization, dated as of
                  September 17, 1999, among Netivation.com, Inc., Netivation.com
                  Merger Two Corp., MEDMarket, Inc., and MEDMarket's selling
                  shareholders;

         -        Agreement and Plan of Merger, dated as of October 12, 1999,
                  among Netivation.com, Inc., Netivation.com Merger Six Corp.,
                  Politicallyblack.com, Inc. and the Selling Stockholders of
                  Politicallyblack.com, Inc.;

         -        Agreement and Plan of Merger, dated as of October 19, 1999,
                  among Netivation.com, Inc., Netivation.com Merger Four Corp.,
                  Raintree Communications Corporation and the Selling
                  Stockholders of Raintree Communications Corporation;


                                       39
<PAGE>

         -        Agreement and Plan of Merger, dated as of October 22, 1999,
                  among Netivation.com, Inc., Netivation.com Merger Five Corp.,
                  Public Disclosure, Inc., and the Selling Stockholders of
                  Public Disclosure, Inc.

Registrant's Form 8-K filed December 29, 1999, as amended (Commission File No.
000-26337):

         -        Agreement and Plan of Merger, dated as of November 17, 1999,
                  among Netivation.com, Inc., Netivation.com Merger Corp.,
                  Net.Capitol, Inc. and the Representing Stockholders of
                  Net.Capitol, Inc.

                                   SIGNATURES

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

NETIVATION.COM, INC.
REGISTRANT

By: /s/ Anthony J. Paquin
---------------------------------
Anthony J. Paquin, President, Chief Executive
Officer, and Chairman of the Board of Directors
Date:    March 29, 2000

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

<TABLE>

<S>                                                  <C>
By: /s/ Anthony J. Paquin                            By: /s/ Douglas K. Carnahan
-----------------------------------------            -------------------------------------
Anthony J. Paquin, President,                        Douglas K. Carnahan, Director
Chief Executive Officer, and                                 Date:  March 29, 2000
Chairman of the Board of Directors
Date:    March 29, 2000


                                       40
<PAGE>



By: /s/ James B. Arnold                              By: /s/ T. A. (Drew) Wahlin
-----------------------------------------            ----------------------------------------------------
James B. Arnold, Chief Financial Officer             T. A. (Drew) Wahlin, Director
Date:    March 29, 2000                              Date:  March 29, 2000



By: /s/ Gary S. Paquin                               By: /s/ Donna L. Weaver
-----------------------------------------            ----------------------------------------------------
Gary S. Paquin, Chief Marketing Officer,             Donna L. Weaver, Director
Secretary, and Director                              Date:  March 29, 2000
Date:    March 29, 2000



By: /s/ James L. Sloan
-----------------------------------------
James L. Sloan, Controller
Date:    March 29, 2000


</TABLE>




                                       41
<PAGE>

                             Netivation.com, Inc.

                  SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
                ACCOUNTS RECEIVABLE ALLOWANCE FOR DOUBTFUL ACCOUNTS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                Balance at            Charged to costs                                  Balance at
           Description                 beginning of period                and expenses(1)          Deductions        end of period
           -----------                 -------------------            ----------------             ----------        -------------
<S>                                    <C>                            <C>                          <C>               <C>
Year ended December 31, 1999.......         -  $                             $                         $                   $
                                       ===================            ================             ==========        =============
Year ended December 31, 1998.......         -                                -
                                       ===================            ================             ==========        =============
Year ended December 31, 1997......          -                             -  $     172              -  $                -  $172
                                       ===================            ================             ==========        =============
----------------------------
(1) Includes $153 acquired in Net Capital acquisition.

</TABLE>


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