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

                                   Form 10-KSB

(Mark One)
[X] Annual  report under section 13 or 15(d) of the  Securities  Exchange Act of
1934 for the fiscal year ended  December  31, 2000 [ ]  Transition  report under
section 13 or 15(d) of the  Securities  Exchange Act of 1934 for the  transition
period from
                           to                 .
         -----------------    ----------------

Commission file no. 0-29705


                      THE MURDOCK GROUP HOLDING CORPORATION
                 (Name of small business issuer in its charter)

                The Murdock Group Career Satisfaction Corporation
                                  (Former name)

           Utah                                                 87-0562244
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)


5295 South Commerce Drive, Suite 475, Salt Lake City, Utah              84107
           (Address of principal executive offices)                   (Zip Code)

Issuer's telephone number is (801) 268-3232.

Securities registered under Section 12(b) of the Exchange Act: None

Securities  registered  under Section 12(g) of the Exchange Act:  Class A Common
Voting Shares

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  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 past 90 days. Yes [X] No []

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B 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. [X]

The  issuer's  revenues  for the  fiscal  year  ending  December  31,  2000 were
$2,084,988.

The market  value of the common stock of the issuer held by  non-affiliates  was
approximately  $5,987,000  on April 4, 2001,  based on the average bid and asked
price of the common stock as of that date as reported by the NASD OTC Electronic
Bulletin Board.

As of April 1, 2001,  the issuer  had a total of  320,943,235  shares of Class A
Common Stock outstanding.

                     Transitional Small Business Disclosure
                       Format (Check One): Yes [ ] No [X]


                                      1

<PAGE>


                                Table of Contents


                                     Part I


                                                                            Page


Item 1.         Description of Business                                       3


Item 2.         Description of Property                                       6


Item 3.         Legal Proceedings                                             7


Item 4.         Submission of Matters to a Vote of Security Holders           7


                                     Part II


Item 5.         Market for Common Equity and Related Stockholder Matters      8


Item 6.         Management's Discussion and Analysis or Plan of Operation     10


Item 7.         Financial Statements                                          13


Item 8.         Changes in and Disagreements with Accountants on
                Accounting and Financial Disclosure                           13


                                    Part III


Item 9.         Directors, Executive Officers, Promoters and Control
                Persons; Compliance with Section 16(a) of the Exchange Act    14


Item 10.        Executive Compensation                                        15


Item 11.        Security Ownership of Certain Beneficial Owners and           17
                Management

Item 12.        Certain Relationships and Related Transactions                18

Item 13.        Exhibits and Reports on Form 8-K                              19
Signatures                                                                    21


                                       2

<PAGE>

                                     Part I

Item 1.   Description of Business


         The Murdock  Group  Holding  Corporation  (formerly  The Murdock  Group
Career  Satisfaction  Corporation)  (the "company" or "Murdock Group") is a Utah
corporation  organized November 5, 1997 to acquire and continue  development and
operation of a business providing career training and improvement services under
a system  originally  developed by Denis Murdock (the "System").  In 1983, Denis
Murdock formed a sole  proprietorship  called "The Murdock Group" in Virginia to
provide  job search  assistance  to senior  executives.  Mr.  Murdock  moved the
business to Salt Lake City, Utah in 1987.  Envision Career  Services,  L.L.C., a
Utah  limited  liability  company  controlled  by KC Holmes  and  Heather  Stone
acquired  the  assets of this  business,  including  all  intellectual  property
rights,  in June 1996.  Envision  conducted its  operations  under the name "The
Murdock  Group" until May 31, 1998,  when it merged with the company in exchange
for 8,205,800 shares of voting common stock. Envision was then dissolved.


         On June 22, 1999, the company formed a subsidiary to provide job search
and  career-based  content to businesses and individuals  over the Internet.  At
December 31, 2000, we owned  approximately  22% of the outstanding stock of this
entity,  CareerWebSource,  Inc.  In  September  1999,  we created a real  estate
operation  to buy and sell  undeveloped  real  property.  Since that  time,  our
business has been divided into three principal areas: Career  Development,  Real
Estate and Internet-based Career Services.


Career Development


         Murdock Group's Career  Development  group markets and services our Job
Search System.  This System sells for  approximately  $3,500 and can be financed
over 2 years.  The System is sold as a package and consists of full-service  job
search, career advancement and motivational training taught in small groups. The
package also includes access to a fully staffed  resource center  containing job
leads, computer workstations, publications, and other job search tools.


         The Job Search System includes the following features:

         o     30 days of access to Career Insight Sessions, which enable
               clients to learn and practice key aspects of the system including
               networking, interviewing, and negotiating.

         o     4  months  of  access  to an  extensive  Resource  Center,  which
               includes  on-call  specialists  to assist clients with job search
               advice,  job postings,  contact  databases,  business  databases,
               training center, job search  publications,  a computer center for
               on-line  research,  database  access,  and  job  search  document
               creation, and a phone/fax center.

         o     4 months of access to coaching from job search professionals who
               provide personalized attention to each client's specific needs.


         Direct  Products.  The  Career  Development  group  also  develops  and
distributes direct products.  The first such product, the CareerIdeal "counselor
in a box," was released in 1999 and contains four  audiotapes  and two workbooks
designed  for people  looking  for their  ideal  job.  The  CareerIdeal  program
contains a variety of tests,  exercises,  and assessments designed to help users
understand their career options and plan specific,  tangible career change. This
product is marketed directly and through the Nightengale-Conant Catalog.


         Corporate Services.  We offer full and partial outplacement services to
businesses  that lay off employees and wish to help those former  employees find
new jobs as quickly as possible.  Outplaced  employees receive selected training
and resources  from the Job Search System.  These  training  services are priced
based upon the number of employees serviced and the type of training services to
be performed.


         Events. Murdock Group develops and markets career fairs. The first fair
was held in March 2000 and was  co-sponsored by KSL AM, a CBS radio affiliate in
Salt Lake City.  That fair  attracted  37  exhibitors  and  approximately  1,050
attendees.  Three career fairs were sponsored  throughout the year.  These fairs


                                       3

<PAGE>

generate hundreds of leads with approximately 15% eventually becoming clients of
the company. We plan to develop similar events in major US cities.


Marketing


         We believe that the desire of individuals to seek satisfaction in their
employment  has  created a  significant  market  for the types of  products  and
services  offered by the  Murdock  Group.  We also  believe  that the market for
career-related  services will continue to grow as job  insecurity and changes in
the employment market compel individuals to take control of their own careers.


         Target  Customers.  We refer to our customers as "clients."  The target
client for our Career Development  products are individual employees working for
themselves  or others,  preparing to work,  or searching  for work.  The typical
client works full time and has some college or  professional  training.  Usually
our clients have at least five years of experience in the work force and are not
top executives in an organization.


         Advertising. We attract clients through a variety of advertising
         methods, including the following:

         o     Direct mail. To date we have  experimented  with  direct mail for
               the Career Development products in the Salt Lake City area.

         o     Internet. Our web site, www.themurdockgroup.com is used to
               advertise our products and services.

         o     Radio. 60-second radio spots to advertise our services air during
               drive time and sporting events.

         o     Newspaper.  We advertise weekly in the classified sections of
               local newspapers.

         o     Referrals  from  Satisfied  Job  Seekers.  Current  clients  and
               satisfied  customers are one of the best referral sources for our
               business.


Competition


         In our view, the job acquisition  industry is large and fragmented with
some  competitors  successful  only in certain  niches,  and with no  competitor
dominating the industry.  Many  competitors have products and services that they
market as being similar to those of the Murdock  Group,  but we believe that our
clients quickly distinguish the difference between our products and services and
the products and services of our competitors.


         Our competitors are primarily privately owned companies.  Some of these
competitors have greater financial, marketing, distribution, technical and other
resources than those available to the Murdock Group.  The two major  competitors
for career consulting  services are well established  nationally.  Both of these
companies  were founded by career  industry  experts who are still active in the
business. These companies are:

         o    Bernard  Haldane,  founded  in 1945  after  World War II to assist
              returning  veterans  in the job  market  and  servicing  primarily
              executives  who earn over $100,000 per year, for a fee of up to 8%
              of the  executive's  salary  (generally more than twice the fee we
              charge); and

         o    Cornell  Business  Associates,  founded  in the  1980's  and  also
              primarily  servicing  executives for an 8% fee, with sales offices
              around the country and a training facility in California.


         In addition  to these main  competitors,  Robert Half offers  staffing,
permanent  placement,  recruiting,  and consulting  services;  Right  Management
Consulting is involved in career  development,  management and  consulting;  and
Provant provides training, career development, and product sales.


         The principal  competitive  factors in obtaining customers appear to be
strong sales and marketing,  life-changing  and unique  principles,  competitive
pricing,  and good customer service. We believe we maintain a strong emphasis on
these factors,  which will be an important competitive advantage for the Murdock
Group.


                                       4

<PAGE>



Employees


         As of April 4, 2001, we had 17 full time  employees.  Our employees are
not  represented  by a  labor  union  and  are  not  subject  to any  collective
bargaining arrangement. We have never experienced a work stoppage and we believe
that our  relations  with  employees  are good.  Corporate,  administrative  and
management services involve four of these full time employees.


Intellectual Property and Proprietary Rights


         We rely on copyright and trademark laws and  contractual  provisions to
protect our proprietary  rights. We have applied for trademark  registration for
the marks The  Murdock  Group(TM)  and The  Murdock  Group  Career  Satisfaction
Corporation(TM), and for copyright protection for "The Jobseekers Bible" and the
Career Insight Sessions course materials. We anticipate that we will continue to
evaluate  the  registration  of  additional  service  marks and  trademarks,  as
appropriate and as our resources permit.


         Litigation  may be  necessary  to  protect  these  proprietary  rights.
Litigation,  if it should become necessary,  may be  time-consuming  and costly.
Despite our efforts to protect these proprietary  rights,  unauthorized  parties
may attempt to copy  aspects of its  services  or to obtain and use  information
that we regard as proprietary. In addition, there are few barriers to entry into
the market for career development and counseling  services.  It is possible that
one or more of our competitors,  many with greater financial and other resources
than  the  Murdock  Group  will  independently  develop  technologies  that  are
substantially equivalent or superior to ours.


Research and Development Expense


         We  incurred  research  and  development  expenses  in 2000 and 1999 of
$759,310 and $548,396,  respectively.  These expenses  primarily  related to the
development of our Internet  subsidiary  product  offering.  We do not expect to
incur significant research and development expenses in 2001.


Real Estate


         In September 1999, we created a real estate group to acquire,  hold and
sell real estate.  This group has been organized on an  experimental  basis;  if
this  venture  succeeds,   we  may  organize  a  subsidiary  to  continue  these
operations.  During 2000, we sold or returned to sellers most of our real estate
holdings.  This was  necessary  because the  expensive  debt  financing on these
properties  severely  restricted  the cash flows  available  for  expanding  our
business  and  developing  or otherwise  enhancing  these  properties  as we had
proposed.


         We presently own  approximately  472 acres of undeveloped  real estate.
However,  we expect  that we will not  acquire  real  property  in the near term
unless it is on terms that are  favorable to the company and that will not limit
our ability to expand our other  operating  units or meet our obligations in the
ordinary course of business. See "Description of Property" in Item 2.


CareerWebSearch, Inc.


         CareerWebSource   (formerly   MyJobSearch.com)  is  a  partially  owned
Internet subsidiary that was founded by the Murdock Group on June 22, 1999 under
the laws of Delaware.  We have  licensed to  CareerWebSource  the  non-exclusive
right to the online  use of our career  insight  sessions  and other  components
comprising the System. CareerWebSource currently has two revenue streams.


         First,  CareerWebSource creates online career centers for high schools,
libraries,  and colleges.  It sells  corporate  partners a sponsorship  on these
career  centers and builds the corporate  partner a proprietary  local job board
with a link to the high school, library, or college sites that they sponsor.


         Second,  the  MyJobSearch.com  online  website  includes a full service
international  job board and sells online directory  resources to recruiters and
corporations.


                                       5

<PAGE>

         In July and August 1999,  CareerWebSource  sold  252,700  shares of its
common stock for $1.50 per share or gross  proceeds of $379,050.  In April 2000,
CareerWebSource sold 2,352,800 shares of Series A Convertible Preferred Stock in
a private  offering to  accredited  investors.  As a result of these  subsequent
funding rounds, which diluted our ownership interest in CareerWebSource, and the
loss of shares pledged by the company as collateral for its  obligations and for
the obligations of CareerWebSource,  we now own approximately 750,000 shares (or
approximately  18%) of its outstanding  common stock and  approximately  720,000
shares (or about 31%) of its outstanding  voting  preferred  stock. In addition,
our executive  officers and directors,  as a group, are the beneficial owners of
approximately  687,770 shares (or approximately  16%) of the outstanding  common
stock of CareerWebSource. See "Certain Relationships and Related Transactions."


Item 2. Description of Property


Office Space Lease


         The Murdock  Group's  corporate  offices and  operations  are housed in
Class  A  office  space  in Salt  Lake  City.  We  believe  that a  professional
appearance is important when providing services to professionals. The address of
our corporate  headquarters is 5295 South Commerce  Drive,  Suite 475, Salt Lake
City, Utah 84107. The telephone  number is (801) 268-3232.  These offices occupy
approximately  12,892 square feet.  Monthly rentals are $27,290.  The lease term
expires on June 30, 2005.  Lease  payments  gradually  increase each year of the
lease term and the monthly payment for the final year is $31,950.


Investments in Real Property


         As of December 31, 2000, we owned the following real property.


         1. A parcel  comprising  71.32 acres in Bluff,  Utah,  for which we are
seeking  re-zoning for home and RV lot  development.  This property was acquired
August 5, 1999 for 1,293,334 shares of common stock and assumption of $60,000 in
debt.  We have  pledged  this  property  as  collateral  for two loans  totaling
$1,060,000,  as follows:  (i) principal of $1,000,000 at 12% interest per annum,
payable to a family trust and (ii)  $60,000 at 3% over prime,  payable to a bank
in monthly installments of principal and interest.

2. A parcel  of 280 acres in  Eastland,  Utah,  for which we are now  developing
plans. This property was acquired August 5, 1999 from a family trust for 346,667
shares of common stock and $480,000 on contract with the seller. We have pledged
this  property  as  collateral  for a loan with  principal  of  $495,000  at 18%
interest per annum, payable to an unrelated party. We settled this obligation by
issuing common stock at December 31, 2000.

3. A parcel of 37.5 acres in Genola,  Utah, for which we are  developing  plans.
This property was acquired  August 23, 1999 from an unrelated  party for $48,900
cash and 293,400  shares of common  stock.  This  property  has been  pledged as
collateral  as security  for a loan in principal  amount of $313,000.  This loan
bears 18% interest.

4. A parcel comprising 82.95 acres in Spanish Fork, Utah. A large section of the
property was recently  used as a gravel pit. We are seeking  county  approval to
use the excavated area as an expanded sand and gravel operation,  an asphalt and
concrete recycling facility,  and a construction and demolition  landfill.  This
property  was acquired  December  31, 1999 from an unrelated  party for $808,000
cash and  1,288,000  shares of common  stock.  We have pledged this  property as
collateral  for loans of  $1,000,000  and $447,000 from private  lenders.  These
loans  bear  interest  at the  rate  of 29%  and  18%  per  annum  respectively.
Subsequent  to December  31,  2000,  these  loans were in  default.  The lenders
foreclosed  and the  property  was sold.  See  Financial  Statement  note titled
"Subsequent Events."

5. On June 30,  2000,  we acquired  750.68  acres of  undeveloped  land in Eagle
Mountain,  Utah in exchange for 6,070,308  shares of common stock and $1,612,684
in cash.  The  common  stock was  valued at  $9,105,462.  Under the terms of the
contract we  guaranteed  the value of the shares issued to the seller as part of
the purchase price. As a result of that  guarantee,  we subsequently  issued the
seller an  additional  17,717,742  shares of common stock due to the decrease in
the trading price of the common stock. On December 1, 2000, we sold a portion of
this land for  $2,692,500.  Subsequent to December 31, 2000, we sold the balance


                                       6

<PAGE>

of this land for $2,463,691. Additionally, under the terms of the purchase price
guarantee we issued  20,000,000 shares of common stock valued at $750,000 to the
note holders as additional consideration.

6. On  December  4,  2000,  we issued  4,350,000  shares  of common  stock for a
building  located in Sugarhouse,  Utah.  The shares were valued at $435,000.  In
addition, we incurred debt of $472,000. Subsequent to December 31, 2000, we sold
this building for $597,000.  As a result of this sale, we received cash proceeds
of $43,234, net of closing costs and relieved $547,000 of notes payable.


         All shares of common  stock issued in the above  transactions  were/are
restricted  shares  and  were  issued  without  registration  in  reliance  upon
exemptions from  registration  available under federal and state securities laws
applicable  to offers and sales of securities  not involving a public  offering.
Total  monthly debt  service on all  encumbrances  secured by the real  property
totals  $100,148.  We believe that there is  sufficient  equity in the remaining
properties to permit it to refinance the original debt at more  favorable  rates
and on more favorable  terms,  which would improve cash flow and  profitability.
However,  there is no  assurance  that we will be  successful  in our efforts to
refinance  this debt or to sell the  property  or that if a piece of property is
sold that the  proceeds  from that sale will  exceed the  amounts  due under the
various encumbrances to which the property may be subject.


         We expect to use the proceeds from the future sale of any real property
to the extent the proceeds  exceed  applicable  liens and  encumbrances  to help
support its general  business  operations.  We believe that the  availability of
these  properties  for  financing  and the potential for profit from the sale of
these properties provide us with flexibility in pursuing our business plan.


Item 3. Legal Proceedings


         As of  December  31,  2000  we  were  party  to  litigation,  primarily
involving  defaults under  long-term debt financing and trade payable  accounts.
Subsequent  to the year end, we settled most of these  actions by entering  into
payment arrangements, granting or releasing interests in real estate, or issuing
shares of common stock. The following  actions were pending at December 31, 2000
and negotiation for resolution of these matters is ongoing.


         We are party to a lawsuit filed by Capital General Corporation ("CGC").
CGC has asserted a deficiency on a loan balance in connection with a foreclosure
of two parcels of real  estate.  CGC is seeking  approximately  $677,000 for the
deficiency,  punitive  damages,  and attorney fees. We have answered the lawsuit
and denied  being  indebted to CGC and we contend  that the  principal  owed was
satisfied by the value of the two parcels of real estate.


         We  are  the  subject  of  other  legal  matters,  which  it  considers
incidental to our business activities. We do not believe these matters will have
a  material  impact  on our  consolidated  financial  condition  or  results  of
operations.


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


         In November 2000, we solicited the consent of our shareholders to amend
the articles of  incorporation  of the company to change the name of the company
to "The Murdock Group Holding  Corporation."  A total of 19,101,616  shares were
voted,  of which  19,099,116  voted in favor of the  amendment  and 1,500 shares
voted against the amendment.


Subsequent  to the year ended  December 31, 2000,  the company also obtained the
consent  of its  shareholder  to make a further  amendment  to the  articles  of
incorporation.  The shareholders approved, by vote of 134,542,232 (53.6%) of the
outstanding  shares, to increase the number of authorized shares of common stock
of the company to 600,000,000,  and ratified  adoption of the 2000 Murdock Group
Stock Option Plan. The combined plans are referred to collectively as the "Stock
Option Plan." The Stock Option Plan, as amended, sets aside 75,000,000 shares of
common stock that may be issued under awards  granted under the plan. A total of
15,400 shares were voted against these proposals.



                                       7


<PAGE>



                                     Part II


Item 5. Market for Common Equity and Related Stockholder Matters


Trading Market


         Our stock is traded in the over-the-counter ("OTC") market and included
on the OTC Bulletin Board under the symbol  "TMGS."  Trading began in the second
quarter of 2000. The following table summarizes data from the OTC Bulletin Board
indicating  the high and low bid prices for a share of common  stock during each
of the  calendar  quarters of 2000 during  which the shares were  traded.  These
prices  reflect   inter-dealer   prices  without  retail  markup,   markdown  or
commission, are not necessarily representative of actual transactions, or of the
value of the company's  securities,  and are, in all likelihood,  not based upon
any  recognized  criteria  of  securities  valuation  as used in the  investment
banking community.


                                                     Bid Price


                Year       Calendar Period         High      Low

                2000       First Quarter            --       --
                           Second Quarter         $1.75    $1.32
                           Third Quarter          $1.37    $0.10
                           Fourth Quarter         $0.14    $0.03

Holders


         As of April 1, 2000, there were approximately 147 record holders of our
voting common stock.


Dividends


         We have not paid  cash  dividends  on our  common  stock.  We expect to
invest our future earnings,  if any, in the further  expansion and growth of our
business for the foreseeable future.


Recent Sales of Unregistered Securities


         During  1999  and  2000,  we  sold  the  following  securities  without
registration under the Securities Act of 1933.


Year Ended December 31, 1999


         During the year ended  December 31, 1999, we issued  113,600  shares of
common stock to employees for compensation.  These shares were issued at a price
of $1.00 per share,  based on the fair market  value of the common  stock on the
date of issuance.


         We also sold  1,103,187  shares of common  stock for cash at a price of
$1.00 per share, for gross proceeds of $1,103,187 in
1999.


         In 1999, we issued 584,722 shares of common stock to service providers,
consultants and others for services rendered to the Murdock Group.  These shares
were issued at prices  ranging from $1.00 to $1.50 per share,  based on the fair
market value of the common stock on the date of issuance.


         During 1999, we issued 3,060,539 shares of common stock to convert debt
to equity. These shares were issued at the fair market value of the common stock
on the dates of  issuance.  We also  issued  5,678,789  shares  of common  stock
between  August and December 1999 as partial  consideration  for the purchase of
real estate.


Year Ended December 31, 2000


         During the year ended  December  31, 2000,  we issued  shares of common
stock to employees  for  services  and to lenders and other  creditors to settle
outstanding  debt and  accounts  payable.  The  following  is a summary of these


                                       8


<PAGE>

transactions.  For additional discussion of these transactions see Note 8 of the
Notes to Financial  Statements  accompanying the audited financials  included in
this report.

         o     3,014,911  shares  of  common  stock  to  employees for services.
               These  shares were valued at prices  ranging  from $0.05 to $1.50
               per share (a total of $619,255) based on the fair market value of
               the shares on the dates of issuance.

         o     88,333  shares  of common  stock  for  other  assets  at  prices
               ranging from $0.10 to $1.50 per share.  The shares were valued at
               $85,833 based on the fair market value of the shares on the dates
               of issuance.

         o     4,093,170  shares  at  prices  ranging  from  $0.04  to $0.05 per
               share in relief of accrued  liabilities  of $199,059.  The shares
               were valued  based on the fair market  value of the shares on the
               dates of issuance.

         o     130,838,686  shares  of  common  stock  at  prices  ranging  from
               $0.03 to $0.96  per share in  satisfaction  of notes  payable  of
               $8,663,845 and accrued interest of $1,190,842. In some cases, the
               creditor  required  that the  shares be  issued  at a  discounted
               price.

         o     14,486,158  shares  of  common stock at prices ranging from $0.03
               to $1.19 per share for  interest and  inducement  to settle notes
               payable.  The shares were valued at  $881,681,  based on the fair
               market value of the shares on the dates of issuance.

         o     28,138,050  shares  of common stock  at prices ranging from $0.10
               to $1.50 per share for  investments  in real  estate.  The shares
               were valued at  $9,540,462  based on the fair market value of the
               shares on the dates of issuance.

         o     As  part of the  proceeds from a sale of  real  estate, the buyer
               returned 220,000 shares of common stock which had a fair value of
               $297,000.


         During the year ended December 31, 2000, NEBO Products,  Inc., returned
2,285,000 shares of Murdock Group common stock to the company in settlement of a
note in principal  amount of  $212,668.  These shares were valued at $178,001 or
$0.08 per share,  and the  remaining  balance of the  receivable  of $34,667 was
written off. Under a separate  agreement,  NEBO Products returned to the company
66,000  shares  of  Murdock  Group  common  stock  valued  at $0.50 per share in
settlement  of a $33,000  payable to the company.  The president and CEO of NEBO
Products is Scott Holmes,  the brother of KC Holmes and Heather Stone,  officers
and directors of the Murdock Group. KC Holmes and Lance Heaton were directors of
NEBO Products until February 2001.


         In connection  with all of the  transactions  involving the issuance of
shares of restricted  stock described  above, we relied upon exemptions from the
registration   requirements  of  the  Securities  Act  of  1933,  including  the
exemptions  afforded by Rule 505 and Section 4(2) under the  Securities  Act for
offers and sales of securities not involving any public offering. The recipients
of the securities  represented and warranted to the Murdock Group that they were
acquiring  them for their own account and for  investment and not with a view to
the public resale or  distribution  thereof.  In addition,  the recipients  were
advised  that  the  securities  issued  in  these  transactions  are  restricted
securities  and that  there  are  significant  restrictions  on  transferability
applicable to the securities by reason of federal and state  securities laws and
that therefore,  they could not sell or otherwise transfer the securities except
in accordance with the applicable  securities  laws. In each case the recipients
were provided with access to all material  information (and with the opportunity
to ask  questions  and receive  answers)  regarding  the  Murdock  Group and the
securities,  and they  represented that they were or are known by the company to
be  accredited  investors  under  Rule  501 of  Regulation  D and to  have  such
knowledge and experience in financial and business matters that they are capable
of  evaluating  the  merits  and risks of the  acquisition  and  holding  of the
securities issued in these transactions. A legend was placed on all certificates
and  instruments  representing  these  securities  stating  that the  securities
evidenced by such certificates or instruments have not been registered under the
Securities Act and setting forth the restrictions on their transfer and sale.


                                       9

<PAGE>


Item 6. Management's Discussion and Analysis or Plan of Operation


         The following  discussion  and analysis  should be read in  conjunction
with our financial  statements and the notes thereto contained elsewhere in this
report.  The  discussion of these  results  should not be construed to imply any
conclusion that any condition or circumstance  discussed herein will necessarily
continue  in the  future.  When  used  in this  report,  the  words  "believes,"
"anticipates,"  "expects,"  and  similar  expressions  are  intended to identify
forward-looking  statements.  Risks and uncertainties could cause actual results
to differ  materially  from those  that are  modified  by these  forward-looking
statements.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking statements,  which speak only as of the date hereof. The Murdock
Group  undertakes no obligation to publicly release the results of any revisions
to these  forward-looking  statements  that  may be made to  reflect  events  or
circumstances  after the date of this report,  or to reflect the  occurrence  of
unanticipated events.


General


         The Murdock Group develops or acquires assets and businesses,  and then
focuses on increasing or creating  equity,  profit and cash flow in those assets
and  businesses.  This is a change  in  business  direction  from  the  previous
business plan  implemented  from 1983 until 1999, when the company  business was
concentrated  on career  coaching and  development.  The company began to pursue
this new  direction  in 1999.  The  process was  formalized  in 2000 with a name
change from The Murdock  Group Career  Satisfaction  Corporation  to The Murdock
Group Holding Corporation.


         The  company's  business now includes  three primary areas of interest:
(1) career coaching and development,  (2) Internet career  development  services
and products, and (3) real estate.


         Career Coaching and Development.  The career coaching business operates
in Salt  Lake  City.  This  business  markets  career-coaching  and  development
services directly to job seekers through radio, newspaper, yellow pages, and the
Internet.  The services include full service coaching and job search assistance.
The job seeker pays the company for these  services.  The business  differs from
the headhunter or employment  agency where the employer pays the bill. As a part
of this business  group,  the company uses  proprietary  job search and coaching
technology  developed  over the past 18 years.  Historically  this  business has
generated  substantially all of the company's revenues.  The business is unique,
difficult to copy,  service intensive and generates regular and steady business.
The company has incurred  significant  losses to date developing its proprietary
job-search technology into a training system that can service a larger volume of
customers  than  its  original  one-on-one   coaching.   The  Company  completed
development  of this  system and has mass  marketed  it to the public  since May
1998. With the completion of the new proprietary  job-search technology training
system  the  Company  has   experienced  a   significant   reduction  in  client
cancellations and discounts, and improved collection of client receivables.


         Online   Career   Development   Services   and   Products.   We  formed
CareerWebSource, Inc. (formerly MyJobSearch.com, Inc.) as a Delaware corporation
in June 1999. This Internet business provides job-search  assistance,  services,
products  and  information  to job seekers and  others.  Revenue  comes from two
principal  sources.  The first  source of revenue is provided by the creation of
online career centers for high schools, libraries, and colleges. CareerWebSource
sells  corporate  partners a sponsorship  on these career centers and builds the
corporate  partner a proprietary local job board with a link to the high school,
library, or college sites that they sponsor.


         The second  revenue  source for  CareerWebSource  is  generated  by the
MyJobSearch.com  website  that the  company  developed  over the last two years.
MyJobSearch.com  is a large online  directory of job search resources with links
provided  free for the job  seeker.  MyJobSearch.com  also  includes  a recently
completed full service  international job board.  MyJobSearch.com sells postings
on this job board and by charges  recruiters and  corporations who are trying to
reach job seekers, for advertising on the site.


         Real Estate.  In September 1999, we formed a Real Estate group with the
intention of generating operating capital by acquiring real property,  generally
undeveloped,  in exchange  for shares of the Murdock  Group  common  stock,  and
pledging the property as collateral for loans while seeking to sell the property
to  developers  at a  profit.  During  1999  and  2000,  we  acquired  generally
undeveloped real property,  in exchange for cash and shares of common stock. The
company used the property for  development,  lending,  debt  restructuring,  and
resale.


                                       10

<PAGE>

         During the year ended December 31, 2000, we acquired several parcels of
land and a commercial  building,  primarily with common stock. Several purchases
have also required cash down payments and the assumption of debt.


         In Fall 2000, we decided to limit acquisitions of undeveloped  property
and raw ground and to begin  focusing  on  commercial  buildings  with intent to
improve  cash  flow  and  profit  potential.  The  company  acquired  its  first
commercial  building  in the fourth  quarter of 2000 and is  currently  pursuing
other commercial real estate projects.


         Since  September 30, 2000,  the company has reduced its holdings in raw
ground substantially and plans additional significant reductions of its interest
in undeveloped  property and raw ground holdings in first and second quarters of
2001. The company expects that it will continue to incur  significant  losses in
the near term as it  converts  its real  estate  business  model from raw ground
development to commercial building acquisition and management.


Restructuring


         Primarily as a result of escalating  interest  expense  associated with
debt  incurred in the purchase of real  property and to finance  operations,  we
incurred  substantial  operating losses in 1999 and 2000. The negative cash flow
from operations  forced us to scale back our operations in 2000 and in September
2000 we developed and began implementing a corporate  restructuring program. The
primary  objectives of this program were (1) to reduce  long-term  debt;  (2) to
eliminate  short-term debt and to reduce interest rates on remaining  short-term
debt obligations; (3) to refocus our operating efforts on the career development
and coaching market; and (4) to increase sales in our primary market, the career
development and coaching market.


         Beginning in September 2000, we negotiated  with our creditors  holding
long and  short-term  debt. We also began reducing our overhead by reductions in
staff  and  personnel.   Since  September  2000,  we  have  made  the  following
significant  changes  in our  debt and  equity  structure  as a  result  of this
restructuring program.


         At year-end  2000,  as a result of the  restructuring,  the company had
reduced  liabilities by  approximately  42% or $12 million compared to September
30, 2000, and had cut operational costs significantly. As of March 31, 2001, the
company further had reduced debt approximately $6.3 million. The total reduction
in outstanding liabilities of approximately $18.3 million represents a reduction
of  approximately  64% from the September  2000 totals.  The company  expects to
complete most of the  restructuring  efforts by the end of the second quarter of
2001. The  restructuring  transactions  are summarized under the caption "Market
for  Common  Equity  and  Related  Stockholder  Matters"  and  in  Note 8 to the
Financial Statements included in this report.


Results of Operations


Year ended December 31, 2000 Compared to the Year Ended December 31, 1999


         Revenues  decreased 12% to $2,274,264  for the year ended  December 31,
2000,  compared to $2,577,366  for the prior year.  This decrease in revenue was
primarily the result of the corporate restructuring that took place in third and
fourth quarters of 2000.  During 2000, the company reported a gain of $2,725,000
on the sale of securities of its subsidiary,  CareerWebSource. The sale occurred
as a result of the loss of shares of the  subsidiary  that had been pledged to a
creditor as collateral  for loans made to the  subsidiary  after the  subsidiary
defaulted on its obligations under the loan agreement.


         Cost of revenues,  decreased 7% to $668,553 for the year ended December
31,2000, compared to $715,433 for the previous year. This decrease also reflects
the efficiency in operational  restructuring and reductions in staff implemented
as  part of the  restructuring  during  the  fourth  quarter  of  2000.  We also
recognized  expense  of  $281,404  in 2000 in  connection  with  the  beneficial
conversion  feature of shares issued at a discount to the market in transactions
involving debt reduction or debt restructuring.


         General and administrative expenses, which include selling expenses and
advertising  expense,  decreased to $5,176,711  for the year ended  December 31,
2000, compared to $8,293,990 for the prior fiscal year. The decrease is a direct
result of the restructuring and cost-cutting measures described above.



                                       11


<PAGE>

         Interest  expense  increased  97% to  $12,732,338  for the  year  ended
December  31,2000,  compared to $6,478,735 for the previous year.  This increase
reflects increased debt carrying cost,  restructuring,  lending incentives,  and
debt settlement  charges incurred during 2000. As a result of the  restructuring
program the company started in September  2000, we expect that interest  expense
in 2001 will be significantly lower than interest expense incurred in 2000.


Liquidity and Capital Resources


         The company has suffered  recurring  losses from  operations  since its
inception in 1996, and as of December 31, 2000,  had an  accumulated  deficit of
$40,030,747.  The  accumulated  deficit  reflects  losses  associated  with  the
development  and startup of operations  and  significant  costs for research and
development  for the  company's  propriety  job-search  technology  and training
system,  as well as  costs  associated  with  the  startup  of the  Real  Estate
operations and the company's Internet subsidiary. The loss in 2000 was primarily
the result of significant  interest expense  associated with the large amount of
debt incurred in connection  with real property  purchase  contracts and working
capital loans, which carry high interest rates. We also accrued $400,000 against
the possible exposure of litigation. See "Item 3. Legal Proceedings."


         At December 31, 2000, we had a working capital deficit of approximately
$13,589,327. This working capital deficit primarily is a result of the company's
practice of funding operations  through  short-term  borrowings at high interest
rates.  The interest  rates  associated  with these  short-term  borrowings  are
significantly higher than prime interest rates.


New Accounting Standards


         During  2000,   the  EITF  issued  a   pronouncement   addressing   the
recognition,  measurement and statement of earnings  classification  for certain
sales incentives.  The pronouncement  will be effective in the second quarter of
2001.   As  a  result,   certain   items   previously   included  in  marketing,
administration  and research  costs on our  consolidated  statements of earnings
will be recorded as  reductions of operating  revenue.  Upon  adoption,  we will
reclassify  prior  period  amounts to conform  to the new  requirements.  Due to
anticipated  additional  consideration of this pronouncement by the EITF, we are
currently  unable to quantify the impact of adoption.  We presently  expect that
adoption  and  subsequent  application  of this  pronouncement  will  not have a
material  effect on our financial  position or results of  operations.  The EITF
also issued a pronouncement  addressing the statement of earnings classification
of shipping  and  handling  costs  billed to  vendors.  This  pronouncement  was
effective  for the  fourth  quarter  of 2000,  but did not have an impact on our
combined financial statements.


Risk Factors


         This Report contains forward-looking statements that may be affected by
risks and uncertainties including many that are outside our control. The Murdock
Group's actual operating  results could differ materially as a result of certain
factors, including those set forth below and elsewhere in this Report.


         We have a history of net losses and accumulated  deficits and there can
be no assurance that we will achieve  profitable  operations or that it will not
require  additional  financing to achieve our business plan. From its inception,
the Murdock  Group has not  achieved  profitable  operations  and  continues  to
operate at a loss. The present business strategy is to improve profitability and
cash flows by generating profits through the sale of real property and adding to
our existing  product line and distribution  channels in the Career  Development
group and myjobsearch.com.  See "Management's Discussion and Analysis or Plan of
Operation."


         Our financial  statements have been prepared on the assumption that the
Murdock Group will continue as a going  concern.  Our revenues have been limited
and it has been necessary to rely upon debt and capital contributions to sustain
operations. Additional financing is required if the Murdock Group is to continue
as a going concern.  If additional funding is not obtained,  we will be required
to scale back or discontinue our operations.


         We have not been  profitable and we may never be  profitable.  If we do
not improve our operating  results,  we may be required to curtail or even cease
operations.  Profitability  depends upon many factors,  including the success of
its  marketing  program,  its  ability  to  identify  and  obtain  the rights to
additional  products  to add to its  existing  product  line,  expansion  of its
distribution  and customer base,  maintenance or reduction of expense levels and


                                       12

<PAGE>

the success of the business  activities.  The Murdock  Group has an  accumulated
deficit as of  December  31, 2000 of  $40,030,747.  We  anticipate  that we will
continue  to incur  operating  losses in the  future.  The  ability  to  achieve
profitable  operations  will depend on our  ability to develop  and  maintain an
adequate  marketing  campaign and control costs and expenses.  See "Management's
Discussion and Analysis or Plan of Operation."


         Environmental  laws and potential  liability for environmental  hazards
and spills on our real property could result in substantial money damages, fines
and expense for  remediation.  The real property  owned by the Murdock Group may
pose or contain environmental hazards or risks and the ownership, development or
sale of such  properties  may subject the  Murdock  Group to federal,  state and
local laws and regulations governing the use, manufacture, storage, handling and
disposal of such  materials  and certain  waste  products.  Although the Murdock
Group  believes  that  its  activities   currently  comply  with  the  standards
prescribed by such laws and regulations, we could be held liable for any damages
that result and any such  liability  could  exceed the  resources of the Murdock
Group.  In addition,  there can be no assurance  that we will not be required to
incur significant costs to comply with such  environmental  laws and regulations
in the future.

         Our recent  restructuring  resulted in the  issuance  of a  significant
number  of  shares  of  common  stock  and  substantial   dilution  of  existing
shareholders. If we issue additional shares to further reduce our obligations or
to acquire  property or otherwise,  our investors may suffer even more dilution,
potentially  reducing the value of their  ownership  interest in the company.  A
significant  number of shares of our common stock are authorized but not issued.
In addition,  there are a substantial  number of shares of common stock reserved
for issuance upon the exercise of certain options,  warrants and similar rights.
If and to the extent such options,  warrants or rights are exercised,  or if the
Board of Directors determines to issue authorized but previously unissued shares
of common  stock in  connection  with  acquisitions  of real  property  or other
transactions,  such issuances could substantially dilute the voting power of the
existing  shareholders.  Furthermore,  the  possibility  of such  issuances  may
adversely  affect the market for our common  stock,  should  such a market  ever
develop.


Item 7. Financial Statements


         The Murdock  Group's  financial  statements  and  associated  notes are
included in this report on pages F-1 through F-25.


Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure

         There were no changes in or disagreements  with our independent  public
accountants on accounting and financial disclosure in 2000.




                                       13


<PAGE>

                                    Part III


Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act


Directors


         KC Thane Holmes,  Chairman,  President and Chief Executive Officer, age
33. Mr.  Holmes has served as a director  and  executive  officer of the Murdock
Group since formation.  He received a BA degree from Brigham Young University in
Psychology  with a minor in Business and  Accounting in 1992.  Prior to founding
Envision  Career  Services,  L.L.C.  and acquiring The Murdock Group in 1996, he
served as a technical sales  representative for Provider  Solutions,  a software
developer, from 1995 to 1996, and as an account executive and technical engineer
for  Ameritech  Library  Services,  a  creator  of  custom  software  for  large
libraries, from 1991 to 1995. Mr. Holmes also serves as a Director, Chairman and
CEO of CareerWebSource.


         Heather J. Stone,  Director, age 31. Ms. Stone received an MBA from the
University of Phoenix with a focus on marketing  and strategic  planning in 1992
and a BA in  English  from  Brigham  Young  University  in 1990.  She  served as
Director of Product Management for ViewSoft,  Inc., a Provo-based software firm,
from 1994 to 1996,  and a Product  Line  Manager for Novell,  Inc., a networking
software firm, for several years.  She was a technical  writer for Clyde Digital
Systems  (RAXCO),  a software  company,  from 1987 to 1991. She has  contributed
articles to technical journals and won several writing awards. She has served as
a director  since the company's  formation.  Ms. Stone also serves as a Director
and President of CareerWebSource.


         Lance Heaton, Director, Treasurer, age 30. For the four years before
serving as a director and  employee of the Murdock  Group,  Mr.  Heaton was Vice
President of Finance and Operations  for Garden Country Inc., a regional  retail
chain.  From  1994 to 1998,  he was the  managing  member  of  Heaton,  Hall and
Associates, a real estate company and the controller of financial operations for
Heaton  Enterprises,  a local  restaurant  chain.  Mr.  Heaton  received a BA in
Economics  from the  University  of Utah.  He has  served  as a  director  since
December 13, 1999. Mr. Heaton also serves as a Director of CareerWebSource.


         Mr. Holmes and Mrs. Stone are brother and sister. Directors serve for a
one-year term or until their successor is elected and qualified.


Executive officers


         In  addition to  those  executive officers who also serve as directors,
namely Mr.  Holmes,  Ms. Stone and Mr.  Heaton,  the following  persons serve as
executive officers of the Murdock Group:


         Stephen  Fitzwater,  Vice President of  Operations,  age 42. Before Mr.
Fitzwater  joined the Murdock Group in 1997 he founded Advanced Massage Therapy,
an  alternative  therapy  business.  From  1993 to 1998 he  owned  and  operated
Greentree  Properties,  a Utah-based real estate investment firm specializing in
turning  around  distressed  properties.  Before  moving  to Utah in  1993,  Mr.
Fitzwater  worked in the  entertainment  industry,  culminating  as the  general
manager of the largest nightclub on the West Coast.


         Chet Nichols,  Controller, age 42. Mr. Nichols joined The Murdock Group
in January 2000.  He graduated  from the  University  of Utah in Accounting  and
Business  Management  and  completed  his CPA Testing in 1993.  Mr.  Nichols has
worked in the accounting  profession since 1982 in the Financial  Services arena
as a Reporting, Budget, Forecasting, and Strategic Planning Manager. He has been
a  Controller  since  1990  in  the  Manufacturing  and  Professional   Services
industries,   and  has  broad  experience  in  Management,   Business  Planning,
Information Systems, Accounting infrastructure and procedures,  Human Resources,
Business Consulting, and Tax.


Section 16(a) Beneficial Ownership Reporting Compliance


         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Murdock Group's executive  officers,  directors and persons who beneficially own
more than 10% of a registered class of our equity  securities to file reports of
ownership and changes in ownership with the Securities and Exchange  Commission.


                                       14

<PAGE>

Officers, directors and greater than 10% shareholders are required by regulation
of the  Securities  and Exchange  Commission  to furnish the Murdock  Group with
copies of all Section 16(a) forms they file.


         Based  solely upon its review of the copies of such forms  furnished to
it, and representations  made by certain persons subject to this obligation that
such filings were not required to be made,  the Murdock Group  believes that all
reports  required to be filed by these  individuals  and persons  under  Section
16(a)  were  filed and it is not aware of any  transactions  in its  outstanding
securities  by or on behalf of any  director,  executive  officer or 10% holder,
which would  require the filing of any report  pursuant to Section  16(a) during
the fiscal year ended December 31, 2000, that was not filed with the Commission.


Item 10. Executive Compensation.


         The following table  summarizes the compensation of the Chief Executive
Officer of the Murdock  Group during the past three fiscal  years.  No executive
officer of the Murdock  Group  earned more than  $100,000  during the year ended
December 31, 2000.


                           Summary Compensation Table

                                                                Long-Term
                         Annual Compensation                  Compensation
                         -------------------                  ------------
                                             Restricted   Securities Underlying
       Position     Year   Salary ($)(1)    Stock Awards  Options / SARs (#) (3)
    -------------  ------ ---------------   ------------------------------------


---------------------
(1)      Mr. Holmes was not paid any wages during 2000. At January 1, 2000,  Mr.
         Holmes was  indebted to the company in the amount of  $441,086.  During
         2000,  this  obligation  was  satisfied  as a result  of  consideration
         pledged  to secure  debt of the  company  and the loss of the  property
         pledged by Mr.  Holmes and by an  affiliate  of Mr.  Holmes.  The table
         excludes  amounts received by Mr. Holmes during 2000 as a result of the
         settlement of obligations of the Murdock Group in transactions  between
         Mr.  Holmes and the company as provided in "Certain  Relationships  and
         Related  Transactions."  At December 31, 2000, the company was indebted
         to Mr.  Holmes in the amount of  $609,718.  See also Notes to Financial
         Statements, included with this report.


      Stock Option Grants


         The table below  contains  information  concerning  stock option grants
made to the Chief Executive Officer during the past fiscal year.


                      Option/SAR Grants in Last Fiscal Year


<TABLE>
<CAPTION>
                                                      Percent of total Options
                            Number of Securities        granted to employees      Exercise Price       Expiration
         Name            Underlying Options granted        in fiscal year            per Share            Date

<S>                               <C>                           <C>                    <C>            <C>
KC Holmes                           250,000                                            $1.50          February 2007

KC Holmes                            30,000                                            $0.05           October 2007

KC Holmes                           250,000                                            $0.05          November 2007

KC Holmes                           500,000                                            $0.05          November 2007

Total                             1,030,000                     3.5%                    NA                 NA
</TABLE>



                                       15

<PAGE>

Compensation of Directors


         Directors of the Murdock Group were not paid any compensation for their
services  as members  of the Board  during the year  ended  December  31,  2000.
Members of the board were issued stock options  during 2000 as follows:  Heather
Stone  received  options for the purchase of 30,000  shares of common stock at a
price of $0.05 per share on October 24,  2000.  These  options  are  exercisable
until October 2007.  Lance Heaton was granted options to purchase 140,000 shares
of common  stock on  February  1, 2000.  These  options  are  exercisable  until
February  2007 at a price of $1.50 per share.  He also was  granted an option in
October  2000 for the  purchase  of 30,000  shares of common  stock at $0.05 per
share through  October 2007. In November 2000, Mr. Heaton was granted options to
purchase a total of  633,334  shares of common  stock at $0.05 per share.  These
options are exercisable until November 2007.


Stock Option and Incentive Plan


         On July 1, 1999, the Board of Directors  adopted the Stock Option.  The
plan was amended in March 2001. As amended, the Stock Option Plan authorizes the
granting of awards of up to 75,000,000  shares of common stock to key employees,
officers,  directors,  consultants,  advisors and sales representatives.  Awards
consist of stock options  (both  non-qualified  options and options  intended to
qualify as "incentive"  stock options under Section 422 of the Internal  Revenue
Code of 1986, as amended), restricted stock awards, deferred stock awards, stock
appreciation  rights and other  stock-based  awards,  as  described in the Stock
Option Plan.


         The Stock Option Plan is administered by the Board of Directors,  which
determines  the persons to whom awards will be granted,  the number of awards to
be granted, and the specific terms of each grant, including the vesting thereof,
subject to the  provisions  of the Stock  Option  Plan.  The  exercise  price of
qualified  options  may not be less  than 100% of the fair  market  value of the
common  stock on the date of grant (or 110% of the fair market value in the case
of a grantee holding more than 10% of our outstanding stock). The aggregate fair
market value of shares for which qualified stock options are exercisable for the
first time by such employee  during any calendar  year may not exceed  $100,000.
Non-qualified  stock options  granted under the Stock Option Plan may be granted
at a price  determined by the Board of  Directors,  not to be less than the fair
market value of the common stock on the date of grant.


         The  Stock  Option  Plan  also  contains   certain  change  in  control
provisions,  which could cause  options and other  awards to become  immediately
exercisable and restrictions and deferral limitations applicable to other awards
to lapse in the event any  "person," as such term is used in Sections  13(d) and
14(d) of the Securities Exchange Act of 1934,  including a "group" as defined in
Section 13(d),  but excluding  certain of  shareholders,  becomes the beneficial
owner of more than 30% of our outstanding shares of common stock.


         As of April 1, 2001,  we had  granted  options  to  purchase a total of
30,245,164  shares,  of which  options to  purchase  7,834,439  were  granted to
employees  and  directors  under the Stock  Option  Plan.  Of the total  options
outstanding,  options to purchase 712,438 shares have an exercise price of $1.00
per share,  and options to purchase  1,841,799  shares have an exercise price of
$1.50 per share.  These options vest over periods ranging from the date of grant
to 7 years from the date of grant.


                                       16

<PAGE>


Item 11. Security Ownership of Certain Beneficial Owners and Management.


         The  following  table sets  forth,  as of April 4, 2001,  the number of
shares of our voting common stock owned by (1) each person known to us to be the
beneficial  owner of more than 5% of our  outstanding  common stock,  (2) by the
executive officers and directors individually, and (3) by the executive officers
and directors as a group.  Except as indicated in the footnotes  below,  each of
the persons listed exercises sole voting and investment power over the shares of
our  common  stock  listed  for  such  person  in the  table.  Unless  otherwise
indicated,  the mailing address of the shareholder is the address of the Murdock
Group, 5295 South Commerce Drive, Suite 475, Salt Lake City, Utah 84107.


                                        Number of Shares      Percent of
        Name / Address                          (1)            Class (2)
--------------------------------    --------------------    ---------------
5% Beneficial Owners

   Ross Investment Group                   22,150,000           6.7%
   MSF Properties                          20,000,000           6.1%
   Holmes Funding                          20,000,000           6.1%
   John R. and Betty H. Call               19,481,823           5.9%


Directors and Executive Officers

   KC Holmes                                2,294,342           0.7%

     Chief Executive Officer
     Chairman of the Board

   Heather Stone, Director                  3,039.842           0.9%

   Lance Heaton                            10,101,000           3.1%

   Stephen Fitzwater                            1,000            *
     Operations

   Operations and Directors as a Group
   (4 persons)                             15,436,184           4.7%

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


*        Less than 1%.

         (1)      Entries  exclude  beneficial   ownership  of  shares  issuable
                  pursuant  to  options  that  have not  vested  or that are not
                  otherwise exercisable as of the date hereof and which will not
                  become  vested  or  exercisable  within 60 days of the date of
                  this report.


         (2)      Percentages rounded to nearest one-tenth of one percent.



                                       17



<PAGE>



Item 12. Certain Relationships and Related Transactions


Year Ended December 31, 1999


         In 1998 and 1999,  we made loans to KC Holmes,  an officer and director
of the Murdock Group.  These loans totaled $277,824 and $441,086 at December 31,
1998 and 1999, respectively. Each loan bears interest at the annual rate of 12%,
has no maturity  date, and is based on an oral  agreement.  In 1998 and 1999, we
made loans to Heather Stone, an officer and director of the Murdock Group. These
loans totaled $96,803 and $132,247 at December 31, 1998 and 1999,  respectively.
Each loan bears interest at the annual rate of 12%, has no maturity date, and is
based on an oral agreement.


         The Murdock Group was indebted to employees and former employees in the
amount of $123,500  as of December  31,  1999,  relating to a private  placement
offering.  The company also has short-term notes payable with various  employees
and their immediate family members. The notes bear interest at rates between 12%
and 36% per annum and are  unsecured.  The balance due under these notes totaled
$294,696 at December 31, 1999. We paid  $109,660 in interest to related  parties
in the year ended  December 31,  1999.  The related  parties  were  employees or
immediate  family  members of executive  officers  and  employees of the Murdock
Group.


         KC Holmes, Lance Heaton, and Heather Stone are also directors, officers
and principal shareholders of CareerWebSource.


         During   1999,   we  provided   accounting   and  other   services  for
CareerWebSource for which CareerWebSource was assessed an allocable share of the
salaries  and other  expenses of the  employees of the Murdock  Group  providing
those services.  From June through  December 31, 1999, the net amount accrued or
paid to the Murdock Group for these services totaled approximately $29,082.


         In June 1999, we loaned  CareerWebSource  cash for working capital. The
funds for this transaction were obtained by the Murdock Group from Aspen Capital
Resources,  LLC. As consideration  for this loan, the Murdock Group, as the sole
shareholder of CareerWebSource  at the time, agreed to cause  CareerWebSource to
issue  common  stock  purchase  warrants to Aspen  Capital  for the  purchase of
296,459 shares of CareerWebSource  common stock at a purchase price of $3.00 per
share.  These  warrants  are  currently  exercisable  and expire in 2006.  Aspen
Resources  also  was  granted  a  security   interest  in  1,000,000  shares  of
CareerWebSource  common  stock  owned of record by the  Murdock  Group.  Amounts
loaned  to  CareerWebSource   under  this  arrangement   totaled   approximately
$1,800,000 as of April 10, 2000.


         In connection with the private offering of CareerWebSource  convertible
preferred  stock in May 2000, the company agreed to convert the amounts owing by
CareerWebSource  to a  subscription  for  the  purchase  of  720,000  shares  of
CareerWebSource Series A Convertible Preferred Stock.


Year Ended December 31, 2000


         During   2000,   we  provided   accounting   and  other   services  for
CareerWebSource for which CareerWebSource was assessed an allocable share of the
salaries  and other  expenses of the  employees of the Murdock  Group  providing
those  services.  The net amount  accrued or paid to the Murdock Group for these
services totaled approximately $61,144 in 2000.


         In satisfaction of a defaulted loan owed to Aspen Capital, KC Holmes, a
director and the CEO of the company,  relinquished  2,000,000  shares of Murdock
Group  common   stock   valued  at  $0.10  per  share  and  203,885   shares  of
CareerWebSource  common  stock  valued  at  $2.50  per  share,  and  had RDF LLC
contribute  $1,500,000  of  assets  to the  company.  Under  an  indemnification
agreement,  the Murdock  Group  reissued Mr. Holmes  2,000,000  shares of common
stock.  In addition,  under a similar  agreement,  CareerWebSource  reissued Mr.
Holmes 203,885 shares of its common stock.  Mr. Holmes also agreed upon a damage
award of $552,428 or 25% of the current value of assets relinquished.


         In satisfaction  of the same defaulted loan,  Heather Stone, a director
of the company,  relinquished  3,038,842  shares of common stock valued at $0.10
per share,  and 303,885 shares of  CareerWebSource  common stock valued at $2.50
per share.  Under  indemnification  agreements,  Ms. Stone was issued  3,038,842
shares of Murdock  Group  common  stock and  303,885  shares of  CareerWebSource


                                       18

<PAGE>

common stock. In addition, Ms. Stone was given a damage award of $265,899 or 25%
of the current value of assets relinquished.


         At December 31, 1999 Mr.  Holmes had a  receivable  with the company in
the amount of $441,086.  During 2000, Mr. Holmes  satisfied the receivable and a
note  payable was  recorded  with the company as a result of the (i)  $1,500,000
personal  assets  seized from an  affiliate  of Mr.  Holmes,  RDF LLC,  (ii) the
$552,428  damage award (iii) $139,503 in loan  assumptions and other advances to
the company. In partial consideration of the note payable, Mr. Holmes (i) caused
RDF LLC to convert  $1,069,700 into 15,314,285  shares of common stock, and (ii)
offset $71,427 in advances received from the company.  At December 31, 2000, the
company owed Mr. Holmes $609,718.


         At December  31, 1999,  Ms. Stone had a receivable  with the company in
the amount of $132,247.  During 2000,  Ms. Stone  satisfied the receivable and a
note payable was recorded as a result of the $265,899  damage award.  In partial
consideration  of the note  payable,  Ms.  Stone  offset  $110,257  in  advances
received  from the company.  At December  31,  2000,  the company owed Ms. Stone
$23,395.


         Based on  mutual  board  approval, CareerWebSource  agreed  to  assume
$317,356 of the above mentioned damage awards to Mr. Holmes and Ms. Stone.


         The company has  short-term  notes  payable with various  employees and
their immediate family members.  The notes bear interest between 12% and 36% per
annum and are unsecured.  The balances of these notes were $891,295 and $294,696
at December 31, 2000 and 1999, respectively.


Item 13. Exhibits and Reports on Form 8-K.

(a)   Exhibits


         The Murdock  Group  files the  following  exhibits  with this report or
incorporates  by reference to exhibits filed  previously with the Securities and
Exchange Commission by the Murdock Group.


  Exhibit No.                   Description

        3.1   Articles of Incorporation dated November 5, 1997 (1)

        3.2   Bylaws dated November 5, 1997 (1)

        3.3   Amended Bylaws (2)

        3.4   Amended and Restated Articles of Incorporation (3)

        3.5   Amendment to Articles of Incorporation dated March 29, 2001

        4.1   Form of Stock Certificate (1)

        4.2   Form of Bond Certificate (1)

        10.1  Purchase Agreement with Envision Career Services LLC, dated
              July 26, 1996 (1)

        10.2  Exchange Agreement with Envision, dated May 31, 1998 (1)

        10.3  Lease (1)

        10.4  License with MyJobSearch.com, Inc. (2)

        10.5  1999 Stock Option Plan (2)

        10.6  Form of Stock Option Award (2)

        10.7  Contract for Purchase of Real Property (2)


                                       19

<PAGE>

        10.8  Contract for Purchase of Real Property (2)

        10.9  Contract for Purchase of Real Property (2)

        10.10 Contract for Purchase of Real Property (2)

        10.11 Contract for Purchase of Real Property (2)

        10.12 Contract for Purchase of Real Property (2)

        10.13 Contract for Purchase of Real Property (2)

        10.14 Contract for Purchase of Real Property (2)

        10.15 Contract for Purchase of Real Property (2)

        10.16 Contract for Purchase of Real Property (2)

        10.17 Contract for Purchase of Real Property (2)

        10.18 Contract for Purchase of Real Property (2)

        10.19 Agreement and Plan of Merger with G&J Farms, Inc. (4)

        10.20 Agreement and Plan of Merger with G.F.S., Inc. (4)

        10.21 Farm Lease Agreement (4)

        10.22 Indemnification Agreement (5)

        10.23 2000 Stock Option Plan  (3)

        16    Letter on change of certifying accountant (2)

        21.1  List of subsidiaries (2)

        23.1  Consent of Hansen Barnett & Maxwell, CPA (2)

        23.2  Consent of David Thomson, CPA (2)




           (1)   Filed as Exhibit to the Murdock Group's registration statement
                 on Form SB-2, Commission File No. 333-65319, and incorporated
                 by  this reference.

           (2)   Filed as Exhibit to annual report on Form 10-KSB for year ended
                 December 31, 1999 and incorporated by this reference.

           (3)   Incorporated  by reference to  Definitive  Proxy  Statement on
                 Schedule 14A dated November 27, 2000.

           (4)   Incorporated by reference to Current Report on Form 8-K, filed
                 in July 2000.

           (5)   Incorporated  by reference to Quarterly  Report for Quarter
                 Ended September 30, 2000.

(b)   Reports on Form 8-K


               We did not file any Current  Reports on Form 8-K during the
               quarter ended December 31, 2000.


                                       20

<PAGE>



                                                                  Signatures


         In accordance with Section 13 or 15(d) of the Securities  Exchange Act,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized this 12th day of April 2001.


The Murdock Group Holding Corporation




  /s/ KC Holmes
-----------------------------------------------
KC Holmes, CEO (Principal Executive Officer)





         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.


Dated this 12th day of April 2001




  /s/ KC Holmes
-----------------------------------------------
KC Holmes, President and CEO, and Director




  /s/ Heather Stone
-----------------------------------------------
Heather Stone, Director




  /s/ Lance Heaton
-----------------------------------------------
Lance Heaton, Director




  /s/ Chet Nichols
-----------------------------------------------
Chet Nichols, Controller (Principal Accounting Officer)



<PAGE>





                                THE MURDOCK GROUP
                               HOLDING CORPORATION







               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                                       AND
                        CONSOLIDATED FINANCIAL STATEMENTS







                           December 31, 2000 and 1999




                            HANSEN, BARNETT & MAXWELL
                           A Professional Corporation
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>








                                THE MURDOCK GROUP
                               HOLDING CORPORATION


                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                         Page


<S>                                                                                                       <C>
Report of Independent Certified Public Accountants......................................................  F-2

Consolidated Balance Sheets - December 31, 2000 and 1999................................................  F-3

Consolidated Statements of Operations for the Years Ended December 31, 2000 and
  1999..................................................................................................  F-5

Consolidated Statements of Stockholders' Deficit for the Years Ended
 December 31, 1999 and 2000.............................................................................  F-6

Consolidated Statements of Cash Flows for the Years Ended December 31, 2000 and
  1999..................................................................................................  F-7

Notes to Consolidated Financial Statements..............................................................  F-9
</TABLE>


                                       F-1

<PAGE>


HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS

                                                           (801) 532-2200
   Member of AICPA Division of Firms                     Fax (801) 532-7944
          Member of SECPS                          345 East 300 South, Suite 200
Member of Summit International Associates        Salt Lake City, Utah 84111-2693



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and the Shareholders
The Murdock Group Holding Corporation


We have  audited the  accompanying  consolidated  balance  sheets of The Murdock
Group Holding Corporation, a Utah corporation, and Subsidiary as of December 31,
2000  and  1999,  and  the  related   consolidated   statements  of  operations,
stockholders'   deficit  and  cash  flows  for  the  years  then  ended.   These
consolidated  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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to  obtain  reasonable  assurance  about  whether  the  consolidated   financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of The Murdock Group
Holding  Corporation  and  Subsidiary as of December 31, 2000 and 1999,  and the
results of their  operations  and their cash flows for the years then ended,  in
conformity with accounting principles generally accepted in the United States.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 4 in the
consolidated  financial  statements,  the Company has suffered  recurring losses
from operations,  negative cash flows from operating  activities,  had a working
capital  deficiency  of  $13,589,327  and a capital  deficiency of $3,649,928 at
December 31, 2000.  These  factors raise  substantial  doubt about the Company's
ability to continue as a going  concern.  Management's  plans in regard to these
matters are also  described in Note 4. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.




                                                       HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
March 27, 2001


                                      F-2

<PAGE>


                      THE MURDOCK GROUP HOLDING CORPORATION
                           CONSOLIDATED BALANCE SHEETS



                                     ASSETS
<TABLE>
<CAPTION>
                                                                                          December 31,____
                                                                                --------------------------------
                                                                                      2000              1999
                                                                                --------------    --------------
Current Assets
<S>                                                                             <C>                <C>
      Cash .................................................................... $          997    $        1,907
      Current portion of contracts receivable, net .............................       712,680           712,219
      Accounts receivable - related parties.....................................       226,167           361,147
      Accrued interest receivable...............................................       233,503           120,820
      Prepaid and other current assets..........................................        46,163            59,884
                                                                                --------------    --------------

           Total Current Assets.................................................     1,219,510         1,255,977
                                                                                --------------    --------------

Property and Equipment, at cost
      Computer equipment........................................................       487,333           972,026
      Software..................................................................        85,061           384,998
      Furniture and fixtures....................................................       382,037           364,685
      Leasehold improvements ...................................................        75,358            77,574
                                                                                --------------    --------------
                                                                                     1,029,789         1,799,283
      Less: accumulated depreciation and amortization...........................      (510,829)         (369,849)
                                                                                --------------    --------------

           Net Property and Equipment ..........................................       518,960         1,429,434
                                                                                --------------    --------------

Other Assets
      Contracts receivable, net - less current portion..........................       145,195           507,844
      Deposits and other assets.................................................        30,456            96,854
      Investments...............................................................    12,724,508        11,067,850
                                                                                --------------    --------------

           Total Other Assets...................................................    12,900,159        11,672,548
                                                                                --------------    --------------

Total Assets....................................................................$   14,638,629    $   14,357,959
                                                                                ==============    ==============
</TABLE>













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


                                      F-3

<PAGE>


                      THE MURDOCK GROUP HOLDING CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                   (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' DEFICIT




<TABLE>
<CAPTION>
                                                                                           December 31,
                                                                                --------------------------------
                                                                                          2000              1999
                                                                                --------------    --------------
Current Liabilities
<S>                                                                             <C>               <C>
      Accounts payable..........................................................$    1,970,700    $    2,676,957
      Accrued liabilities.......................................................     1,953,034           590,564
      Unearned revenue .........................................................            --            50,000
      Short-term notes payable..................................................     8,537,726        12,521,900
      Short-term notes payable - related parties................................       960,795           418,196
      Current portion of notes payable..........................................     1,296,788           951,963
      Current portion of notes payable - related parties........................            --            15,000
      Current portion of obligations under capital leases ......................        89,794           554,431
                                                                                --------------    --------------

           Total Current Liabilities............................................    14,808,837        17,779,011
                                                                                --------------    --------------

Long-Term Liabilities
      Notes payable - long-term.................................................     1,859,388         2,915,083
      Obligations under capital leases - long-term..............................        48,742           642,754
                                                                                --------------    --------------

           Total Long-Term Liabilities..........................................     1,908,130         3,557,837
                                                                                --------------    --------------

Redeemable Common Stock
      Common Stock - no par value,  1,047,727 shares and 1,447,227 shares issued
       and outstanding, respectively, redeemable
       at $1.50 per share.......................................................     1,571,590         2,170,841
                                                                                --------------    --------------

Stockholders' Deficit
      Preferred Stock - no par value, 25,000,000 shares authorized,
        no shares issued or outstanding.........................................            --                --
      Common Stock - no par value, 600,000,000 shares
        authorized; 207,975,658 shares and 17,502,850 shares issued and
        outstanding, respectively...............................................    36,380,819        12,528,980
      Accumulated deficit.......................................................   (40,030,747)      (21,678,710)
                                                                                --------------    --------------

           Total Stockholders' Deficit..........................................    (3,649,928)       (9,149,730)
                                                                                --------------    --------------

Total Liabilities and Stockholders' Deficit.....................................$   14,638,629    $   14,357,959
                                                                                ==============    ==============
</TABLE>







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

                                      F-4

<PAGE>


                      THE MURDOCK GROUP HOLDING CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS




<TABLE>
<CAPTION>
                                                                                     For the Years  Ended
                                                                                         December 31,
                                                                                -------------------------------
                                                                                    2000              1999
Revenue
<S>                                                                             <C>               <C>
      Service revenue, inclusive of interest charged............................$    2,274,264    $    2,577,366
      Less contract discounts and cancellations.................................      (189,276)         (226,053)
                                                                                --------------    --------------
           Net Revenue..........................................................     2,084,988         2,351,313
                                                                                --------------    --------------

Cost of Revenue.................................................................       668,553           715,433
                                                                                --------------    --------------

           Gross Profit.........................................................     1,416,435         1,635,880
                                                                                --------------    --------------

Operating Expenses
      Selling, general and administrative.......................................     5,176,711         8,293,990
      New products research and development.....................................       795,310           548,396
      Loss on disposal of investments...........................................     4,283,020                --
      Indemnification for damages to shareholders...............................       500,971                --
      Impairment of investments.................................................       285,000                --
      Contingency reserve.......................................................       430,494                --
                                                                                --------------    --------------

           Total Operating Expenses.............................................    11,471,506         8,842,386
                                                                                --------------    --------------

Other Income (Expense)
      Interest expense..........................................................   (12,732,338)       (6,478,735)
      Other income..............................................................        30,129            57,464
      Loss in subsidiary........................................................      (524,387)               --
      Gain on issuance of securities in consolidated subsidiary.................     1,961,247                --
      Gain on sale of securities of subsidiary..................................     2,725,000                --
                                                                                --------------    --------------
           Total Other Expenses.................................................    (8,540,349)       (6,421,271)
                                                                                --------------    --------------

Loss Before Minority Interest and Extraordinary Loss............................   (18,595,420)      (13,627,777)
                                                                                --------------    -------------

Minority Interest in Loss of Consolidated Subsidiary............................       875,349           453,320
                                                                                --------------    --------------

Loss Before Extraordinary Loss .................................................   (17,720,071)      (13,174,457)
                                                                                --------------    --------------

Extraordinary Loss (Net $0 in income taxes, See Note 18)........................       631,966                --
                                                                                --------------    --------------

Net Loss   .....................................................................$  (18,352,037)   $  (13,174,457)
                                                                                ==============    ==============


Basic and Diluted Loss Per Common Share Before Extraordinary Loss...............$        (0.39)   $        (1.07)
                                                                                ==============    ==============

Basic and Diluted Extraordinary Loss Per Common Share...........................$        (0.01)   $           --
                                                                                ==============    ==============

Basic and Diluted Net Loss Per Common Share.....................................$       (0.40)    $
                                                                                =============     ==============
(1.07)      ....................................................................
=====

Weighted Average Common Stock Used in Per Share Calculations....................    46,010,718        12,315,949
                                                                                ==============    ==============
</TABLE>


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


                                    F-5

<PAGE>


                      THE MURDOCK GROUP HOLDING CORPORATION
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                           DECEMBER 31, 1999 AND 2000



<TABLE>
<CAPTION>
                                                          Common Stock                             Accumulated
                                                     Shares           Amount                 Deficit           Total

<S>                                              <C>                <C>                    <C>              <C>
Balance - December 31, 1998....................    8,112,300           408,900             (8,504,253)      (8,095,353)

Issuance of common stock for cash..............    1,103,187         1,103,187                     --        1,103,187
Issuance of common stock to employees
   as bonuses..................................      113,600           113,600                     --          113,600
Issuance of common stock for services..........      584,722           610,929                     --          610,929
Issuance of common stock in satisfaction
   of debt obligations.........................    3,060,539         3,532,617                     --        3,532,617
Issuance of common stock to purchase real
   estate property.............................    5,678,789         8,485,178                     --        8,485,178
Common stock purchased in connection with
   real estate acquisitions....................      (79,000)         (118,500)                               (118,500)
Redeemable common stock........................   (1,071,287)       (1,606,931)                   --        (1,606,931)
Net loss   ....................................           --                --            (13,174,457)     (13,174,457)
                                                 -----------        ----------             ----------       ----------

Balance - December 31, 1999....................   17,502,850        12,528,980            (21,678,710)      (9,149,730)

Issuance of common stock for interest and
   enticements to settle debt obligations......   14,486,158           881,691                     --          881,691
Issuance of common stock for services..........    3,014,911           619,255                     --          619,255
Issuance of common stock in satisfaction
   of debt obligations and related beneficial
   conversion feature..........................  130,838,686        10,136,091                     --       10,136,091
Issuance of common stock in satisfaction
   of accrued liabilities......................    4,093,170           199,059                     --          199,059
Issuance of common stock issued to purchase
   real estate property........................   28,138,050         9,540,462                     --        9,540,462
Issuance of common stock for other assets......       88,333            85,833                     --           85,833
Release of redeemable common stock.............      399,500           599,250                     --          599,250
Common stock issued in connection with redeemable
  common stock and price guarantee.............   11,985,000                --                     --               --
Common stock returned as part of resale of
   real estate property........................     (220,000)         (297,000)                    --         (297,000)
Common stock returned in satisfaction of
   a receivable................................   (2,351,000)         (211,001)                    --         (211,001)
Contributed capital from officers and directors           --         1,269,450                     --
1,269,450
Issuance of warrants for financing and
  consulting activities........................           --         1,028,749                     --        1,028,749
Net loss.......................................           --                --            (18,352,037)     (18,352,037)
                                                 -----------        ----------             ----------       ----------

Balance - December 31, 2000....................  207,975,658        36,380,819            (40,030,747)      (3,649,928)
                                                 ===========        ==========             ==========       ==========
</TABLE>



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


                                       F-6

<PAGE>


                      THE MURDOCK GROUP HOLDING CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                          For the Years Ended
                                                                                             December 31 ,
                                                                                       2000                1999
                                                                                ----------------      -----------------
Cash Flows From Operating Activities
<S>                                                                             <C>                   <C>
      Net loss................................................................. $   (18,352,037)      $  (13,174,457)
      Adjustments to reconcile net loss to net cash
       used in operating activities:
           Depreciation and amortization........................................        190,343              229,980
           Expenses paid with common stock, options, and notes payable..........      2,780,974            1,221,024
           Loss from subsidiary (consolidated and equity portion)...............      1,589,945                   --
           Gain on issuance of securities in consolidated subsidiary and
             minority interest in loss of subsidiary............................     (1,961,247)            (453,320)
           Extraordinary loss on settlement of debt.............................        631,966                   --
           Loss from sale, foreclosure, or impairment of assets.................      4,568,919               57,193
           Gain on disposal of equity common stock in settlement of debt........     (2,725,000)                  --
           Beneficial conversion feature recorded on conversion of debt
             to equity..........................................................        281,404                   --
           Indemnification for damages to shareholders..........................        500,971                   --
           Contingency reserve..................................................        430,494                   --
           Reversal of valuation allowance on accounts receivable - related
             party..............................................................       (573,333)                  --
      Change in operating assets and liabilities:
           Contracts receivable.................................................        354,874             (668,021)
           Accounts receivable - related party..................................     (1,114,465)             (24,821)
           Accrued interest receivable..........................................       (112,683)            (120,199)
           Prepaid expenses and other...........................................         95,281              (13,901)
           Deferred offering costs..............................................             --              153,659
           Deposits and other assets............................................        123,403                   --
           Accounts payable.....................................................       (130,252)           2,325,802
           Accrued liabilities..................................................      6,252,821             (639,487)
           Unearned revenue.....................................................             --               50,000
                                                                                ----------------      ---------------
           Net Cash From Operating Activities...................................     (7,167,622)         (11,056,548)
                                                                                ----------------      ---------------

Cash Flows From Investing Activities
      Acquisition of real estate investments....................................        (12,011)            (478,332)
      Purchases of property and equipment.......................................         (2,318)            (199,993)
      Proceeds from sale of real estate.........................................        124,738                   --
      Decrease in deposits and other assets.....................................             --              348,575
      Proceeds from investments.................................................             --               25,400
                                                                                ----------------      ---------------
           Net Cash From Investing Activities...................................        110,409             (304,350)
                                                                                ----------------      ---------------

Cash Flows From Financing Activities
      Proceeds from notes payable...............................................     10,787,651           22,118,138
      Proceeds from related party notes payable.................................      3,147,710            3,250,944
      Principal payments on notes payable.......................................     (4,823,434)         (11,355,881)
      Principal payments on related party notes payable.........................     (1,925,768)          (3,855,224)
      Payments on capital lease obligations.....................................       (129,856)            (217,295)
      Increase in minority interests............................................             --              373,490
      Payments for private placement offering...................................             --              (60,829)
      Proceeds from sale of stock...............................................             --            1,103,187
                                                                                ----------------      ---------------
           Net Cash From Financing Activities...................................      7,056,303           11,356,530
                                                                                ----------------      ---------------

Net Decrease in Cash............................................................           (910)              (4,368)
Cash at Beginning of Year.......................................................          1,907                6,275
                                                                                ----------------      ---------------
Cash at End of Year.............................................................$           997       $        1,907

                                                                                ================      ===============
</TABLE>

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


                                       F-7

<PAGE>


                      THE MURDOCK GROUP HOLDING CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                       For the Years Ended
                                                                                           December 31,
                                                                                     2000              1999
                                                                                --------------     --------------

Supplemental Cash Flow Information
     Cash paid during the year for:
<S>                                                                             <C>                <C>
           Interest.............................................................$    5,958,508     $    3,655,289
                                                                                ==============     ==============


Supplemental Disclosures of Noncash Investing
   and Financing Activities
      Common stock issued for notes payable, and accrued interest...............$   14,648,795     $    3,532,617
      Common stock issued for investments in real estate........................     9,540,462          8,485,178
      Debt issued for investments in real estate................................     2,314,806          2,109,542
      Equipment acquired under capital leases...................................        17,353            106,052
      Conversion of related party receivable into investment in subsidiary......     1,800,000                 --
      Elimination equity in subsidiary..........................................     2,171,302                 --
      Capital leases converted to notes payable.................................       353,333                 --
      Common stock returned for satisfaction of a receivable and sale of real
        estate..................................................................       508,001                 --
      Common stock issued for satisfaction of accounts payable..................       199,059                 --
      Common stock and notes payable issued for other assets....................       225,833                 --
      Related party payables settled through advances...........................       249,143                 --
      Transfer of notes payable-related party to accounts payable...............     1,101,232                 --
      Receivables settled and related party notes incurred due to indemnification
         for damages to shareholders............................................       317,356                 --
      Accrued liabilities converted to notes payable............................     1,483,316                 --
      Accrued interest and notes payable settled through sale of real estate....     5,220,862                 --
      Property and equipment disposals..........................................         1,633                 --
</TABLE>


















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


                                       F-8

<PAGE>


                      THE MURDOCK GROUP HOLDING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

Organization  -  Effective  May 31,  1998,  the  members of a limited  liability
company ("Envision") exchanged their membership interest for common stock in The
Murdock Group Career Satisfaction Corporation  ("Murdock"),  a Utah Corporation.
Envision's  members  conveyed  all of their  membership  interest  to Murdock in
exchange  for  8,205,800  shares of  Murdock  common  stock.  As a result of the
transaction,  Envision's  membership  interests in Envision were  terminated and
Envision was dissolved. As a result of the exchange, a majority of Murdock stock
was owned by Envision  members and they  assumed  the  operating  control of the
combined  entity.  Where the  ownership  and  operating  control in the combined
entity reside in shareholders of the acquired  corporation,  generally  accepted
accounting  principles  require that  Envision be treated as the  purchaser  for
accounting  presentation.  The business combination of Murdock with Envision was
accounted for as a combination  of entities under common  control,  similar to a
pooling of interests.  No acquired  assets or liabilities  were adjusted to fair
value.  Murdock had no operating or material assets or liabilities  prior to May
31, 1998, and the financial  statements are essentially the historical financial
statements of Envision. Envision's equity has been adjusted to reflect the above
accounting treatment,  therefore,  consolidated historical data of Envision from
inception  has been  combined and shown in these  financial  statements.  During
2000,  the Company  changed its name from the Murdock Group Career  Satisfaction
Corporation to the Murdock Group Holding Corporation (the "Company").

Investment  in Career Web Source - In June 1999,  the Company  formed a Delaware
subsidiary  called  myjobsearch.com  ("MJS")  and  transferred  to MJS  all  the
Company's   developmental   materials   for  an   interest   in  the  web   site
myjobsearch.com  in exchange for 2,000,000 shares of common stock of MJS. During
2000, MJS changed its name to CareerWebSource ("CWS").

 On April 17, 2000, the Company  converted  notes  receivable of $1,800,000 from
CWS into 720,000 shares of CWS voting convertible  preferred stock. On that same
date, CWS issued 1,632,800 shares of voting convertible preferred stock for $5.2
million  after  offering  costs.  This  transaction  resulted  in the  Company's
ownership interest in CWS decreasing to 45% of the total voting shares. Prior to
the year ending  December 31, 2000, the percentage of ownership in CWS decreased
to 22%  due to (i) the  transfer  of  1,050,000  shares  of  common  stock  to a
creditor--the  shares  had been  pledged  as  collateral  on a note and (ii) the
transfer of 200,000  common shares in  conjunction  with a conversion of debt to
the Company's  and CWS' common  stock.  As a result of the decrease in ownership
percentage,  the Company is required to account for its  investment in CWS under
the equity method of accounting.  On April 17, 2000, the Company's investment in
CWS was $524,387.  To properly reflect the Company's investment in CWS under the
equity method of accounting on April 17, 2000, the Company  recognized a gain in
the amount of $1,961,247. The Company elected to discontinue applying the equity
method in CWS when its  investment  was  reduced to zero and did not provide for
additional losses.  Accordingly,  from April 17, 2000 through December 31, 2000,
the Company recognized only $524,387 in losses from its equity investment in CWS
which  results in the Company  having a zero  investment  in CWS at December 31,
2000. If CWS subsequently  reports net income, the Company shall resume applying
the equity method only after the  Company's  share of that net income equals the
share of net losses  not  recognized  during  the  period the equity  method was
suspended. Because the Company had no basis in its investment in CWS the Company
recognized  a $2,725,000  gain on its transfer of 1,250,000  shares of CWS stock
mentioned above.

Operations of CWS for the year ended December 31, 2000 were as follows:

        Net contract
        revenue..................................    $       73,509
        5 years
        Gross
        profit...................................    $    (705,416)
        5 years
        Loss from
        operations...............................    $   (4,604,730)
        5 years
        Net loss.................................    $   (4,644,495)



Principles of Consolidation - The accompanying consolidated financial statements
include the  operations of CWS for the period from January 1, 2000 through April
16, 2000 and for the year ended December 31, 1999 on a consolidated basis and by


                                      F-9

<PAGE>

the equity  method of  accounting  for the period  from April 17,  2000  through
December  31,  2000.  Intercompany  accounts and  transactions  were  eliminated
through the date of consolidation.

Nature of  Operations  - The Company is a  job-search  and  employment  training
company.  The Company is focused on providing service to professionals with five
or more years of experience who are dissatisfied  with their career direction or
current  job  situation.  The  Company  offers  job-search  training  workshops,
consultants and coaches, and access to a job-search resource center. The Company
also provides  full-service hiring assistance,  including training,  recruiting,
and outplacement to  corporations.  The Company's main office is located in Salt
Lake City, Utah. The Company closed offices in Seattle, Washington and Portland,
Oregon on June 16, 1999.  Substantially  all of the Company's  revenues are from
the services described above.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Cash Equivalents and Fair Value of Financial Instruments - The Company considers
highly liquid  investments with an original  maturity of three months or less to
be cash.

The  carrying  amounts  reported  in  the  accompanying  consolidated  financial
statements  for  cash,  accounts  receivable,  other  current  assets,  accounts
payable,  accrued expenses and unearned revenue  approximate fair values because
of the immediate or short-term  maturities of these financial  instruments.  The
carrying  amounts of the Company's  contract's  receivables and debt obligations
approximate fair value based on current interest rates available to the Company.

Property  and  Equipment  -  Property  and  equipment  are  stated  at cost  and
depreciated  using the  straight-line  method over their estimated useful lives.
Leasehold  improvements are amortized over the terms of the respective leases or
the  estimated  economic  lives  of  the  assets,   whichever  is  shorter.  The
depreciation and amortization periods are as follows:

           Computer equipment and software.........................3-5 years
           Office equipment........................................   5 years
           Art, furniture and fixtures.............................   7 years
           Leasehold improvements and other........................   5 years

Depreciation expense for the years ended December 31, 2000 and 1999 was $190,343
and $229,980, respectively. Depreciation expense includes amortization of assets
under capital lease.

On retirement or  disposition  of property and  equipment,  the cost and related
accumulated  depreciation and amortization are removed from the accounts and any
resulting  gain or loss is  recognized  in the  statement of  operations.  Major
renewals  and  betterments  are  capitalized,   while  minor   expenditures  for
maintenance and repairs are charged to expense as incurred.

Investments in Real Estate -- Investments in real estate are stated at the lower
of cost or estimated fair value. For financial reporting  purposes,  the Company
evaluates the fair value of each piece of property periodically.  If a potential
impairment is identified,  it is measured by the property's  fair value compared
with its most recent  appraisal.  To the extent that the carrying  value exceeds
the  estimated  fair value,  a provision  is  recorded  for the  decrease in net
realizable  value.  Estimated  fair value is not  necessarily an indication of a
property's  current  value or the amount that will be realized upon the ultimate
disposition  of the  property.  During the year ended  December  31,  2000,  the
Company  reduced the  carrying  value of certain  properties  by $285,000 due to
impairment.  The remaining  properties  held by the Company had  estimated  fair
values in excess of their carrying  values as of December 31, 2000 and 1999. All
properties  are located in Utah. As a result of this  geographic  concentration,
the operations and sales of these  properties  could be adversely  affected by a
recession or general economic downturn in Utah.



                                      F-10
<PAGE>


Income Taxes - The Company recognizes an asset or liability for the deferred tax
consequences  of all  temporary  differences  between the tax bases of assets or
liabilities  and their reported  amounts in the financial  statements  that will
result in  taxable or  deductible  amounts  in future  years  when the  reported
amounts of the assets or  liabilities  are recovered or settled.  These deferred
tax assets or liabilities  are measured using the enacted tax rates that will be
in effect when the differences are expected to reverse.  Deferred tax assets are
reviewed  periodically for recoverability and valuation allowances are provided,
as necessary.

Concentrations  of  Credit  Risk  - The  Company's  financial  instruments  that
potentially  subject  the  Company  to  concentrations  of credit  risk  consist
principally of cash, contracts receivable,  and loans to related parties. In the
normal course of business,  the Company  provides credit terms to its customers.
The Company performs  ongoing credit  evaluations of its customers and maintains
allowances for possible losses, but typically does not require collateral.

Revenue  Recognition - The Company's  career  development  program  provides the
participant an  opportunity to attend two training  classes and the optional use
of other  resources  of the  Company  such as its  career  library,  job  search
software and referral services. Revenue from job training services is recognized
upon the participant's completion of two training classes.

Research and Development  Costs - Research and Development costs are expensed as
incurred.  These costs were  $795,310 and $548,396 for the years ended  December
31, 2000 and 1999,  respectively.  Research  and  development  costs  consist of
expenditures  incurred by CWS for the launch and modification of its website. As
a result of the Company  changing its accounting for CWS from the  consolidation
method to the equity method, these costs will no longer be recorded.

Advertising  - The  Company  expenses  the cost of  advertising  when  incurred.
Advertising expense for the years ending December 31, 2000 and 1999 was $295,059
and $2,245,935.

 Basic and Diluted  Loss Per Share - Basic loss per common  share is computed by
dividing net loss  attributable to common  stockholders by the weighted  average
number of common stock  outstanding.  Dilutive loss per common share is computed
by dividing net loss attributable to common stockholders by the weighted average
number of common stock and the dilutive  potential common share equivalents then
outstanding. Potential common share equivalents consist of common stock issuable
upon the exercise of stock options.

As of December  31, 2000 and 1999,  there were options  outstanding  to purchase
25,626,728   shares  of  common  stock  and  986,000  shares  of  common  stock,
respectively,  that were not  included in the  computation  of diluted  loss per
common share as their effect would have been  anti-dilutive,  thereby decreasing
the loss per common share.

Recent  Accounting  Pronouncements - In June 1998, the FASB issued SFAS No. 133,
"Accounting  for Derivative  Instruments  and Hedging  Activities".  SFAS No.133
establishes  new  accounting  and  reporting  standards  for companies to report
information  about  derivative   instruments,   including   certain   derivative
instruments   embedded  in  other   contracts   (collectively   referred  to  as
derivatives),  and for hedging activities.  This statement,  as extended by SFAS
No. 137, is effective for financial statements issued for all fiscal quarters of
fiscal years  beginning  after June 15,  2000.  The Company does not expect this
statement  to have a material  impact on the  Company's  results of  operations,
financial position or liquidity.

On December  3, 1999,  the  Securities  and  Exchange  Commission  issued  Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." This
bulletin  requires the application of specific  criteria in determination of the
timing of revenue  recognition in financial  statements and is effective for all
fiscal  years  beginning  after  December  16, 1999.  The  Company's  accounting
policies  conform to the  requirements of this bulletin and the adoption of this
bulletin  had no  material  effect  upon the  Company's  results of  operations,
financial position or liquidity.

Reclassification  - Certain  accounts  have been  reclassified  to conform  with
current presentations, which have no effect on net loss.

NOTE 3--RESTATEMENT




                                      F-11
<PAGE>

The accompanying  consolidated  financial statements as of December 31, 1999 and
for the year then ended  have been  restated  to  reclassify  671,787  shares of
common stock valued at $1,007,681 from common stock to redeemable  common stock.
During the year ended  December 31, 2000, it was  discovered  that an additional
guaranteed  value of 671,787  shares of common stock at $1.50 per share had been
issued during 1999 for the acquisition of certain real estate investments.  As a
result of this change,  stockholders'  deficit at December 31, 1999 decreased by
$1,007,681,  net loss for the year ended  December 31, 1999 did not change,  and
weighted average shares  decreased by 184,051,  resulting in a $0.02 decrease in
loss per common share at December 31, 1999.

NOTE 4 - BUSINESS CONDITION

The  accompanying  consolidated  financial  statements  have  been  prepared  in
conformity with generally  accepted  accounting  principles,  which contemplates
continuation  of the  Company as a going  concern.  The  Company  has  sustained
substantial operating losses since inception.  As of December 31, 2000 and 1999,
current  liabilities  exceed  current  assets  by  $13,589,327  and  $16,523,034
respectively,  and total  liabilities  exceed  total  assets by  $2,078,338  and
$6,978,889,  respectively.  These  matters  raise  substantial  doubt  about the
Company's ability to continue as a going concern. The Company requires immediate
proceeds  from  financing  or from the sale of its  assets  to meet its  current
obligations.  Management is seeking private equity and debt capital,  as well as
seeking to find a buyer for its investments in real estate.  No assurances exist
that such  sales  will  occur or that  capital  will be raised  to  satisfy  its
obligations.   These  consolidated  financial  statements  do  not  include  any
adjustments relating to the recoverability and classification of recorded assets
or amounts and  classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

NOTE 5 - CONTRACTS RECEIVABLE, NON-RELATED

Contracts receivable consists of the following at December 31, 2000 and 1999:

                                                        2000              1999
                                              --------------    --------------
      Current
           Contracts receivable...............$    1,188,364    $      847,345
           Write-off allowance................      (475,684)         (135,126)
                                              ---------------   --------------

           Net................................$      712,680    $      712,219
                                              ==============    ==============

      Non-Current
           Contracts receivable...............$      177,067    $      626,609
           Write-off allowance................       (31,872)         (118,765)
                                              --------------    --------------

           Net................................$      145,195    $      507,844
                                              ==============    ==============

      Total
           Contracts receivable...............$    1,365,431    $    1,473,954
           Write-off allowance................      (507,556)         (253,891)
                                              --------------    --------------
           Net................................$      857,875    $    1,220,063
                                              ==============    ==============

Contracts generated from sales of service bear interest at annual rates of 19.9%
and have terms of twenty-four months. The contracts are not collateralized.

At December 31, 2000, the Company had agreements with two financial institutions
for options to  purchase  contracts,  at the sole  discretion  of the  financial
institutions.  The agreements  provide for sales on a full recourse basis with a
percentage  of the  amount  sold  held  back by the  financial  institutions  as
additional  collateral.  At December 31, 2000,  the Company had a receivable  of
$47,547, for amounts held back by the financial institutions.

For the year ended December 31, 2000, the Company sold with recourse $379,849 of
contracts receivable generated from sales.

The Company considers all contracts  receivable past due in excess of 90 days to
be delinquent.  The following  summarizes activity in the allowance for possible
credit losses:


                                      F-12
<PAGE>

                                                         2000           1999
                                                     -----------    -----------

           Beginning balance.........................$   253,891    $   234,643
           Allowance for doubtful accounts...........$   716,754    $   610,700
           Amounts written off.......................$  (463,089)   $  (591,452)
                                                      ----------    -----------
           Ending balance............................$   507,556    $   253,891
                                                      ==========    ===========

NOTE 6 - RELATED PARTY TRANSACTIONS

In  satisfaction  of the defaulted loan further  described in Note 18, KC Holmes
("Mr.  Holmes")  relinquished  2,000,000  shares of the  Company's  common stock
valued at $0.10 per share,  203,885  shares of CWS common  stock valued at $2.50
per share. RDF LLC, an entity related to Mr. Holmes, also contributed $1,500,000
of other assets to the Company. Per an indemnification agreement, Mr. Holmes was
reissued  2,000,000  shares of the Company's  common stock and 203,885 shares of
CWS' common stock. In addition,  Mr. Holmes was given a damage award of $552,428
or 25% of the current value of assets relinquished.

In  satisfaction  of the defaulted  loan further  described in Note 18,  Heather
Stone (Ms. Stone)  relinquished  3,038,842  shares of the Company's common stock
valued at $0.10 per share,  and 303,885  shares of CWS' common  stock  valued at
$2.50  per  share.  Per an  indemnification  agreement,  Ms.  Stone  was  issued
3,038,842 shares of the Company's common stock and 303,885 shares of CWS' common
stock. In addition, Ms. Stone was given a damage award of $265,899 or 25% of the
current value of assets relinquished.

At December 31, 1999 Mr. Holmes had a receivable  with the Company in the amount
of $441,086. The Company provided an allowance for the full receivable amount at
December 31, 1999.  During 2000, Mr. Holmes  satisfied the receivable and a note
payable was recorded with the Company as a result of the  (i)$1,500,000  RDF LLC
assets  seized,  (ii) the  $552,428  damage  award  and (iii)  $139,503  in loan
assumptions and other advances to the Company.  In partial  consideration of the
note payable,  Mr.  Holmes (i) had RDF LLC convert  $1,069,700  into  15,314,285
shares of common  stock and (ii) offset  $71,427 in advances  received  from the
company. At December 31, 2000, the Company owes Mr. Holmes $609,718. The Company
decreased bad debt expense during 2000 for the repayment of the $441,086  listed
above that was previously reserved against in 1999.

At December 31, 1999, Ms. Stone had a receivable  with the Company in the amount
of $132,247. The Company provided an allowance for the full receivable amount at
December 31, 1999.  During 2000,  Ms. Stone  satisfied the receivable and a note
payable was recorded with the Company as a result of the $265,899  damage award.
In partial  consideration  of the note  payable,  Ms. Stone  offset  $110,257 in
advances  received from the Company.  At December 31, 2000, the Company owes Ms.
Stone  $23,395.  The  Company  decreased  bad debt  expense  during 2000 for the
repayment of the $132,247 previously valued against.

Based on mutual board approval,  CWS, a related party company,  agreed to assume
$317,356 of the above mentioned  damage awards to Mr. Holmes and Ms. Stone.  The
Company  recorded a receivable from CWS for this amount and decreased the amount
by $91,189 in  advances  received  from CWS,  leaving a balance of  $226,167  at
December 31, 2000.

See Notes 7, 10, and 14 for other related party transactions.




NOTE 7 - DUE FROM RELATED PARTIES

Amounts due from related parties consists of the following at December 31,

<TABLE>
<CAPTION>
                                                                                           2000             1999
                                                                                  -------------    -------------
         Loan to CWS, non-interest bearing,
<S>                                                                               <C>              <C>
         Unsecured, due on demand.................................................$     226,167    $          --




                                      F-13
<PAGE>

         Loans to officers and directors, interest at 8%,
         Unsecured, see Note 6....................................................           --          573,333
         Less: allowance for uncollectibility due to personal
         guarantees on other Company debts, see Note 6............................           --         (573,333)

         Loan to an affiliated company through a revolving
         line of credit, interest at 10%, settled during 2000.....................           --          328,147

         Loan to employee, non-interest bearing,
         Unsecured, settled during 2000...........................................           --           33,000
                                                                                  -------------    -------------

         Total....................................................................$     226,167    $     361,147
                                                                                  =============    =============
</TABLE>

NOTE 8 - INVESTMENTS IN REAL ESTATE

On June 30,  2000,  the Company  acquired a total of 750.68 acres of raw land in
Eagle  Mountain,  Utah in  exchange  for  6,070,308  shares of common  stock and
$1,612,684  in cash.  The  common  stock was valued at  $9,105,462  or $1.50 per
share.  Under the terms of the  contract  the seller had a  guaranteed  purchase
price. As a result of the guarantee, the Company issued the seller an additional
17,717,742  shares of common  stock due to the decrease in the  Company's  stock
price.  No  additional  value was  recorded  as a result of this  issuance.  The
Company recorded the investment at a cost of $10,744,560, net of closing costs.

On December 1, 2000, the Company sold a portion of this land for $2,692,500. The
carrying  value of the land sold was  $4,835,052.  As a result of this sale, the
Company  recorded a relief of notes  payable and accrued  interest of $2,692,500
and a loss on the sale of an investment of $2,142,552.  As of December 31, 2000,
the Company had an investment of $5,909,508 related to this land recorded on the
accompanying balance sheet.

Subsequent to year-end, the Company sold their remaining investment in this land
for  $2,463,691.  As a result of this sale the Company  relieved  $2,463,691  of
notes payable and recorded a loss of $3,445,817.  Additionally,  under the terms
of the subsequent agreement the Company issued 20,000,000 shares of common stock
valued at $750,000 to the note holders as additional consideration.

On June 30, 2000,  the Company  entered into an agreement  with a third party to
purchase .89 acres of land in Francis,  Utah. In connection  with this purchase,
the Company paid cash of $15,000 and incurred  additional debt of $136,989.  The
Company recorded the investment at a cost of $149,000,  net of closing costs. In
December 2000, the Company  transferred  this land in relief of notes payable of
$136,931.  In connection  with this transfer the Company  recorded a loss on the
sale of the investment of $12,069.

On December 4, 2000, the Company issued  4,350,000  shares of common stock for a
building  located in Sugarhouse,  Utah.  The shares were valued at $435,000.  In
addition, the Company incurred additional debt of $472,000. The Company recorded
the property at a cost of $870,000,  net of closing costs. At December 31, 2000,
the Company  evaluated  the carrying  value of this  property  based on a recent
appraisal  of the  building  and wrote down the  investment  by  $45,000  due to
impairment. Subsequent to year-end, the Company sold this building for $597,000.
As a result of this sale, the Company received cash proceeds of $43,234,  net of
closing  costs,  relieved  $547,000  of notes  payable  and  recorded  a loss of
$228,000.


During 2000, the Company purchased  additional acreage relating to an investment
made in 1999.  The purchase  increased the carrying  value of the  investment by
$103,719 to $655,869. During 2000, the Company deeded the property to the lender
in  satisfaction of $69,346 in notes payable.  Additionally  the lender paid the
Company  $42,519 under the terms of the  transfer.  As a result of this transfer
the Company recorded a loss of $544,004.

In 1999, the Company  acquired  certain parcels of real estate  primarily within
the rural areas of the State of Utah,  which it intended to develop or resell at
a future date. The Company acquired these properties through payments in various
combinations of stock  issuances,  new debt issuances or assumptions,  and cash.
The stock was valued at $1.50 per share on all of these investment acquisitions.
The Company  recorded the  investments at a cost of $11,067,850  during the year
ended  December  31, 1999.  During the year ended  December 31, 2000 the Company
sold several of these  properties at a total  carrying  value of $4,285,700  for
$2,701,304.  The sales price  consisted of cash  receipts of $82,219,  relief of



                                      F-14
<PAGE>

debt and accrued  interest of  $2,322,085  and  220,000  shares of common  stock
returned to the Company  originally  recorded at a fair value of $297,000.  As a
result of this sale, the Company  recorded a loss on sale of the  investments of
$1,584,396.  During 2000, the Company  recorded an impairment of $240,000 on one
property due to the fair value being less than the carrying  value.  At December
31,  2000,  the  Company  had  $5,990,000  recorded  in  investments  related to
investments purchased in 1999.

NOTE 9 - SHORT-TERM NOTES PAYABLE

<TABLE>
<CAPTION>
Short-term notes payable consist of the following:                                         2000             1999
                                                                                  -------------    -------------

         Short-term  notes  payable  to  various  individuals,   family  trusts,
          partnerships or limited liability  companies,  interest rates from 20%
          to 120%, due at various dates during
<S>                                                                               <C>              <C>
          2001, unsecured.........................................................$   2,769,350    $   2,501,796

         Short-term  notes  payable  to  various  individuals,   family  trusts,
          partnerships or limited liability  companies,  interest rates from 15%
          to 48%, due at various dates during 2001,
          secured by real estate..................................................    4,395,376        8,053,780

         Short-term notes payable to trusts, interest rates from 24% to 36%, due
          at various dates during 2001, partially collateralized
          by contracts receivable.................................................    1,373,000        1,966,324
                                                                                  -------------    -------------

                                                                                  $   8,537,726    $  12,521,900
                                                                                  =============    =============
</TABLE>

NOTE 10 - NOTES PAYABLE - RELATED PARTIES

Short-Term
The Company has  short-term  notes  payable  with  various  employees  and their
immediate family members.  The notes bear interest between 12% and 36% per annum
and are  unsecured.  The  balances of these notes were  $891,295 and $294,696 at
December 31, 2000 and 1999, respectively.

In  January  1998,  the  Company  sold 375 units to related  parties.  Each unit
consisted of a $1,000  promissory  note and 400 shares of the Company's  Class A
common stock.  The notes  initially  carried an interest rate of 16% and matured
one year from the date of issuance.  The Company recorded debt issuance costs at
$.01 per share or $1,500 upon the issuance of the 150,000  shares of stock.  The
note holders had an option to extend the maturity date for an  additional  year,
whereupon,  if  exercised,  the note would bear  interest  at 18% for the entire
two-year period. At December 31, 2000 and 1999, the balances of these notes were
$69,500 and $123,500, respectively.

Long-Term
At December 31, 1999, the Company had a convertible bond issued to a trust, with
interest at 30%, with a balance of $15,000. The debt was paid off during 2000.


NOTE 11 - NOTES PAYABLE

<TABLE>
<CAPTION>
Notes payable consist of the following:                                                    2000             1999
                                                                                  -------------    -------------

         Notes payable to individuals, interest at 24%,
<S>                                                                               <C>              <C>
          due May 2001, partially secured by contracts receivable ................$     500,000    $     500,000

         Notes payable to a company, interest rates from
          20%-25%, due at various times from December
          2001 through February 2007, unsecured...................................      957,776        1,446,191



                                      F-15
<PAGE>


         Note payable to an individual, interest at 29%,
          due June 2005, secured by real estate...................................    1,000,000               --

         Notes payable to various  family trusts and  companies,  interest rates
          from 18% to 48%, due at various times between April 1999 and
          November 2001, unsecured................................................      698,400          908,855

         Notes payable to a company, interest at 14 %,
          due November 2001, secured by real estate...............................           --        1,012,000
                                                                                  -------------    -------------

                Total notes payable...............................................    3,156,176        3,867,046

                Less current portion..............................................   (1,296,788)        (951,963)
                                                                                  -------------    -------------

                Notes payable-- long-term.........................................$   1,859,388    $   2,915,083
                                                                                  =============    =============
</TABLE>

The following table represents principal maturities of notes payable for each of
the next five years ending December 31,:

            Year Ending December 31,
                          2001.........................$   1,296,788
                          2002                               113,127
                          2003                               130,074
                          2004                               149,560
                          2005                               171,965
                          Thereafter                       1,294,662

NOTE 12 - CAPITAL LEASES

The  Company  leases  computer  software,  hardware,  and office  furniture  and
fixtures under capital leases.  The assets and liabilities  under capital leases
are recorded at the lower of the present value of the minimum lease  payments or
the fair value of the  asset.  The assets  are  amortized  over their  estimated
productive  lives (three to seven years).  Amortization  of assets under capital
leases is included in depreciation expense for December 31, 2000 and 1999.

Following is a summary of property held under capital leases at December 31,

<TABLE>
<CAPTION>
                                                                                           2000             1999
                                                                                  -------------    -------------
<S>                                                                               <C>              <C>
                Property and equipment, at cost...................................$     323,609    $   1,136,305
                Less: Accumulated amortization....................................     (141,219)        (167,098)
                                                                                  -------------    -------------

                                                                                  $     182,390    $     969,207
                                                                                  =============    =============
</TABLE>

Minimum  future lease  payments  under capital  leases for each of the next five
years and in the aggregate at December 31, 2000 are:

              Year Ending December 31,
                        2001...............................$     118,070
                        2002                                      57,207
                        2003                                       5,318
                        2004                                       5,318
                        2005                                         443
                                                           -------------

      Total minimum lease payments.........................      186,356
      Less: Executory costs                                       (1,465)
                                                           -------------
      Net minimum lease payments                                 184,891
      Less: Amount representing interest                         (46,355)
                                                           -------------
      Present value of net minimum lease payments                138,536



                                      F-16
<PAGE>

      Less: Current portion                                      (89,794)
                                                           -------------

      Long-term portion   .................................$      48,742
                                                           =============

NOTE 13 - REDEEMABLE STOCK

The Company's president has personally guaranteed the value of 399,500 shares of
common stock issued to an  individual  at $599,250 or $1.50 per share as partial
consideration  given in connection  with the  acquisition of certain real estate
investments.  This  guarantee  was  originally  exercisable  by the  shareholder
between  May 22, 2001 and June 22,  2001.  Accordingly,  these  shares of common
stock  were  considered  to be  redeemable  under  this  agreement  and had been
presented  under the caption of "Redeemable  Stock" in the financial  statements
for year 1999.  During 2000, the Company  accelerated  the valuation  period and
distributed  11,985,000  shares of common stock to precipitate  the sale of real
estate which  fulfilled the valuation  guarantee.  These shares have been issued
with no  additional  value  given and all shares have been  presented  under the
caption of "Common Stock".

In 1999, as part of the  consideration  given to a lender to acquire  financing,
the Company  issued  375,940 of common stock.  The Company  agreed to repurchase
these  shares of common  stock at $1.50 per share by June 1, 2000 if the  public
market for these shares had not attained that level. A verbal agreement  between
the parties  extended  this  valuation  guarantee  with no specific  date. As of
December  31,  2000 no  additional  shares of  common  stock  have been  issued.
Accordingly,  these shares of common stock are considered to be redeemable under
this agreement and have been presented  under the caption of "Redeemable  Stock"
in the financial statements for the years ending December 31, 2000 and 1999.

In 1999,  the Company  guaranteed  the value of 714,667  shares of common  stock
issued  to  individuals  for  $1,007,681  or  $1.50  per  share  as  part of the
consideration  given in connection  with the  acquisition of certain real estate
investments.  The Company  agreed to repurchase  these shares of common stock at
$1.50 per share at any time  subsequent  to January  1, 2001 at the  individuals
demand.  Accordingly,  these  shares  of  common  stock  are  considered  to  be
redeemable  under this  agreement and have been  presented  under the caption of
"Redeemable Stock" in the financial  statements for the years ended December 31,
2000 and 1999.  Subsequent to year end the Company issued  19,481,823  shares of
common stock to these individuals in connection with this guarantee.

NOTE 14 - COMMON STOCK TRANSACTIONS

Amendment to Articles of Incorporation

On November 10, 2000, with stockholder approval,  the Company filed an amendment
and restatement of the Company's  articles of  incorporation  which: (i) changed
the Company's  name to "The Murdock Group Holding  Corporation";  (ii) increased
the Company's  authorized capital stock to 300,000,000 shares;  (iii) authorized
the issuance up to 25,000,000  shares of preferred  stock;  (iv)  eliminated the
Class B Non-Voting  Shares,  none of which had been issued,  and (v) adopted the
"2000 Murdock Group Stock Option Plan".

On March 29, 2001, with stockholder approval, the Company filed an amendment and
restatement of the Company's  articles of incorporation  which (i) increased the
number of authorized  common shares from  300,000,000  to  600,000,000  and (ii)
increased  the number of  available  options and  warrants  from  25,000,000  to
75,000,000.

Common Stock issued for Services, Loan Origination Fees and Accrued Liabilities

During the year ended December 31, 2000, the Company issued  3,014,911 shares of
common stock for services at prices ranging from $0.05 to $1.50 per share. These
shares of common stock were valued at $619,255 based on the fair market value of
the shares on the dates of issuance.

During the year ended  December 31, 2000,  the Company  issued  88,333 shares of
common stock for loan  origination  fees at prices  ranging from $0.75 to $1.50.
The shares of common stock were valued at $85,833 based on the fair market value
of the shares on the dates of issuance  and will be  amortized  over the life of
the debt.

During the year ended December 31, 2000, the Company issued  4,093,170 shares of
common  stock at  prices  ranging  from  $0.04 to $0.05  per  share in relief of



                                       F-17
<PAGE>

accrued liabilities of $199,059. The shares of common stock were valued based on
the fair market value of the shares on the dates of issuance.

Common Stock issued for Debt

During the year ended December 31, 2000, the Company issued  130,838,686  shares
of common stock at prices ranging from $0.03 to $0.96 per share in  satisfaction
of notes  payable of  $8,663,845  and accrued  interest of  $1,190,842.  In some
cases,  the Company  issued shares of common stock at a discounted  price.  As a
result of this discount, the Company recorded a beneficial conversion feature on
these shares.  The value of the beneficial  conversion feature was determined as
the difference  between the fair value of the Company's common stock on the date
of conversion and the conversion  price. The value of the beneficial  conversion
feature was  $281,404  and was  recognized  as  additional  paid-in  capital and
interest expense.

During the year ended December 31, 1999, the Company issued  3,060,539 shares of
common  stock at  prices  ranging  from  $1.00 to $1.25  for the  settlement  of
$3,532,617 in debt.

Common Stock issued for Interest and Enticements to Settle Debt

During the year ended December 31, 2000, the Company issued 14,486,158 shares of
common  stock at prices  ranging  from $0.03 to $1.19 per share for interest and
enticements to settle notes  payable.  The shares of common stock were valued at
$875,941  based on the fair market  value of the shares on the dates of issuance
and charged to interest  expense.  The Company recorded a beneficial  conversion
feature of $5,750 related to the shares based on the difference between the fair
value of the Company's common stock and the issuance price.

During the year ended December 31, 1999, the Company issued  5,678,789 shares of
common  stock at prices  ranging from $1.35 to $1.50 per share for a total value
of  $8,485,178.  The  shares  of  common  stock  were  issued  as  part  of  the
consideration paid to acquire investments in real estate.

Common Stock Issued for Investments in Real Estate

During the year ended December 31, 2000, the Company issued 28,138,050 shares of
common stock at prices ranging from $0.10 to $1.50 per share for  investments in
real estate.  The shares of common stock were valued at $9,540,462  based on the
fair  market  value of the  shares  on the  dates of  issuance.  For  additional
discussion of these transactions see Note 8.

During the year ended  December 31, 1999,  the Company  issued 584,722 shares of
common  stock at prices  ranging  from  $1.00 to $1.50  per  share for  services
related to the acquisition of real estate and financing  needs.  The total value
of shares of common stock issued was $610,929.

Common Stock Received in Settlement of Notes Receivable

During the year ended  December 31, 2000, a related  corporation  of the Company
through common  management  returned  2,285,000  shares of the Company's  common
stock to the Company in  settlement  of a note  receivable  of  $212,668.  These
shares of common  stock were  valued at  $178,001  or $0.08 per  share,  and the
remaining  balance of the  receivable  of $34,667  was  written  off to interest
expense.  Under a separate agreement,  the related  corporation  returned 66,000
shares of the Company's  common stock valued at $0.50 per share in settlement of
a $33,000 receivable.

Other Common Stock Transactions

During the year ended December 31, 1999, the Company issued  1,103,187 shares of
common stock for cash proceeds of $1,103,187 or $1.00 per share.

During the year ended  December 31, 1999,  the Company  issued 113,600 shares of
common stock for $113,600 in employee bonuses at $1.00 per share.

NOTE 15 - STOCK OPTIONS




                                       F-18
<PAGE>

Non-Qualified  Plan:  During July 1999,  the Company  adopted The Murdock  Group
Holding  Corporation  1999 Stock  Option and  Incentive  Plan for the benefit of
officers  and other key  employees.  The Board of Directors  approved  1,500,000
shares  of  authorized  but  unissued  shares of common  stock be  reserved  for
issuance  under the plan.  A total of 812,000  options to purchase  common stock
were issued under the 1999 plan as discussed below.

Qualified  Plan:  During 2000, the Company  adopted the 2000 Murdock Group Stock
Option  Plan.  The total  number of shares of the  Company's  stock  that may be
awarded under the plan is 25,000,000  shares,  which was increased to 75,000,000
through a proxy statement filed on March 29, 2001. A total of 6,556,331  options
to purchase common shares were issued under the 2000 plan as discussed below.

Compensation  relating to options  granted to  non-employees  is measured by the
fair value of the  options,  computed  using the  Black-Scholes  option  pricing
model.  Stock-based compensation to employees is measured by the intrinsic value
method  computed  as the  difference  between  the fair value of the  underlying
common  stock and the exercise  price of the stock  option on the date  granted.
Estimates of compensation  are recorded before the measurement date based on the
fair value of the underlying common stock and the exercise price of the stock on
intervening dates.

When options are  forfeited,  the  compensation  expense  previously  recognized
relating  to the  unvested  options is  reversed  in the period the  options are
forfeited.

Non-Employee Grants:

During 2000, the Company granted  19,011,023 options to purchase common stock at
prices ranging from $0.03 to $1.50 per share to various  individuals,  companies
and trusts.  All options vested upon date of grant.  A total of 330,534  options
were forfeited during 2000.  Settlement charges and interest expense of $179,884
and $848,865,  respectively,  were  recognized  based upon the fair value of the
option on the date of grant at prices ranging from $0.02 to $0.62 per option.

The fair value of each option  granted  during the year ended  December 31, 2000
was estimated on the date of grant using the Black-Scholes  option-pricing model
with the following weighted-average  assumptions:  underlying common stock value
of $0.12,  expected  life of the options of 1.97 years,  expected  volatility of
68.49% and risk-free interest rate of 5.92%.

During  1999,  the Company  granted  174,000  options to  consultants  at prices
ranging  from $1.00 to $1.50.  150,000  options  vested  immediately  and 24,000
options vested through July 2003, of which 22,000 options were forfeited  during
2000. The fair value of the stock on the dates of grant was $1.00 per share.  No
expense was recognized for options granted during 1999.

A summary  of the  status of the  Company's  non-employee  stock  options  as of
December 31, 2000 and 1999 and changes  during the years then ended is presented
below:

<TABLE>
<CAPTION>
                                                                                               Weighted
                                                                                                Average
                            Options                                      Exercise Price      Exercise Price
------------------------------------------------------------------      ---------------     ---------------
<S>                                                     <C>             <C>                 <C>
         Outstanding at December 31, 1998............            -      $             -     $           -
                  Granted............................      174,000          1.00 - 1.50                1.45
                                                        ----------
         Outstanding at December 31, 1999............      174,000          1.00 - 1.50                1.45
                                                        ----------
                  Granted ...........................   19,011,023          0.03 - 1.50                0.11
                  Forfeited..........................     (352,534)         1.00 - 1.50                1.47
                                                        ----------
         Outstanding at December 31, 2000............   18,832,489          0.03 - 1.50                0.10
                                                        ==========

         Options exercisable at December 31, 2000....   18,832,489                                     0.10
                                                        ==========
</TABLE>

The following  tables summarize  information  about  non-employee  stock options
outstanding at December 31, 2000 and 1999:



                                       F-19
<PAGE>


         December 31, 2000

<TABLE>
<CAPTION>
                                                  Weighted Average      Weighted                        Weighted
              Range of               Number          Remaining           Average          Number         Average
           Exercise Price         Outstanding     Contractual Life    Exercise Price   Exercisable    Exercise Price
          ----------------------------------------------------------------------------------------------------------

<S>         <C>                   <C>                <C>                <C>            <C>              <C>
            $ 0.03 - 0.06         17,980,489         6.86 years         $     0.03     17,980,489       $   0.03
              1.00 - 1.50            852,000         6.26 years               1.50        852,000           1.50
                                  ------------                                      ---------------
                                  18,832,489                                           18,832,489
                                  ============                                      ===============
</TABLE>

         December 31, 1999
<TABLE>
<CAPTION>
                                                       Weighted          Weighted                        Weighted
                                                        Average           Average                        Average
              Range of                 Number          Remaining         Exercise         Number         Exercise
           Exercise Price           Outstanding     Contractual Life      Price         Exercisable       Price
          ---------------------------------------------------------------------------------------------------------

<S>         <C>                         <C>           <C>               <C>              <C>           <C>
            $ 1.00 - 1.50               174,000       6.89 years        $     1.45       151,500       $     1.50
</TABLE>

Employee Grants:

During the year ended December 31, 2000, the Company granted options to purchase
6,556,331  shares  of common  stock to  various  employees.  These  options  had
exercise  prices  ranging from $0.05 to $1.50 per share,  which was equal to the
fair value of the Company's common stock on the date of issuance.  These options
vest  through  July 2004.  A total of 481,092 of these  options  were  forfeited
during 2000.

During the year ended December 31, 1999, the Company granted options to purchase
812,000 shares of common stock to various employees.  These options had exercise
prices  ranging  from $1.00 to $1.50.  A total of 93,000 of these  options  were
forfeited during 2000.



                                       F-20
<PAGE>




A summary of the status of the Company's  employee  stock options as of December
31, 2000 and 1999 and changes during the years then ended are presented below:
<TABLE>
<CAPTION>
                                                                                             Weighted
                                                                                             Average
                           Options                                       Exercise Price      Exercise Price
------------------------------------------------------------------       --------------      --------------
<S>                                                      <C>            <C>                 <C>
         Outstanding at December 31, 1998............           -       $            -      $            -
                  Granted............................      812,000          1.00 - 1.50                1.01
                                                     -------------
         Outstanding at December 31, 1999............      812,000          1.00 - 1.50                1.01
                                                     -------------
                  Granted ...........................    6,556,331          0.05 - 1.50                0.32
                  Forfeited..........................    (574,092)          0.05 - 1.50                0.81
                                                     -------------
                  Outstanding at December 31, 2000...    6,794,239          0.05 - 1.50                0.36
                                                     =============
         Options exercisable at December 31, 2000....      477,680                                     1.21
                                                     =============
</TABLE>

The  weighted-average  fair value of  options  granted  during  the years  ended
December   31,  2000  and  1999  was  $0.16  per  share  and  $0.34  per  share,
respectively.

The  following  tables  summarize   information  about  employee  stock  options
outstanding at December 31, 2000 and 1999:

         December 31, 2000

<TABLE>
<CAPTION>
                                                 Weighted Average       Weighted                        Weighted
           Range of Exercise        Number           Remaining          Average          Number         Average
                 Price           Outstanding     Contractual Life    Exercise Price   Exercisable    Exercise Price
          --------------------- --------------- -------------------- --------------- --------------- ---------------

<S>         <C>                     <C>             <C>                <C>                             <C>
            $  0.05                 5,092,002       6.85 years         $     0.05                -     $        -
               1.00                   710,438       5.63 years               1.00          275,438           1.00
               1.50                   991,799       6.09 years               1.50          202,242           1.50
                                ---------------                                      ---------------
                                    6,794,239                                              477,680
                                ===============                                      ===============
</TABLE>

         December 31, 1999
<TABLE>
<CAPTION>
                                                      Weighted         Weighted                         Weighted
                                                      Average           Average                         Average
                Range of            Number           Remaining         Exercise          Number         Exercise
              Exercise Price      Outstanding     Contractual Life       Price         Exercisable        Price
          --------------------- --------------- -------------------- --------------- --------------- ---------------

<S>       <C>                         <C>           <C>                <C>                 <C>         <C>
          $ 1.00 - 1.50               812,000       6.63 years         $     1.01          105,750     $     1.05
</TABLE>


The fair  value of the stock  options  was  estimated  at the grant  date by the
Company  using  the   Black-Scholes   option   pricing   model.   The  following
weighted-average assumptions were used in the Black-Scholes option pricing model
for the years ended December 31, 2000 and 1999, respectively:  underlying common
stock  value of $0.32 and $1.00,  weighted-average  risk-free  interest  rate of
5.77% and 6.04%, a weighted-average  dividend yield of 0 percent,  volatility of
68.29% and 0.00%, and a weighted-average  expected lives of 2.61 and 6.63 years,
respectively.  Had  compensation  cost  for the  Company's  stock  options  been
determined  based on their fair value at the grant dates,  net loss and loss per
share would have been  increased  to the pro forma  amounts  that follow for the
years ended December 31, 2000 and 1999:
<TABLE>
<CAPTION>
                                                                                           2000              1999
                                                                                  -------------    --------------

<S>                                                                               <C>              <C>
         Net loss as reported.....................................................$(18,352,037)    $ (13,174,457)
         Net loss pro forma.......................................................$(18,908,581)    $ (13,285,727)
         Basic and diluted loss per common share as reported......................$      (0.40)    $       (1.07)
         Basic and diluted loss per common share pro forma........................$      (0.41)    $       (1.08)
</TABLE>

NOTE 16 - INCOME TAXES



                                      F-21
<PAGE>


There was no benefit or provision for income taxes for the years ended  December
31, 2000 or 1999.  The components of the net deferred tax asset and liability at
December 31, 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                                                                           2000             1999
                                                                                  -------------    -------------
                Deferred Tax Asset
<S>                                                                               <C>              <C>
                      Net operating loss carryforward.............................$  11,483,790    $   5,770,939
                      Accrual to cash adjustments.................................      486,035          203,350
                      Tax basis goodwill..........................................    1,019,653        1,101,772
                      Impairment of investments...................................      106,305               --
                      Contingency accrual.........................................      160,574               --
                      Allowance for doubtful accounts.............................      363,347               --
                      Valuation allowance.........................................  (13,619,704)      (7,076,061)
                                                                                  -------------    -------------

                Net Deferred Tax Asset............................................$         --     $         --
                                                                                  =============    =============
</TABLE>

The  recognition of deferred tax assets is based upon  judgements  regarding the
potential  realization  of such assets in the future.  Management  believes that
realization  is not assured;  therefore an allowance  has been  provided for the
entire  deferred tax asset.  The valuation  allowance  increased  $6,543,643 and
$4,101,157 during the years ended December 31, 2000 and 1999.

The Company has net operating loss  carryforwards  in the amount of $30,854,216,
which will expire, if unused, beginning in 2013 through 2020.

The  following  is a  reconciliation  of the income tax benefit  computed at the
federal  statutory  tax rate with the  provision  for income taxes for the years
ended December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                                           2000             1999
                                                                                  -------------    -------------
                Rate Reconciliation
<S>                                                                               <C>              <C>
                      Income Tax benefit at statutory rate (34%)..................$  (6,239,693)   $  (4,479,315)
                      Change in valuation allowance...............................    6,543,643        4,101,157
                      State tax, net of federal benefit...........................     (605,616)        (434,757)
                      Non deductible expenses.....................................      301,666          812,915
                                                                                  -------------    -------------

                Provision for Income Taxes........................................$         --     $          --
                                                                                  =============    =============
</TABLE>

NOTE 17 - NON-CANCELLABLE OPERATING LEASES

The Company leases office facilities and office equipment under  non-cancellable
operating leases.

Future  minimum lease  payments  under  non-cancelable  operating  leases are as
follows:

            Year Ending December 31,                               Amount
                                                            -------------
                      2001..................................$     341,966
                      2002                                        348,613
                      2003                                        357,618
                      2004                                        370,510
                      2005                                        383,402
                                                            -------------

                                                            $   1,802,109

Facility  rental  expense  for the  periods  ending  December  31, 2000 and 1999
totaled approximately $475,699 and $608,049 respectively.

Note 18 - EXTRAORDINARY ITEMS

In September  2000, the Company  defaulted on loans with a principal  balance of
$3,464,973 and accrued interest of $1,801,396 of accrued interest to a financing
company. In connection with the default,  the Company transferred certain assets



                                      F-22
<PAGE>

to the financing company. In addition,  certain officers of the Company,  acting
as guarantors,  transferred personal assets for payment of the notes and accrued
interest.

In  connection  with the default,  certain  officers of the Company  transferred
5,038,842 shares of Company common stock valued at $0.10 per share and 1,050,000
shares of CWS  common  stock  valued  at $2.50 per  share.  The  Company  issued
5,038,842  shares of its common stock to the officers,  as  replacement  for the
officer's shares of common stock transferred.  In addition,  an officer advanced
$1,500,000 of personal assets to the financing company.  The advance satisfied a
receivable  due from the  officer  and the  remaining  amount was  recorded as a
related party payable.  Officers of the Company also transferred  507,770 shares
of their  personal CWS common stock valued at  $1,269,425  or $2.50 per share to
repay the  remaining  balance  owing,  which has been  recorded  as  contributed
capital.

These transactions  resulted in the recognition of $2,625,000 of income from the
sale of CWS common stock,  as the Company's  cost of the investment was zero. An
extraordinary  loss of $631,966 was also  recorded,  as more  consideration  was
given in repayment than the total amount owing.

NOTE 19 - Commitments and Contingencies

Payroll Tax Contingency
During the forth quarter 2000,  the Company  severed its  relationship  with the
employee leasing company with whom it processed payroll. Subsequent to year end,
the Company retained another employee leasing company.  However, in the interim,
the Company did not pay payroll  taxes and has unpaid  federal and state payroll
tax  liabilities,  which have been  reflected in the financial  statements.  The
Company has  notified  the  Internal  Revenue  Service  regarding  this  matter,
however, no penalties and interest have yet been assessed.  The Company recorded
a contingent liability of $30,494 for potential tax penalties.

Legal Matters
As of  December  31,  2000,  the  Company  was  party to  litigation,  primarily
involving  defaults under  long-term debt financing and trade payable  accounts.
Subsequent  to year-end,  the Company  settled most of these actions by entering
into payment  arrangements,  granting or releasing  interest in real estate,  or
issuing shares of common stock.  These settlement amounts were included in notes
payable and accrued liabilities as of December 31, 2000.

The  Company  is party  to an  outstanding  lawsuit  filed  by  Capital  General
Corporation  (CGC).  CGC contends a deficiency  on a loan balance in  connection
with a foreclosure of two parcels of real estate.  CGC is seeking  approximately
$677,000 for the deficiency,  punitive  damages,  and attorney fees. The Company
has responded to the lawsuit and denies being  indebted to CGC and contends that
the principal owed was satisfied by the value of the two parcels of real estate.
The Company recorded a $400,000 contingent liability regarding this issue.

The Company is the subject of other legal matters, which it considers incidental
to its business  activities.  It is the opinion of management,  after discussion
with legal  counsel,  that the ultimate  disposition of these legal matters will
not have a material impact on the consolidated financial condition or results of
operations of the Company.

NOTE 20 - SUBSEQUENT EVENTS (UNAUDITED)

Subsequent  to  year-end,  the Company  increased  its short term  borrowing  by
$116,000.  These  proceeds  were used to fund  operations  of the Company and to
settle debt and restructuring costs.

The Company  converted  debt of $937,710 and accrued  interest of $164,752  into
43,181,060  shares of common  stock.  In some cases the Company gave a discount.
The value of this beneficial  conversion feature was $211,748 and was recognized
as interest expense.  In connection with these  conversions,  the Company issued
warrants to purchase 3,578,236 shares of common stock. The warrants had exercise
prices  ranging  from  $0.03 to $0.05  and were  valued  at  $70,761  using  the
Black-Scholes  option  pricing  model,  using  the  following   weighted-average
assumptions: underlying common stock value $0.04, expected life of the option of
2.0 years, expected volatility of 68.8% and risk-free interest rate of 4.75%.

The  Company  issued  200,000  shares of common  stock for  services,  valued at
$10,000.



                                       F-23
<PAGE>


The Company placed  3,000,000  shares of common stock in escrow with an attorney
to be sold.  Proceeds of the stock sales from the escrow account are placed in a
separate  escrow  account  to be  used  at  the  Company's  and  the  attorney's
discretion.  As of March 27, 2001,  none of the shares of common stock in escrow
had been sold.

The Company settled  $4,457,358 of debt through the selling or transfer of three
parcels of real estate held by the Company. The real estate had a carrying value
of $9,234,508.  In connection with these sales,  the Company  recorded a loss of
$4,727,151.  Additionally,  the Company issued 20,000,000 shares of common stock
as an  enticement to enter into the  agreement.  The shares of common stock were
valued at $750,000.

The Company bought  100,000 shares of preferred  stock and 28,667 shares of CWS'
common stock for 8,002,857  shares of the Company's  common stock. The shares of
common stock were valued at $300,000.

The Company  satisfied stock value guarantees of $1,007,681  against real estate
by issuing  19,481,823 shares of common stock to an investor.  In addition,  the
Company  issued  19,101,837  shares of common stock valued at $848,427 to settle
other  claimed  guarantees  and disputes  related to the  Company's  real estate
purchases, this amount will be charged to expense.

Subsequent to year-end,  the Company issued options,  pursuant to the 2000 Plan,
to  purchase a total of  1,040,200  shares of common  stock.  These  options are
exercisable at $0.03 per share and expire three years from the date of issuance.
The granting of the options  will have no  financial  effect due to the exercise
price being equal to the market value of the common stock on the date granted.

On March 29, 2001, the Company filed a proxy statement to increase the number of
authorized  shares  of common  stock  from  300,000,000  to  600,000,000  and to
increase  the number of  available  options  and  warrants  from  25,000,000  to
75,000,000.


                                      F-24