Securities and Exchange Commission

                             Washington, D.C. 20549

                                  Form 10-KSB

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

For the fiscal year ended December 31, 2000

                                       OR

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

For the transition period from _______________to_________________

                          Commission File Number 1-1200

                           EUROWEB INTERNATIONAL CORP.
             (Exact Name of Registrant as specified in its charter)

           Delaware                            13-3696015

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

                 445 Park Avenue, 15th Floor, New York NY 10022
                    (Address of principal executive offices)

The Registrant's telephone number, including area code: (212) 758-9870

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class                   Name of Each Exchange on which Registered
Common Stock, par value
$.001 per share                        NASDAQ SMALL CAP

Indicate  by check  mark  whether  the  Registrant  (1) has filed  all  reports
required  to be filed by  Section  13 or 15(d) of the Securities  Exchange Act
of 1934 during the preceding 12 months (or for such shorter  period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.  Yes   X     No ___

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  [  ]

Registrant had revenues of $4,397,386 for the year ended  December 31, 2000. As
of March 23, 2001,  23,624,531  shares of Common Stock were outstanding of
which 9,701,465 were held by  non-affiliates  of the Company.  The aggregate
market value of the Common Stock held by  non-affiliates  of the Company as of
March 23, 2001 was $9,701,465 (based upon the closing bid price on such date on
the Nasdaq of $1.00).



                      Documents incorporated by reference:

Part III - Portions of the Registrant's Proxy statement for the Annual Meeting
of Stockholders for the fiscal year ended December 31, 2000.

<PAGE>




                                TABLE OF CONTENTS



PART I         ...............................................................1

Item 1. Description of Business...............................................1
         History of Business .................................................1
         EuroWeb Strategy ....................................................1
         Entry into ISP Market in Eastern Europe and History of  Acquisitions.1
         Market Analysis Summary..............................................3
         Products and Services................................................3
         Customers............................................................5
         Network Operations and Technical Support.............................5
         Sales and Marketing..................................................5
         Government Regulations...............................................5
         Employees ...........................................................6


Item 2. Description of Properties.............................................6

Item 3. Legal Proceedings.....................................................6

Item 4. Submission of Matters to a Vote of Security Holders...................6

PART II  .....................................................................7

Item 5. Market For Registrant's Common Equity And Related Stockholder Matters.7
         Market Information...................................................7
         Holders of Common Stock..............................................7
         Dividends............................................................7

Item 6. Management's Discussion and Analysis of Financial Condition and
        Results of Operations.................................................8
         Operations...........................................................8
         Results of Operations - Year Ended December 31, 2000 Compared to Year
         Ended December 31, 1999..............................................9
         Liquidity and Capital Resources......................................11
         Inflation and Foreign Currency.......................................11
         Effect of Recent Accounting Pronouncements...........................12
         Risk Factors.........................................................12
         Forward-Looking Statements...........................................16

Item 7.  Financial Statements.................................................16

Item 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.................................................16


PART III   ...................................................................17

Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
        COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.....................17

Item 10. EXECUTIVE COMPENSATION...............................................17

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......17

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................18

PART IV   ................................................................... 19

Item 13.  EXHIBITS AND REPORTS ON FORM 8-K....................................19













<PAGE>


                                     PART I



Item 1.    Description of Business



History of Business

           EuroWeb  International  Corp.  (the  "Company" or "EuroWeb") is a
Delaware  corporation  which was organized on November 9,
1992.  It was a development stage company through December 31, 1993.

           Its wholly-owned  Hungarian  subsidiary,  Teleconstruct  Epitesi Kft
("Teleconstruct"),  a limited liability company,  was organized on March 19,
1993 with the  intention to contract  with  community-sponsored  telecom
companies in Hungary to construct and maintain local telephone  exchanges in
their areas.  The subsidiary had two operating  business  segments:  (1)
building or renovation of condominium  apartments and (2) design,  civil
engineering,  and laying of underground  fiber optic telephone and cable lines.
The latter segment was  discontinued  in 1994. The shares of the subsidiary,
Teleconstruct,  were sold in December 1998. With the sale of
Teleconstruct, the Company exited the construction business.



                     EuroWeb Strategy

           Since exiting the  construction  business,  the Company has been
striving to be the leading  supplier in Central  Europe to businesses of
complete  communications  solutions using Internet  technologies.  Rather than
servicing  individual  users, the Company focuses its efforts on business users
and seeks to satisfy all their needs with high quality and reliable service.

           The Company's  business has shown continued growth since it entered
the Internet field in January 1997, and the Company has made  various
acquisitions  in Hungary,  the Czech  Republic,  Slovakia  and  Romania.  The
Company  expects  such growth to continue throughout  Central Europe, as it
explores other expansion  opportunities  throughout the region, and lays the
groundwork to enter the e-commerce market in the region.



       Entry into ISP Market in Central Europe and History of Acquisitions



           The Company  entered the Internet  Service  Provider  ("ISP")  market
in Central  Europe through  various  acquisitions  of companies  in that area
over the past three  years.  On January 2, 1997 the Company  acquired  all of
the  outstanding  stock of three Hungarian  ISPs for a total purchase price of
approximately  $1,785,000,  consisting of 144,000 shares of common stock of the
Company and $1,425,000 in cash (collectively, the "1997 Acquisitions")1.
Thereafter  in 1997,  the three  Hungarian  companies  were combined
and merged into a new Hungarian  entity  known as EuroWeb Rt. On November 22,
1998,  the Company sold 51% of the  outstanding  shares of EuroWeb  Rt. to
Pantel Rt. for  $2,200,000  in cash and an  agreement  to  increase  the share
capital of EuroWeb  Rt. by $300,000 without  changing the ownership  ratio
(after the capital  increase,  the ownership  ratio would remain 49 - 51
percent).  Because the Company  currently owns a minority interest in EuroWeb
Rt., and EuroWeb Rt. is not a consolidated  subsidiary of the Company,  neither
the revenues  derived from the  Hungarian  operation  nor  information  on
employees of the  Hungarian  operation  are included in the
Company's financial information for the years presented.


--------
1 1997 Acquisitions were as follows:
(a) Eunet (Hungary Ltd.) for a total cash cost of $1,000,000, and an assumption
of $128,000 in liabilities;
(b) E-Net Hungary Telecommunications and Multimedia for a total cash cost of
$200,000 and $150,000 in stock (60,000 share valued at $2.50 per share); and
(c) MS Telecom Rt. for a total cash cost of $225,000 and $210,000 in stock
(84,000 shares valued at $2.50 per share).

                                      -1-

<PAGE>

            The Company  continued with its acquisitions of ISPs in
the Czech Republic,  Slovakia and Romania in 1999 and 2000. On June 11, 1999,
the Company acquired all of the  participating  interests of Luko CzechNet,
an ISP in the Czech Republic,  for a total cost of  $1,862,154  consisting of
450,000  shares of the  Company's  common stock and 50,000  options  valued at
$2.00 per share,  and the balance paid in cash. This acquisition was effective
as of June 1, 1999.

           On July 15, 1999, the Company  acquired all of the  outstanding
shares of capital stock of EUnet  Slovakia,  an ISP in the Slovak  Republic,
for a total cost of $813,299  consisting  of 237,040  shares of the  Company's
common  stock valued at $1.6875 per share issued  August 9, 1999 and the
balance  paid in cash.  This  acquisition  was  effective as of August 1, 1999.
The Company then made another acquisition of a Slovak ISP on July 15, 1999 with
the purchase of 70% of the equity of Dodo s.r.o.'s  subsidiary,  R-Net,
for a total cost of $630,234  consisting of 145,455 shares of the Company's
common stock valued at $1.375 per share issued August 13, 1999 and the balance
paid in cash.  This acquisition was effective as of August 1, 1999.

           On  September  23,  1999 and  November  16,  1999 the  Company
acquired  from Slavia  Capital  o.c.p.,  a.s.  70% and 30%, respectively,  of
the issued and outstanding  stock of Global Network  Services  a.s.c., a
Slovakian  corporation  providing  Internet service  primarily to businesses
located in Bratislava  and other major cities in Slovakia for a total
purchase price of $1,633,051, consisting of 355,568  shares of the Company's
common stock valued at $1.406 per share issued on September 23, 1999,  and the
balance paid in cash.  This  acquisition  was  effective as of October 1, 1999.
All Slovakian  operations  were then merged under the name of Euroweb Slovakia.

           On April 21, 2000, the Company  acquired all of the outstanding
capital stock of Isternet SR, s.r.o.,  an Internet service provider in the
Slovak  Republic,  for  $1,029,299  in cash.  Goodwill  arising on this
purchase was $945,200.  This  acquisition  was effective May 1, 2000.

           On May 19, 2000, the Company  purchased all of the Internet related
assets of Sumitkom  Rokura,  S.R.L. an Internet service provider in Romania,
for $1,561,125 in cash. The  acquisition  has been accounted for as an asset
purchase with a value of $1,150,000 being assigned to customer lists acquired.

           On May 22, 2000,  the Company  acquired the remaining 30% of R-Net
(the initial 70% being acquired in 1999) for $355,810 in cash. Goodwill
arising on this purchase was $357,565.

           On June 14, 2000,  the Company  acquired  all of the  outstanding
shares of capital  stock of Mediator  S.A.,  an Internet service  provider  in
Romania  for a  total  cost of  $2,835,569.  This  consisted  of  $2,040,000
in cash  and  the  assumption  of a $540,000 liability to the former owner
payable in annual  installments of $180,000  commencing on June 1, 2001.
Goodwill arising on this purchase was  $2,455,223.  Immediately  after the
purchase the name was changed to Euroweb  Romania,  S.A. This  acquisition  was
effective as of July 1, 2000.

        On August 25, 2000, the Company, through its subsidiary, Luko Czech,
acquired all of the outstanding capital stock of Stand s.r.o., an Internet
service provider in the Czech Republic for $280,735 in cash, which was merged
into Luko Czech under the name of Euroweb Czech Republic. This acquisition was
effective as of September 1, 2000.

                                      -2-

<PAGE>

           On February 11, 2000, a special meeting of the shareholders  was
held and two proposals were approved.  Proposal number one approved  the
amendment  of the  Company's  certificate  of  incorporation  increasing  the
number of shares of common  stock that is authorized for issuance by the
Company from 20,000,000  shares of common stock to 60,000,000  shares of
common stock.  Proposal number two  approved  the  issuance  and sale by the
Company to KPN Telecom  B.V.  ("KPN"),  a  Netherlands  Limited  Liability
Company,  of 10,286,742  shares at $1.58 per share and rights to shares equal
to all other  outstanding  warrants,  options and other securities at
$1.38 per share.  At closing KPN exercised its option to purchase  1,516,812
shares at $1.38 per share in addition to the  10,286,742 shares at $1.58 per
share.  These  approvals  gave KPN control of 51% of the Company's  common
stock,  representing  voting control of the Company.  This transaction provided
the Company with more than $ 18,000,000 in capital to fund future acquisitions.

           On October 24, 2000, KPN Telecom B.V.  exercised its option for
501,512 shares of the company's  common stock at $ 1.38 per
share, in order to maintain its 51% equity interest in the Company.

           The Company is currently seeking to acquire other Internet service
providers in Central and Eastern Europe.





           Market Analysis Summary

           The  Internet  is a  collection  of  connected  computer  systems
and  networks  that link  millions of public and private computers.  The
Internet and the web have experienced rapid growth over recent years.  This
growth is projected to continue.

           The Company  believes  that the  countries  that it is targeting in
Central  Europe  present a tremendous  opportunity  for long-term growth.



           Products and Services

           The activity of the company can be divided into three parts: (1)
providing  Access to the internet (2) content  (additional internet  related)
services to clients  including web page design,  web page hosting,  service
hosting,  advertisement,  (3) other revenues mainly consist of sale of internet
related devices, hardware-software advisory, reinvoiced telecommunication costs.


                                   -3-

<PAGE>

           EuroWeb provides services in all three areas as follows:

 --------------------------------------------- ---------------------------
                     2000                                         1999
 --------------------------------------------- ---------------------------
 --------------------------------------------- ---------------------------
Internet Access      78%                                           85%
----------------------------------------------- --------------------------
----------------------------------------------- --------------------------
Content               3%                                           14%
----------------------------------------------- --------------------------
----------------------------------------------- --------------------------
Other                19%                                           1%
----------------------------------------------- --------------------------


           Internet Access

           Access to the  Internet can be either  through a leased line,  which
maintains an open  connection  to the Internet at all times, or through dial-up
service, which requires subscribers to dial a telephone number to connect to the
Internet.

           EuroWeb offers a variety of access options, including leased-line
and dial-up lines.

           Content

           EuroWeb markets  various  services for the design,  development,
hosting and maintenance of home pages (entry points for a collection of
information  presented  through the World Wide Web).  EuroWeb  installs and
maintains home pages on EuroWeb  servers for customers concerned with the cost,
difficulty or security of maintaining home pages on their own network.

           Web site content on the Internet is stored on computers  known as
servers (that  "serve"  information  to Internet  users). The business of "Web
site hosting"  includes  maintaining  these computers as well as ensuring that
the computers are always connected to the  Internet so that  information  may
be  available 24 hours a day,  seven days a week.  Web hosting  services are
provided for a monthly fee, which varies depending on the bandwidth of the
connection to the Internet, as well as other factors.

           Other Services

           In order to provide  comprehensive  services to customers,  the
company - based on the individual  request and needs of the customers - provides
necessary internet  equipment and advisory to the installation of internet
connection and content services.  On behalf of the Customers,  the installation
of necessary  telecommunication line can also be organized and its costs can be
invoiced by the Company.

           The Company also intends to enter the e-commerce  market in Central
Europe,  as it is currently  laying the groundwork for provision of this
service.

                                      -4-
<PAGE>


                     Customers

           EuroWeb's customers are businesses and professionals in various
sectors, including government,  multinational corporations, computer  systems
and service,  tourism and  entertainment,  banking and insurance,  and media.
EuroWeb's  customer base has grown to over 940 leased line  business  customers
and over 14,000 dial up  customers  in  Slovakia,  the Czech  Republic and in
Romania as of December 31, 2000.  In 2000, no customer accounted for more than
1.5% percent of EuroWeb's total revenues.



                     Network Operations and Technical Support

           EuroWeb  believes that effective  network and technical  support are
important  criteria by which  commercial  users select Internet access providers
and has dedicated  substantial resources to building a high quality support
infrastructure.  As of December 31, 2000,  EuroWeb had a network  operations
group consisting of thirty-four  (34) people,  including  technical and customer
support employees.  EuroWeb's network operations personnel located at EuroWeb's
network operations center in Slovakia,  the Czech Republic and Romania are
responsible for continuously  monitoring  traffic across EuroWeb's  network
infrastructure.  EuroWeb's  technical support personnel  work to find solutions
for customers  experiencing  difficulties  with Internet  applications.  Both
technical  support and customer  support  personnel are currently  available
from 8 a.m. to 8 p.m.,  Monday through Friday.  At other times,  these personnel
respond to technical support requests via telephone.



                     Sales and Marketing

           EuroWeb  employs  thirty-seven  (37) persons in sales and  marketing.
To date,  EuroWeb has sold its  Internet  access and applications  products and
services  primarily through direct personal and telephone  contact.  Call
activity is generated in response to a variety of promotional programs,
including advertising in general business and specialty periodicals,
participation in industry shows, and press  relations.  The sales persons work
closely with the customer and technical  support group,  which is responsible
for installation at multiple sites and for support and technical consulting
services.



                     Government Regulations

           EuroWeb is not currently subject to direct government  regulation
other than laws and regulations  applicable to businesses generally.  There are
currently few laws or regulations  directly applicable to access to or commerce
on the Internet.  However,  with the increasing  popularity and use of the
Internet,  it is likely that new laws and regulations involving the Internet
will be adopted at the local,  state,  national or  international  levels,
covering  issues such as user privacy,  freedom of expression,  pricing of
products and  services,  taxation,  information  security or the  convergence
of  traditional  communications  services with Internet communications.


                                      -5-
<PAGE>

                     Employees

           The Company employs a total of one hundred and fifteen (115) persons
in the Czech Republic,  Slovakia and in Romania.  None of the  Company's
employees  are  represented  by a labor  organization.  These  figures do not
include  employees  at EuroWeb Rt. in Hungary.

           The Company's business of delivering Internet services is labor
intensive.  Accordingly,  EuroWeb's success depends in part on its ability to
identify, hire, train and retain employees who can provide the Internet
strategy,  technology,  marketing,  audience development  and creative skills
required by clients.  There is currently a shortage of such  personnel,  and
this shortage is likely to continue for the foreseeable future.



Item 2.    Description of Properties

           The following table lists the office spaces that the Company and its
subsidiaries lease from unaffiliated persons:

<TABLE>
<S>                                     <C>                             <C>                     <C>        C>          <C>


         Lessor                    Address of Property               Primary Use          Sq. feet      Rent        Lease Terms
                                                                                                        Amount/
                                                                                                         Month
-------------------------     ------------------------------------------------------       -------    ------------  -------------

The Company                   445 Park Avenue               stockholder relations and         800          $2,000     month to
                              New York, NY 10022            general executive                                            month
Euroweb Czech Republic        Argentinska 58                general operations              1,610          $2,400       3-month
                              CS-170 05                                                                                  notice
                              Prague, Czech Republic
Euroweb Slovakia              Rocianska 36                  general operations              6,020          $2,050     until the
                              SK-83102                                                                                end of 2001
                              Bratislava, Slovakia
Euroweb Romania               Bd. Unirii 33, Bl. A2, Sc.3,  general operations              3,440          $3,655       3-month
                              6th Floor, Sector 3                                                                        notice
                              Bucharest, Romania
</TABLE>


Item 3.    Legal Proceedings

           In May 1999, a statement of claim was filed  against Luko Czech,
one of the  Company's  wholly-owned  subsidiaries  in the Czech  Republic.  The
claim  involves  alleged  damages  in the  amount  of  approximately  $132,000
resulting  from  the  Company's cancellation  of a contract with a data network
provider.  The Company claims that the contract was terminated in accordance
with its terms and  conditions,  and has  presented  documents  in support of
its  position.  The Company is not a party to any other  material
legal proceedings as of the date of this report.

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

           No matters were submitted to a vote of the Company's  security
holders  through the  solicitation of proxies or otherwise,
during the last quarter of the fiscal year ended December 31, 2000.

                                      -6-
<PAGE>

                                    PART II



Item 5.  Market For Registrant's Common Equity And Related Stockholder Matters

                     Market Information

           The Company's  Common Stock is traded in the  over-the-counter
market on the National  Association of Securities  Dealers'Automated Quotation
System ("Nasdaq") under the symbol "EWEB".

           The  following  table sets forth the high and low bid prices for the
Common Stock during the periods  indicated as reported by Nasdaq. The prices
reported reflect  inter-dealer  quotations,  and may not represent actual
transactions and do not include retail mark-ups, mark-downs or commissions.

                            High                            Low
Quarter Ending:

1999
March 31, 1999              3.188                          1.594
June 30, 1999               2.750                          1.344
September 30, 1999          1.938                          1.250
December 31, 1999          16.813                          1.594

2000
March 31, 2000             21.250                          5.500
June 30, 2000               7.000                          2.500
September 30, 2000          4.375                          1.875
December 31, 2000           2.438                          0.688

On March 23, 2001 the closing bid price on the Nasdaq for the Common Stock was
$1.00.



           Holders of Common Stock

           As of March 13, 2001 the Company had 23,624,531  shares of Common
Stock  outstanding and 127  shareholders  of record.  The Company believes that
it has approximately 10,742 beneficial owners who hold  their shares in street
names.

                     Dividends

           It is the  present  policy of the  Company  to retain  earnings,
if any,  to  finance  the  development  and growth of its business.
Accordingly,  the Board of Directors  does not  anticipate  that cash
dividends will be paid until earnings of the Company warrant such dividends,
and there can be no assurance that the Company can achieve such earnings or
any earnings.


                                      -7-
<PAGE>


Item 6.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations

                     Operations


           The Company is an Internet Service Provider,  providing access to
the Internet for principally  business customers and also maintains  computers
known as "servers,"  which store, and allow for access to, Web sites, and
develops  content,  including  graphics and database for Web sites.  The
Company  operates  through three wholly owned  subsidiaries,  one located in
the Czech Republic,  one located in  Slovakia,  and one  located  in  Romania,
known as  Euroweb  Czech  Republic,  Euroweb  Slovakia,  and  Euroweb  Romania,
respectively.


Acquisitions


           In January 1997, the Company  acquired three ISP businesses in
Hungary and  consolidated the three Hungarian ISPs under one roof under the
name of Euroweb Rt. In November  1998,  the Company sold 51% of this
subsidiary to Pantel Rt. Because the Company owns a minority  interest in
Euroweb Rt.,  Euroweb Rt. is not a  consolidated  subsidiary,  but rather an
affiliated  company.  Neither the revenues  derived from the Hungarian
affiliate nor information on employees of the operation of the Hungarian
affiliate are included in the Company's  financial  figures for the years
ended December 31, 1999 and December 31, 2000. The Company reports its 49%
share of the net profits from Euroweb Rt.,  however,  for the years ended
December 31, 1999 and 2000. In 2000, Euroweb Rt. purchased three ISP companies
plus the assets of a fourth ISP company.


           In addition, since January 1997 the Company has acquired 8 ISPs in
Slovakia, the Czech Republic, and Romania.


           In June 1999, the Company acquired all of the participating
interests of Luko CzechNet, an ISP in the Czech Republic,  for a purchase price
of $1,862,154  consisting of 450,000 shares of the Company's  common stock and
50,000 options,  with the balance paid in cash. Goodwill arising on this
purchase was $1,734,996.

           In July 1999, the Company acquired all of the outstanding  shares of
capital stock of EUnet Slovakia,  an ISP in the Slovak Republic,  for a
purchase price of $813,299  consisting of 237,040 shares of the Company's
common stock and the balance paid in cash. Goodwill arising on this purchase
was $726,213.

           In July 1999, the Company  acquired 70% of the equity of R-Net, a
subsidiary of a Slovak internet service  provider,  for a purchase price of
$630,234  consisting of 145,455 shares of the Company's common stock and the
balance paid in cash.  Goodwill arising on this purchase was $607,663.

           In September 1999 and November 1999, the Company acquired 70% and
30%,  respectively,  of the outstanding  shares of Global Network  Services,
a.s.,  an Internet  service  provider in the Slovak  Republic for a purchase
price of  $1,633,051,  consisting of 355,568 shares of the Company's common
stock and the balance paid in cash. Goodwill arising on this purchase was
$1,776,532.


                                      -8-

<PAGE>

           In April 2000,  the Company  acquired all of the  outstanding
capital stock of Isternet SR,  s.r.o.,  an Internet  service provider in the
Slovak Republic, for $1,029,299 in cash. Goodwill arising on this purchase was
$945,200.

           In May 2000,  the Company  purchased all of the Internet  related
assets of Sumitkom  Rokura,  S.R.L.  an Internet  service provider in Romania,
for  $1,561,125 in cash.  The  acquisition  has been  accounted for as an asset
purchase on the books of Euroweb Romania, S.A., with a value of $1,150,000
being assigned to customer lists acquired.

           In May 2000,  the Company  acquired the  remaining  30% of R-Net
(the  initial 70% being  acquired in 1999) for $355,810 in cash. Goodwill
arising on this purchase was $357,565.

           In June 2000, the Company  acquired all of the outstanding  capital
stock of Mediator S.A., an Internet service provider in Romania, for a purchase
price of $2,835,569. This consisted of $2,040,000 in cash and the assumption of
a $540,000 liability to the former owner payable in annual installments of
$180,000 commencing on June 1, 2001. Goodwill arising on this purchase was
$2,455,223.

           In August 2000, the Company, through its subsidiary,  Euroweb Czech
Republic, acquired all of the outstanding capital stock of Stand s.r.o.,  an
Internet  service  provider in the Czech Republic,  for $280,735 in cash.
Goodwill  arising on this purchase was $260,063.

           The results of  operations  of each ISP have been included in the
Company's  consolidated  results of operations  from the effective date of
acquisition.





                     Results of Operations

      Year Ended December 31, 2000 compared to Year Ended December 31, 1999


           The  impact  of the  above  mentioned  acquisitions  has  been to
increase  the  revenues  and the  costs  of the  Company approximately
threefold as compared to 1999.  This is due to the fact that in 1999,  all of
the  acquisitions  occurred in the second half of the year,  and so the results
of  operations  of these  acquisitions  were only  included  for half a year,
whereas  they are included for the full year in 2000.  Moreover,  the results
of  operations  for the 2000  acquisitions  have been included in the 2000
consolidated results, making comparison with 1999 difficult.


Revenues

           A significant  portion of the Company's  revenues are derived from
providing access to the internet by way of leased lines.
Customers are billed in advance and revenue is recognized as it is earned.

           Total revenues from Internet  activities for the year ended December
31, 2000 were $4,397,386 in comparison with $1,233,567 for the year ended 1999.
The  increase in revenues of  $3,163,819  was due  primarily  to the effect of
additional  acquisitions  in Slovakia in 2000 and the entry into the Romanian
ISP market which contributed $930,825 to the 2000 revenues.


                                      -9-
<PAGE>

Cost of revenues

           Cost of  revenues  comprise  mostly  telecommunication  network
expenses  which are  related  to the  provision  of access facilities to
customers.

           Network costs were  $2,283,225  in 2000 in comparison to $628,880 in
1999.  The increase in cost of revenues is also due to the effect of current
year acquisitions.  There were no significant pricing policy changes within the
Company during 2000.


Operating expenses (excluding depreciation and amortization)

           The increase in operating  expenses from $1,595,397 to $3,987,023 is
also due to the  acquisitions as well as the fact that most of the  acquisitions
were made into  small  owner-managed  companies  which  were not  paying
competitive  salaries.  Since the acquisitions,  the Company has  increased
the  salaries  and  benefits of the  acquired  employees  to that of the market
(sometimes translating  into a two-three  fold  increase).  Moreover,  the
number of employees has increased from 69 in 1999 to 118 at the end of
2000,  contributing to the increase in remuneration  expenses,  as well as the
related SG&A expenses associated with a higher level of employees.

           Although  operating  costs above have increased  approximately  250%,
the increase must be taken in  conjunction  with the increase in gross profit
of  approximately  350%.  Operating  costs per dollar of revenue was $0.91 in
2000 compared to $1.29 in 1999, due to efficiencies realized upon consolidation
of the acquired entities into the existing structure of the Company.


Depreciation and amortization

           Amortization of goodwill and intangibles  accounts for over 70% of
depreciation & amortization.  The goodwill  amortization in 1999 was low due to
the fact that most of the acquisitions in 1999 were made in the second half of
the year.

Net interest income

           Net  interest  income has  quadrupled  from  $222,154 in 1999 to
$904,016 in 2000 mainly due to the issuance of shares (see Liquidity  and
Capital  Resources)  for cash.  Approximately  $14 million of the proceeds was
used to purchase a Federal Home Mortgage Corporation  debt security  bearing
interest at 5%. The remaining amount was invested in other securities and /or
was held in interest bearing accounts.

Equity interest in affiliate

           The 30% increase in the equity in the net income of affiliate is due
to an  improvement in  profitability  of the affiliate in 2000.

                                      -10-

<PAGE>


Sale or disposal transactions

           During  2000,  the  Company  focused  purely  on  acquisitions  and
thus did not divest  any of its  assets as it did in 1999. Consequently, no
gain/loss on sale or disposals are recorded in 2000.


           Liquidity and Capital Resources

           On February  11,  2000,  the  Company  approved  the  issuance  and
sale by the Company to KPN  Telecom  B.V.  ("KPN"),  a Netherlands  Limited
Liability  Company,  of 10,286,742 shares at $1.58 per share and rights to
shares equal to all other outstanding warrants,  options and other  securities
at $1.38 per share.  At closing KPN  exercised  its option to purchase
1,516,812  shares at $1.38 per share in addition to the  10,286,742  shares at
$1.58 per share.  These  approvals  gave KPN control of 51% of the Company's
common  stock,  representing  voting  control of the Company.  This  transaction
provided the Company with more than $ 18,000,000  in capital to fund future
acquisitions.  On October 24, 2000, KPN Telecom B.V.  exercised its option for
501,512 shares of the Company's common stock at $1.38 per share, in order to
maintain its 51% equity interest in the Company.

           The Company's cash, cash equivalents and marketable  securities were
approximately  $18,550,631 as of December 31, 2000, an increase of  $14,682,781
from the end of fiscal year 1999. The increase was due to the fact that the
Company sold  12,305,066  shares of the Common Stock for $18,777,720,  net of
placement costs, and from the exercise of 1,401,334  options and warrants for
$2,547,934, net of transaction costs.

           The Company has $18,550,631 of cash, cash  equivalents  and
marketable  securities  compared to $ 2,309,851 total short and long term
liabilities,  so the Company is in a strong  financial  position.  Management
believes that with its existing  cash,  cash equivalents,  marketable
securities and internally  generated funds,  there will be sufficient funds to
meet the Company's  currently projected  working  capital  requirements  and
other cash  requirements  until at least the next 12 months.  The Company plans
to make future  acquisitions of Internet  service  providers in Central and
Eastern  Europe.  The excess cash on hand is to be used to finance such future
acquisitions.



                Inflation and Foreign Currency

           The Company maintains its books in local  currencies,  the Hungarian
forint for Euroweb Rt., Czech koruna for Euroweb Czech Republic and the Slovak
koruna for Euroweb Slovakia.  However, given the  hyper-inflationary  situation
in Romania, the U.S. dollar is used as the functional currency.


           Due to strengthening of the US dollar on international  currency
markets during the year, the local currencies/U.S.  dollar exchange rate in
these countries increased, which  represented an effective devaluation during
2000 of approximately 10%.

                                      -11-

<PAGE>


           Effect of Recent Accounting Pronouncements

           In June 1998 the Financial  Accounting  Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"),
"Accounting  for Derivative  Instruments  and for Hedging  Activities."  In
June 2000 the FASB issued  Statement of Financial  Accounting  Standards No.
138 ("Statement No. 138"),  "Accounting  for Certain  Derivative  Instruments
and Certain Hedging Activity,  an Amendment of SFAS 133." Statement No. 133, as
amended  requires  companies to recognize all derivatives as either assets
or liabilities  in the statement of financial  condition and measure those
instruments  at fair value.  It also requires that changes in fair value of a
derivative be recognized  currently in earnings  unless  specific  hedge
accounting  criteria are met. The Company adopted SFAS No. 133, as amended on
January 1, 2001.  The adoption of SFAS No. 133 did not materially  impact the
Company's  financial position or results of operations.



                     Risk Factors

           The Company is subject to certain risk  factors due to the industry
in which it competes and the nature of its  operations. Theses risks include
the following:

           Limited  Operating  History;  Accumulated  Deficit.  Although the
Company was founded in November 1992, it only entered the Internet  business in
January  1997 by  acquiring  three  operating  Internet  businesses.
Accordingly,  the Company has only limited operating  history on which to base
an  evaluation  of its present  business  and  prospects.  The Company and its
prospects  must be considered in light of the risks,  expenses and
difficulties  frequently  encountered by companies in an early stage of
development, particularly  companies in new and rapidly  evolving  markets such
as the Internet.  Such risks for the Company  include,  but are not
limited to, an evolving  business  model and the  management of both internal
and  acquisition  based growth.  To address these risks, the Company  must,
among  other  things,  continue to expand its client  base,  continue to
develop the  strength  and quality of its operations,  maximize  the value
delivered  to clients,  respond to  competitive  developments  and  continue to
attract,  retain and motivate  qualified  employees.  There can be no
assurance  that the Company  will be  successful  in meeting  these  challenges
and addressing such risks and the failure to do so could have a material
adverse affect on the Company's  business,  results of operations
and financial condition.

           Regulations and Legal  Uncertainties.  In the United States,  the
business proposed by the Company is not currently subject to direct regulation
other than federal and state regulation  applicable to businesses generally and
multi-level  marketing.  However, changes in the regulatory  environment
relating to the  telecommunications,  Internet and media industries could have
an effect on its business,  which  effect may be  materially  adverse  to the
interests  of the  Company.  Additionally,  legislative  proposals  from
international,  federal,  state and foreign  governmental bodies in the areas
of content regulation,  intellectual  property,  privacy rights and tax issues,
could impose  additional  regulations and  obligations  upon all online service
and content  providers,  which effect  may be  materially  adverse to the
interests  of the  Company.  The  Company  cannot  predict  the  likelihood
that any such legislation will pass, nor the financial impact, if any, the
resulting regulation may have on it.


                                      -12-

<PAGE>

           Moreover,  the applicability to persons engaged in Internet commerce
of existing laws governing issues such as intellectual property  ownership,
libel and  personal  privacy is  uncertain.  Recent  events  relating to the
use of online  services for certain activities  has  increased  public  focus
and could  lead to  increased  pressure  on  foreign  and  national
legislatures  to impose regulations  on online service  providers.  The U.S.
law relating to the liability of entities  conducting  business over the
Internet for information carried on, or disseminated  through,  their systems
is currently unsettled and has been the subject of several recent
private  lawsuits.  While the Company  intends to provide only content which
meets the highest  standards in quality,  creativity  and ethical  values,
should  similar  actions be initiated  against it, costs  incurred as a result
of such actions could have a material adverse effect on the business of the
Company.

           Dependence on Key Personnel;  Limited  Management;  Need for
Qualified  Management and Other Personnel.  The success of the
Company  will be dependent  on the  personal  efforts of Csaba Toro,  Vice
President-International,  Managing  Director  (CEO) of all European  Operations,
Frank R. Cohen,  Chairman of the Board,  Treasurer  (CFO), and Robert Genova,
President,  CEO. The loss of the services of any of such  individuals  could
have a material adverse effect on the Company's  business and prospects.  The
Company does not have and does not  intend to obtain  "key-man"  insurance  on
the life of any of its  officers.  The  success  of the  Company  is
largely dependent upon its ability to hire and retain  additional  qualified
management,  marketing,  technical,  financial and other personnel.  Competition
for qualified  personnel is intense,  and there can be no assurance  that the
Company will be able to hire or retain  additional  qualified  management.
The inability to attract and retain  qualified  management and other personnel
will have a material adverse effect on the Company.

           Developing  Market;  New  Entrants;  Unproven  Acceptance of the
Products;  Uncertain  Adoption of Internet as a Medium of Commerce  and
Communications.  The market for  Internet  Programs  and  services  has only
recently  begun to develop and is rapidly evolving.  The Internet is
characterized  by an increasing  number of market entrants who have  introduced
or developed  products and services for  communication  and  commerce  over the
Internet  and private  networks.  As is typical in the case of a new and rapidly
evolving  industry,  demand and market  acceptance  for  recently  introduced
products  and  services  are subject to a high level of uncertainty.  Critical
issues concerning the commercial use of the Internet (including  security,
reliability,  cost, ease of use and access,  and quality of service)  remain
unresolved  and may impact the growth of Internet use.  While the Company
believes that its products and services offer significant  advantages for
Internet users,  there can be no assurance that its products and services will
become  widely  chosen  for  access to the  Internet  or that,  if chosen,
will hold the  attention  of users in order to allow it to continue to attract
users.

           Because the market for the  Company's  proposed  business,  products
and services is new and  evolving,  it is difficult to predict the future
growth  rate,  if any, and size of this  market.  There can be no  assurance
that the market for its products and services will  develop,  that the
Company's  products or services will be adopted,  or that  individual  personal
computer  users in business or at home will use the Internet for commerce and
communication.  If the market fails to develop,  develops more slowly than
expected,  becomes saturated with competitors,  or if its products do not
achieve market acceptance,  its business,  operating results
and financial condition will be materially adversely affected.

           Competition.  The market for  Internet-based  products and services
is new,  intensely  competitive,  rapidly  evolving and subject to rapid
technological  change.  The Company  expects  competition  to persist,
intensify  and increase in the future.  Such competition could materially
adversely affect the Company's business, operating results or financial
condition.

                                      -13-

<PAGE>


           EuroWeb's  principal  competitors in Hungary are  GTS-Datanet,
which has a customer base similar to that of the Company's, MATAVNet,  the
subsidiary of the national Hungarian  telephone company,  PSINet - Elender,
and the aggressively  growing Nextra which entered the Hungarian market last
year.

           We recognize as the main  competitors of Euroweb  Slovakia,  4
largest or most active  providers in Slovakia:  Nextra,  GTS Inec,  SLOVANET
and the incumbent telecom operator,  Slovak Telecom,  also providing internet
services.  The first two players have a customer base similar to that of the
Company's.

           Romania's Internet market is in initial phase of development.  At
present,  other then Euroweb Romania, there are two other data transmission
companies providing internet services,  who also cover the entire territory of
Romania:  Global One Romania,  Logic Telecom.

           The Company may face intense  competition  from other companies
directly  involved in the same business and also from many other  companies
offering  products  which can be used in lieu of those  offered by the  Company.
Competition  can take many  forms, including  convenience in obtaining
products,  service,  marketing and  distribution  channels.  Although the
Company believes it can compete on the basis of the quality and  reliability
of its  services,  there can be no  assurance  that the Company  will be able
to compete  successfully  against current or future  competitors or that
competitive  pressures faced by the Company will not materially adversely
affect the Company's business, operating results or financial condition.

           Volatility  of Stock Prices.  Market  prices for the Company's
common stock will be influenced by many factors and will be subject to
significant  fluctuations in response to variations in operating  results of
the Company and other factors such as investor perceptions  of the Company,
supply and demand,  interest  rates,  general  economic  conditions  and those
specific to the industry, developments  with  regard to the  Company's
activities,  future  financial  condition  and  management.  There  can be no
assurance regarding the future prices at which the Company's common stock will
trade, if any.

           Foreign  Currency and Exchange  Risks and Rate  Revaluation.  The
Company will be subject to significant  foreign  exchange risk.  There are
currently no meaningful  ways to hedge  currency risk in either  Hungary,  the
Czech  Republic,  Romania or Slovakia. Therefore,  the Company's ability to
limit its exposure to currency  fluctuations is significantly  restricted.  The
Company's ability to obtain dividends or other  distributions  is subject to,
among other things,  restrictions on dividends under applicable local laws
and  foreign  currency  exchange  regulations  of the  jurisdictions  in which
its  subsidiaries  operate.  The laws  under  which the Company's  operating
subsidiaries are organized  provide generally that dividends may be declared by
the partners or shareholders out of yearly  profits  subject to the
maintenance  of  registered  capital and required  reserves and after the
recovery of  accumulated losses.  There may be other  currency  risks that the
Company will face as it expands its  operations  into other  Central and Eastern
European countries.


                                      -14-

<PAGE>


           Other factors affecting shareholders/investors

           Possible Future Capital Needs.  The Company  currently  anticipates
that its available cash resources will be sufficient to meet its presently
anticipated working capital and capital  expenditure  requirements for at least
the next 12 months.  However,  the Company  may  need to raise  additional
funds in  order  to  support  more  rapid  expansion,  acquire  complementary
businesses  or technologies or take advantage of unanticipated  opportunities
through public or private financing,  strategic  relationships or other
arrangements.  There can be no assurance  that such  additional  funding,  if
needed,  will be available  on terms  acceptable  to the Company,  or at all.
If adequate  funds are not  available on  acceptable  terms,  the Company may
be unable to develop or enhance its services  and  products  or take  advantage
of future  opportunities  either of which  could  have a material  adverse
effect on the Company's  business,  results of operations  and financial
condition.  The Company may determine,  depending  upon the  opportunities
available to it, to seek  additional  debt or equity  financing to fund the
cost of acquiring  subscriber  bases or service firms.  To the extent that the
Company finances an acquisition  with equity  securities,  any such issuance of
equity  securities would result in dilution to the interests of the Company's
stockholders.  Additionally,  to the extent that the Company  finances an
acquisition with equity  securities,  any such issuance of equity  securities
would result in dilution to the interests of the Company's  stockholders.
Additionally,  to the extent that the Company incurs  indebtedness or issues
debt securities in connection with any  acquisition,  the Company will be
subject to risks  associated  with  incurring  substantial  indebtedness,
including the risks that interest rates may fluctuate and cash flow may be
insufficient to pay principal and interest on any such indebtedness.

           No  Dividends.  The Company does not  currently  intend to pay cash
dividends on its common stock and does not  anticipate paying such  dividends
at any time in the  foreseeable  future.  At present,  the Company will follow
a policy of retaining all of its earnings, if any, to finance the development
and expansion of its business.

           Potential  Issuance of Additional  Common and Preferred Stock.  The
Company is authorized to issue up to 60,000,000  shares of common  stock as a
result of an  amendment  to the  Certificate  of  Incorporation  filed with the
Delaware  Secretary of State on February 11, 2000. To the extent of such
authorization,  the Board of the Company will have the ability,  without
seeking stockholder approval,  to issue additional shares of common stock in
the future for such consideration as the Board may consider  sufficient.  The
issuance of  additional  common  stock in the future will reduce the
proportionate  ownership  and voting  power of the common  stock offered
hereby.  The Company is also  authorized to issue up to 5,000,000  shares of
preferred  stock,  the rights and preferences of which may be  designated  in
series  by the  Board.  To the  extent of such  authorization,  such
designations  may be made  without stockholder  approval.  The  designation and
issuance of series of preferred  stock in the future would create  additional
securities which may have voting,  dividend,  liquidation preferences or other
rights that are superior to those of the common stock, which could
effectively deter any takeover attempt of the Company.



                                      -15-
<PAGE>



                     Forward-Looking Statements

           When used in this Form 10-KSB,  in other  filings by the Company
with the SEC, in the  Company's  press  releases or other public or
stockholder  communications,  or in oral  statements  made with the  approval
of an  authorized  executive  officer of the Company,  the words or phrases
"would be," "will allow,"  "intends to," "will likely result," "are expected
to," "will  continue," "is anticipated," "estimate," "project," or similar
expressions are intended to identify  "forward-looking  statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.

           The Company  cautions  readers not to place undue reliance on any
forward-looking  statements,  which speak only as of the date made,  are based
on certain  assumptions  and  expectations  which may or may not be valid or
actually  occur,  and which involve various  risks and  uncertainties,
including  but not limited to the risks set forth below.  See "Risk  Factors."
In addition,  sales and other revenues may not commence  and/or  continue as
anticipated  due to delays or otherwise.  As a result,  the Company's  actual
results for future periods could differ materially from those anticipated or
projected.

           Unless otherwise required by applicable law, the Company does not
undertake, and specifically disclaims any obligation,  to update any
forward-looking  statements to reflect occurrences,  developments,
unanticipated events or circumstances after the date of such statement.





Item 7.    Financial Statements

           Reference is made to the Consolidated Financial Statements of the
           Company, beginning with the index thereto on page F-1.



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

           None.







                                      -16-

<PAGE>





                                    PART III


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

           There is incorporated in this Item 9 by reference the  information
appearing under the caption  "Election of Directors" in the Company's
definitive  Proxy statement for the 2001 Annual Meeting of  Stockholders,  a
copy of which will be filed not later than 120 days after the close of the
fiscal year.

Item 10.   EXECUTIVE COMPENSATION

           There is  incorporated in this Item 10 by reference the  information
appearing under the caption  "Election of Directors - Executive  Compensation"
in the Company's  definitive  Proxy statement for the 2001 Annual Meeting of
Stockholders,  a copy of which will be filed not later than 120 days after the
close of the fiscal year.

Item 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

           The following  table sets forth  information  with respect to the
beneficial  ownership of the Common Stock as of March 23, 2001 by (i) each
person known by the Company to own beneficially more than 5% of the outstanding
Common Stock;  (ii) each director of the Company;  and (iii) all executive
officers and directors as a group.  Except as otherwise  indicated below,  each
of the entities or persons named in the table has sole voting and investment
powers with respect to all shares of Common Stock  beneficially  owned by
it or him as set forth opposite its or his name.


                                      -17-



<PAGE>
                                     Shares
                                     Beneficially
Name and Address                     Owned (1)             Percent Owned (1)
------------------------------------ --------------------- -----------------

Frank R. Cohen                       525,000 (2)           2.23%
445 Park Avenue
New York, NY 10022

Robert Genova                        608,000 (3)           2.58%
227 Route 206, Unit 11
Flanders, NJ 07836

Csaba Toro                           485,000(4)            2.05%
1122 Budapest
Varosmajor utca 13
Hungary

Marten Pieters                       0                     0
KPN Telecom B.V.
Maanplein 5
The Hague, The Netherlands

Rob van Vliet                        0                     0
KPN Telecom B.V.
Maanplein 5
The Hague, The Netherlands

All Officers and Directors as a      1,618,000             6.84%
Group (5 Persons)

KPN Telecom B.V.                    12,305,066(5)         52%
Maanplein 5
The Hague, The Netherlands
____________________________
(1)        Unless otherwise indicated, each person has sole investment and
voting power with respect to the shares indicated,  subject to community
property laws, where  applicable.  For purposes of this table, a person or
group of persons is deemed to have "beneficial  ownership" of any shares which
such person has the right to acquire  within 60 days after April 10, 2001.  For
purposes of computing  the  percentage of  outstanding  shares held by each
person or group of persons named above on April 10,  2001,  any security  which
such person or group of persons has the right to acquire  within 60 days after
such date is deemed to be  outstanding  for the purpose of computing the
percentage  ownership  for such person or persons,  but is not deemed to be
outstanding for the purpose of computing the percentage ownership of any other
person.
(2)        Includes 515,000 shares of Common Stock issuable upon exercise of
currently  exercisable  options:  100,000 shares at $1.00 per share pursuant to
Mr.  Cohen's  September 1998  employment  contract;  315,000 shares at $2.00
per share pursuant to an April 1999  modification to his employment  contract;
and 70,000 shares at $1.25 per share and 30,000 shares at $1.625 per share
pursuant to the Company's 1993 Stock Option Plan.
(3)        Includes  470,000 shares of Common Stock issuable upon exercise of
currently  exercisable  options:  70,000 shares at $1.00 per share pursuant to
Mr.  Genova's  September 1998 employment  contract;  370,000 shares at $2.00 per
share pursuant to an April 1999  modification  to his  employment  contract;
and 30,000 shares at $1.625  pursuant to the Company's  1993 Stock Option Plan.
(4)        Includes 485,000 shares of Common Stock issuable upon exercise of
currently  exercisable  options:  100,000 shares at $1.00 per share pursuant to
Mr. Toro's  September  1998  employment  agreement;  315,000 shares at $2.00
per share pursuant to an April  1999  modification  to his  employment
agreement;  50,000  shares at $2.00 per share  granted  pursuant  to a prior
consulting agreement, and 20,000 shares at $1.50 pursuant to the Company's 1993
Stock Option Plan.
(5)        Information  included within a Schedule 13D dated February 24, 2000
and filed with the Securities and Exchange  Commission, in which Schedule 13D,
KPN Telecom B.V. ("KPN"),  the Reporting Person under the Schedule 13D, states
that KPN, in addition to this number of shares of Common Stock  beneficially
owned,  also holds 2,774,082  shares of Common Stock pursuant to an option,
that is  exercisable at a purchase price of $1.38 per share upon exercise by a
third party of an option or warrant for an identical number of shares of the
Company's  Common Stock so as to preserve KPN's majority  interest in the
Company, as  specified  in the Option  Agreement,  dated  November  19, 1999
and amended by the Amended and  Restated  Agreement  of December 13, 1999.

Item 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

           There is incorporated in this Item 12 by reference the information
appearing under the caption "Certain  Relationships and Related Party
Transactions" in the Company's  definitive proxy statement for the 2001 Annual
Meeting of Stockholders,  a copy of which will be filed no later than 120 days
after the close of the fiscal year.


                                      -18-

<PAGE>


PART IV


Item 13.   EXHIBITS AND REPORTS ON FORM 8-K

A.  Exhibits (numbers below reference Regulation S-B, Item 601)
           (2) Subscription Agreement and Option Agreement with KPN(23)
           (3)(a)Certificate of Incorporation filed November 9, 1992(2)
              (b)Amendment to Certificate of Incorporation filed July 9, 19973
              (c)By-laws(2)
           (4)(a)Form of Common Stock Certificate(2)
              (b)Form of Underwriters' Warrants to be sold to Underwriters(2)
              (c)Placement  Agreement  between  Registrant  and J.W.  Barclay &
                Co.,  Inc. and form of Placement  Agent  Warrants  issued in
                connection with private placement financing(2)
              (d)Form of 10% Convertible Debenture used in connection with
                offshore private placement financing pursuant to Regulation S4
              (e)Form of Common Stock Purchase Warrant in connection with
                private placement financing under Section 506 of Regulation D(4)
           (10)(a)Consulting agreement between Registrant and Klenner Securities
                Ltd.  (2)
               (b)Consulting agreement between Registrant and Robert Genova(2)
               (c)Consulting agreement between Registrant and Laszlo
                Modransky(2)
               (d)1993 Incentive Stock Option Plan(2)
               (e)Sharing agreement for space and facilities between Registrant
                and Hungarian Telephone and Cable Corp.(2)
               (f)Articles of Association (in English) of Teleconstruct Building
                 Corp.  (2)
               (g)Articles of Association (in English) of Termolang Engineer
                and Construction Ltd.  (2)
               (h)Letter of intent between Teleconstruct Building Corp.  and
                Pilistav(2)
               (i)Employment agreement between Registrant and Robert Genova and
                termination agreement dated February 5, 19975
               (j)Employment  agreement between Registrant and Peter E.
                Klenner(2) and termination  agreement dated October 30,
               1996, and agreement for sale of condominium unit to M&A as
                amended(4)
               (k)Employment agreement between Registrant and Frank R.  Cohen(2)
                and modification of employment agreement(4)
               (l)Letter of Intent agreement between Registrant and Raba-Com
                Rt.  (4)
               (m)Letter of Intent agreement between Registrant and
                Kelet-Nograd Rt.  (4)
               (n)Letter of Intent agreement between Registrant and 3 Pilistav
                villages for installation of cable in those areas(4)
               (o)Lease agreement between Registrant's subsidiary EUNET Kft.
                and Varosmajor Passage, Kft.  for office space(4)
               (p)Acquisition agreement between Registrant and KFKI Computer
                Systems Corp.  dated December 13, 1996(4)
               (q)Acquisition agreement between Registrant and E-Net Hungary(4)
               (r)Acquisition agreement between Registrant and MS Telecom Rt.(4)
               (s)Employment Agreement between Registrant and Imre Kovats(4)
               (t)Employment Agreement between Registrant and Csaba Toro(4)
               (u)Promissory Note from Registrant to HBC(4)
               (v)Communication Services Agreement between Registrant and MCI
                Global Resources, Inc.6
               (w)Lease and Option Agreement for Building B as of April 1, 1998
                with Hafisa Kft.7
               (x)License Agreement between Gric Communications, Inc.  and
                EuroWeb International Corp.(5)
               (y)Consulting Agreement between Registrant and Eurus Capital
                Corporation and Rescission Agreement8
                (y)(i)Agreement rescinding Option Agreement with Eurus Capital
                        Corporation9

                                      -19-

<PAGE>

               (z) Financial Consulting Agreement between Registrant and J.W.
                Barclay & Co., Inc.10
               (aa)Mergers and Acquisitions Agreement between Registrant and
                J.W. Barclay11
               (bb)Placement Agreement between Registrant and J.P. Carey, Inc.
                and form of Placement   Agent   Warrants   issued  in
                connection with private placement   financing12
               (cc)Private Placement Agreement between Registrant and Peter E.
                Klenner13
               (dd)Employment Agreement between Registrant and Csaba Toro14
               (ee)Employment Agreement between Registrant and Robert Genova15
               (ff)Employment Agreement between Registrant and Frank R. Cohen16
               (gg)Placement  Agreement  between  Registrant and JP Carey
                Securities  Inc. and Warrant  Agreement in connection  with
                private placement financing17
               (hh)Private Placement Agreement between Registrant and M&A
                Management18
               (ii)Form of  Subscription  Agreement in connection with private
                offering of common stock and Warrants  pursuant to Rule 506 of
                Regulation D under Section 4(2) of the Securities Act of 193319
               (jj)Acquisition Agreement between Registrant and Luko Czech Net,
                5.1.0. dated June 11, 199920
               (kk)Acquisition Agreement between Registrant and Slavia Capital,
                O.C.P.,a.s. dated July 2, 199921
               (ll)Acquisition Agreement between Registrant and Eunet Slovakia
                s.r.o. dated July 14, 199922
               (mm)Acquisition Agreement between Registrant and shareholders of
                Dodo, s.r.o. dated August 5, 199923
               (nn)Acquisition  Agreement  between  Registrant and shareholders
                of Mediator S.A. dated May 17, 200027 and Amendment thereto on
                August 28, 200028.
           (16) (a)Letter on Change in Certifying Accountant24
                (b)Letter by Former Accountant Agreeing with Company's
                Statements.(24)
           (22) (a)Proxy Statement for Special Meeting of Stockholders.25
                (b)Press Release on Adjournment of Special Meeting.26
                (c)Press Release on Results of Vote.27




--------

2 Exhibits are incorporated by reference to Registrant's Registration Statement
on Form SB-2 dated May 12, 1993 (Registration No.
33-62672-NY, as amended)
3 Filed with Form 10-QSB for quarter ended June 30, 1998.
4 Filed with Form 8-K as of February 17, 1994
5 Filed with Form 10-KSB for year ended December 31, 1996
6 Filed with Form 10-QSB for quarter ended September 30, 1997.
7 Filed with Form 10KSB for year ended December 31, 1997.
8 Filed with Amendment No. 1 to Registration Statement 333-52841
9 Filed with Amendment No. 2 to Registration Statement 333-52841

10 File with Amendment No. 1 to Registration Statement 333-52841
11 Filed with Amendment No. 1 to Registration Statement 333-52841
12 Filed with Form 8-K as of October 14, 1998
13 Filed with Form 8-K as of October 14, 1998
14 Filed with Form 8-K as of October 14, 1998
15 Filed with Form 8-K as of October 14, 1998
16 Filed with Form 8-K as of October 14, 1998
17 Filed with Form 8-K as of April 21, 1999
18 Filed with Form 8-K as of April 21, 1999
19 Filed with Form 8-K as of April 21, 1999
20 Filed with Form 8-K as of June 11, 1999
21 Filed with Form 10-QSB for quarter ended June 30, 1999
22 Filed with Form 10-QSB for quarter ended June 30, 1999
23 Filed with Form 10-QSB for quarter ended June 30, 1999
24 Filed with Form 8-K on December 21, 1999.
25 Filed with Form DEF 14A on December 14, 1999.
26 Filed with Form 8-K on January 12, 2000.
27 Filed with Form 8-K on February 14, 2000.
27 Filed with Form 8-K on June 27, 2000.
28 Filed with Form 8-K/A on August 28, 2000.


                                      -20-

<PAGE>













                           EUROWEB INTERNATIONAL CORP.



             Consolidated Balance Sheet as of December 31, 2000 and
           Consolidated Statements of Operations & Comprehensive Loss,
                  Stockholders' Equity, and Cash Flows for the
                     Years ended December 31, 2000 and 1999



                                      -20-

<PAGE>




                           EUROWEB INTERNATIONAL CORP.

                        Consolidated Financial Statements

                           December 31, 2000 and 1999




                                TABLE OF CONTENTS






Independent Auditors' Report                                        F-2


Consolidated Financial Statements:


 Consolidated Balance Sheet                                         F-3
 Consolidated Statements of Operations and Comprehensive Loss       F-4
 Consolidated Statements of Stockholders' Equity                    F-5
 Consolidated Statements of Cash Flows                              F-6
 Notes to Consolidated Financial Statements                         F-7









                                      F-1

<PAGE>



                          Independent Auditors' Report



The Board of Directors and Stockholders
Euroweb International Corp.


We have audited the accompanying  consolidated balance sheet of Euroweb
International Corp. and subsidiaries as of December 31, 2000, and the related
consolidated  statements of operations and comprehensive  loss,  shareholders'
equity and cash flows for each of the years in the two year period  ended
December  31,  2000.  These  consolidated  financial  statements  are the
responsibility  of the Company's management.  Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance  with generally  accepted  auditing
standards in the United States of America.  Those standards require  that we
plan and  perform  the audit to obtain  reasonable  assurance  about  whether
the  financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test basis,  evidence  supporting  the amounts  and
disclosures  in the financial  statements.  An audit also includes assessing
the accounting  principles used and significant estimates made by management,
as well as evaluating the overall  financial  statement  presentation.  We
believe that our 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 consolidated financial  position
of Euroweb  International  Corp. and subsidiaries as of December 31, 2000, and
the  consolidated  results of their operations  and their cash flows for the
years ended  December 31, 2000 and 1999, in conformity  with  generally
accepted  accounting principles in the United States of America.








KPMG Hungaria Kft.
Budapest, Hungary
March 23, 2001




                                      F-2

<PAGE>



                           Euroweb International Corp.
                           Consolidated Balance Sheet
                                December 31, 2000

<TABLE>
<S>                                                                                          <C>

                                                                                              2000
   ASSETS
  Current assets:
    Cash and cash equivalents (note 3)                                                   $ 4,372,783
    Investment in securities (note 4)                                                     14,177,848
    Trade accounts receivable, less allowance for doubtful accounts of                       414,983
    $375,828
    Current portion of note receivable (note 14)                                             164,354
    Loan receivable (note 15)                                                                 86,682
    Prepaid and other current assets                                                         653,349
                                                                                         ___________
         Total current assets                                                             19,869,999

  Note receivable, less current portion (note 14)                                            540,738
  Investment in affiliate (note 6)                                                           939,602
  Property and equipment, less accumulated depreciation (note 7)                           1,150,089
  Intangibles, less accumulated amortization (note 8)                                      8,086,040
  Other non-current assets (note 10)                                                          45,557
                                                                                         ___________
       Total assets                                                                      $30,632,025
                                                                                         ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Trade accounts payable                                                                  $940,332
    Current portion of acquisition indebtedness (note 10)                                    180,000
    Other current liabilities                                                                232,687
    Accrued expenses                                                                         208,824
    Deferred revenues                                                                        212,253
                                                                                           _________
       Total current liabilities                                                           1,774,096

   Loan payable (note 11)                                                                    103,734
   Acquisition indebtedness, less current portion (note 10)                                  360,000
    Non-current portion of lease obligations (note 9)                                         72,021

       Total liabilities                                                                   2,309,851

   Stockholders' equity (note 13)
   Preferred stock, $.001 par value - Authorized 5,000,000 shares;
      no shares issued or outstanding                                                              -
   Common stock, $.001 par value - Authorized 60,000,000 shares;
      issued and outstanding   24,008,481 shares                                              24,129
   Additional paid-in capital                                                             48,227,764
   Accumulated deficit                                                                   (19,742,020)
   Accumulated other comprehensive losses
                                                                                            (14,011)
   Treasury stock -  195,600 common shares, at cost
                                                                                           (173,688)
                                                                                          __________
      Total stockholders' equity                                                          28,322,174

   Commitments and contingencies (note 16)

      Total liabilities and stockholders' equity                                         $30,632,025
                                                                                         ===========



          See accompanying notes to consolidated financial statements.

</TABLE>

                                      F-3

<PAGE>


                           Euroweb International Corp.
          Consolidated Statements of Operations and Comprehensive Loss
                     Years Ended December 31, 2000 and 1999

<TABLE>
<S>                                                                     <C>                     <C>


                                                                        2000                      1999

Revenues                                                                 $ 4,397,386            $ 1,233,567
Cost of revenues                                                           2,283,225                628,880
                                                                          __________             __________
   Gross profit                                                            2,114,161                604,687

Operating expenses
   Compensation and related costs                                          1,759,823                591,301
   Consulting, professional and directors fees                               792,965                481,604
   Other selling, general and administrative expenses                      1,434,235                522,492
   Depreciation and amortization                                           1,983,631                489,434
                                                                           _________              _________
               Total operating expenses                                    5,970,654              2,084,831

Loss from operations                                                     (3,856,493)             (1,480,144)

   Net interest income                                                       904,016                222,154
   Equity in net income of affiliate  (Note 6)                               201,402                 83,595
   Loss on equity adjustment by affiliate                                   (12,250)                      -
   Gain on sale of interest in affiliate                                           -               147,000
   Realized loss on sale of securities                                             -              (136,792)

Loss from continuing operations before income taxes and minority          (2,763,325)           (1,164,187)
interest
Provision for income taxes                                                         -               (14,398)

Minority interests                                                             5,050                 6,377
                                                                          ___________           ___________
Loss from continuing operations                                           (2,758,275)           (1,172,208)
Loss from discontinued operations (note 14)                                        -               (50,858)
                                                                          ___________           ___________

Net loss                                                                 (2,758,275)            (1,223,066)

Other comprehensive gain (loss)                                              85,391                (52,427)
                                                                          __________            ____________

Comprehensive loss                                                     $ (2,672,884)           $(1,275,493)
                                                                       ==============          ============

Net loss per share, basic and diluted                                          (.12)                 (.14)

Weighted average number of shares outstanding, basic and diluted          21,994,700             8,593,000





</TABLE>

           See accompanying notes to consolidated financial statements

                                      F-4






<PAGE>




                           EUROWEB INTERNATIONAL CORP.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2000 and 1999



<TABLE>
<S>                                     <C>          <C>          <C>           <C>          <C>            <C>        <C>



                                                                                          Accumulated
                                                               Additional                    Other
 Total
                                                 Common Stock  Paid-in     Accumulated  Comprehensive    Treasury   Stockholders'
                                       Shares       Amount     Capital    Deficit        Gains(Losses)    Stock          Equity

Balances, January 1, 1999               6,444,916   $6,445   $20,886,852   $(15,760,679)    $(46,975)           -   $5,085,643
Issuance of shares for cash (net of     2,160,361    2,160     3,042,023                -           -           -    3,044,183
placement costs of $297,545)
Issuance of shares for acquisitions     1,188,063    1,188     1,998,812                -           -           -    2,000,000
Issuance of options for acquisitions            -        -        25,500                -           -           -       25,500
Exercise of common stock options          285,000      285       538,465                -           -           -      538,750
Exercise of common stock warrants         419,341      345       424,164                -           -           -      424,509
Foreign currency translation loss               -        -             -                -    (73,402)           -     (73,402)
Unrealized loss on investment                   -        -             -                -   (115,817)           -     (115,817)
Realized loss on investment                     -        -             -                -     136,792           -      136,792
Net loss for the period                         -        -             -      (1,223,066)           -           -   (1,223,066)
                                        _________  ________   __________      ____________   _________      ______  ___________

Balances, December 31, 1999            10,497,681  $10,423   $26,915,816    $(16,983,745)   $(99,402)         $-     $9,843,092
                                       ==========  =======   ===========    =============   =========         ===    ==========

Issuance of shares for cash (net of    12,305,066   12,305    18,765,415                -          -            -    18,777,720
placement costs of $260,620)
Exercise of stock warrants              1,311,334    1,311     2,404,123                -          -            -     2,405,434
Exercise of stock options                  90,000       90       142,410                                                142,500
Foreign currency translation loss               -        -             -                -   (86,997)            -      (86,997)
Unrealized gain on securities available         -        -             -                -    172,388            -       172,388
for sale
Net loss for the period                         -        -             -      (2,758,275)          -            -    (2,758,275)
Treasury stock                          (195,600)        -             -                -         -       (173,688)    (173,688)
                                       _________  ________   ___________      ___________   _________      ______  _____________
Balances, December 31, 2000            24,008,481  $24,129   $48,227,764    $(19,742,020)  $(14,011)   $(173,688)   $28,322,174
                                       ========== ========   ===========    =============  ==========  ==========  =============


</TABLE>





           See accompanying notes to consolidated financial statements

                                      F-5

<PAGE>

<TABLE>
<S>                                                                                     <C>                     <C>

                           Euroweb International Corp.
                      Consolidated Statements of Cash Flows
                      Year Ended December 31, 2000 and 1999
------------------------------------------------------------------------------- ---------------------- ----------------------
                                                                                            2000             1999
Cash flows from operating activities:
   Net loss
                                                                                  $(2,758,275)           $(1,223,066)
   Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization                                                     1,983,631                489,434
   Amortization of discount on acquisition indebtedness (note 10)                       14,790                      -
   Gain on sale of interest in affiliate                                                     -              (147,000)
   Loss on equity adjustment by affiliate                                               12,250                      -
   Equity in net income of affiliate                                                 (201,402)               (83,595)
   Provision for doubtful accounts                                                     131,205                 17,782
   Foreign currency loss                                                                84,845                  6,470
   Minority interests                                                                    5,050                (6,377)
   Gain on sale of securities                                                                -                136,792
   Non-cash compensation expense                                                             -                 96,000
Changes in operating assets and liabilities net of effects of acquisitions:
   Accounts receivable                                                               (193,890)                 11,243
   Prepaid and other assets                                                          (281,016)                 47,981
   Accounts payable and accrued expenses                                               103,042               (95,928)
   Deferred revenue                                                                     26,339                (6,721)
                                                                                    __________              _________
           Net cash used in operating activities                                    (1,073,431)             (756,985)

Cash flows from investing activities:
   Certificates of deposit purchased                                                 1,052,779                 46,212
   Investment in securities                                                       (14,005,460)                      -
   Repayments of notes receivable                                                      152,817                571,958
   Issuance of loan receivable                                                               -               (250,000)
   Repayments of loan receivable                                                        81,526                 81,792
   Proceeds from sale of other investments                                                   -                 43,733
   Acquisition of property and equipment, intangibles                              (2,034,796)              (160,341)
   Investment in affiliate                                                                   -               (59,100)
   Acquisition of Internet companies net of cash acquired                          (3,633,884)             (2,639,485)
                                                                                  ___________             ___________
        Net cash used in investing activities                                     (18,387,018)             (2,365,231)

Cash flows from financing activities:
   Payments to acquire treasury stock                                                (173,688)                      -
   Principal payments under capital lease obligations                                 (33,769)                      -
   Repayment of loan payable                                                          (85,094)               (50,630)
   Proceeds from issuance of common stock                                           21,325,654              4,279,368
                                                                                    __________              _________
          Net cash provided by financing activities                                 21,033,103              4,228,738

Effect of foreign exchange rate changes on cash                                       (14,942)                 20,269
                                                                                      ________               _________

Net increase in cash and cash equivalents                                            1,557,712              1,126,791
Cash and cash equivalents, beginning of period                                       2,815,071              1,688,280
                                                                                     _________            ___________
Cash and cash equivalents, end of period                                            $4,372,783            $2 ,815,071
                                                                                    ==========            ===========

Supplemental disclosure of cash transactions
   Interest paid                                                                      $ 45,473                 $5,945
   Income tax paid                                                                           -               $ 14,398

  Non-cash transactions:
    Debt acquired on acquisition of subsidiaries                                     $ 643,734                      -
    Issuance of common stock for acquisition of subsidiaries                                 -             $2,000,000

</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-6

<PAGE>

                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999

1.    Organization and Business

EuroWeb  International  Corporation  (the  "Company") is a Delaware
corporation  which was  organized on November 9, 1992,  and was a
development stage enterprise through December 31, 1993.

The Company owns and operates  Internet  service  providers in the Czech
Republic,  Romania and Slovakia.  The Company's  consolidated statements  of
operations  also include the equity in the net income of Euroweb  Hungary Rt.,
in which the Company has a 49% ownership interest.   The Company operates in
one business segment.


2.  Summary of Significant Accounting Policies

  (a) Principles of consolidation

       The consolidated  financial statements comprise the accounts of the
       Company and its controlled  subsidiaries.  All material intercompany
       balances and transactions have been eliminated upon consolidation.

       The consolidated  financial  statements have been prepared in accordance
       with generally accepted  accounting  principles in the Unites States of
       America.

  (b) 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 the  disclosure  of contingent  assets and  liabilities
       at the date of the  financial  statements  and the  reported  amounts of
       revenues  and expenses during the reporting period.  Actual results
       could differ from those estimates.  Significant estimates made by the
       Company include the period of benefit and recoverability of goodwill and
       other intangible assets.

  (c)  Fair value of financial instruments

       The  carrying  values of cash  equivalents,  certificates  of  deposits,
       investment  in debt  securities,  notes and loans receivable, accounts
       payable, loans payable and accrued expenses approximate fair values.

  (d)  Revenue recognition

       Revenues from monthly Internet  services are recognized in the month in
       which the services are provided.  Revenue for other services, including
       equipment sales are recognized as the service is performed or the
       equipment is delivered.

  (e) Cost of revenues

       Cost of revenues  comprise  principally  of  telecommunication  network
       expenses,  costs of content  services  and cost of internet equipment
       sold.


                                      F-7

<PAGE>


                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999


  (f)  Foreign currency  translation

       The Company  considers the United States Dollar ("US$") to be the
       functional  currency of the Company and unless  otherwise
       stated,  the respective local currency to be the functional  currency
       of its  subsidiaries.  The reporting  currency of the Company is the
       US$ and  accordingly,  all amounts included in the  consolidated
       financial  statements have been translated into US$.

       The balance sheets of subsidiaries  are translated  into US$ using the
       year end exchange  rates.  Revenues and expenses are translated at
       average rates in effect for the periods presented.  The cumulative
       translation  adjustment is reflected as a separate component of
       shareholders' equity on the consolidated balance sheet.

       The Company  conducts  business and  maintains  its accounts  for Euroweb
       Romania in the Romanian Lei ("ROL").  Romania is considered highly
       inflationary and, therefore the U.S. dollar is used as the functional
       currency.  The Company's financial statements presented in ROL are
       remeasured into U.S. dollars using the following policies:

  -  Monetary assets and  liabilities  are remeasured into the functional
     currency using the exchange rate at the balance sheet date.
  -  Non-monetary assets and liabilities are remeasured into the functional
     currency using historical exchange rates.
  -  Revenues,  expenses,  gains and losses are remeasured into the functional
     currency using the average exchange rate for the period except for
     revenues and expenses related to non-monetary  items that are remeasured
     using historical  exchange rates.

     The net  effect  of  re-measurement  from the  local  currency  into the
     functional  currency  (US$)  is  included  in the determination of net
     profit and loss.

     Foreign  currency  transaction  gains and losses are included in the
     consolidated  results of  operations  for the periods presented.


 (g) Cash and cash equivalents

      Cash and cash equivalents include cash at bank and short-term deposits of
      less than three months duration.


 (h) Investment in securities

      Investments in marketable  debt  securities are  classified as
      available-for-sale  and are recorded at fair value with any
      unrealized holding gains or losses included as a component of other
      comprehensive income until realized.

                                      F-8

<PAGE>

                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999


 (i) Investment in affiliate

      Until November 1998, the Company owned 100% of Euroweb Rt., and as such
      consolidated  this entity for reporting  purposes. In November  1998,  a
      51%  interest in Euroweb Rt. was sold to Pantel Rt. and the Company
      retained a minority  interest of 49%. As the Company no longer exerts any
      control over Euroweb Rt., the investment is carried on the equity basis.

      The Company  records as income its share of the earnings of Euroweb
      Hungary Rt., net of goodwill  amortization.  Dividends are credited
      against the investment  account when declared.  The excess of the
      carrying value of the Company's  investment over its equity in the fair
      value of the  underlying net assets  (goodwill) of  approximately
      $586,000 at the  acquisition date is being  amortized  over  three  years.
      The net  balance  of this  goodwill  as at  December  31,  2000 is
      $189,532 representing one remaining year's future benefit.


 (j) Property and equipment

      Property and  equipment are stated at cost,  less  accumulated
      depreciation.  Equipment  purchased  under capital lease is
      stated at the present value of minimum lease payments at the inception
      of the lease,  less  accumulated  depreciation.  The Company  provides
      for depreciation of equipment using the  straight-line  method over the
      shorter of estimated useful lives of four years or the lease term.

      Recurring maintenance on property and equipment is expensed as incurred.

      When assets are retired or otherwise  disposed  of, the related  costs
      and  accumulated  depreciation  from the  respective accounts and any
      gain or loss on disposals are included in the results of operations.


 (k) Intangibles

      Intangibles consist of goodwill and customer lists.  Goodwill results
      from business  acquisitions and represents the excess of purchase price
      over the fair value of net assets  acquired.  Amortization  is computed
      over the estimated  future period of benefit (generally five years) on a
      straight-line basis. The Company assesses  recoverability by determining
      whether the goodwill can be recovered  through  undiscounted  future
      operating  cash flows of the acquired  operations.  The amount of
      goodwill  impairment,  if any, is measured based on projected  discounted
      future  operating  cash flows using  appropriate discount rates.
      Conditions  which may indicate that an impairment issue exists include a
      negative  economic  downturn or a change in the  assessment  of future
      operations.  No such events are currently  expected in Central  Europe at
      the present time.  However,  the assessment of the recoverability of
      goodwill will be impacted if estimated future operating cash flows
      are not achieved.

                                      F-9

<PAGE>

                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999

 (k) Intangibles (continued)

      Customer lists were acquired as a result of a purchase of assets and are
      being  amortized over the estimated  future period of benefit of five
      years. The assessment of  recoverability  and possible  impairment are
      determined in a manner similar to the assessment of goodwill  described
      above. No  recoverability  or impairment  issues have been  identified,
      although the assessment of the recoverability will be impacted if
      estimated future operating cash flows are not achieved.


 (l) Net loss per share

      The Company has adopted Statement of Financial  Accounting Standards No.
      128, "Earnings per Share," ("SFAS No. 128"), which  provides for the
      calculation  of "basic" and  "diluted"  earnings per share.  Basic
      earnings(loss)  per share  include no dilution and is computed by
      dividing  income(loss)  attributable to common  stockholders by the
      weighted  average number of common shares outstanding for the period.
      Diluted  earnings(loss) per share reflects the potential effect of common
      shares issuable  upon  exercise of stock  options and  warrants in
      periods in which they have a dilutive  effect.  The Company had
      potentially  dilutive common stock  equivalents for the years ended
      December 31, 2000 and 1999,  which were not included in the computation
      of diluted net loss per share because they were antidilutive.


 (m) Comprehensive loss

      The Company adopted  Statement of Financial  Accounting  Standards No.
      130,  "Reporting  Comprehensive  Income," ("SFAS No.130") which
      established  standards for reporting and display of  comprehensive
      income,  its  components  and  accumulated balances.  Comprehensive
      income is defined to include all changes in equity except those
      resulting from  investments  by, and  distributions  to,  owners.  Among
      other  disclosures,  SFAS No.130  requires  that all items that are
      required to be recognized under current accounting  standards as
      components of comprehensive  income be reported in a financial  statement
      that is displayed  with the same  prominence as other  financial
      statements.  The Company has chosen to present a Combined
      Statement of Operations and Comprehensive Loss.


 (n) Business segment reporting

      The Company adopted Statement of Financial Accounting  Standards No. 131,
      "isclosures About Segments of an Enterprise and Related  Information,"
      ("SFAS No. 131"). SFAS No. 131 superseded FASB Statement No. 14,
      "Financial  Reporting for Segments of a Business  Enterprise."  SFAS No.
      131 establishes  standards for disclosures  about  operating  segments,
      products and  services,  geographic  areas and major  customers.
      Management  has  determined  that the Company  operates in one industry
      segment,  acting as an Internet service provider to business  customers.
      Substantially  all of the Company's  revenues are derived from the
      provision of such services.

                                  F-10

<PAGE>


                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999

 (o) Income taxes

      The Company accounts for income taxes in accordance with Statement of
      Financial  Accounting  Standards No. 109, "Accounting for Income Taxes".
      Deferred tax assets and liabilities,  net of appropriate valuation
      allowances,  are recognized for the future tax consequences  attributable
      to differences  between the financial  statement  carrying amounts of
      existing assets and liabilities and their  respective tax bases and
      operating loss and tax credit  carry-forwards.  Deferred tax assets and
      liabilities,  if any, are measured  using enacted tax rates expected to
      apply to taxable income in the years in which those temporary
      differences  are  expected to be recovered or settled.  The effect on
      deferred tax assets and  liabilities  of a change in tax rates is
      recognized in income in the period that includes the enactment date.


 (p) Stock-Based compensation

      The Company  applies the intrinsic  value-based  method of accounting
      prescribed  by Accounting  Principles  Board ("APB") Opinion No. 25,
      "Accounting for Stock Issued to Employees," and related  interpretations
      including FASB Interpretation No. 44,  "Accounting for Certain
      Transactions  involving Stock Compensation an interpretation of APB
      Opinion No. 25" issued in March 2000, to account for its fixed plan stock
      options.  Under this method,  compensation  expense is recorded on the
      date of grant only if the current market price of the underlying  stock
      exceeds the exercise  price.  SFAS No. 123,  "Accounting for  Stock-Based
      Compensation,"  ("SFAS  No.  123")  established  accounting  and
      disclosure  requirements  using  a fair value-based method of accounting
      for stock-based  employee  compensation plans. As allowed by SFAS No. 123,
      the Company has elected to  continue  to apply the  intrinsic
      value-based  method of  accounting  described  above,  and has  adopted
      the disclosure requirements of SFAS No. 123.


(q) Recent accounting pronouncements

      In June 1998 the Financial  Accounting  Standards Board ("FASB") issued
      Statement of Financial Accounting Standards No. 133 ("SFAS No.  133"),
      "Accounting  for  Derivative  Instruments  and for  Hedging  Activities."
      In June 2000 the FASB issued Statement of Financial Accounting Standards
      No. 138 ("Statement No. 138"),  "Accounting for Certain Derivative
      Instruments and Certain Hedging  Activity,  an Amendment of SFAS 133.
      "Statement No. 133, as amended,  requires  companies to recognize
      all  derivatives as either assets or liabilities in the statement of
      financial  condition and measure those  instruments at fair value.  It
      also  requires  that  changes in fair value of a derivative  be
      recognized  currently  in earnings  unless specific hedge  accounting
      criteria are met. The Company adopted SFAS No. 133, as amended on January
      1, 2001. The adoption of SFAS No. 133 did not materially impact the
      Company's financial position or results of operations.



                                      F-11

<PAGE>


                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999

3.    Cash Concentration

At December 31, 2000, cash and cash equivalents included $3,395,294 on
deposit with a U.S. money market fund.

4.    Investment in Securities

On February 15, 2000, the Company purchased a Federal Home Loan Mortgage
Corporation debt security.       The debt security has a
face value of  $14,200,000, bears interest at 5.0% (yield to maturity of 6.44%)
and was purchased for $ 14, 005,460. The debt security matures on February 15,
2001. An unrealized holding gain of $172,388, being the difference between the
cost and the market value as of December 31, 2000, has been recorded as a
comprehensive gain.


5.   Acquisitions

During the years ended  December 31, 2000 and 1999 the Company,  through its
subsidiaries,  acquired  the entities  described  below,
which were accounted for by the purchase method of accounting.

2000 Acquisitions


a)         On April 21, 2000, the Company  acquired all of the outstanding
      capital stock of Isternet SR, s.r.o.,  an Internet service provider in
      the Slovak  Republic,  for  $1,029,299  in cash.  Goodwill  arising on
      this  purchase was  $945,200.  The results of Isternet SR's operations
      from May 1, 2000 to December 31, 2000 have been included in the
      accompanying  statements of operations and comprehensive loss for 2000.

b)         On May 19, 2000, the Company  purchased all of the Internet related
      assets of Sumitkom  Rokura,  S.R.L. an Internet service provider in
      Romania,  for  $1,561,125 in cash. The  acquisition  has been  accounted
      for as an asset  purchase,  with a value of $1,150,000 being assigned to
      customer lists acquired.

c)         On May 22, 2000,  the Company  acquired the  remaining  30% of R-Net
      (the initial 70% being  acquired in 1999,  see Note 5h  below) for
      $355,810 in cash. Goodwill arising on this purchase was $357,565.

d)         On June 14, 2000, the Company acquired all of the outstanding
      capital stock of Mediator S.A., an Internet service provider in Romania,
      for a purchase price of $2,835,569. This consisted of $2,040,000 in cash
      and the assumption of a $ 540,000 liability to the former owner  payable
      in annual  installments  of $180,000  commencing  on June 1, 2001.
      Goodwill  arising on this purchase was $2,455,223.  The  results of
      Mediator  S.A.'s  operations  from July 1, 2000 to  December  31,  2000
      have been  included in the accompanying  statements of operations and
      comprehensive loss for 2000.  Immediately after the purchase, the name
      was changed to Euroweb Romania S.A.

                                      F-12

<PAGE>





                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999


e)         On August 25, 2000, the Company,  through its  subsidiary,
      Luko Czech,  acquired all of the  outstanding  capital stock of
      Stand s.r.o.,  an Internet service provider in the Czech Republic,  for
      $280,735 in cash.  Goodwill arising on this purchase was $260,063.  The
      results of Stand's  operations from September 1, 2000 to December 31,
      2000 have been included in the accompanying statements of operations and
      comprehensive loss for 2000.


1999 Acquisitions

f)         On June 11, 1999, the Company acquired all of the participating
      interests of Luko CzechNet,  an ISP in the Czech Republic, for a purchase
      price of $1,862,154  consisting of 450,000 shares of the Company's common
      stock and 50,000 options (see Note 18a) valued at $2.00 per share, and
      the balance paid in cash.  Goodwill arising on this purchase was
      $1,734,996.  The results of Luko CzechNet's  operations  from June 1,
      1999 to December 31, 1999 have been included in the  accompanying
      statements of operations and  comprehensive  loss for 1999, and its
      entire 2000 results have been included in the  accompanying  statements
      of operations and comprehensive loss for 2000.



g)         On July 15, 1999, the Company  acquired all of the  outstanding
      shares of capital stock of EUnet  Slovakia,  an ISP in the Slovak
      Republic,  for a purchase price of $813,299  consisting of 237,040 shares
      of the Company's common stock valued at $1.6875 per share and the balance
      paid in cash.  Goodwill  arising on this  purchase  was  $726,213.  The
      results of EUnet  Slovakia's operations  from August 1, 1999 to December
      31,  1999 have been  included in the  accompanying  statements  of
      operations  and comprehensive  loss for 1999,  and its entire 2000
      results have been included in the  accompanying  statements of operations
      and comprehensive loss for 2000.

h)         On July 15, 1999, the Company acquired 70% of the equity of R-Net, a
      subsidiary of a Slovak internet service provider,  for a purchase  price
      of $630,234  consisting  of 145,455  shares of the  Company's  common
      stock valued at $1.375 per share and the balance paid in cash.  Goodwill
      arising on this purchase was $607,663.  The results of R-Net's operations
      from August 1, 1999 to December 31, 1999 have been included in the
      accompanying  statements of operations  and  comprehensive  loss for 1999,
      and its entire 2000 results have been included in the accompanying
      statements of operations and comprehensive loss for 2000.

i)         On September 23, 1999 and November 16, 1999 the Company acquired 70%
      and 30%,  respectively,  of the outstanding  shares of Global  Network
      Services,  a.s.,  an Internet  service  provider in the Slovak  Republic
      for a purchase  price of  $1,633,051, consisting  of 355,568  shares of
      the Company's  common stock valued at $1.406 per share and the balance
      paid in cash.  Goodwill arising on this purchase was  $1,776,532.  The
      results of Global Network  Services'  operations from October 1, 1999 to
      December 31, 1999 have been included in the accompanying  statements of
      operations and  comprehensive  loss for 1999, and its entire 2000
      results have been included in the accompanying statements of operations
      and comprehensive loss for 2000.

                                      F-13

<PAGE>


                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999

5.  Acquisitions (continued)

The  following  unaudited  pro-forma  information  presents a summary of
consolidated  results of  operations  of the Company and the significant
acquisitions described above as if the acquisitions had occurred at January 1,
1999.

------------------- -------------------- -----------------------------
                     December 31, 2000    December 31, 1999
------------------- -------------------- -----------------------------
------------------- -------------------- -----------------------------
Revenues                 5,503,579            5,346,577
------------------- -------------------- -----------------------------
------------------- -------------------- -----------------------------
Net loss                (3,187,169)          (3,584,498)
------------------- -------------------- -----------------------------
------------------- -------------------- -----------------------------
Net loss per share         (.14)                (.42)
------------------- -------------------- -----------------------------



6.  Affiliate, carried on an equity basis

The  Company's  consolidated  statement of  operations  for the years ended
December 31, 2000 and 1999 include the  Company's  equity interest in the net
income of Euroweb Rt. for each period, calculated as follows:

                                              2000                  1999

   Revenues                            $ 4,909,413                  $ 3,091,486

   Gross profit                          2,927,825                    1,606,425

   Net income from operations              798,006                      557,584

   Net income                           $  798,006                  $   557,584

   Company's 49% equity in net income      391,023                      273,216
   Amortization of goodwill related to
   the Company's investment              (189,621)                    (189,621)

   Equity in net income of affiliate     $ 201,402                   $   83,595


Since the  functional  currency of the affiliate is the  Hungarian  forint,
the  Company's  net  investment in the affiliate has been reduced by its share
of the  translation  loss ($ 72,053)  arising upon  conversion of the
affiliate's  financial  statements into US dollars.  This amount has also
been recorded in other comprehensive gain (loss).



                                      F-14

<PAGE>


                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999


7. Property and equipment

     Property and equipment as at December 31, 2000 and 1999 were as follows:

                                                2000                1999

     Software                            $ 61,151                  $ 5,016
     Internet equipment                 1,237,619                  412,671
     Vehicles                             335,711                   79,817
     Other                                 64,546                    4,589

       Total                            1,699,027                  502,093
       Less accumulated depreciation     (548,938)                 (90,325)
                                       $1,150,089                $ 411,768

Depreciation charged during 2000 and 1999 was $458,613 and $90,325 respectively.


8. Intangible assets

     Intangible assets as at December 31, 2000 and 1999 consist of the
following:

                                         2000                       1999

     Customer lists                   $1,150,000              $         -
     Goodwill                          8,863,455                 4,845,404
       Total                          10,013,455                 4,845,404
       Less accumulated amortization  (1,927,415)                 (402,397)
                                       $8,086,040              $ 4,443,007

Amortization  charged  during 2000 and 1999 was  $1,525,018 and $402,397
respectively.  The customer  lists were obtained  during the
course of an asset purchase of a Romanian company (See Note 5-Acquisitions).

9. Leases

The Company is committed  under  various  capital  leases,  which  expire over
the next three  years.  The amount of assets held under
capital leases included in property and equipment is as follows:

                                        2000

     Internet equipment                 $ 78,534
     Vehicles                            150,199
       Total                             228,733
       Less accumulated depreciation     (57,233)
                                        $171,500


                                      F-15

<PAGE>
                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999


9. Leases (continued)
The following is a schedule of future minimum  capital lease  payments  (with
initial or remaining  lease terms in excess of one year)as of December 31, 2000:

             2001                                       $ 71,500

             2002                                         58,860

             2003                                         27,042
       Total minimum lease payments                      157,402
       Less interest costs                                36,381
       Present value of future mimimum lease payments    121,021
       Less:   current installments                       49,000
             Non-current portion of lease obligations    $72,021



10.   Acquisition Indebtedness

In  connection  with the  acquisition  of  Euroweb  Romania  S.A.,  the
company  assumed  indebtedness  of $  540,000  from a selling
shareholder  (see Note  5-Acquisitions).  The  indebtedness is payable in three
yearly  installments  of $180,000,  commencing June 1, 2001. Due to the
long-term nature of this financial  instrument,  this liability has been
discounted  using an appropriate  rate, with the unamortized portion of
$45,557 being recorded as non-current assets.


11.  Loan payable

At the date of  acquisition  in April 2000,  Isternet SR,  s.r.o.  had a a loan
from one of its former  shareholders  amounting to SKK 4,600,000 ($103,734).
The loan is repayable by January 2003 and bears interest at a rate of BRIBOR
("Bratislava  Inter-Bank Overnight Rate")+ 5%.  The loan has been classified
as non-current as the Company is not required to repay any portion of the loan
in 2001.



12.   Income taxes

      Components of income taxes are as follows:


                          2000                            1999
                  --------------------------    ------------------------------
                 Current   Deferred  Total      Current  Deferred     Total
 Federal            -         -        -          -          -          -
 State and local    -         -        -          -          -          -
 Foreign            -         -        -         14,398      -         14,398
                  -------    ------  -------     ------      ------   -------
 Total               $ -      $ -    $ -        $ 14,398     $  -    $ 14,398
                  =======    ======   =======     ======    ======      =====


                     F-16

<PAGE>

                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999

The difference between the total expected tax expense (benefit)   (using the
statutory rate of 34%) and tax expense for the years ended December 31, 2000
is accounted for as follows:

<TABLE>
<S>                                      <C>       <C>         <C>              <C>
                                        2000                              1999
                                     ------------------         --------------------------
                                     Amount      %               Amount           %
                                    ---------   --------       --------        ---------
 Computed expected tax
   benefit                           $(939,531)  (34.00)     $(395,823)         (34.00)

 State Taxes Net of Federal Benefit  (164,142)   (5.94)        (69,153)          (5.94)

 Amount Attributable to Foreign
   Operations                         860,051     31.13        193,945           16.66

 Permanent Differences                   673       0.02        (58,712)          (5.04)

 Other                               (21,769)     (0.79)             -              -

 Change in Valuation Allowance        264,718      9.58        344,141           29.56
                                     ---------    ------        --------         -------
 Total benefit                          $ -       0.00%     $   14,398            1.24%
                                     =========    ======        ========         ======

</TABLE>


The tax effects of temporary differences that give rise to significant portions
of deferred tax assets at December 31, 2000 and 1999 are as follows:
                                            2000               1999
                                        ----------         ----------
    Deferred Tax Assets:
      Net Operating Loss Carryovers      $2,309,885        $2,065,480
      Capital Loss Carryovers            1,321,392          1,301,079
                                         ----------        ----------
    Gross Tax Assets                     3,631,277          3,366,559
    Valuation Allowance                 (3,631,277)        (3,366,559)
                                          ----------       ----------
    Net Deferred Tax Asset                  $    -             $    -
                                          ==========       ==========
 The Company has incurred net  operating  losses from  inception.  Net
operating  loss  carryovers  will expire in varying  amounts if unused  as of
the years  ended  December  31,  2008 - 2020.  Capital  loss  carryovers  will
expire  if unused as of the years  ended December  31,  2002 - 2004.  A
valuation  allowance  has been  established  due to  uncertainty  whether
the  Company  will  generate sufficient  taxable  earnings and capital gains
to utilize the available  carryovers.  The Tax Reform Act of 1986 contains
provisions which may limit the net  operating  loss  carryforwards  available
to be used in any given year if certain  events  occur,  including
significant  changes in ownership  interests.  The Company has not  assessed
the impact of these  provisions  on the  availability  of Company loss
carryovers.

                                      F-17

<PAGE>

                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999


13.   Stockholders' equity

On February  11,  2000,  the number of shares of common  stock that is
authorized  for  issuance by the  Company was  increased  from 20,000,000 to
60,000,000.  KPN Telecom B.V. ("KPN"),  a Netherlands  Limited Liability
Company,  purchased  10,286,742 shares at $1.58 per share and was granted
rights to common shares equal to all other outstanding  warrants,  options and
other securities at $1.38 per share.  KPN exercised its option to purchase
1,516,812  shares at $1.38 per share,  thereby  gaining  control of 51% of the
Company's common stock, representing voting control of the Company.

On October 24, 2000,  KPN  exercised  its option for 501,512  common  shares at
$ 1.38 per share,  in order to maintain its 51% equity interest in the Company.


14.  Discontinued operations

On March 19, 1993, a wholly-owned Hungarian limited liability company,
Teleconstruct Epitesi Kft ("Teleconstruct"),  was organized to construct  and
maintain  local  telephone  exchanges  in  conjuction  with
community-sponsored  telecom  companies  in Hungary.  The subsidiary  had two
operating  business  segments:  (1) building  and/or  renovation of condominium
apartments and (2) design,  civil engineering,  and  laying of  underground
fiber  optic  cables.  The  latter  segment  was  discontinued  in 1994.  The
shares of the subsidiary,  Teleconstruct,  were sold in  December  1998 for
$1,500,000,  resulting  in a loss of $50,858  recognized  in 1999,  and
$119,678  recognized  in 1998.  The sales price has been  satisfied  by a
payment of $500,000  in January  1999 and the  issuance of a promissory note
for $1,000,000  payable in sixty equal monthly  installments,  including
interest at approximately 7.3% per annum. The note is  collateralized  by the
building.  With the sale of  Teleconstruct,  the Company  has exited the
construction  business  and accordingly, the construction operations have been
classified as discontinued operations for all periods presented.


15.  Related party transactions

In January 1999, the Company provided a loan to a vice-president  comprising
$150,000,  repayable in monthly  installments of $8,000, including  interest
at 11% per  annum.  In  September  1999,  the  Company  provided  an
additional  loan of  $100,000  to the  same vice-president.  Both loans were
rolled into one new loan repayable in monthly  installments of $8,000,
including interest at 11% per annum. The new loan is collateralized by two
apartment units in Budapest,  Hungary.  The loan will be fully repaid by the
end of 2001. Therefore all of the amount outstanding as of December 31, 2000
has been classified under Current Assets.



                                      F-18

<PAGE>




                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999

16.   Commitments and Contingencies

   (a) Employment Agreements

        Employment  agreements with the three officers of the Company provide
        for aggregate annual compensation of $646,000 through
        December 31, 2005.

   (b) Legal Proceedings

        In May 1999 a statement of claim was filed against Luko Czech, a wholly
        owned  subsidiary,  alleging  damages in the amount of  approximately
        $132,000  resulting  from the Company's  cancellation  of a contract
        with a data network  provider.  The Company  maintains that the contract
        was properly  terminated in accordance with its terms and conditions.
        The Company has presented documents to the Courts in support of its
        position, and the outcome at the present time is uncertain.


17.  Stock Option Plan and Employee Options

a) Stock Options

Under the Company's  Stock Option Plan (the "Plan"),  an aggregate of 670,000
shares of common stock are authorized for issuance.  The Plan provides that
incentive and  nonqualified  options may be granted to officers,  directors and
consultants of the Company for the purpose of providing an incentive to those
persons.  The Plan may be  administered  by either the Board of Directors or a
committee of three directors appointed by the Board (the "Committee").  The
Board or Committee determines,  among other things, the persons to whom
stock  options are granted,  the number of shares  subject to each  option,
the date or dates upon which each option may be exercised and the exercise
price per share.

Options  granted under the Plan are generally  exercisable for a period of up
to six years from the date of grant.  Options  terminate upon the optionee's
termination of employment or consulting  arrangement with the Company,  except
that, under certain circumstances, an optionee may exercise an option within
the three-month  period after such  termination of employment.  An optionee may
not transfer any options although an option may be exercised by the personal
representative of a deceased  optionee within the three-month  period
following  the  optionee's  death.  Incentive  options  granted to any
employee who owns more than 10% of the  Company's  outstanding common  stock
immediately  before  the grant  must have an  exercise  price of not less  than
110% of the fair  market  value of the underlying  stock on the date of the
grant.  Moreover,  the exercise term may not exceed five years.  The aggregate
fair market value of common stock  (determined at the date of grant) for which
any employee may exercise  incentive options in any calendar year may not
exceed  $100,000.  In addition,  the Company  will not grant a  nonqualified
option with an exercise  price less than 85% of the fair market value of the
underlying common stock on the date of the grant.

The total  number of options  issued and  outstanding  as of  December  31,
2000  pursuant  to the Plan is 437,500.  A total of 10,000
options were exercised and 67,500 granted in 2000.

                                      F-19

<PAGE>


                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999



17.  Stock Option Plan and Employee Options (continued)


(b) Employment Agreement Options

The Company has issued exercisable  options pursuant to employment  agreements.
The total number of options issued and outstanding as of December  31, 2000
pursuant to  employment  agreements  is  1,270,000.  A total of 30,000  options
were  exercised  and none were granted in 2000.


(c) Accounting for stock-based options

Stock  options  and  employment  agreement  options  are all  considered
options  which  come  under the  guidelines  of  stock-based compensation.  For
options  granted to employees at exercise  prices equal to the fair market
value of the underlying  common stock at the date of grant, no compensation
cost is recognized.

SFAS No. 123,  "Accounting  for Stock-Based  Compensation,"  ("SFAS No. 123"),
requires the Company to provide pro forma  information regarding  net  income
and  earnings  per share as if  compensation  cost for the  Company's  stock
options  had been  determined  in accordance with the fair value-based  method
prescribed in SFAS No. 123. The Company estimates the fair value of each stock
option at the grant date by using the Black-Scholes  option-pricing  model with
the following  weighted-average  assumptions used for grants: no dividends paid
for all years;  expected volatility of 125% (74% in 1999);  weighted average
risk-free interest rates of 4.61% (5.5% in 1999); and expected lives of 3 years
(5 in 1999).


 Under the  accounting  provisions  of SFAS No. 123, the  Company's net loss
and net loss per share would have been reduced to the pro forma amounts
indicated below:



                                                  Year ended
                                                  December 31,
                                         2000                    1999
   Net loss:
       As reported                        $(2,758,275)      $(1,223,066)
       Pro forma                           (2,804,310)       (2,854,666)

   Basic and diluted loss per share:
       As reported                    $      (.12)           $    (.14)
       Pro forma                             (.13)                (.31)


                                      F-20

<PAGE>

                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999


17.        Stock Option Plan and Employee Options (continued)

Transactions involving options granted under the Plan and Employment Agreements
are summarized below:

                                   2000                        1999
                               ---------------------    ---------------------
                                            Weighted                 Weighted
                                             average                  average
                                            exercise                  exercise
                                  Shares       Price    Shares       Price

  Outstanding, January 1,       1,680,000  $1.53        880,000      $1.39
  Granted                          67,500   1.50      1,130,000       1.68
  Exercised                      (40,000)   1.16       (285,000)      1.89
  Cancelled                           -        -        (45,000)      1.54
  Outstanding, December 31,     1,707,500   1.54       1,680,000      1.53
  Exercisable, December 31,     1,707,500   1.54       1,680,000      1.53


 18.  Other Stock Options and Stock Warrants

  (a) Options issued to effect business combination

        On June 11, 1999 the Company issued 50,000  options,  at an exercise
        price of $2.00 per share,  exercisable  until June 11, 2000 pursuant to
        acquisition  agreements.  The Company has estimated the fair value of
        the options using the  Black-Scholes option-pricing  model and has
        recorded this amount as goodwill on the  transaction.  The options were
        exercised on June 1, 2000.

  (b)  Stock Warrants

       The following table summarizes information about stock warrants at
       December 31, 2000:

                                                     Weighted
                                 Number               average
                              outstanding at        remaining
                               December 31,       contractual
    Range of exercise prices    2000                    life
     -----------------------  --------------       -----------
     $ 2.20                      50,000             3.1
     $ 2.00-2.25              1,076,731             1.0


Warrants are generally  granted in connection with private placement
transactions.  During 2000,  1,311,334  warrants were exercised,
with no additional warrants being granted.

                                      F-21

<PAGE>

                           Euroweb International Corp.
                   Notes to Consolidated Financial Statements
                           December 31, 2000 and 1999


19.   Segment disclosures

The Company  operates in a single  operating  segment i.e. the  provision  of
Internet  services.  The  Company's  operations  involve providing access to
the Internet,  hosting servers and developing  content for web sites. The
Company provides  services in the Slovak Republic,  the Czech  Republic and in
Romania.  Operations are managed and financial  performance is evaluated by the
Company's  chief operating  decision maker based on the delivery of Internet
services over leased  telecommunications  networks.  Substantially all of
the Company's operating assets are located in Central Europe and all of its
revenues are generated in Central Europe.

Products and services

The  Company  groups all of its  revenue  into one  category  "Internet  and
related  revenue".  This is due to the fact that  Access Services,  i.e.
access to the  internet by either a leased line or through a dial up service,
accounts  for 78% (85% in 1999) of the revenue  stream.  For the years ended
December 31, 2000 and 1999,  none of the  Company's  customers  accounted
more than 10% of the Company's total revenue.

The following table summarizes financial information by geographic area for
the year ending December 31, 2000:

----------------- ------------- --------------- ---------- ------- ------------
                  Slovakia      Czech Republic   Romania   U.S.A.      Total
----------------- ------------- --------------- ---------- ------- ------------
----------------- ------------- --------------- ---------- ------- ------------
Revenues            $2,429,162      $1,107,399   $860,825      $-   $4,397,386
----------------- ------------- --------------- ---------- ------- ------------
----------------- ------------- --------------- ---------- ------- ------------

----------------- ------------- --------------- ---------- ------- ------------
----------------- ------------- --------------- ---------- ------- ------------
Fixed assets(NBV)      762,078         100,739    281,679   5,593    1,150,089
----------------- ------------- --------------- ---------- ------- ------------
----------------- ------------- --------------- ---------- ------- ------------
Intangibles          3,395,695       1,445,644  3,244,701       -    8,086,040
----------------- ------------- --------------- ---------- ------- ------------


20.   Subsequent events

The  investment in debt security  matured on February 15, 2001 and the Company
has purchased  similar  securities  maturing on January 25, 2002, with a face
value of $14,650,000. There have been no other material subsequent events since
December 31, 2000.









                                      F-22


<PAGE>






                                   SIGNATURES

           Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended,  the Registrant has duly caused
this Report to be signed on its behalf by the undersigned,  thereunto duly
authorized,  in the City of New York, State of New York, on the 29th day of
March 2001.


                       EUROWEB INTERNATIONAL CORP.




                           By /s/Frank R. Cohen
                              Frank R. Cohen
                          Chairman of the Board



           Pursuant to the  requirements  of the  Securities  Exchange of 1934,
as amended,  this Report has been signed below by the following persons in the
capacities and on the dates indicated:



  SIGNATURE            TITLE                                         DATE

/s/Frank R. Cohen    Chairman of Board, Secretary, Treasurer    March 29, 2001
Frank R. Cohen       (CFO)
                     Director

/s/Robert Genova     President, Chief Executive Officer (CEO)   March 29, 2001
Robert Genova        Director

/s/Csaba Toro        Vice President, International Managing     March 29, 2001
Csaba Toro           Director (COO) of all European Operations
                     Director

/s/Marten Pieters    Director                                   March 29, 2001
Marten Pieters


/s/Rob van Vliet     Director                                   March 29, 2001
Rob van Vliet


                                      -22-