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                                  UNITED STATES
                       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, 2001

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

             For the transition period from __________ to __________

                         Commission file number: 0-22076

                               DTVN HOLDINGS, INC.
                 (Name of small business issuer in its charter)

               Delaware                                  76-0404904
 (State or other jurisdiction of           (I.R.S. Employer Identification No.)
   incorporation or organization)

      1801 Gateway Blvd., Suite 101                          75080
            Richardson, Texas                              (Zip Code)
 (Address of principal executive offices)

                    Issuer's telephone number (972) 783-0284

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                     Common Stock, $.001 par value per share

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

         Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and disclosure 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. [ ]

         Issuer's revenues for fiscal year ended December 31, 2001:  $17,147,795

         As of March 26, 2002, there were 59,414,609 shares of the registrant's
common stock, $.001 par value per share (the "Common Stock"), outstanding. The
aggregate market value of the Common Stock held by non-affiliates of the
registrant, as of such date was approximately $9,506,337 (based on the closing
price of $0.16 per share as reported on the OTC Bulletin Board).

         Portions of the registrant's Proxy Statement for its 2002 Annual
Meeting of Stockholders, as described in the Table of Contents enclosed, are
incorporated herein by reference into Part III of this Form 10-KSB. If the Proxy
Statement is not filed with the Securities and Exchange Commission in definitive
form prior to April 30, 2001, the registrant intends to amend this report to
include information omitted from Part III hereof.

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

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                                TABLE OF CONTENTS
<TABLE>
<S>          <C>                                                                                                 <C>
ITEM 1.      DESCRIPTION OF BUSINESS ..........................................................................  2

             The Company ......................................................................................  2

             Benefits of Using the Company ....................................................................  3

             Growth Strategy ..................................................................................  4

             Acquisition Strategy .............................................................................  5

             Services .........................................................................................  5

             Customers ........................................................................................  5

             Sales and Marketing ..............................................................................  6

             Competition ......................................................................................  6

             Government Regulation ............................................................................  6

             Employees ........................................................................................  8

             Risk Factors .....................................................................................  8

ITEM 2.      DESCRIPTION OF PROPERTY .......................................................................... 15

ITEM 3.      LEGAL PROCEEDINGS ................................................................................ 16

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .............................................  16

ITEM 5.      MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ............................ 16

ITEM 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION ........................................ 19

             Forward-Looking Statements ....................................................................... 19

             Overview ......................................................................................... 20

             Results of Operations for Year Ended December 31, 2001 Compared to Year Ended
             December 31, 2000 ................................................................................ 21

             Liquidity and Capital Resources .................................................................. 22

             Critical Accounting Policies ..................................................................... 26

ITEM 7.      FINANCIAL STATEMENTS ............................................................................. 27

ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. ............ 44

ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
              SECTION 16(A) OF THE EXCHANGE ACT ............................................................... 45

ITEM 10.     EXECUTIVE COMPENSATION ........................................................................... 45

ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ................................... 45

ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ................................................... 45

ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K ................................................................. 45
</TABLE>

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                                     PART I

Forward-Looking Statements

         All statements other than statements of historical fact contained in
this report, including without limitation statements containing the words
"believes," "may," "will," "estimate," "continue," "anticipates," "intends,"
"expects" "project," "potential, " and words of similar import, constitute
"forward- looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, events or developments to be materially different from any future
results, events or developments expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general economic
and business conditions, both nationally and in the regions in which the Company
operates; technology changes; competition; changes in business strategy or
development plans; the ability to attract and retain qualified personnel;
liability and other claims asserted against the Company; and other factors
referenced in the Company's filings with the Securities and Exchange Commission.
Given these uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. The Company disclaims any obligation to update
any such factors or to publicly announce the result of any revisions to any of
the forward-looking statements contained herein to reflect future results,
events or developments. All forward-looking statements included herein are
expressly qualified in their entirety by the cautionary statements in this
paragraph.

ITEM 1.  DESCRIPTION OF BUSINESS

The Company

         The Company, through its primary operating subsidiary, DataVoN, Inc.,
is a provider of converged, internet protocol (IP) communication services. The
Company provides toll quality voice and data communications services over
private IP networks (VoIP) targeting carrier and enterprise customers. Carriers
who deploy soft switch equipment on an IP network can provide high quality
video, voice, and data services while retaining the flexibility, scalability,
and cost efficiencies. The Video Intelligence Division of DataVoN delivers
business-critical video applications and services, specializing in enterprise IP
video services, including store and forward services and video conferencing.

         Examples of services available in the Company's current product line
include: voice origination and termination, "follow me" services, pre-paid
calling card services, and 8xx origination and termination. Some of Video
Intelligence's products are point-to-point and multi-point video conferencing,
and hyperlink video archiving. In an effort to maximize the Company's staff and
network advantages, the Company has focused on acquiring high volume, carrier
customers, offering the carriers reduced costs for the same quality of service
available in legacy networks. Building relationships with carrier customers
allows the Company to establish a revenue stream for operation and expansion.
The Company has a qualified management team with communications experience in
companies such as MCI Worldcom, XO Communications, and CapRock Communications.

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         As of December 31, 2001, the Company had deployed eight Cisco 8260
Gateway devices, and brought online a NexVerse soft switch. The Company believes
that its current network has the capacity to carry approximately 500 million
minutes of uncompressed, IP traffic per month. The flexibility of the new
network generally provides the ability to access new markets with an
implementation period of 30 to 90 days.

         The following objectives summarize the Company's strategy: (i)
generating positive cash flow from sales of existing products while building a
low overhead, next generation IP network with new technology at its core, (ii)
managing growth conservatively by utilizing positive cash flow or other
financing resources as necessary, (iii) leveraging IP technology to provide the
lowest cost, carrier-grade, wholesale communications solutions to a growing
domestic and international communications marketplace, and (iv) taking advantage
of technologies that allow the Company to deliver a comprehensive set of
converged voice, video and data services to customers.

         The Company was incorporated in 1993 (as Zydeco Energy, Inc.) and
originally engaged in acquiring leases, drilling, and producing oil and gas
reserves. In June 2000, the Company merged with DataVoN, Inc. ("DataVoN"). As a
result of the DataVoN merger, the former shareholders of DataVoN acquired
approximately 80% of the voting power of the Company's common stock. The DataVoN
merger was accounted for as a reverse acquisition of the Company by DataVoN
under the purchase method of accounting. Accordingly, the historical financial
statements of DataVoN prior to the DataVoN merger have become the Company's
financial statements, and the Company's results of operations have been combined
with those of DataVoN from and after the date of the DataVoN merger. In 2001,
the oil and gas seismic exploration operations were not material to the
Company's combined results of operations and substantially all of the oil and
gas assets were sold. Consequently, the Company does not discuss oil and gas
operations below.

Benefits of Using the Company

         The Company's core business enables integrated communications service
providers and large enterprises to outsource their voice and data services over
an IP network at lower costs than over traditional networks while maintaining
toll quality transmission for voice traffic.

         The Company believes its core services provide the following key
benefits to customers:

         .  Low Price. The Company believes its services are often the low-price
            option for carriers because packet switching is more efficient than
            traditional circuit switching. In addition, the Company leverages
            the packet switched network to deliver both voice and data traffic,
            which results in lower costs than circuit-based alternatives that
            deploy duplicate networks to deliver voice and data services.

         .  Network Expertise. The Company believes it has positioned itself
            with quality IP technology vendors and a highly qualified team with
            extensive telecommunications

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            network expertise. The Company's network design group handles the
            design, engineering, and deployment of the Company's soft-switched
            network. The Company has a Network Operations Center ("NOC") located
            in Richardson, Texas that monitors the network operations and
            troubleshoots the issues that arise in day-to-day operations.

         .  Improved Capital Allocation of Customers. By purchasing origination,
            transport, and termination services from the Company, the customer
            can deploy financial resources in areas other than network
            infrastructure. The Company's customers can gain a competitive
            advantage or maintain competitive parity with their competitors by
            expanding their end user offerings (i.e., marketing, customer
            service) without incurring the substantial capital investments and
            operating costs that would otherwise be required to build and deploy
            their own multiple-service network.

Growth Strategy

         The Company plans to leverage its customer relationships, operational
expertise, regulatory insight, and state-of-the-art network as a platform from
which to drive future growth. Specifically, the Company believes the following
growth opportunities are available:

         .  Increased service capabilities in strong markets. As customer needs
            develop, the Company intends to acquire additional bandwidth and
            Network platform for several existing markets;

         .  Expanded customer base through strategic marketing relationships and
            wholesale contracts. The Company has successfully acquired a number
            of new customers and anticipates continued expansion of the customer
            base in 2002;

         .  Expansion in new geographic areas. The Company plans to expand into
            additional markets as justified by traffic patterns; and,

         .  New product offerings. The Company plans to leverage its IP network
            and its inherent flexibility by developing and offering enhanced
            services, such as the video conferencing product that is now being
            tested by a number of potential customers.

                                       4

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Acquisition Strategy

         As part of its strategy to provide comprehensive communications
services as part of the leverage of the Company's network, the Company may
expand through strategic or tactical acquisitions of companies and through
attracting individuals with relevant expertise, both within existing lines of
business and complementary lines of business. The Company believes that the
ongoing upheaval in the telecommunications sector continues to create
opportunities for expansion through acquisitions. The Company plans to rely on
the experience of its management team to identify acquisition opportunities. At
this time the Company has no agreements to acquire any companies.

Services

         The Company's current services include:

..        Terminations. The Company has the flexibility to meet customers in many
         different cities due to its network design. This is advantageous
         compared to the smaller legacy carriers because a large termination
         footprint is deployed at a lower cost. With its next-generation
         network, if a customer has demand for a new market, the Company,
         believes it is able enter a market in roughly one-third of the time
         historically required. The Company is able to support nationwide
         terminations through its extensive "on-net" footprint and strategic
         partnerships that operate in geographic areas that are not "on-net" to
         the Company.

..        H.323. Our switching environment allows us to utilize H.323 protocol.
         This will reduce the normal provisioning cycle from 45 to 60 days to 3
         to 5 days. By using H.323 to peer into other networks, the Company will
         be able to realize revenue in shorter time frames and offer a wider
         variety of services.

..        Originations: Using the IP network, The Company has developed a local
         origination product that competes with traditional 8XX traffic. The
         target customers for this product are internet service providers and
         other data services users. The Company believes it will see steady
         growth with this product, comparable to its growth in terminations.

..        International Markets: The Company is able to serve international
         locations through strategic partnerships that have been developed. The
         ability to peer into other networks with H.323 eliminates many of the
         obstacles in providing this service.

Customers

         The Company's current customers are telecommunications carriers,
Internet service providers, pre-paid service providers, competitive local
exchange carriers, independent telephone companies and enhanced services
providers. The Company intends to enhance its current wholesale customer base
with the addition of large enterprise customers.

                                       5

<PAGE>

         For the year ended December 31, 2001, the Company's two largest
customers accounted for approximately 52.5% of the Company's revenues. As of
February 28, 2002, the Company's two largest customers have accounted for
approximately 79.6% of the Company's revenues in 2002. In 2001 the company moved
away from yearly, minimum commitment agreements with customers. Today, the
Company's customers generally enter into master service contracts under which a
variety of services can be ordered. Typically, the customers do not have minimum
commitments under these agreements.

Sales and Marketing

         The Company expects to expand its carrier business with existing
customers. The Company plans to also leverage the next-generation packet
switched network for direct sales and rapid development of new products for
existing customers and untapped markets. Finally, the Company will continue to
derive sales from the formation of strategic alliances with industry leaders
offering products and or services, like video conferencing, that require the
flexibility and the scalability of the IP-based network.

Competition

         The Company competes in the market for enhanced IP communications
services and the market for carrier transmission services. The Company faces
competition from a variety of sources, including large communications service
providers with more resources, longer operating histories, and more established
positions in the telecommunications marketplace. Some of the competitors have
begun to develop or deploy IP telephony capabilities. Most of the Company's
competitors are larger companies.

         Large carriers carry a substantial majority of the domestic and
international traffic and have started to deploy packet-switched networks for
voice and data traffic. These carriers have substantial resources and have large
budgets available for research and development. In addition, several companies,
many with significant resources, such as Level 3 and Qwest Communications, are
building fiber optic networks, primarily in the United States, for IP telephony
traffic. These networks can be expected to carry voice and data traffic.

         The Company also competes with companies who have focused primarily on
IP telephony. AT&T, Clearinghouse, iBasis, and ITXC, all of which have
substantially greater financial, marketing, and network resources than the
Company, sell international voice and data over the Internet. Other IP telephony
companies, including Net2Phone and deltathree, are currently focusing on the
retail market and personal computer-based IP telephony.

         Competition for gateway access, call management, and enhanced services
is becoming intense. Even though the Company faces increasing competition in
this market space, the Company believes these companies may represent potential
future customers and strategic partners.

Government Regulation

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         The Company believes that under United States law, based on specific
regulatory classifications and recent regulatory decisions, the IP
communications services that the Company provides constitute information
services, as opposed to regulated telecommunications services. As such, the
FCC's current position is that information service providers, including IP
telephony providers, are not telecommunications carriers, and thus not currently
subject to FCC regulations or any regulations by state agencies charged with
regulating telecommunications carriers. Nevertheless, aspects of the Company's
operations may be subject to state or federal regulation, including regulation
governing universal service funding, disclosure of confidential communications,
copyright and excise tax issues.

         On April 10, 1998, the FCC issued a report to Congress discussing its
implementation of certain universal service provisions contained in the 1996
amendments to the Communications Act of 1934. In its report, the FCC stated that
it would undertake an examination of whether phone-to-phone IP telephony should
be considered an information service or a telecommunications service. The FCC
noted that certain forms of phone-to-phone IP telephony appeared to lack the
characteristics of an information service and to have the same functionality as
non-Internet protocol telecommunications services.

         In addition, the FCC is currently considering whether to impose
surcharges or other common carrier regulations upon certain providers of
Internet and IP telephony, primarily those which provide Internet and IP
telephony services to end users located in the United States. Although the FCC
decided that information service providers, including Internet and IP telephony
providers, are not telecommunications carriers, various companies have
challenged that decision. Congressional dissatisfaction with the FCC's
conclusions could result in requirements that the FCC impose greater or lesser
regulations. It is also possible that the FCC will adopt a regulatory framework
for IP telephony providers different than that applied to traditional common
carriers. Several efforts have been made in the United States to enact federal
legislation that would either regulate or exempt from regulation communications
services provided over the Internet. Any change in the existing regulation of IP
telephony by the FCC or Congress could materially adversely affect the Company's
business, financial condition, and results of operation.

         The Company cannot give any assurances that IP telephony will continue
to be lightly regulated by the FCC and state regulatory agencies. Although the
FCC has determined that, at present, information service providers, including IP
telephony providers, are not telecommunications carriers, the Company cannot be
certain that this position will continue.

         In the future, the FCC may require providers of Internet and IP
telephony services to be subject to traditional common carrier regulation, make
universal service contributions, and/or pay access charges. Increased regulation
of the Internet may slow its growth. Such regulation may negatively impact the
cost of doing business over the Internet and private internet and materially
adversely affect the Company's business, operating results, financial condition,
and future prospects.

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<PAGE>

         In addition to the FCC and Congress, state regulatory authorities, and
legislators may assert jurisdiction over the provision of intrastate IP
telephony services. Some states already have initiated proceedings to examine
the regulation of such services.

         The Company's management cannot assure investors that its service will
not be regulated in the future. Several efforts have been made in the United
States to enact federal legislation that would either regulate or exempt from
regulation communications services provided over the Internet or IP technology.
Increased regulation of the Internet and IP communication may slow its growth,
particularly if other countries also impose regulations. Such regulation may
negatively impact the cost of doing business and materially adversely affect the
Company's business, operating results, financial condition, and future
prospects.

         While the Company believes that the transport of voice communications
services over the Internet and private IP networks is currently permitted under
the United States law, some foreign countries have laws or regulations that may
prohibit voice communications over the Internet.

Employees

         As of December 31, 2001, the Company and its subsidiaries had 30
full-time employees.

Risk Factors

         Many of the statements, estimates, predictions, and projections
contained in this "Description of Business" section and the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
section of this annual report on Form 10-KSB, in addition to certain statements
contained elsewhere in this annual report, are "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
forward-looking statements are prospective, involving risks and uncertainties.
While these forward-looking statements, and any assumptions on which they are
based, are made in good faith and reflect the Company's current judgment
regarding the direction of its business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions,
or other future performance suggested herein. The following risk factors should
be considered carefully by the Company's stockholders and prospective investors
in evaluating the Company and its business. The Company does not undertake to
release publicly any revisions to forward-looking statements that may be made to
reflect events or circumstances after the date of this annual report or to
reflect the occurrence of unanticipated events.

Risks Related to the Company's Operations
-----------------------------------------

The Company may be unable to continue as a going concern.

         The Company's principal capital and liquidity needs historically and
currently have related to the development of its network infrastructure, its
sales and marketing activities, and general capital needs. The Company's capital
needs have been met, in large part, from cash flow generated from operations.
However, during the years ended December 31, 2001 and 2000, the Company incurred
losses of $32,751,069 and $2,985,117, respectively. The Company had a working
capital deficit of $7,176,555 as of December 31, 2001. As a consequence an
increasing portion of the Company's capital needs have been met by and will
require future capital loans or equity investments. These factors among others
may indicate that the Company will be unable to continue as a going concern for
a reasonable period of time.

         The Company's continuation as a going concern is dependent upon its
ability to generate sufficient cash flow to meet its obligations on a timely
basis, to comply with the terms of its financing agreements, to obtain
additional financing as may be required, and ultimately to attain profitability.

         The Company has a limited operating history, and you may inaccurately
assess its prospects for success.

         In 2001, the Company deployed substantially new network elements and
migrated its primary business from wholesale circuits to wholesale
minutes-of-use traffic. The Company's

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primary business line changed dramatically. The Company also devoted substantial
resources to the development of a state-of-the-art video conferencing product
that is now becoming available. Due to the Company's limited operating history
in its current lines of business, it is difficult for the Company to predict
future results of operations. Moreover, the Company cannot be sure that it has
accurately identified all of the risks to its business, especially since the
Company uses new, and in many cases, unproven technologies, and provides new
services. As a result, its past results and rates of growth may not be a
meaningful indicator of its future results of operations. Also, your assessment
of the prospects for the Company's success may prove inaccurate.

         The Company's revenue would decline significantly if it lost one or
more of its most significant customers.

         The Company generates much of its revenue from a limited number of
customers. Customers may discontinue their use of the Company's services at any
time, and without notice. Therefore, in any given quarter, the Company would
lose a significant amount of revenue if it lost one or more major customers.

         Failure to obtain necessary additional capital in the future on
acceptable terms to the Company would prevent the Company from paying operating
expenses and executing its business plan.

         The Company needs additional capital to finance operations, investments
in equipment and corporate infrastructure, expand its network, increase the
range of services it offers and respond to competitive pressures and perceived
opportunities. Cash flow from operations and cash on hand may not be sufficient
to cover the Company's operating expenses and capital investment needs. The
Company cannot assure you that additional financing will be available on terms
acceptable to it, if at all. Failure to obtain additional funding would prevent
the Company from making expenditures that will allow it to grow or maintain its
operations.

         If the Company raises additional funds by selling equity securities or
issuing debt, new investors may receive more favorable terms than current
stockholders, who may experience dilution.

         If the Company raises additional funds by selling equity securities,
the relative equity ownership of its existing investors could be diluted or new
investors could obtain terms more favorable than previous investors. If the
Company raises additional funds through debt financing, it could incur
significant borrowing costs. The failure to obtain additional financing when
required could result in the Company being unable to continue as a going
concern.

         The Company may not be able to generate sufficient revenue to maintain
profitability if telecommunications carriers and other communications service
providers are reluctant to use its services or do not use its services in
sufficient volume.

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         If the market for IP telephony and new services does not develop as the
Company expects, or develops more slowly than expected, its business, financial
condition, and results of operations will be materially adversely affected.

         The Company's customers may be reluctant to use its services for a
number of reasons, including:

         .  perceptions that the quality of voice transmitted over the packet
            switched data network is low;

         .  perceptions that IP telephony is unreliable; and

         .  traffic may not be able to be delivered with significant cost
            advantages.

         The growth of its business depends on carriers and other communications
service providers generating an increased volume of voice and data traffic, and
selecting its network to carry at least some of this traffic. If the volume of
voice and data traffic fails to increase, or decreases, and these third-parties
do not employ the Company's network, the Company's ability to generate
sufficient revenues to maintain profitability will be materially adversely
affected. The Company can not assure you that end-users will continue to
purchase services from its customers or that its customers will maintain a
demand for its services.

         The Company depends on its key personnel and may have difficulty
attracting and retaining the skilled employees it needs to execute its growth
plans.

         The Company depends heavily on its key management. The Company's future
success will depend, in large part, on the continued service of its key
management and technical personnel. If any one of these individuals is unable or
unwilling to continue in their present positions, the Company's business,
financial condition and results of operations would suffer.

         The Company will need to attract skilled personnel to execute its
growth plans. The Company's future success will depend, in large part, on its
ability to attract, retain and motivate highly skilled employees, particularly
engineering and technical personnel. Competition for such employees in the
Company's industry is intense. The Company has from time to time in the past
experienced, and it expects to continue to experience in the future, difficulty
in hiring and retaining employees with appropriate qualifications. The Company
may not be able to retain its employees or attract, assimilate or retain other
highly qualified employees in the future. If the Company does not succeed in
attracting and retaining skilled personnel, it may not be able to grow at a
sufficient rate to maintain profitable operations.

         The Company may face quality and capacity problems over its network
based on failures by third parties.

         Vendors. The Company relies upon third-party vendors to provide it with
network connectivity, bandwidth, and the equipment and software that the Company
uses to transfer and translate calls from traditional voice networks to the
packet switched network, and vice versa. The Company cannot assure you that it
will be able to continue purchasing such equipment and


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software on acceptable terms, if at all. If the Company becomes unable to
purchase the equipment needed to maintain and expand its network as currently
configured, the Company may not be able to maintain or expand its network to
accommodate growth and the Company may consequently be unable to grow revenues
sufficiently to maintain projections. Additionally, there can be no assurances
that such equipment or software will meet the expectations of the Company's
customers or the expectations of its management with respect to capabilities,
upgradability, or capacity.

         Parties that Maintain Phone and Data Lines. The Company's business
model depends on the availability of the managed IP network bandwidth to
transmit voice and data calls, and to provide other value-added services.
Third-parties maintain, and in many cases own, the traditional voice networks as
well as data networks. Some of these third-parties are national telephone
companies. They may increase their charges for using these lines at any time and
decrease the Company's profitability. They may also fail to properly maintain
their lines and disrupt the Company's ability to provide service to its
customers. Any failure by these third-parties to maintain these lines and
networks that leads to a material disruption of the Company's ability to provide
services and could discourage its customers from using the Company's network,
which could have the effect of preventing the Company's ability to maintain
projections.

         Strategic Relationships. The Company depends in part on its strategic
relationships to expand its distribution channels and develop and market its
services. The Company's strategic relationship partners may choose not to renew
existing arrangements on commercially acceptable terms, if at all. In general,
if the Company loses certain key strategic relationships, or if the Company
fails to develop new relationships in the future, its ability to expand the
scope and capacity of its network, and to maintain state-of-the-art technology,
would be materially adversely affected.

         The Company may not be able to succeed in the intensely competitive
market for its services.

         The market for VoIP, data and other value-added services is extremely
competitive and will likely become more competitive. Internet protocol and IP
telephony service providers, such as Net2Phone, Inc., iBasis, Inc., and ITXC
Corp., carry and terminate voice and data traffic to various market segments
over IP networks competing with the Company. In addition, major
telecommunications carriers, such as AT&T, MCI WorldCom and Qwest
Communications, have all entered or announced plans to enter the IP telephony
market. Finally, many legacy carriers offer non-IP based products that are
competitive with the Company's offerings. All of these companies are larger than
the Company and have substantially more resources than the Company. Intense
competition in the Company's markets can be expected to continue to put downward
pressure on prices and adversely affect its profitability. The Company cannot
assure you that it will be able to compete successfully against its competitors
and the Company may lose customers or fail to grow its business as a result of
this competition.

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         The Company is subject to downward pricing pressures that could prevent
the Company from maintaining profitability.

         As a result of numerous factors, including increased competition,
prices for bandwidth and long distance calls have been decreasing. This downward
trend of prices to end-users has caused the Company to lower the prices it
charges communications service providers for call completion on its network. If
this downward pricing pressure continues, the Company cannot assure you that it
will be able to offer IP telephony services at costs lower than, or competitive
with, the traditional voice network services with which it competes. The
continued downward pressure on prices would have a material adverse effect on
the Company's ability to operate its network and business profitability.

         If the Company is not able to keep up with rapid technological change
in a cost effective way, the relative quality of its services could suffer.

         The technology upon which the Company's services depend is changing
rapidly. Significant technological changes could render the equipment that the
Company uses obsolete, and competitors may begin to offer new services that it
is unable to offer. The Company must adapt to its rapidly changing market by
continually improving the responsiveness, reliability, services and features of
its network and by developing new features and applications to meet customer
needs. If the Company is unable to successfully respond to these developments or
does not respond in a cost-effective way, it may not be able to offer
competitive services.

         The Company may not be able to expand and upgrade its network
adequately to accommodate any future growth.

         The Company's business requires that it handle a large number of calls
simultaneously. As the Company expands its operations, the Company expects to
handle significantly more calls. The Company will need to expand and upgrade its
hardware and software to accommodate such increased traffic. If the Company does
not expand and upgrade quickly enough, it will not have sufficient capacity to
handle the traffic and its operating performance would suffer. Consequently, the
Company could develop a negative reputation with its customers and lose
business.

         If the Company fails to manage its growth, the Company could lose
customers.

         The Company has grown rapidly to date and expects to continue to grow
rapidly. In order to increase the number of its customers and the size of its
operations, the Company will need to improve its administrative, accounting,
operating systems, and controls. The Company may need to redesign several
internal systems. The Company's attention to these matters may distract it from
other aspects of its business. Moreover, failure to implement new systems and
controls may hamper the Company's ability to provide services to customers and
may impair the quality of its services that could result in the loss of
customers.

                                       12

<PAGE>

         Fluctuations in the Company's quarterly results of operations that
result from various factors inherent in its business may cause the market price
of the Common Stock to fall.

         The Company's revenue and results of operations have fluctuated and may
continue to fluctuate significantly from quarter to quarter in the future due to
a number of factors, many of which are not in its control, including, but not
limited to:

         .  the amount of traffic the Company is able to sell to its customers,
            and their decisions on whether to route traffic over the Company's
            network;

         .  the percentage of traffic that the Company is able to carry over the
            managed IP network, rather than over the more costly traditional
            public-switched telephone network;

         .  the Company's ability to negotiate changes in the termination fees
            charged by its local providers when its margins deteriorate;

         .  capital expenditures required to expand or upgrade its network;

         .  technical difficulties or failures of its network systems or
            third-party delays in expansion or provisioning system problems; and

         .  the Company's ability to offer value-added services that are
            appealing to the market.

         Because of these factors, you should not rely on quarter-to-quarter
comparisons of the Company's results of operations as an indication of its
future performance. It is possible that, in future periods, the Company's
results of operations will be significantly lower than the estimates of public
market analysts and investors. Such a discrepancy could cause the price of the
Common Stock to decline significantly.

         The Company believes that it does not infringe upon the proprietary
intellectual property rights of any third party, and no third party has asserted
a patent infringement claim against the Company.

         It is possible that a claim of infringement on proprietary intellectual
property rights might be asserted successfully against the Company in the
future. The Company's ability to provide its services depends on its freedom to
operate. That is, the Company must ensure that it does not infringe upon the
proprietary rights of others or have licensed all such rights. The Company has
not requested or obtained an opinion from counsel as to whether its services
infringe upon the intellectual property rights of any third parties. A party
making an infringement claim could secure a substantial monetary award or obtain
injunctive relief that could effectively block its ability to provide services
in the United States.

         If any of these risks materialize, the Company could be forced to
suspend operations, to pay significant amounts to defend its rights, and a
substantial amount of management's attention may be diverted from its ongoing
business, each of which could materially adversely affect its ability to
maintain profitability.

                                       13

<PAGE>

         The Company relies on a variety of technologies, primarily software,
that it licenses from third parties.

         Continued use of this technology by the Company may require that it
purchase new or additional licenses from third parties. There can be no
assurances that the Company can obtain those third party licenses needed for its
business or that the third party technology licenses that it does have will
continue to be available to it on commercially reasonable terms or at all. The
loss or inability to maintain or obtain upgrades to any of these technology
licenses could result in delays or breakdowns in the Company's ability to
continue developing and providing its services or to enhance and upgrade its
services.

         The Company may undertake strategic acquisitions in the future and any
difficulties from integrating such acquisitions could damage its ability to
attain or maintain profitability.

         The Company may acquire businesses and technologies that complement or
augment its existing businesses, services and technologies. Integrating any
newly acquired businesses or technologies could be expensive and time-consuming.
The Company may not be able to integrate any acquired business successfully.
Moreover, the Company may need to raise additional funds through public or
private debt or equity financing to acquire any businesses, which may result in
dilution for stockholders and the incurrence of indebtedness. The Company may
not be able to operate acquired businesses profitably or otherwise implement its
growth strategy successfully.

Risks Related to the IP Telephony Industry
------------------------------------------

         The telecommunications industry is subject to domestic governmental
regulation and legal uncertainties that could prevent the Company from executing
its business plan.

         While the FCC has tentatively decided that information service
providers, including IP telephony providers, are not telecommunications carriers
for regulatory purposes, various companies have challenged that decision.
Congress is dissatisfied with the conclusions of the FCC and the FCC could
impose greater or lesser regulation on the Company's industry. The FCC is
currently considering, for example, whether to impose surcharges or other
regulations upon certain providers of IP telephony, primarily those that provide
IP telephony services to end-users located within the United States.

         Aspects of the Company's operations may be, or become, subject to state
or federal regulations governing universal service funding, disclosure of
confidential communications, copyright and excise taxes. The Company cannot
assure you that government agencies will not increasingly regulate
Internet-related services. Increased regulation of the Internet may slow its
growth. Such regulation may also negatively impact the cost of doing business
over the Internet and materially adversely affect the Company's ability to
maintain profitability.

                                       14

<PAGE>

         Effects of recent events

         The terrorist attacks in New York and Washington, D.C. on September 11,
2001, additional threatened terrorists acts, and the ongoing military action
have created uncertainties in the Company's industry, as well as domestic and
international economies, and the financial markets in general. These events, and
potential future terrorist acts, may result in reduced demand from the Company's
clients for its services and products and may potentially have a material
adverse effect on its business, financial condition and operating results.

Risks Related to the OTC Bulletin Board
---------------------------------------

         Because the Common Stock is traded on the OTC Bulletin Board, the
Company cannot guarantee an orderly public market for the Common Stock, and
there are numerous risks related to buying low-priced stocks (stocks that are
less than $5.00 per share).

         The Common Stock is currently traded on the OTC Bulletin Board. As a
result, you may find it more difficult to sell the Common Stock or to obtain
accurate quotations of the market value of the Common Stock as compared to
shares that are quoted on The Nasdaq Stock Market or traded on an exchange. The
Company cannot assure you that a regular trading market will develop or be
sustained.

         For as long as the Common Stock is traded on the OTC Bulletin Board and
if the trading price of the Common Stock is below $5.00 per share, trading in
the Company's securities will be subject to the requirements of certain "penny
stock" rules of the SEC. These rules require additional disclosure to investors
by broker-dealers for any trades involving a penny stock. Penny stock rules
require that the broker-dealer deliver to the investor a disclosure statement
explaining the penny stock market and the associated risks with the market prior
to any penny stock transaction. There are also sales practice requirements for
broker-dealers who sell penny stocks to most persons. For these types of
transactions, the broker-dealer must make a determination that the purchaser is
suitable for the transaction and must receive the purchaser's written consent to
the transaction prior to sale. These additional burdens on brokers and dealers
may discourage them from making transactions in the Common Stock. This could
severely limit the market price and liquidity of the Company's securities and
the ability of purchasers to sell any of the shares of the Company in the
secondary market. That, in turn, could materially and adversely affect the
market price and severely limit the liquidity of the Common Stock.

ITEM 2.  DESCRIPTION OF PROPERTY.

         The Company's executive office is located at 1081 Gateway Boulevard,
Suite 101, Richardson, Texas, a suburb of Dallas. Those offices constitute
approximately 15,150 square feet of commercial space under lease through October
15, 2002. The Company's NOC is located in approximately 1,771 square feet of
commercial space on Campbell Road in Richardson, Texas, under lease through
April 30, 2003. The Company has 4,623 square feet of commercial space in
Richardson, Texas, under lease with a related party through April 30, 2003. In
2002, approximately 12.5% of this space was subleased by the prime lessor for
the remainder of the

                                       15

<PAGE>

term of the primary lease. The remaining space is not being used. Finally, the
Company has 2,739 square feet of space under lease in Ft. Worth, Texas. This
former Video Intelligence space is no longer being used and the Company is
attempting to sublease such space.

ITEM 3.  LEGAL PROCEEDINGS.

         DataVoN is currently involved in litigation with a former sales agent
related to commission allegedly owed to the former sales agent. The trial stage
of the litigation concluded on August 17, 2001, and resulted in a judgment
against DataVoN in the approximate amount of $2,100,000, including attorneys'
fees, court costs and accrued interest. DataVoN accrued the liability in the
third quarter of 2001. DataVoN has appealed the judgment. DataVoN has not posted
a supercedeas bond despite successfully obtaining a reduction of the amount of
such bond from the trial court. DataVoN and the plaintiff in that litigation
entered into an agreement in February 2002 suspending execution of the judgment
for at least six months. Under the terms of that agreement DataVoN paid the
plaintiff $100,000, agreed to pay $20,000 per month, and issued to the plaintiff
warrants covering 250,000 shares of the Company's common stock with a exercise
price of $0.32 per share. The cash consideration will be applied against the
final judgment, if any, upheld on appeal. Additional warrants may be required to
be issued under the suspension agreement.

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

         Not Applicable

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Common Stock has traded on the OTC Bulletin Board under the symbol
"DTVN" since December 26, 2000, to reflect the change in the Company's name from
"Zydeco Energy, Inc." to "DTVN Holdings, Inc." Prior to that date, the Common
Stock was quoted under the symbol "ZNRG" on the OTC Bulletin Board from May 25,
1999, to December 25, 2000. Warrants to purchase one share of Common Stock (the
"Warrants") traded on the OTC Bulletin Board under the symbol "ZNRGW" from May
25, 1999, until their expiration on December 13, 2000. The following table sets
forth the quarterly high and low sales prices of the Common Stock and the
Warrants as reported by the Nasdaq National Market and OTC Bulletin for the
periods indicated. These quotations reflect interdealer prices, without retail
mark-up, mark-down, or commission, and may not represent actual transactions.

                                       16

<PAGE>

<TABLE>
<CAPTION>

                                                      Common Stock                        Warrants
                                              ------------------------------    ------------------------------
                                                   High            Low               High           Low
                                                   -----           ----              -----          ----
         <S>                                      <C>            <C>                <C>            <C>
         Year Ended December 31, 2000
             First Quarter                        5.7500         0.0781             0.5620         0.0010
             Second Quarter                       3.0625         0.8750             0.4730         0.1250
             Third Quarter                        2.0312         0.7188             0.1250         0.0150
             Fourth Quarter                       1.6875         0.3125             0.0400         0.0010

         Year Ended December 31, 2001
             First Quarter                        1.2800         0.4100               NA             NA
             Second Quarter                       0.9500         0.5000               NA             NA
             Third Quarter                        0.8800         0.4500               NA             NA
             Fourth Quarter                       0.6500         0.2000               NA             NA
</TABLE>

         As of March 26, 2002, there were 59,414,609 shares of the Common Stock
outstanding, held by approximately 102 holders of record.

         The Company has not declared or paid any cash dividends on its Common
Stock and does not anticipate declaring or paying any in the foreseeable future.
The Board of Directors intends to retain future earnings, if any, to support the
growth of the Company's business. The declaration and payment of future
dividends, if any, will be at the sole discretion of the Board of Directors and
will depend upon the Company's profitability, financial condition, prospects,
cash requirements, and other factors deemed relevant by the Board of Directors.

         On June 9, 2000, the Company issued 32,623,855 shares of the Common
Stock and 7,190 shares of the Series A Preferred Stock in connection with its
merger with DataVoN. Each of the 7,190 shares of Series A Preferred Stock issued
in the merger was entitled to 1,000 votes on all matters, except as required by
law, with the Common Stock. The 7,190 shares of Series A Preferred Stock were
convertible into 7,190,000 shares of the Common Stock (or 1,000 shares of Common
Stock for each share of Series A Preferred Stock). The Series A Preferred Stock
was issued in the merger because of limitations on the number of authorized
shares of Common Stock under the Company's Certificate of Incorporation. By
their terms, all outstanding shares of the Series A Preferred Stock issued in
the merger automatically convert into shares of the Common Stock upon approval
by the Company's stockholders of an amendment to the Company's Certificate of
Incorporation to increase the number of shares of Common Stock that the Company
is authorized to issue. Pursuant to stockholder approval obtained at a special
meeting of the Company's stockholders held on December 21, 2000, the Company's
Certificate of Incorporation was amended to increase the number of authorized
shares of the Common Stock. As a result of receiving the stockholder approval,
the 7,190 shares of the Series A Convertible Preferred Stock issued in the
merger were automatically converted into 7,190,000 shares of the Common Stock
pursuant to their terms.

                                       17

<PAGE>

         Upon the consummation of the Company's merger with DataVoN, the Company
issued to two individuals for broker services, warrants to purchase an aggregate
of 523,756 shares of the Common Stock at $0.08 per share.

         On April 13, 2001, the Company acquired, through a merger, Video
Intelligence, Inc., a Pennsylvania corporation ("Video Intelligence"). Pursuant
to the Video Intelligence merger, the Company issued 6,749,775 shares of the
common stock, par value $0.001 per share, of the Company (the "Common Stock")
and agreed to pay a total of $493,225 in cash to the holders of all of the
issued and outstanding shares of capital stock of Video Intelligence. As
reported on the OTC Bulletin Board, the price at which the Common Stock last
traded on April 12, 2001 was $0.65 per share. Of the total cash consideration to
be paid by the Company in connection with the Video Intelligence merger,
$246,613 was paid on April 13, 2001. The balance of $246,612 was paid on June
12, 2001.

         An aggregate of 2,530,251 shares of Common Stock issued in connection
with the Video Intelligence merger are subject to a certain Relinquishment
Agreement, dated April 12, 2001 (the "Relinquishment Agreement"), among the
Company, Video Intelligence, and certain stockholders of the Company. Pursuant
to the Relinquishment Agreement, in the event that financial or other
performance criteria set forth in the Relinquishment Agreement are not achieved
during the first year after the closing of the Video Intelligence merger, all or
a portion of the Common Stock issued by the Company in connection with the Video
Intelligence merger will be relinquished and transferred to the Company, without
further consideration, as a refund of consideration previously paid in
connection with the Video Intelligence merger.

         Under the terms of the Video Intelligence merger, all of the options to
purchase shares of common stock of Video Intelligence that were issued and
outstanding at the time of the Video Intelligence merger were assumed by the
Company and converted into options to purchase 1,141,804 shares of the Common
Stock at an exercise price of $0.25 per share. The assumed options were
exercisable for a period of ninety days following the closing of the Video
Intelligence merger. As of the final exercise date, 948,948 of the options had
been exercised and 192,856 had been abandoned. The total exercise price paid for
these options was $153,830 and 333,629 shares exchanged in cashless options
exercises. A portion of the option shares issued is subject to the same
Relinquishment Agreement discussed above.

         On August 13, 2001, pursuant to the terms of a Stock Purchase Agreement
between the Company and Dynegy Technology Capital Corp., the Company issued
1,312,451 shares of its common stock, par value $0.001 per share, to Dynegy in
exchange for $1.5 million. Pursuant to the same agreement the Company issued an
additional 437,485 shares of its common stock, par value $0.001, to Dynegy in
exchange for $500,000 on November 6, 2001. The issuances were made without
general solicitation or advertising, and the purchaser represented that it was
acquiring the shares without a view to distribute and that they were afforded
the opportunity to review all publicly filed documents and to ask questions, and
receive answers from, officers of the Company.

         On September 18, 2001, a subsidiary of the Company entered into a
Promissory Note with

                                       18

<PAGE>

an individual for up to $2,000,000. This note evidences a line of credit under
which the Company can request a maximum of two $1,000,000 advances. Interest
accrues on the unpaid balance of the principal at 10% per annum and is secured
by the Company's accounts receivable. The advances are due 180 days after drawn.
As of December 31, 2001, $2,000,000 had been advanced under the note. The
original draw was on September 24, 2001, and the second draw was on November 17,
2001. The original maturity date of the initial installment of the note has been
extended to April 5, 2002, and the maturity of the second installment is May 15,
2002. Additionally, the lender has agreed to forbear from exercise of remedies
related to alleged covenant defaults until April 5, 2002. The Company intends to
pay all amounts due on April 5, 2002, and has obtained an agreement from the
lender for a waiver of any then existing defaults when such payment is made. The
Company issued a total of 250,000 warrants for the purchase of common stock of
the Company to various individuals in connection with the loan. The warrants are
exercisable for five years at an exercise price of $0.60 per share.

         DataVoN is currently involved in litigation with a former sales agent
related to commission allegedly owed to the former sales agent. The trial stage
of the litigation concluded on August 17, 2001, and resulted in a judgment
against DataVoN in the approximate amount of $2,100,000, including attorneys'
fees, court costs and accrued interest. DataVoN accrued the liability in the
third quarter of 2001. DataVoN and the plaintiff in that litigation entered into
an agreement in February 2002 suspending execution of the judgment for at least
six months. Under the terms of that agreement DataVoN paid the plaintiff
$100,000 and agreed to pay $20,000 per month, and the Company issued to the
plaintiff warrants covering 250,000 shares of the Company's common stock with an
exercise price of $0.32 per share. The cash consideration will be applied
against the final judgment, if any, upheld on appeal. Additional warrants may be
required to be issued under the suspension agreement.

         The Company believes that the above transactions were private
transactions not involving a public offering and were exempt from the
registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to Section 4(2) thereof. The sales of the securities
were without the use of an underwriter, and the shares contain a restrictive
legend permitting the transfer thereof only upon registration of the shares or
an exemption under the Securities Act.

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

         The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with the
consolidated financial statements and footnotes included herein for the years
ended December 31, 2001 and December 31, 2000.

Forward-Looking Statements

         All statements other than statements of historical fact contained in
this report, including without limitation statements containing the words
"believes," "may," "will," "estimate,"

                                       19

<PAGE>

"continue," "anticipates," "intends," "expects" "project," "potential," and
words of similar import, constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, events or developments to be
materially different from any future results, events or developments expressed
or implied by such forward-looking statements. Such factors include, among
others, the following: general economic and business conditions, both nationally
and in the regions in which the Company operates; technology changes;
competition; changes in business strategy or development plans; the ability to
attract and retain qualified personnel; liability and other claims asserted
against the Company; and other factors referenced in the Company's filings with
the Securities and Exchange Commission. Given these uncertainties, readers are
cautioned not to place undue reliance on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future results, events or developments. All
forward-looking statements included herein are expressly qualified in their
entirety by the cautionary statements in this paragraph.

Overview

         The Company, through its primary operating subsidiary, DataVoN, Inc.,
is a provider of converged, IP communication services. The Company provides toll
quality voice and data communications services over private IP networks (VoIP)
targeting carrier and enterprise customers. Carriers who deploy soft switch
equipment on an IP network can provide high quality video, voice, and data
services while retaining the flexibility, scalability, and cost efficiencies.
The Video Intelligence Division of DataVoN delivers business-critical video
applications and services, specializing in enterprise IP video services,
including store and forward services and video conferencing.

         Examples of services available in the Company's current product line
include: voice origination and termination, "follow me" services, pre-paid
calling card services, and 8xx origination and termination. Some of Video
Intelligence's products are point-to-point and multi-point video conferencing,
and hyperlink video archiving. In an effort to maximize the Company's staff and
network advantages, the Company has focused on acquiring high volume, carrier
customers, offering the carriers reduced costs for the same quality of service
available in legacy networks. Building relationships with carrier customers
allows the Company to establish a revenue stream for operation and expansion.
The Company has a qualified management team with communications experience in
companies such as MCI Worldcom, XO Communications, and CapRock Communications.

         As of December 31, 2001, the Company had deployed eight Cisco 8260
Gateway devices, and brought online a NexVerse soft switch. The current network
has the capacity to carry approximately 500 million minutes of uncompressed, IP
traffic per month. Significantly, the flexibility of the new network provides
the ability to rapidly access new markets with an implementation period of 30 to
90 days.

         The following objectives summarize the Company's strategy: (i)
generating positive cash flow from sales of existing products while building a
low overhead, next generation IP network

                                       20

<PAGE>

with new technology at its core, (ii) managing growth conservatively by
utilizing positive cash flow or other financing resources as necessary, (iii)
leveraging IP technology to provide the lowest cost, carrier-grade, wholesale
communications solutions to a growing domestic and international communications
marketplace, and (iv) taking advantage of technologies that allow the Company to
deliver a comprehensive set of converged voice, video and data services to
customers.

Results of Operations for Year Ended December 31, 2001 Compared to Year Ended
December 31, 2000

         Revenue. The Company's revenue increased by approximately $5.75 million
to approximately $17.15 million for the year ended December 31, 2001, from
approximately $11.40 million for the year ended December 31, 2000. The increase
in net revenue resulted from new products, the planned introduction of the new,
packet-switched infrastructure and the concomitant increase in rates charged as
the result of a shift from primarily flat-rated circuit revenue to primarily
minutes of use revenue.

         Cost of Services. Cost of services increased by approximately $9.27
million to approximately $16.34 million for the year ended December 31, 2001,
from approximately $7.10 million for the year ended December 31, 2000. The
increase in expense was driven by the increase in traffic and expenses resulting
from the network expansion. Collocation facility fees increased to approximately
$.94 million for the year ended December 31, 2001, from approximately $.30
million for the year ended December 31, 2000. Telecommunications fees increased
to approximately $15.40 million for the year ended December 31, 2001 from
approximately $6.80 million for the year ended December 31, 2000. As a
percentage of net service revenue, cost of services expense increased to
approximately 95.3% for the year ended December 31, 2001, from approximately
62.3% for the year ended December 31, 2000.

         Selling and Marketing Expenses. Selling and marketing expenses include
expenses relating to the salaries, payroll taxes, benefits and commissions that
the Company pays for sales personnel and the expenses associated with the
development and implementation of its promotion and marketing campaigns,
including expenses relating to its outside public relations firm and industry
analysts. Selling and marketing expenses increased by approximately $.24 million
to approximately $.36 million for the year ended December 31, 2001 from
approximately $.12 million for the year ended December 31, 2000. Selling and
marketing expenses include expenses relating to the salaries, payroll taxes,
benefits and commissions that the Company pays for sales personnel and the
expenses associated with the development and implementation of its promotion and
marketing campaigns. This increase is attributable to the increase in sales
personnel.

         General and Administrative Expenses. General and administrative
expenses include salary, payroll tax and benefit expenses and related costs for
general corporate functions, including executive management, administration,
office facilities, information technology, human resources and amortization of
unearned stock compensation. General and administrative expenses increased by
approximately $.65 million to approximately $5.45 million for the year ended
December 31, 2001, from approximately $4.80 million for the year ended December
31, 2000.

                                       21

<PAGE>

General and administrative expenses increased primarily due to the recognition
of a loss on uncollectible accounts receivable related to a 8XX termination and
8XX origination customer that went out of business during the year ended
December 31, 2001, an increase in the number of personnel, and an increase in
consulting and professional fees, but the increase was partially offset by a
decrease in the stock-based compensation. As a percentage of net revenue,
general and administrative expenses decreased to approximately 31.8% for the
year ended December 31, 2001, from approximately 42.1% for the year ended
December 31, 2000 due to the factors described above.

         Litigation Judgment. Litigation judgment expenses increased by
approximately $2.16 million to approximately $2.16 million for the year ended
December 31, 2001, as compared to $0 for the year ended December 31, 2000.
Litigation judgment expenses increased as a result of the entry of a judgment
against DataVoN.

         Loss on Disposal of Assets. Loss on Disposal of Assets increased by
approximately $19.39 million to approximately $19.39 million for the year ended
December 31, 2001, as compared to $0 for the year ended December 31, 2000. This
increase is a result of selling substantially all of the assets originally
acquired in the Merger in June 2000 and the corresponding write off of all the
related goodwill during the year ended December 31, 2001.

         Depreciation, Amortization and Depletion Expense. Depreciation,
amortization and depletion expense increased by approximately $2.09 million to
approximately $5.35 million for the year ended December 31, 2001 from
approximately $3.26 million for the year ended December 31, 2000. This increase
primarily resulted from the goodwill associated with the acquisition of Video
Intelligence in April of 2001 and depreciation of equipment related to the
expansion of the Company's network.

         Interest Income and Interest Expense. Interest expense is primarily
comprised of interest on the Company's notes payable, and various capital
leases. Interest income is primarily composed of income earned on the Company's
cash and cash equivalents and certificates of deposit.

Liquidity and Capital Resources

         The Company's principal capital and liquidity needs historically and
currently have related to the development of its network infrastructure, its
sales and marketing activities, and general capital needs. The Company's capital
needs have been met, in large part, from cash flow generated from operations.
However, during the years ended December 31, 2001 and 2000, the Company incurred
losses of $32,751,069 and $2,985,117, respectively. The Company had a working
capital deficit of $7,166,555 as of December 31, 2001. As a consequence an
increasing portion of the Company's capital needs have been met by and will
require future capital loans or equity investments. These factors among others
may indicate that the Company will be unable to continue as a going concern for
a reasonable period of time.

         The Company's continuation as a going concern is dependent upon its
ability to generate sufficient cash flow to meet its obligations on a timely
basis, to comply with the terms of its financing agreements, to obtain
additional financing as may be required, and ultimately to attain profitability.

         Net cash used by operating activities was approximately $4.74 million
for the year ended December 31, 2001, as compared to net cash provided by
operating activities of approximately $3.64 million for the year ended December
31, 2000. The change was primarily attributable to

                                       22

<PAGE>

network expansion and increased selling, general and administrative expenses
related to the Company's network and its expansion.

         Net cash used by investing activities was approximately $1.22 million
for the year ended December 31, 2001, as compared to approximately $50,000 for
the year ended December 31, 2000. This change was primarily attributable to
increased capital expenditures related to the expansion of the Company's
network.

         Net cash provided by financing activities was approximately $3.43
million for the year ended December 31, 2001, as compared to net cash used by
financing activities of approximately $1.09 million for the year ended December
31, 2000. The change was primarily attributable to investments under a Stock
Purchase Agreement whereby an investor invested $2 million and proceeds from
debt instruments used in the expansion of the Company's network.

         In March 2000, the Company entered into a note payable arrangement with
a vendor for the purchase of network equipment. In October 2000, the Company
refinanced the equipment with a master revolving note with a bank to include
future purchases of equipment. Interest is payable monthly at an interest rate
of the bank's prime rate plus .5%, with the outstanding principal converting
into an installment loan on May 22, 2001. On October 19, 2001, the remaining
balance was refinanced with a promissory note to another bank. The note bears
interest at the bank's base rate plus 1% per annum. The note is due October
2004.

         On November 5, 2000, the Company entered into a variable rate
installment agreement with a bank for approximately $300,000. The note bears
interest at the bank's prime rate plus 1% per annum. The note was due November
5, 2003. On October 19, 2001, the remaining balance was refinanced with a
promissory note to another bank. The note bears interest at the bank's base rate
plus 1% per annum. The note is due October 2004.

         On February 23, 2001, the Company entered into a variable rate
installment agreement with a bank for approximately $23,000. The note bears
interest at the bank's prime rate plus 1% per annum. The note was due December
23, 2004. On October 19, 2001, the remaining balance was refinanced with a
promissory note to another bank. The note bears interest at the bank's base rate
plus 1% per annum. The note is due October 2004.

                                       23

<PAGE>

         On June 15, 2001, a subsidiary of the Company entered into a note
payable with a related party for $100,000 and on July 29, 2001, an additional
$22,000. Until the final balance is paid on June 1, 2002 and July 29, 2002 the
note bears interest at 9% per annum. The note is unsecured.

         On August 13, 2001, pursuant to the terms of a Stock Purchase Agreement
between the Company and Dynegy Technology Capital Corp., the Company issued
1,312,451 shares of its common stock, par value $0.001 per share, to Dynegy in
exchange for $1.5 million. Pursuant to the same agreement the Company issued an
additional 437,485 shares of its common stock, par value $0.001, to Dynegy in
exchange for $500,000 on November 6, 2001. The issuances were made without
general solicitation or advertising, and the purchaser represented that it was
acquiring the shares without a view to distribute and that they were afforded
the opportunity to review all publicly filed documents and to ask questions, and
receive answers from, officers of the Company.

         On September 18, 2001, a subsidiary of the Company entered into a
Promissory Note with an individual for up to $2,000,000. This note evidences a
line of credit under which the Company can request a maximum of two $1,000,000
advances. Interest accrues on the unpaid balance of the principal at 10% per
annum and is secured by the Company's accounts receivable. The advances are due
180 days after drawn. As of December 31, 2001, $2,000,000 had been advanced
under the note. The original draw was on September 24, 2001, and the second draw
was on November 17, 2001. The original maturity date of the initial installment
of the note

                                       24

<PAGE>

was extended and the maturity of the second installment is May 15, 2002.
Additionally, the lender agreed to forbear from exercise of remedies related
to alleged covenant defaults. Out of the $2,000,000 payment arising from the
settlement of a vendor dispute, the Company has paid all amounts due, and has
obtained an agreement from the lender for a waiver of existing defaults.

         DataVoN is currently involved in litigation with a former sales agent
related to commission allegedly owed to the former sales agent. The trial stage
of the litigation concluded on August 17, 2001, and resulted in a judgment
against DataVoN in the approximate amount of $2,100,000, including attorneys'
fees, court costs and accrued interest. DataVoN accrued the liability in the
third quarter of 2001. DataVoN and the plaintiff in that litigation entered into
an agreement in February 2002 suspending execution of the judgment for at least
six months. Under the terms of that agreement DataVoN paid the plaintiff
$100,000 and agreed to pay $20,000 per month, and the Company issued to the
plaintiff warrants covering 250,000 shares of the Company's common stock with a
exercise price of $0.32 per share. The cash consideration will be applied
against the final judgment, if any, upheld on appeal. Additional warrants may be
required to be issued under the suspension agreement.

         On March 21, 2002, the Company entered into an agreement with a vendor
resolving disputes and providing for financing and equipment for joint
development of network products. Under the terms of the agreement the Company
has received a cash payment of $2,000,000. Additionally, the Company will
receive relief from some of the Company's current equipment lease obligations
and favorable treatment related to certain future equipment acquisitions.

Contractual Obligations and Commercial Commitments

                             Payments Due By Period

--------------------------------------------------------------------------------
Contractual Cash         Total     Less than   1-3 Years   4-5 Years  After 5
Obligations                        1 Year                             Year
--------------------------------------------------------------------------------
Long Term Debt           567,548     267,200     300,348           -          -
--------------------------------------------------------------------------------
Capital Lease
Obligations            2,887,597   1,099,381   1,788,216           -          -
--------------------------------------------------------------------------------
Operating Leases       1,415,410     863,894     551,516           -          -
--------------------------------------------------------------------------------
Unconditional
Purchase Obligations           -           -           -           -          -
--------------------------------------------------------------------------------
Other Long Term
Obligations                    -           -           -           -          -
--------------------------------------------------------------------------------
Total Contractual
Cash Obligations       4,870,555   2,230,475   2,640,080           -          -
--------------------------------------------------------------------------------


                   Amount of commitment Expiration per period

--------------------------------------------------------------------------------
Other Commercial         Total     Less than   1-3 Years   4-5 Years  After 5
Commitments             Amounts    1 Year                             Years
                       Committed
--------------------------------------------------------------------------------
Lines of Credit        2,000,000   2,000,000           -           -          -
--------------------------------------------------------------------------------
Standby Letters of
Credit                         -           -           -           -          -
--------------------------------------------------------------------------------
Guarantees                     -           -           -           -          -
--------------------------------------------------------------------------------
Standby Repurchase
Obligations                    -           -           -           -          -
--------------------------------------------------------------------------------
Other Commercial
Commitments           19,520,958   8,532,232  10,988,726           -          -
--------------------------------------------------------------------------------
Total Commercial
Commitments           21,520,958  10,532,232  10,988,726           -          -
--------------------------------------------------------------------------------

         Capital expenditures totaled approximately $1.42 million for the year
ended December 31, 2001. The Company expects to continue the expansion of its
network throughout 2002 and intends to increase its capital expenditures
accordingly. The Company has incurred $6.30 million, $4.73 million of which were
capital leases and cash from operations and $1.57 million of which were
operating leases, since December 31, 2000. The Company intends to incur
approximately $5 million in additional capital expenditures during the remainder
of 2001 through a combination of operating and capital leases, cash from
operations, and the issuance of either debt or equity securities or both. The
Company currently does not have sufficient cash on hand, existing borrowing
availability or any commitments for the cash to fund all of the planned capital
expenditures. The Company intends to use cash flows from operations, issuance of
obligations under capital and operating leases, and proceeds from the sale of
either debt or equity securities or both to fund such capital expenditures.
There can be no assurance that the Company will be able to generate sufficient
cash flow or obtain such outside financing to fund the planned capital
expenditures. If the Company is unable to generate sufficient cash flow or
obtain such outside financing, the planned expansion of its network
infrastructure will be reduced, delayed or canceled and such reduction, delay or
cancellation could have a material adverse effect on the business, financial
condition or results of operations of the Company.

         The accompanying consolidated financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.

         The Company has experienced losses from operations and resulting
dependence on access to additional external financing to cover operating
expenses and debt payments and there can be

                                       25

<PAGE>

no assurances that these losses will not continue. Cash flows from operations
are insufficient to meet the financial obligations of the Company at this time.
However, the Company anticipates that its cash on hand, cash flows from
operations, deferred infrastructure costs to be received pursuant to existing
agreements, and cash from additional equity or debt financing may be sufficient
to satisfy operating expenses, existing commitments, including debt payments,
and planned capital expenditures. Note that there can be no assurance that the
Company will receive payments due under existing agreements, that its business
will generate sufficient cash flows from operations, that sufficient equity
capital can be raised, or that future borrowings will be available, in an amount
sufficient to enable the Company to pay operating expenses, make debt payments,
or make necessary capital or other expenditures, including the planned capital
expenditures. Our ability to operate as a going concern is dependent on our
ability to obtain sufficient cash from the sources identified herein. The
consolidated financial statements do not include any adjustments relating to
this recoverability and classification of liabilities that might be necessary
should the company be unable to continue as a going concern.

Critical Accounting Policies

         The methods, estimates and judgments that we use in applying our most
critical accounting policies have a significant impact on the results that we
report in our consolidated financial statements. We evaluate our estimates and
judgments on an on-going basis. We base our estimates on historical experience
and on assumptions that we believe to be reasonable under the circumstances. Our
experience and assumptions for the basis for our judgments about carrying value
of assets and liabilities are not readily apparent from other sources. We
believe the following accounting policies are the most critical to the
preparation of our consolidated financial statements:

         Revenue Recognition. We derive revenues primarily from the sale of the
information services that we provide to customers through our network. We record
revenue in the same period in which the information services are provided.

         Allowance for Doubtful Accounts. We do not currently maintain
allowances for doubtful accounts for estimated losses from our customers'
inability to make the payments that they owe us. However, we monitor this
situation on an on-going basis. In reviewing whether or not to make such an
allowance we analyze historical bad debts, customer concentrations, current
customer credit-worthiness, current economic trends and changes in our customer
payment patterns. If the financial condition of our customers were to
deteriorate and to impair their ability to make payments to us allowances might
be required in future periods.

         Asset Retirement Obligations. In June 2001, the FASB issued SFAS No.
143 "Accounting for Asset Retirement Obligations". SFAS 143 is not expected to
have a material impact on the Company's consolidated financial statements and
related disclosure as the Company does not have material assets that are
affected by this policy.

         Impairment for Long-Lived Assets. In July 2001, the FASB issued SFAS
No. 144, Accounting for Impairment or Disposal of Long-Lived Assets (SFAS 144).
SFAS 144 supersedes SFAS 121. Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of. SFAS 144 applies to all long-lived
assets including discontinued operations, and amends Accounting Principle Board
of Opinion No. 30 Reporting the Effect of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.
SFAS 144 requires that long-lived assets that are to be disposed of by sale be
measured at the lower of book or fair value less cost to sell. SFAS 144 is
effective for financial statements issued for fiscal years beginning after
December 15, 2001 and its provisions are generally expected to be applied
prospectively. The application of this statement is not expected to have a
material impact on our financial statements.

         Goodwill. In July 2001, the Financial Accounting Standards Board issued
the accounting rules governing business combinations, goodwill and intangible
assets. These rules are Statement of Financial Accounting Standards No. 141,
Business Combinations, and No. 142, Goodwill and Other Intangible Assets. With
the adoption of Statement 142, goodwill is no longer subject to amortization
over its estimated useful life. Rather, goodwill will be subject to at least an
annual assessment for impairment by applying a fair-value-based test at the
reporting units level. Impairment loss would be recognized to the extent the
carrying amount of goodwill exceeds the implied fair value. Under the new rules,
an acquired intangible asset should be separately recognized if the benefit of
the intangible asset is obtained through contractual or other legal rights, or
if the intangible asset can be sold, transferred, licensed, rented, or
exchanged, regardless of the acquirer's intent to do so. Determining the useful
lives of intangible assets will require considerable judgment and fact-based
analysis. The Company has adopted the provisions of this standard as of January
1, 2002, and we have conformed our accounting policy to the requirements in this
standard. As a result, goodwill and certain intangible assets will not be
amortized, but instead, will be reviewed for impairment at least annually, in
accordance with the provisions of this statement.

         Management believes this standard will have a material non-cash impact
on the corporation's financial statements related to April, 2001, acquisition of
Video Intelligence, Inc., as it will not allow for amortization of goodwill,
which approximates $900,000 annually. At this time the Company has not
determined how goodwill will be allocated to specific reporting units as of
January 1, 2002, as the Corporation is in the process of evaluating its
reporting units. Accordingly, the Corporation has not made a determination about
whether or not an impairment charge will be necessary upon adoption of the new
standard.

         As a result of the third quarter 2001 sale of substantially all of the
assets acquired in the merger with Zydeco Energy in June 2000, management
determined that the future cash flow to be derived from the remaining assets
acquired in merger could not support the goodwill that resulted from such merger
as it was accounted for under the purchase method. As a consequence of that
determination, the remaining unamortized goodwill was deemed impaired and
written off in full in the third quarter of 2001.

                                       26

<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

                          Independent Auditors' Report

The Stockholders and Board of Directors of
DTVN Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of DTVN Holdings,
Inc. and subsidiaries, as of December 31, 2001 and 2000, and the related
consolidated statements of operations, stockholders' equity and comprehensive
loss and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of DTVN Holdings, Inc.
and subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in note 1(b) to the
consolidated financial statements, the Company's loss from operations, net
working capital deficit, and the resulting dependence upon access to additional
external financing raise substantial doubt about its ability to continue as a
going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                                    KPMG LLP

Dallas, Texas

February 15, 2002,
except for note 16, which is as of March 21, 2002.

                                       27

<PAGE>

                               DTVN HOLDINGS, INC.
                         (Formerly Zydeco Energy, Inc.)

                           Consolidated Balance Sheets

                 For the Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>


                                   Assets                                           2001            2000
                                                                                -------------  --------------
<S>                                                                             <C>            <C>
Current assets:
    Cash and cash equivalents                                                   $     369,943  $    2,895,402
    Other current investments (note 5)                                                101,785         100,000
    Accounts receivable                                                             1,594,577         278,059
    Vendor deposit (note 2)                                                                 -          64,000
    Deferred income taxes  (note 8)                                                         -         902,339
    Other current assets                                                            1,101,160         121,674
                                                                                -------------  --------------

            Total current assets                                                    3,167,465       4,361,474
                                                                                -------------  --------------

Property and equipment, net (note 3 and 4)                                          5,421,458       1,136,806
Goodwill, net (notes 1a and 1g)                                                     3,901,494      23,562,199
Other assets                                                                          303,805               -
Investments (note 5)                                                                   50,000         182,061
Purchased technology                                                                        -         635,508
                                                                                -------------  --------------
                                                                                $  12,844,222  $   29,878,048
                                                                                =============  ==============

                    Liabilities and Stockholders' Equity

Current liabilities:
    Accounts payable                                                            $   3,670,746  $    1,314,688
    Unearned revenue                                                                   98,823         697,758
    Accrued liabilities and other                                                   3,278,047         994,609
    Notes payable to related parties (note 4, 6 and 7)                                122,000         249,090
    Current portion of notes payable (note 7)                                       2,075,024         211,035
    Current installments of obligations under capital leases (note 4)               1,099,380          11,971
                                                                                -------------  --------------
            Total current liabilities                                              10,344,020       3,479,151
                                                                                -------------  --------------
Deferred income taxes (note 8)                                                              -          39,101
Notes payable less current portion (note 7)                                           300,348         343,411
Obligations under capital leases, excluding current installments (note 4)           1,788,217          12,139
                                                                                -------------  --------------
            Total liabilities                                                      12,432,585       3,873,802
                                                                                -------------  --------------
Stockholders' equity:
    Preferred Stock: 1,000,000 authorized, none issued and outstanding
    Common stock,  par value $.001; 150,000,000 authorized, and 59,414,609
       issued and outstanding in 2001; 150,000,000 authorized, and
       49,965,951 issued and outstanding in 2000                                       59,414          49,966
    Additional paid in capital                                                     37,160,319      29,959,014
    Accumulated deficit                                                           (36,808,096)     (4,057,027)
    Accumulated other comprehensive income                                                  -          52,293
                                                                                -------------  --------------
            Total stockholders' equity                                                411,637      26,004,246
                                                                                -------------  --------------
Commitments and contingencies (notes 4, 7 and 15)
                                                                                -------------  --------------
                                                                                $  12,844,222  $   29,878,048
                                                                                =============  ==============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       28

<PAGE>

                               DTVN HOLDINGS, INC.
                         (Formerly Zydeco Energy, Inc.)

                      Consolidated Statements of Operations

                 For the years ended December 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                                           2001               2000
                                                                                      ---------------   ----------------
<S>                                                                                   <C>               <C>
Net service revenue                                                                   $    16,988,835   $     11,290,239
Other revenue                                                                                 158,960            111,789
                                                                                      ----------------  ----------------
             Total revenue                                                                 17,147,795         11,402,028

Costs and expenses (notes 4 and 6):

    Cost of services                                                                       16,338,423          7,068,647
    Selling and marketing                                                                     364,910            121,026
    General and administrative (including $762,639                                          5,445,920          4,799,632
    and $2,251,416 non-cash expenses for 2001 and 2002)
    Litigation judgment (note 12)                                                           2,163,658                  -
    Loss on disposal of assets (note 13)                                                   19,397,138              3,011
    Depreciation, amortization and depletion (note 4)                                         713,598            288,627
    Amortization of goodwill                                                                4,634,743          2,973,199
                                                                                     ----------------   ----------------
             Total costs and expenses                                                      49,058,390         15,251,131
                                                                                     ----------------   ----------------
             Operating loss                                                              (31,910,595)        (3,849,103)

Interest income                                                                                58,639             87,383
Interest expense (note 7)                                                                     216,677             56,940
Other income                                                                                  135,815                  -
Gain on sale of investments                                                                    59,232                  -
                                                                                     ----------------   ----------------
             Loss before income taxes                                                     (31,873,586)        (3,821,671)

Income tax expense (benefit) (note 8)                                                         877,483           (836,554)
                                                                                     ----------------   ----------------
             Net Loss                                                                $    (32,751,069)  $     (2,985,117)
                                                                                     ================   ================

Net loss per common share - basic and diluted (note l)                               $           (.61)  $           (.06)
                                                                                     ================   ================

Weighted average common shares outstanding - basic and diluted                             53,311,097         46,370,951
</TABLE>

See accompanying notes to consolidated financial statements.

                                       29

<PAGE>

                               DTVN HOLDINGS, INC.
                         (Formerly Zydeco Energy, Inc.)

     Consolidated Statements of Stockholder's Equity and Comprehensive loss

                 For the years ended December 31, 2001 and 2000
<TABLE>
<CAPTION>
                                                                                          Retained      Accumlated
                                Preferred stock          Common stock        Additional   earnings        other          Total
                             ----------------------  ---------------------    paid in    accumulated  comprehensive  stockholder's
                              Shares       Amount       Shares     Amount     capital     (deficit)      income         equity
                             ---------   ----------  -----------  --------  -----------  ------------ -------------  -------------
<S>                          <C>           <C>       <C>          <C>       <C>            <C>
Balance at
  January 1, 2000                   --           --    1,000,000    $1,000           --        97,400            --         98,400

Change in tax status
  from S corporation
  to C corporation
  (note 1):                                                                                                                     --

Net income through
 change in tax
 status (note 1)                    --           --           --        --           --     1,071,910            --      1,071,910
Dividend payments                   --           --           --        --           --    (1,375,446)           --     (1,375,446)
Reflect change in
 tax status                         --           --           --        --     (206,136)      206,136            --             --

Merger between
 DataVoN and DTVN
 (note 1):

Reverse acquisition
 and new capitalization
 of DTVN (note 1)                7,190            7   41,775,951    41,776   27,920,917            --            --     27,962,700
Conversion of
 preferred stock                (7,190)          (7)   7,190,000     7,190       (7,183)           --            --             --
Amortization of stock
 based compensation                 --           --           --        --    2,251,416            --            --      2,251,416

Comprehensive loss:

    Unrealized gain
     on investments                 --           --           --        --           --            --        52,293         52,293
    Net loss since
     change in tax
     status                         --           --           --        --           --    (4,057,027)           --     (4,057,027)
                             ---------   ----------  -----------  --------  -----------  ------------    ----------    -----------
Total comprehensive
  loss                              --           --           --        --           --    (4,057,027)       52,293     (4,004,734)
                             ---------   ----------  -----------  --------  -----------  ------------    ----------    -----------
Balance at
  December 31, 2000                 --           --   49,965,951   $49,966   29,959,014    (4,057,027)       52,293     26,004,246
Sale of common stock                --                 1,749,934     1,749    1,998,251            --            --      2,000,000
Exercise of stock
  options                           --           --      948,949       949      131,251            --            --        132,200
Amortization of stock
  based compensation                --           --           --        --      743,922            --            --        743,922
Acquisition of Video
  Intelligence (Note 9)             --           --    6,749,775     6,750    4,286,104            --            --      4,292,854
Loan discount financing
 agreement                          --           --           --        --       41,777            --            --         41,777

Comprehensive loss:

    Net loss year ended
     December 31, 2001              --           --           --        --           --   (32,751,069)           --    (32,751,069)

Gain on sale of
  investments                       --           --           --        --           --            --       (52,293)       (52,293)
                             ---------   ----------  -----------  --------  -----------  ------------    ----------    -----------
Balance at
  December 31, 2001                 --           --   59,414,609    59,414   37,160,319   (36,808,096)           --        411,637
                             =========   ==========  ===========  ========  ===========  ============    ==========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       30

<PAGE>


                               DTVN HOLDINGS, INC.
                         (Formerly Zydeco Energy, Inc.)

                      Consolidated Statements of Cash Flows

                 For the years ended December 31, 2001 and 2000
<TABLE>
<CAPTION>
                                                                                        2001              2000
                                                                                   --------------   ---------------
<S>                                                                                  <C>            <C>
Cash flows from operating activities:

    Net loss                                                                        $  (32,751,069)      (2,985,117)
    Adjustments to reconcile net loss to net cash provided
       by (used in) operating activities:
          Depreciation, amortization and depletion                                       5,348,341        3,261,826
          Non-cash general & administrative expenses                                       762,639        2,251,416
          Loss on disposal of asset                                                     19,397,138            3,011
          Gain on sale of investments                                                     (59,232)                0
          Deferred tax (benefit) expense                                                   877,483         (836,554)
          Changes in assets and liabilities:
             Accounts receivable                                                       (1,252,472)          494,611
             Customer deposit                                                                    -         (360,000)
             Vendor deposit                                                                 64,000          296,000
             Accounts payable and accrued liabilities and other                          4,503,771        1,401,878
             Unbilled revenue                                                            (695,842)                -
             Unearned revenue                                                            (598,935)          203,876
             Prepaid expenses and other                                                  (332,790)          (91,785)
                                                                                   --------------   ---------------
                    Net cash provided by (used in) operating activities                (4,736,968)        3,639,162
                                                                                   --------------   ---------------
Cash flows from investing activities:

    Capital expenditures                                                               (1,417,620)         (478,635)
    Payment of deposits                                                                  (268,380)                -
    Purchase of investments                                                                (1,785)           (3,710)
    Sale of investments                                                                   138,998                 -
    Sale of assets                                                                        740,000                 -
    Payment of cash for acquisitions, net of cash acquired                               (410,793)          432,414
                                                                                   --------------   ---------------
                    Net cash used in investing activities                              (1,219,580)          (49,931)
                                                                                   --------------   ---------------

Cash flows from financing activities:

    Proceeds from notes payable to related parties                                        122,000           250,000
    Principal payments on notes payable to related parties                               (249,090)             (910)
    Proceeds from notes payable                                                         2,025,448           566,822
    Principal payments on obligations                                                    (599,469)         (529,035)
    Proceeds sale of common stock                                                       2,000,000                 -
    Proceeds exercise stock options                                                       132,200                 -
    Payments of dividends                                                                       -        (1,375,446)
                                                                                   --------------   ---------------

                    Net cash provided by (used in) financing activities                 3,431,089        (1,088,569)
                                                                                   --------------   ---------------

Net increase in cash and cash equivalents                                              (2,525,459)        2,500,662
Cash and cash equivalents at beginning of year                                          2,895,402           394,740
                                                                                   --------------   ---------------

Cash and cash equivalents at end of year                                           $      369,943         2,895,402
                                                                                   ==============   ===============

Supplemental disclosure of cash flow information:

    Cash paid during the year for interest                                         $       97,727            20,822
                                                                                   ==============   ===============

    Cash paid during the year for income taxes                                     $      103,843            27,180
                                                                                   ==============   ===============
</TABLE>

                                       31

<PAGE>

                              DTVN HOLDINGS, INC.
                         (Formerly Zydeco Energy, Inc.)

                     Consolidated Statements of Cash Flows

                 For the years ended December 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                     2001            2000
                                                                --------------   -------------
<S>                                                             <C>              <C>
Non-cash investing activities:
    Capital leases for equipment                                $    3,322,965               -
                                                                ==============   =============

    Notes payable for equipment                                 $       23,267         501,709
                                                                ==============   =============

    Acquisition of Video Intelligence by DTVN (note 1f)         $    4,292,854               -
                                                                ==============   =============
</TABLE>


See accompanying notes to consolidated financial statements.

                                       32

<PAGE>

(1)    Summary of Significant Accounting Policies

       (a)    Merger and Basis of Financial Reporting

              On June 9, 2000, DataVoN, Inc. ("DataVoN") merged (the "Merger")
              with DTVN Holdings, Inc. ("DTVN"), formerly Zydeco Energy, Inc.,
              and DataVoN became a subsidiary of DTVN. Shareholders of DataVoN
              received shares of DTVN equal to a majority of the shares of DTVN
              outstanding after the transaction. Accordingly, the business
              combination has been accounted for as a reverse acquisition of
              DTVN by DataVoN using the purchase method of accounting.
              Accordingly, the historical financial statements of DataVoN prior
              to the Merger have become the financial statements of the
              registrant, and the results of operations of DTVN have been
              combined with DataVoN beginning on June 9, 2000. References to the
              "Company" refer to operations of DataVoN prior to the Merger and
              the combined operations of DataVoN and DTVN subsequent to the
              Merger. The purchase price totaled approximately $28 million,
              which was comprised of the traded market value of DTVN's
              outstanding common stock and the fair value of DTVN's outstanding
              options and warrants at the date the Merger was agreed and
              announced, and direct acquisition costs. A substantial portion of
              the purchase price was allocated to goodwill that was being
              amortized to expense over a five-year period. As a result of a
              disposition of substantially all the tangible assets acquired in
              the June 2000 Zydeco Energy, Inc. merger during the year ended
              December 31, 2001 all of the remaining goodwill in the amount of
              $19,394,416 was written off.

              Under the terms of the Merger, DataVoN's shareholders received
              32,623,855 shares of common stock and 7,190 shares of preferred
              stock of DTVN. The preferred shares were automatically converted
              into 7,190,000 common shares when sufficient additional common
              shares of DTVN were authorized by its stockholders.

              In connection with the Merger, DataVoN converted from an S
              corporation into a C corporation. Accordingly, the Company
              eliminated DataVoN's retained earnings and established deferred
              federal income taxes at the date of the Merger. The corresponding
              deferred tax benefit of $643,969 was recognized in the statement
              of operations for the nine months ended June 30, 2000.

       (b)    Going Concern

              The accompanying consolidated financial statements have been
              prepared on a going concern basis, which contemplates the
              realization of assets and the satisfaction of liabilities in the
              normal course of business. As shown in the consolidated financial
              statements during the years ended December 31, 2001 and 2000, the
              Company incurred losses of $32,751,069 and $2,985,117,
              respectively. The Company also has a working capital deficit of
              $7,176,555 at December 31, 2001. These factors among others may
              indicate that the Company will be unable to continue as going
              concern for a reasonable period of time.

              The consolidated financial statements do not include any
              adjustments relating to this recoverability and classification of
              liabilities that might be necessary should the Company be unable
              to continue as a going concern. The Company's continuation as a
              going concern is dependent upon its ability to generate sufficient
              cash flow to meet its obligations on a timely basis, to comply
              with the terms of its financing agreements, to obtain additional
              financing as may be required, and ultimately to attain
              profitability.

                                       33

<PAGE>


       (c)    Principles of Consolidation

              The consolidated financial statements include the financial
              statements of DTVN and its four wholly owned subsidiaries. All
              significant intercompany balances and transactions have been
              eliminated in consolidation.

       (d)    Cash Equivalents and Certificates of Deposit

              For purposes of the statements of cash flows, the Company
              considers all demand deposits, time deposits and other highly
              liquid investments with an initial maturity of less than 90 days
              to be cash equivalents.

              Certificates of deposit are classified as available-for-sale and
              are carried at fair value, which approximates cost.

       (e)    Investment Securities

              Investment securities held as of December 31, 2001 include U.S.
              Treasury securities. The Company classifies its securities as
              available-for-sale.

              Available-for-sale securities are recorded at fair value.
              Unrealized holding gains and losses, net of the related tax
              effect, on available-for-sale securities are excluded from
              earnings and are reported as a separate component of other
              comprehensive income until realized. Realized gains and losses
              from the sale of available-for-sale securities are determined
              based on specific identification basis.

              A decline in the market value of any available-for-sale security
              below cost that is deemed to be other than temporary results in a
              reduction in carrying amount to fair value. The impairment is
              charged to earnings and a new cost basis for the security is
              established. Dividend and interest income are recognized when
              earned.

       (f)    Property and Equipment

              Property and Equipment are recorded at cost. Maintenance and
              repairs are charged against income as incurred, while major
              replacements are capitalized. The cost and related accumulated
              depreciation of assets sold or retired are removed from the
              accounts, and any resulting gain or loss is reflected in
              operations. Equipment under capital leases is stated at the
              present value of minimum lease payments.

              The Company provides depreciation on equipment using the
              straight-line method over the estimated useful lives of the
              respective assets. Equipment held under capital leases are
              amortized straight line over the shorter of the lease term or
              estimated useful life of the asset.

                                       34

<PAGE>

       (g)    Goodwill

              Goodwill, which represents the excess of purchase price over fair
              value of net assets acquired, is amortized on a straight-line
              basis over a five-year period. The Company assesses the
              recoverability of this intangible asset by determining whether the
              amortization of the goodwill balance over its remaining life 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 undiscounted future operating
              cash flows expected to be generated by the acquired business. The
              assessment of the recoverability of goodwill will be impacted if
              estimated future operating cash flows are not achieved. As of
              December 31, 2001 the goodwill attributable to the acquisition of
              Video Intelligence in April 2001 was $4,545,430 of which $643,936
              was amortized throughout fiscal 2001 for a net balance of
              $3,901,494.

       (h)    Income Taxes

              The Company was a Subchapter S corporation through the date of the
              merger. The federal income tax liability incurred as a result of
              the Company's earnings was the responsibility of its stockholder.
              Therefore, no federal income taxes were provided in the Company's
              financial statements as of December 31, 2001. The Company made
              distributions to its stockholder to pay federal income taxes owed
              by the stockholder related to the Company's taxable income. In
              June 2000, the Company changed its tax status to a C corporation
              for federal income tax purposes and recorded approximately $42,000
              of deferred tax assets.

              Subsequent to the merger, federal and state income taxes are
              accounted for under the asset and liability method. Deferred tax
              assets and liabilities 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
              carryforwards. Deferred tax assets and liabilities 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.

       (i)    Revenue Recognition

              The Company generally bills for its services based on capacity
              made available to its customers, rather than actual usage. Service
              based on capacity is generally billed monthly in advance. Revenue
              from service billed in advance is deferred and recognized as
              revenue when earned. Service based on actual usage is recognized
              as revenue when earned and is billed monthly in arrears.

              The Company may incur incremental costs to establish new
              connections with customers. In these situations, the Company may
              charge its customers a set up fee for the new connections. The
              Company defers these set-up fees, and incremental set-up costs,
              and recognizes them ratably over the initial service commitment
              period for the new connection, which is generally one year.

       (j)    Impairment of Long-lived Assets and Long-lived Assets to Be
              Disposed Of

              Long-lived assets are reviewed for impairment whenever events or
              changes in circumstances indicate that the carrying amount of an
              asset may not be recoverable. Recoverability of assets to be held
              and used is measured by a comparison of the carrying amount of an
              asset to future net cash flows expected to be generated by the
              asset. If such assets are considered to be impaired, the
              impairment to be recognized is measured by the amount by which the
              carrying

                                       35

<PAGE>

              amount of the assets exceeds the fair value of the assets. Assets
              to be disposed of are reported at the lower of the carrying amount
              or fair value less costs to sell.

       (k)    Use of Estimates

              Management of the Company has made a number of estimates and
              assumptions that affect the reported amounts of assets and
              liabilities and disclosure of contingent assets and liabilities to
              prepare these financial statements in conformity with accounting
              principles generally accepted in the United States of America.
              Actual results could differ from those estimates.

       (l)    Net Loss per Share

              Basic and diluted net loss per common share was determined by
              dividing net loss by the weighted average common shares
              outstanding during the period. As of December 31, 2001, the
              Company's weighted average common shares outstanding were
              53,311,097.

       (m)    Fair Value of Financial Instruments

              Financial instruments consist principally of cash equivalents,
              certificates of deposit, accounts receivable, accounts payable and
              short-term notes payable. The estimated fair value of these
              instruments approximates their carrying value.

       (n)    Concentrations of Credit Risk

              The Company's customers are primarily well-established long
              distance carriers throughout the United States. Two non-affiliated
              customers comprised 27.0% and 25.5% of revenues during 2001, and
              1.6% and 0% of accounts receivable at December 31, 2001. Two
              non-affiliated customers comprised 54% and 35% of revenues during
              2000, and 0% and 0% of accounts receivable at December 31, 2000.

       (o)    Stock Option Plan

              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 exceeded the
              exercise price. SFAS No. 123, "Accounting for Stock-Based
              Compensation," 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 reqirements of SFAS No. 123.


(2)    Vendor Deposit

       Vendor deposit required prior to the provision of bandwidth capacity was
       $0 and $64,000 in 2001 and 2000, respectively.

(3)    Property and Equipment

       Property and equipment, net, consisted of the following (see note 4):

<TABLE>
<CAPTION>
                                                          Estimated
                                                         useful life            2001               2000
                                                       ----------------   ----------------   ----------------
<S>                                                   <C>            <C>                  <C>
       Computer equipment                                 3-5 years     $       355,308             59,985
       Office equipment and furniture                    3-10 years             219,075             99,305
       Telecommunications equipment                        5 years            5,557,953            925,462
       Leasehold improvements                            Lease-Term              36,956             36,956
       Oil and gas properties                                                         -            285,000
                                                                          ----------------   ----------------
                 Total property and equipment                                 6,169,292          1,406,708
       Less accumulated depreciation, amortization
           and depletion                                                       (747,834)          (269,902)
                                                                          ----------------   ----------------
       Property and equipment, net                                      $     5,421,458          1,136,806
                                                                          ================   ================
</TABLE>

<PAGE>

(4)    Leases

       (a)    Operating Leases

              In 2001, the Company leased office space from M.M. Simpson, a
              related party. In 2001, the Company also leased an airplane from
              EDVon, Inc. for a four month period, January 1, 2001 through April
              30, 2001. The Company also leased office space and had various
              equipment leases to non-related parties. Total rental expense was
              $412,754 in 2001 and $80,725 in 2000. Of the total rental expense,
              $51,180 was paid to related parties in 2001 and $75,265 was paid
              to related parties in 2000. All leases were entered into in the
              normal course of business. Since April 30, 2001, the lease related
              to the airplane has not been a liability of the Company.

              Future minimum lease payments under non-cancelable operating
              leases (with initial or remaining lease terms in excess of one
              year) as of December 31, 2001 are: 2002 - $863,894; 2003 -
              $483,431; 2004 - $38,552; 2005 - $29,553 and 2006 - $0. $46,767 of
              these future minimum lease payments are due to related parties.

       (b)    Capital Leases

              In 1999, the Company entered into capital leases with EDVon, Inc.,
              M.M. Simpson and an agent of Fidelity National Title, all of which
              are related parties, for computers, a vehicle and office equipment
              that expire at various dates through 2003, except for the vehicle
              which was terminated on May 1, 2000. At December 31, 2001, the
              leases to EDVon, Inc. and M.M. Simpson had been terminated. In
              2001, the Company entered into various capital leases with
              non-related parties for telecommunication equipment and office
              equipment. The gross amount of equipment and related accumulated
              amortization recorded under capital leases were as follows:

<TABLE>
<CAPTION>
                                                       2001                2000
                                                      ------              ------
<S>                                         <C>                   <C>
       Telecommunications equipment         $       3,057,679
       Computer equipment                   $         208,882             20,292
       Office equipment and furniture                  26,564             20,269
                                               -----------------  ---------------------

                                            $       3,293,125             40,561
       Less accumulated amortization                 (405,528)           (16,451)
                                               -----------------  ---------------------

                                            $       2,887,597             24,110
                                               =================  =====================
</TABLE>

              Amortization of assets held under capital leases of $213,796 is
              included with depreciation expense.

              The lease terms for the equipment under capital leases are 24, 36
              and 48 months. Future minimum lease payments, of which all is due
              to non-related parties, under capital leases as of December 31,
              2001 are:

<PAGE>

<TABLE>
<CAPTION>
                                                                      2001                 2000
                                                                     ------               ------
       <S>                                                  <C>                   <C>
                       2001                                                 -             13,911
                       2002                                         1,323,562             11,311
                       2003                                         1,136,395              1,528
                       2004                                           812,643                  -
                       2005                                             8,115                  -
                                                               -----------------  ---------------------
               Total minimum lease payments                         3,280,715             26,750
       Less amounts representing interest (at
           approximately 10%)                                         393,118              2,640
                                                               -----------------  ---------------------
               Present value of minimum capital lease
                 payments                                           2,887,597             24,110
       Less current installments of obligations under
           capital leases                                           1,099,380             11,971
                                                               -----------------  ---------------------
               Obligations under capital leases,
                 excluding current installments             $       1,788,217             12,139
                                                               =================  =====================
</TABLE>

(5)    Investment Securities

       The cost, gross unrealized holding gains, gross unrealized holding losses
       and fair value of available-for-sale securities by major security type at
       December 31, 2001 and 2000 were as follows:

<TABLE>
<CAPTION>
                                                                    Gross                   Gross
                                                                  unrealized              unrealized               Fair
                                                Cost             holding gains          holding losses             value
                                            ------------        ----------------       ----------------         -------------
       <S>                               <C>                <C>                    <C>                      <C>
                  2001
                  ----
       Available for sale:
       U.S. Treasury securities          $        50,000    $                 --   $                 --     $          50,000
       Certificates of deposit                   101,785                      --                     --               101,785
                                            ------------        ----------------       ----------------         -------------
                                         $       151,785    $                 --   $                 --     $         151,785
                                            ============        ================       ================         =============
                 2000
                 ----
       Available for sale:
       U.S. Treasury securities          $        50,000    $                 --   $                 --     $          50,000
       Corporate equity securities                79,761                  52,300                     --               132,061
       Certificates of deposit                   100,000                      --                     --               100,000
                                            ------------        ----------------       ----------------         -------------
                                         $       229,761    $             52,300   $                 --     $         282,061
                                            ============        ================       ================         =============
</TABLE>

       In 2001, the Company's available for sale securities consisted only of
       U.S. Treasury Securities and certificates of deposit whose carrying
       value approximate their fair market value.

(6)    Related Party Transactions

       In 2001 and 2000, the Company entered into a number of transactions in
       the normal course of business with related parties. These transactions
       include operating and capital leases with related

                                       38

<PAGE>

       parties (see note 4), notes payable to related parties (see note 7) and
       services provided by related parties.

       The Company incurred expenses to a related party, M.M. Simpson &
       Associates, P.C. (M.M. Simpson), in the amount of $149,031 and
       $126,221 in 2001 and 2000, respectively, for legal services provided
       to the Company.

       The Company also paid M.M. Simpson $0 and $25,955 in 2001 and 2000,
       respectively, for payroll costs of shared employees.

(7)    Notes Payable

       In March 2000, the Company entered into a note payable arrangement with a
       vendor for the purchase of network equipment. In October 2000, the
       Company refinanced the equipment with a master revolving note with a bank
       to include future purchase of equipment. Interest is payable monthly at
       an interest rate of the bank's prime rate plus .5%, with the outstanding
       principal on May 22, 2001, converting into an installment loan. On
       October 19, 2001, the remaining balance was refinanced with a promissory
       note to another bank. The note bears interest at the bank's base rate
       plus 1% per annum. The note is due October 2004.

       On November 5, 2000, the Company entered into a variable rate installment
       agreement with a bank for approximately $300,000. The note bears interest
       at the bank's prime plus 1% per annum. The note was due November 5, 2003.
       On October 19, 2001, the remaining balance was refinanced with a
       promissory note to another bank. The note bears interest at the bank's
       base rate plus 1% per annum. The note is due October 2004.

       On February 23, 2001, the Company entered into a variable rate
       installment agreement with a bank for approximately $23,000. The note
       bears interest at the bank's prime rate plus 1% per annum. The note was
       due December 23, 2004. On October 19, 2001, the remaining balance was
       refinanced with a promissory note to another bank. The note bears
       interest at the bank's base rate plus 1% per annum. The note is due
       October 2004.

       On June 15, 2001, the Company entered into a note payable with a related
       party for $100,000 and on July 29, 2001, an additional $22,000. Until the
       final balance is paid on June 15, 2002, and July 29, 2002, the note bears
       interest at 9% per annum. The note is unsecured.

       On September 18, 2001, the Company entered into a Promissory Note with an
       individual for up to $2,000,000. This note evidences a line of credit
       under which the Company can request a maximum of two $1,000,000 advances.
       Interest accrues on the unpaid balance of the principal at 10% per annum
       and is secured by the Company's accounts receivable. The advances are due
       180 days after drawn. As of December 31, 2001, $2,000,000 had been
       advanced under the note. The original draw was on September 24, 2001, and
       the second draw was on November 17, 2001. The original maturity date of
       the initial installment of the note was extended, and the maturity of the
       second installment is May 15, 2002. Additionally, the lender agreed to
       forbear from exercise of remedies related to alleged covenant defaults.
       Out of the $2,000,000 payment arising from the settlement of a vendor
       dispute, the Company has paid all amounts due and has obtained an
       agreement from the lender for a waiver of existing defaults.

       Total interest expense incurred to related parties (see notes 4 and 7)
       under notes payable and capital leases amounted to $10,757 and $17,898 in
       2001 and 2000, respectively.

                                       39

<PAGE>

       The aggregate maturities of lines of credit and notes payable by year are
       as follows:

             Fiscal Year
             -----------
                 2002                                      $     2,197,024
                 2003                                              163,826
                 2004                                              136,522
                                                             -------------------
             Total                                               2,497,372
                                                             -------------------
             Current installments                                2,197,024
             Long-term notes payable, excluding
               current installments                        $       300,348
                                                             ===================

(8)    Income Taxes

       Management assessed the likelihood that the Company would utilize the
       deferred tax assets, and decided it is more likely than not, the deferred
       tax assets will not be realized, therefore, a full valuation allowance
       has been established. A valuation allowance of $4,127,622 was
       established.

       On June 9, 2000, the Company converted from an S corporation to a C
       corporation and, thus, became subject to the U.S. corporate federal
       income tax. Prior to this time, the Company was treated as a pass-through
       entity under Sub-chapter S of the Internal Revenue Code.

       Income tax (benefit)/expense for the years ended December 31, 2001 and
       2000 differed from the amount computed by applying the U.S. federal
       income tax rate of 34% to loss before taxes as a result of the following:

<TABLE>
<CAPTION>
                                                                2001                      2000
                                                            -------------            ---------------
<S>                                                         <C>                      <C>
Computed "expected" tax expense                             $ (11,135,363)           $    (1,297,637)
State income tax expense, net of federal benefit                 (262,246)                   (62,143)
Amortization of goodwill                                        8,169,914                  1,010,896
Benefit of Subchapter S-election                                       --                   (453,606)
Conversion from Subchapter S to C                                      --                    (41,878)
Benefit of lower tax bracket                                           --                    (19,626)
Other                                                             (22,444)                    27,440
Change in valuation allowance                                   4,127,622                         --
                                                            -------------            ---------------
Total income tax expense (benefit)                          $     877,483            $      (836,554)
                                                            =============            ===============
</TABLE>

       The tax effects of temporary differences that give rise to significant
       portions of the deferred tax assets and deferred tax liabilities, related
       substantially to federal income taxes, at December 31, 2001 and December
       31, 2000 include:

<TABLE>
<CAPTION>
                                                                   2001               2000
                                                               ------------        -----------
<S>                                                           <C>                  <C>
       Accrual to cash adjustment under Section 481(a)          $    40,564         $  60,848
       Allowance for doubtful accounts                                    0             9,144
       Non-qualified stock compensation                           1,107,376           832,348
       Plant and equipment, principally due to
          Differences in depreciation                               (94,556)          (39,101)
       Litigation contingency                                       799,905                --
       Net operating loss carryforward                            2,258,416                --
       Amortizable intangibles                                       15,917                --
       Valuation allowance                                       (4,127,622)               --
                                                               ------------        -----------
       Net deferred tax asset                                   $        --         $ 863,239
                                                               ============        ===========
</TABLE>

       The Company has estimated net operating loss carryforwards of $6,108,779
       which began expiring in 2020.

                                       40

<PAGE>

(9)    Acquisitions

       On April 13, 2001, the Company completed a merger with Video
       Intelligence, Inc., a Pennsylvania corporation ("Video Intelligence").
       Pursuant to the merger, the Company issued 6,749,775 shares of the common
       stock, par value $0.001 per share, of the Company (the "Common Stock")
       and agreed to pay a total of $493,225 in cash to the holders of all of
       the issued and outstanding shares of capital stock of Video Intelligence.
       An aggregate of 2,530,251 shares of Common Stock issued in connection
       with the merger are subject to a certain Relinquishment Agreement, dated
       April 12, 2001 among the Company, Video Intelligence and certain
       stockholders. Pursuant to the Relinquishment Agreement, in the event that
       financial or other performance criteria set forth in the Relinquishment
       Agreement are not achieved during the first year after the closing of the
       merger, all or a portion of the Common Stock will be relinquished and
       transferred to the Company, without further consideration, as a refund of
       consideration previously paid in connection with the merger. Under the
       terms of the merger, all of the options to purchase shares of common
       stock of Video Intelligence that were issued and outstanding at the time
       of the merger were assumed by the Company and converted into options to
       purchase 1,141,804 shares of Common Stock at $0.25 per share. The assumed
       options were exercisable for a period of ninety (90) days following the
       closing of the merger. As of the final exercise date, 948,948 of the
       options had been exercised and 192,856 were abandoned. The total exercise
       price paid for these options was $153,830 and 333,629 shares exchanged in
       cashless option exercises. A portion of the option shares issued is
       subject to the Relinquishment Agreement discussed above.

(10)   Segment Information

       SFAS No. 131, Disclosures About Segments of an Enterprise and Related
       Information, establishes standards for reporting information regarding
       operating segments in annual financial statements and requires selected
       information for those segments to be presented in interim financial
       reports issued to stockholders. Operating segments are identified as
       components of an enterprise about which separate discrete financial
       information is available for evaluation by the chief operating decision
       maker in deciding how to allocate resources and assess performance.

                                       41

<PAGE>

       The Company's chief operating decision-maker, as defined under SFAS No.
       131, is the chief executive officer. The Company is now organized along
       two lines of business, enhanced information services and ownership of
       immaterial oil and gas assets. The enhanced information services segment
       provides Internet protocol services including voice, video and data
       communications. The oil and gas segment is operated through Zydeco
       Exploration, Inc. (Zydeco) and the Company has liquidated most of its oil
       and gas assets. Zydeco's revenues and net loss for the period from the
       Merger date to December 31, 2001 was insignificant and Zydeco's total
       assets were $2,331,777 at December 31, 2001.

(11)   Stock Option Plans

       In March 2000 DataVoN adopted a stock option plan (the Plan) that was
       assumed by the Company under the terms of the Merger. Under the Plan, the
       Company may grant to officers, directors, consultants and key employees
       options to purchase shares of the Company's common stock for an exercise
       price of not less than 85% of the fair value of the common stock at the
       date of grant.

       In December 2000, the Company adopted a stock option and restricted
       stock plan pursuant to which the Company's Board of Directors may grant
       shares of the Company's common stock that are subject to certain terms
       and restrictions and options to purchase shares of the Company's common
       stock to officers, directors, consultants and key employees. Stock
       options are granted with an exercise price equal to the fair market value
       of the common stock at the date of the grant.

       As of December 31, 2001, there were 10,101,349 shares available for grant
       under the two incentive compensation programs. The per share
       weighted-average fair value of stock options granted during 2001 was
       $0.75 using the Black-Scholes option pricing model with the following
       assumptions: dividend yield-0%, expected volatility-20% and risk-free
       interest rate-5% and an expected option term of ten years.

       Stock option transactions during 2000 and 2001 were as follows:

                                                              Weighted
                                             Number of        Average
                                             Options          Exercise Price
                                             -------          --------------
       Outstanding December 31, 1999                 -                     -
                  Exercised                          -                     -
                  Granted                    4,254,959                 $0.61
                  Forfeited                   (550,030)                $0.49
                                             ----------                -----
       Outstanding December 31, 2000         3,704,929                 $0.63
                  Exercised                          -                     -
                  Granted                    4,796,624                 $0.75
                  Forfeited                 (1,968,459)                $0.70
                                             ---------                 -----
       Outstanding December 31, 2001         6,533,094                 $0.68
                                             =========                 =====

                                       42

<PAGE>

       The following table summarizes certain information about the Company's
       stock options at December 31, 2001:

<TABLE>
<CAPTION>
                               Options Outstanding
                               -------------------

Range of Average    Number of     Weighted Average Remaining     Weighted Exercise
Exercise Prices     Options      Contractual Life Outstanding          Price
----------------    ---------    ----------------------------          -----

<S>                 <C>          <C>                                    <C>
$0.00 - $0.50       1,717,283    9.2 years                              $0.45
$0.51 - $0.69       1,405,836    10 years                               $0.63
$0.70 - $0.75       1,700,000    9.35 years                             $0.75
$0.76 - $1.50       1,709,975    10 years                               $0.88
</TABLE>

       As of December 31, 2001, 1,574,889 options were exercisable.

       The Company applies Accounting Principles Board Opinion No. 25,
       "Accounting for Stock Issued to Employees" in accounting for the program.
       If compensation cost for the Company's program had been determined
       consistent with SFAS 123, the Company's net loss and loss per share on a
       pro forma basis for the years ended December 31, 2001 and 2000 would have
       been as follows:

                                             2001            2000
                                             ----            ----
Net Loss
  As reported                            (32,751,069)    ($2,985,117)
  Pro forma                              (33,625,177)    ($3,583,987)
Basic and diluted loss per share
  As reported                                   (.61)         ($0.06)
Pro forma                                       (.55)         ($0.05)

(12)   Litigation Judgment

         DataVoN is currently involved in litigation with a former sales agent
         related to commission allegedly owed to the former sales agent. The
         trial stage of the litigation concluded on August 17, 2001, and
         resulted in a judgment against DataVoN in the amount of $2,163,658,
         including attorneys' fees, court costs and accrued interest. DataVoN
         accrued the liability in the third quarter of 2001. DataVoN and the
         plaintiff in that litigation entered into an agreement in February 2002
         suspending execution of the judgment for at least six months. Under the
         terms of that agreement DataVoN paid the plaintiff $100,000 and agreed
         to pay $20,000 per month, and the Company issued to the plaintiff
         warrants covering 250,000 shares of the Company's common stock with a
         exercise price of $0.32 per share. The cash consideration will be
         applied against the final judgment, if any, upheld on appeal.
         Additional warrants may be required to be issued under the suspension
         agreement.

(13)   Loss on Disposal of Assets

         As a result of selling substantially all the assets originally obtained
         from the June 2000 merger with Zydeco Energy, Inc. ("Zydeco") during
         the year ended December 31, 2001, a loss on disposal was recognized in
         the amount of $19,394,416. This impairment change reduced the
         unamortized goodwill balance related to the Zydeco merger to zero.

(14) Comprehensive Loss

       Comprehensive loss is defined as the change in equity of a business
       enterprise during a period from transactions and other events and
       circumstances from non-owner sources. Comprehensive loss consists of net
       loss and any unrealized gain on investments.

                                       43

<PAGE>

(15)     Contingencies

         The Company is party from time to time to ordinary litigation
         incidental to its business, none of which is expected to have a
         material adverse effect on the results of operations, financial
         position or liquidity of the Company.

         A vendor has indicated to the Company that, in its opinion, the amount
         due to the vendor is materially more than the amount accrued by the
         Company as due to such vendor. The Company disagrees with the vendor's
         assertion. The Company is engaged in discussions with such vendor
         regarding this matter; however, the matter has not been resolved at
         this time. There can be no assurances that the outcome of this matter
         will or will not have a material impact on the financial condition of
         the Company.

(16)     Subsequent Events

         On March 21, 2002, the Company entered into an agreement with a vendor
         resolving disputes and providing for financing and equipment for joint
         development of network products. Under the terms of the agreement the
         Company will receive a cash payment of $2,000,000 within 15 days of the
         date of the agreement. Additionally, the Company receives relief from
         some of the Company's current equipment lease obligations and favorable
         treatment related to certain future equipment acquisitions.

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

         On August 4, 2000, the Company engaged KPMG LLP ("KPMG"), to serve as
the Company's independent accountant in future periods. Prior to August 4, 2000,
KPMG had served as the independent auditor for DataVoN. Except for consultation
with matters related to DataVoN, during the Company's fiscal years ended 1999
and 1998 and the subsequent interim preceding this engagement of KPMG, neither
the Company nor anyone on its behalf has consulted with KPMG regarding the
application or accounting principals to a specific or contemplated transaction,
or the type of audit opinion that might be rendered on the Company's financial
statements, and no written or oral advice was provided to the Company that was a
fact of considered by the Company in reaching the decision as to any accounting,
auditing, or financial reporting issue.

                                       44

<PAGE>

                                    PART III

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

     The information required by this item will be contained under the caption
"Election of Directors" in the Company's Proxy Statement to be distributed in
connection with its 2002 Annual Meeting of Stockholders and is incorporated
herein by reference.

ITEM 10. EXECUTIVE COMPENSATION

     The information required by this item will be contained under the caption
"Executive Compensation" in the Company's Proxy Statement to be distributed in
connection with its 2002 Annual Meeting of Stockholders and is incorporated
herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item will be contained under the caption
"Stock Ownership" in the Company's Proxy Statement to be distributed in
connection with its 2002 Annual Meeting of Stockholders and is incorporated
herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item will be contained under the caption
"Certain Relationships" in the Company's Proxy Statement to be distributed in
connection with its 2002 Annual Meeting of Stockholders and is incorporated
herein by reference.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

       Exhibit No.     Description
       -----------     -----------

           3.1       Certificate of Incorporation and Certificates of Amendment
                     thereto (incorporated by reference to the Company's Annual
                     Report on Form 10-K for the year ended December 31, 1995).

           3.2       Certificate of Amendment to Certificate of Incorporation,
                     dated December 21, 2000 (incorporated by reference to Form
                     8-K (File No. 0-22076) filed with the SEC on December 21,
                     2000).

                                       45

<PAGE>

           3.3       Amended and Restated Bylaws (incorporated by reference to
                     the Company's Quarterly Report on Form 10-QSB for the
                     quarterly period ended September 30, 2000).

           3.4       Certificate of Designations of Series A Convertible
                     Preferred Stock of the Company (incorporated by reference
                     to Form 8-K (File No. 0-22076) filed with the SEC on
                     June 19, 2000).

           10.1      Form of Warrant Agreement by and among Zydeco Energy, Inc.
                     and Brean Murray & Co., Inc. (incorporated by reference to
                     Registration Statement on Form S-1 (Reg. No. 333-27679)).

           10.2      Agreement and Plan of Merger among Zydeco Energy, Inc., DVN
                     Aquisition Corporation, and DataVoN Inc. dated as of
                     May 23, 2000 incorporated by reference to Form 8-K (File
                     No. 0-22076) filed with the EC on May 24, 2000).

           10.3      2000 Stock Option Plan (formerly known as DataVoN Inc. 2000
                     Stock Option Plan) (incorporated by reference to
                     Registration Statement on Form S-8 (Reg. No. 333-41492)
                     filed with the SEC on July 14, 2000).

           10.4      2000 Stock Option and Restricted Stock Plan (incorporated
                     by reference to Registration Statement on Form S-8 (Reg.
                     No. 333-53348) filed with the SEC on January 8, 2001).

           16.1      Letters on Change in Certifying Accountant (incorporated by
                     reference to Form 8-K (File No. 0-22076) filed with the SEC
                     on February 2, 2000 and August 8, 2000).

           21.1*     Subsidiaries of the Company.

           23.1*     Consent of KPMG LLP.

     * Filed herewith.

(b)  Reports on Form 8-K

          On November 6, 2001, the Company filed a Report on Form 8-K dated
     October 11, 2001, pursuant to Item 5 disclosing the appointment of
     additional members of its Board of Directors.

<PAGE>

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

                                       DTVN HOLDINGS, INC.

                                       By  /s/ Hugh D. Simpson
                                         ---------------------------------------
                                           Hugh D. Simpson
                                           President and Chief Executive Officer
                                           Date: April 15, 2002

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

<TABLE>
<CAPTION>
Signature                                       Title                          Date
---------                                       -----                          ----
<S>                            <C>                                        <C>
/s/ Hugh D. Simpson            President, Chief Executive Officer,        April 15, 2002
-------------------            and Chairman of the Board
Hugh D. Simpson                (Principal Executive Officer)

/s/Philip N. O'Reilly          Chief Financial Officer and Director       April 15, 2002
---------------------          (Principal Accounting Officer)
Philip N. O'Reilly

/s/ Steve Holden               Director                                   April 15, 2002
----------------
Steve Holden

/s/ Michael McInerney          Director                                   April 15, 2002
---------------------
Michael McInerney

/s/ Steve Moffitt              Director                                   April 15, 2002
-----------------
Steve Moffitt

/s/ Jay Nickell                Director                                   April 15, 2002
------------------
Jay Nickell
</TABLE>

<PAGE>

                                  EXHIBIT INDEX

       Exhibit No.     Description
       -----------     -----------

           3.1       Certificate of Incorporation and Certificates of Amendment
                     thereto (incorporated by reference to the Company's Annual
                     Report on Form 10-K for the year ended December 31, 1995).

           3.2       Certificate of Amendment to Certificate of Incorporation,
                     dated December 21, 2000 (incorporated by reference to Form
                     8-K (File No. 0-22076) filed with the SEC on December 21,
                     2000).

           3.3       Amended and Restated Bylaws (incorporated by reference to
                     the Company's Quarterly Report on Form 10-QSB for the
                     quarterly period ended September 30, 2000).

           3.4       Certificate of Designations of Series A Convertible
                     Preferred Stock of the Company (incorporated by reference
                     to Form 8-K (File No. 0-22076) filed with the SEC on
                     June 19, 2000).

           10.1      Form of Warrant Agreement by and among Zydeco Energy, Inc.
                     and Brean Murray & Co., Inc. (incorporated by reference to
                     Registration Statement on Form S-1 (Reg. No. 333-27679)).

           10.2      Agreement and Plan of Merger among Zydeco Energy, Inc., DVN
                     Acquisition Corporation, and DataVoN Inc. dated as of
                     May 23, 2000 (incorporated by reference to Form 8-K (File
                     No. 0-22076) filed with the SEC on May 24, 2000).

           10.3      2000 Stock Option Plan (formerly known as DataVoN Inc. 2000
                     Stock Option Plan) (incorporated by reference to
                     Registration Statement on Form S-8 (Reg. No. 333-41492)
                     filed with the SEC on July 14, 2000).

           10.4      2000 Stock Option and Restricted Stock Plan (incorporated
                     by reference to Registration Statement on Form S-8 (Reg.
                     No. 333-53348) filed with the SEC on January 8, 2001).

           16.1      Letters on Change in Certifying Accountant (incorporated by
                     reference to Form 8-K (File No. 0-22076) filed with the SEC
                     on February 2, 2000 and August 8, 2000).

           21.1*     Subsidiaries of the Company.

           23.1*     Consent of KPMG LLP.

     * Filed herewith.