<PAGE>


                    U. S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   ___________

                                   FORM 10-QSB


           [x] Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                  For the Quarterly Period Ended March 31, 2000

                                       or

          [ ] 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: 33-93994

                                 MANGOSOFT, INC.
             (Exact name of registrant as specified in its charter)

                 Nevada                                       87-0543565
                 ------                                       ----------
     (State or other jurisdiction of                    (IRS Employer ID. No.)
      incorporation or organization)

     1500 West Park Drive, Suite 190                            01581
             Westborough, MA                                    -----
             ---------------                                  (Zip code)
 (Address of principal executive offices)

Registrant's telephone number, including area code:   (508) 871-7397


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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

     Common Stock                                     21,559,127 Shares
    $.001 Par Value                             (Outstanding on March 31, 2000)



<PAGE>



                         MANGOSOFT, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                              INDEX TO FORM 10-QSB



<TABLE>
<CAPTION>
<S>                                                                                                                    <C>
PART I.   FINANCIAL INFORMATION

ITEM 1--Financial Statements:
          Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2000
              and 1999 and Cumulative For The Period From June 15, 1995 (Inception) to March 31, 2000.................   3
          Condensed Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999............................   4
          Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2000
                and 1999 and Cumulative For The Period From June 15, 1995 (Inception) to March 31, 2000...............   5
          Notes to Condensed Consolidated Financial Statements........................................................   6

ITEM 2--Management's Discussion and Analysis of Financial Condition and Results of Operations.........................  10


PART II.   OTHER INFORMATION

ITEM 1--Legal Proceedings.............................................................................................. 16

ITEM 2--Changes in Securities and Use of Proceeds...................................................................... 16

ITEM 3--Defaults Upon Securities....................................................................................... 17

ITEM 4--Submission of Matters to a Vote of Security Holders............................................................ 17

ITEM 5--Other Information.............................................................................................. 17

ITEM 6--Exhibits and Reports on Form 8-K............................................................................... 17

Signatures............................................................................................................. 18

Exhibit Index.......................................................................................................... 19

</TABLE>



                                       2

<PAGE>



                          PART I. FINANCIAL INFORMATION

                         MANGOSOFT, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                CUMULATIVE FROM
                                                           THREE MONTHS ENDED MARCH 31,          JUNE 15, 1995
                                                           ----------------------------          (INCEPTION) TO
                                                            2000                 1999            MARCH 31, 2000
                                                           ------               ------          ----------------
<S>                                                      <C>                  <C>                  <C>
Revenues............................................     $    1,335           $      --            $  283,948
Cost of revenues....................................             --                 275                91,892
                                                      --------------       -------------        --------------
          Gross margin..............................          1,335                (275)              192,056

Costs and expenses:

  Research and development (excluding stock-based
    compensation of $11,119,266 in 2000 and
    $21,205,188 cumulative from June 15, 1995
    (Inception) to March 31, 2000...................      1,141,781           1,177,272            24,127,252

  Selling and marketing (excluding stock-based
    compensation of $1,480,859 in 2000 and
    $2,784,192 cumulative from June 15, 1995
    (Inception) to March 31, 2000...................        271,933              18,004             9,784,637

  General and administrative (excluding stock-
    based compensation of $9,565,884 in 2000 and
    $18,911,324 cumulative from June 15, 1995
    (Inception) to March 31, 2000...................        666,670             611,028            11,231,631

  Stock-based compensation..........................     22,166,009                  --            42,900,704
  Consulting fees to related parties................             --               7,582               712,683
                                                      --------------       -------------        --------------
          Total operating costs and expenses........     24,246,393           1,813,886            88,756,907
                                                      --------------       -------------        --------------
Loss from operations................................    (24,245,058)         (1,814,161)          (88,564,851)
Interest income.....................................         13,225               2,749               591,843
Interest expense to related parties (including
    $3,027,375 related to a beneficial conversion
    feature in cumulative from June 15,  1995
    (Inception) to March 31, 2000)..................         (9,783)            (68,391)           (3,295,377)
Other interest expense (including $1,832,625
    related to a beneficial conversion feature in
    cumulative from June 15, 1995 (Inception)
    to March 31, 2000)..............................             --             (17,700)           (2,012,296)
                                                      --------------       -------------        --------------
          Total interest expense....................         (9,783)            (86,091)           (5,307,673)
Other income (expense), net.........................         (1,467)                781               (74,214)
                                                      --------------       -------------        --------------
Net loss............................................    (24,243,083)         (1,896,722)          (93,354,895)
Accretion of preferred stock........................     (9,627,147)           (706,846)          (16,231,171)
                                                      --------------       -------------        --------------
Net loss applicable to common stockholders..........  $ (33,870,230)       $ (2,603,568)        $(109,586,066)
                                                      ==============       =============        ==============
Net loss per common share - basic and diluted         $       (1.68)       $     (19.01)
                                                      ==============       =============
Shares used in computing basic and diluted
   net loss per common share........................    20,130,349              136,949
                                                      ==============       =============
</TABLE>


            See Notes to Condensed Consolidated Financial Statements.




                                       3

<PAGE>


                                      MANGOSOFT, INC. AND SUBSIDIARY
                                      (A DEVELOPMENT STAGE COMPANY)

                                  CONDENSED CONSOLIDATED BALANCE SHEETS
                                               (UNAUDITED)


<TABLE>
<CAPTION>
                                                                  MARCH 31, 2000        DECEMBER 31, 1999
                                                                  --------------        -----------------
ASSETS

CURRENT ASSETS:
<S>                                                               <C>                       <C>
     Cash and cash equivalents...............................     $  14,491,646             $      29,959
     Accounts receivable.....................................               270                      --
     Prepaid insurance.......................................            93,754                   120,968
       Other prepaid expenses and current assets.............            12,948                     7,187
                                                                  --------------            -------------
          Total current assets...............................        14,598,618                   158,114

PROPERTY AND EQUIPMENT, at cost..............................         2,251,713                 2,078,631
Accumulated depreciation.....................................        (1,989,846)               (1,930,742)
                                                                  --------------            -------------
        Property and equipment, net..........................           261,867                   147,889

DEPOSITS AND OTHER ASSETS....................................             5,943                     5,943
                                                                  --------------            -------------
     TOTAL...................................................     $  14,866,428             $     311,946
                                                                  ==============            =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
     Demand notes payable to related parties.................     $         --              $     232,500
     Other short-term debt...................................            55,704                    92,904
     Accounts payable, including past due amounts............         1,710,079                 1,558,988
     Accrued payroll.........................................           176,293                   192,191
     Other accrued expenses..................................            57,273                   414,734
     Accrued expenses to related parties.....................               --                    712,683
     Accrued merger costs....................................               --                     77,893
                                                                  --------------            -------------
          Total current liabilities..........................         1,999,349                 3,281,893

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY):
     Convertible preferred stock, Series A...................             2,500                      --
     Common stock............................................            21,559                    19,924
     Additional paid-in capital..............................       113,443,856                72,185,728
     Deferred compensation...................................        (4,162,497)               (2,980,343)
     Deficit accumulated during the development stage..             (96,438,339)              (72,195,256)
                                                                  --------------            -------------
          Total stockholders' equity  (deficiency)...........        12,867,079                (2,969,947)
                                                                  --------------            -------------
     TOTAL...................................................      $ 14,866,428                $  311,946
                                                                  ==============            =============
</TABLE>



            See Notes to Condensed Consolidated Financial Statements.



                                       4

<PAGE>



                         MANGOSOFT, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                                  CUMULATIVE FROM
                                                                                 THREE MONTHS ENDED MARCH 31,      JUNE 15, 1995
                                                                                 ----------------------------      (INCEPTION) TO
                                                                                     2000            1999          MARCH 31, 2000
                                                                                    ------          ------        ----------------
<S>                                                                              <C>             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.......................................................................  $ (24,243,083)  $ (1,896,722)     $(93,354,895)

Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization..............................................         59,104         26,128         2,110,670
    Stock-based compensation...................................................     22,166,009           --          42,900,704
    Beneficial conversion feature of 12% convertible notes.....................           --             --           4,860,000
    Accrued interest converted into paid-in capital in connection
        with  the conversion of the 12% convertible notes......................           --             --             377,409
    Loss on disposal of equipment..............................................           --             --              71,942
    Change in assets and liabilities:
        Accounts receivable ...................................................           (270)         9,458              (270)
        Inventory..............................................................           --              275              --
        Prepaid insurance and other current assets.............................         21,453        (17,845)           29,386
        Deposits and other assets..............................................           --             --              (5,943)
        Accounts payable.......................................................        151,091         (5,552)        1,710,079
        Accrued payroll........................................................        (15,898)       (14,419)          176,293
        Other accrued expenses.................................................       (357,461)       275,665            57,289
        Accrued expenses to related parties....................................       (712,683)         7,582              --
        Deferred revenue.......................................................           --          (19,160)             --
                                                                                   ------------     ----------      ------------
               Total adjustments...............................................     21,311,345        262,132        52,287,559
                                                                                   ------------     ----------      ------------
               Net cash used in operating activities...........................     (2,931,738)    (1,634,590)      (41,067,336)

CASH FLOWS FROM INVESTING ACTIVITIES:

    Expenditures for property and equipment....................................       (173,082)           --         (2,457,228)
    Payment of merger costs....................................................        (77,893)           --           (276,173)
    Proceeds from sale of fixed assets.........................................           --              --             12,749
                                                                                   ------------     ----------      ------------
            Net cash used in investing activities..............................       (250,975)           --         (2,720,652)
                                                                                   ------------     ----------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net proceeds from issuance of common and preferred stock...................     17,914,100            --         52,460,018
    Proceeds from issuance of notes to related parties.........................           --          250,000         4,232,500
    Repayments of notes to related parties.....................................       (232,500)           --           (232,500)
    Proceeds from other debt financings........................................           --        2,000,000         2,750,000
    Repayments of other debt financings........................................        (37,200)      (750,000)         (830,384)
    Purchase of common stock from related party................................           --              --           (100,000)
                                                                                   ------------     ----------      ------------
               Net cash provided from financing activities.....................     17,644,400      1,500,000        58,279,634
                                                                                   ------------     ----------      ------------

NET INCREASE (DECREASE)  IN CASH AND EQUIVALENTS...............................     14,461,687       (134,590)       14,491,646

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.................................         29,959        232,637              --
                                                                                   ------------     ----------      ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD.......................................    $ 14,491,646     $  98,047       $ 14,491,646
                                                                                   ============     ==========      ============
</TABLE>


            See Notes to Condensed Consolidated Financial Statements.



                                       5

<PAGE>



                         MANGOSOFT, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



1.   NATURE OF BUSINESS

         MangoSoft, Inc. and subsidiary (a development stage company) ("the
     Company") develops advanced software technology to simplify, expand and
     integrate networking and pooled use of computer resources. The Company
     organizes itself as one segment reporting to the chief operating decision-
     maker.

          The Company is considered to be a development stage company since it
     has not generated significant revenues from products that have been
     developed-to-date. The Company is subject to a number of risks similar to
     those of other companies in an early stage of development. Principal among
     these risks are dependencies on key individuals, competition from other
     substitute products and larger companies, the successful development and
     marketing of its products and the need to obtain adequate additional
     financing necessary to fund future operations.

         The accompanying condensed 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 financial statements during the three months
     ended March 31, 2000 and 1999, and cumulative for the period from June 15,
     1995 (inception) to March 31, 2000, the Company incurred net losses of
     $24,243,083, $1,896,722 and $93,354,895, respectively. These factors, among
     others, raise substantial doubt about the Company's ability to continue as
     a going concern. Based upon the raising of approximately $31.2 million in
     proceeds from the sale of common stock and Convertible Preferred Stock,
     Series A, subsequent to December 31, 1999 (see Note 3), management believes
     that the Company will have sufficient capital to fund its existing
     operations for the next twelve (12) months.

         The financial statements do not include any adjustments relating to the
     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
     and ultimately to attain profitability.

2.   BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation - The Company, without audit, has prepared the
     accompanying condensed consolidated financial statements. In the opinion of
     management, these unaudited interim condensed consolidated financial
     statements furnished herein reflect all adjustments, which in the opinion
     of management are of a normal recurring nature, necessary to fairly state
     MangoSoft, Inc. and subsidiary's financial position, cash flows and the
     results of operations for the periods presented and have been prepared on a
     basis substantially consistent with the audited financial statements at
     December 31,1999. Certain information and footnote disclosures normally
     included in financial statements prepared in accordance with generally
     accepted accounting principles for annual periods have been condensed or
     omitted. Accordingly, these unaudited interim condensed consolidated
     financial statements should be read in conjunction with the Company's
     Form 10-KSB for the year ended December 31, 1999.

         The results of operations for the interim periods are not necessarily
     indicative of the results of operations to be expected for the fiscal year.

         Principles of Consolidation - The consolidated financial statements
     include the accounts of the Company and its wholly owned subsidiary after
     the elimination of all significant intercompany balances.




                                       6

<PAGE>

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

         Fair Value of Financial Instruments - The Company's financial
     instruments, including cash and cash equivalents, accounts receivable,
     accounts payable, notes payable and short-term debt are carried at cost
     which approximates their fair value because of the short-term maturity of
     these financial instruments.

         Cash and Equivalents - Cash and equivalents include cash on hand, cash
     deposited with banks and highly liquid debt securities with remaining
     maturities of ninety days or less when purchased.

         Inventory - Inventory is stated at lower of cost or market using the
     first-in, first-out method. Inventory consists of costs associated with
     printing and packaging of software.

         Property and Equipment - Property and equipment are recorded at cost.
     Depreciation and amortization are provided using the straight-line method
     over the estimated useful lives (one to five years) of the related assets.
     The Company periodically evaluates the recoverability of its long-lived
     assets based on the expected undiscounted cash flows and recognizes
     impairments, if any, based on the discounted cash flows.

         Revenue Recognition - Revenue is recognized when earned. The Company
     sells its products primarily through distributors wherein the revenue is
     recognized upon resale of the products by the distributor. Revenue from
     products licensed to original equipment manufacturers ("OEMs") is
     recognized when OEMs ship the licensed products. Provisions are recorded
     for estimated product returns and allowances.

         Software Development Costs - Costs incurred prior to technological
     feasibility of the Company's software products are expensed as research and
     development costs. Certain costs incurred after technological feasibility
     has been established are capitalized. In 2000 and 1999, no such costs were
     capitalized.

         Stock-Based Compensation - The Company accounts for stock-based
     employee compensation arrangements using the intrinsic value method in
     accordance with Accounting Principles Board Opinion ("APB") No. 25,
     "Accounting for Stock Issued to Employees" , and complies with the
     disclosure provisions of Statement of Financial Accounting Standards
     ("SFAS") No. 123, "Accounting for Stock-Based Compensation".

         Equity instruments issued to non-employees are accounted for in
     accordance with the provisions of SFAS No. 123 and Emerging Issues Task
     Force ("EITF") Issue No. 96-18, "Accounting for Equity Instruments That Are
     Issued To Other Than Employees For Acquiring, or in Conjunction with
     Selling, Goods or Services". All transactions in which goods or services
     are the consideration received for the issuance of equity instruments are
     accounted for based on the fair value of the consideration received or the
     fair value of the equity instrument issued, whichever is more reliably
     measurable. The measurement date of the fair value of the equity instrument
     issued is the date on which the counterparty's performance is complete or
     the date on which it is probable that performance will occur.

         Income Taxes - The Company recognizes deferred tax liabilities and
     assets for the expected future tax consequences of events that have been
     included in the Company's consolidated financial statements or tax returns.
     Deferred tax liabilities and assets are determined based on the difference
     between the financial statement carrying amounts and tax bases of existing
     assets and liabilities, using enacted tax rates presently in effect.
     Valuation allowances are established when necessary to reduce the deferred
     tax assets to those amounts expected to be realized.

         Net Loss Per Common Share - Basic earnings per common share is computed
     by dividing net loss applicable to common stockholders by the weighted
     average number of common shares outstanding during the period.



                                       7

<PAGE>

         Basic and diluted loss per common share are the same for all periods
     presented, as potentially dilutive stock options of 3,368,428 in 2000 and
     1,994,737 in 1999 have not been included in the calculation as their effect
     is antidilutive.

         Comprehensive Income - Comprehensive income (loss) is equal to net
     income (loss) for the three months ended March 31, 2000 and 1999.

         Future Adoption of Accounting Pronouncements - In June 1998, the
     Financial Accounting Standards Board issued SFAS No. 133, "Accounting for
     Derivative Instruments and Hedging Activities". SFAS No. 133 establishes
     accounting and reporting standards for derivative instruments, including
     certain derivative instruments embedded in other contracts, and for hedging
     activities. The provisions of SFAS No. 133 are effective for periods
     beginning after June 15, 2000. The Company is currently evaluating the
     effect, if any, SFAS No. 133 will have on the Company's financial position
     and results of operations. The Company will adopt this accounting standard
     on January 1, 2001, as required.

         Reclassifications - Certain reclassifications have been made to the
     1999 and cumulative since inception amounts to conform to the 2000
     presentation.

         Supplemental Cash Flow Information - The following table sets forth
     certain supplemental cash flow information for the three months ended March
     31, 2000 and 1999, and cumulative for the period from June 15, 1995
     (inception) to March 31, 2000:

<TABLE>
<CAPTION>
                                                                                             Three Months Ended
                                                                                                 March 31,              Cumulative
                                                                                            --------------------          Since
                                                                                              2000        1999          Inception
                                                                                              ----        ----          ---------
<S>                                                                                       <C>           <C>          <C>
         Supplemental Cash Flow Information
           Cash paid during the period for interest.....................................  $    9,783    $ 11,102       $    97,710

          Non Cash Financing Activities
            Accretion of preferred stock and warrants...................................   9,627,147     706,846        16,231,171
            Fair value of warrants issued in connection with the sale of the
               convertible preferred stock, Series A....................................     711,229        --             711,229
            Issuance costs of the convertible preferred stock, Series A.................     235,900        --             235,900
            Conversion of accounts payable into common stock............................     100,000                       190,000
</TABLE>

3.   STOCKHOLDERS' EQUITY (DEFICIENCY)

         During February and March 2000, the Company sold 2.5 million shares of
     a new issuance of Convertible Preferred Stock, Series A, (the "Preferred
     Stock") to accredited investors at $4.00 per share. The Preferred Stock was
     convertible into common stock (initially at a ratio of one to one) and had
     a liquidation preference of $10 million. The Preferred Stock would
     automatically convert to common stock upon the subsequent sale of an
     additional $10 million of the Company's securities.

         In accordance with Emerging Issues Task Force Abstract No. 98-5,
     "Accounting for Convertible Securities with Beneficial Conversion Features
     or Contingently Adjustable Conversion Ratios," the net proceeds from the
     Series A financing were allocated between the conversion feature and the
     preferred stock; because the fair value of the common stock was
     significantly in excess of the conversion price implicit in the Series A
     stock, the net proceeds was allocated to the conversion feature. Since the
     Preferred Stock was immediately convertible into common stock, an immediate
     dividend or accretion of $9,050,371 was recorded from common stockholders'
     equity to the carrying value of the Preferred Stock.




                                       8

<PAGE>

         In March 2000, the Company sold approximately 4.2 million shares of
     common stock to accredited investors at $5.00 per share. Upon completion of
     the sale of common stock, the Preferred Stock automatically converted, in
     accordance with its terms, into 2.5 million shares of common stock.

         The Company received $18.1 million from the sale of the common and
     Preferred Stock during the three months ended March 31, 2000 and $12.9
     million in April 2000. In May 2000, the Company received $210,000 from the
     sale of an additional 52,500 shares of common stock at $4.00 per share. The
     $31.2 million in proceeds will be used for research and development,
     marketing and general working capital or such other purposes as the Company
     may determine from time to time in its discretion.

         Costs incurred in connection with the sale of the Preferred Stock were
     $947,129, including $711,229 representing the fair value of warrants issued
     to the placement agent to purchase 58,975 shares of the Preferred Stock at
     $4 per share. The fair value of the warrants was calculated using the
     Black-Scholes option pricing model, with a risk-free interest rate of 6%,
     an expected life of two years, no dividends and a volatility of 150%.
     Because the Preferred Stock was immediately convertible into common stock,
     an immediate dividend or accretion of $576,776, representing the difference
     between the quoted market price of the common stock and the exercise price
     of the warrants was recorded from common stockholders equity relating to
     the warrants.

4.   STOCK-BASED COMPENSATION

         As discussed in Note 2, the Company accounts for stock options granted
     to employees in accordance with APB No. 25. Under APB No. 25, stock options
     which include stock appreciation rights ("SARs") are accounted for as a
     variable plan and compensation expense is measured at each reporting date
     based on the difference between the option exercise price and the market
     price of the common stock. For unvested options, compensation expense is
     recognized over the vesting period; for vested options, compensation
     expense is adjusted up or down at each reporting date based on changes in
     the market price of the common stock.

         During the three months ended March 31, 2000, compensation related to
     the SARs totaled $23,075,810 based on the market price of $18.00 at that
     date compared to the fair market value at the dates of grant. Because a
     substantial portion of the options are vested, the charge to expense in the
     first quarter of 2000 was $22,166,009. The balance relates to unvested
     options and will be charged to expense over the vesting period. Based on
     the number of vested options at March 31, 2000, a $1 increase in the market
     price of the Company's common stock results in the immediate recognition of
     compensation expense of approximately $2,500,000.

5.   TRANSACTIONS WITH STOCKHOLDERS

         Demand Notes Payable - In March 2000, the Company repaid the $232,500
     in demand notes payable to related parties, plus the related interest
     expense of $9,783 during the quarter.

         Administrative Services - During the three months ended March 31, 1999,
     a stockholder provided administrative assistance to the Company. Amounts
     expensed and accrued for such services in the three months ended March 31,
     1999 were $7,582 in 1999 . No administrative services were provided in
     2000.

         In March 2000, the Company repaid $712,683 in accrued expenses to
     related parties for administrative services provided to the Company during
     1998 and 1999.

                                    ********



                                       9

<PAGE>




                          PART I. FINANCIAL INFORMATION

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS


OVERVIEW

     Management's Discussion and Analysis of Financial Condition and Results of
Operations contains trend analysis and other forward-looking statements. Actual
results could differ materially from those set forth in the forward-looking
statements as a result of factors set forth elsewhere herein, including under
"Risk Factors." This discussion should be read in conjunction with the
accompanying consolidated financial statements for the periods specified and the
associated notes. Further reference should be made to the Company's Form 8-K
filed with the Securities and Exchange Commission on September 21, 1999 (as
amended on October 27, 1999) and Form 10-KSB filed with the Securities and
Exchange Commission on April 17, 2000.

     The Company develops and markets advanced software technology to simplify,
expand and integrate networking and pooled use of computer resources. The
Company is considered to be a development stage company since it has not
generated significant revenues from the products that have been
developed-to-date. The Company is subject to a number of risks similar to those
of other companies in an early stage of development. Principal among these risks
are dependencies on key individuals, competition from other substitute products
and larger companies, the successful development and marketing of its products
and the need to obtain adequate additional financing necessary to fund future
operations.

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2000 AND 1999

        Revenue was $1,335 in 2000 on sales of the CacheLink product. There was
no revenue in 1999. A single customer, Ramp Networks, Inc., represented 20% of
the revenue in 2000. No other customer represented 10% or more of revenue.

        Cost of revenues in 1999 represent the write-off of disk replication
costs. In 2000, the products sold were delivered over the Internet and the
Company incurred no disk replication costs.

     Operating expenses, excluding stock-based compensation costs, increased
14.7% to $2,080,384 in 2000 due primarily to development of the Company's
reseller network. A summary of the operating expenses and the increases
(decreases) is as follows:
<TABLE>
<CAPTION>
                                                    Three Months Ended March 31,          Increase (Decrease)
                                                    ----------------------------          -------------------
                                                        2000             1999             $ Amount         %
                                                        ----             ----             --------        ---
<S>                                                <C>               <C>              <C>                <C>
         Research and development................. $  1,141,781      $ 1,177,272      $    (35,491)      (3.0)
         Selling and marketing....................      271,933           18,004           253,929     1410.4
         General and administrative...............      666,670          611,028            55,642        9.1
         Consulting fees paid to related party....           --            7,582            (7,582)     100.0
                                                   ------------      -----------      -------------    ------
                                                      2,080,384        1,813,886           266,498       14.7
         Stock-based compensation.................   22,166,009              --         22,166,009      100.0
                                                   ------------      -----------      -------------    ------
             Total................................ $ 24,246,393      $ 1,813,886      $ 22,432,507     1236.7
                                                   ============      ===========      =============    ======
</TABLE>

        Stock-based compensation costs were $22,166,009 in 2000. Of this total,
$11,119,266 related to research and development, $1,480,859 related to selling
and marketing and $9,565,884 related to general and administrative activities.
The stock-based compensation costs primarily represent the excess of the fair
value of the Company's common stock over the exercise price of the variable
stock option grants. There were no stock-based compensation costs in the three
months ended March 31, 1999.



                                       10

<PAGE>

       The loss from operations increased from $1,896,722 in 1999 to $24,243,083
in 2000 primarily due to the stock-based compensation costs.

        Interest income increased from $2,749 in1999 to $13,225 in 2000 due to
the $18.1 million received from the sale of the Convertible Preferred Stock,
Series A and the common stock in February and March 2000.

       Interest expense decreased from $86,091 to $9,783 due to the conversion
of the notes issued in 1998 and 1999 into common stock in conjunction with the
merger.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     The Company was formed in June 1995 and, since its formation, has raised
approximately $60 million through March 31, 2000 through the placement of
private debt and equity securities.

     In addition, the Company has, at times, depended upon bank debt, loans from
stockholders and Directors and credit from suppliers to meet interim financing
needs. Bank debt of $750,000, incurred to purchase capital equipment in 1998,
was repaid using proceeds received from issuance of the 12% Senior Secondary
Secured Convertible Notes (the "12% convertible notes") in 1999. Borrowing from
stockholders and Directors have generally been refinanced with new debt
instruments or converted to additional equity. At March 31, 2000, an additional
$2.0 million in financing was provided through notes payable to an insurance
company, accounts payable, accrued expenses and other trade credit, a
significant portion of which was past due.

     The proceeds raised have been used in the development of the Company's
current products with approximately $24.1 million invested in research and
development and $9.8 million in sales and marketing, principally due to an
earlier attempt to distribute its products through traditional retail software
channels. The remaining proceeds have been used for working capital and general
corporate purposes.

     To date, product sales have provided a minor source of liquidity. From
inception through March 31, 2000, the Company generated $.3 million in sales and
incurred cumulative net losses of $93.4 million, including losses of $24.2
million in the three months ended March 31, 2000 and $33.0 million during the
year ended December 31, 1999.

     Since inception, the Company has satisfied its working capital and other
liquidity needs principally through the issuance of equity and debt securities,
loans from stockholders and Directors, trade credit and bank debt. Unless the
Company can generate a significant level of on-going revenue and attain adequate
profitability in the near-term, it will be necessary to seek additional sources
of equity or debt financing. Although the Company has been successful in raising
past financing, there can be no assurance that any additional financing will be
available to the Company on commercially reasonable terms, or at all. Any
inability to obtain additional financing when needed will have a material
adverse effect on the Company, requiring the Company to significantly curtail or
possibly cease its operations. In addition, any additional equity financing may
involve substantial dilution to the interests of the Company's then existing
shareholders.

       During the three months ended March 31, 2000, the Company received $18.1
million from the sale of 2.5 million shares of Convertible Preferred Stock,
Series A, (the "Preferred Stock") to accredited investors for $4.00 per share
and approximately 1.6 million shares of common stock for $5.00 per share. In
April 2000, the Company received an additional $12.9 million from the sale of an
additional 2.6 million shares of common stock at $5 per share. In May 2000, the
Company received $210,000 from the sale of an additional 52,500 shares of common
stock at $4.00 per share.

       Under the terms of the Preferred Stock issuance, the Preferred Stock
automatically converted into common stock on a one-for-one basis when $10
million or greater was raised in the subsequent sale of common stock. The offer
and sale of the common and Preferred Stock were exempt from registration under
the Securities Act of 1933, as amended (the "Act"), pursuant to Regulation D
promulgated by the Securities and Exchange Commission under Section 4(2) of the
Act. Management believes the $31.2 million in proceeds from the sale of the
common and Preferred Stock will be adequate to fund the Company's existing
operations for at least the next twelve (12) months.



                                       11

<PAGE>

RECENTLY ISSUED ACCOUNTING STANDARDS

       In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. The provisions of SFAS No. 133 are effective for periods
beginning after June 15, 2000. The Company is currently evaluating the effect,
if any, SFAS No. 133 will have on the Company's financial position and its
results of operations. The Company will adopt this accounting standard on
January 1, 2001, as required.

RISK FACTORS

Limited Operating History and History of Substantial Operating Losses

       The Company's current operations substantially commenced in May 1997.
Accordingly, the Company's prospects must be evaluated in light of the problems,
expenses, delays and complications normally encountered with any early stage
business. The Company has a history of substantial operating losses since
inception (June 1995) and has an accumulated deficit of approximately $96.4
million as of March 31, 2000. For the three months ended March 31, 2000 and
fiscal year ended December 31, 1999, the Company's losses from operations were
$24.2 million and $27.8 million, respectively. Such losses have resulted
primarily from costs incurred in research and development activities, the
establishment of an initial sales and marketing force, and general and
administrative expenses. The Company expects to incur additional operating
losses over the foreseeable future and expects cumulative losses to increase
substantially as the Company's marketing, sales, and research and development
efforts expand. The Company has historically experienced cash flow difficulties
primarily because its expenses exceed its revenues.

Need for Expanded Market Acceptance of the Company's Products; Concentration of
Revenue

       The Company's cumulative revenues from June 15, 1995 (inception) to March
31, 2000 of $283,948 have been derived primarily from sales of the prior
versions of its Medley product through the Company's relationship with SVA
Japan, Inc. The Company expects to derive a substantial majority of its revenues
in the foreseeable future from the sale of CacheLink, MIND and its updated
Medley product, none of which has previously been marketed by the Company.
Accordingly, the Company's future financial performance will depend on the
growth in demand for and acceptance of new software products. As is typical in
new and evolving markets, demand for and market acceptance of products are
subject to a high level of uncertainty. The Company has limited experience in
commercially providing software products and services and the Company's MIND
product is still only a prototype and will not be available for commercial sale
until at least the fourth quarter of 2000. In addition, the small business
market is relatively young and there are few proven products. There can be no
assurance that the Company will generate business from these products or that
its market acceptance will increase. If these markets fail to develop, develop
more slowly than expected or attract new competitors, or if the Company's
products do not achieve market acceptance, the Company's business, financial
condition and results of operations will be materially and adversely affected.
In addition, the loss of SVA Japan, Inc. as a reseller could have a material
affect on the Company's business financial condition and results of operations.

Evolving Market Strategy

       The Company expects its future marketing efforts will substantially focus
on developing strategic relationships with other larger public and private
companies ("Channel Sources") that seek to augment their business by directly or
indirectly offering to their customers the Company's products. To date, the
Company's only significant Channel Sources are with US Online and SVA Japan,
Inc. The inability to receive, manage or retain additional Channel Sources, or
their ability to market the Company's products effectively or provide timely and
cost effective customer support and service, could materially adversely affect
the Company's business, operating results and financial condition.



                                       12

<PAGE>

Expansion and Lack of Liquidity

       The Company will require substantial additional capital to finance its
future growth and product development activities. The Company intends to use a
significant portion of the proceeds from the securities sales in the first
quarter of 2000 for current operating expenses and to expand its operations. The
expansion of the Company's operations will be dependent in large measure on the
acceptance of its technology. Although the Company has identified certain areas
for potential expansion, there can be no assurance that the Company will be able
to expand its operations successfully. The Company may also expand its
operations through acquisitions. The Company currently has no agreements,
understandings or commitments and is not engaged in any negotiations relating to
any potential acquisitions. There can be no assurance that the Company will
effect any acquisitions or that the Company will be able to successfully
integrate into its operations any acquired businesses.

      The future rollout of its MIND Internet service may require additional
investment capital. The timing and amount of the Company's capital requirements
will depend on many factors, including:

          o    acceptance and demand for the Company's products;
          o    the costs of developing new products or enhancing existing new
               products;
          o    the costs associated with expanding the Company's operations; and
          o    the number and timing of acquisitions, if any.

       If the Company issues additional stock to raise capital, current
ownership percentages may be reduced. If funding is insufficient at any time in
the future, the Company may be unable to develop or enhance its products, take
advantage of business opportunities or respond to competitive pressures, any of
which could harm the Company's business.

Potential Delisting; Possible Volatility of Stock Price

       Although the Company will attempt to do so, there can be no assurance
that the Company will be able to maintain its listing on the OTCBB, which would
require it to register its common stock under Federal Securities laws. For the
Common Stock to thereafter be included for trading on the National Quotation
Bureau "Pink Sheets," a market maker must make certain filings with the National
Quotation Bureau. There can be no assurance that any such filings will be made
or that if made, the common stock will be accepted for inclusion into the "Pink
Sheets." Even if included, a trading market may not develop or be sustained.
Regardless, since there may not be a trading market for the common stock,
investors may not be able to liquidate their investment. Moreover, even if the
common stock is included for trading in the "Pink Sheets," the price of the
common stock may be adversely affected when an aggregate of 18,349,127 shares of
the common stock become eligible for sale pursuant to (i) Rule 144 and (ii)
registration rights afforded certain stockholders of the Company.

Uncertain Adoption of Internet as a Medium of Commerce and Communications, and
Dependence on the Internet

       Demand and market acceptance for recently introduced services and
products like those offered by the Company are subject to a high level of
uncertainty. The use of the Internet in marketing and advertising and otherwise,
particularly by those individuals and enterprises that have historically relied
upon traditional means of marketing and advertising, generally requires the
acceptance of a new way of conducting business and exchanging information.
Enterprises that have already invested substantial resources in other means of
conducting business and exchanging information may be particularly reluctant or
slow to adopt a new strategy that may make their existing resources and
infrastructure less useful. There can be no assurance that the market for the
Company's products will develop and if it fails to develop, develops more slowly
than expected or becomes saturated with competitors, or if the Company's
products do not achieve market acceptance, the Company's business, operating
results and financial conditions will be materially adversely affected. The
Company's ability to derive revenues will also depend upon a robust industry and
the infrastructure for providing Internet access and carrying Internet traffic.
The Internet may not prove to be a viable commercial marketplace because of
inadequate development of the necessary infrastructure or timely development of
complementary products, such as high speed modems. Moreover, other critical
issues concerning the commercial use of the Internet (including security,
reliability, cost, ease-of-use, access, and quality of service) remain
unresolved and may impact the growth of Internet use. Because global commerce
and online exchange of information on the Internet and other similar open
wide-area-networks ("WANs") are new and evolving, it is difficult



                                       13

<PAGE>

to predict with any assurance whether the Internet will prove to be and remain a
viable commercial marketplace. If the infrastructure necessary to support the
Internet's commercial viability is not developed, or if the Internet does not
become a viable marketplace, the Company's business, operating results and
financial condition would be materially and adversely affected.

Intellectual Property; Changing Technology; Potential Infringement

       The Company owns trademarks on "CacheLink," "Medley," "Mango,"
"MangoSoft," "Pool" and "Pooling." In addition, the Company has been granted
four patents and two provisional patents. Four other patents have been applied
for and are pending. There can be no assurance, however, that the patents will
be issued, and if issued, there can be no certainty that claims allowed in any
such patents would provide competitive advantages or protection for the
Company's products, or that such claims will not be successfully challenged by
competitors. The Company considers certain elements of its software and its
Pooling technology to be proprietary. The Company relies on a combination of
trade secrets, copyright and trademark law, contractual provisions,
confidentiality agreements and certain technology and security measures to
protect its proprietary intellectual property, technology and know-how. The
Company's business is subject to rapid changes in technology including potential
introduction of competing products and services which could have a material
adverse impact on the Company's business. There are existing hardware-based file
server and web caching products that could be used as the basis for the
development of technology that would be directly competitive with the technology
employed by the Company. In addition, there can be no assurance that research
and development by others will not render the Company's technology obsolete or
uncompetitive. Furthermore, in a technology-based industry, there can be no
assurance that a claim of patent or other infringement will not be made against
the Company. While the Company is not aware of any such claims, no infringement
studies have been conducted on behalf of the Company. Despite the Company's
efforts to protect its proprietary rights, existing copyright, trademark, patent
and trade secret laws afford only limited protection. Moreover, effective
protection of copyrights, trade secrets, trademarks and other proprietary rights
may be unavailable or limited in certain foreign countries and territories.
There can be no assurance that these domestic and foreign laws, in combination
with the steps taken by the Company to guard its proprietary rights, will be
adequate to prevent misappropriation of its technology or other proprietary
rights.

Regulatory Acceptance of the Company's Technology; Government Regulation, Legal
Uncertainties and Regulatory Policy Risks

      The Company is not currently subject to direct regulation by any
government agency, other than regulations applicable to businesses generally.
However, due to the increasing media attention focused on the Internet, it is
possible that a number of laws and regulations may be adopted with respect to
the Internet, covering issues such as user privacy, and pricing and
characteristics and quality of products and services. The adoption of any such
laws or regulations may decrease the growth of the Internet, which could in turn
decrease the demand for the Company's products and increase the Company's cost
of doing business or cause the Company to modify its operations, or otherwise
have an adverse effect on the Company's business, operating results and
financial condition. Moreover, the applicability to the Internet of existing
laws governing issues such as property ownership, libel and personal privacy is
uncertain. The Company cannot predict the impact, if any, that future regulation
or regulatory changes may have on its business.

Competition; No Substantial Barriers to Entry into the Company's Business; Price
Erosion

       The markets for the Company's products are characterized by rapid
technological change, evolving industry standards, customer demands and intense
competition. The Company competes with a number of large public and private
companies, including many large computer and software designers which have
created technologies and products that perform similar and/or competing
functions to those of the Company's products. The Company also competes with
hardware providers that have bundled in a certain level of networking
functionality on top of the hardware, all-in-one Internet access solutions and
virtual office workspace offerings. Many of the Company's competitors have
greater resources, including more extensive facilities, larger research and
development teams, more experienced marketing teams, greater capital resources
and equipment, and the ability to offer a broader range of services than the
Company. As a result, the Company's ability to remain competitive will depend in
significant part upon it being able to successfully and continually develop and
introduce, in a timely and cost-effective manner,



                                       14

<PAGE>

enhancements to existing products in response to both evolving demands of the
marketplace and competitive product offerings. In addition, over a long-term
period, the Company's ability to remain competitive will depend in significant
part upon its ability to develop and introduce, in a timely and cost-effective
manner, new products to expand and diversify the Company's product offerings.
There can be no assurance that the Company will be successful in developing and
introducing, in a timely and cost-effective way, any enhancements or extension
for existing products or any new products. In addition, there can be assurance
that the competitors of the Company will not achieve technological advances that
provide a competitive advantage over the Company's products or that make such
products obsolete.

Management of Growth; Dependence on Key Personnel and Ability to Attract New
Personnel

       Even if the Company successfully generates significant revenue growth,
there can be no assurance that the Company will effectively develop and
implement systems, procedures or controls adequate to support the Company's
operations or that management will be able to achieve the rapid execution
necessary to fully exploit the opportunity for the Company's products. To manage
its business and any growth, the Company must continue to implement and improve
its operational and financial systems and continue to expand, train and manage
its employees. In particular, management believes that the Company will need to
hire additional employees. If the Company is unable to manage growth
effectively, the Company's business, operating results and financial condition
will be materially affected. The success of the Company is dependent upon the
efforts of Dale Vincent, the Company's President and Chief Executive Officer;
Scott H. Davis, the Company's Vice President and Chief Technology Officer;
Robert E. Parsons, the Company's Chief Financial Officer; and other members of
senior management. The loss of Mr. Vincent, Mr. Davis, Mr. Parsons, or of any of
the Company's senior management, could delay or prevent the Company from
achieving its objectives. The Company is also highly dependent upon its ability
to continue to attract and retain additional management and technical personnel
because of the specialized nature of the Company's business. Competition for
such qualified personnel is intense, and there can be no assurance that the
Company will be able to retain existing personnel or attract, assimilate or
retain additional qualified personnel necessary for the development of its
business. The inability of the Company to attract and retain qualified personnel
would have a material adverse effect on the Company's business, financial
condition and results of operations.

Risk of Errors or Failure in Software Products

       Complex products such as CacheLink and Medley, or any new product which
may be developed by the Company in the future, may contain errors, failures,
bugs or defects, particularly when first introduced, and as updates, upgrades
and new versions are released. The introduction by the Company of products with
errors, failures, bugs, defects or otherwise with reliability, quality or
compatibility problems could result in adverse publicity, product returns,
reduced orders, uncollectible accounts receivable, delays in collecting accounts
receivable, product redevelopment costs, loss of or delay in market acceptance
of the Company's products, or claims by the customer or others against the
Company. Alleviating such problems could require significant expenditures of
capital and resources by the Company's customers. Errors, failures, bugs or
defects in the Company's products could have a material adverse effect on the
Company's business, financial condition and results of operations.

No Dividends

       The Company intends to retain any future earnings to finance its
operations and does not intend to pay dividends.

Concentration of Share Ownership

       As of March 31, 2000, the Company's directors and officers, together with
entities affiliated with them, beneficially own approximately 21% of the
Company's capital stock, including all outstanding options to purchase shares of
the Company's common stock. These stockholders, acting as a group, may continue
to have significant influence over the outcome of all matters submitted to the
stockholders for approval, including the election of a majority of the Company's
Board of Directors and the determination of all corporate actions. The voting
power of these stockholders could also have the effect of delaying or preventing
a change in control of the Company. Such


                                       15

<PAGE>

influence by management could have the effect of discouraging others from
attempting to take-over the Company thereby increasing the likelihood that the
market price of the common stock will not reflect a premium for control.

Year 2000 Risk

       The Company has reviewed its internal computer programs and systems to
ensure that they are Year 2000 compliant and has not experienced any material
adverse effects as a result of the Year 2000 problem. While the Company believes
that its current systems are compliant and that no additional material
expenditures are required to address Year 2000 compliance of its internal
computer systems, there can be no assurance to that effect. In addition, the
Company cannot predict the effect of the Year 2000 problem on the vendors,
customers and other entities with which the Company transacts business, or with
whose products the Company's products interact. There can be no assurance that
the effect of the Year 2000 problem on such entities will not have a material
adverse effect on the Company's business, financial condition and results of
operations.

Registration Rights of Other Securityholders-Potential Costs to the Company;
Adverse Effects on Future Financing and Stock Price

       The Company is obligated to use reasonable efforts to file a registration
statement relating to the resale of up to 1,000,000 shares of the Company's
common stock sold in a Rule 506 Offering completed in August of 1999, 300,000
shares of the Company's common stock held by the placement agent from that
offering and 1,000,000 shares of the Company's common stock held by Palisade
Private Partnership, L.P. The Company is obligated to use its best efforts to
have such registration statement declared effective as soon as practicable after
filing with the Securities Exchange Commission and shall keep such registration
statement effective for a period of at least one year. These registration rights
could result in substantial future expense to the Company and could adversely
affect any future equity or debt financing. Furthermore, the sale of common
stock held by or issuable to the holders of registration rights, or even the
potential of such sales, could have an adverse effect on the market price of the
Common Stock.


                           PART II. OTHER INFORMATION


ITEM 1  LEGAL PROCEEDINGS

       On August 30, 1999, one of the Company's shareholders filed suit in
Orange County (CA) Superior Court alleging damages for fraud in the sale of
securities under both federal and California state law seeking a rescission of
the purchase agreement governing the sale of such securities. The shareholder
seeks damages in the amount of $50,000, plus interest. The Company has answered
the complaint, denied all material allegations and asserted various affirmative
defenses. Discovery has commenced. The Company believes that this litigation
will not have a material adverse effect on its business, financial position,
liquidity or results of operations, although there can be no assurance as to the
ultimate outcome of these matters.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

       In September 1999, the Company sold 3,000,000 shares of its common stock
at $1.25 per share to accredited investors as defined in Rule 501 of Regulation
D. The $3,690,000 in net proceeds from the sale was used for working capital and
general corporate purposes.

       During the three months ended March 31, 2000, the Company received $18.1
million from the sale of 2.5 million shares of Convertible Preferred Stock,
Series A, (the "Preferred Stock") to accredited investors for $4.00 per share
and approximately 1.6 million shares of common stock for $5.00 per share. In
April 2000, the Company received an additional $12.9 million form the sale of an
additional 2.6 million shares of common stock at $5 per share. In May 2000, the
Company received $210,000 from the sale of an additional 52,500 shares of common
stock at $4.00 per share. The proceeds from the sale of these securities will be
used for research and development,



                                       16

<PAGE>

marketing and general working capital or such other purposes as the Company may
determine from time to time in its discretion.

       Under the terms of the offer and sale of the Preferred Stock, the
Preferred Stock automatically converted into common stock on a one-for-one basis
when $10 million or greater was raised in the subsequent sale of common stock.
Accordingly, all of the Preferred Stock was converted into common stock and
subsequently cancelled. The sale of the common and Preferred Stock were exempt
from registration under the Securities Act of 1933, as amended (the "Act"),
pursuant to Regulation D promulgated by the Securities and Exchange Commission
under Section 4(2) of the Act.


ITEM 3.  DEFAULTS UPON SECURITIES
                  None.


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

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


ITEM 5.  OTHER INFORMATION
                  None.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

         11.  Computation of Net Loss Per Common Share
         27.  Financial Data Schedules

(b)      Reports on Form 8-K

      The Registrant filed a report on Form 8-K on January 20, 2000 (as amended
on January 28, 2000), which reported that the Company appointed Deloitte &
Touche LLP as its independent auditors.



                                       17


<PAGE>



                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


May 15, 2000                    MANGOSOFT, INC.

                                 /S/
                                    --------------------------------------------
                                    Robert Parsons
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)




                                       18

<PAGE>



                                  EXHIBIT INDEX



EXHIBIT      DESCRIPTION
-------      -----------

11.          Computation of Net Loss Per Common Share
27.          Financial Data Schedules








                                       19