<PAGE>

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

                                    FORM 10-K

    FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                                   (Mark One)

            [X] Annual Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934
                    For the fiscal year ended March 31, 2002
                                       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 0-24408

                       Universal Broadband Networks, Inc.
             (Exact Name of Registrant as Specified in Its Charter)

            Delaware                                            33-0611753
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization                            Identification Number)

                          2030 Main Street, Suite 1300
                            Irvine, California 92614
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's telephone number including area code: (949) 260-4729

        Securities Registered Pursuant to Section 12(b) of the Act: None

           Securities Registered Pursuant to Section 12(g) of the Act:

                                                      Name of Each Exchange
      Title of Each Class                              on Which Registered
      -------------------                              -------------------
  Common Stock $.001 par value                                 None

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

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

         The aggregate market value of the Common Stock held by non-affiliates
of the registrant based upon the $0.002 closing sales price of its Common Stock
on June 15, 2002 on the Over the Counter Bulletin Board approximated $50,600.

         The number of shares of Common Stock outstanding as of June 15, 2002
was 25,346,849.



<PAGE>

                                     PART I

         THIS ANNUAL REPORT ON FORM 10-K INCLUDES "FORWARD-LOOKING STATEMENTS",
INCLUDING STATEMENTS CONTAINING THE WORDS "BELIEVES", "ANTICIPATES", "EXPECTS"
AND WORDS OF SIMILAR IMPORT. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL
FACT INCLUDED IN THIS ANNUAL REPORT INCLUDING, WITHOUT LIMITATION, SUCH
STATEMENTS UNDER "MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" AND "BUSINESS" AND ELSEWHERE HEREIN,
REGARDING THE COMPANY OR ANY OF THE TRANSACTIONS DESCRIBED HEREIN, INCLUDING THE
TIMING, FINANCING, STRATEGIES AND EFFECTS OF SUCH TRANSACTIONS AND THE COMPANY'S
GROWTH STRATEGY AND ANTICIPATED GROWTH, ARE FORWARD-LOOKING STATEMENTS.

ITEM 1.  DESCRIPTION OF BUSINESS
--------------------------------

                                    BUSINESS

OVERVIEW

         Universal Broadband Networks, Inc., formerly IJNT.net, Inc., was an
emerging facilities-based integrated communications carrier using digital
subscriber line, or DSL, technology to offer broadband data and voice
telecommunication services to small and medium-sized businesses and high-end
residential consumers, particularly multiple tenant units ("MTUs") and multiple
dwelling units ("MDUs"). We were deploying a scalable network in targeted
geographic areas where high demand existed for our services and which were
underserved by other carriers.

         We began operations in 1997 as a provider of high-speed wireless
Internet access primarily to small and medium-sized businesses, MDUs and
telecommuters. We initially offered one-way Internet access and began offers of
two-way access in early 1998. We selected Salt Lake City as our initial market
because its topography offered excellent line-of-sight transmission to nearly
the entire population of 1.3 million. We subsequently expanded our wireless
Internet services to Texas and California.

         In early 1998, we began offering dial-up Internet access to complement
our wireless services. We also acquired Man Rabbit House Multimedia, Inc.
("MRHM"), a web-site design firm, to offer web-site and e-commerce design and
development services to better serve the needs of our business customers. See
discussion of the disposition of MRHM at "Management's Discussion and Analysis."

         In the fourth quarter of 1998, we formed Urjet Backbone Network, Inc.
("UBN") to operate as a competitive local exchange carrier and to provide fiber
connectivity services through the Internet. In late 1998, we commenced
discussions with Nortel Networks, Inc. ("Nortel") to finance construction of
portions of our broadband network and to offer DSL services using Nortel
products. Such negotiations resulted in the execution of a credit agreement with
Nortel in July 1999. Since July 1999, we focused our primary capital and
management efforts to implement our DSL service strategy.

         As of June 2000, we had completed installation of the primary
components of our high-capacity Nortel DMS-500 switch ("transmission equipment")
at our Los Angeles network operations center and a redundant Internet protocol
("IP") core and asynchronous transport mode ("ATM") network, completed
co-location site selection and applications for our Los Angeles market build,
hired an experienced telecommunications operations group, built our customer
care center, completed phase one of our back office operating support systems,
and secured a substantial equipment financing arrangement with Nortel Networks,
Inc. In addition, as of June 2000, we had leased or acquired access to fiber
routes co-location facilities in and between a number of major western cities,
including Los Angeles, San Francisco, San Jose, Seattle, Salt Lake City, Dallas
and Houston. As of June 2000, we had competitive local exchange carrier, or
CLEC, operating authority or pending applications in all states within the
western United States region.

                                        2


<PAGE>

BANKRUPTCY FILING AND RELATED MATTERS

         Due to overall market conditions, we were unsuccessful in our efforts
to secure new vendor financing and additional debt or equity financing. As a
result, on October 31, 2000 (the "Petition Date"), Universal Broadband Networks,
Inc. and four of its wholly-owned subsidiaries (collectively the "Company")
filed a voluntary petition for relief (the "Chapter 11 Case") under Chapter 11
of the United States Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the Central District of California (the "Bankruptcy
Court"). Since the Petition Date, the Company has conducted limited activities
as a debtor-in-possession under the Bankruptcy Code. See further discussion in
Notes 1 and 2 of the accompanying Consolidated Financial Statements.

         In early January 2001, after considering current industry conditions
and other factors (and in consultation with the creditors committee formed
during bankruptcy proceedings), management concluded that reorganization was not
feasible. A decision to liquidate the Company was reached at that time, and
liquidation commenced soon thereafter. Thus, the Company is no longer engaged in
the conduct of business, and now operates for the sole purpose of holding and
liquidating its assets. The Company expects that its assets will either be sold
or assigned to secured creditors, with any remaining proceeds distributed to
other creditors. As a result, the Company changed its basis of accounting
effective December 31, 2000 (and for periods ending subsequent to that date)
from the going-concern basis to a liquidation basis in accordance with
accounting principles generally accepted in the United States ("GAAP").
Consequently, at March 31, 2002 and 2001, assets have been reported at estimated
net realizable value (with an allowance for estimated known disposition costs),
assuming an orderly liquidation. Liabilities are presented based on the
estimated amount expected to be allowed by the Bankruptcy Court, even though
certain obligations may be adjudicated or settled for lesser amounts as
described in Notes 1 and 2 of the accompanying Consolidated Financial
Statements. Differences between (a) the estimated revalued amounts of assets and
liabilities and (b) actual cash transactions and other events after March 31,
2002 will be recognized in the period in which they are susceptible of
reasonable estimation in accordance with GAAP.

         In the Chapter 11 Case, all of the Company's liabilities as of the
Petition Date are considered subject to compromise under a plan of liquidation
(including the entire amount of secured claims which may be undersecured).
Pre-petition liabilities whose disposition may be subject to settlement or
otherwise dependent on the outcome of the Chapter 11 Case have been segregated
and classified as liabilities subject to compromise in the accompanying March
31, 2002 and 2001 consolidated statements of net liabilities in liquidation.

         Generally, actions to enforce or otherwise effect repayment of
pre-chapter 11 liabilities and pending litigation against the Company are stayed
while the Company continues as a debtor-in-possession during bankruptcy
proceedings. Schedules have been filed by the Company with the Bankruptcy Court
setting forth its assets and liabilities as of the Petition Date as reflected in
the Company's accounting records. Pre-petition liabilities reflected in the
accompanying March 31, 2002 and 2001 consolidated statements of net liabilities
in liquidation are principally based on these bankruptcy schedules. Differences
between amounts reflected in such schedules and claims filed by creditors are
currently being investigated, and will be either amicably resolved or
adjudicated by the Bankruptcy Court. Such claims do not necessarily encompass
the universe of claimants, nor the amount of each claim that may be asserted
against the Company in the bankruptcy proceedings. The ultimate amount of and
settlement terms for such liabilities are not presently determinable.

         In the Chapter 11 Case, the Company may sell assets and settle
liabilities for amounts other than the estimated amounts reflected in the
accompanying March 31, 2002 and 2001 consolidated statements of net liabilities
in liquidation. The administrative expenses resulting from the Chapter 11 filing
will unfavorably affect the future financial condition of the Company. Moreover,
future results may be adversely affected by other claims and factors resulting
from the Chapter 11 filing.

         The Company has defaulted on certain indebtedness. Under terms of the
secured financing agreement with Nortel, $4.1 million of principal and interest
under Tranche A became due and payable on November 1, 2000. In addition,
quarterly payments of $1.1 million each, in principal and interest under Tranche
B were due and payable beginning November 15, 2000. Also, $4.1 and $1.6 million,
respectively, of principal and interest under the terms of two unsecured note
agreements became due and payable on December 15, 2000 and January 2, 2001,
respectively. The Company did not make the payments on any of the above credit
agreements. Because of the combination of these events and cross-default
provisions included in the Company's other debt agreements and in certain lease
agreements, substantially all of the Company's indebtedness is in default and is
now due and payable. Any repayment of such indebtedness will be the subject of
the Company's plan of liquidation. Because of the aforementioned defaults,
substantially all unamortized deferred financing costs were written off or
accelerated as of September 30, 2000.

                                       3


<PAGE>

         On December 20, 2001, the Bankruptcy Court approved an order
effectively disposing of the transmission equipment via a nonjudicial
foreclosure with Nortel Networks, Inc. (Nortel), a significant creditor in the
Chapter 11 Case. Under such agreement, the Company received $0.2 million in cash
and a reduction of the liabilities owed Nortel in an amount no less than $2.8
million. Such cash was received on February 5, 2002. The Company has accounted
for the agreement as a disposition of the Nortel equipment for $3.0 million
resulting in a gain on liquidation of equipment in the amount of $2.0 million.

EMPLOYEES

         Two employees remain at March 31, 2002 to address the needs of the
Company while it liquidates assets and executes its plan of liquidation. As of
the Petition Date, substantially all of the Company's employees had been
terminated. A substantial number of the employees were terminated without
salaries being paid in full for their final two weeks of employment. The related
expense and liability have been reflected in the accompanying March 31, 2002 and
2001 consolidated statements of net liabilities in liquidation.

ITEM 2.  DESCRIPTION OF PROPERTY
--------------------------------

         Prior to the Chapter 11 filing, the Company occupied approximately
94,000 square feet of office and facility space at fourteen separate locations
in California, Texas and Utah. Such leases previously expired on various dates
through February 2010. All of the Company's facilities were leased. The monthly
rental obligation for all of the Company's properties approximated $203,000 (see
further discussion below). Currently, the Company leases approximately 500
square feet of office space in Irvine, California, for its corporate
headquarters at an approximate cost of $1,700 per month. In addition, the
Company continued the lease on one of its Salt Lake City, Utah offices, during
the process of negotiations to sell such operations (see further discussion in
Note 10 of the consolidated financial statements, included herein) at a cost of
approximately $4,000 per month for 2,934 square feet. Such lease has been
subsequently rejected as of July 2001, when operations were terminated at that
location.

         Subsequent to the Petition Date, the Company rejected substantially all
of its lease obligations and other executory contracts pursuant to the
provisions of the Bankruptcy Code. The Company has recorded the liabilities
associated with these rejected contracts based upon management's estimate of the
maximum potential liability, and reflected such amounts in the accompanying
March 31, 2002 and 2001 consolidated statements of net liabilities in
liquidation. These claims, however, are subject to certain limitations imposed
by the Bankruptcy Code and applicable state law. Consequently, such claims may
be settled or adjudicated in amounts less than those recorded by the Company;
however, it is not currently possible to reasonably estimate the impact of these
limitations. Pursuant to the provisions of the Bankruptcy Code, these
liabilities are treated as pre-petition claims and reflected as "liabilities
subject to compromise" in the aforementioned statement of net liabilities in
liquidation.

ITEM 3.  LEGAL PROCEEDINGS
--------------------------

         On the Petition Date, the Company filed a voluntary petition for relief
under the Bankruptcy Code in the United States Bankruptcy Court for the Central
District of California. For more information, see Note 2 ("Bankruptcy Case and
Related Matters") to the accompanying consolidated financial statements.

         The Company has been named as a defendant in certain legal proceedings,
principally with regard to the enforcement of contractual obligations for
payment for services or products. Moreover, there are other threatened claims of
a substantial nature that have been asserted against the Company. All lawsuits
have been stayed with respect to the Company as a result of the petition for
relief under Chapter 11 of the Bankruptcy Code and will be adjudicated through
the bankruptcy proceedings.

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

         No matters were submitted to a vote of security holders during the
fourth quarter of the year ended March 31, 2002.

                                       4



<PAGE>

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

         The Company's common stock ceased trading on the Nasdaq National Market
on October 17, 2000 at the Company's request. Since the Company no longer
satisfied the requirements for continued listing on the Nasdaq National Market,
by letter dated November 3, 2000, the Company requested that its securities be
delisted from the Nasdaq National Market. On November 9, 2000, the Company's
common stock began being quoted on the Over the Counter Bulletin Board under the
ticker symbol "UBNTQ"; such market is not sponsored or supported by the Company.
No assurance can be given as to the continuing existence or liquidity of any
trading market for the Company's common stock. Notwithstanding this market
activity, the Company believes that its outstanding shares of common stock
currently have nominal value.

         From April 25, 2000 through October 17, 2000, the Company's common
stock was quoted on the NASDAQ National Market under the symbol "UBNT." From
December 9, 1997 to April 25, 2000, the Company's common stock was quoted on the
NASDAQ OTC Bulletin Board. The following table presents, for the periods
indicated, the high and low sales prices per share of the Company's common stock
as reported on the NASDAQ OTC Bulletin Board and the NASDAQ National Market
system. For the entire fiscal year ended March 31, 2002, the stock price was not
higher than $0.02.

<TABLE>
<CAPTION>
                                                           FOR THE THREE MONTHS ENDED
                                        ---------------------------------------------------------------
                                           JUNE 30,        SEPTEMBER 30,     DECEMBER 31,     MARCH 31,
                                             2000              2000             2000            2001
                                             ----              ----             ----            ----
<S>                                        <C>               <C>              <C>             <C>
High................................       $ 12.25           $ 5.00            $ 1.50          $0.02
Low.................................        $ 2.69           $ 1.06            $ 0.02          $0.02
</TABLE>

         As of April 24, 2002, there were an estimated 615 shareholders of
record of the Company's common stock.

DIVIDEND POLICY

         We do not expect to pay any cash dividends on our Common Stock for the
foreseeable future.

ITEM 6.  SELECTED FINANCIAL DATA
--------------------------------

         The selected financial data presented below for the year ended March
31, 2002 and three months ended March 31, 2001 (liquidation basis), the nine
months ended December 31, 2000, and for the year ended March 31, 2000 (going
concern basis), have been derived from the consolidated financial statements of
the Company, which are included elsewhere in this Form 10-K. The consolidated
financial statements as of and for the year ended March 31, 2002, for the
quarter ended March 31, 2001, and for the nine months ended December 31, 2000
were audited by Squar, Milner, Reehl & Williamson, LLP, independent certified
public accountants. The consolidated financial statements for the year ended
March 31, 2000 were audited by BDO Seidman, LLP, independent certified public
accountants. This selected consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Company's consolidated financial statements
(including the notes thereto) included elsewhere in this Form 10-K.

                                        5



<PAGE>

<TABLE>
                                                 Universal Broadband Networks, Inc.

                                         Condensed Consolidated Statements of Financial Data
                    For the Year ended March 31, 2002, the Three Months Ended March 31, 2001 (Liquidation Basis)
                     the Nine Months Ended December 31, 2000 and the Years Ended March 31, 2001, 1999, and 1998
                                     (Amounts in thousands, except share and per share amounts)
<CAPTION>

                                                       LIQUIDATION BASIS                       GOING CONCERN BASIS
                                            ----------------------------  ----------------------------------------------------------
                                           FOR THE YEAR   FOR THE PERIOD  FOR THE PERIOD
                                               ENDED      JANUARY 1, 2001 APRIL 1, 2000                  MARCH 31,
                                              MARCH 31,     TO MARCH 31,  TO DECEMBER 31,   MARCH 31,       1999         MARCH 31,
                                                2002           2001           2000           2000       (AS RESTATED)      1998
                                            -------------  -------------  -------------  -------------  -------------  -------------
<S>                                         <C>            <C>            <C>            <C>            <C>            <C>
Revenues .................................  $         17   $         21   $      1,644   $      2,617   $      1,552   $        147
                                            -------------  -------------  -------------  -------------  -------------  -------------
Operating expenses:
    Network expenses .....................            36             63          5,736          3,347            543             66
    Payroll and related expenses .........           402            176          5,066         14,318          2,421            774
    Selling, general and
      administrative expenses ............         1,035             --         10,341         12,107          5,549          1,622
    Other income .........................        (2,308)          (269)
    Depreciation and amortization ........            --             --          3,451          3,045          1,219             83
    Impairment charges, bankruptcy-related
      adjustments, and other (net) .......           130          2,953         29,618             --             --             --
                                            -------------  -------------  -------------  -------------  -------------  -------------
        Total operating expenses .........          (705)         2,923         54,212         32,817          9,732          2,545
                                            -------------  -------------  -------------  -------------  -------------  -------------
Operating income (loss) ..................           722         (2,902)       (52,568)       (30,200)        (8,180)        (2,398)

Interest income ..........................            --             --             64            183             65             13
Interest expense, including write-off
   and amortization of deferred
   financing costs .......................            --             --         (3,671)        (2,368)          (147)           (10)
                                            -------------  -------------  -------------  -------------  -------------  -------------
Net income (loss) ........................           722         (2,902)       (56,175)       (32,385)        (8,262)        (2,395)
Preferred stock beneficial conversion
   feature, related warrants and
   dividends .............................            --             --         (2,749)        (1,027)          (364)            --
                                            -------------  -------------  -------------  -------------  -------------  -------------
Net income (loss) available to common
shareholders .............................  $        722   $     (2,902)  $    (58,924)  $    (33,412)  $     (8,626)  $     (2,395)
                                            =============  =============  =============  =============  =============  =============
Loss per common share, basic and diluted..  $         --   $         --   $      (2.75)  $      (1.84)  $      (0.58)  $      (0.21)
                                            =============  =============  =============  =============  =============  =============
Weighted-average number of common
shares outstanding, basic and diluted ....            --             --     21,422,253     18,199,114     14,890,130     11,528,021
                                            =============  =============  =============  =============  =============  =============
Other Data:
Current Assets ...........................  $         --   $         --   $         --   $      1,883   $      1,466   $        955
Total Assets .............................  $         --   $         --   $         --   $     20,336   $      4,799   $      2,710
Total Assets in Liquidation ..............  $        710   $      2,050   $         --   $         --   $         --   $         --
Current Liabilities ......................  $         --   $         --   $         --   $     24,793   $        898   $        606

Total Liabilities ........................  $         --   $         --   $         --   $     25,581   $        898   $        655
Total Net Liabilities in Liquidation .....  $     54,506   $     55,228   $         --   $          --  $         --   $         --
Total shareholders' equity (deficit) .....  $         --   $         --   $         --   $     (5,245)  $      3,901   $      2,055
Consolidated Cash Flow Data:
   Used in operating activities ..........  $         --   $         --   $    (15,431)  $    (12,158)  $     (4,962)  $     (1,679)
   Used in investing activities ..........  $         --   $         --   $     (1,512)  $    (12,244)  $     (1,315)  $        (18)
   Provided by financing activities ......  $         --   $         --   $     16,646   $     24,675   $      7,117   $      1,760
   (Decrease) increase in net
     liabilities in liquidation ..........  $       (722)  $      3,198   $         --   $         --   $         --   $         --

</TABLE>

                                                                 6



<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
-----------------------------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS
         -----------------------------------

         IN ADDITION TO HISTORICAL INFORMATION, MANAGEMENT'S DISCUSSION AND
ANALYSIS INCLUDES CERTAIN FORWARD-LOOKING STATEMENTS, INCLUDING, BUT NOT LIMITED
TO, THOSE RELATED TO THE GROWTH AND STRATEGIES, FUTURE OPERATING RESULTS AND
FINANCIAL POSITION AS WELL AS ECONOMIC AND MARKET EVENTS AND TRENDS OF THE
COMPANY. ALL FORWARD-LOOKING STATEMENTS MADE BY THE COMPANY, INCLUDING SUCH
STATEMENTS HEREIN, INCLUDE MATERIAL RISKS AND UNCERTAINTIES AND ARE SUBJECT TO
CHANGE BASED ON FACTORS BEYOND THE CONTROL OF THE COMPANY. ACCORDINGLY, THE
COMPANY'S ACTUAL RESULTS AND FINANCIAL POSITION COULD DIFFER MATERIALLY FROM
THOSE EXPRESSED OR IMPLIED IN ANY FORWARD-LOOKING STATEMENT AS A RESULT OF
VARIOUS FACTORS, INCLUDING WITHOUT LIMITATION FACTORS DESCRIBED IN THE COMPANY'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION REGARDING RISKS AFFECTING
THE COMPANY'S FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

BANKRUPTCY FILING AND RELATED MATTERS

         As explained above, on October 31, 2000 the Company filed a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy Code. Since
the Petition Date, the Company has conducted limited activities as a
debtor-in-possession under the Bankruptcy Code. See further discussion in
"Description of Business" above and Notes 1 and 2 of the accompanying
Consolidated Financial Statements.

         In connection with the Chapter 11 Case and the adoption of liquidation
basis accounting discussed above, the Company recorded total expenses of $32.6
million (net) during the year ended March 31, 2001. The Company recognized $22.1
million in asset impairment charges and in relation to the adoption of
liquidation basis accounting, $0.2 in professional fees, $7.8 million in lease
and contract rejection costs, $3.7 million in the write-off and accelerated
amortization of deferred financing costs, and adjustments of certain
pre-petition liabilities of $(1.2) million. See further discussion in Notes 2,
7, 8 and 9 of the accompanying Consolidated Financial Statements.

         A comparison of the results of operations for the year ended March 31,
2002 and the three months ended March 31, 2001 (liquidation basis) and the nine
months ended December 31, 2000 (going concern basis) with prior years would not
be meaningful to investors due to the Chapter 11 filing. The Company's
operations have been suspended since October 2000. In addition, as discussed
above, the Company has implemented liquidation-basis accounting effective
December 31, 2000 and for periods ending subsequent to that date.

GOING CONCERN (2000)

         The Company's consolidated financial statements as of and for periods
prior to December 31, 2000 were prepared assuming the Company would continue as
a going concern. During the year ended March 31, 2000, the Company experienced a
net loss of $32.4 million and had negative cash flows from operations of $12.2
million. In addition, the Company had substantial working capital and
shareholders deficits at March 31, 2000.
Lastly, the Company had significant present and future working capital demands,
which required substantial equity and debt financing which had not yet been
secured. These factors, among others, raised substantial doubt about the
Company's ability to continue as a going concern at the date such financial
statements were prepared. The 2000 consolidated financial statements included
elsewhere herein do not include any adjustments that resulted from the outcome
of these uncertainties.

         In an effort to reverse the negative financial conditions noted above,
management of the Company intended to secure a series of debt and equity
financings during 2000 that were expected to exceed $200 million. Additionally,
the Company intended to expand its operations through the establishment of
switch-based telecommunications facilities in pre-designated markets, and
develop its management and sales teams, and its corporate infrastructure.
Management of the Company believed these events would provide the working
capital required to purchase necessary equipment, establish the requisite
infrastructure and fund operations until such time as the Company became
profitable.

         The Company was unable to successfully implement its plans, including
generating profitable operations, generating positive cash flows from operations
and obtaining additional debt and equity capital to meet present and future
working capital demands.

                                        7



<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         As previously mentioned, the Company is operating as a debtor in
possession under the provisions of Chapter 11 of the Bankruptcy Code. In the
opinion of management, the Company has sufficient cash reserves to continue to
operate on a limited basis pending the final outcome of the Chapter 11 Case.

EQUIPMENT FINANCING AND LINE OF CREDIT ARRANGEMENT

         In July 1999, UBN (a subsidiary of UBEE) entered into a credit
agreement (the "Agreement") with Nortel Networks, Inc. ("Nortel") that provided
for a line-of-credit of up to $7 million ("Tranche A") as well as a term loan of
up to $37 million ("Tranche B"). However, the maximum combined borrowing under
the Agreement could not exceed $37 million. Furthermore, under terms of the
original Agreement, the Company was not able to borrow under Tranche B until a
$30 million equity infusion to UBN had been completed. If such infusion was not
completed by October 30, 2000, the Tranche B commitment would terminate. On
September 20, 2000 Nortel amended the Agreement, waiving the equity infusion
requirement and converting the outstanding balance of an open account, under
which Nortel advanced approximately $13 million in equipment and services, to a
draw-down under Tranche B. However, in connection with the amendment, no further
borrowings under Tranche B were allowed. The Agreement is collateralized by all
of the assets and the common stock of UBN. A substantial portion of the
Company's assets were located in its UBN subsidiary, until the sale of such
equipment in February 2002, see below.

         Borrowings under Tranche A could be used for working capital and
general corporate purposes, bear interest at 13%, and were scheduled to mature
on July 31, 2000. On August 15, 2000, the Company borrowed $4.0 million from
another third party (see discussion below on "Other Debt") and partially repaid
Tranche A. The Company obtained an amendment to the Agreement from Nortel to
extend the maturity date of Tranche A to November 1, 2000. As a result of the
Chapter 11 Case, the Company did not make the payment to Nortel for the
outstanding balance due on Tranche A. As of March 31, 2002 and 2001,
approximately $4.1 million (including interest) was outstanding under Tranche A,
and no additional borrowings were available. See further discussion in Note 2 to
the accompanying consolidated financial statements.

         Borrowings under Tranche B could only be used to finance purchases of
Nortel goods and services and bear interest at the prime rate (8.00% at March
31, 2001) plus 3.75%. Tranche B was payable in twelve equal quarterly payments
beginning November 15, 2000. No borrowings were outstanding under Tranche B at
March 31, 2000, as the Company had not completed the required $30.0 million
equity infusion. However, as of March 31, 2000, the Company owed Nortel $6.6
million for purchases of equipment and services. Additionally, as of March 31,
2000, Nortel had delivered approximately $3.7 million of transmission equipment
that was not completely installed until subsequent to March 31, 2000. The
Company had not recorded this liability or the related fixed assets as of March
31, 2000 as the Company believed that its obligation should not be recognized
until such time as the equipment is completely installed. Had the Company
recorded the $3.7 million in transmission equipment as of March 31, 2000, the
unfinanced Nortel purchases would have totaled $10.3 million at March 31, 2000.
If the Company was able to complete the required equity infusion, these
borrowings would be classified as Tranche B borrowings. If the required equity
infusion was not completed, the Company would be required to pay for these
purchases pursuant to normal vendor terms. As of June 30, 2000, no borrowings
were outstanding under Tranche B, and the Company owed Nortel approximately
$12.8 million on an open account for purchases of equipment and services.
Effective September 20, 2000, Nortel required the Company to convert the
unfinanced purchases into borrowings under Tranche B as a condition of amending
the Agreement to waive certain of its covenants. As of March 31, 2002 and 2001,
approximately $10.4 million and $13.2 million, respectively, (including
interest) was outstanding under Tranche B. As a result of the Chapter 11 Case,
the Company did not make any of the payments due to Nortel beginning November
15, 2000 as required under the terms of the payment schedule. See further
discussion in Note 2 to the accompanying consolidated financial statements.

                                       8



<PAGE>

         On December 20, 2001, the Bankruptcy Court approved an order
effectively disposing of the transmission equipment via a nonjudicial
foreclosure with Nortel, a significant creditor in the Chapter 11 Case. Under
such agreement, the Company received $0.2 million in cash and a reduction of the
liabilities owed Nortel in an amount no less than $2.8 million. Such cash was
received on February 5, 2002. The Company has accounted for the agreement as a
disposition of the Nortel equipment for $3.0 million resulting in a gain on
liquidation of equipment in the amount of $2.0 million.

         The above amounts payable to Nortel have been classified as liabilities
subject to compromise in the accompanying March 31, 2002 and 2001 consolidated
statements of net liabilities in liquidation because the estimated net
realizable value of UBN's assets is less than the amount owed to Nortel.

         In connection with the Agreement, the Company issued a warrant to
purchase 492,094 shares of the Company's common stock (see Note 9 to the
accompanying consolidated financial statements). The estimated fair value of the
warrants of approximately $1.9 million, as well as certain other costs related
to the Agreement, were capitalized as deferred financing costs during the year
ended March 31, 2000 and amortized over the life of the Tranche A loan,
completed in July 2000.

         The Agreement has certain restrictive financial covenants that include
minimum tangible net worth requirements, maximum asset-to-net-worth ratios,
minimum net income requirements and other restrictions with respect to financial
ratios. Furthermore, the Agreement has restrictions related to specific
activities including, but not limited to, limitations on leases, timely payment
of accounts payable and timely submission of certain reports to Nortel. Although
the Company entered into an amendment to the Agreement that revised all such
covenants effective March 31, 2000, the Company is not in compliance with any of
the covenants or restrictions as of March 31, 2002 and 2001; such non-compliance
will be processed by the Bankruptcy Court through the Chapter 11 proceedings.

OTHER DEBT

         On April 17, 2000, the Company entered into an unsecured Note and
Warrant Purchase Agreement to borrow $5.0 million. The agreement provided for
interest at 6% per annum, with any unconverted principal and accrued interest
due October 17, 2001. The interest was payable in cash or common stock, at the
election of the Company, upon conversion of principal or October 17, 2001,
whichever is earlier. The agreement provided for the conversion of the note's
principal balance into shares of common stock, at the election of the holder, at
a price of $6.06 per share. The conversion price equaled the closing market
price of the Company's common stock on April 17, 2000. The agreement required
the Company to obtain effective registration of the shares underlying the
convertible note and the warrant by October 17, 2000. The agreement also
provided for a 2% per month cash penalty if such registration was not effective
on said date. See Notes 8 and 10 of the accompanying consolidated financial
statements for additional information.

         In conjunction with the above agreement, the Company issued warrants to
the holder of the convertible note to purchase 412,541 shares of common stock at
a price of $6.06 per share. The warrants expire three years from the date of
grant. The Company estimated the fair value of the warrants at approximately
$1.7 million using the Black-Scholes Option Pricing Model, and was amortizing
such amount over the eighteen-month life of the debt. Due to the filing of the
Chapter 11 Case, the Company accelerated the amortization of the remaining $1.2
million as of September 30, 2000.

         On May 23, 2000, the Company entered into an unsecured Note and Warrant
Purchase Agreement to borrow $250,000. The agreement provided for interest at 6%
per annum, with any unconverted principal and accrued interest due November 23,
2001. The interest was payable by the Company in cash or common stock, at the
election of the Company, upon conversion of principal or November 23, 2001,
whichever is earlier. The agreement provided for the conversion of the note's
principal balance into shares of common stock, at the election of the holder, at
a price of $3.91 per share. The agreement required the Company to obtain
effective registration of the shares underlying the convertible note and the
warrant by November 23, 2000. The agreement also provided for a 2% per month
cash penalty if such registration was not effective on said date. See Notes 8
and 10 of the accompanying consolidated financial statements for additional
information.

                                       9



<PAGE>

         In conjunction with the May 2000 agreement, the Company issued warrants
to the holder of the convertible note to purchase 32,000 shares of common stock
at a price of $3.91 per share. The conversion price equaled the closing price of
the Company's common stock on May 23, 2000. The warrants expire three years from
the date of grant. The Company estimated the fair value of the warrants at
$84,000 using the Black- Scholes Option Pricing Model and was amortizing such
amount over the eighteen-month life of the debt. Due to the filing of the
Chapter 11 Case, the Company accelerated the amortization of the remaining
$66,000 as of September 30, 2000.

         On June 5, 2000, the Company entered into a secured Note and Warrant
Purchase Agreements to borrow $1 million. On July 7, 2000, this agreement was
amended to include an additional $0.5 million. The agreement provided for
interest at 6% per annum, with principal and accrued interest originally due in
August 2000. The lender subsequently agreed to extend the maturity date to
January 2, 2001. The agreement also provided for default interest at a rate of
24% per annum. The agreement required the Company to obtain effective
registration of the shares underlying the warrants issued in connection with the
note by August 21, 2000, and provided for a 2% per month cash penalty if such
registration was not effective on said date. As a result of the Chapter 11 Case,
the Company did not make the payment for the outstanding balance due on this
Note Agreement. See further discussion in Notes 8 and 10 of the accompanying
consolidated financial statements. The above amounts totaling $1.5 million have
been dismissed by the bankruptcy court in response to a claims objection by the
Company.

         In conjunction with the above June 5, 2000 agreement, the Company
issued warrants to the holder of the note to purchase 200,000 shares of common
stock at a price of $2.88 per share and 100,000 shares at a price of $4.06. The
warrants expire three years from the date of grant. The Company estimated the
fair value of the warrants at approximately $0.9 million and $0.3 million,
respectively, using the Black-Scholes Option Pricing Model, and amortized such
amounts over the life of the debt, ending in August 2000.

         On August 15, 2000, the Company entered into an unsecured Note
Agreement to borrow $4 million. The agreement provided for interest at 13.7% per
annum, with principal and accrued interest due December 15, 2000. As a result of
the Chapter 11 Case, the Company did not make the payment for the outstanding
balance due on this Note Agreement. See further discussion in Note 8 of the
accompanying consolidated financial statements.

         On August 2, 2000, the Company entered into a Secured Convertible
Promissory Note Agreement to borrow approximately $8.8 million. Of this amount,
$1.295 million was borrowed on July 7, 2000; the remaining $7.5 million was
borrowed during the quarter ended September 30, 2000. The entire note became
convertible 91 days after its original issuance into shares of the Company's
common stock at a price equal to 75% of the average closing market price for the
five business days immediately preceding the conversion date. The reduced
conversion price represents a beneficial conversion feature that the Company
valued at approximately $1.5 million. This amount was expensed in the quarter
ended September 30, 2000 as part of the accelerated amortization of deferred
financing costs. The note bears interest at the rate of 8% per annum, and is due
and payable, if not converted, on August 2, 2003. See further discussion in
Notes 2 and 8 of the accompanying consolidated financial statements.

         During the year ended March 31, 2001, principal of $0.6 million was
converted into 3,236,652 shares and interest of $9,000 was converted into 74,229
shares for a total of 3,310,881 shares of the Company's common stock issued in
connection with conversion of the debt.

         In connection with the above August 2, 2000 agreement, the Company
issued warrants to a broker for services rendered to purchase 200,000 shares of
common stock at a price of $1.50 per share. The Company estimated the fair value
of the warrants at $0.5 million using the Black-Scholes Option Pricing Model.
Due to the filing of the Chapter 11 Case, the Company accelerated the
amortization of this cost as of September 30, 2000.

SHARES ISSUED FOR SERVICES

         During the year ended March 31, 2001, the Company issued 34,570 shares
of common stock in exchange for various professional services. The estimated
fair value of the stock issued of $0.3 million has been charged to operations.
In addition, 821 shares of common stock were issued to an employee under the
terms of an employment agreement for the year ended March 31, 2001. The
estimated fair value of the stock issued of $2,000 has been charged to
operations as compensation expense.

                                       10



<PAGE>

         Effective for the fiscal year beginning April 1, 2000, non-employee
directors received an annual fee in the form of Company common stock with a fair
market value of $60,000 as of the 31st of May each year. Accordingly, on May 31,
2000, the Company's non-employee directors (Messrs. Torney, Charles, Cubley,
Kramer and Pazian) each received $60,000 of the Company's common stock valued at
the market price of $2.88 a share (20,833 shares each), or a total of 104,165
shares issued. The total fair value of the stock issued of $0.3 million was
charged to operations in June 2000. During the fourth quarter of fiscal 2001,
such shares were cancelled in connection with the Chapter 11 Case. In addition,
a total of 5,000 shares (2,500 shares each) issued to Messrs. Charles and Cubley
during the year ended March 31, 2000 were also cancelled, and a reduction of
expense of $52,000 was recorded in the current fiscal year.

PRIVATE PLACEMENT

         In September 2000, the Company sold shares of its common stock through
a private placement. The Company issued 333,333 shares for net consideration of
$450,000.

SERIES A CONVERTIBLE PREFERRED STOCK

         In December 1998, the Company entered into an agreement with private
investors (the "Investors") whereby the Investors purchased 2,000 shares of the
Company's convertible Preferred Series A Stock (the "Series A Preferred Stock")
for a gross price of $2.0 million, net of commissions of $0.2 million. In May
1999, the Agreement was amended to include an additional 2,000 shares of Series
A Preferred Stock, which netted approximately $1.8 million (net of $0.2 million
expenses) to the Company. The Series A preferred Stock provided for a rate of
conversion that was below market value (a beneficial conversion feature),
carried a liquidation preference of $1,000 per share of Series A Preferred
Stock, and the underlying common stock was to be registered within certain time
parameters. The Series A Preferred Stock carried an 8% coupon, payable upon
conversion in common stock. The dividend was paid in the form of additional
shares of the Company's common stock at the time of the preferred stock
conversion.

         All 2,000 shares of the December 1998 Series A Preferred Stock were
converted into 867,828 shares of common stock during the year ended March 31,
2000. During the quarter ended June 30, 2000, the remaining 2,000 shares of
Series A Preferred Stock were converted into 364,299 shares of common stock and
$0.2 million in related dividends ($0.1 million of which was earned and accrued
during the year ended March 31, 2000) was converted into 29,432 shares of common
stock, for a total of 393,731 shares of common stock issued in connection with
the Series A Preferred Stock conversions during the year ended March 31, 2001.

         As of March 31, 2001, all of the Series A Preferred Stock and related
dividends had been converted to common stock.

SERIES B CONVERTIBLE PREFERRED STOCK

         On July 21, 2000, the Company entered into an agreement with a private
investor whereby the investor purchased 100,000 shares of the Company's
convertible Preferred Series B Stock (the "Series B Preferred Stock") at a price
of $10.00 per share for gross proceeds of $1 million, net of commissions of
approximately $0.2 million. The shares have a liquidation preference of $10 per
share.

         The convertible feature of the Series B Preferred Stock provides for a
rate of conversion that is below market value. Under terms of the Agreement, the
investors have the right to convert the Series B Preferred Stock into common
stock at a 25% discount from the average closing market price of the Company's
common stock for the five business days immediately preceding the conversion
request. Such feature represents a beneficial conversion feature that the
Company valued at $250,000.

         In conjunction with the sale of the Series B Preferred Stock, the
Company granted the investors warrants to purchase 1,000,000 shares of common
stock at a price of $2.00 per share and granted the placement agent warrants to
purchase 150,000 shares of common stock at a price of $1.50 per share. The
Company estimated the fair value of the warrants at $2.1 million and $0.4
million, respectively, using the Black-Scholes Option Pricing Model. The
placement agent exercised the warrants for 150,000 shares of the Company's
common stock in September 2000.

                                       11



<PAGE>

         During the year ended March 31, 2001, 41,690 shares of Series B
Preferred Stock were converted into 797,300 shares of common stock. The
remaining 58,310 shares carry a liquidation preference of $0.6 million.

OPTIONS GRANTED TO PURCHASE COMMON STOCK

         The Company's Board of Directors adopted the 2000 Management Equity
Incentive Plan (the "Management Plan") and the 2000 Equity Incentive Plan (the
"Equity Plan") during the year ended March 31, 2000. Both of the Plans required
shareholder approval, which was obtained on July 25, 2000 at the Annual
Stockholders Meeting.

         Under terms of the Management Plan and the Equity Plan, from May 17,
2000 to August 1, 2000, the Company granted options to purchase 1,261,250 shares
of its common stock to certain management and employees at prices between $2.94
and $4.63 per share, the closing market prices of the Company's common stock on
each grant date. In addition, pursuant to terms of an employment contract with
the Company's Chief Executive Officer ("CEO"), on June 19, 2000 the Company
granted options to purchase one million shares of common stock to its CEO at
$5.28 per share, the closing market price of the Company's common stock on such
grant date. These plans are "non-compensatory" under GAAP and, accordingly, no
compensation expense was recorded in connection with these grants.

         On April 13, 2000, the Company granted various service providers
options to purchase 20,500 common shares of stock at a price of $8.03 per share.
The exercise price equaled the closing market price of the Company's common
stock at the date of grant. The Company estimated the fair value of the options
at approximately $0.2 million using the Black-Scholes Option Pricing Model.

WARRANTS ISSUED TO PURCHASE COMMON STOCK

         During the year ended March 31, 2001, in conjunction with the issuance
of various debt obligations, the Company issued warrants to purchase 944,541
shares of its common stock.

         During the year ended March 31, 2001, the Company issued a warrant to
purchase 100,000 shares of its common stock at $1.50 per share to a consultant
under the terms of a contract dated September 18, 2000. The Company estimated
the fair value of the warrant at $0.3 million using the Black-Scholes Option
Pricing Model.

         In connection with the issuance of Series B Preferred Stock on July 21,
2000, the Company granted 1,000,000 warrants to the investors to purchase shares
of the Company's common stock at $2.00. The Company also issued 150,000 warrants
to purchase shares of the Company's common stock to the placement agent at $1.50
per share. The Company estimated the fair value of the 1,150,000 warrants at
$0.75 million, using the Black-Scholes Option Pricing Model; such value is
reduced to the remaining face amount of the issued Series B Preferred Stock, net
of expenses. In September 2000, the placement agent exercised the aforementioned
warrant for 150,000 shares of the Company's common stock.

         In connection with execution of a financial advisory services agreement
on May 22, 2000 with an investment banking firm, the Company granted warrants to
purchase 250,000 shares of its common stock at a price of $6.06 per share. The
warrants expire five years from the date of grant. The Company estimated the
fair value of the warrants at $0.8 million using the Black-Scholes Option
Pricing Model. The agreement required the Company to obtain effective
registration of the shares underlying the warrants by November 22, 2000. See
further discussion in Note 10 of the accompanying consolidated financial
statements.

         The Company was involved in a dispute with a third party consultant
concerning consideration the Company allegedly owed for various financial
advisory services. The Company reached a settlement with the consultant whereby
it agreed to issue warrants to purchase 75,000 shares of the Company's common
stock with an exercise price of $5.00 per share. The Company estimated the fair
value of the warrants at $0.1 million using the Black-Scholes Option Pricing
Model.

INFLATION

         Management does not believe that inflation has had or is likely to have
any significant impact on the Company's operations.

                                       12



<PAGE>

PROPOSED MERGER

         As previously disclosed in Form 10-K filed with the SEC on July 11,
2001, the Company had been negotiating a merger with Norstar Telecommunications,
Inc. ("Norstar"). During the quarter ended June 30, 2001, the Company received
an initial non-refundable deposit of $50,000 cash under terms of a binding
Letter of Intent ("LOI"). However, Norstar has breached such LOI by indicating
that it will not go forward with the merger.

         The Company is currently negotiating a merger with FoneFriend Inc.
("FoneFriend"). During the year ended March 31, 2002, the Company received an
initial non-refundable deposit of $50,000 cash under terms of a binding Letter
of Intent ("LOI"). Based on such binding letter of intent ("LOI") executed June
13, 2002, the principal terms of the proposed transaction are as follows: (a)
FoneFriend would be merged into the Company, which would be the surviving
entity, (b) the Company would receive a total of $115,000 in cash by the closing
date, and its largest creditors would own approximately 5% of the post-merger
entity, (c) such cash consideration and most of the Company's other assets would
be transferred to a third party for the benefit of the Company's creditors, and
(d) FoneFriend stockholders would own the remaining 95% equity interest in the
surviving entity. Under the terms of the LOI, the surviving entity would seek to
register with the Securities and Exchange Commission Company stock owned by
existing shareholders within six months of the effective date of the proposed
merger. Absent such registration, the surviving entity would either (1) issue
additional shares to such stockholders or (2) purchase such stock at an
agreed-upon (but presently undetermined) price.

         Any proposed merger is subject to approval of the Bankruptcy Court.

                                       13



<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

         The Company's exposure to market risk for interest rates relates to
debt obligations.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

         The information required by Item 8 of this Report is set forth in Item
14(a) under the caption "Financial Statements" as a part of this report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
------------------------------------------------------------------------
         FINANCIAL DISCLOSURE
         --------------------

         Effective as of October 31, 2000, the Company accepted the resignation
of BDO Seidman, LLP (the "Former Accountant") as the Company's independent
certified public accountants, which was tendered on that same date. The report
of the Former Accountant on the consolidated financial statements of the Company
(at and for the year ended March 31, 2000) did not contain an adverse opinion,
nor was it qualified or modified as to audit scope or accounting principles. The
report of the Former Accountant did include an uncertainty paragraph expressing
substantial doubt about the Company's ability to continue as a going concern. In
connection with the only previous audit and subsequent interim review performed
by the Former Accountant, there have been no disagreements with the Former
Accountant on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of the Former Accountant, would have caused it
to make reference to the subject matter of the disagreements in connection with
its report.

         On December 28, 2000, the Company engaged Squar, Milner, Reehl &
Williamson, LLP, to replace the Former Accountant.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
-----------------------------------------

         As discussed in Item 12 below, the Company has not had any directors
since January 2001.

         As of March 31, 2002 and 2001, the Company's only executive officer was
Brandon Powell.

         BRANDON POWELL, age 40, served as a consultant and legal counsel for
the Company and its affiliates since August 1998. As of April 2000, Mr. Powell
became an officer of the Company as Vice President, General Counsel, and has
served as its Secretary and Executive Vice President (and as the Company's only
executive officer) since November 2000. From 1996 through 1998, Mr. Powell
practiced with the Powell Law Firm in Albuquerque, Phoenix and Orange County.
Brandon Powell is a member of the California and New Mexico State Bars. From
1992 through 1996, Mr. Powell was involved in the practice of business,
corporate and technology law with Compton, Coryell, Hickey and Ives of Santa Fe
and Albuquerque, New Mexico.

                                       14



<PAGE>

ITEM 11. EXECUTIVE COMPENSATION
-------------------------------

         The following table sets forth all compensation awarded to, earned by
or paid to (i) the individuals who served as the Company's Chief Executive
Officer during the last completed fiscal year ended March 31, 2002 (1), (ii)
four other highly compensated executive officers whose annual salary and bonus
exceeded $100,000 for the last completed fiscal year and (iii) the next two
highest paid employees whose annual salary and bonuses exceeded $100,000 for the
last completed fiscal year (collectively, the "Named Executive Officers"), for
services rendered to the Company in all capacities during the last completed
fiscal year.

<TABLE>
<CAPTION>

                                             SUMMARY COMPENSATION TABLE
                                                                                       Long-Term
                                                    Annual Compensation (1)           Compensation
                                            ---------------------------------------- ---------------
                                    Fiscal                            Other Annual                      All Other
   Name and Principal Position       Year   Salary($)(2) Bonus($)    Compensation($)   Options(#)    Compensation($)
-----------------------------------  ----   ---------    --------    ---------------   ----------    ---------------
<S>                                 <C>      <C>         <C>               <C>         <C>                  <C>
Michael A. Sternberg(3) ......      2002       -0-          -0-           -0-             -0-              -0-
     Former Chief Executive         2001     187,297     1,000,000        -0-          1,000,000           -0-
     Officer and Director           2000       -0-          -0-           -0-             -0-              -0-

Jon H. Marple(4)..............      2002       -0-          -0-           -0-             -0-              -0-
     Former Chief Executive         2001      65,255        -0-           -0-             -0-              -0-
     Officer and Chairman           2000     175,000        -0-           -0-           350,000            -0-

Brandon Powell(5).............      2002     184,969        -0-           -0-             -0-              -0-
     Executive Vice President       2001     175,000        -0-           -0-            10,500            -0-
     and General Counsel            2000       -0-          -0-           -0-             -0-              -0-

Jeffrey R. Matsen (6).........      2002       -0-          -0-           -0-             -0-              -0-
     Former Executive Vice          2001     132,016        -0-           -0-            8,000             -0-
     President, Secretary and       2000     154,560        -0-         142,150         200,000            -0-
     General Counsel

</TABLE>

----------------
(1)      Excludes compensation in the form of perquisites and other personal
         benefits that constitutes the lesser of $50,000 or 10.0% of the total
         annual salary and bonus of each of the Named Executive Officers.
(2)      Represents amounts actually paid for the years ended March 31, 2001 and
         2002, and annualized rates for the year ended March 31, 2000. Due to
         the Chapter 11 filing, substantially all the Company's employees and
         executives were terminated in October 2000. Therefore, there were not
         four executives besides the CEO who exceeded $100,000 compensation.
         Brandon Powell is the only executive officer of the Company as of March
         31, 2002 and 2001.
(3)      Mr. Sternberg became a Director and the Chief Executive Officer of the
         Company on June 19, 2000, pursuant to an Employment Agreement of the
         same date. Per terms of his employment contract, he received a $1.0
         million cash bonus and options to purchase one million shares of the
         Company's common stock at a price of $5.28, the fair market value of
         the common stock on such date. Mr. Sternberg effectively resigned
         January 15, 2001 and has not provided any services for the Company
         since that date.
(4)      Mr. Marple resigned as Chief Executive Officer of the Company on May 6,
         2000. Mr. Marple was Chairman of the Board of Directors of the Company
         until his resignation in September 2000.
(5)      Mr. Powell became an Executive Officer on April 1, 2000, and is the
         sole Executive officer of the Company as of March 31, 2002 and 2001.
(6)      Mr. Jeffrey Matsen became an Executive Officer on October 1, 1999. Mr.
         Jeffrey Matsen received a total of $75,000 in salary compensation for
         the fiscal year ended March 31, 2000. He was a director of the Company
         from December 18, 1998 to May 19, 2000. In addition, see Item 13 below.
         He received 50,000 shares of S-8 common stock of the Company valued at
         approximately $142,000 as a signing bonus in October 1999.

                                       15



<PAGE>

OPTION GRANTS IN LAST YEAR

      Due to the Chapter 11 filing, there were no stock option grants or
exercises during the year ended March 31, 2002.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

         Due to termination of most of the Company's staff on October 17, 2000
in connection with the Chapter 11 Case, all of the stock options expired on
January 17, 2001.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information as to the beneficial
ownership of the capital stock of the Company as of June 15, 2002, by: (i) each
person known to the Company to beneficially own more than five percent (5%) of
the capital stock of the Company; (ii) each of the Company's directors; (iii)
each of the Company's Named Executive Officers; and (iv) all executive officers
and directors as a group.

<TABLE>
<CAPTION>
                      NAME (1)                       NO. OF SHARES       APPROXIMATE PERCENTAGE
                                                         OWNED                   OWNED
<S>           <C>                                       <C>                       <C>
Mary E. Blake (2).................................      5,831,626                 23%

All Executive Officers and Directors as a group...         -0-                     0%
</TABLE>

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

                                       16



<PAGE>

         (1) This table is based upon information supplied by officers,
directors, and principal stockholders and Schedules 13D and 13G, if any, filed
with the Commission with regard to the Company's common stock. Unless otherwise
indicated in the footnotes of this table and subject to community property and
marital property laws where applicable, each of the stockholders named in this
table has sole voting and investment power with respect to the shares indicated
as beneficially owned. Applicable percentages are based on 25,344,184 shares
outstanding on June 15, 2002.

         The information contained in this table reflects "beneficial ownership"
as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Shares not outstanding that are subject to
vested options, or options that vest and become exercisable by the holder
thereof within sixty (60) days of March 31, 2002 are deemed outstanding for the
purposes of calculating the number and percentage owned by such shareholder, but
are not deemed outstanding for the purposes of calculating the percentage owned
by each other shareholder listed. Unless otherwise noted, all shares listed as
beneficially owned by a shareholder are actually outstanding.

         As previously discussed, the Company's entire Board of Directors
resigned prior to February 1, 2001, and all executive officers except for
Brandon Powell have also resigned effective March 31, 2001. Mr. Powell does not
own any shares of the Company's common stock.

         (2) Amount per Schedule 13D filed May 14, 2001. Does not include
2,250,000 shares which were surrendered by Ms. Blake to the Company, but which
were not cancelled due to the shares being pledged as security for a note
payable. Ms. Blake resigned from the Company's Board of Directors effective
September 13, 2000.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

TRANSACTIONS WITH JEFFREY MATSEN

         Until his resignation December 31, 2000, Mr. Jeffrey R. Matsen was the
Executive Vice President, Secretary and General Counsel of the Company. On
August 5, 1999, Mr. Matsen received 5,000 shares of the Company's common stock
in exchange for legal services rendered at a value of $4.22 per share or
approximately $21,000.

TRANSACTIONS WITH OTHER RELATED PARTIES

         During the years ended March 31, 2001 and 2000, the Company was a party
to several transactions (as described below) involving Mr. Jon R. ("J.R.")
Marple and JustWebit.com, Inc., a Nevada corporation, managed by J.R. Marple.
J.R. Marple is the son of Jon H. Marple, the Company's former Chairman of the
Board of Directors.

         In April 1999, the Company issued to JustWebit 50,000 shares of common
stock valued at $0.1 million for services. In December of 1999, the Company
issued to JustWebit 25,000 shares valued at $0.2 million for services.

         At March 31, 2000, the Company was owed $0.1 million from JustWebit. Of
this amount, $50,000 represents the amount J.R. Marple agreed to pay to purchase
the JustWebit domain name from the Company. Such domain name was acquired by the
Company in the Webit of Utah purchase during a prior year. Such amount was to be
repaid to the Company through the issuance of 84,700 shares of stock of
JustWebit, which are traded over-the-counter, having a fair value approximating
$50,000. The remainder represented $31,000 due to the Company in connection with
an acquisition during the year ended March 31, 1999 and $17,000 cash funds
advanced during the year ended March 31, 2000. Such amounts were to be repaid to
the Company through the issuance of 68,600 shares of stock of JustWebit, having
a fair value approximating $60,000. Such shares were issued during the year
ended March 31, 2001 and are restricted pursuant to Rule 144. The Company has
determined the shares to be without value and has written off such balance as of
March 31, 2001.

                                       17



<PAGE>

         The Company incurred $0.2 million and $63,000 to an affiliate of Robert
Santore for services and products during the year ended March 31, 2000. Robert
Santore is the nephew of Mary Blake, the former Vice Chairman of the board of
Directors of the Company.

         The aforementioned transactions were not conducted on an "arms-length"
basis. Accordingly, the amounts tendered by the Company may be in excess of that
which would have been negotiated with independent third parties in the ordinary
course of business.

EMPLOYEE BENEFIT PLANS

         Effective on February 29, 2000, the Company's Board of Directors
adopted the 2000 Management Equity Incentive Plan and the 2000 Equity Incentive
Plan (collectively, the "Equity Incentive Plans"), subject to the approval of
the Company's shareholders, which was obtained on July 25, 2000. The principal
terms and provisions of the Equity Incentive Plans are summarized in Note 9 to
the accompanying Consolidated Financial Statements. Due to the Chapter 11
filing, all the outstanding options have been cancelled.

                                       18



<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
------------------------------------------------------------------------

         (a) Financial Statements. The following financial statements of the
Company are included herein.

                                                                     PAGE NUMBER
                                                                     -----------
         (1) Consolidated Financial Statements.

                Report of Independent Certified Public Accountants,
                Squar, Milner, Reehl & Williamson, LLP                    F-1

                Report of Independent Certified Public Accountants,
                BDO Seidman, LLP                                          F-2

                Consolidated Statements of Net Liabilities in
                Liquidation as of March 31, 2002 and 2001                 F-3

                Consolidated Statements of Changes in Net Liabilities
                in Liquidation for the year ended March 31, 2002
                and the three months ended March 31, 2001                 F-4

                Consolidated Statements of Operations for the nine
                months ended December 31, 2000 and for the year
                ended March 31, 2000                                      F-5

                Consolidated Statements of Shareholders' Deficit for
                the years ended March 31, 2002, 2001, and 2000            F-6

                Consolidated Statements of Cash Flows for the year
                ended March 31, 2002 and the three months ended
                March 31, 2001                                            F-8

                Consolidated Statements of Cash Flows for the nine
                months ended December 31, 2000 and for the year
                ended March 31, 2000                                      F-9

                Notes to Consolidated Financial Statements                F-11

                                       19



<PAGE>

         (2) The following Exhibits are filed as part of this Report.

NUMBER
EXHIBIT  DESCRIPTION
-------  -----------

2.1      Agreement and Plan of Reorganization dated July 31, 1997 between the
         Registrant and Interjet (a)
2.2      Agreement and Plan of Reorganization between the Registrant and Access
         Communications, Inc. dated December 31, 1997 (a)
3.1      Certificate of Incorporation, as amended (b)
3.2      Bylaws of the Company, as amended (b)
3.3      Certificate of Designation for Series A Convertible Preferred Stock (c)
4.1      Specimen Common Stock Certificate (a)
4.2      Specimen Certificate of Series A Convertible Preferred Stock (c)
4.3      Preferred Stock and Private Equity Line of Credit Agreement dated
         December 4, 1998 (g)
4.4      Preferred Stock and Private Equity Line of Credit Agreement dated May
         27, 1999 (g)
4.5      1992 Stock Option Plan (d)
4.6      2000 Management Equity Incentive Plan (f)
4.7      2000 Equity Incentive Plan (f)
4.8      Form of Stock Option Agreement (Non-qualified) (g)
10.1     Credit Agreement with Nortel Networks, Inc. dated as of July 30, 1999
         (e)
10.2     Amendment Number 1 to Credit Agreement with Nortel Networks, Inc. (g)
10.3     Employment Agreement with Michael A. Sternberg (g)
10.4     Employment Agreement with Jeffery R. Matsen (g)
10.5     Form of Employment Agreement with Nancy J. Hobbs (g)
10.6     Form of Employment Agreement with Steven M. Pierson (g)
10.7     Employment Agreement with Jerral R. Pulley (g)
10.8     Lease Agreement between the Registrant and Koll Tower Four Associates
         (g)
10.9     Lease Agreement between the Registrant and Downtown Properties III, LLC
         (g)
10.10    Indefeasible Right of Use Agreement between the Registrant and Star
         Telecommunications, Inc. dated as of December 29, 1999 (g)

(a)      Incorporated by reference to the exhibit of same number to the
         Registrant's Report on Form 8-K filed with the SEC on September 8,
         1997.
(b)      Incorporated by reference to the exhibit of the same number to the
         Registrant's annual Report on Form 10-KSB/A for the annual period ended
         March 31, 1999 filed with the SEC on October 8, 1999.
(c)      Incorporated by reference to the exhibit of the same number to the
         Registrant's Registration Statement on Form S-3/A, as amended, filed
         with the SEC October 8, 1999.
(d)      Incorporated by reference to the exhibit of the same number to the
         Registrant's annual Report on Form 10-KSB for the annual period ended
         March 31, 1997 filed with the SEC on October 16, 1997.
(e)      Incorporated by reference to the exhibit of the same number to the
         Registrant's quarterly Report on Form 10-Q for the quarterly period
         ended June 30, 1999 filed with the SEC on August 16, 1999
(f)      Incorporated by reference to the exhibit of same number to the
         Registrant's Definitive Proxy Statement filed with the SEC on July 5,
         2000
(g)      Incorporated by reference to the exhibit of the same number to the
         Registrant's quarterly Report on Form 10-K for the annual period ended
         March 31, 2000 filed with the SEC on July 10, 2000

         (b) Reports on Form 8-K.

         None

                                       20



<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.

Universal Broadband Networks, Inc.

 /s/  BRANDON POWELL
--------------------------------------
Brandon Powell
Executive Vice President
June 28, 2002

                                       21



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)

                                    CONTENTS
                                                                     PAGE NUMBER
                                                                     -----------
         (1) Consolidated Financial Statements.

                Report of Independent Certified Public Accountants,
                Squar, Milner, Reehl & Williamson, LLP                    F-1

                Report of Independent Certified Public Accountants,
                BDO Seidman, LLP                                          F-2

                Consolidated Statements of Net Liabilities in
                Liquidation as of March 31, 2002 and 2001                 F-3

                Consolidated Statements of Changes in Net Liabilities
                in Liquidation for the year ended March 31, 2002
                and the three months ended March 31, 2001                 F-4

                Consolidated Statements of Operations for the nine
                months ended December 31, 2000 and for the year
                ended March 31, 2000                                      F-5

                Consolidated Statements of Shareholders' Deficit for
                the years ended March 31, 2002, 2001, and 2000            F-6

                Consolidated Statements of Cash Flows for the year
                ended March 31, 2002 and the three months ended
                March 31, 2001                                            F-8

                Consolidated Statements of Cash Flows for the nine
                months ended December 31, 2000 and for the year
                ended March 31, 2000                                      F-9

                Notes to Consolidated Financial Statements                F-11



<PAGE>

Report of Independent Certified Public Accountants

To the Board of Directors and Stockholders
Universal Broadband Networks, Inc.

We have audited the accompanying consolidated statements of net liabilities in
liquidation of Universal Broadband Networks, Inc. and Subsidiaries (collectively
referred to as the "Company"), a debtor-in-possession, as of March 31, 2002 and
2001 and the related consolidated statements of changes in net liabilities in
liquidation and cash flows for the year ended March 31, 2002 and the three
months ended March 31, 2001. In addition, we have audited the related
consolidated statements of operations and cash flows for the nine months ended
December 31, 2000. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits 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.

On October 31, 2000, the Company filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code. As described in Note 1 to the
consolidated financial statements, in January 2001 management of Universal
Broadband Networks, Inc. reached a decision to liquidate the Company, and
commenced liquidation shortly thereafter. As a result, the Company has changed
its basis of accounting as of December 31, 2000 from the going-concern basis to
a liquidation basis. Accordingly, the consolidated financial statements of the
Company as of December 31, 2000 and for periods ended thereafter are not
comparable to any consolidated financial statements of prior periods.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Universal Broadband Networks, Inc. and Subsidiaries as of March 31, 2002 and
2001, the consolidated changes in net liabilities in liquidation and cash flows
for the year ended March 31, 2002 and the three months ended March 31, 2001, the
consolidated results of operations for the nine months ended December 31, 2000,
and cash flows for the nine months ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States.

As discussed in Note 12, the Company has executed a binding letter of intent
with a telecommunications company that proposes to acquire a 95% equity interest
in the Company subject to approval by the Bankruptcy Court and execution of a
definitive merger agreement.

/s/ Squar, Milner, Reehl & Williamson, LLP

June 15, 2002
Newport Beach, California

                                       F-1



<PAGE>

Report of Independent Certified Public Accountants

The Board of Directors
Universal Broadband Networks, Inc. Irvine, California

We have audited the accompanying consolidated statements of operations,
shareholders' deficit and cash flows of Universal Broadband Networks, Inc.
(formerly IJNT.net, Inc.) and subsidiaries (the "Company") for the year ended
March 31, 2000. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit.

We conducted our audit 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 financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated results of operations and
cash flows of Universal Broadband Networks, Inc. and subsidiaries for the year
ended March 31, 2000, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements were prepared assuming the
Company would continue as a going concern. As discussed in Note 1 to the
accompanying consolidated financial statements, the Company incurred substantial
losses and negative cash flows from operations; the Company also had substantial
working capital and shareholders' deficits as of March 31, 2000. Lastly, the
Company had significant present and future working capital demands which
required substantial equity and debt financing which had not yet been secured.
These factors, among others, raised substantial doubt about the Company's
ability to continue as a going concern at the time such consolidated financial
statements were prepared. Management's plans concerning these matters are also
described in Note 1. The accompanying consolidated financial statements do not
include any adjustments that resulted from the outcome of these uncertainties.

                                                            /S/ BDO SEIDMAN, LLP
                                                                BDO SEIDMAN, LLP
Costa Mesa, California
June 29, 2000

                                       F-2



<PAGE>
<TABLE>

      UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                                 (DEBTOR-IN-POSSESSION)
                CONSOLIDATED STATEMENTS OF NET LIABILITIES IN LIQUIDATION
                                 (AMOUNTS IN THOUSANDS)
                                   (LIQUIDATION BASIS)

<CAPTION>

                                         ASSETS

                                                               MARCH 31,    MARCH 31,
                                                                 2002         2001
                                                             ------------  ------------
<S>                                                          <C>           <C>

Cash .....................................................   $       541   $       719
Accounts receivable ......................................            44            72
Prepaid expenses and other assets ........................             5             9
Property and equipment (Notes 1, 2 and 3) ................            --         1,000
Frequency licenses and access rights (Notes 1, 2 and 4) ..           120           250
                                                             ------------  ------------
     Total assets in liquidation .........................   $       710   $     2,050
                                                             ============  ============

                                       LIABILITIES

Post-petition accounts payable and accrued liabilities ...   $       983   $       245
Liabilities subject to compromise (Note 2) ...............        54,233        57,033
                                                             ------------  ------------
    Total liabilities in liquidation .....................        55,216        57,278
                                                             ------------  ------------

 Net liabilities in liquidation ..........................   $    54,506   $    55,228
                                                             ============  ============

               See report of independent certified public accountants and
                accompanying notes to consolidated financial statements.

                                           F-3
</TABLE>



<PAGE>
<TABLE>

    UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                                (DEBTOR-IN-POSSESSION)
         CONSOLIDATED STATEMENTS OF CHANGES IN NET LIABILITIES IN LIQUIDATION
                                (AMOUNTS IN THOUSANDS)
                                 (LIQUIDATION BASIS)
<CAPTION>

                                                          FOR THE YEAR
                                                             ENDED      FOR THE THREE
                                                            MARCH 31,    MONTHS ENDED
                                                              2002      MARCH 31, 2001
                                                          ------------  -------------
<S>                                                       <C>           <C>
Revenues ..............................................   $        17    $        21
                                                          ------------  -------------
Operating expenses:
Network expenses ......................................            36             63
Payroll and related expenses ..........................           402            176
General and administrative expenses ...................         1,035             --
Gain on disposal of transmission equipment (Note 7) NOW        (1,968)            --
Other income ..........................................          (340)          (269)
Impairment charges, adjustments to adopt
   liquidation-basis accounting, and other (net) ......           130          2,953
                                                          ------------  -------------
   Total operating (income) expenses ..................          (705)         2,923
                                                          ------------  -------------

Net income (loss) .....................................   $       722    $    (2,902)
                                                          ============   ============

              See report of independent certified public accountants and
               accompanying notes to consolidated financial statements.

                                         F-4

</TABLE>



<PAGE>
<TABLE>

     UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                                 (DEBTOR-IN-POSSESSION)
                         CONSOLIDATED STATEMENTS OF OPERATIONS
               (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                 (GOING CONCERN BASIS)
<CAPTION>

                                                          FOR THE NINE    FOR THE YEAR
                                                          MONTHS ENDED       ENDED
                                                          DECEMBER 31,      MARCH 31,
                                                              2000            2000
                                                         -------------   -------------
<S>                                                      <C>             <C>
Revenues .............................................   $      1,644    $      2,617
                                                         -------------   -------------
Operating expenses:
Network expenses .....................................          5,736           3,347
Payroll and related expenses (Notes 9, 10 and 11) ....          5,066          14,318
Selling, general and administrative expenses (Notes 9,
   10 and 11) ........................................         10,341          12,107
Depreciation and amortization ........................          3,451           3,045
Impairment charges, bankruptcy-related adjustments,
   and other (net) ...................................         29,618              --
                                                         -------------   -------------
   Total operating expenses ..........................         54,212          32,817
                                                         -------------   -------------
Operating loss .......................................        (52,568)        (30,200)

Interest income ......................................             64             183
Interest expense, including write-off and amortization
   of deferred financing costs .......................         (3,671)         (2,368)
                                                         -------------   -------------

Net loss .............................................   $    (56,175)   $    (32,385)
                                                         =============   =============

  Loss per common share, basic and diluted (Note 1) ..   $      (2.75)   $      (1.84)
                                                         =============   =============

Weighted-average number of common shares outstanding,
   basic and diluted .................................     21,422,253      18,199,114
                                                         =============   =============

                 See reports of independent certified public accountants
             and accompanying notes to consolidated financial statements.

</TABLE>
                                          F-5



<PAGE>
<TABLE>

                     UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                                                (DEBTOR-IN-POSSESSION)
                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
                                     (AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<CAPTION>

                              Series A & B
                              Convertible                                     Additional
                            Preferred Stock             Common Stock           Paid-In      Accumulated
                         -----------------------   -----------------------
                           Shares       Amount       Shares       Amount       Capital        Deficit        Total
                         -----------   ---------   -----------    --------    -----------   ------------    ---------
<S>                           <C>            <C>   <C>                 <C>        <C>           <C>            <C>
Balances,
     March 31, 1999           2,000          --    16,098,129          16         15,084        (11,199)       3,901

(See Notes 7, 9, 10 and 11)

   Issue shares for
     services                    --          --       438,213          --          2,273             --        2,273
   Sale of shares in
     private placements
     (net of issuance
     costs of $545)              --          --     2,843,750           3          9,772             --        9,775
   Conversion of
     preferred stock         (2,000)         --       867,828           1             --             (1)          --
   Preferred stock
     dividends                   --          --        35,588          --            104           (241)        (137)
   Issue convertible
     preferred stock
     (net of issuance
     costs of $211)           2,000          --            --          --          1,789             --        1,789
   Beneficial
     conversion feature
     of convertible
     preferred stock             --          --            --          --            448           (448)          --
   Warrants issued in
     conjunction with
     issuance of
     convertible
     preferred stock             --          --            --          --            338           (338)          --
   Warrants issued in
     conjunction with
     financing
     arrangement                 --          --            --          --          1,943             --        1,943

                                                      (continued)

                                See reports of independent certified public accountants
                             and accompanying notes to consolidated financial statements.

</TABLE>
                                                          F-6



<PAGE>
<TABLE>

                     UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                                                (DEBTOR-IN-POSSESSION)
                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
                                     (AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                              Series A & B
                              Convertible                                     Additional
                            Preferred Stock             Common Stock           Paid-In      Accumulated
                         -----------------------   -----------------------
                           Shares       Amount       Shares       Amount       Capital        Deficit        Total
                         -----------   ---------   -----------    --------    -----------   ------------    ---------
<S>                          <C>       <C>         <C>            <C>         <C>           <C>             <C>
   Options granted to
     non-employees               --  $    --               --   $      --   $        332  $          --   $      332
   Options granted to
     employees                   --       --               --          --          7,238             --        7,238
   Other                         --       --               --          --             26             --           26
   Net loss                      --       --               --          --             --        (32,385)     (32,385)
                         -----------   ---------   -----------    --------    -----------   ------------    ---------

Balances,
     March 31, 2000           2,000       --       20,283,508          20         39,347        (44,612)      (5,245)

(See Notes 8 and 9)

   Issue shares for
     services                    --          --        33,056          --            201             --          201
   Issue shares for
     accounts payable
     to employee                 --          --        45,040          --            362             --          362
   Issue shares for
     redemption of
     warrants                    --          --       150,000          --            225             --          225
   Sale of shares in
     private placements
     (net of issuance
     costs of $50)               --          --       333,333          --            450             --          450
   Conversion of Series
     A preferred stock       (2,000)         --       364,299           1            162                         163
   Preferred stock
     dividends                   --          --        29.432          --             --            (24)         (24)
   Issue convertible
     Series B preferred
     stock (net of
     issuance costs of
     $166)                  100,000           1            --          --            833             --          834
   Beneficial
     conversion feature
     of convertible
     preferred stock             --          --            --          --            249           (249)          --
   Beneficial
     conversion feature
     of convertible debt         --          --            --          --          1,470             --        1,470
   Warrants issued in
     conjunction with
     financing
     arrangements                --          --            --          --          3,487             --        3,487
   Warrants issued for
     services                    --          --            --          --          1,212             --        1,212
   Options granted to
     non-employees for
     services                    --          --            --          --            153             --          153
   Issue shares for
     conversion of
     convertible debt            --          --     3,310,881           3            558             --          561
   Conversion of Series
     B preferred stock      (41,690)         --       797,300           1             (1)            --           --
   Net loss                      --          --            --          --             --        (59,077)     (59,077)
                         -----------   ---------   -----------    --------    -----------   ------------    ---------

Balances,
     March 31, 2001          58,310    $      1    25,346,849     $    25     $   48,708    $  (103,962)    $(55,228)

   Net income                    --          --            --          --             --            722          722
                         -----------   ---------   -----------    --------    -----------   ------------    ---------

Balances,
     March 31, 2002          58,310    $      1    25,346,849     $    25     $   48,708    $  (103,240)    $(54,506)
                         ===========   =========   ===========    ========    ===========   ============    =========

                                See reports of independent certified public accountants
                             and accompanying notes to consolidated financial statements.

</TABLE>
                                                          F-7



<PAGE>
<TABLE>

               UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                                          (DEBTOR-IN-POSSESSION)
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (AMOUNTS IN THOUSANDS)
                                            (LIQUIDATION BASIS)
<CAPTION>

                                                                                           FOR THE THREE
                                                                          FOR THE YEAR      MONTHS ENDED
                                                                          ENDED MARCH 31,     MARCH 31,
                                                                               2002             2001
                                                                           -------------    -------------
<S>                                                                        <C>              <C>
     Impairment of frequency licenses..................................    $       (130)    $        447
     Impairment of fixed assets........................................               -            2,500
     Sale of equipment.................................................          (1,000)               -

     Change in net liabilities in liquidation:
     Cash..............................................................    $       (178)    $        160
     Accounts receivable...............................................             (28)               1
     Prepaid expenses and other assets ................................              (4)              14
     Accounts payable and accrued expenses.............................            (738)             124
     Liabilities subject to compromise.................................           2,800              (48)
                                                                           -------------    -------------
     (Decrease) increase in net liabilities in liquidation.............    $       (722)    $      3,198
     Net liabilities in liquidation - March 31, 2001...................          55,228
                                                                           -------------
     Net liabilities in liquidation - March 31, 2002...................    $     54,506
                                                                           =============

     Net liabilities in liquidation - December 31, 2001................                           52,030
                                                                                            -------------
     Net liabilities in liquidation - March 31, 2001...................                     $     55,228
                                                                                            =============

                          See report of independent certified public accountants
                       and accompanying notes to consolidated financial statements.

                                                    F-8

</TABLE>



<PAGE>
<TABLE>

         UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                                    (DEBTOR-IN-POSSESSION)
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (AMOUNTS IN THOUSANDS)
                                     (GOING CONCERN BASIS)
<CAPTION>

                                                                  FOR THE NINE   FOR THE YEAR
                                                                  MONTHS ENDED      ENDED
                                                                  DECEMBER 31,     MARCH 31,
                                                                     2000            2000
                                                                  ------------   ------------
<S>                                                               <C>            <C>
Cash flows used in operating activities:
     Net loss                                                     $   (56,175)   $   (32,385)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Impairment charges and certain bankruptcy-related
              adjustments                                              19,644             --
         Accrued lease and contract rejection costs                     7,846             --
         Bad debt expense                                                 260            666
         Depreciation and amortization                                  3,451          3,045
         Write-off and amortization of deferred financing costs         5,660          1,399
         Stock options issued as compensation                              --          7,570
         Stock options and warrants issued for services                 1,365             --
         Stock issued for services                                        554          2,273
         Accrued interest                                               1,181             --
         Write-off of goodwill and other assets                            --          1,227
         Other non-cash                                                    --              3
         Changes in operating assets and liabilities:
              Accounts receivable                                        (270)          (552)
              Prepaid expenses and other current assets                   622           (258)
              Other assets                                                 91             --
              Accounts payable and accrued liabilities                    676          4,407
              Accrued payroll and related expenses                       (336)           447
                                                                  ------------   ------------

Net cash used in operating activities                                 (15,431)       (12,158)
                                                                  ------------   ------------

Cash flows used in investing activities:
     Advances to related parties                                           --           (361)
     Purchases of property and equipment                               (1,512)       (10,626)
     Purchase of licenses and other assets                                 --         (1,000)
     Write-off of deposits                                                 --           (257)
                                                                  ------------   ------------

Net cash used in investing activities                                  (1,512)       (12,244)
                                                                  ------------   ------------

                                          (Continued)

                    See reports of independent certified public accountants
                 and accompanying notes to consolidated financial statements.

</TABLE>
                                              F-9



<PAGE>
<TABLE>

        UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                                    (DEBTOR-IN-POSSESSION)
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (AMOUNTS IN THOUSANDS)
                                    (GOING CONCERN BASIS)
<CAPTION>

                                                              FOR THE NINE     FOR THE YEAR
                                                              MONTHS ENDED        ENDED
                                                               DECEMBER 31,      MARCH 31,
                                                                   2000            2000
                                                               -------------   -------------
<S>                                                            <C>             <C>
Cash flows provided by financing activities:
     Repayments of borrowings from related parties             $         --    $       (188)
     Borrowings of short-term debt and other obligations             19,545              --
     Repayments of short-term debt and other obligations             (4,000)           (222)
     Borrowings under equipment financing and line of credit
         arrangement                                                     --          14,222
     Payment of debt issuance costs                                      --            (660)
     Repayments under capital lease obligations                        (408)            (41)
     Proceeds from sale of convertible preferred stock, net             834           1,789
     Proceeds from exercise of warrants                                 225              --
     Proceeds from sale of common stock, net                            450           9,775
                                                               -------------   -------------

Net cash provided by financing activities                            16,646          24,675
                                                               -------------   -------------

Net (decrease) increase in cash                                        (297)            273
Cash at beginning of period                                           1,176             903
                                                               -------------   -------------

Cash at end of period                                          $        879    $      1,176
                                                               =============   =============

   Supplemental schedule of non-cash transactions:
     Issuance of capital leases for asset purchases            $         --    $      1,231
                                                               =============   =============
     Increase in debt relating to asset purchases              $      8,131    $      4,361
                                                               =============   =============
     Issuance of warrants in conjunction with financing
         arrangements                                          $      3,487    $      1,943
                                                               =============   =============
     Issuance of warrants in conjunction with preferred and
         common stock                                          $      2,476    $        338
                                                               =============   =============
     Beneficial conversion feature of preferred stock          $        249    $        448
                                                               =============   =============
     Preferred stock dividends paid in common stock            $        162    $        137
                                                               =============   =============

Cash paid for:
     Interest                                                  $        176    $        824
                                                               =============   =============
     Taxes                                                     $          1    $          1
                                                               =============   =============

                    See reports of independent certified public accountants
                and accompanying notes to consolidated financial statements.

</TABLE>
                                             F-10



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company operated through several wholly-owned subsidiaries: IJNT, Inc.
("IJNT"), Ubee Network Enterprises, Inc. ("UBEE"), Access Communications, Inc.
("Access"), Webit of Utah, Inc. ("Webit"), UrJet Backbone Network, Inc. ("UBN"),
Man Rabbit House Multimedia, Inc. ("MRHM"), GIjargon.com ("GI"), and Global
Broadband Services, Inc. ("Global"). Some subsidiaries were inactive, including
Access, Webit, GI and Global. The accompanying consolidated financial statements
include the accounts of Universal Broadband Networks, Inc. and the
aforementioned subsidiaries. On July 25, 2000, the shareholders of the Company
ratified the proposal to change the name of the Company from IJNT.net, Inc. to
Universal Broadband Networks, Inc. and the stock ticker symbol was
correspondingly changed to UBNT. All significant intercompany balances and
transactions have been eliminated in consolidation.

The Company was formerly engaged in the business of providing wireless internet
access through microwave technology, dial-up internet access, web site design,
web hosting services, fiber backbone connectivity, and other telecommunications
carrier services. Prior to October 31, 2000, the Company principally operated in
Utah (Salt Lake City), Texas, and California. As of June 2000, the Company had
leased or otherwise acquired access to fiber route co-location facilities in
several major cities in the aforementioned states.

LIQUIDATION BASIS OF ACCOUNTING (2002 and 2001)

On October 31, 2000 (the "Petition Date"), Universal Broadband Networks, Inc.
and four of its wholly-owned subsidiaries (collectively the "Company") filed a
voluntary petition for relief (the "Chapter 11 Case") under Chapter 11 of the
United States Bankruptcy Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the Central District of California (the "Bankruptcy
Court"). Since the Petition Date, the Company has conducted limited activities
as a debtor-in-possession under the Bankruptcy Code. See Note 2 for additional
information.

In early January 2001, after considering current industry conditions and other
factors (and in consultation with the creditors committee formed during
bankruptcy proceedings), management concluded that reorganization was not
feasible. A decision to liquidate the Company was reached at that time, and
liquidation commenced soon thereafter. Thus, the Company is no longer engaged in
the conduct of business to any significant extent, and now operates for the sole
purpose of holding and liquidating its assets. The Company expects that its
assets will either be sold or assigned to secured creditors, with any remaining
proceeds distributed to other creditors. As a result, the Company changed its
basis of accounting effective December 31, 2000 (and for periods ending
subsequent to that date) from the going-concern basis to a liquidation basis in
accordance with accounting principles generally accepted in the United States
("GAAP"). Consequently, at March 31, 2002 and 2001, assets have been reported at
estimated net realizable value (with an allowance for known disposition costs),
assuming an orderly liquidation. Liabilities are presented based on the
estimated amount expected to be allowed by the Bankruptcy Court, even though
certain obligations may be adjudicated or settled for lesser amounts as
described in Note 2. Differences between (a) the estimated revalued amounts of
assets and liabilities and (b) actual cash transactions and other events after
March 31, 2002 will be recognized in the period in which they are susceptible of
reasonable estimation in accordance with GAAP.

The accompanying statements of operations and statements of cash flows for the
period April 1, 2000 to December 31, 2000 have been prepared in accordance with
GAAP applicable to a going concern prior to adoption of the liquidation basis of
accounting. Except as discussed in the preceding paragraph, GAAP assumes that
assets will be realized and liabilities will be discharged in the ordinary
course of business. As a result of the Chapter 11 Case and management's decision
to liquidate the Company, the realization of assets and liquidation of
liabilities is now subject to uncertainty. The valuation of assets in
liquidation is based on management's estimate of their net realizable value (net
of estimated known disposition costs) at March 31, 2002 and 2001, respectively.
Such values could differ materially from amounts ultimately realized in the
future as the Company completes its liquidation. In the Chapter 11 Case,

                                      F-11



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   (continued)

LIQUIDATION BASIS OF ACCOUNTING (2002 and 2001) (continued)

all of the Company's liabilities as of the Petition Date are considered subject
to compromise (including the entire amount of secured claims which may be
undersecured). Pre-petition liabilities whose disposition may be subject to
settlement or otherwise dependent on the outcome of the Chapter 11 Case have
been segregated and classified as liabilities subject to compromise in the
accompanying March 31, 2002 and 2001 consolidated statements of net liabilities
in liquidation.

Generally, actions to enforce or otherwise effect repayment of pre-chapter 11
liabilities and pending litigation against the Company are stayed while the
Company continues as a debtor-in-possession during bankruptcy proceedings.
Schedules have been filed by the Company with the Bankruptcy Court setting forth
its assets and liabilities as of the Petition Date as reflected in the Company's
accounting records. Pre-petition liabilities reflected in the accompanying
consolidated statement of net liabilities in liquidation (see Note 2) are
principally based on these bankruptcy schedules. Differences between amounts
reflected in such schedules and claims filed by creditors are currently being
investigated, and will be either amicably resolved or adjudicated by the
Bankruptcy Court. Such claims do not necessarily encompass the universe of
claimants, nor the amount of each claim that may be asserted against the Company
in the bankruptcy proceedings. The ultimate amount of and settlement terms for
such liabilities are not presently determinable.

Since management has abandoned any expectation of reorganizing the Company,
Statement of Position No. 90-7, "FINANCIAL REPORTING BY ENTITIES IN
REORGANIZATION UNDER THE BANKRUPTCY CODE," is no longer mandatory under GAAP.

GOING CONCERN BASIS OF ACCOUNTING (2000)

The accompanying 2000 consolidated financial statements were prepared assuming
the Company would continue as a going concern. During the year ended March 31,
2000 ("Fiscal 2000"), the Company experienced a net loss of $32,385 and had
negative cash flows from operations of $12,158. In addition, the Company had
substantial working capital and shareholders' deficits at March 31, 2000.
Lastly, the Company had significant present and future working capital demands,
which required substantial equity and debt financing which had not yet been
secured. These factors, among others, raised substantial doubt about the
Company's ability to continue as a going concern at the date such consolidated
financial statements were prepared. The 2000 consolidated financial statements
do not include any adjustments that resulted from the outcome of these
uncertainties.

In an effort to reverse the negative financial conditions noted above,
management of the Company intended to secure a series of debt and equity
financings during 2000 that were expected to exceed $200,000. Additionally, the
Company intended to expand its operations through the establishment of
switch-based telecommunications facilities in pre-designated markets, and
develop its management and sales teams, and its corporate infrastructure.
Management of the Company believed these events would provide the working
capital required to purchase necessary equipment, establish the requisite
infrastructure and fund operations until such time as the Company became
profitable.

The Company was unable to successfully implement its plans, including generating
profitable operations, generating positive cash flows from operations and
obtaining additional debt and equity capital to meet present and future working
capital demands.

                                      F-14



<PAGE>
  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   (continued)

CASH

The Company places its cash with high quality credit institutions. The Federal
Deposit Insurance Corporation ("FDIC") insures cash accounts at each institution
for up to $100. From time to time, the Company maintains cash balances in excess
of the FDIC limit.

CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially expose the Company to concentrations of
credit risk consist primarily of cash and accounts receivable. Credit is
extended to customers based upon an evaluation of the customer's financial
condition and credit history, and generally the Company does not require
collateral. Credit losses are provided for in the consolidated financial
statements by management based upon a detailed evaluation of the collectibility
of accounts receivable.

PROPERTY AND EQUIPMENT

In connection with the Chapter 11 Case and as discussed in Note 2, the Company
has adopted liquidation accounting effective December 31, 2000. Except for the
frequency licenses, substantially all property and equipment has been disposed
as of March 31, 2002, see further discussion at Notes 3 and 7. The transmission
equipment at March 31, 2001 is stated at estimated net realizable value. No
depreciation or amortization was recorded subsequent to the Chapter 11 filing on
October 31, 2000. See Note 3 regarding disposition of transmission equipment.

Prior to the adoption of liquidation accounting, property and equipment were
stated at cost and depreciated or amortized (as applicable) using the
straight-line method over the estimated useful lives of the related assets,
ranging from three to seven years (or lease term, if shorter). Maintenance and
repairs were charged to expense as incurred. At the time of retirement or other
disposition of property and equipment, the cost and accumulated depreciation or
amortization were removed from the accounts and any resulting gain or loss was
reflected in operations.

OTHER ASSETS

Other assets for 2002 and 2001 primarily consist of frequency licenses and lease
security deposits (see Note 4). Frequency licenses represent certain channel
rights in various regional markets. In 2001, such licenses were determined to be
impaired, and were written down by $270 at March 31, 2001 to an estimated net
realizable value of $250. Prior to the Chapter 11 Case, frequency licenses were
amortized on a straight-line basis over the license period, which generally
ranged from two to three years. The IRU represented a 20-year license of a
digital transmission network connecting the Los Angeles and San Francisco market
areas and was being amortized on a straight-line basis. Due to the Chapter 11
Case, current market conditions, and for reasons discussed in Note 2, management
determined that it was more likely than not that the IRU could not be sold and
the remaining unamortized balance of $833 was written off during the year ended
March 31, 2001. See Note 4 regarding further impairment of such frequency
licenses.

As further discussed in Note 5, the Company rejected substantially all of its
lease obligations pursuant to the provisions of the Bankruptcy Code and impaired
the related security deposits totaling $238. Amortization related to frequency
licenses totaled $0, $133, and $448 for the years ended March 31, 2002, 2001 and
2000, respectively.

Deferred financing costs represented certain costs associated with the issuance
of debt obligations including legal costs, loan fees, commitment fees and the
estimated fair value of warrants issued in conjunction with such debt
obligations. Deferred financing costs were capitalized and amortized over the
term of the related debt obligations using the effective yield method.
Amortization related to deferred financing costs totaled $0, $2,472, and $1,399
for the years ended March 31, 2002, 2001 and 2000, respectively. The remaining
balance of $3,689 was either written off or the amortization was accelerated as
of September 2000 in connection with the Chapter 11 Case. See further discussion
in Notes 2, 8 and 9.

LONG-LIVED ASSETS

Prior to the adoption of liquidation accounting, the Company reviewed the
carrying amount of its long-lived assets and identifiable intangible assets for
possible impairment whenever events or changes in circumstances indicate that
the carrying amount of the assets may not be recoverable. Recoverability of
assets to be held and used was measured by a comparison of the carrying amount
of the asset to future undiscounted net cash flows expected to be generated by
the asset. If any such assets were considered impaired, the impairment to be
recognized was measured by the excess of the carrying amount of the asset over
its estimated fair value. Assets to be disposed of were reported at the lower of
the carrying amount or estimated fair value less costs to sell.

                                      F-15



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   (continued)

LONG-LIVED ASSETS (continued)

Management determined that fixed and other assets totaling $0, $23,293, and $80,
respectively, were impaired during the years ended March 31, 2002, 2001 and
2000. A significant portion of the fixed and other assets impaired during the
year ended March 31, 2001 was due to the Company's Chapter 11 Case.
Management determined that goodwill totaling $1,147 was impaired during the year
ended March 31, 2000.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting periods. Actual results could materially differ
from those estimates. Significant financial statement categories requiring
estimates include, but are not limited to, the allowance for doubtful accounts
and the recoverability of property and equipment and intangible assets through
future operations.

REVENUE RECOGNITION

Wireless Internet service requires certain hardware items to be installed at the
customer's location. Sales of the equipment and installation labor were
recognized as revenue in the period in which the equipment was installed.
Internet access revenue was recognized monthly as it was earned. Web site
development services revenue was recognized based on stages of development,
typically over a period of one to three months, as the customer authorized the
stages.

ADVERTISING

Advertising costs are expensed as incurred. During the years ended March 31,
2002, 2001, and 2000, advertising expenses totaled $0, $648 and $788,
respectively.

INCOME TAXES

The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 "ACCOUNTING FOR INCOME TAXES" ("SFAS 109"). Under SFAS 109,
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. 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. A valuation allowance is
provided for significant deferred tax assets when it is more likely than not
that such assets will not be recovered.

                                      F-16



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   (continued)

STOCK-BASED COMPENSATION

The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 123 ("SFAS 123"), "ACCOUNTING FOR STOCK-BASED
COMPENSATION," which defines a fair value based method of accounting for
stock-based compensation. However, SFAS 123 allows an entity to continue to
measure compensation cost related to stock and stock options issued to employees
using the intrinsic method of accounting prescribed by Accounting Principles
Board Opinion No. 25 ("APB 25"), "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES."
Entities electing to remain with the accounting method of APB 25 must make pro
forma disclosures of net loss, as if the fair value method of accounting defined
in SFAS 123 had been applied. The Company elected to account for stock-based
compensation to employees under APB 25 (see Note 9).

EARNINGS PER SHARE

Basic earnings per share ("EPS") is computed as net loss available to common
shareholders (including the effect of beneficial conversion features relating to
equity transactions) divided by the weighted average number of common shares
outstanding during the period. Diluted EPS reflects the potential dilution that
could occur from common shares issuable through stock options, warrants and
other convertible securities. Basic and diluted EPS are the same, as the effect
of common stock equivalents on EPS is anti-dilutive for all periods presented.

The following table reconciles the numerators and denominators of the basic and
diluted EPS computations for the following periods (such information is not
required for periods under the liquidation basis of accounting):

<TABLE>
<CAPTION>
                                                          NINE MONTHS
                                                             ENDED           YEAR ENDED
                                                          DECEMBER 31,        MARCH 31,
                                                             2000               2000
                                                         --------------     --------------
<S>                                                      <C>                <C>
Basic and diluted:
    Net loss                                             $     (56,175)     $      (32,385)
    Adjustments to net loss:
    Preferred stock dividends                                      (24)              (241)
    Warrants issued in connection with sale of
         convertible preferred stock (see Note 9)                 (750)              (338)
    Preferred stock beneficial conversion
         feature (see Note 9)                                     (249)              (448)
                                                         --------------     --------------

Basic and diluted net loss                               $     (57,198)     $     (33,412)
                                                         ==============     ==============

Weighted average number of common shares                    21,422,253         18,199,114
                                                         ==============     ==============

Basic and diluted net loss per common share              $       (2.67)     $       (1.84)
                                                         ==============     ==============
</TABLE>

The total potential common shares that have not been included in the calculation
of diluted net loss per share totaled 3,647,573, and 4,302,358 for the nine
months ended December 31, 2000 and the year ended March 31, 2000, respectively.

                                      F-17



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   (continued)

SEGMENT REPORTING

The Company adopted Statement of Financial Accounting Standards No. 131 ("SFAS
131"), "DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION,"
during the year ended March 31, 1999. SFAS 131 establishes standards for public
company reporting of information about operating segments and related
disclosures about products and services, geographic areas and major customers in
annual consolidated financial statements. The Company operated primarily in one
business segment.

COMPREHENSIVE INCOME

The Company adopted Statement of Financial Accounting Standards No. 130,
"REPORTING COMPREHENSIVE INCOME" ("SFAS 130") during the year ended March 31,
1999. SFAS 130 established new guidelines for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. The adoption of SFAS 130 had no effect on the accompanying
consolidated financial statements, because the Company did not have any elements
of comprehensive income during any of the periods presented.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "DISCLOSURES ABOUT FAIR
VALUE OF FINANCIAL INSTRUMENTS", requires disclosure of the estimated fair
value, if reasonably obtainable, of the Company's financial instruments. Since
the Company is reporting on the liquidation basis of accounting at March 31,
2002 and 2001, such disclosure requirement is not applicable.

RECLASSIFICATIONS AND COMPARABILITY

Certain reclassifications have been made to the 2000 consolidated financial
statements to conform with the presentation of the financial statements for the
nine months ended December 31, 2000. In addition, because of the adoption of
liquidation basis accounting, the consolidated financial statements of the
Company as of March 31, 2002 and 2001 and for the quarter ended March 31, 2001,
are not comparable to any consolidated financial statements of prior periods.

RECENT ACCOUNTING PRONOUNCEMENTS

Due to the Company reporting on the liquidation basis of accounting, recent
accounting pronouncements under GAAP do not impact the Company.

                                      F-18



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

2. BANKRUPTCY CASE AND RELATED MATTERS

BANKRUPTCY FILING

As discussed in Note 1, the Company is currently a debtor-in-possession pursuant
to the Bankruptcy Code. As such, management of the Company continues to conduct
limited activities under the supervision of the Bankruptcy Court. In accordance
with the provisions of the Bankruptcy Code, an automatic stay provides that
creditors of the Company and other parties in interest are prevented from
seeking repayment of pre-petition debts. Additionally, unless otherwise approved
by the Bankruptcy Court, the Company must refrain from payment of pre-petition
indebtedness.

The Company's bankruptcy filing resulted in non-payment of $4.1 million due on
November 15, 2000 (see Note 7). In addition, monthly payments of $1.1 million
each in principal and interest under Tranche B of the secured vendor financing
agreement (see Note 7) became due and payable beginning on November 1, 2000.
Also, $4.1 million and $1.6 million of principal and interest under the terms of
two unsecured note agreements became due and payable on December 15, 2000 and
January 2, 2001, respectively. Because of the combination of these events and
cross-default provisions included in the Company's other debt agreements (see
Note 8) and in certain lease agreements, substantially all of the Company's
indebtedness is in default and is now due and payable. Any repayment of such
indebtedness will be the subject of the Company's Chapter 11 Case. Because of
the aforementioned defaults, substantially all unamortized deferred financing
costs totaling $3,689 were written off or accelerated as of September 30, 2000.

Subsequent to the Petition Date, the Company rejected substantially all of its
lease obligations and other executory contracts pursuant to the provisions of
the Bankruptcy Code. See Note 5 for additional information.

Although legal fees and other administrative expenses to complete the Company's
bankruptcy proceedings may be significant, they are not susceptible to
reasonable estimation at this time; accordingly, the accompanying consolidated
financial statements do not include any provision for such costs not yet
incurred by the Company. The March 31, 2002 and 2001 estimated net realizable
value of total assets in liquidation will be reduced in the future by general
and administrative expenses incurred subsequent to that date.

                                      F-19



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

2. BANKRUPTCY CASE AND RELATED MATTERS (continued)

TRADING MARKET

The Company's common stock ceased trading on the Nasdaq National Market on
October 17, 2000 at the Company's request. Since the Company no longer satisfies
the requirements for continued listing on the Nasdaq National Market, by letter
dated November 3, 2000, the Company requested that its securities be delisted
from the Nasdaq National Market. On November 9, 2000, the Company's common stock
began being quoted on the Over the Counter Bulletin Board; such market is not
sponsored or supported by the Company. No assurance can be given as to the
continuing existence or liquidity of any trading market for the Company's common
stock. Notwithstanding this market activity, the Company believes that its
outstanding shares of common stock currently have nominal value.

LIABILITIES SUBJECT TO COMPROMISE AND OTHER BANKRUPTCY-RELATED ADJUSTMENTS,
LIQUIDATION BASIS OF ACCOUNTING ADJUSTMENTS, AND IMPAIRMENT CHARGES

The March 31, 2002 balances of unsecured and undersecured pre-petition
liabilities that became subject to compromise on October 31, 2000 are as
follows:

Secured vendor financing (Note 7)                                 $      10,388
Estimated lease and contract rejection costs (Note 5)                     7,846
Accounts payable                                                          9,441
Obligations under capital leases (Note 5)                                 2,642
Accrued payroll and related expenses                                        298
Unsecured  and under-secured short-term debt (Notes 7 and 8)             23,618
                                                                  --------------
       Total liabilities subject to compromise                    $      54,233
                                                                  ==============

As discussed in Note 3, certain liabilities totaling approximately $2,800 were
discharged by the Bankruptcy Court during the year ended March 31, 2002.

Impairment charges, adjustments to adopt the liquidation basis of accounting,
and certain adjustments relating to the bankruptcy reported in the consolidated
statement of operations for the nine months ended December 31, 2000 or in the
consolidated statement of changes in net liabilities in liquidation for the
period January 1, 2001 to March 31, 2001 include the following:

Estimated lease and contract rejection costs                      $       7,846
Fixed asset impairment and certain adjustments to adopt
   liquidation-basis accounting (Note 3)                                 20,660
Impairment of other assets (Note 4)                                       1,444
Professional fees                                                           150
Write-off and accelerated amortization of deferred financing
   costs (Notes 4 and 8)                                                  3,689
Adjustment of certain pre-petition liabilities                           (1,218)
                                                                  --------------

          Total                                                   $       32,571
                                                                  ==============

No such liquidation basis impairment charges were recorded in the year ended
March 31, 2002.

                                      F-20



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at March 31, 2001:

       Furniture, fixtures and equipment          $         -
       Capitalized software                                 -
       Leasehold improvements                               -
       Transmission equipment                           1,000
       Leased vehicles                                      -
                                                  ------------
                                                  $     1,000
                                                  ============

As discussed in Notes 1 and 2, the Company recognized the impairment of $20,660
of its fixed assets in connection with the Chapter 11 Case and the adoption of
liquidation basis accounting during the year ended March 31, 2001. The estimated
net realizable value of the transmission equipment set forth above assumes an
orderly liquidation and is based in part on an independent third-party
valuation.

On December 20, 2001, the Bankruptcy Court approved an order effectively
disposing of the transmission equipment via a nonjudicial foreclosure with
Nortel, a significant creditor in the Chapter 11 Case. Under such agreement, the
Company received $168 in cash and a reduction of the liabilities owed Nortel in
an amount no less than $2,800. Such cash was received on February 5, 2002. The
Company has accounted for the agreement as a disposition of the Nortel equipment
for approximately $3,000, resulting in a gain on liquidation of equipment in the
amount of approximately $2,000.

Depreciation and amortization expense totaled $0, $3,173, and $2,597 for the
years ended March 31, 2002, 2001 and 2000, respectively.

4. OTHER ASSETS

Other assets consist of frequency licenses in the amounts of $120 and $250 for
the years ending March 31, 2002 and 2001, respectively (see Notes 9 and 11).

As discussed in Notes 1 and 2, the Company recognized impairment of the
following assets due to the adoption of liquidation accounting or in connection
with the Chapter 11 Case during the year ended March 31, 2001: $833 of the
Indefeasible Right of Use License, $3,689 of deferred financing costs, $270 of
frequency licenses, and $341 of deposits and other assets. At March 31, 2002,
the Company reduced the liquidation value of its licenses to approximately $120,
based on a recent offer from an independent third party.

                                      F-21



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

5. LEASE OBLIGATIONS

The Company had various operating and non-cancelable capital leases. Subsequent
to the Petition Date, the Company rejected substantially all of its lease
obligations and other executory contracts pursuant to the provisions of the
Bankruptcy Code. The Company has recorded the liabilities associated with these
rejected contracts based upon management's estimate of the maximum potential
liability, and reflected such amounts in the accompanying March 31, 2002 and
2001 statements of net liabilities in liquidation. These claims, however, are
subject to certain limitations imposed by the Bankruptcy Code and applicable
state law. Consequently, such claims may be settled or adjudicated in amounts
materially less than those recorded by the Company; however, it is not currently
possible to reasonably estimate the impact of these limitations. Pursuant to the
provisions of the Bankruptcy Code, these liabilities are treated as pre-petition
claims and reflected as "liabilities subject to compromise" in the
aforementioned statement of net liabilities in liquidation.

6. INCOME TAXES

The provision for income taxes for the years ended March 31, 2002, 2001 and 2000
is not material to the financial statements.

The Company has deferred tax assets and a corresponding 100% valuation allowance
on such assets at March 31, 2002 and 2001 as follows:

                                                    2002              2001
                                                    ----              ----
      Deferred tax assets:
          Net operating loss carryforwards     $       23,000    $       23,000
                                               ---------------   ---------------

      Gross deferred tax assets                        23,000            23,000

      Valuation allowance                             (23,000)          (23,000)
                                               ---------------   ---------------

      Deferred tax assets, net                 $            -    $            -
                                               ===============   ===============

The income tax benefit differs from the amount of income tax determined by
applying the expected U.S. Federal income tax rate of 34% to the pretax loss for
the years ended March 31, 2002, 2001 and 2000 as a result of the following:

<TABLE>
<CAPTION>
                                                             2002              2001             2000
                                                             ----              ----             ----
       <S>                                               <C>              <C>               <C>
       Computed "expected" tax (benefit)                 $        245     $    (20,086)     $   (11,011)
       Decrease in income tax benefit resulting from:
           Stock option compensation                                -            2,128            2,461
           Other nondeductible expenses                             -              264               34
           State income tax expense                                 -                1                1
           Losses with no current benefit                           -           17,694            8,516
           Decrease in valuation allowance                       (244)               -                -
                                                         -------------    -------------     ------------

                                                         $          1     $          1      $         1
                                                         =============    =============     ============
</TABLE>

                                      F-22



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

6. INCOME TAXES (continued)

At March 31, 2002, the Company has an estimated Federal tax net operating loss
carryforward of approximately $68,000 which expires through 2022, and a state
net operating loss carryforward of approximately $25,000 which expires through
2007.

As a result of the Company's significant equity transactions, the Company may
have experienced a more than 50% ownership change for federal income tax
purposes. As a result, an annual limitation may be placed upon the Company's
ability to realize the benefit of its net operating loss carryforward. The
amount of this annual limitation, as well as the impact of the application of
other possible limitations under the consolidated return regulations, has not
been definitively determined at this time. Management believes sufficient
uncertainty exists regarding realization of the deferred tax asset items and
that a valuation allowance equal to the net deferred tax asset amount is
required.

Additionally, the proposed merger discussed in Note 12 will result in some or
all of the tax net operating loss carryforwards becoming unusable.

7. EQUIPMENT FINANCING AND LINE-OF-CREDIT ARRANGEMENT

In July 1999, UBN (a subsidiary of UBEE) entered into a credit agreement (the
"Agreement") with Nortel Networks, Inc. ("Nortel") that provided for a
line-of-credit of up to $7,000 ("Tranche A") as well as a term loan of up to
$37,000 ("Tranche B"). However, the maximum combined borrowing under the
Agreement could not exceed $37,000. Furthermore, under terms of the original
Agreement, the Company was not able to borrow under Tranche B until a $30,000
equity infusion to UBN had been completed. If such infusion was not completed by
October 30, 2000, the Tranche B commitment would terminate. On September 20,
2000 Nortel amended the Agreement, waiving the equity infusion requirement and
converting the outstanding balance of an open account, under which Nortel
advanced approximately $12,995 in equipment and services, to a draw-down under
Tranche B. However, in connection with the amendment, no further borrowings
under Tranche B were allowed. The Agreement is collateralized by all of the
assets and the common stock of UBN. As of March 31, 2001, approximately 55% of
the Company's consolidated total assets in liquidation were owned by its UBN
subsidiary. The Agreement further restricts UBN from dividending or loaning
funds to Universal Broadband Networks, Inc. or any of its subsidiaries.

Borrowings under Tranche A could be used for working capital and general
corporate purposes, bear interest at 13%, and were scheduled to mature on July
31, 2000. On August 15, 2000, the Company borrowed $4,000 from another third
party (Note 8) and partially repaid Tranche A. As of March 31, 2002 and 2001,
$4,089(including interest), was outstanding under Tranche A and no additional
borrowings were available. The Company obtained an amendment to the Agreement
from Nortel to extend the maturity date of Tranche A to November 1, 2000. As a
result of the Chapter 11 Case, the Company did not make the payment to Nortel
for the outstanding balance due on Tranche A. See further discussion in Note 2.

                                      F-23



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

7. EQUIPMENT FINANCING AND LINE-OF-CREDIT ARRANGEMENT (continued)

Borrowings under Tranche B could only be used to finance purchases of Nortel
goods and services and bore interest at the prime rate plus 3.75%. Tranche B was
payable in twelve equal quarterly payments beginning November 15, 2000. No
borrowings were outstanding under Tranche B at March 31, 2000, as the Company
had not completed the required $30,000 equity infusion. However, as of March 31,
2000, the Company owed Nortel $6,576 for purchases of equipment and services.
Additionally, as of March 31, 2000, Nortel had delivered approximately $3,700 of
transmission equipment that was not completely installed until subsequent to
March 31, 2000. The Company had not recorded this liability or the related fixed
assets as of March 31, 2000 as the Company believed that its obligation should
not be recognized until such time as the equipment is completely installed. Had
the Company recorded the $3,700 in transmission equipment as of March 31, 2000,
the unfinanced Nortel purchases would have totaled $10,276 at March 31, 2000. If
the Company was able to complete the required equity infusion, these borrowings
would be classified as Tranche B borrowings. If the required equity infusion was
not completed, the Company would be required to pay for these purchases pursuant
to normal vendor terms. As of June 30, 2000, no borrowings were outstanding
under Tranche B, and the Company owed Nortel $12,780 on an open account for
purchases of equipment and services. Effective September 20, 2000, Nortel
required the Company to convert the $12,995 of unfinanced purchases into
borrowings under Tranche B as a condition of amending the Agreement to waive
certain covenants in order that the Company could pursue third-party equity
financing opportunities and continue discussions with Nortel regarding a
restructuring and expansion of the Agreement. As of March 31, 2002 and 2001,
$10,388 and $13,188, respectively, (including interest) was outstanding under
Tranche B. As a result of the Chapter 11 Case, the Company did not make any of
the payments due to Nortel beginning November 15, 2000 as required under the
terms of the payment schedule. See further discussion in Note 2.

On December 20, 2001, the Bankruptcy Court approved an order effectively
disposing of the Nortel equipment via a nonjudicial foreclosure with Nortel, a
significant creditor in the Chapter 11 Case. Under such agreement, the Company
received $168 in cash and a reduction of the liabilities owed Nortel in an
amount no less than $2,800. Such cash was received subsequently on February 5,
2002. The Company has accounted for the agreement as a disposition of the Nortel
equipment for $2,968 resulting in a gain on liquidation of equipment in the
amount of $1,968.

The March 31, 2002 and 2001 liability amounts set forth below have been
classified as liabilities subject to compromise in the accompanying statements
of net liabilities in liquidation because the estimated net realizable value of
UBN's assets is less than the amount owed to Nortel.

A summary of the borrowings under the Agreement follows:

                                         March 31, 2002       March 31, 2001
                                         --------------       --------------

          Tranche A                     $         4,089      $         4,089
          Tranche B                              10,388               13,188
                                         ---------------     ----------------

          Total                         $        14,477      $        17,277
                                        ================     ================

In connection with the Agreement, the Company issued a warrant to purchase
492,094 shares of the Company's common stock (see Note 9). The estimated fair
value of the warrants of approximately $1,943, as well as certain other costs
related to the Agreement, were capitalized as deferred financing costs during
the year ended March 31, 2000 and amortized over the life of the Tranche A loan,
completed in July 2000.

The Agreement has certain restrictive financial covenants that include minimum
tangible net worth requirements, maximum asset-to-net-worth ratios, minimum net
income requirements and other restrictions with respect to financial ratios.
Furthermore, the Agreement has restrictions related to specific activities
including, but not limited to, limitations on leases, timely payment of accounts
payable and timely submission of certain reports to Nortel. Although the Company
entered into an amendment to the Agreement that revised all such covenants
effective March 31, 2000, the Company is not in compliance with any of the
covenants or restrictions as of March 31, 2002 and 2001; such non-compliance
will be processed by the Bankruptcy Court through the Chapter 11 proceedings.

                                      F-24



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

8. OTHER DEBT

On April 17, 2000, the Company entered into an unsecured Note and Warrant
Purchase Agreement to borrow $5,000. The agreement provided for interest at 6%
per annum, with any unconverted principal and accrued interest due October 17,
2001. The interest was payable in cash or common stock, at the election of the
Company, upon conversion of principal or October 17, 2001, whichever is earlier.
The agreement provided for the conversion of the note's principal balance into
shares of common stock, at the election of the holder, at a price of $6.06 per
share. The conversion price equaled the closing market price of the Company's
common stock on April 17, 2000. The agreement also provided for an adjustment of
the conversion price to the closing market price of the Company's common stock
on April 17, 2001, if such price is lower than $6.06 on that date. However, the
conversion price cannot be adjusted to less than $3.94 per share. The agreement
required the Company to obtain effective registration of the shares underlying
the convertible note and the warrant (see Note 10) by October 17, 2000. The
agreement also provided for a 2% per month cash penalty if such registration was
not effective on said date. As a result of the Chapter 11 Case, the Company did
not make the payment for the outstanding balance due on this Note Agreement. See
further discussion in Notes 2 and 10.

In conjunction with the above agreement, the Company issued warrants to the
holder of the convertible note to purchase 412,541 shares of common stock at a
price of $6.06 per share. The warrants expire three years from the date of
grant. The Company estimated the fair value of the warrants at $1,689 using the
Black-Scholes Option Pricing Model, and was amortizing such amount over the
eighteen-month life of the debt. Due to the filing of the Chapter 11 Case, the
Company accelerated the amortization of the remaining $1,173 as of September 30,
2000.

On May 23, 2000, the Company entered into an unsecured Note and Warrant Purchase
Agreement to borrow $250. The agreement provided for interest at 6% per annum,
with any unconverted principal and accrued interest due November 23, 2001. The
interest was payable by the Company in cash or common stock, at the election of
the Company, upon conversion of principal or November 23, 2001, whichever is
earlier. The agreement provided for the conversion of the note's principal
balance into shares of common stock, at the election of the holder, at a price
of $3.91 per share. The conversion price equaled the closing market price of the
Company's common stock on May 23, 2000. The agreement also provided for an
adjustment of the conversion price to the closing market price of the Company's
common stock on May 23, 2001, if such price is lower than $3.91 on that date.
However, the conversion price cannot be adjusted to less than $2.54 per share.
The agreement required the Company to obtain effective registration of the
shares underlying the convertible note and the warrant (see Note 10) by November
23, 2000. The agreement also provided for a 2% per month cash penalty if such
registration was not effective on said date. As a result of the Chapter 11 Case,
the Company did not make the payment for the outstanding balance due on this
Note Agreement. See further discussion in Notes 2 and 10.

In conjunction with the above May 23, 2000 agreement, the Company issued
warrants to the holder of the convertible note to purchase 32,000 shares of
common stock at a price of $3.91 per share. The warrants expire three years from
the date of grant. The Company estimated the fair value of the warrants at $84
using the Black- Scholes Option Pricing Model and was amortizing such amount
over the eighteen-month life of the debt. Due to the filing of the Chapter 11
Case, the Company accelerated the amortization of the remaining $66 as of
September 30, 2000.

                                      F-25



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

8. OTHER DEBT (continued)

On June 5, 2000, the Company entered into a Note and Warrant Purchase Agreements
to borrow $1,000. On July 7, 2000, this agreement was amended to include an
additional $500. The agreement provided for interest at 6% per annum, with
principal and accrued interest originally due in August 2000. The agreement also
provided for default interest at a rate of 24% per annum. The agreement required
the Company to obtain effective registration of the shares underlying the
warrants issued in connection with the note (see Note 10) by August 21, 2000,
and provided for a 2% per month cash penalty if such registration was not
effective on said date. The agreement is personally guaranteed by the former
Chairman of the Board of Directors of the Company, and collateralized by trust
deeds on two of his residences. The above amounts totaling $1,500 have been
dismissed by the bankruptcy court in response to a claims objection by the
Company.

In conjunction with the above June 5, 2000 agreement, the Company issued
warrants to the holder of the note to purchase 200,000 shares of common stock at
a price of $2.88 per share and 100,000 shares at a price of $4.06. The warrants
expire three years from the date of grant. The Company estimated the fair value
of the warrants at $933 and $279, respectively, using the Black-Scholes Option
Pricing Model, and amortized such amounts over the life of the debt, ending in
August 2000.

On August 15, 2000, the Company entered into an unsecured Note Agreement to
borrow $4,000. The agreement provided for interest at 13.7% per annum, with
principal and accrued interest due December 15, 2000. As a result of the Chapter
11 Case, the Company did not make the payment for the outstanding balance due on
this Note Agreement. See further discussion in Note 2.

On August 2, 2000, the Company entered into a Secured Convertible Promissory
Note Agreement to borrow $8,795. Of this amount, $1,295 was received on July 7,
2000; the remaining $7,500 was received during the quarter ended September 30,
2000. The note was secured by shares of common stock owned by the Company's
former chairman of the Board of directors. The entire note became convertible 91
days after its original issuance into shares of the Company's common stock at a
price equal to 75% of the average closing market price for the five business
days immediately preceding the conversion date. The reduced conversion price
represents a beneficial conversion feature that the Company has valued at
$1,470. This amount was expensed in the quarter ended September 30, 2000 as part
of the accelerated amortization of deferred financing costs (see Note 2). The
note bears interest at the rate of 8% per annum, and is due and payable, if not
converted, on August 2, 2003.

During the year ended March 31, 2001, principal of $552 was converted into
3,236,652 shares and interest of $9 was converted into 74,229 shares for a total
of 3,310,881 shares of the Company's common stock issued in connection with
conversion of the debt.

In connection with the above August 2, 2000 agreement, the Company issued
warrants to a broker for services rendered to purchase 200,000 shares of common
stock at a price of $1.50 per share. The Company estimated the fair value of the
warrants at $502 using the Black-Scholes Option Pricing Model. Due to the filing
of the Chapter 11 Case, the Company accelerated the amortization of this cost as
of September 30, 2000.

                                      F-26



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9.   CAPITALIZATION

RESTRICTIONS ON DIVIDENDS

Pursuant to state law, the Company is restricted from paying dividends to
its shareholders for the foreseeable future as a result of its accumulated
deficit as of March 31, 2002.

SHARES ISSUED FOR SERVICES, FISCAL 2001

During the year ended March 31, 2001, the Company issued 34,570 shares of common
stock in exchange for various professional services. The estimated fair value of
the stock issued of $252 has been charged to operations. In addition, 821 shares
of common stock were issued to an employee under the terms of an employment
agreement for the year ended March 31, 2001. The estimated fair value of the
stock issued of $2 has been charged to operations as compensation expense.

Effective for the fiscal year beginning April 1, 2000, non-employee directors
receive an annual fee in the form of Company common stock with a fair market
value of $60 as of the 31st of May each year. Accordingly, on May 31, 2000, the
Company's non-employee directors (Messrs. Torney, Charles, Cubley, Kramer and
Pazian) each received $60 of the Company's common stock valued at the market
price of $2.88 a share (20,833 shares each), or a total of 104,165 shares
issued. The total fair value of the stock issued of $300 was charged to
operations in June 2000. During the fourth quarter of fiscal 2001, such shares
were cancelled in connection with the Chapter 11 Case.

In addition, a total of 5,000 shares (2,500 shares each) issued to Messrs.
Charles and Cubley during the year ended March 31, 2000 were also cancelled, and
a reduction of expense of $52 was recorded in the current fiscal year.

SHARES ISSUED FOR SERVICES AND OTHER, FISCAL 2000

During the year ended March 31, 2000, the Board of Directors authorized the
issuance of 438,213 shares of common stock to various individuals and employees
as compensation for services provided to the Company. The shares were valued at
market prices ranging from $2.00 to $10.81 as of the day of Board approval. The
Company recorded expense totaling $2,273 for the year ended March 31, 2000.
Certain of these shares were issued to related parties (see Note 11).

On March 31, 2000, the Company executed a severance and purchase agreement with
an employee. The agreement provided for the issuance of 75,000 shares of common
stock valued at $602 for the purchase of such employee's 5% ownership interest
in UBN. The Company was owed $241 by the employee, which was offset against the
amount ultimately paid. Net shares totaling 45,040 were issued to the employee
in April 2000. During the year ended March 31, 2000, the Company recorded $602
of goodwill, which was subsequently determined to be impaired as of March 31,
2000.

                                      F-27



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. CAPITALIZATION (continued)

PRIVATE PLACEMENT, FISCAL 2001

In September 2000, the Company sold shares of its common stock through a private
placement. The Company issued 333,333 shares for consideration of $450 (net of
commissions of $50).

PRIVATE PLACEMENTS, FISCAL 2000

In May 1999, the Company sold shares of common stock through a private placement
in Germany that are exempt from registration pursuant to Regulation S of the
Securities Act of 1933, as amended (the "Securities Act"). The Company issued
600,000 shares for net consideration of $800 (net of commissions of $545). The
net proceeds received by the Company for each share represented a significant
discount from the prevailing U.S. market price of the Company's common stock.

In December 1999, the Company sold shares of common stock through a domestic
private placement. The Company issued 2,243,750 shares for net consideration of
$8,975 (net of commissions of $0). The common stock subscription and purchase
agreement required the Company to issue additional shares if the average bid
price per share is less than $4.00 per share for any 15 consecutive trading days
during the four month period commencing December 31, 2000. The common stock
subscription and purchase agreement also required the Company to file a
registration statement with the SEC for the shares sold in the offering, with
such registration statement to be effective no later than December 31, 2000. The
common stock subscription and purchase agreement also contains certain
restrictive financial covenants, which include, among other things, a
restriction on the number of shares of stock the Company may sell during the two
year period ending December 31, 2001.

In connection with the private placement, the Company granted the investors
warrants to purchase 560,938 shares of common stock at a price of $9.88 per
share (see discussion below).

                                      F-28



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. CAPITALIZATION (continued)

SERIES A CONVERTIBLE PREFERRED STOCK

In December 1998, the Company entered into an agreement with private investors
(the "Investors") whereby the Investors purchased 2,000 shares of the Company's
convertible Preferred Series A Stock (the "Series A Preferred Stock") for a
gross price of $2,000, net of commissions of $200. In May 1999, the Agreement
was amended to include an additional 2,000 shares of Series A Preferred Stock,
which netted $1,789 (net of $211 expenses) to the Company. The Series A
Preferred Stock carried an 8% coupon, payable upon conversion in common stock.
The Series A Preferred Stock carried a liquidation preference of $1,000 per
share of Series A Preferred Stock. The dividend was paid in the form of
additional shares of the Company's common stock at the time of the preferred
stock conversion. The Series A Preferred Stock required the Company to register
the underlying common stock with the SEC within certain time parameters, as
defined. The company defaulted with said requirement (see further description at
Note 10).

The convertible feature of the Series A Preferred Stock provided for a rate of
conversion that was below market value. Under terms of the Agreement, the
Investors had the right to convert the Series A Preferred Stock into common
stock at a 20% discount from the average closing market price of the Company's
common stock for the five business days immediately preceding a request for
conversion. Such feature is normally characterized as a "beneficial conversion
feature". Pursuant to Emerging Issues Task Force No. 98-5 ("EITF 98-5"),
"ACCOUNTING FOR CONVERTIBLE SECURITIES WITH BENEFICIAL CONVERSION FEATURES OR
CONTINGENTLY ADJUSTABLE CONVERSION RATIOS", the Company has determined the
values of the beneficial conversion feature of the Series A Preferred Stock to
be $448 and $364 at May 1999 and December 1998, respectively.

In conjunction with the sale of the Series A Preferred Stock in May 1999 and
December 1998, the Company granted the placement agent warrants to purchase
50,000 and 75,000, respectively, shares of common stock at prices of $3.24 and
$2.50 per share, respectively (see discussion below). In the calculation of
basic and diluted loss per share, the values of the beneficial conversion
feature and the placement agent warrants have increased the net loss applicable
to common shareholders.

All 2,000 shares of the December 1998 Series A Preferred Stock were converted
into 867,828 shares of common stock during the year ended March 31, 2000. During
the quarter ended June 30, 2000, the remaining 2,000 shares of Series A
Preferred Stock were converted into 364,299 shares of common stock and $162 in
related dividends ($137 of which was earned and accrued during the year ended
March 31, 2000) was converted into 29,432 shares of common stock, for a total of
393,731 shares of common stock issued in connection with the Series A Preferred
Stock conversions during the year ended March 31, 2001.

As of March 31, 2001, all of the Series A Preferred Stock and related dividends
had been converted to common stock.

SERIES B CONVERTIBLE PREFERRED STOCK

On July 21, 2000, the Company entered into an agreement with a private investor
whereby the investor purchased 100,000 shares of the Company's convertible
Preferred Series B Stock (the "Series B Preferred Stock") at a price of $10.00
per share for gross proceeds of $1,000, net of commissions of $166. The shares
have a liquidation preference of $10 per share.

                                      F-29



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. CAPITALIZATION (continued)

SERIES B CONVERTIBLE PREFERRED STOCK (continued)

The convertible feature of the Series B Preferred Stock provides for a rate of
conversion that is below market value. Under terms of the Agreement, the
investors have the right to convert the Series B Preferred Stock into common
stock at a 25% discount from the average closing market price of the Company's
common stock for the five business days immediately preceding the conversion
request. Such feature represents a beneficial conversion feature that the
Company valued at $249. In the calculation of basic and diluted loss per common
share, the value of the beneficial conversion feature has increased the net loss
applicable to common shareholders.

In conjunction with the sale of the Series B Preferred Stock, the Company
granted the investors warrants to purchase 1,000,000 shares of common stock at a
price of $2.00 per share and granted the placement agent warrants to purchase
150,000 shares of common stock at a price of $1.50 per share (see discussion
below).

During the year ended March 31, 2001, 41,690 shares of Series B Preferred Stock
were converted into 797,300 shares of common stock. The remaining 58,310 shares
carry a liquidation preference of $583.

RELIANCE ON REGISTRATION EXEMPTIONS

With respect to the aforementioned private placements and preferred stock
offerings, the Company has relied on registration exemptions provided under
Regulations D and S and in section 4(2) of the Securities Act and various
exemptions provided under state securities laws. The Company may have violated
certain of these Federal and/or state securities laws in connection with certain
of the aforementioned offerings of common and preferred stock.

                                      F-30



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. CAPITALIZATION (continued)

WARRANTS TO PURCHASE COMMON STOCK, FISCAL 2001

During the year ended March 31, 2001, in conjunction with the issuance of
various debt obligations, the Company issued warrants to purchase 944,541 shares
of its common stock (see Note 8).

During the year ended March 31, 2001, the Company issued a warrant to purchase
100,000 shares of its common stock at $1.50 per share to a consultant under the
terms of a contract dated September 18, 2000. The Company estimated the fair
value of the warrant at $265 using the Black-Scholes Option Pricing Model.

In connection with the issuance of Series B Preferred Stock on July 21, 2000,
the Company granted 1,000,000 warrants to the investors to purchase shares of
the Company's common stock at $2.00. The Company also issued 150,000 warrants to
purchase shares of the Company's common stock to the placement agent at $1.50
per share. The Company estimated the fair value of the 1,150,000 warrants at
$750, using the Black-Scholes Option Pricing Model; such value is reduced to the
remaining face amount of the issued Series B Preferred Stock, net of expenses.
In September 2000, the placement agent exercised the aforementioned warrant for
150,000 shares of the Company's common stock.

In connection with execution of a financial advisory services agreement on May
22, 2000 with an investment banking firm, the Company granted warrants to
purchase 250,000 share of its common stock at a price of $6.06 per share. The
warrants expire five years from the date of grant. The Company estimated the
fair value of the warrants at $801 using the Black-Scholes Option Pricing Model.
The warrant agreement required the Company to obtain effective registration of
the shares underlying the warrants by November 22, 2000.

                                      F-31



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. CAPITALIZATION (continued)

WARRANTS TO PURCHASE COMMON STOCK, FISCAL 2001 (continued)

The Company was involved in a dispute with a third party consultant concerning
consideration the Company allegedly owed for various financial advisory
services. The Company reached a settlement with the consultant whereby it agreed
to issue warrants to purchase 75,000 shares of the Company's common stock with
an exercise price of $5.00 per share. The Company estimated the fair value of
the warrants at $146 using the Black-Scholes Option Pricing Model.

WARRANTS TO PURCHASE COMMON STOCK, FISCAL 2000

During the year ended March 31, 2000, in conjunction with the sale of the
Preferred Stock, the Company issued the placement agent warrants to purchase
75,000 shares of common stock at a price of $2.50 per share. Such warrants
expire five years from the date of grant. The warrants retain "piggy-back"
Registration Rights. The Company valued the warrants at $245 using the
Black-Scholes Option Pricing Model.

During the year ended March 31, 2000, in conjunction with the sale of the
Preferred Stock, the Company issued the Investors warrants to purchase 50,000
shares of common stock at a price of $3.24 per share. Such warrants expire five
years from the date of grant. The warrants have an adjustment provision, as
defined, should the Company sell shares of common stock at a price below $3.24
per share. The Company valued the warrants at $93 using the Black-Scholes Option
Pricing Model.

During the year ended March 31, 2000, in connection with its equipment financing
and line-of-credit arrangement (see Note 7), the Company issued warrants to
purchase 492,094 shares of common stock at a price of $4.97 per share. Such
warrants expire five years from the date of grant. The Company valued the
warrants at $1,943 using the Black-Scholes Option Pricing Model. The holders of
the warrants have both demand and "piggy-back" registration rights.

During the year ended March 31, 2000, in conjunction with the sale of common
stock, the Company issued the investors warrants to purchase 560,938 shares of
common stock at a price of $9.88 per share. Such warrants expire five years from
the date of grant. The Company valued the warrants at $4,609 using the
Black-Scholes Option Pricing Model.

During the year ended March 31, 2000, the Company issued a warrant to purchase
100,000 shares of common stock at a price of $1.95 per share. Such warrant
expires two years from the date of grant. The Company was obligated to provide
the warrant in 1997 as a result of assistance provided by the recipient with
certain capital raising activities. The Company valued the warrant at $149 using
the Black-Scholes Option Pricing Model.

                                      F-32



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. CAPITALIZATION (continued)

OPTIONS GRANTED TO PURCHASE COMMON STOCK, FISCAL 2000 AND 2001

The Company's Board of Directors adopted the 2000 Management Equity Incentive
Plan (the "Management Plan") and the 2000 Equity Incentive Plan (the "Equity
Plan") during the year ended March 31, 2000. Both of the Plans required
shareholder approval, which was obtained on July 25, 2000 at the Annual
Stockholders Meeting.

The Management Plan provides for the issuance of up to 2,417,500 options to
purchase shares of common stock. Such options can either be incentive options or
non-qualified options, and may be granted to employees, directors and
consultants. The Management Plan has limits as to the number of options that may
be granted to any one recipient in a given year, as defined. The options granted
pursuant to the Management Plan may have a term of up to 10 years, vesting
provisions of no less than 20% per year, and exercise prices of no less than the
par value of the Company's common stock (non-qualified options) and 100% of fair
market value at the date of grant (incentive options).

The Equity Plan provides for the issuance of up to 3,000,000 options to purchase
shares of common stock. The terms of the Equity Plan are substantially the same
as the Management Plan, except that the restriction on the number of options
that may be granted to any one recipient in a given year is different and the
exercise price of grants for non-qualified options may not be less than 85% of
fair market value of the Company's common stock at the date of grant.

On March 30, 2000, the Company granted 2,803,000 options pursuant to the
Management and Equity Plans to purchase shares of common stock to various
officers and employees. Of the options granted, 60% generally vest over a four
year period, with options granted to certain members of senior management
vesting over two and three year periods. The remaining 40% vested immediately.
The 60% of the options were granted at prices ranging from $10.81 to $12.75 per
share, which equaled or exceeded the market price of the Company's common stock
at the date of grant. The remaining 40% of the options were granted at prices
ranging from $3.00 to $12.75 per share, with 906,000 options at exercise prices
that were substantially below the market price of the Company's common stock at
the date of grant. The Company recorded compensation expense relating to such
options in the fourth quarter of Fiscal 2000 totaling $7,238.

On March 30, 2000, the Company also granted 37,500 options pursuant to the
Equity Plan to purchase shares of common stock to a consultant. Of the options
granted, 60% vest over a four-year period. The remaining 40% vested immediately.
The options were granted at a price of $12.75 per share, which exceeded the
market price of the Company's common stock at the date of grant. Management of
the Company valued the options granted to this non-employee at estimated fair
value using the Black-Scholes Option Pricing Model. The Company recorded
consulting expense relating to such options in the fourth quarter of Fiscal 2000
totaling $332.

Under terms of the Management Plan and the Equity Plan, from May 17, 2000 to
August 1, 2000, the Company granted options to purchase 1,261,250 shares of its
common stock to certain management and employees at prices between $2.88 and
$4.63 per share, the closing market prices of the Company's common stock on each
grant date. In addition, pursuant to terms of an employment contract with the
Company's Chief Executive Officer ("CEO"), on June 19, 2000 the Company granted

                                      F-33



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. CAPITALIZATION (continued)

OPTIONS GRANTED TO PURCHASE COMMON STOCK, FISCAL 2000 AND 2001 (continued)

options to purchase one million shares of common stock to its CEO at $5.28 per
share, the closing market price of the Company's common stock on such grant
date. The options described in this paragraph are "non-compensatory" under APB
No. 25 and, accordingly, no compensation expense was recorded in connection with
these grants.

On April 13, 2000, the Company granted various service providers options to
purchase 20,500 common shares of stock at a price of $8.03 per share. The
exercise price equaled the closing market price of the Company's common stock at
the date of grant. The Company estimated the fair value of the options at $153
using the Black-Scholes Option Pricing Model.

Due to termination of most of the Company's staff on October 17, 2000 in
connection with the Chapter 11 Case, all of the options expired on January 17,
2001. No options were exercised during the year ended March 31, 2001.

The following table summarizes information about stock option transactions:

                                                                    Weighted
                                                                    Average
                                              Option Shares      Exercise Price
--------------------------------------------------------------------------------

Outstanding at March 31, 1999                            -        $           -
Options granted                                  2,840,500                 8.55
Options expired                                          -                    -
Options forfeited                                        -                    -
Options exercised                                        -                    -
--------------------------------------------------------------------------------

Outstanding at March 31, 2000                    2,840,500        $        8.55
Options granted                                  2,281,750                 4.36
Options expired                                 (5,122,250)                6.73
Options forfeited                                        -                    -
Options exercised                                        -                    -
--------------------------------------------------------------------------------

Outstanding at March 31, 2001                            -        $           -
================================================================================

The weighted average estimated fair value of options granted during the years
ended March 31, 2001 and 2000 approximated $4.35 and $6.99 per share,
respectively. No options were granted in the year ended March 31, 2002.

                                      F-34



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. CAPITALIZATION (continued)

The following table summarizes information about stock warrant transactions:

                                                                   Weighted
                                                Warrant            Average
                                                 Shares         Exercise Price
--------------------------------------------------------------------------------

Outstanding at March 31, 1999                            -        $           -
Warrants granted                                 1,278,032                 6.69
Warrants expired                                         -                    -
Warrants forfeited                                       -                    -
Warrants exercised                                       -                    -
--------------------------------------------------------------------------------

Outstanding at March 31, 2000                    1,278,032        $        6.69

Warrants granted                                 2,519,541                 3.36
Warrants expired                                         -                    -
Warrants forfeited                                       -                    -
Warrants exercised                                (150,000)                1.50
--------------------------------------------------------------------------------

Outstanding at March 31, 2001 and 2002           3,647,573        $        4.60
================================================================================

Exercisable at March 31, 2001 and 2002           3,647,573        $        4.60
================================================================================

The weighted average estimated fair value of warrants granted during the years
ended March 31, 2001 and 2000 approximated $2.85 and $5.51 per share,
respectively. No warrants were granted, expired, forfeited, or exercised during
the year ended March 31, 2002.

If the Company had elected the fair value method of accounting for stock-based
employee compensation, compensation cost would be accrued at the estimated fair
value of all stock grants over the service period, regardless of later changes
in stock prices and volatility. The fair value at the grant date for options
granted during the years ended March 31, 2001 and 2000, respectively, has been
estimated using the Black-Scholes Option Pricing Model with the following
weighted average assumptions: no dividend yield; expected volatility of 300% and
116%, respectively, based on historical results; risk-free interest rate of 5.2%
and 6.0%, respectively, per annum; and average expected option lives of five
years.

                                      F-35



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. CAPITALIZATION (CONTINUED)

The following table sets forth the pro forma net loss, the net loss available
for common shareholders, and the loss per weighted average common share amounts
for the nine months ended December 31, 2000 and the year ended March 31, 2000 as
if the Company had elected the fair value method of accounting for stock
options:

<TABLE>
<CAPTION>

                                                        NINE MONTHS
                                                           ENDED            Year Ended
                                                      DECEMBER 31, 2000   March 31, 2000
                                                      -----------------   --------------
      <S>                                             <C>                 <C>
      Net Loss
          As reported                                 $     (56,175)      $     (32,385)
          Pro forma                                   $     (64,686)      $     (36,076)

      Net Loss Available for Common Shareholders
          As reported                                 $     (57,198)      $     (33,412)
          Pro forma                                   $     (65,709)      $     (37,103)

      Basic and Diluted Loss Per Share
          As reported                                 $       (2.67)      $       (1.84)
          Pro forma                                   $       (3.07)      $       (2.04)

</TABLE>

The above December 31, 2000 and March 31, 2000 year ended pro forma effect of
applying the fair value method of accounting for employee stock options is not
necessarily representative of the potential effects on reported net income or
loss for future years.

10. COMMITMENTS AND CONTINGENCIES

See Notes 1 and 2 regarding the Chapter 11 Case.

POTENTIAL SECURITY LAW VIOLATIONS

The Company may have violated certain Federal and state securities laws in
connection with certain offerings of its common and preferred stock and in
connection with complying with quarterly and annual reporting requirements
during the years ended March 31, 2000 and 1999 (see Note 9). The Company may be
subject to various claims for damages in future lawsuits (including demands for
rescission), if any, from third parties as a result of such potential securities
laws violations. Although no claims have been made to date, the Company's
inability to avoid future claims, if any, could cause it to sustain substantial
losses which could have a material adverse effect on the Company's consolidated
financial conditions and results of operations.

                                      F-36



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

10. COMMITMENTS AND CONTINGENCIES (continued)

REGISTRATION RIGHTS AGREEMENTS

The Company is obligated under various agreements to register its common stock,
including the common stock underlying certain warrants and convertible preferred
stock. The Company is subject to penalties for failure to register such
securities, the amount of which could be material to the Company's consolidated
financial condition, results of operations and cash flows. The Company filed a
registration statement on Form S-3 in August 2000 to register the necessary
securities; such registration statement was deemed effective by the Securities
and Exchange Commission on September 13, 2000. Thereafter, the Company defaulted
on certain registration obligations. Any claims related to registration rights
will be adjudicated through the bankruptcy proceedings.

PENDING AND THREATENED LITIGATION

The Company has been named as a defendant in certain legal proceedings,
principally with regard to the enforcement of contractual obligations for
payment for services or products. Moreover, there are other threatened claims of
a substantial nature that have been asserted against the Company. All lawsuits
have been stayed with respect to the Company as a result of the petition for
relief under Chapter 11 of the Bankruptcy Code and will be adjudicated through
the bankruptcy proceedings.

                                      F-37



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

10. COMMITMENTS AND CONTINGENCIES (continued)

DISPOSITION OF MRHM

During the quarter ended June 30, 2000, the Company's Board of Directors
directed management to effect the disposition of MRHM. MRHM had total assets and
net assets approximating $538 and $29, respectively, as of June 30, 2000, and a
net loss from operations approximating $745 for the quarter then ended, before
any accruals related to office-closing costs. MRHM provided a variety of web
design and web hosting services. Management expected to continue, although to a
lesser extent, to provide such services after the successful disposition of
MRHM. The Company did not identify MRHM as a separate business line that
required discontinued operations accounting.

On July 31, 2000, negotiations for the sale of MRHM were discontinued and its
operations were largely terminated on August 1, 2000. A reduced staff provided
for the orderly transition of hosting operations to alternative providers and
the windup of development projects. In connection with such termination, the
Company recognized the impairment of $290 of fixed assets, various current
assets and deposits. MRHM had two office leases, which required minimum lease
payments aggregating $1,618 over the next five years. The leases were rejected
as part of the bankruptcy proceedings; see further discussion at Notes 2 and 5.

DISPOSITION OF SATELLITE OFFICES

The Company had wireless and dial-up internet service operations in five
satellite offices located in Concord and Petaluma, California, Beaumont and
Houston, Texas and Salt Lake City, Utah. The satellite offices have incurred
substantial losses from operations. During the first quarter of the year ended
March 31, 2001, the Board of Directors instructed management to evaluate such
offices to determine whether they should be retained and restructured, or sold.
The satellite offices had various office leases, which required minimum lease
payments aggregating $1,536 over the next five years. Substantially all of the
leases were rejected as part of the bankruptcy proceedings, see further
discussion in Notes 2 and 5.

Management reached a decision to sell the satellite offices and/or their
customer bases; since a sale was not affected in a timely manner, such offices
were closed in September and October 2000. A sharply reduced staff was providing
for the continuing operation of the interoffice network in order to bill and
serve the remaining customers; however, no new customers were being added to the
network. The minimal remaining Irvine, California wireless operations and
customers were sold to a third party, in an arms-length transaction, during the
quarter ended December 31, 2000 for $50. No significant operations remained at
March 31, 2001 in any of the Company's satellite offices. During the quarter
ended September 30, 2000, the Company recognized an impairment of $1,216 of
fixed assets in all the satellite offices in order to approximate their
estimated fair value.

The remaining operations of the Salt Lake City, Utah office were abandoned
effective July 2001 due to the Company's inability to effect a sale of the
office.
                                      F-38



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

11. RELATED PARTY TRANSACTIONS

The Company incurred $163 to an affiliate of Robert Santore for services
and products during the year ended March 31, 2000. Robert Santore is the nephew
of Mary Blake, the former Vice-Chairman of the Board of Directors of the
Company.

In April 1999, the Company issued to JustWebit, an entity in which J.R. Marple
has a substantial ownership interest, 50,000 shares valued at $102 for services.
In December of 1999, the Company issued to JustWebit 25,000 shares valued at
$247 for services. J.R. Marple is the son of Jon Marple, the former Chairman of
the Board of Directors of the Company.

At March 31, 2000, the Company was owed $98 from JustWebit, a company whose CEO
and principal shareholder is J.R. Marple. Of this amount, $50 represents the
amount J.R. Marple has agreed to pay to purchase the JustWebit domain name from
the Company. Such domain name was acquired in the Webit of Utah purchase during
a prior year. Such amount is to be repaid to the Company through the issuance of
84,700 shares of stock of JustWebit, which are traded over-the-counter, having a
fair value approximating $50. The remainder represents $31 due to the Company in
connection with an acquisition during the year ended March 31, 1999 and $17 cash
funds advanced during the year ended March 31, 2000. Such amounts were to be
repaid to the Company through the issuance of 68,600 shares of stock of
JustWebit, having a fair value approximating $60. Such shares were issued during
the year ended March 31, 2001 and were restricted pursuant to Rule 144. The
Company has determined the shares to be without value and has written off such
balance as of March 31, 2001.

The aforementioned transactions were not conducted on an "arms-length" basis.
Accordingly, the amounts tendered by the Company may be in excess of that which
would have been negotiated with independent third parties in the ordinary course
of business.

12. PROPOSED MERGER

As previously disclosed in the Company's March 31, 2001 financial statements,
the Company had been negotiating a merger with Norstar Telecommunications, Inc.
("Norstar"). During the year ended March 31, 2001, the Company received an
initial non-refundable deposit of $50 cash under terms of a binding Letter
of Intent ("LOI"). However, Norstar has breached such LOI by indicating that it
will not go forward with the merger.

                                      F-39



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

12. PROPOSED MERGER (continued)

The Company is currently negotiating a merger with FoneFriend Inc.
("FoneFriend"). During the year ended March 31, 2002, the Company received an
initial non-refundable deposit of $50 cash under terms of a binding Letter
of Intent ("LOI"). Based on such binding letter of intent ("LOI") executed June
13, 2002, the principal terms of the proposed transaction are as follows: (a)
FoneFriend would be merged into the Company, which would be the surviving
entity, (b) the Company would receive a total of $115 in cash by the closing
date, and its largest creditors would own approximately 5% of the post-merger
entity, (c) such cash consideration and most of the Company's other assets would
be transferred to a third party for the benefit of the Company's creditors, and
(d) FoneFriend stockholders would own the remaining 95% equity interest in the
surviving entity.

Under the terms of the LOI, the surviving entity would seek to register with the
Securities and Exchange Commission Company stock owned by existing shareholders
within six months of the effective date of the proposed merger. Absent such
registration, the surviving entity would either (1) issue additional shares to
such stockholders or (2) purchase such stock at an agreed-upon (but presently
undetermined) price.

Any proposed merger is subject to approval of the Bankruptcy Court.

13. MARCH 31, 2000 PARENT COMPANY FINANCIAL STATEMENTS

The Company has a significant subsidiary, UBN, which accounted for more than 25%
of the Company's consolidated net assets as of March 31, 2000 on an absolute
basis. Pursuant to UBN's equipment financing and line-of-credit arrangement (see
Note 7), UBN is restricted from dividending or loaning funds to Universal
Broadband Networks, Inc. or any of its subsidiaries. Presented below is the
unconsolidated condensed statements of operations and cash flows for the year
ended March 31, 2000, as if the Company had accounted for UBN under the equity
method of accounting.

Condensed Unconsolidated Statement of Operations

                                                            Year Ended
                                                             March 31,
                                                               2000
                                                           -------------

Revenues                                                   $      2,617
                                                           -------------
Operating expenses:
     Network expenses                                             1,427
     Payroll and related expenses                                 6,930
     Selling, general and administrative expenses                 6,864
     Depreciation and amortization                                1,675
                                                           -------------

Total operating expenses                                         16,896
                                                           -------------

Operating loss                                                  (14,279)

Loss from investment in UBN                                     (18,198)
Other income                                                         50
Interest income                                                      44
Interest expense                                                     (2)
                                                           -------------

Net loss                                                        (32,385)

Preferred stock beneficial conversion feature,
  related warrants and dividends                                 (1,027)
                                                           -------------

Net loss applicable to common shareholders                 $    (33,412)
                                                           =============

                                      F-41



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

13. MARCH 31, 2000 PARENT COMPANY FINANCIAL STATEMENTS (continued)

                Condensed Unconsolidated Statement of Cash Flows

                                                            Year Ended
                                                             March 31,
                                                               2000
                                                           -------------

Cash flows used in operating activities:
     Net loss                                              $    (32,385)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Bad debt expense                                           666
         Depreciation and amortization                            1,311
         Loss of UBN                                             18,198
         Stock issued for services                                2,273
         Stock options issued for compensation                    3,565
         Write-off of assets and goodwill                         1,227
         Other non-cash                                              39
         Changes in current assets and liabilities:
              Accounts receivable                                  (552)
              Prepaid expenses and other current assets             249
              Account payable and accrued liabilities             1,563
              Accrued payroll                                       170
                                                           -------------

Net cash used in operating activities                            (3,676)
                                                           -------------

Cash flows used in investing activities:
     Advances to related parties                                   (401)
     Advances to UBN                                             (5,507)
     Purchases of property and equipment                         (1,267)
     Increase in deposits                                            (1)
                                                           -------------

Net cash used in investing activities                            (7,176)
                                                           -------------

Cash flows provided by financing activities:
     Repayment of borrowings from related parties                  (188)
     Repayments of short-term debt and other obligations           (222)
     Proceeds from sale of convertible preferred stock            1,789
     Proceeds from sale of common stock                           9,775
                                                           -------------

Net cash provided by financing activities                        11,154
                                                           -------------

Net increase in cash                                                302
Cash at beginning of period                                         903
                                                           -------------

Cash at end of period                                      $      1,205
                                                           =============

                                      F-42



<PAGE>

  UNIVERSAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES (FORMERLY IJNT.NET, INC.)
                             (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>

14. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

                                  Year Ended March 31, 2002
                                        (In thousands)

<CAPTION>

                                                 First      Second       Third      Fourth
                                                Quarter     Quarter     Quarter     Quarter
                                               ---------   ---------   ---------   ---------
<S>                                            <C>         <C>         <C>         <C>
Revenues                                       $     16    $      1    $     --    $     --
                                               =========   =========   =========   =========
Revenues less network expenses                 $    (27)    $    (8)    $    (4)   $     20
                                               =========   =========   =========   =========

Net loss per statement of operations           $   (294)   $   (300)   $  1,777    $   (461)
Adjustments                                           --          --          --          --
                                               ---------   ---------   ---------   ---------
Net loss available for common shareholders     $   (294)   $   (300)   $  1,777   $    (461)
                                               =========   =========   =========   =========

                               Year Ended March 31, 2001 (1)(2)
                             (In thousands except per share data)

                                                 First      Second       Third      Fourth
                                                Quarter     Quarter     Quarter     Quarter
                                               ---------   ---------   ---------   ---------

Revenues                                       $    683    $    634    $    327    $     21
                                               =========   =========   =========   =========
Revenues less network expenses                 $ (1,655)   $ (2,256)   $   (181)   $    (42)
                                               =========   =========   =========   =========

Net loss per statement of operations           $(12,327)   $(21,825)   $(22,023)   $ (2,902)
Adjustments (see Note 1)                            (23)     (1,000)         --          --
                                               ---------   ---------   ---------   ---------
Net loss available for common shareholders     $(12,350)   $(22,825)   $(22,023)   $ (2,902)
                                               =========   =========   =========   =========

Basic and diluted loss per common share        $  (0.60)   $  (1.09)   $  (1.05)
                                               =========   =========   =========

                               Year Ended March 31, 2000 (2)(3)
                             (In thousands except per share data)

                                                 First      Second       Third      Fourth
                                                Quarter     Quarter     Quarter     Quarter
                                               ---------   ---------   ---------   ---------
Revenues                                       $    925    $    740    $    628    $    324
                                               =========   =========   =========   =========
Revenues less network expenses                 $    542    $    114    $   (329)   $ (1,057)
                                               =========   =========   =========   =========

Net loss per statement of operations           $ (2,091)   $ (3,183)   $ (7,120)   $(19,991)
Adjustments (see Note 1)                           (541)        (54)        (51)       (381)
                                               ---------   ---------   ---------   ---------
Net loss available for common shareholders     $ (2,632)   $ (3,237)   $ (7,171)   $(20,372)
                                               =========   =========   =========   =========

Basic and diluted loss per common share        $  (0.16)   $  (0.18)   $  (0.40)   $  (1.12)
                                               =========   =========   =========   =========
</TABLE>

(1)  The above net loss available for common shareholders for the second quarter
     of the year ended March 31, 2001 differs from the amount reported in the
     Company's September 30, 2000 Form 10-Q/A. As a result of certain warrants
     issued in connection with the sale of convertible preferred stock (see Note
     9), the previously reported amount increased by approximately $750 ($0.04
     per common share).

(2)  The above loss per share amounts for each quarter were computed based on
     the weighted average number of common shares outstanding during each
     quarter.

(3)  Data for the first, second and third quarters of the year ended March 31,
     2000 is per the amended 10-Q filings.

                                      F-43