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

                                   FORM 10-KSB

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

For the Fiscal Year Ended June 30, 1998       Commission File Number 0-24001

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

                                    Delaware
         (State or other jurisdiction of incorporation or organization)

                                   76-0552098
                      (I.R.S. Employer Identification No.)

                           5444 Westheimer, Suite 2080
                              Houston, Texas 77056
                                 (713) 622-9287
                        (Address, including zip code, and
                    telephone number, including area code, of
                    registrant's principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:  NONE

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

                                                 Title of Each Class
                                            Common Stock, $.01 Par Value

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [ ]

The issuer's revenues for the fiscal year ended June 30, 1998 were $ 0.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant  on September  22, 1998 was $ 523,123,  based on the closing price of
such  stock of $.5625 on such  date.  The  number of shares  outstanding  of the
registrant's  Common  Stock,  $.01 par value,  as of September 22, 1998 was 7.23
million.

Transitional Small Business Disclosure format (Check one): YES [ ]  NO [X]


<PAGE>



                                      INDEX
<TABLE>
<CAPTION>

                                                                                                          Page Number
<S>                                                                                                           <C> 
                                     PART I.

Items 1. & 2.     Business and Properties.                                                                        3

Item 3.           Legal Proceedings.                                                                             29

Item 4.           Submission of Matters to a Vote of Security Holders.                                           29

                                                      PART II.

Item 5.           Market for the Registrant's Common Equity and Related
                  Stockholder Matters.                                                                           29

Item 6.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.                                                           30

Item 7.           Financial Statements.                                                                          32

Item 8.  Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure.                                                           32

                                                      PART III.

Item 9.           Directors, Executive Officers, Promoters and Control
                  Persons; Compliance with Section 16(a) of the Exchange Act.                                    32

Item 10.          Executive Compensation.                                                                        33

Item 11.          Security Ownership of Certain Beneficial Owners and
                  Management.                                                                                    35

Item 12.          Certain Relationships and Related Transactions.                                                36

                                                      PART IV.

Item 13.          Exhibits and Reports on Form 8-K.                                                              37

</TABLE>




<PAGE>


ITEMS 1 and 2.  BUSINESS AND PROPERTIES.

                                  INTRODUCTION


         JVWeb,  Inc. (the "Company") was incorporated on October 28, 1997 under
the laws of the State of  Delaware.  The  Company  was  formed for  purposes  of
pursuing electronic commerce opportunities.  On May 20, 1998, the Company became
publicly-held  through the distribution by LS Capital Corporation ("LS Capital")
of  certain  of its  shares  of  the  Company's  common  stock  to LS  Capital's
stockholders.

         Electronic  commerce  opportunities  are  expected  to arise in several
different ways. First, the Company expects to offer products,  services, content
and  advertising  by means of sites on the  World  Wide Web (the  "Web")  of the
Internet.  The  Company  is  currently  developing  a Web site to offer  already
identified products,  and is in the processing of acquiring an on-line financial
publication  to offer  content.  The Company  expects to develop  additional Web
sites in the future to offer  products and services yet to be identified  and to
provide  content  (also yet to be  identified)  and  advertising  in  connection
therewith.  (For a description of the Company's current projects,  see "BUSINESS
AND PROPERTIES - Current  Projects.")  Although the Company may offer  products,
services,  content and advertising  directly (such as in the case of the initial
Web site now being developed and the on-line  publication  being acquired),  the
Company  believes  that it is much  more  likely  to offer  products,  services,
content and advertising through joint ventures with established  businesses.  In
the  case of  joint  ventures,  the  Company  expects  to  contribute  technical
expertise and (in certain  instances)  financial  assistance  in developing  the
joint ventures' Web sites,  while the joint venture partners will be responsible
for furnishing  the joint  ventures'  products or services,  the content for the
joint ventures' Web sites, and the related business expertise.  In addition, the
Company  expects to acquire  other  companies  to be  identified  in the future.
Acquisition  candidates  are expected to include  emerging  electronic  commerce
companies,  traditional companies with good prospects for significant electronic
commerce,  and Internet  service  companies  capable of enhancing  the Company's
Internet  resources.  The  Company  also  intends to  develop a  fee-for-service
division  to sell the  technological,  marketing  and other  abilities  that the
Company now has or in the future may acquire.

         The address of the  Company is 5444  Westheimer,  Suite 2080,  Houston,
Texas 77056,  and its telephone  number is  713/622-9287.  The Company's own Web
site is located at  http://wwwjvweb.com.  Information contained in the Company's
Web site  shall not be deemed to be a part of this  Annual  Report.  Unless  the
context indicates  otherwise,  the term "Company" shall include JVWeb, Inc., the
joint ventures in which it becomes a venturer, and its future subsidiaries.



<PAGE>


                                  RISK FACTORS

          In  addition  to the other  information  in this  Annual  Report,  the
following  risk  factors,  among  others,  should  be  considered  carefully  in
evaluating the Company and its business.

         1. Extremely Limited Operating History. The Company was incorporated in
October  1997 and at that  time  continued  preliminary  work  commenced  by the
founder  of  the  Company  several  months  earlier.  Accordingly,  there  is no
meaningful operating history upon which to base an evaluation of the Company and
its  business and  prospects.  The  Company's  business  and  prospects  must be
considered  in  light  of  the  risks,  expenses  and  difficulties   frequently
encountered  by  companies  in their  early stage of  development,  particularly
companies in new and rapidly evolving markets such as electronic commerce.  Such
risks  for the  Company  include,  but are  not  limited  to,  an  evolving  and
unpredictable  business  model and the  management  of growth.  To address these
risks,  the Company  must,  among other  things,  identify  and pursue  suitable
electronic  commerce  opportunities;  identify and enter into binding agreements
with  suitable  joint  venture  partners;   identify  and  consummate   suitable
acquisitions;  develop and increase the Company's customer bases;  implement and
successfully execute the Company's business and marketing strategy;  continue to
develop and upgrade the Company's technology and transaction-processing systems;
create and constantly improve the Company's Web sites; provide superior customer
service and order fulfillment; respond to competitive developments; and attract,
retain and motivate  qualified  personnel.  There can be no  assurance  that the
Company will be successful in  addressing  such risks,  and the failure to do so
could have a  material  adverse  effect on the  Company's  business,  prospects,
financial condition and results of operations.

         2. Fluctuations in Operating Results.  The Company's  operating results
are  expected to  fluctuate  in the future due to a number of  factors,  many of
which are outside the  Company's  control.  These  factors  include the level of
usage of the Internet; demand for products,  services and advertising offered on
the Company's Web sites;  the Company's  ability to pursue  suitable  electronic
commerce  opportunities,  enter into  suitable  joint  ventures  and  consummate
suitable  acquisitions  at a steady rate;  the Company's  ability to attract new
customers  at  a  steady  rate;  the  addition  or  loss  of  advertisers;   the
introduction  of new  products,  services  or Web  sites by the  Company  or its
competitors;  pricing changes for Web-based products,  services and advertising;
technical  difficulties with respect to the Company's Web sites;  costs relating
to  acquisitions;  and  general  economic  conditions  and  economic  conditions
specific to the  Internet and Web sites.  As a strategic  response to changes in
the  competitive  environment,  the Company  may from time to time make  certain
service, marketing or supply decisions or acquisitions that, while beneficial in
the long run, could have a material  adverse  effect on the Company's  quarterly
results of operations and financial condition.  The Company also expects that it
like other retailers may experience seasonality in its businesses in the future.
Due to all of the  foregoing  factors,  in some  future  quarter  the  Company's
operating  results  may  fall  below  the  expectations  of  investors  and  any
securities  analysts  who follow the Common  Stock.  In such event,  the trading
price of the  Common  Stock  would  likely  be  materially  adversely  affected.
Further, the Company believes that period-to-period comparisons of its financial
results may not  necessarily  be meaningful  and should not be relied upon as an
indication of future performance.

         3. Future  Capital  Needs;  Uncertainty  of Additional  Financing.  The
Company currently has no constant and continual flow of revenues.  The Company's
future  liquidity and capital  requirements  will depend upon numerous  factors,
including the success of the Company's Web sites. The Company may be required to
raise   additional  funds  through  public  or  private   financing,   strategic
relationships  or  other  arrangements.  There  can be no  assurance  that  such
additional  funding,  if needed,  will be available on terms  acceptable  to the
Company,  or at all.  Furthermore,  debt  financing (if  available)  may involve
restrictive covenants,  which may limit the Company's operating flexibility with
respect to certain business matters.  If additional funds are raised through the
issuance of equity securities,  the percentage  ownership of the stockholders of
the Company will be reduced,  stockholders may experience additional dilution in
net  book  value  per  share,  and  such  equity  securities  may  have  rights,
preferences or privileges senior to those of the holders of the Company's Common
Stock.  While the Company's need for additional capital can not now be precisely
ascertained  because of the  uncertainty  of the actual  growth of the  Company,
management  believes that the future  capital needs of the Company,  in order to
pursue the Company's business plan as desired, will exceed the Company's current
financial  position.  The Company  expects to finance its  operations for fiscal
1999 through cash flow from  operations,  proceeds  from the exercise of certain
outstanding  warrants  to  purchase  shares of Common  Stock,  and the  possible
private placement of the Company's equity securities. The Company is looking for
sources of additional  capital,  but there can be no assurance that such sources
can be found or that, if found,  the terms of such capital will be  commercially
acceptable  to the Company.  If adequate  funds are not  available on acceptable
terms,  the Company may be unable to take advantage of future  opportunities  or
respond to  competitive  pressures,  any of which could have a material  adverse
effect on the Company's business, results of operations and financial condition.

         4.   Dependence  on  the  Internet.   The  Company's   future   success
substantially  depends upon continued  growth in the use of the Internet and the
Web in order to  support  the sale of the  products,  services  and  advertising
offered by the Company on its Web sites. Rapid growth in the use of and interest
in the  Internet and the Web is a recent  phenomenon.  There can be no assurance
that communication or commerce over the Internet will become more widespread. In
addition,  to the extent that the Internet  continues to experience  significant
growth in the number of users and level of use,  there can be no assurance  that
the  Internet  infrastructure  will  continue  to be able to support the demands
placed upon it by such potential  growth or that the  performance or reliability
of the Web will not be adversely affected by this continued growth. In addition,
the  Internet  could  lose its  viability  due to delays in the  development  or
adoption of new standards and protocols  required to handle  increased levels of
Internet  activity or due to increased  governmental  regulation.  Changes in or
insufficient availability of telecommunications services to support the Internet
also could result in slower response times and adversely affect usage of the Web
and the Company's  Web sites.  If use of the Internet does not continue to grow,
or if the Internet  infrastructure  does not effectively support growth that may
occur, the Company's  business,  operating results and financial condition would
be materially adversely affected.

         5. Uncertain  Acceptance of the Internet as a Medium for Commerce.  The
success of the  Company's  business  plan will depend  upon the  adoption of the
Internet  as a medium for  commerce  by a broad base of  consumers,  vendors and
advertisers.  The  Company's  target  markets are  expected to be  comprised  of
consumers,  vendors and advertisers who have historically used traditional means
of commerce to conduct business.  Most of the Company's  customers,  vendors and
advertisers  will  have only  limited  experience  with the Web as a  commercial
medium  and may not  find  such a  medium  to be an  effective  way to  transact
business.  For the  Company  to be  successful,  these  consumers,  vendors  and
advertisers must accept and utilize novel ways of conducting business. Moreover,
critical issues  concerning the commercial use of the Internet,  such as ease of
access, security,  reliability,  cost and quality of service, development of the
necessary  infrastructure  (such as a  reliable  network  backbone)  and  timely
development and  commercialization of performance  improvements  (including high
speed  modems),  remain  unresolved and may affect the growth of Internet use or
the  attractiveness of conducting  commerce by means of Web sites. The Company's
ability to generate  significant  revenues will depend upon, among other things,
consumer,  vendor  and  advertiser  acceptance  of the Web as an  effective  and
sustainable  commercial  medium.  There can be no  assurance  that there will be
broad  acceptance  of the  Internet  as an  effective  medium  for  commerce  by
consumers,   vendors  and  advertisers  will  develop  successfully  or  achieve
widespread acceptance.

         6. Developing Market. The electronic market for products,  services and
advertising  has only recently begun to develop and is rapidly  changing.  As is
typical for a new and rapidly evolving market, demand for products, services and
advertising  over the  Internet is subject to a high level of  uncertainty,  and
there exist few proven  services and products.  Since the market for  electronic
commerce on the Internet is new and  evolving,  predictions  of the size of this
market or its future growth rate, if any, are difficult.  Moreover, no standards
have yet been  widely  accepted  for the  measurement  of the  effectiveness  of
Web-based  advertising,  and there can be no assurance  that such standards will
develop   sufficiently  to  support  Web-based   advertising  as  a  significant
advertising medium. In addition, there can be no assurance that advertisers will
determine  that  banner  advertising  offered  on Web sites is an  effective  or
attractive  advertising  medium,  and there can be no assurance that the Company
will effectively transition to any other forms of Web-based advertising,  should
they develop.  Furthermore,  certain  advertising  filter software  programs are
available that limit or remove advertising from an Internet user's desktop. Such
software,  if generally  adopted by users, may have a materially  adverse effect
upon the viability of  advertising  on the Internet.  Moreover,  there can be no
assurance that  consumers and vendors will determine that the electronic  medium
is an  effective  way to conduct  commerce.  If the  markets  for the  Company's
electronic commerce fail to develop, develop more slowly than expected or become
saturated with  competitors,  or if the Company's  electronic  commerce does not
achieve market  acceptance,  the Company's  business,  results of operations and
financial condition will be materially adversely affected.

         7.  Opportunity  Selection.  Probably  the  most  integral  part of the
Company's  business  strategy is the  identification  and pursuit of potentially
successful electronic commerce opportunities. There can be no assurance that the
Company will be able to identify successful electronic commerce opportunities or
that the Company will be able to pursue these opportunities successfully even if
identified.   There  is  no  specific   criterion   for   selecting   electronic
opportunities.  Accordingly,  management  will have  significant  flexibility in
selecting  such  opportunities.   The  failure  of  management  to  select  good
electronic commerce  opportunities would probably have a material adverse effect
on the Company's business, results of operations and financial condition.

         8. Uncertain  Acceptance of Brands.  While the Company expects to offer
the brands of other persons, the Company also intends to develop its own brands.
The Company  believes  that, due to the growing number of Internet sites and the
relatively  low barriers to entry,  the  importance  of brand  recognition  will
increase as more companies engage in commerce over the Internet. Development and
awareness of the Company's  brands will depend largely on the Company's  success
in establishing and maintaining positions as leaders in Internet commerce and in
providing high quality products and services,  which cannot be assured. In order
to attract  and retain  customers,  vendors and  advertisers  and to promote and
maintain the Company's brands in response to competitive pressures,  the Company
may find it necessary  to increase  its  marketing  and  advertising  budgets or
otherwise to increase  substantially  its  financial  commitment to creating and
maintaining brand loyalty among vendors and consumers.  If the Company is unable
to provide high quality products,  services and advertising or otherwise fail to
promote  and  maintain  its  brands,  or if the  Company is unable to (or incurs
significant expenses in an attempt to) achieve or maintain a leading position in
Internet commerce or to promote and maintain its brands, the Company's business,
results of operations  and  financial  condition  will be  materially  adversely
affected.

         9. Content and Graphic  Development.  Content and (to a lesser  degree)
graphic development  relating to the Company's Web sites are key elements to the
Company's success.  If these sites fail to have solid content (which is modified
on a continual basis) and appealing  graphics,  the Company expects that it will
fail to develop successfully its brands, and consumers,  vendors and advertisers
will not be attracted to, or will not continue to visit and utilize,  the sites.
The Company has relied and will  continue to rely  substantially  on content and
graphic development efforts of third parties. There can be no assurance that the
Company's  current or future  third-party  providers will effectively  implement
these  properties,  or that their efforts will result in significant  revenue to
the Company. Any failure to develop and maintain high-quality and successful Web
sites could have a material adverse effect on the Company's business, results of
operations and financial condition.

         10.  Internet  Commerce  Security  Risks.  A  significant   barrier  to
electronic   commerce  and   communications   is  the  secure   transmission  of
confidential  information  over  public  networks.  The  Company  will  rely  on
encryption and authentication  technology licensed from third parties to provide
the  security and  authentication  necessary to effect  secure  transmission  of
confidential  information.  There can be no assurance  that advances in computer
capabilities,  new  discoveries in the field of  cryptography or other events or
developments will not result in a compromise or breach of the algorithms used by
the Company to protect customer  transaction data. If any such compromise of the
Company's security were to occur, it could have a material adverse effect on the
Company's business,  results of operations and financial condition.  A party who
is able to  circumvent  the Company's  security  measures  could  misappropriate
proprietary information or cause interruptions in the Company's operations.  The
Company may be required to expend  significant  capital and other  resources  to
protect  against the threat of such security  breaches or to alleviate  problems
caused by such breaches. Concerns over the security of Internet transactions and
the privacy of users may also inhibit the growth of the Internet generally,  and
the  Web  in  particular,   especially  as  a  means  of  conducting  commercial
transactions.  To the extent  that  activities  of the  Company  or third  party
contractors  involve the storage and  transmission  of proprietary  information,
such as credit card  numbers,  security  breaches  could expose the Company to a
risk of loss or  litigation  and possible  liability.  There can be no assurance
that the  Company's  security  measures will prevent  security  breaches or that
failure to  prevent  such  security  breaches  will not have a material  adverse
effect on the Company's business, results of operations and financial condition.

         11.  Risks  Associated  with  Technological  Change.  The  Internet and
electronic markets are characterized by rapid technological  change,  changes in
user and customer  requirements,  frequent new service or product  introductions
embodying  new  technologies  and the  emergence of new industry  standards  and
practices  that could render the  Company's  existing  Web sites and  technology
obsolete.  The  Company's  performance  will depend,  in part, on its ability to
license  leading  technologies,  enhance its existing  services,  and respond to
technological advances and emerging industry standards and practices on a timely
and  cost-effective  basis.  The  development  of Web sites entails  significant
technical and business risks. There can be no assurance that the Company will be
successful in using new  technologies  effectively  or adapting its Web sites to
consumer,  vendor, advertising or emerging industry standards. If the Company is
unable, for technical,  legal,  financial or other reasons, to adapt in a timely
manner in response to changing market conditions or customer  requirements,  the
Company's  business,  results of  operations  and financial  condition  would be
materially adversely affected.

         12. Risk of System Failure;  Single Site. The Company's success largely
depends upon  communications  hardware and computer hardware made available by a
third party in a facility located in Arizona.  Like all computer  systems,  this
system is  vulnerable  to damage  from  earthquake,  fire,  floods,  power loss,
telecommunications  failures, break-ins and similar events. Despite the security
measures of the Company,  its servers are also  vulnerable to computer  viruses,
physical or electronic  break-ins and similar disruptive  problems,  which could
lead to interruptions,  delays, loss of data or cessation in service to users of
the  Company's  services  and  products.  The Company  does not  presently  have
redundant systems or a formal disaster recovery plan. The Company's does not now
and  will  not  for  the  foreseeable  future  maintain  business   interruption
insurance.  Any system  failure  that  causes  interruption  or an  increase  in
response  time of the  Company's  Web sites could result in less traffic to such
sites  and,  if  sustained  or  repeated,  could  reduce the  attractiveness  to
consumers,  vendors and  advertisers of the products,  services and  advertising
offered by the Company. In addition,  a key element of the Company's strategy is
to  generate  a high  volume of  visits  to and  activity  with  respect  to the
Company's  Web sites.  An increase in the volume of visits to the  Company's Web
sites  could  strain the  capacity of the  software or hardware  deployed by the
Company,  which  could  lead to slower  response  time or system  failures,  and
adversely  affect sales of products,  services and advertising and the number of
impressions received by advertising and thus the Company's advertising revenues.

         13. Reliance on Merchandise Vendors and Third Party Manufacturers.  The
Company  expects  that it will  entirely  depend  upon  vendors  and third party
manufacturers  to supply it with merchandise for sale through its Web sites, and
the  availability of merchandise is and will continue to be  unpredictable.  The
Company  expects  that  it  will  generally  have  no  long-term   contracts  or
arrangements with its vendors and manufacturers  that guarantee the availability
of merchandise for its businesses.  There can be no assurance that the Company's
current and future vendors and  manufacturers  will continue to sell merchandise
to or manufacture  merchandise for the Company or otherwise provide  merchandise
for sale  through the  Company's  Web sites or that the Company  will be able to
establish new vendor or manufacturer  relationships that ensure merchandise will
be available.  The Company will also rely on many of its vendors,  manufacturers
and its joint venture partners to process and ship merchandise to customers. The
Company will have limited  control over the shipping  procedures of its vendors,
manufacturers  and its joint venture  partners,  and shipments by these vendors,
manufacturers and joint venture partners may be subject to delays. Although most
merchandise sold by the Company is expected to carry a warranty  supplied either
by the manufacturer or the vendor and the Company will not be legally  obligated
to accept  merchandise  returns,  the Company may be voluntarily  constrained to
accept   returns  from   customers   for  which  the  Company  may  not  receive
reimbursements  from its vendors or  manufacturers.  If the Company is unable to
develop and maintain  satisfactory  relationships with vendors and manufacturers
on acceptable  commercial  terms, if the Company is unable to obtain  sufficient
quantities of  merchandise,  if the quality of service  provided by such vendors
and manufacturers falls below a satisfactory  standard or if the Company's level
of  returns  exceeds  its  expectations,  the  Company's  business,  results  of
operations and financial condition will be materially adversely affected.

         14.  Reliance on Other Third  Parties.  In addition to its  merchandise
vendors and manufacturers,  the Company's  operations will depend on a number of
third  parties.  The Company will have limited  control over these third parties
and will probably have no long-term  relationships with any of them. The Company
does not own a gateway onto the Internet,  but instead now and presumably always
will rely on an Internet  service provider to connect the Company's Web sites to
the Internet. The Company also will rely on a variety of technology that it will
license from third parties.  The loss of or inability of the Company to maintain
or obtain upgrades to any of these  technology  licenses could result in delays,
which would  materially  adversely  affect the  Company's  business,  results of
operations  and  financial  condition,  until  equivalent  technology  could  be
identified, licensed or developed and integrated.  Furthermore, the Company will
depend on hardware  suppliers for prompt  delivery,  installation and service of
servers and other equipment used to deliver the Company's products and services.
If the Company is unable to maintain satisfactory  relationships with such third
parties on acceptable  commercial terms, or the quality of products and services
provided  by such  third  parties  falls  below  a  satisfactory  standard,  the
Company's  business,  results of  operations  and  financial  condition  will be
materially  adversely affected.  In addition,  the Company will also depend upon
Web browsers for access to the products, services and advertising offered by it.

         15.  Protection  of  Intellectual  Property.  The  development  of  the
Company's  brands  depends  to a  significant  degree on the  protection  of its
trademarks and trade names. The Company has registered the "JVWeb",  "Dad & me",
and  "familylifestyle"  trademarks  in the United  States and claims  common law
trade  name  rights  in these  and  other  names.  Nonetheless,  there can be no
assurance  that the Company will be able to secure  significant  protection  for
these  trademarks.  Current and future  competitors of the Company or others may
adopt  product or service names  similar to the  Company's  trademarks,  thereby
impeding the Company's  ability to build brand identity and possibly  leading to
customer  confusion.  The inability of the Company to protect its trademarks and
trade  names might have a material  adverse  effect on the  Company's  business,
results of operations and financial condition.  In addition,  the Company may in
the future receive notices from third parties  claiming  infringement by aspects
of the Company's  businesses.  While the Company is not currently subject to any
such claim, any future claim, with or without merit, could result in significant
litigation  costs  and  diversion  of  resources,  including  the  attention  of
management,  and  require  the  Company  to enter  into  royalty  and  licensing
agreements,  which  could  have a  material  adverse  effect  on  the  Company's
business,  results of operations  and financial  condition.  In the future,  the
Company may also need to file  lawsuits to enforce  the  Company's  intellectual
property  rights,  to protect the Company's  trade secrets,  or to determine the
validity and scope of the proprietary rights of others. Such litigation, whether
successful or unsuccessful,  could result in substantial  costs and diversion of
resources, which could have a material adverse effect on the Company's business,
results of operations and financial condition.

         16. Regulatory Concerns. The Company is not currently subject to direct
regulation by any government agency in the United States, other than regulations
applicable  to  businesses  generally,  and  there  are  currently  few  laws or
regulations directly applicable to access to or commerce on the Internet. Due to
the  increasing  popularity  and use of the  Internet,  a  number  of  laws  and
regulations may be adopted with respect to the Internet, covering issues such as
user privacy,  pricing and characteristics and quality of products and services.
Such  legislation  could  dampen  the  growth  in use of the Web  generally  and
decrease the acceptance of the Web as a  communications  and commercial  medium,
and could  thereby have a material  adverse  effect on the  Company's  business,
results  of  operations   and   financial   condition.   In  addition,   several
telecommunications  carriers are seeking to have telecommunications over the Web
regulated  by the  Federal  Communications  Commission  (the  "FCC") in the same
manner as other  telecommunications  services.  For example,  America's Carriers
Telecommunications  Association  has  filed a  petition  with  the FCC for  this
purpose.  In  addition,  because the growing  popularity  and use of the Web has
burdened the existing telecommunications infrastructure and many areas with high
Web use have begun to experience interruptions in phone service, local telephone
carriers,  such as Pacific Bell,  have  petitioned the FCC to regulate  Internet
service  providers  and online  service  providers  in a manner  similar to long
distance  telephone  carriers  and to impose  access  fees on  Internet  service
providers and online service providers. If either of these petitions is granted,
or the relief sought therein is otherwise granted, the costs of communicating on
the Web could increase  substantially,  potentially slowing the growth in use of
the Web, which could in turn decrease the demand for the products,  services and
advertising  offered by the Company.  Any new  legislation  or regulation or the
application  of  existing  laws and  regulations  to the  Internet  could have a
material  adverse  effect  on the  Company's  business,  operating  results  and
financial condition. In addition, as the Company's products and services will be
available and sold over the Internet in multiple  states and foreign  countries,
and as the Company will sell to numerous  consumers  resident in such states and
foreign countries, such a jurisdiction may claim that the Company is required to
qualify to do business as a foreign entity in such jurisdiction.  The Company is
qualified  to do  business  in only two  states,  and  failure by the Company to
qualify  to do  business  as a  foreign  entity  in a  jurisdiction  where it is
required  to do so could  subject  the  Company to taxes and  penalties  for the
failure to qualify.  Any application of laws or regulations of a jurisdiction in
which the  Company is not  currently  qualified  could  have a material  adverse
effect on the Company's business, results of operations and financial condition.

         17. Other Potential Liability. Because materials may be downloaded from
the Company's Web sites and may be subsequently  distributed to others, there is
a possibility  that claims could be asserted against the Company on a variety of
legal  theories  (including  defamation,  negligence and copyright and trademark
infringement)  depending  on the  nature  and  content  of such  materials.  For
example, the Company could be liable for libel for any defamatory information it
provided  about a person,  for any losses  incurred  by a person in  reliance on
incorrect information  negligently provided by the Company and for copyright and
trademark  infringement  resulting  from  information  provided by the  Company.
Moreover,  the Company  expects  that it will enter into  agreements  with third
parties  whereby the Company may provide links to such third parties' Web sites.
A claimant might successfully argue that by providing such links, the Company is
liable for wrongful  actions by such third parties through such Web sites,  such
as defamation,  negligence and copyright and trademark infringement,  as well as
losses  resulting  from the products and services  sold by the third party.  The
Company is in the process of procuring general liability insurance.  Even if the
Company is successful in procuring this  insurance,  the insurance may not cover
all  potential  claims or may not be adequate to  indemnify  the Company for all
liability  that may be imposed.  Any  imposition  of liability or legal  defense
expenses that are not covered by insurance or is in excess of insurance coverage
could  have a  material  adverse  effect on the  Company's  business,  operating
results and financial condition.

         18.  Possible  Forfeiture  of Assets.  On July 31,  1998,  the  Company
entered  into an  agreement  to acquire  all of the  assets of an on-line  daily
financial publication for a purchase price of $140,000. The Company made several
payments on the purchase price. The Company has a remaining balloon  installment
in the amount of $85,000.  The Company does not now have funds  available to pay
this final  installment.  The  Company  is  working  to assure  that it has cash
available to make timely this  payment,  but there can be no assurance  that the
Company will be successful in this regard. The failure to make timely this final
installment could result in a forfeiture of the assets being acquired as well as
all amounts theretofore paid on the purchase price. The loss of these assets and
amounts of monies could have a material adverse effect on the Company.  For more
information  on this  transaction  and  the  related  risk,  see  "BUSINESS  AND
PROPERTIES - Current Projects - Wall Street Whispers."

         19.   Indemnification   of  Officers  and  Directors   for   Securities
Liabilities.  The Bylaws of the Company provide that the Company shall indemnify
any director,  officer,  agent and/or  employee as to those  liabilities  and on
those terms and  conditions as are specified in the General  Corporation  Law of
Delaware.  Further, the Company may purchase and maintain insurance on behalf of
any such  persons  whether or not the Company  would have the power to indemnify
such person against the liability insured against. The foregoing could result in
substantial  expenditures  by the Company and  prevent  any  recovery  from such
officers,  directors, agents and employees for losses incurred by the Company as
a result of their  actions.  Further,  the  Commission  takes the position  that
indemnification  is against the public  policy as  expressed in the Act, and is,
therefore, unenforceable.

         20. Competition.  The electronic  commerce market,  particularly on the
Internet,  is new, rapidly evolving and intensely  competitive,  and the Company
expects competition to intensify in the future. Certain current competitors have
established,   and  certain  other  current   competitors  (as  well  as  future
competitors)  may in  the  future  establish,  cooperative  relationships  among
themselves  or  directly  with  vendors to obtain  exclusive  or  semi-exclusive
sources  of  merchandise.   Accordingly,  new  competitors  or  alliances  among
competitors and vendors may emerge and rapidly  acquire market share.  Increased
competition may result in reduced operating margins,  loss of market share and a
diminished brand franchise,  any one of which could materially  adversely affect
the Company's business,  results of operations and financial condition.  Most of
the Company's current and potential competitors have and will have significantly
greater financial, technical, marketing and other resources than the Company. As
a result,  they may be able to secure merchandise from vendors on more favorable
terms than the Company,  and they may be able to respond more quickly to changes
in customer  preferences  or to devote  greater  resources  to the  development,
promotion and sale of their merchandise than the Company can.

         21. Management of Potential  Growth.  The Company expects to expand its
operations rapidly and  significantly.  This rapid growth is expected to place a
significant  strain  on the  Company's  management,  operational  and  financial
resources. In order to manage the expected growth of its operations, the Company
will be required to expand  existing  operations  (particularly  with respect to
customer service and  merchandising);  to improve on a timely basis existing and
implement  new  operational,  financial and inventory  systems,  procedures  and
controls,  including  improvement of its financial and other internal management
systems;  and to train,  manage and  expand  its  employee  base.  Further,  the
Company's  management  will be required to maintain  relationships  with various
merchandise vendors, freight companies, warehouse operators, other Web sites and
services,  Internet  service  providers  and other third parties and to maintain
control  over the  strategic  direction  of the  Company  in a rapidly  changing
environment.  If the  Company  is  unable  to  manage  growth  effectively,  the
Company's  business,  results of  operations  and  financial  condition  will be
materially adversely affected.

         22.  Potential  Acquisitions.  As part of its  business  strategy,  the
Company  expects to  acquire  complementary  companies,  products,  services  or
technologies.  There  can be no  assurance  that  the  Company  will  be able to
identify additional suitable acquisition  candidates or that the Company will be
able to acquire such candidates on acceptable terms. In addition, the successful
implementation  of this strategy  depends on the  Company's  ability to identify
suitable acquisition candidates,  acquire such companies on acceptable terms and
integrate  their  operations  successfully  with those of the Company.  Any such
transactions  would be  accompanied  by the risks  commonly  encountered in such
transactions.  Such  risks  include,  among  other  things,  the  difficulty  of
assimilating  the  operations  and  personnel  of the  acquired  companies;  the
potential  disruption  of the  Company's  ongoing  business;  the  inability  of
management  to maximize  the  financial  and  strategic  position of the Company
through the successful  incorporation of acquired  businesses and  technologies;
additional  expenses associated with amortization of acquired intangible assets;
the maintenance of uniform  standards,  controls,  procedures and policies;  the
impairment of relationships with employees,  customers,  vendors and advertisers
as a result of any  integration of new management  personnel;  and the potential
unknown  liabilities  associated  with  acquired  businesses.  There  can  be no
assurance that the Company would be successful in overcoming  these risks or any
other problems  encountered in connection with such acquisitions.  Due to all of
the foregoing,  the Company's pursuit of an overall acquisition  strategy or any
future acquisition may have a material adverse effect on the Company's business,
results of operations,  financial condition and cash flows. Although the Company
does not  expect to use cash for  acquisition  consideration,  to the extent the
Company  chooses to do so in the  future,  the Company may be required to obtain
additional financing,  and there can be no assurance that such financing will be
available on favorable  terms,  if at all. In  addition,  if the Company  issues
stock to complete any future acquisitions, existing stockholders will experience
further ownership dilution.  Finally,  Greg J. Micek, a director,  the president
and the controlling stockholder of the Company owning approximately 73.1% of the
Common Stock  considered on a fully diluted basis, has indicated that he intends
to maintain control of the Company, and that in this connection, he expects that
he will not cause the Company to enter into any  acquisition  that causes him to
lose such control.  Consequently,  the size of any acquisitions that the Company
may make in the foreseeable  future can be expected to be limited by Mr. Micek's
expressed intentions.

         23.  Reliance  Upon  Directors  and  Officers  and  Limited  Management
Resources. The Company substantially depends upon the efforts and skills of Greg
J. Micek, a director and the President of the Company.  The loss of the services
of Mr. Micek, or his inability to devote sufficient  attention to the operations
of the  Company,  would  have  a  materially  adverse  effect  on the  Company's
operations.  The Company does not maintain key man life  insurance on Mr. Micek.
In addition,  there can be no assurance  that the current level of management is
sufficient  to  perform  all   responsibilities   necessary  or  beneficial  for
management to perform. The Company's success in attracting  additional qualified
personnel  will depend on many  factors,  including  its ability to provide them
with  competitive  compensation  arrangements,  equity  participation  and other
benefits.  There  is no  assurance  that  the  Company  will  be  successful  in
attracting highly qualified individuals in key management positions.

         24. Lack of Relevant Experience by Management. The Company expects that
its  management  will  generally  have  little  or no direct  experience  in the
management or operation of the types of businesses  represented  by the products
and services that the Company will offer by means of Web sites,  either directly
or through joint ventures.  In the case of joint  ventures,  the Company expects
that its joint venture  partners will have a requisite level of experience,  but
there can be no assurance  that the Company's  management  will be familiar with
the joint venture's  proposed  business  enough to ascertain this.  Management's
lack of experience may make the Company more  vulnerable  than others to certain
risks, and it may also cause the Company to be more vulnerable to business risks
associated  with  errors in  judgment  that  could have been  prevented  by more
experienced  management.  As a result,  management's lack of previous experience
could have a material  adverse effect on the future  operations and prospects of
the Company.

         25. Control,  Cumulative Voting,  and Preemptive Rights.  Greg Micek, a
director  and the  President  of the Company,  owns  approximately  86.5% of the
outstanding  Common Stock (considered on an undiluted basis).  Cumulative voting
in the election of Directors is not  provided  for.  Accordingly,  the holder or
holders of a majority of the shares of Common Stock  (namely Mr.  Micek) is
able to elect all of the Company's  Board of Directors.  There are no preemptive
rights in connection  with the Common Stock.  Thus,  stockholders may be diluted
in their percentage  ownership of the Company in the event additional shares are
issued by the Company in the future.

         26.  Preferred  Stock.  The  Company's   Certificate  of  Incorporation
authorized the issuance of up to 10,000,000 shares of Preferred Stock, par value
$.01 per  share,  of which  none  were  issued  as of  September  3,  1998.  The
authorized  Preferred Stock  constitutes what is commonly  referred to as "blank
check"  preferred  stock.  This  type of  preferred  stock  allows  the Board of
Directors  from time to time to divide  the  Preferred  Stock  into  series,  to
designate each series,  to fix and determine  separately for each series any one
or more  relative  rights  and  preferences  and to issue  shares of any  series
without  further  stockholder  approval.  One of the effects of the existence of
authorized but unissued shares of preferred stock authorized in series may be to
enable the  Company's  Board of  Directors  to render it more  difficult,  or to
discourage  an  attempt,  to gain  control of the  Company by means of a merger,
tender offer at a control premium price,  proxy contest or otherwise and protect
the continuity of or entrench the Company's management,  which concomitantly may
have a potentially adverse effect on the market price of the Common Stock.

         27. Limited Trading Market; Limited Float. The Common Stock trades only
in the  over-the-counter  market on the OTC Electronic  Bulletin  Board.  Public
trading of the shares of Common Stock in this market  commenced  only  recently,
and such trading is still in the process of developing. The volume of trading in
the Common Stock has been extremely  light.  The Company is exerting  efforts to
increase  investor  awareness  and  interest  in the  Company  with  a  view  to
increasing the volume of trading and perhaps even the prices at which the Common
Stock is traded.  Thus far, the prices at which the Common Stock has traded have
fluctuated fairly widely on a percentage basis. See "MARKET FOR THE REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDER  MATTERS." There can be no assurance as to
the prices at which the Common Stock will trade in the future, although they may
continue  to  fluctuate  significantly.  Prices  for the  Common  Stock  will be
determined in the marketplace  and may be influenced by many factors,  including
the depth and liquidity of the markets for the Common Stock, investor perception
of the Company and the industry in which the Company  participates,  and general
economic and market conditions. In addition to the preceding, only approximately
9.6%  of the  shares  of  Common  Stock  outstanding  are  held by  persons  not
affiliated  with the Company.  The limited  float  resulting  from the foregoing
facts may make the Common  Stock less  liquid  than it would be in a more active
trading  market,  possibly  causing  holders of the Common Stock to retain their
shares longer than they may want. The resulting  limited liquidity may also have
the effect of  depressing  the price of the Common Stock.  The Company  believes
that the initial limited float will be eased to some extent over time as certain
warrants  to  purchase  the Company  are  exercised,  as shares of Common  Stock
subject to legal or contractual  restrictions become freely tradeable, as freely
tradeable shares are issued in connection with acquisitions,  and if the Company
elects to effect  additional  public  offerings of  additional  shares of Common
Stock.

         28.  Potential  Future Sales Pursuant to Rule 144.  Approximately  7.23
million shares of Common Stock are issued and outstanding, approximately 6.55 of
which are believed to be "restricted securities" as that term is defined in Rule
144  promulgated  under the Act.  Rule 144 provides in general that a person (or
persons  whose  shares are  aggregated)  who has  satisfied  a one-year  holding
period,  may sell within any three month period, an amount which does not exceed
the greater of 1% of the then outstanding  shares of Common Stock or the average
weekly trading volume during the four calendar weeks prior to such sale. Most of
the restricted  shares will have been outstanding for over one year near the end
of October 1998 and thus will then be eligible for sale under Rule 144. Rule 144
also  permits  the sale of shares,  under  certain  circumstances,  without  any
quantity  limitation,  by persons who are not  affiliates of the Company and who
have beneficially owned the shares for a minimum period of two years. Hence, the
possible sale of these restricted shares may, in the future dilute an investor's
percentage of freely  tradeable  shares and may have a depressive  effect on the
price of the Company's  securities and such sales,  if  substantial,  might also
adversely  effect the  Company's  ability to raise  additional  equity  capital.
However,  most of the  approximately  6.55  shares  believed  to be  "restricted
securities"  are held by  affiliates  of the  Company  and must (by law) be sold
subject to the volume  limitations of Rule 144 described above, thus restraining
the number of shares that can sold in any period of time.

         29. Risk of Potential to Dilution Future Share  Issuances;  Outstanding
Warrants.  The Company has registered an aggregate of 5,000,000 shares of Common
Stock to be  offered  by the  Company on a  continuous  or delayed  basis in the
future in connection with anticipated business combination transactions.  Nearly
all of these shares are still  available  for issuance in the future.  Moreover,
the Company has  registered  an aggregate of 1,000,000  shares of Common  Stock,
which the  Company  may issue to  outside  consultants  to  compensate  them for
services  provided to the Company.  Again,  nearly all of these shares are still
available for issuance in the future.  The issuance of shares in connection with
acquisitions and to consultants and the consideration or services to be received
therefor  will be  entirely  within the  discretion  of the  Company's  Board of
Directors.  Although  the Board of Directors  intends to utilize its  reasonable
business  judgment to fulfill its fiduciary  obligations  to the Company's  then
existing  stockholders in connection with any such issuance,  future issuance of
additional  shares could cause  immediate  and  substantial  dilution to the net
tangible  book  value of those  shares  of  Common  Stock  that are  issued  and
outstanding  immediately prior to such  transaction.  Any future decrease in the
net  tangible  book value of such  issued and  outstanding  shares  could have a
material effect on the market value of the shares. In addition,  the Company has
outstanding  certain  warrants to purchase  shares of Common Stock.  The Company
also has the obligation to issue  additional such warrants in the future.  These
warrants  confer on the holder the ability to purchase shares of Common Stock at
specified  prices,  which may be less than the then current  market price of the
Common Stock. A total of 7.5 million  additional shares of Common Stock would be
issued  if all of the  warrants  that are  currently  outstanding,  and that the
Company is obligated to issue, were to be exercised.  Any shares of Common Stock
issued pursuant to these warrants would further dilute the percentage  ownership
in the  Company  held by existing  stockholders.  The terms on which the Company
could  obtain  additional  capital  during  the  life of these  warrants  may be
adversely  affected  because of such potential  dilution and because the holders
thereof might be expected to convert or exercise them if the market price of the
Common Stock exceeds their conversion or exercise price, a time when the Company
would,  in all  likelihood,  be able to  obtain  equity  capital  on terms  more
favorable than those provided for by the warrants.

         30. Risks Relating to Low-Priced Securities.  The trading prices of the
Common  Stock has been below $5.00 per share.  As a result of this price  level,
trading in the Common  Stock is subject  to the  requirements  of certain  rules
promulgated  under the  Exchange  Act which  require  additional  disclosure  by
broker-dealers in connection with any trades generally  involving any non-NASDAQ
equity security that has a market price of less than $5.00 per share, subject to
certain  exceptions.  Such rules require the delivery,  prior to any penny stock
transaction,  of a disclosure schedule explaining the penny stock market and the
risks associated  therewith,  and impose various sales practice  requirements on
broker-dealers who sell penny stocks to persons other than established customers
and  accredited   investors  (generally   institutions).   For  these  types  of
transactions,  the broker-dealer must make a special  suitability  determination
for the  purchaser  and have  received the  purchaser's  written  consent to the
transaction prior to sale. The additional burdens imposed upon broker-dealers by
such requirements may discourage  broker-dealers from effecting  transactions in
the Common Stock  affected,  which could severely limit the market  liquidity of
the Common Stock.

         31. No  Dividends.  The  holders of the Common  Stock are  entitled  to
receive  dividends  when,  as and if declared by the Board of  Directors  out of
funds legally  available  therefore.  To date, the Company has not paid any cash
dividends.  The Board of Directors  does not intend to declare any  dividends in
the foreseeable future, but instead intends to retain all earnings,  if any, for
use in the Company's  business  operations.  If the Company  obtains  additional
financing,  restrictions  are  likely to be placed on the  Company's  ability to
declare any dividends.

         32.  Potential Year 2000 Problems.  The Company believes that it has no
potential internal Year 2000 problems.  Nonetheless, the Company recognizes that
the computer systems of financial  institutions and other vendors with which the
Company  will do business  could have Year 2000  problems  that could affect the
Company. However, the Company has no greater exposure to these types of problems
than other businesses in general.  Nonetheless,  the Company could be materially
adversely  affected by these  problems  in ways that can not now be  quantified.
However,  to avoid being  adversely  affected by the Year 2000 problems of other
persons, the Company has instituted a program of carefully screening persons and
companies  with which it will do a material  amount of business  and  monitoring
their efforts to avoid their own Year 2000 problems.



<PAGE>


                                    BUSINESS

                               Industry Background

         The  Internet  is  an  increasingly   significant   global  medium  for
communications,  content and online commerce.  Growth in Internet usage has been
fueled by a number of factors, including the large and growing installed base of
personal  computers in the workplace and home,  advances in the  performance and
speed of personal computers and modems,  improvements in network infrastructure,
easier  and  cheaper  access to the  Internet  and  increased  awareness  of the
Internet among businesses and consumers.

         The increasing  functionality,  accessibility  and overall usage of the
Internet and online services have made them an attractive commercial medium. The
Internet  and  other  online  services  are  evolving  into a unique  sales  and
marketing  channel,  just as retail stores,  mail-order  catalogs and television
shopping have done. In theory,  electronic  retailers have  virtually  unlimited
electronic  shelf  space  and  can  offer  customers  a vast  selection  through
efficient searches and retrieval interfaces.  Moreover, electronic retailers can
interact  directly  with  customers  by  frequently   adjusting  their  featured
selections,   editorial  insights,  shopping  interfaces,   pricing  and  visual
presentations.  Beyond the benefits of selection,  purchasing is more convenient
than shopping in a physical retail store because electronic shopping can be done
24 hours a day and does not  require a trip to a store.  Web  sites can  present
advertising  and marketing  materials in new and  compelling  fashions,  display
products and services in electronic  catalogs,  offer  products and services for
sale electronically,  process transactions and fulfill orders, provide customers
with rapid and  accurate  responses  to their  questions,  and  gather  customer
feedback  efficiently.  The minimal cost to develop and maintain a Web site, the
ability to reach and serve a large and global group of customers  electronically
from a central  location,  and the potential for personalized  low-cost customer
interaction,  provide  additional  economic  benefits for electronic  retailers.
Unlike  traditional  retail  channels,  electronic  retailers  do not  have  the
burdensome costs of managing and maintaining  expensive retail real estate and a
significant retail store  infrastructure or the continuous  printing and mailing
costs of catalog marketing. Furthermore, electronic retailers are generally able
to conduct their  businesses  with fewer  employee than  traditional  retailers.
Because of these advantages over  traditional  retailers,  electronic  retailers
have the potential to build large,  global customer bases quickly and to achieve
superior  economic  returns over the long term.  An  increasingly  broad base of
products  and  services is  successfully  being sold  electronically,  including
computers, travel services, brokerage services, automobiles, music and books. If
this trend  continues,  the migration  from  traditional  shopping to electronic
shopping will effect  dramatic  changes in retailing as it has  heretofore  been
conducted.

         In addition to the offering of products and services through electronic
commerce,  the Internet has created a new medium for disseminating content, such
as the content  historically  delivered by  newspapers,  magazines and journals.
Electronic  dissemination of content offers numerous  advantages over historical
mediums  of  content  dissemination.  First,  the  content  can be  provided  to
consumers  more  quickly,  as the delays  required by printing  and delivery are
avoided.  For example,  a magazine  that  ordinarily is mailed for delivery on a
particular day can be made available  electronically  as soon as the magazine is
otherwise  ready for print,  at least one day before  anticipated  delivery.  In
addition,  content can be updated on a real time basis so that only current (and
no outdated)  content appears.  Moreover,  the electronic  content can be linked
instantaneously to related content of interest. While newspapers,  magazines and
journals can offer only still-shot  photography,  electronic  commerce can offer
moving and even live  pictures  much akin to  television.  Equally (if not most)
important,  electronic  content can be distributed at a much lower cost compared
to historical mediums because electronic dissemination does not involve printing
and  delivery  costs.  The new medium of content  dissemination  provided by the
Internet  has in turn  lead  to new  forms  of  advertising,  especially  banner
advertisements  that appear as Web sites are  displayed.  As the presence on the
Web of  suppliers  of  content  and  advertising  increases,  the new  forms  of
advertising such as the banner  advertisements  should increase in prominence as
well, thus creating additional revenue opportunities.

         Although  businesses are pursuing  electronic  commerce  rapidly and at
increasing rates, the basic  differences of electronic  commerce from historical
commerce require  companies to take  fundamentally  new approaches.  A number of
Internet  professional services firms have emerged to assist businesses with the
development and implementation of their electronic commerce strategies. However,
these firms tend to be small and focused on a  particular  aspect of  electronic
commerce,  apparently  lacking the necessary depth and integration of strategic,
technical and creative  skills to meet all the  electronic  commerce  needs of a
business.  After  analyzing  the  very  fragmented  Internet  service  industry,
management has concluded that:

         1.       Most  traditional  advertising  and  marketing  agencies  have
                  neither  a  proven  track  record  of  success  in the area of
                  electronic  commerce and lack the extensive  technical  skills
                  (such  as  application  development,  and  legacy  system  and
                  database  integration)  required to solve increasingly complex
                  electronic commerce problems.

         2.       Most vendors of computer and technology  products and services
                  lack the  creative  and  marketing  skills  required  to build
                  audiences and deliver unique and compelling  content,  and are
                  further   constrained   by  their  need  to  recommend   their
                  proprietary brands.

         3.       Internet access service  providers,  whose core strength is in
                  providing  Internet  access and site hosting,  typically  lack
                  both  the  necessary  creative  and  application   development
                  skills.

         Management  believes that to provide fully competent Internet services,
a service  provider must  possesses a full range and  integration  of strategic,
technical and creative skills required for electronic commerce.

         Businesses  seeking to realize  the  benefits  provided  by  electronic
commerce face a formidable  series of  challenges  presented by the need to link
business and marketing  strategies,  new and rapidly  changing  technologies and
continuously updated content. The establishment and maintenance of a Web site to
pursue electronic commerce requires significant  technical expertise in a number
of  areas,   such  as  electronic   commerce   systems,   security  and  privacy
technologies,   application  and  database  programming,  mainframe  and  legacy
integration  technologies and advanced user interface and multimedia production.
Marketing  expertise  in  a  number  of  areas  (including  the  development  of
audiences,  greater search engine  presence,  and broader ranges of links to the
site) is also required. Few businesses (especially small, emerging and mid-sized
businesses)  appear  to have the  time,  money,  and  strategic,  technical  and
creative  skills to implement an electronic  commerce  strategy on their own. In
addition, management believes that the novelty, complexity and rapid development
of electronic commerce has left many businesses  (especially small, emerging and
mid-sized  businesses)  bewildered and reluctant to act, despite a strongly felt
need to become involved in electronic commerce.

         Furthermore, the Company believes that most firms providing services to
develop and implement  electronic  commerce  strategies  charge on a flat-fee or
time and  materials  basis.  Under these  pricing  approaches,  the service firm
profits  from  providing  the services  regardless  of whether or not the client
business profits from the services provided.  Accordingly,  the interests of the
client and the service  provider  are not aligned  because the client  bears the
entire loss of a failed electronic  commerce strategy while the service provider
bears none of this risk.  Management  believes  that  these  pricing  approaches
engender a suspicion that the service  provider may not be candidly  assessing a
client's electronic  commerce potential,  lest the service provider dissuade the
prospective  client  and  miss  an  opportunity  for a  fee.  While  a  business
contemplating an electronic  commerce  strategy may be concerned about missing a
business  opportunity that may be necessary to bolster or preserve the business'
competitive  posture,  the  business  is  equally  concerned  about  avoiding  a
worthless  investment  in  money,  time and  business  readjustment.  Management
believes that flat-fee and time and materials pricing approaches further inhibit
businesses' willingness to undertake electronic commerce strategies.

         Overall  the  Company  believes  that  electronic   commerce   presents
excellent  business  opportunities  for the foreseeable  future.  Because of the
relative  novelty of electronic  commerce,  the Company believes that the market
for electronic  commerce is fairly  wide-open,  although  market  leadership has
already  been  established  in a number  of  respects.  Nonetheless,  plenty  of
opportunities  still  exist,  especially  with  regard  to small,  emerging  and
mid-sized businesses.  The Company believes that customer  unfamiliarity and the
fragmented state of the electronic  commerce market creates an opportunity for a
company with fully integrated strategic,  technical and creative Internet skills
that can assist businesses while sharing the risk imposed by electronic commerce
strategies.  Prior to the present,  the number of consumers with Internet access
was  probably  too small for  small,  emerging  and  mid-sized  businesses  (the
Company's target prospects) to participate  successfully in electronic commerce.
The Company believes that the present represents an excellent time to enter into
new markets  created by  electronic  commerce at a time when entry is easier and
market position can be better established than it may be if entry were attempted
further into the future.

         Despite the Company's optimism about the future of electronic commerce,
the  pursuit of a plan of a business  plan based on  electronic  commerce is not
without  considerable  risks.  For  more  information  about  these  risks,  see
"BUSINESS  AND  PROPERTIES  - RISK  FACTORS  -  Dependence  on the  Internet,  -
Uncertain  Acceptance  of the  Internet as a Medium for  Commerce,  - Developing
Market,  -  Internet   Commerce  Security  Risks,  -  -  Risks  Associated  with
Technological  Change,  - Risk of System  Failure;  Single  Site,  -  Regulatory
Concerns, and - Other Potential Liability."

                               The JVWeb Solution

         The  Company  was  founded  to seek  out  and  capitalize  on  business
opportunities  presented by electronic  commerce.  The Company believes that the
anticipated migration from traditional shopping to electronic shopping,  and the
anticipated  increase in the electronic  dissemination of content,  will present
for the foreseeable future excellent business opportunities to sell products and
services  that are now either not  available at all or are  available  only to a
limited  extent in electronic  commerce,  and to offer new forms of  advertising
made  available  by the  Internet.  While the  Company  may pursue some of these
opportunities  on its own, the Company expects that it will pursue most of these
opportunities  with joint  venture  partners  who have  established  businesses,
products and services. The Company intends to offer to prospective joint venture
partners  technical  Internet  expertise  (and in  certain  instances  financial
assistance) for an ownership interest in the resulting electronic  business,  in
lieu of an up-front payment of cash. The Company  believes that,  because of the
strongly  perceived need to be engaged in electronic  commerce and the hesitancy
of many established  businesses to pursue electronic  commerce on their own (due
to  their   unfamiliarity  with  electronic  commerce  and  the  unique  way  of
approaching  it and the concern about  bearing a substantial  loss from a failed
electronic  commerce  strategy),  the Company  should  have for the  foreseeable
future an ample array of joint  venture  prospects.  The Company also intends to
develop a full, integrated ensemble of strategic,  technical and creative skills
required for electronic commerce.  Currently,  the Company relies on third party
vendors to provide these skills.  However,  the Company intends actively to seek
acquisitions to give these skills to the Company internally.

         Key   components  of  the   Company's   solution  to  the  question  of
capitalizing on the anticipated growth in electronic commerce,  the migration of
traditional shopping to electronic shopping,  and the increase in the electronic
dissemination of content, include:

                  Identification   and   Selection   of   Electronic    Commerce
         Opportunities. Although the number of businesses engaging in electronic
         commerce  by means of Web  sites is  growing  rapidly,  the  number  of
         businesses  that have not yet  engaged,  and the number of products and
         services that have not been offered and content not made available,  in
         electronic  commerce remain very large. The Company intends to maintain
         an active program of locating electronic commerce opportunities, and to
         select only those opportunities that present the greatest likelihood of
         success.

                  Joint Ventures. Although the Company expects to undertake some
         electronic commerce  opportunities  alone, the Company believes that it
         will undertake most  electronic  commerce  opportunities  through joint
         ventures  with  established,   profitable  businesses  whose  products,
         services  or content (in most cases) are not  currently  being  offered
         electronically.  The Company  would  furnish  expertise  in  electronic
         commerce (and in certain instances financial  assistance) for an equity
         interest in the resulting electronic  business,  in lieu of an up-front
         payment of cash.  Because of the  Company's  willingness  to enter into
         such an  arrangement,  the Company  expects to be an  attractive  joint
         venture partner for many established business seeking to become engaged
         in electronic commerce. This willingness will allow selected businesses
         to enter into electronic commerce with minimal financial investment and
         risk,  while providing the Company with a substantial  potential return
         for its services and financial  contributions.  The  Company's  limited
         experience  thus far  indicates  that for the  foreseeable  future  the
         Company  will  have an  ample  array of joint  venture  prospects.  The
         Company  expects  that  for  the   foreseeable   future  the  financial
         assistance that the Company will provide to a joint venture in which it
         participates  may range from fairly  minimal  amounts to  approximately
         $100,000  at  the  high  end.  In  order  to  provide  this   financial
         assistance,  the  Company  will  have to  procure  funds  from  various
         sources, which are discussed in "RISK FACTORS - - Future Capital Needs;
         Uncertainty of Additional  Financing" above.  There can be no assurance
         that the Company will be successful in procuring these funds.

                  Electronic   Store   Economics.    By   pursuing    electronic
         opportunities as the Company expects, the Company will in effect become
         an  electronic   retailer.   Electronic   retailers  enjoy   meaningful
         structural economic advantages relative to traditional retailers.  They
         enjoy significantly  improved inventory  turnover,  avoid investment in
         expensive retail real estate and realize reduce personnel requirements.
         Further, electronic retailers serve a global market through centralized
         operations, allowing their investments in Web sites, content, marketing
         and  technology  to be leveraged  over a  relatively  large sales base.
         Beyond the benefits of selection, purchasing products and services from
         an electronic  retailer is more  convenient than shopping in a physical
         retail store because the electronic retailer is open 24 hours a day and
         shopping  does not require a trip to a store.  Products  can be shipped
         directly to the customer's  home or office.  The Company  believes that
         customers  may buy more  products and  services  because they have more
         hours to shop and can act immediately on a purchase impulse. Because an
         electronic  retailer  has a global  reach,  it can deliver an extremely
         broad selection to customers in rural, international or other locations
         that cannot support traditional  retailers offering comparable products
         and  services.   Web  sites  may  include  not  only  the  content  and
         applications  dealing  directly  with  products  and services and their
         purchase,   but  also  stimulating  content  to  inform  and  entertain
         customers  while shopping,  thus  encouraging the shopper to return for
         more  visits and to make more  purchases.  Over time,  the  Company can
         accumulate  substantial preference and behavioral information that will
         allow it to customize targeted sales efforts and to provide value-added
         services to its customers.

                  Content  Opportunities.  The  Company  also  expects to pursue
         opportunities  created by the  relatively  new  ability to  disseminate
         content electronically.  Many businesses that disseminate content (such
         as  newspapers,  magazines  and  journals)  continue to use  historical
         delivery methods,  primarily print. Electronic dissemination of content
         offers  numerous   advantages   over  historical   methods  of  content
         dissemination,  such as quicker delivery, more up-to-date content, more
         flexible  presentation  using such techniques as live video,  audio and
         links  to  related  content,   and  much  lower  costs  of  production.
         Electronic content  dissemination has lead to new forms of advertising,
         such  as  banner   advertisements.   In  addition,   providing  content
         electronically on a limited, sample basis is expected to increase sales
         of the underlying  hardcopy content.  The Company intends to seek joint
         ventures  with  existing  content  providers to provide  their  content
         electronically to increase subscription and advertising revenues.

                  Acquisitions.   The   Company   intends   actively   to   seek
         acquisitions  to  develop a full,  integrated  ensemble  of  strategic,
         technical  and  creative  skills  required  for  electronic   commerce.
         Currently,  the Company  relies on third party vendors to provide these
         skills.  However,  the Company foresees great benefits by being able to
         provide  these  skills  internally.  While a small  number of companies
         providing  integrated Internet skills are already  well-established and
         growing,  management  believes that the market for integrated  Internet
         services is currently underserved.



<PAGE>


                                    Strategy

         The Company's  objective is to take  advantages of electronic  commerce
opportunities.  The Company  plans to attain this goal through the following key
strategies:

                  Electronic Commerce Opportunities. The Company intends to seek
         attractive electronic commerce opportunities for it to undertake on its
         own or through joint ventures with established businesses.  The Company
         intends to maintain a program of actively seeking  electronic  commerce
         opportunities and selecting only those  opportunities  that present the
         greatest  likelihood for success.  The Company's success will depend on
         its ability to  identify  and  successful  pursue  electronic  commerce
         opportunities as they arise.

                  Create  Customer  Loyalty by  Delivering  a  Compelling  Value
         Proposition.   In  connection   with  the   Company's   commerce-driven
         opportunities,  the  Company's  goal  is to  deliver  to the  Company's
         customers  the  benefits  of  electronic  commerce  and by  maintaining
         relentless  customer  focus.  The  Company  will  strive  to offer  its
         customers compelling value through innovative use of technology,  broad
         selection,  high-quality  content,  a high level of  customer  service,
         competitive pricing and personalized services. In addition, the Company
         will seek to offer its  customers a  high-quality  shopping  experience
         through  informative and  entertaining  content,  as well as simple and
         efficient navigation capabilities.

                  Build Strong Brand  Recognition.  The Company's strategy is to
         develop,   promote,   advertise  and  increase  the  brand  equity  and
         visibility of its products,  services and advertising through excellent
         service  and  a  variety  of  marketing  and  promotional   techniques,
         including advertising on other Web sites and other media, conducting an
         ongoing public relations campaign and developing business alliances and
         partnerships.

                  Create a Superior Economic Model. Because the Company will not
         be burdened by the costs or legacy of physical store networks,  related
         personnel, and printing and delivering of content, the Company believes
         it will have an inherent  economic  advantage  relative to  traditional
         retailers and providers of content. The Company's goal is to capitalize
         on this  advantage by  aggressively  driving  revenue growth to achieve
         economies  of  scale  and  by  incorporating   technological   advances
         throughout its Web sites.

                  Maintain  Technology Focus and Expertise.  A  state-of-the-art
         interactive  commerce  platform is necessary  to enhance the  Company's
         service offering,  leverage the unique characteristics of retailing and
         electronic content delivery,  and enable a superior economic model. The
         Company will be committed to  developing,  acquiring  and  implementing
         technology-driven     enhancements     to    its    Web    sites    and
         transaction-processing  systems. Among other technology objectives, the
         Company intends to provide increasingly  valuable  personalized service
         programs,  make user  interfaces  as  intuitive,  engaging  and fast as
         possible and  continuously  improve the  efficiency of its  fulfillment
         activities.

                  Pursue Incremental Revenue Opportunities.  The Company intends
         to  leverage  its brands,  electronic  commerce  experience,  operating
         infrastructures  and customer bases to broaden its presence and develop
         additional  revenue  opportunities.   In  addition,  the  Company  will
         consider   developing   incremental   revenue   opportunities   through
         affiliated  or related Web sites,  related  product  areas,  geographic
         expansion  or  acquisition  of  complementary  businesses,  products or
         technologies.   Finally,   the  Company's   customer   demographic  and
         substantial   site  traffic   create  a  meaningful   opportunity   for
         advertising sales, the sale of demographic  information and the sale of
         links to other sites to be featured on the Company's sites.

                  Strengthen Electronic Commerce Abilities.  The Company intends
         to  continue  to build a  critical  mass of  strategic,  technical  and
         creative talent primarily  through  acquisitions in order to strengthen
         its  electronic  commerce  abilities.  The Company  intends to continue
         efforts  to  identify,  review  and  integrate  the  latest  electronic
         commerce   technologies   and   accumulating  and  deploying  the  best
         demonstrated  practices  for  developing  and  implementing  electronic
         commerce strategies.

                  Develop Additional  Strategic  Relationships.  The Company has
         developed   a  number  of   informal   strategic   relationships   with
         advertisement  agencies,  web developers,  site content managers,  site
         hosts and other  persons  whose  services are  necessary to develop and
         implement an  electronic  commerce  strategy.  None of these  strategic
         relationships has yet resulted in a legal binding  relationship.  While
         the Company  intends to develop the  ability to render  these  services
         internally,  the Company also intends to continue developing  strategic
         relationships  so that the  Company  can have  adequate  access to such
         services for the  foreseeable  future.  The Company expects that it may
         ultimately  acquire  some  of  the  firms  with  which  it  establishes
         strategic relationships.

                  Attract and Retain Exceptional Employees. The Company believes
         that versatile and experienced employees provide significant advantages
         in the rapidly evolving market in which it will compete. The Company is
         committed to building a talented  employee  base and to  attracting  an
         experienced management team.

                              Opportunity Selection

         Management  believes  that  opportunities  in  electronic  commerce are
either commerce-driven or content-driven.  Commerce-driven opportunities involve
the sale of products and services through electronic mediums, such as electronic
stores.  Content-driven  opportunities involve the provision of content (such as
that  historically  provided by  newspapers,  magazines  and  journals)  through
electronic  mediums,  the  attraction  of  consumers  to such  content,  and the
offering of advertising  (and even products and services) in connection with the
provision of such content. The Company expects to pursue both commerce-driven or
content-driven opportunities.

         Currently   the  Company   learns  of  all  its   electronic   commerce
opportunities through word-of-mouth  referrals. For the present, the Company has
been able to learn of a sufficient number of electronic  commerce  opportunities
by this means.  However, in the future as the Company grows, the Company intends
to advertise for joint venture prospects  primarily  through the Internet,  once
regulatory constraints have been complied with. Moreover, the Company may engage
investment bankers,  brokers and other  intermediaries to locate these prospects
as well.

         Once a joint venture  prospect is presented,  a thorough  study will be
undertaken of the prospect's  strategic market position,  business  requirements
and existing  systems and  capabilities,  to determine the  likelihood  that the
prospect's  business will succeed in electronic  commerce.  After the study, the
Company's  site  management  team  (composed  of  the  site  administrator,  web
marketing  consultant,  financial  controller  and project  manager)  accepts or
rejects the prospect. This decision is based on a number of factors, such as the
prospect's  historical or prospective  ability to fulfill orders,  the lack of a
clearly perceived electronic commerce strategy, the lack of perceived electronic
market  interest  and the need for an initial  budget  too high to  warrant  the
related risk. Currently,  the Company intends to charge a $2,500 application fee
to defer the costs of screening a prospect. If the Company decides not to pursue
a joint venture with the prospect, the Company will develop a basic Web site for
the prospect in consideration of the application fee.

         If a prospect is accepted,  the Company enters into  negotiations  with
the prospect to formalize an on-going  joint venture  relationship.  The Company
expects that the joint ventures it forms will assume the form of corporations or
limited  liability  companies  organized  in  Delaware  (a  favorable  state for
corporations),  Texas (the  state in which the  Company  is  headquartered),  or
another favorable jurisdiction. The Company expects that it will own between 20%
to 80% of the outstanding  equity  interests in each joint venture  depending on
the relative  contributions of the venturers.  The  documentation  governing the
joint venture will delineate the respective  responsibilities of the Company and
its joint venture partner.  In the case of the Company,  these  responsibilities
are expected to include the contribution of necessary  strategic,  technical and
creative skills and (in certain  instances)  financial  assistance in developing
the joint  venture's  Web site.  (For the  present,  the Company will act as the
coordinating  consultant  and will utilize  third party vendors in providing the
foregoing  skills;   however,  the  Company  intends  to  acquire  these  skills
internally,   primarily  through  acquisitions.)  The  joint  venture  partner's
responsibilities  will include the furnishing of the joint ventures' products or
services,  the  content  for the joint  ventures'  Web  sites,  and the  related
business  expertise.  The Company  expects that it and its joint venture partner
will have  management  authority with respect to the respective  areas for which
they have responsibility.  The capital  contributions of the venturers should be
fairly  minimal,  and will be worked out on a  case-by-case  basis.  The Company
expects  that as the joint  ventures  with  commerce-driven  Web  sites  receive
revenues,  such  revenues  will be first  used to  reimburse  the joint  venture
partner for the costs of providing the joint venture's product or services, then
such  revenues will be used to pay other joint  venture  expenses,  and then the
remainder  will  be  distributed  to the  venturers  in  accordance  with  their
percentage  ownership.  A similar  scheme will be used for joint  ventures  with
content-driven Web sites,  except that the joint ventures' revenues are expected
to  result  from  additional  advertising  and  additional  subscription  to the
underlying  hardcopy  publication  resulting  from the Web  sites.  The  Company
expects  that the  documentation  governing  the joint  venture  will  include a
buy-sell arrangement whereby either the Company or its joint venture partner may
terminate its relationship  with the other by setting the price and terms of the
purchase of one of the  venturer's  interest and allowing the other  venturer to
elect to sell to or buy out the  venturer  setting  the price and terms for such
price and upon such terms.  The Company also expects that the terms of the joint
ventures  will be renewable on an annual basis and the  documentation  governing
the joint venture will provide for the sale of the joint venture's business upon
dissolution  either to a third  party,  or to the  Company or its joint  venture
partner at an appraised price.

         The  Company  expects  that for the  foreseeable  future the  financial
assistance  that  the  Company  will  provide  to a joint  venture  in  which it
participates may range from fairly minimal amounts to approximately  $100,000 at
the high end. In order to provide this  financial  assistance,  the Company will
have to procure funds from various sources, which are discussed in "RISK FACTORS
- - Future Capital Needs;  Uncertainty of Additional Financing" above. There can
be no assurance that the Company will be successful in procuring these funds.

                                    Web Sites

         The proper  development and implementation of a Web site for a business
involves a number of steps.  First,  a thorough study is undertaken to determine
the likelihood that the business will succeed in electronic  commerce.  Once the
study determines that the business is likely to succeed in electronic  commerce,
a strategy for  developing  a Web site is  developed  by a team  composed of the
business principals, advertising agency, web developer and content site manager.
A domain name is agreed upon and obtained.  The Web site is then "story boarded"
or laid out conceptually and graphically. A web developer develops the structure
of the Web  site,  including  electronic  commerce  systems;  host  integration;
implementation  of  third-party  applications  and  security  technologies;  and
integration of hardware,  software and Internet  access  products.  A compelling
user  interface  is  created  to attract  and hold the  attention  of the target
audience  while   conforming  to  brand  images  and  marketing   campaigns.   A
relationship  with a  third-party  vendor  is  established  to  provide  secure,
state-of-the-art, high-availability Web site hosting and integrated services for
e-mail and secure electronic  commerce.  Once  operational,  a Web site requires
ongoing support services for content maintenance, site administration, technical
problems,  assistance with the hosting environment, and software support. As the
Web site nears  completion,  electronic  marketing  objectives  are developed to
establish and increase Web site traffic, strengthen brand awareness and generate
sales leads.  Electronic  media planning and purchasing,  and electronic  public
relations is undertaken.  This is followed by efforts to optimize the Web site's
search engine presence,  increase site access through hyperlink  recruitment and
disseminate  key  messages to  Internet  newsgroups,  mailing  lists and forums.
Typically a Web site starts as a basic site costing several thousand dollars. It
can then become  increasingly  more  complex  through  the  addition of more Web
pages,  links and commercial  capability.  Ultimately,  an extremely complex Web
site can cost several million dollars.



<PAGE>


                            Electronic Retail Stores

         Many,  if not  most,  of the  Company's  commerce-driven  Web sites are
expected to assume the form of an electronic  retail store.  Customers  enter an
electronic retail store through a Web site and, in addition to ordering products
and  services,  can conduct  targeted  searches,  browse from among  highlighted
selections,   read  content  provided,   register  for  personalized   services,
participate in promotions and check order status.

                  Browsing.  As a customer proceeds through the store, he or she
         encounters  graphic images of featured products and services.  Clicking
         with the mouse on any of these images pulls up more  information  about
         the featured product and service, as well as a button which, if clicked
         on, adds the product or service to the customer's  order. The Company's
         electronic   stores  are  expected  to  offer  visitors  a  variety  of
         highlighted subject areas and special features. To enhance the shopping
         experience  and  increase  sales,  the Company are  expected to feature
         various products and services on a rotating basis throughout the store.
         These images of featured  products and services  appear one or two at a
         time,  in addition  to  whatever  material  the  customer  specifically
         requested.

                  Ordering.  To purchase a product or service,  customers simply
         click  on a button  to add the  product  or  service  to their  virtual
         shopping baskets.  Customers can add and subtract products and services
         from their  shopping  baskets as they  browse,  prior to making a final
         purchase  decision,  just as in a physical  store.  To execute  orders,
         customers  click on the buy button and are prompted to supply  shipping
         and credit  card  details,  either by e-mail,  fax or  telephone.  This
         information  will be stored on a secure server and need not be provided
         again  by  repeat  customers.   The  personal  password  allows  repeat
         customers to automatically  access their previously  provided  shipping
         and credit card  information.  The Company's system will  automatically
         confirm each order by e-mail to the customer shortly after the order is
         placed and will advise  customers  by e-mail  shortly  after orders are
         shipped.

                  Availability and  Fulfillment.  The Company does not expect to
         carry very much inventory but will rely almost exclusively on its joint
         venture  partners  and  third  party  vendors  and   manufacturers  for
         fulfillment  of orders.  Orders will be received by the Company's  site
         administrator,  who will then  notify  and  direct  the  related  joint
         venture partner or third party vendor to fulfill the order. Most of the
         Company's products are expected to be available for immediate shipment,
         while  others  are  available  for  shipment  within  48 to  72  hours.
         Customers  will be  permitted  to  select  from a variety  of  delivery
         options,   including  overnight  and  various  international   shipping
         options, as well as gift-wrapping services. The Company will use e-mail
         to notify  customers  of order  status under  various  conditions.  The
         Company will seek to provide rapid and reliable fulfillment of customer
         orders.

                  Content.  The Company's  electronic retail stores are expected
         to offer  numerous  forms of content to entertain and engage  shoppers,
         enhance the customer's  shopping  experience  and encourage  purchases.
         These  forms will  include  articles  by experts on  subjects  in which
         visitors to the Company's Web sites are expected to be interested, chat
         rooms in which  visitors  can  communicate  with  each  other  and with
         selected  persons in whom visitors are expected to be  interested,  and
         contests in which visitors have a chance to win a prize.

                  Electronic Community. By creating an electronic community, the
         Company  hopes to  provide  customers  with an  inviting  and  familiar
         experience  that  will  encourage  them  to  return  frequently  to the
         Company's  Web sites and to interact  with other  users,  and that will
         promote loyalty and repeat purchase.  In addition to the content of the
         Web  sites,  the  Company  intends  to  establish  chat  rooms in which
         visitors to the Web sites, who presumably will have something in common
         with each other, can communicate with each other in real time.  Experts
         and authors of the  content  featured  on the  Company's  Web sites are
         expected to participate in these chat rooms,  thus giving  visitors the
         opportunity  to engage in a dialogue and acquire  information  in which
         they are interested.

                  Customer  Service  and  Personalized   Services.  The  Company
         believes  that  its  ability  to  establish   and  maintain   long-term
         relationships  with its  customers  and  encourage  repeat  visits  and
         purchases depends, in part, on the strength of its customer support and
         service operations and staff. Furthermore,  the Company values frequent
         communication  with  and  feedback  from  its  customers  in  order  to
         continually improve its electronic stores and its services. The Company
         will offer e-mail addresses to enable customers to request  information
         and to encourage feedback and suggestions.  The Company will maintain a
         team of customer  support and service  personnel  for handling  general
         customer  inquiries,  answering  customer  questions about the ordering
         process,  and  investigating  the  status  of  orders,   shipments  and
         payments.  The Company will also offer a toll-free  line for  customers
         who are  reluctant to enter their  credit card numbers  through the Web
         site.  The  Company  will  automate  certain  of the tools  used by its
         customer  support and service staff,  and the Company intends to pursue
         actively  on-going  enhancements  to and  automation  of  its  customer
         support  and  service  systems and  operations.  The Company  currently
         expects to notify its customers  electronically by e-mail as orders are
         received and shipped.  The Company also expects to notify its customers
         by e-mail of products,  services and other matters in which they may be
         interested.   The  Company  also   expects  to  notify  its   customers
         electronically  by  e-mail  on a  regular  basis as to  promotions  the
         Company is then running.

                  Collaborative   Filtering.   The  Company  intends  to  add  a
         collaborative  filtering service to its personalized  service offerings
         in the future. The collaborative  filtering service will function as an
         expert reviewer that develops a relationship  with  customers,  helping
         them to find  products  and  services  they  may  like  based  on their
         preferences.

                                Current Projects

Dad&me.com

         The Company's first project was the development of its wholly-owned Web
site known as  "www.dadandme.com."  This site  became  operational  on March 20,
1998,  and  continues  to be  developed.  The Company  has not yet  aggressively
marketed this site, and does not intend to do so until it completes  development
of the site and has  entered  into  certain  co-marketing  agreements  now being
negotiated.  This site is dedicated to fortifying  and enhancing  fatherhood and
offering products sold under the "Dad & me" logo. The concept  originated from a
series of children  books written by Greg J. Micek, a director and the President
of the  Company.  All  authorship  rights  pertaining  to these  books have been
assigned to a subsidiary of the Company. This www.dadandme.com site will feature
content  and  products  addressed  specifically  to  fathering  issues.  Initial
products  will number  approximately  20 and are  expected to include  T-shirts,
sweatshirts,  polo shirts,  pen and pencil sets, books, mugs and picture frames.
The  www.dadandme.com Web site features articles on parenting and a chat room in
which  visitors  can  communicate  with  each  other  and with an  authority  on
children.  The Company is using  www.dadandme.com  as a test site for future Web
sites to be developed by the Company.  Several other Web sites  currently  under
consideration   are   expected  to   commence   full-scale   development   after
www.dadandme.com   becomes   fully   operational.   The  Company   expects  that
www.dadandme.com    will   eventually   be   link   with   another   Web   site,
www.familylifestyle.com,  a Web site expected  (through links) to serve as a hub
for a series of commercial  sites  dedicated to family  issues and products.  In
this regard,  the Company has entered into an agreement to become the  exclusive
on-line  distributor for "Frogletz",  Chameleon Casual's line of children's play
clothing.

Wall Street Whispers

         On July 31,  1998,  the Company  entered  into an  agreement  (the "WSW
Agreement") to acquire all of the assets (collectively, the "Assets") comprising
a financial publication know as "Wall Street Whispers" (the "Publication").  The
Publication  is  an  on-line  daily   financial   publication   that  summarizes
information  from over 15 analysts  sources  under  contract.  The WSW Agreement
provides that title to the Assets will be  transferred  to the Company upon full
payment  of the  purchase  price for the  Assets  (the  "Purchase  Price").  The
Purchase Price for the Assets is $140,000. The Company made a downpayment toward
the Purchase  Price in the amount of $25,000 and three  additional  installments
each in the amount of $10,000.  The WSW Agreement provides that the Company must
pay a final  balloon  installment  in the amount of $85,000 by October 15, 1998.
The Company  does not now have funds  available  for the October  15th  payment.
However,  the Company has the ability to issue  shares of the  Company's  common
stock to pay the  outstanding  amount in lieu of the payment of cash.  Shares of
the  Company's   common  stock  issued  as  payment  are  credited  against  the
outstanding  balance in the manner provided for in the WSW Agreement.  There can
be no assurance  that the issuance of shares will satisfy the Company's  payment
obligations. The Company is also working to assure that it has cash available to
make timely the October 15th payment.  The WSW Agreement  provides  that, if the
Company fails to pay timely the required  installments when due, the sellers may
immediately  terminate the WSW Agreement and be freed from their  obligations to
transfer ownership of the Assets to the Company. In such event, the Company will
forfeit all payments made on the Purchase Price thus far. In addition, under the
WSW Agreement,  the sellers are obligated to obtain certain third party consents
to the transfer of the Assets.  If the sellers fail to obtain these  consents by
the time the Company  stands ready to pay the remaining  balance of the Purchase
Price, the Company may immediately terminate the WSW Agreement and be freed from
its obligation to acquire  ownership of the Assets.  Moreover,  the Company will
also be entitled to a full refund of all  payments  made on the  Purchase  Price
thus far.

Heitmann S.A.C.

         The  Company  has formed a  strategic  alliance  with  Heitmann  S.A.C.
("Heitmann"),  a company  based in the United  Kingdom.  Heitmann has  designed,
written,  translated and communicated  technical  information for over 25 years,
working  with  some of the  world's  largest  multinationals.  Because  it has a
network of 11 offices across Europe and two production  facilities in the United
States and works in the  world's 25 most used  languages,  Heitmann  has a broad
geographical reach. Heitmann has a particular emphasis in new media distribution
and deploys  proprietary  expertise in the  publishing  of Internet and Intranet
technologies. Since 1994 Heitmann has produced over 2,000 successful interactive
information  projects.  Pursuant  to their  strategic  alliance,  Heitmann  will
provide Web development and other Internet related technical  services on behalf
of the Company,  and the Company will market these  technical  capabilities on a
fee for service basis in the United States. This new strategic partnership is an
outgrowth of the relationship between the two companies that has solidified over
time with the  assistance  provided by Heitmann in the creation of the Company's
showcase   websites   www.jvweb.com   and   www.dadandme.com.   These   projects
demonstrated  the ability of the two companies to use Internet tools to complete
Web projects across international boundaries.  The Company and Heitmann have not
entered into a legally binding agreement with regard to their relationship,  but
they intend to explore, through their strategic alliance, the basis for entering
into a legally binding agreement in the future.

                                  Acquisitions

         The  Company  intends  to pursue an active  acquisition  program  in an
effort to foster the  Company's  growth  over and above the  growth  that can be
achieved  internally.  The Company believes that there are a number of potential
acquisition candidates that satisfy its acquisition  objectives.  The Company is
currently discussing the acquisitions of several companies.  These companies are
engaged in a variety of businesses (such as advertising  services,  web hosting,
merchandise  fulfillment and web development and integration) that would further
enable the Company to provide Internet and electronic commerce services. Each of
the companies  with which the Company is currently  engaged in  discussions  has
annual  revenues  of less than  $250,000.  The  Company  has not yet  reached an
agreement in principle with regard to the acquisition of any of these companies.
There is no assurance that any  acquisitions  will result from  discussions with
any of these companies.  Acquisition candidates are expected to include emerging
electronic  commerce  companies,  traditional  companies with good prospects for
significant  electronic  commerce,  and Internet  service  companies  capable of
enhancing  the  Company's  Internet  resources.  Some of these may  include  the
Company's joint venture partners and third party vendors.

         Management  will be  dedicated  to  identifying  potential  acquisition
candidates.  The Company  may in the future  retain the  services of  investment
bankers,  brokers and other  intermediaries  to assist in identifying  potential
acquisition  candidates.  Management  will also engage in  negotiations  and due
diligence activities with each acquisition candidate to explore whether it meets
the Company's operating  strategy,  and will work to complete the acquisition of
suitable candidates.  The Company will stress to each acquisition  candidate the
advantages of merging with the Company,  including the benefits of being part of
an organization committed to growth.  Following the closing of each acquisition,
the Company  intends to move rapidly to integrate the acquired  company into the
Company's operations.

         The Company has not developed, nor does it currently intend to develop,
a valuation  model and a  standardized  transaction  structure  it will use on a
consistent  basis  for  its  anticipated  acquisitions.   Instead,  the  Company
anticipates  considering each acquisition on a case-by-case basis.  However, the
Company expects that the purchase price for acquisition  candidate will be based
on quantitative factors, including historical revenues, profitability, financial
condition and contract backlog, and the Company's qualitative  evaluation of the
candidate's  management  team,  operational  compatibility  and  customer  base.
Nonetheless,  the Company expects to acquire suitable candidates through mergers
in exchange for shares of Common  Stock,  and  5,000,000  shares of Common Stock
have been register in this connection and for this purpose.

         The   acquisitions   are  expected  to  be  accounted   for  using  the
pooling-of-interests  method of accounting.  However,  some  acquisitions may be
accounted  for using the  purchase  method of  accounting.  Under this method of
accounting,  for each  acquisition,  a portion of the  purchase  price  would be
allocated  to the  tangible  and  identifiable  intangible  assets  acquired and
liabilities  assumed based on their  respective  fair values on the  acquisition
date.  This  portion  would  include both (i) amounts  allocated  to  in-process
technology and immediately  charged to operations and (ii) amounts  allocated to
completed  technology and amortized on a straight-line  basis over the estimated
useful life of the  technology of six months.  The portion of the purchase price
in excess of tangible and identifiable intangible assets and liabilities assumed
would be allocated to goodwill and amortized on a  straight-line  basis over the
estimated period of benefit,  which ranges from one to two years. The results of
operations  of the  acquired  entity  would be  consolidated  with  those of the
Company as of the date the Company  acquires  effective  control of the acquired
entity,  which  generally  would occur prior to the formal legal  closing of the
transaction and the physical exchange of acquisition consideration. In addition,
the Company  may grant  stock  options to  employees  of an acquired  company to
provide  them with an incentive to  contribute  to the success of the  Company's
overall  organization.  As a result of both the purchase accounting  adjustments
and  charges  for the  stock  options  just  described,  the  Company  may incur
significant non-cash expenses related to its acquisitions.

         The successful  implementation  of the Company's  acquisition  strategy
depends on the Company's  ability to identify suitable  acquisition  candidates,
acquire such  companies  on  acceptable  terms and  integrate  their  operations
successfully  with  those of the  Company.  There can be no  assurance  that the
Company will be able to do so.  Moreover,  in pursuing  acquisitions the Company
may compete with companies with similar  acquisition  strategies.  Most of these
competitors  will be larger and have greater  financial and other resources than
the Company.  Competition  for these  acquisition  targets  could also result in
increased  prices for  acquisition  targets and a  diminished  pool of companies
available for  acquisition.  Acquisitions  also involve a number of other risks,
including  adverse  effects on the  Company's  reported  operating  results from
increases  in  goodwill  amortization,  acquired  in-process  technology,  stock
compensation  expense and increased  compensation  expenses resulting from newly
hired employees,  the diversion of management  attention,  risks associated with
the subsequent  integration of acquired businesses,  potential disputes with the
sellers of one or more acquired  entities and the failure to retain key acquired
personnel.  Client  satisfaction  or performance  problems with an acquired firm
could also have a material  adverse impact on the reputation of the Company as a
whole, and any acquired company could  significantly  fail to meet the Company's
expectations.  Due to all of the foregoing,  the Company's pursuit of an overall
acquisition strategy or any individual completed,  pending or future acquisition
may have a  material  adverse  effect  on the  Company's  business,  results  of
operations,  financial  condition and cash flows.  If the Company  issues Common
Stock to complete future  acquisitions as it expects to, there will be ownership
dilution  to  existing  stockholders.  In  addition,  to the extent the  Company
chooses to pay cash  consideration  in such  acquisitions,  the  Company  may be
required to obtain additional  financing and there can be no assurance that such
financing will be available on favorable terms, if at all.

                              Intellectual Property

         The Company regards its service marks,  trademarks,  trade dress, trade
secrets and similar intellectual property as critical to its success, and relies
on trademark law, trade secret  protection  and  confidentiality  and/or license
agreements  with its  employees,  customers,  partners and others to protect its
proprietary  rights.  The Company pursues the registration of its trademarks and
service marks in the U.S.,  and has applied for the  registration  of certain of
its trademarks and service marks.  Effective trademark,  service mark, and trade
secret  protection  may not be available in every country in which the Company's
products and services are made available electronically. The Company may license
to third  parties  in the  future  certain of its  proprietary  rights,  such as
trademarks.  While the  Company  will  attempt to ensure that the quality of its
brands are  maintained by such  licensees,  there can be no assurance  that such
licensees will not take actions that might materially adversely affect the value
of the Company's  proprietary rights or reputation,  which could have a material
adverse effect on the Company's  business,  prospects,  financial  condition and
results of  operations.  There can be no  assurance  that the steps taken by the
Company to protect its proprietary rights will be adequate or that third parties
will not infringe or misappropriate  the Company's  trademarks,  trade dress and
similar  proprietary  rights. In addition,  there can be no assurance that other
parties will not assert infringement claims against the Company. The Company may
be subject to legal  proceedings  and claims  from time to time in the  ordinary
course  of  its  business,  including  claims  of  alleged  infringement  of the
trademarks  and  other  intellectual  property  rights of third  parties  by the
Company and its licensees. Such claims, even if not meritorious, could result in
the expenditure of significant financial and managerial resources.

                              Market and Marketing

         The Company's  objective is to take  advantages of electronic  commerce
opportunities.  The Company's  marketing will be focused on developing a flow of
potential electronic commerce opportunities for the Company's consideration, and
developing sales of the products,  services and advertising  offered through the
electronic commerce opportunities selected by the Company.

         Currently,  the  Company  learns  of all of  its  potential  electronic
commerce  opportunities  through  word-of-mouth  referrals.  In the future,  the
Company  intends to  advertise  for  electronic  commerce  opportunities  on the
Internet once  regulatory  constraints  have been complied with, and the Company
may engage intermediaries and brokers to locate these prospects as well. One way
or the other,  the Company  intends to  maintain  an active  program of locating
electronic commerce opportunities.

         With respect to the Company's products and services offered through Web
sites,  the Company's  marketing  strategies  will be designed to strengthen its
brand names,  increase customer traffic to its Web sites,  build strong customer
loyalty,   maximize   repeat   purchases   and   develop   incremental   revenue
opportunities.  The  Company  intends to build  customer  loyalty by  creatively
applying  technology to deliver  personalized  programs and service,  as well as
creative  and  flexible  merchandising.  The  Company  will be  able to  provide
increasingly  targeted and customized  services by using the extensive  customer
preference  and  behavioral  data  obtained as a result of its  experience.  The
Internet allows rapid and effective  experimentation and analysis,  instant user
feedback and efficient  "redecorating of the store for each and every customer,"
all of which  the  Company  intends  to  incorporate  in its  merchandising.  In
contrast to traditional  direct-marketing  efforts,  the Company's  personalized
notification   services  will  send  customers  highly  customized   notices  at
customers'  request.  By offering  customers a compelling and personalized value
proposition,  the Company will seek to increase the number of visitors that make
a purchase,  to encourage  repeat visits and  purchases  and to extend  customer
retention.  Loyal, satisfied customers also generate  word-of-mouth  advertising
and awareness,  and are able to reach thousands of other customers and potential
customers because of the reach of electronic commerce

         The  Company  will  employ a variety  of  media,  program  and  product
development,  business  development and promotional  activities to achieve these
goals. The Company intends to place  advertisements on various Web sites.  These
advertisements  usually take the form of banners that encourage readers to click
through  directly to the Company's Web sites.  The Company also intends to enter
into co-marketing  agreement  pursuant to which links to the Company's Web sites
will be featured on other,  non-Company  Web sites.  The Company also intends to
engage in a coordinated  program of print advertising in specialized and general
circulation newspapers and magazines.  In the future it may begin advertising in
other media. This activity will be undertaken with the hope of the Company being
featured in a wide variety of television shows,  articles and radio programs and
widely-read portions of the Internet,  such as portions included on Netscape and
Yahoo!

                                   Technology

         The Company has implemented a broad array of site management,  customer
interaction,  transaction-processing  and fulfillment services and systems using
commercially available, licensed technologies. The Company's current strategy is
to license commercially  available technology whenever possible rather than seek
internally developed solutions.

         The Company will use a set of applications for accepting and validating
customer orders, organizing, placing and managing orders with vendors, receiving
product and assigning it to customer orders,  and managing  shipment of products
and services to customers based on various ordering criteria. These applications
will also manage the process of  accepting,  authorizing  and charging  customer
credit  cards.  In  addition,  the  Company's  systems will allow it to maintain
ongoing automated e-mail  communications with customers  throughout the ordering
process at a negligible  incremental  cost.  These  systems will  automate  many
routine  communications  entirely,  facilitate  management  of  customer  e-mail
inquiries and allow  customers (on a self-service  basis) to check order status,
change their e-mail  address or password,  and check  subscriptions  to personal
notification services.

         A group of systems administrators and network managers will monitor and
operate the Company's Web sites,  network operations and  transaction-processing
systems.  The continued  uninterrupted  operation of the Company's Web sites and
transaction-processing  systems is  essential  to its  businesses,  and the site
operations  staff is expected to ensure,  to the greatest extent  possible,  the
reliability of the Company's Web sites and transaction-processing systems.

                                   Competition

         The electronic  commerce market is new,  rapidly evolving and intensely
competitive,  the Company  expects such  competition to intensify in the future.
Barriers to entry are minimal,  and current and new  competitors  can launch new
Web sites at a relatively low cost.  The Company  expects that it will encounter
fierce  competition  with regard to any product or service that it offers in the
future. Competitive pressures created by any current or future competitors could
have a material adverse effect on the Company's business,  prospects,  financial
condition  and results of  operations.  The Company  believes that the principal
competitive  factors  in its  markets  will  be  brand  recognition,  selection,
personalized  services,  convenience,  price,  accessibility,  customer service,
quality  of  editorial  and other  site  content  and  reliability  and speed of
fulfillment,  and the  Company  intends  to compete  vigorously  in all of these
aspects. The Company expects that most of its current and potential  competitors
will have longer  operating  histories,  larger  customer  bases,  greater brand
recognition and significantly  greater financial,  marketing and other resources
than the Company. In addition,  electronic retailers may be acquired by, receive
investments  from or enter  into other  commercial  relationships  with  larger,
well-established  and  well-financed  companies  as  use  of  the  Internet  and
electronic commerce increases.  Certain of the Company's competitors may be able
to secure  merchandise  from vendors on more  favorable  terms,  devote  greater
resources to marketing and promotional campaigns,  adopt more aggressive pricing
or inventory  availability  policies and devote  substantially more resources to
their Web sites and systems development than the Company.  Increased competition
may result in reduced operating  margins,  loss of market share and a diminished
brand  franchise.  There can be no  assurance  that the Company  will be able to
compete  successfully  against current and future  competitors,  and competitive
pressures  faced  by the  Company  may have a  material  adverse  effect  on the
Company's  business,  prospects,  financial condition and results of operations.
Further, as a strategic response to changes in the competitive environment,  the
Company  may from  time to time  make  certain  pricing,  service  or  marketing
decisions  or  acquisitions  that could have a  material  adverse  effect on its
business,  prospects,   financial  condition  and  results  of  operations.  New
technologies  and the  expansion  of  existing  technologies  may  increase  the
competitive pressures on the Company. In addition, companies that control access
to  transactions  through  network  access or Web  browsers  could  promote  the
Company's competitors or charge the Company a substantial fee for inclusion.

                                    Employees

         The Company  currently has only one employee,  Greg J. Micek. Mr. Micek
currently  devotes all of his business  time and  attention to the Company.  The
Company expects that it may have as many as five employees within the next year,
excluding  employees  of  acquired  businesses.  Although  the  competition  for
employees is fairly intense, the Company does not now foresee problems in hiring
additional qualified employees to meet its labor needs.

                                   Facilities

         The Company  currently  leases a small  amount of office  space for its
corporate  offices  on  a  month-to-month  basis.  The  Company  also  owns  the
intellectual property rights in its domain names and Web sites.
The Company does not own any significant tangible property.

ITEM 3.  LEGAL PROCEEDINGS

         Since  the date of its  organization  through  the date of this  Annual
Report, the Company has not been involved in any legal proceedings. There can be
no  assurance,  however,  that the Company will not in the future be involved in
litigation incidental to the conduct of its business.

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

         None.

                                    PART II.

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

As of June 30,  1998,  the  Company  had 216  holders of record.  Trading in the
Common Stock commenced on June 30, 1998.  Since trading  commenced in the Common
Stock,  the sales prices of the Common Stock have ranged from a low of $.75 to a
high of $1.25.  Presented  below are the high and low  closing bid prices of the
Common Stock for the periods indicated:

                                                    High(1)           Low(1)

Fiscal year ended June 30, 1998:

Fourth Quarter                                       $.75              $.75

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

(1)      Reflects  sole trade to occur during  fiscal 1998 on June 30,  1998,  
the date trading in the Common Stock commenced.

         The Company has never paid cash  dividends,  and has no  intentions  of
paying cash dividends in the foreseeable future.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

          The  following  discussion  provides  information  to  assist  in  the
understanding  of the Company's  financial  condition and results of operations,
and should be read in  conjunction  with the  financial  statements  and related
notes appearing elsewhere herein.

Summary

         Significant  progress  has been  made in the  initial  developments  of
JVWeb,  Inc.,  since its inception on November 11, 1997. Our focus centered upon
exploiting  a  potentially  exploding  segment  of  business  commerce,  on-line
commerce.  We fully believe  that,  over the next few years,  "e-commerce"  will
mature  into a broad  and  deep  channel  through  which  significant  worldwide
commerce will flow.  JVWeb's  premise is that businesses will migrate to the web
as this channel of  distribution  is exploited.  Small to medium sized companies
can participate on the same-leveled  playing field as larger  organizations.  As
this migration occurs, the average business owner is confronted with an array of
alternatives  in developing a business  strategy for exploiting  commerce on the
Internet.  That business owner's knowledge of technology is simply inadequate to
support  the  financial  and  human   investment   required  to  be  successful.
Compounding  the  challenge,  the  typical  web  developer  lacks  the  business
sophistication to assist the owner in making those critical decisions, which can
make the difference between success and failure. Therefore, JVWeb as a strategic
Internet  services provider becomes the "partner" in developing and implementing
electronic commerce strategy.  To that end, we are building an organization that
takes advantage of this emerging commerce  channel.  We have identified where we
want to deploy our capabilities, and we will be pursuing this in two main areas:
Through  expanding  our  ability to  deliver on our  promise,  and  through  the
e-commerce projects we select.

         We have also  concentrated  on building our capacity to  simultaneously
implement a business  structure  that will absorb rapid growth.  Our filing with
the Securities and Exchange  Commission to become a public company as a spin-off
of an existing public company,  LS Capital  Corporation  became effective on May
12, 1998. The  distribution  of the shares  occurred on May 20, 1998 and trading
commenced in June, 1998.

         As our financial  statement  shows,  we invested our initial capital on
the  development  of our first  operating  website,  dadandme.com,  which became
operational  in April,  1998. We also acquired  domain names for jvweb.com and a
third web site address,  www.familylifestyle.com  as we anticipate expanding our
web presence in 1998.

         We have also continued to absorb the costs of filing to become a public
company,  which is  reflected in the  expenditures  for this year ending June 3,
1998.

         We anticipate further  development  efforts to continue in the upcoming
first quarter of fiscal 1999.  We are also  projecting  our first  revenues from
operations to initiate in this same quarter.

Period Ending June 30, 1998

         The  Company  currently  has cash on hand only  sufficient  to  operate
throughout  fiscal 1999 on a fairly minimal  scale.  In order for the Company to
pursue its business plan in the manner it prefers,  the Company  expects that it
will need to raise  additional  funds in amounts  that can not now be  precisely
ascertained  due to the  uncertainty of the actual growth of the Company.  There
can be no  assurance  that the Company will be  successful  in raising the funds
that it needs.  See  "BUSINESS  AND  PROPERTIES - RISK FACTORS - Future  Capital
Needs; Uncertainty of Additional Financing."

         The Company does not anticipate performing any research and development
in the next  twelve  months,  other than that which is  performed  in the normal
course of business as it develops its electronic commerce capabilities,  such as
the  testing  of  new,  widely-available  software  for  use  in  the  Company's
electronic  commerce  pursuits.  There are no expected purchases or sales of any
plant or significant equipment.  The Company does not anticipate any significant
changes  in  its  number  of   employees,   other  than   through  any  possible
acquisitions.

         In November,  1997, the Company sold 500,000 shares of common stock and
1,500,000  Class A warrants  to LS Capital  Corporation  at a purchase  price of
$5,000 pursuant to the related spin-off agreement.

         In March,  1998, the Company  issued  200,000  shares of common stock 
to a private  investor at a purchase price of $.25 per share.

         Subsequent  to the year end,  but  prior to this  filing,  the  Company
reported  the  receipt  of  $50,000  from a  shareholder,  in the form of a loan
convertible to common stock, on August 13, 1998. An additional  $50,000,  in the
same  manner  and from  the same  source,  is  expected  around  the  middle  of
September.

Business Operations

         As the Company initiates its business  operations in the upcoming first
quarter  ending  9/30/98,  business  operations  are developing in the following
areas. The first area involves the development of an e-commerce presence through
company-owned  Brands. In this regard, the Company is engaged in rolling out two
brands  under its  control.  The first  brand,  as  announced  on July 31, 1998,
involves the Company's contract to acquire an on-line financial newsletter, Wall
Street Whispers. The Company is presently making a concentrated effort to absorb
this  publication  and is actively  and  aggressively  marketing to increase its
subscriber base.

         The second brand, as announced on July 30, 1998, involves the Company's
having acquired the on-line rights to distribute the line of frogletz children's
clothes from  Chameleon  Casuals.  This is part of a  substantial  effort by the
Company to roll-out  its  "community-to-commerce"  web  commerce  strategy  with
dadandme.com.  The Company  expects to make  significant  progress over the next
fiscal year to establish this brand as a material contributor to its business.

         The second operational area, which involves its relationship in two key
areas with Heitmann S.A.C, announced on June 30, 1998, is involved in building a
fee-for-service  division.  The Company has just recently, on September 2, 1998,
completed  hosting  a  visit  from  Heitmann,   in  which  significant  business
opportunities  were  discussed.  The  Company is putting a primary  emphasis  on
building a  fee-for-service  division,  with Heitmann S.A.C as a key supplier of
web creation  services to  prospective  clients of the  Company.  The Company is
exploiting an  opportunity  to serve  significant  customers that are requesting
access to the  customized  web-related  services  that are  being  built for the
on-line   marketing  of  the  Company's  own  brands.   These  services  include
web-hosting,  web-site  development and  maintenance,  and an array of strategic
internet  services  (SIS) that the Company has  assembled  for its own use.  The
Company  believes  that this  fee-for  service  division  will be a  significant
contributor  to its  business  over  the  next  year.  For  example,  a  typical
customized   package  of  services  for  a  particular   client  could   involve
web-hosting,  web  development  and  maintenance,  and other SIS resources could
involve  annual per client  revenue of up to $300,000.  The company is presently
actively  pursuing  this type of  fee-for-service  business,  although it cannot
provide any  assurances  that it will,  in fact,  acquire any of the projects at
this time.

         The second key  contribution  that Heitmann  S.A.C is providing in this
emerging fee-for-service division, involves the Company's commitment to building
web-hosting  capabilities,  as an  identified  core  competency  of a  strategic
internet services  company.  The Company has been informed by Heitmann that, for
various technical and business reasons,  Heitmann would like to work through the
Company to provide  U.S.  based  web-hosting  services for  Heitmann's  European
client base.  Heitmann  presently works through a number of European  vendors to
provide this service, and finds the rates in Europe to be significantly  greater
than can be obtained in the U.S. As a result,  as well as through the  Company's
own independent  determination of the need to expand its capabilities to provide
this  service,  the  Company has  engaged a  consultant  to assist in locating a
web-hosting  service to align with to provide this service for U.S. and European
clients. Heitmann has provided the Company with a 12 month proforma of projected
revenue to be derived  from its client base.  Although  the Company  declines to
disclose  the  projection,  it will state that a typical  customer is  presently
paying between $1,000 and $8,000(US) monthly for web-hosting services in Europe.
The Company, and Heitmann, believe such services can be provided by the Company,
in the U.S.
at a significant less rate.

         As a third  operational  thrust for the Company,  the above operational
developments  will  provide  the focus  required  for the  Company's  pursuit of
selected acquisitions to build its service capabilities. The Company is actively
engaged in  discussions  with  targeted  companies  to acquire  both  "back-end"
support in, for example,  web-hosting and other technical  services,  as well as
"front-end"  support of brand marketing  capabilities with selected  advertising
and public relations firms.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The  reports  of  Company's  Independent  Auditors  appear  at Page F-1
hereof,  and the Financial  Statements of the Company appear at Page F-2 through
F-____ hereof.

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

         Not applicable.

                                    PART III.

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

         The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>

         Name                                        Age               Positions
<S>      <C>                                        <C>                 <C> 

         Greg J. Micek                               43                Director, President

         Lewis E. Ball                               66                Director, Treasurer & Secretary
</TABLE>

         Greg J. Micek has served as a Director  and  President  of the  Company
since inception.  Since 1983, Mr. Micek has been a principal of The Micek Group,
a business  consulting firm. In this connection,  from June 1996 to June 1997 he
served as President and Chief  Executive  Officer of  HyperDynamics  Corporation
(formerly  Ram-Z  Enterprises,  Inc.),  a publicly  traded  company  focusing on
technology acquisitions.  In addition, from 1992 to 1994 Mr. Micek served as the
Project Manager for the City of Austin's Small Contractor  Support Network,  and
from 1991 to 1992, he served as a business reorganization  consultant for Parker
Brothers,  Inc.  Mr.  Micek  received  a  Bachelor  of Arts and a  Doctorate  of
Jurisprudence from Creighton University.

         Lewis E.Ball has served as a director of the Company since November 15,
1997. He has been a financial  consultant  to a number of companies  since 1993.
From June 1996 to January 1997, Mr. Ball served as the Chief  Financial  Officer
of HyperDynamics  Corporation  (formerly Ram-Z Enterprises,  Inc.). Mr. Ball has
many years of industry  experience as a Chief Financial  Officer and Director of
several major public companies, including Stewart & Stevenson Services, Inc. and
Richmond  Tank  Car  Company  (from  1983 to  1993).  He is a  Certified  Public
Accountant and a Certified Management Accountant.  Mr. Ball earned a Bachelor of
Business  Administration  in  Finance  from the  University  of Texas at Austin,
followed by post-graduate studies in accounting at the University of Houston.

         The authorized number of directors of the Company is presently fixed at
two. Each  director  serves for a term of one year that expires at the following
annual stockholders'  meeting.  Each officer serves at the pleasure of the Board
of Directors and until a successor has been qualified and appointed.  Currently,
directors of the Company receive no remuneration for their services as such, but
the Company will reimburse the directors for any expenses  incurred in attending
any directors meeting.

         There  are  no  family   relationships,   or  other   arrangements   or
understandings  between or among any of the  directors,  executive  officers  or
other  person  pursuant to which such person was selected to serve as a director
or officer.

         Section 16(a) of the  Securities  Exchange Act of 1934, as amended (the
"Exchange Act"), requires that the Company's officers and directors,  and person
who own more than ten  percent of a  registered  class of the  Company's  equity
securities,  file  reports  of  ownership  and  changes  in  ownership  with the
Securities  and Exchange  Commission  and furnish the Company with copies of all
such Section 16(a) forms. Based solely on its review of the copies of such forms
received by it and written  representations  from certain reporting person,  the
Company  believes  that,  during  the  period  of May 12,  1998 (the date of the
effectiveness of the Company's registration under the Exchange Act) through June
30,  1998,  each  of its  officers,  directors  and  greater  than  ten  percent
stockholders complied with all such applicable filing requirements.

ITEM 10.  EXECUTIVE COMPENSATION.

                           Summary Compensation Table

         The following table sets forth the compensation  paid by the Company to
its Chief  Executive  Officer for services in all  capacities to the Company (no
executive  officer  of the  Company  had total  annual  salary and bonus for the
fiscal year ended June 30, 1998 exceeding $100,000).

                         Summary Compensation Table (1)
<TABLE>
<CAPTION>

                                            Annual            Long-Term
                                            Compensation    Compensation

(a)                        (b)              (c)                  (g)
                           Fiscal
Name and                   Year                             Securities Underlying
Principal Position         Ended            Salary          Options (number of shares)
<S>                          <C>              <C>           <C>    

Greg J. Micek              6/30/98           (2)             2,000,000
Chief Executive
Officer and
President

</TABLE>

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

(1)      The Columns designated by the SEC for the reporting of certain bonuses,
         other annual compensation,  long-term compensation, including awards of
         restricted  stock,  long term  incentive  plan  payouts,  and all other
         compensation,  have been eliminated as no such bonuses, awards, payouts
         or  compensation  were awarded to,  earned by or paid to any  specified
         person during any fiscal year covered by the table.
(2)      Mr. Micek is entitled to an annual  salary of $60,000;  however, 
         he voluntarily elected not to receive any portion of his salary during 
         fiscal 1998.

                               Stock Option Grants

         The following table sets forth information  pertaining to stock options
granted  during the fiscal year ended June 30, 1998. The Company has not granted
stock appreciation rights ("SAR's") of any kind.



<PAGE>


                      Option Grants in the Last Fiscal Year
<TABLE>
<CAPTION>

(a)                        (b)              (c)                        (d)              (e)
                           Number of
                           Securities       Percentage of Total
                           Underlying       Options Granted
                           Options          Employees              Exercise          Expiration
Name                       Granted          in Fiscal Year            Price             Date
<S>                          <C>             <C>                       <C>              <C>

Greg J. Micek              2,000,000          100%                     $.10             December 1, 2002

</TABLE>

                  Option Exercises/Value of Unexercised Options

         The  following  table sets forth the  number of  securities  underlying
options  exercisable  at June  30,  1998,  and the  value  at June  30,  1998 of
exercisable in-the-money options remaining outstanding as to the Chief Executive
Officer of the Company. No SAR's of any kind have been granted.

                       Aggregated Option Exercises in Last
                  Fiscal Year and Fiscal Year End Option Values

<TABLE>
<CAPTION>

(a)                                         (d)                                         (e)

                                    Number of Securities
                                    Underlying Unexercised                      Value of Unexercised
                                    Options at June 30, 1998           In-the-Money Options at
                                    (Numbers of Shares)                         June 30, 1998
Name                                Exercisable                                 Exercisable
<S>                                <C>                                          <C>

Greg J. Micek                       2,000,000                                   $130,000(2)
</TABLE>

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

(1)      The Columns  designated  by the SEC for the  reporting of the number of
         shares  acquired on exercise,  the value  realized,  and the number and
         value of unexercisable  options have been eliminated as no options were
         exercised and no  unexercisable  options existed during the fiscal year
         covered by the table.
(2)      The price of the Common Stock used for  computing  this value was the 
         $.75 per share  closing bid price of the Common Stock on the OTC 
         Bulletin Board on June 30, 1998.


                                   Other Plans

         The Company has no other deferred  compensation,  pension or retirement
plans in which executive officers participate.

                      Compensation Agreement with Officers

         The Company has entered into an employment  agreement (the  "Employment
Agreement") with Greg J. Micek, a Director and the President of the Company. The
Employment  Agreement  has a term of three years and will  expire in  accordance
with its terms in November 2000. Under the Employment Agreement, Mr. Micek is to
receive an annual  salary of $60,000,  although as of September 18, 1998, he not
yet  received  any payment  from the Company on his  salary.  Mr.  Micek is also
entitled  to  participate  in any  and  all  employee  benefit  plans  hereafter
established for the employees of the Company.  The Employment Agreement contains
a covenant  not to compete  barring Mr.  Micek from  engaging in the  electronic
commerce  business  anywhere in the world for one year after the  termination of
the  Employment  Agreement  by the Company  with cause or by Mr.  Micek  without
cause.


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

         The  following  table  sets  forth  as of  June  30,  1998  information
regarding  the  beneficial  ownership  of Common Stock (i) by each person who is
known by the Company to own beneficially more than 5% of the outstanding  Common
Stock;  (ii) by each  director;  and (iii) by all  directors  and  officers as a
group.
<TABLE>
<CAPTION>

                                                                      
Name and Address of                 Shares Beneficially Owned                        
Beneficial Owner                    Number           Percent          
<S>                                 <C>                  <C>          
Greg J. Micek                      8,200,000(2)      73.1%            
5444 Westheimer, Suite 2080
Houston, Texas 77056

Lewis E. Ball                        100,000         *              
6122 Valley Forge
Houston, Texas 77057

All directors and officers         8,300,000(3)      74.0%          
as a group (two persons)
</TABLE>


(1)      Includes  shares Stock  beneficially  owned  pursuant to options and 
          warrants  exercisable  within 60 days after the date of this 
          Prospectus.
(2)      Includes  6,200,000  shares owned outright and 2,000,000  shares that 
          may be purchased  pursuant an option currently exercisable.
(2)      Includes  6,300,000  shares owned outright and 2,000,000  shares that
          may be purchased  pursuant an option currently exercisable.

*        Less than one percent.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         In connection with the organization of the Company,  the Company issued
to Mr. Micek 6.2 million shares of Common Stock in consideration of a payment of
$62,000.

         The Company has entered into a stock option  agreement  (the  "Anderson
Option  Agreement") with Dudley R. Anderson,  the former Treasurer and Secretary
of the Company.  The Anderson  Option  Agreement  provides  that,  for providing
consulting  services to the  Company,  the Company  shall issue to Mr.  Anderson
options to purchase  shares of Common Stock, at a purchase price per share equal
to the fair market value, on any day on which Mr. Anderson  provides  consulting
services to the Company. The number of shares with respect to which Mr. Anderson
will be issued options will depend on the number of hours of consulting services
that he provides on any particular day. Mr. Anderson will be issued an option to
purchase 250 shares (on any day on which he consults for up to four hours),  500
shares (on any day on which he consults for more than four hours and up to eight
hours),  750 shares (on any day on which he  consults  for more than eight hours
and up to ten hours) and 1,000  shares (on any day on which he consults for more
than ten hours).  Notwithstanding  the preceding,  the maximum number of shares,
with  respect to which Mr.  Anderson  may be  granted  options  pursuant  to the
Anderson  Option  Agreement,  is 250,000.  Each option issued under the Anderson
Option Agreement will have a term of five years after the date it is issued.  As
of September 14, 1998,  Mr.  Anderson had been issued under the Anderson  Option
Agreement  options to purchase 42,250 shares of Common Stock. On August 4, 1998,
Mr.  Anderson  resigned  from his  positions as Treasurer  and  Secretary of the
Company to pursue other  opportunities.  He and the Company  mutually  agreed to
terminate the Anderson Option Agreement.

         As  a  finder's  fee  for  making  the  introductions  leading  to  the
investment of LS Capital in the Company and for a payment of $.01 per share, the
Company  issued to Lewis E. Ball, a director of the Company,  100,000  shares of
Common Stock.

         The Company has entered into an agreement  with Kevin Dotson,  a person
who provides Internet consulting services to the Company. In this agreement, the
Company  agreed to issue options to purchase  shares of Common Stock on the same
terms as provided for in the Anderson Option Agreement,  including the per-share
purchase  price and the  maximum  limit on the  number of option  shares.  As of
September 14, 1998,  Mr.  Dotson had been issued under his agreement  options to
purchase  340,000  shares of Common Stock.  The exact number of shares of Common
Stock with respect to which  options will be issued to Mr. Dotson can not now be
determined.

         The Company has entered  into an agreement  with Cherie Dunn,  who will
provide  market  strategy  and  brand  development  consulting  services  to the
Company.  In this  agreement,  the Company  agreed to issue  options to purchase
5,000  shares of Common  Stock at a purchase  price per share of $.10 and 65,000
shares of Common  Stock at a  purchase  price per share of $.25.  Certain of the
$.25 optioned  shares are subject to forfeiture  upon the  occurrence of certain
events.


                                                      PART IV.

ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) Documents filed as part of this report:

1.  Financial Statements:
<TABLE>
<S>                                                                                                             <C>

          Independent Auditor's Report ........................................................................F-1

          Balance Sheet as of June 30, 1998 .................................................................. F- 2

          Income Statement for the period from October 28, 1997 (Date of Inception)
                     through June 30, 1998 ................................................................... F- 3

          Statement of Stockholders' Equity for the period from October 28, 1997 (Date of
                     Inception) through June 30, 1998 .........................................................F- 4

          Statement of Cash Flows for the period from October 28, 1997 (Date of Inception)
                     through June 30, 1998  .................................................................. F- 5

          Notes to Financial Statements .......................................................................F- 6

2.  Financial Statement Schedules:

          None

</TABLE>


<PAGE>


3.  Exhibits:

         The  following  exhibits  are  filed  with  this  Annual  Report or are
incorporated herein by reference:
<TABLE>
<CAPTION>

Exhibit No.         Description
<S>                 <C>

3.01              Certificate of  Incorporation  of the Company is  incorporated  herein by reference from
                  the  Company's  Registration  Statement  on Form  SB-2 (SEC  File No.  333-41635)  filed
                  December 29, 1997, Item 27, Exhibit 3.01.
3.02              Bylaws  of  the  Company  is  incorporated   herein  by  reference  from  the  Company's
                  Registration  Statement on Form SB-2 (SEC File No.  333-41635)  filed December 29, 1997,
                  Item 27, Exhibit 3.02.
4.01              Specimen  Common  Stock  Certificate  is  incorporated  herein  by  reference  from  the
                  Company's  Registration  Statement on Form SB-2 (SEC File No.  333-41635) filed December
                  29, 1997, Item 27, Exhibit 4.01.
4.02              Warrant  Agreement  dated  December  15, 1997  between the  Company and  American  Stock
                  Transfer  & Trust  Company  is  incorporated  herein  by  reference  from the  Company's
                  Registration  Statement on Form SB-2 (SEC File No.  333-41635)  filed December 29, 1997,
                  Item 27, Exhibit 4.02.
4.03              First  Amendment  to  Agreement  dated March 31, 1998  between the Company and  American
                  Stock  Transfer  Company  & Trust  Company  is  incorporated  herein by  reference  from
                  Amendment  No. 2 to the  Company's  Registration  Statement on Form SB-2/A (SEC File No.
                  333-41635) filed April 21, 1998, Item 27, Exhibit 4.03.
10.01             Agreement  dated  November  15, 1997 between the Company and LS Capital  Corporation  is
                  incorporated  herein by  reference  from the  Company's  Registration  Statement on Form
                  SB-2 (SEC File No. 333-41635) filed December 29, 1997, Item 27, Exhibit 10.01.
10.02             Employment  Agreement  dated  December  1, 1997 by and  between  the Company and Greg J.
                  Micek is incorporated herein by reference from the Company's  Registration  Statement on
                  Form SB-2 (SEC File No. 333-41635) filed December 29, 1997, Item 27, Exhibit 10.02.
10.03             Stock Option  Agreement dated December 1, 1997 executed by the
                  Company  in favor of Greg J. Micek is  incorporated  herein by
                  reference from  Amendment No. 1 to the Company's  Registration
                  Statement  on Form  SB-2/A  (SEC  File  No.  333-41635)  filed
                  February 27, 1998, Item 27, Exhibit 10.03.
10.04             Stock  Option  Agreement  dated  December  17, 1997  executed by the Company in favor of
                  Dudley R.  Anderson is  incorporated  herein by reference  from  Amendment  No. 1 to the
                  Company's  Registration  Statement  on  Form  SB-2/A  (SEC  File  No.  333-41635)  filed
                  February 27, 1998, Item 27, Exhibit 10.04.
10.05             Stock  Option  Agreement  dated  December  1, 1997  executed  by the Company in favor of
                  Kevin Dotson is  incorporated  herein by reference from Amendment No. 1 to the Company's
                  Registration  Statement  on Form  SB-2/A (SEC File No.  333-41635)  filed  February  27,
                  1998, Item 27, Exhibit 10.05.
10.06             Stock Option  Agreement  dated  December 1, 1997 executed by the Company in favor of G-2
                  Advertising  is  incorporated  herein by reference from Amendment No. 1 to the Company's
                  Registration  Statement  on Form  SB-2/A (SEC File No.  333-41635)  filed  February  27,
                  1998, Item 27, Exhibit 10.06.
10.07             First  Amendment  dated  April  14,  1998 to  Agreement  dated
                  November   15,  1997   between  the  Company  and  LS  Capital
                  Corporation is incorporated herein by reference from Amendment
                  No. 2 to the Company's  Registration  Statement on Form SB-2/A
                  (SEC  File No.  333-41635)  filed  April  21,  1998,  Item 27,
                  Exhibit 10.07.
10.08             Agreement  dated  April 20,  1998  between  the Company and LS
                  Capital  Corporation is incorporated  herein by reference from
                  Amendment  No. 2 to the  Company's  Registration  Statement on
                  Form SB-2/A  (SEC File No.  333-41635)  filed April 21,  1998,
                  Item 27, Exhibit 10.08.
10.09             Asset  Purchase  Agreement  dated  July 31,  1998 by and among
                  Market Data Corporation and Time Financial Services,  Inc. (as
                  sellers) and the Company (as purchaser) is incorporated herein
                  by reference from the Company's (SEC File No. 0-24001) Current
                  Report on Form 8-K dated July 31,  1998,  Item  7(c),  Exhibit
                  10.01.
10.10             Agreement  dated August 3, 1998 by and between  Equitrust  Mortgage  Corporation and the
                  Company is  incorporated  herein by reference from the Company's  Current Report on Form
                  8-K dated July 31, 1998 (SEC File No. 0-24001), Item 7(c), Exhibit 10.02.
10.11             Promissory Note dated August 3, 1998 in the original principal
                  amount of $50,000  made payable by the Company to the order of
                  Equitrust  Mortgage  Corporation  is  incorporated  herein  by
                  reference from the Company's  Current Report on Form 8-K dated
                  July 31,  1998  (SEC File No.  0-24001),  Item  7(c),  Exhibit
                  10.02.
21.01             Subsidiaries of Registrant
99.01             The Company's 1998  Consultant  Compensation  Plan is  incorporated  herein by reference
                  from the Company's  Registration  Statement on Form S-8 (SEC File No.  333-55979)  filed
                  June 3, 1998, Item 8, Exhibit

          (b)     Reports on Form 8-K

                  The Registrant filed a report on Form 8-K dated July 31, 1998,
                  reporting on the Registrant's  agreement to acquire all of the
                  assets of an  on-line  daily  financial  publication  known as
                  "Wall Street Whispers."

</TABLE>




<PAGE>



                                            INDEPENDENT AUDITOR'S REPORT



To the Board of Directors
   JVWeb, Inc.
   Houston, Texas

We have  audited  the  accompanying  balance  sheet of JVWeb,  Inc.,  a Delaware
corporation,  as of June 30,  1998,  and the  related  statements  of  expenses,
stockholders'  equity, and cash flows for the period from inception (October 28,
1997) to June 30, 1998. These financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of JVWeb,  Inc., as of June 30,
1998,  and the  results of its  operations  and its cash  flows for the  initial
period then ended in conformity with generally accepted accounting principles.



MALONE & BAILEY, PLLC
Houston, Texas

September 10, 1998




<PAGE>


                                   JVWeb, Inc.
                          (A Development Stage Company)
                                  Balance Sheet
                               As of June 30, 1998


                                   ASSETS
<TABLE>
<S>                                                                                       <C>    

Cash                                                                                   $     412
Employee advance                                                                           2,550
Inventory                                                                                  5,305
Prepaid legal expenses                                                                    19,500

     Total Current Assets                                                                 27,767

Office equipment and furniture (net of $530
     accumulated depreciation)                                                             3,860

Deposit on purchase of subsidiary                                                         25,000

     Total Assets                                                                      $  56,627


      LIABILITIES & STOCKHOLDERS' EQUITY

Accounts payable                                                                       $   7,481
Notes payable to founding shareholder                                                     38,000
Note payable                                                                               1,250

     Total Liabilities                                                                    46,731

Preferred stock, $0.01 par, 10,000,000
     shares authorized, no shares issued or
     outstanding                                                                            -
Common stock, $0.01 par, 50,000,000 shares
     authorized, 7,170,000 shares issued and
     outstanding                                                                          71,700
Paid-in capital                                                                          112,816
Accumulated deficit during
     the development stage                                                              (174,620)

     Total Stockholders' Equity                                                            9,896

     Total Liabilities & Stockholders' Equity                                          $  56,627


</TABLE>









                                See notes to financial statements.
                                               F -2
<PAGE>

                                            JVWeb, Inc.
                                   (A Development Stage Company)
                                         Income Statement
                         Period from October 28, 1997 (Date of Inception)
                                       Through June 30, 1998

<TABLE>
<S>                                                                                         <C> 

REVENUES                                                                               $     190
COST OF SALES                                                                                 48

        Gross Margin                                                                         142

EXPENSES
     General and administrative                                                          174,338
     Depreciation                                                                            530
                                                                                         174,868

        Operating (Loss)                                                                (174,726)

INTEREST INCOME                                                                              106

        Net Deficit Accumulated During
           Development Stage                                                           $(174,620)


NET LOSS PER COMMON SHARE                                                              $(   0.02)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                             6,681,250
</TABLE>

















                                See notes to financial statements.
                                               F - 3


<PAGE>


                                   JVWeb, Inc.
                          (A Development Stage Company)
                        Statement of Stockholders' Equity
                Period from October 28, 1997 (Date of Inception)
                              Through June 30, 1998


                                                                                
<TABLE>
<CAPTION>
                                                                                                         Accumulated
                                                                                                          Deficit
                                                                                                          During the
                                                               Common Stock               Paid-in         Development
                                                        Shares          Amount            Capital           Stage          Totals
<S>                                                     <C>                   <C>               <C>         <C>            <C>   
Shares issued at inception
     to founding shareholder
        for cash                                        6,200,000      $ 62,000           $   7,516                      $  69,516

Shares issued for cash                                    700,000         7,000              48,000                         55,000

Shares issued for services                                200,000         2,000              58,000                         60,000

Shares issued as a deposit
     on purchase of subsidiary                             70,000           700             129,300                        130,000

Returnable shares                                                                          (130,000)                      (130,000)

Net (deficit)                                                                                              (174,620)      (174,620)

Balances, June 30, 1998                                 7,170,000      $ 71,700           $ 112,816       $(174,620)     $   9,896


</TABLE>



                                        See notes to financial statements.
                                                        F-4



<PAGE>


                                            JVWeb, Inc.
                                   (A Development Stage Company)
                                      Statement of Cash Flows
                         Period from October 28, 1997 (Date of Inception)
                                       Through June 30, 1998

<TABLE>
<S>                                                                                       <C>

CASH FLOW FROM OPERATIONS
  Net deficit                                                                        $  (174,620)
  Adjustments to reconcile net deficit to
   cash provided from operating activities
Depreciation                                                                                 530
       Common stock issued for services                                                   60,000
       Increase in employee advance                                                     (  2,550)
Increase in inventory                                                                   (  5,305)
       Increase in prepaid legal expenses                                               ( 19,500)
       Increase in accounts payable                                                        7,481

       NET CASH USED BY OPERATING ACTIVITIES                                            (133,964)

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of office equipment & furniture                                              (  4,390)
  Deposit on purchase of subsidiary                                                     ( 25,000)

       NET CASH USED BY INVESTING ACTIVITIES                                            ( 29,390)

CASH FLOW FROM FINANCING ACTIVITIES
  Notes payable to founding shareholder                                                   38,000
  Note payable                                                                             1,250
  Issuance of common stock                                                               124,516

       NET CASH PROVIDED BY FINANCING ACTIVITIES                                         163,766

       NET INCREASE IN CASH                                                                  412

       CASH ON JUNE 30, 1998                                                           $     412

</TABLE>













                       See notes to financial statements.
                                      F - 5


<PAGE>


                                   JVWeb, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of operations.  JVWeb, Inc.  ("Company") was formed October 28, 1997 as a
Delaware  corporation.  The Company  was formed to market and  develop  internet
sites as commercial sales outlets.

Use of estimates.  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and  assumptions   that  affect  certain   reported   amounts  and  disclosures.
Accordingly, actual results could differ from those estimates.

Cash and cash equivalents.  For purposes of the cash flow statement, the Company
considers  highly liquid  investments  with maturities less than 90 days as cash
and cash equivalents.

Inventories consist of imprinted sportswear and ad-specialty items.  Inventories
are stated at the lower of cost,  determined on the first-in,  first-out  (FIFO)
method, or market.

Office equipment and furniture are valued at cost.  Maintenance and repair costs
are charged to expense as incurred.  Gains and losses on disposition of property
and  equipment  are  reflected  in  income.  Depreciation  is  computed  on  the
straight-line method for financial reporting purposes, based on estimated useful
lives of 3 to 5 years.

Revenue and cost  recognition.  Revenues from  merchandise  sales are recognized
when the  merchandise is sold.  All  merchandise is sold over the internet using
credit card payments. Advertising costs are expensed as incurred.

Income  taxes.  Income taxes are  provided  for the tax effects of  transactions
reported in the  financial  statements  and consist of taxes  currently due plus
deferred taxes related primarily to depreciation differences.


NOTE B - DEVELOPMENT STAGE OPERATIONS AND RELATED PARTY
             TRANSACTIONS

The founding  shareholder  contributed $69,516 cash for the initial common stock
issued.  The founding  shareholder also loaned the Company $23,000  individually
and $15,000 from a related company, both of which are due upon demand and accrue
interest at 6%.

The Company  entered into a three-year  employment  agreement  with the founding
shareholder  in October  1997  which  named him  President  of the  Company  and
provided  an annual  salary of  $60,000.  The  Company has not paid any wages to
date.

In October 1997,  the Company  granted  2,000,000  stock options to purchase the
Company's  common  stock at $0.10 per  share to the  founding  shareholder.  The
options may be exercised at any time and expire in five years.






                                      F - 6

<PAGE>

NOTE C - PREPAID LEGAL EXPENSES

In early May 1998,  the Company  issued  20,000  common  stock  options at their
estimated  fair market  value of $0.25 per share to its  attorney  for  services
rendered.  In late June  1998,  the  Company  issued  50,000  shares to the same
attorney.  These  shares are valued at their  estimated  fair value of $0.75 per
share. As of June 30, 1998,  $18,000 has been recorded as legal expense with the
remainder of $19,500 shown as prepaid legal expense.


NOTE D - NOTE PAYABLE

The Company borrowed $1,250 from a former consultant.  The loan is due upon
demand and interest accrues at 6%.


NOTE E - OPERATING LEASES

The Company is obligated on a corporate office lease in Houston, Texas and on an
electronic  web site lease in Arizona on a  month-to-month  basis for a total of
$1,500 per month.


NOTE F - CONSULTING AGREEMENTS

The Company has entered into two consulting  agreements by which 250,000 options
to purchase the Company's common stock at $0.25 per share have been issued,  and
a variable  monthly cash retainer is paid. The options are subject to forfeiture
on a  prorata  basis  should  the  services  terminate  prior to the term of the
agreement.

The Company has entered  into four  consulting  agreements  by which  options to
purchase the Company's common stock at prices approximating fair market value on
the date of grant are issued at a rate of 100  shares  per hour.  As of June 30,
1998, 105,250 options have been granted under these agreements.

The Company  entered  into  another  consulting  agreement  which it canceled in
August  1998.  The  Company  issued  50,000  shares as  compensation  under this
agreement, and does not believe it is liable for any additional amounts.


NOTE G - STOCK OPTIONS

As permitted under Statement of Financial  Accounting  Standards  (SFAS) No. 123
(Accounting  for Stock-Based  Compensation),  the Company has continued to apply
Accounting Principles Board (APB) Opinion No. 25 (Accounting for Stock Issued to
Employees) and related interpretations. Accordingly, no compensation expense has
been recognized for the stock options.  The Company has granted options pursuant
to its stock option plan.  Grants are made at management's  discretion,  and are
compensation for services. As of June 30, 1998 a total of 4,041,250 options were
outstanding and exercisable with the following exercise prices:

                                    2,233,250          at         $ 0.10
                                    1,500,000          at           1.00
                                      308,000          at           0.25

Outstanding  options  expire  in 5 years  from  date  of  grant,  and  are  100%
exercisable at date of grant.

                                      F - 7

NOTE H - FINANCING

As of September 10, 1998, the Company has not achieved significant sales volume.
Only temporary equity financing has been secured to date.


NOTE I - SUBSEQUENT EVENTS

The Company  entered  into an Asset  Purchase  Agreement  in July 1998 with Time
Lending Services,  Inc. to purchase all the assets of a publication called "Wall
Street Whispers." The purchase price of the publication is $140,000. The Company
has paid $45,000 ($25,000 as of June 30, 1998) in cash, and issued 70,000 shares
of the  Company's  common  stock on June 29,  1998.  The balance of the purchase
price,  $95,000, is due by October 15, 1998. Any proceeds realized from the sale
of the common stock by the seller will be deducted from the balance due, and any
shares not sold will be returned  to the  Company  once the balance due has been
paid in full.



NOTE I - SUBSEQUENT EVENTS (Continued)

The Company received $50,000 in August 1998 from Equitrust Mortgage  Corporation
("Equitrust")  pursuant to an agreement dated August 3, 1998 which states if the
Company files a  registration  statement  (SB-2) within 90 days from the date of
the  loan,  the note  will  automatically  convert  into  200,000  shares of the
Company's  common stock.  Further,  upon  registration,  Equitrust will purchase
another  200,000  shares for $50,000.  The Company  received a $5,000 deposit on
this transaction in August 1998. Further, Equitrust has an option to purchase an
additional 100,000 shares of common stock for $25,000.

The Company  entered into two  consulting  agreements in July 1998.  The term of
both  agreements is six months,  and 75,000 shares will be issued as payment for
the consulting services.

The Company  entered into two consulting  agreements in August 1998. The term of
both  agreements  is one year,  and a total of 101,900  shares will be issued in
monthly installments as payment for the consulting services.

In August 1998, the Company  agreed to issue an additional  45,060 shares of its
common  stock  to  an  existing   corporate   shareholder   without   additional
compensation.  The  shareholder  had  distributed  shares of the  Company to its
shareholders as a dividend,  which resulted in short positions which the Company
agreed to cover.






                                      F - 8


<PAGE>


                                                     SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934,  JVWeb,  Inc.  has duly caused this annual  report on Form
10-KSB to be signed on its behalf by the undersigned, thereunto duly authorized.

September 23, 1998                               JVWEB INC.


                                                 By: /s/ Greg J. Micek
                                                 Greg J. Micek
                                                 Principal Executive Officer,
                                                 Principal Financial Officer and
                                                 Principal Accounting Officer)

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

Name                                        Title                               Date
<S>                                           <C>                                  <C>

/s/ Greg. J. Micek                          Director and President              September 23, 1998
Greg J. Micek                               (Principal Executive Officer
                                            and Principal Financial Officer)

/s/ Lewis E. Ball                           Director                             23, 1998

</TABLE>

<PAGE>


                                 EXHIBITS INDEX
<TABLE>
<CAPTION>

Exhibit
Number        Description
<S>             <C> 

3.01          Certificate of  Incorporation  of the Company is  incorporated  herein by reference from the
                  Company's  Registration  Statement on Form SB-2 (SEC File No.  333-41635) filed December
                  29, 1997, Item 27, Exhibit 3.01.
3.02              Bylaws  of  the  Company  is  incorporated   herein  by  reference  from  the  Company's
                  Registration  Statement on Form SB-2 (SEC File No.  333-41635)  filed December 29, 1997,
                  Item 27, Exhibit 3.02.
4.01          Specimen  Common Stock  Certificate is  incorporated  herein by reference from the Company's
                  Registration  Statement on Form SB-2 (SEC File No.  333-41635)  filed December 29, 1997,
                  Item 27, Exhibit 4.01.
4.02              Warrant  Agreement dated December 15, 1997 between the Company
                  and American  Stock  Transfer & Trust Company is  incorporated
                  herein by reference from the Company's  Registration Statement
                  on Form SB-2 (SEC File No. 333-41635) filed December 29, 1997,
                  Item 27, Exhibit 4.02.
4.03          First  Amendment  to Agreement  dated March 31, 1998 between the Company and American  Stock
                  Transfer  Company & Trust Company is  incorporated  herein by reference  from  Amendment
                  No. 2 to the Company's  Registration  Statement on Form SB-2/A (SEC File No.  333-41635)
                  filed April 21, 1998, Item 27, Exhibit 4.03.
10.01             Agreement  dated  November  15, 1997 between the Company and LS Capital  Corporation  is
                  incorporated  herein by  reference  from the  Company's  Registration  Statement on Form
                  SB-2 (SEC File No. 333-41635) filed December 29, 1997, Item 27, Exhibit 10.01.
10.02             Employment  Agreement  dated  December  1, 1997 by and  between  the Company and Greg J.
                  Micek is incorporated herein by reference from the Company's  Registration  Statement on
                  Form SB-2 (SEC File No. 333-41635) filed December 29, 1997, Item 27, Exhibit 10.02.
10.03             Stock Option  Agreement dated December 1, 1997 executed by the
                  Company  in favor of Greg J. Micek is  incorporated  herein by
                  reference from  Amendment No. 1 to the Company's  Registration
                  Statement  on Form  SB-2/A  (SEC  File  No.  333-41635)  filed
                  February 27, 1998, Item 27, Exhibit 10.03.
10.04             Stock  Option  Agreement  dated  December  17, 1997  executed by the Company in favor of
                  Dudley R.  Anderson is  incorporated  herein by reference  from  Amendment  No. 1 to the
                  Company's  Registration  Statement  on  Form  SB-2/A  (SEC  File  No.  333-41635)  filed
                  February 27, 1998, Item 27, Exhibit 10.04.
10.05             Stock  Option  Agreement  dated  December  1, 1997  executed  by the Company in favor of
                  Kevin Dotson is  incorporated  herein by reference from Amendment No. 1 to the Company's
                  Registration  Statement  on Form  SB-2/A (SEC File No.  333-41635)  filed  February  27,
                  1998, Item 27, Exhibit 10.05.
10.06             Stock Option  Agreement  dated  December 1, 1997 executed by the Company in favor of G-2
                  Advertising  is  incorporated  herein by reference from Amendment No. 1 to the Company's
                  Registration  Statement  on Form  SB-2/A (SEC File No.  333-41635)  filed  February  27,
                  1998, Item 27, Exhibit 10.06.
10.07             First  Amendment  dated  April  14,  1998 to  Agreement  dated
                  November   15,  1997   between  the  Company  and  LS  Capital
                  Corporation is incorporated herein by reference from Amendment
                  No. 2 to the Company's  Registration  Statement on Form SB-2/A
                  (SEC  File No.  333-41635)  filed  April  21,  1998,  Item 27,
                  Exhibit 10.07.
10.08             Agreement  dated  April 20,  1998  between  the Company and LS
                  Capital  Corporation is incorporated  herein by reference from
                  Amendment  No. 2 to the  Company's  Registration  Statement on
                  Form SB-2/A  (SEC File No.  333-41635)  filed April 21,  1998,
                  Item 27, Exhibit 10.08.
10.09             Asset  Purchase  Agreement  dated  July 31,  1998 by and among
                  Market Data Corporation and Time Financial Services,  Inc. (as
                  sellers) and the Company (as purchaser) is incorporated herein
                  by reference from the Company's (SEC File No. 0-24001) Current
                  Report on Form 8-K dated July 31,  1998,  Item  7(c),  Exhibit
                  10.01.
10.10             Agreement  dated August 3, 1998 by and between  Equitrust  Mortgage  Corporation and the
                  Company is  incorporated  herein by reference from the Company's  Current Report on Form
                  8-K dated July 31, 1998 (SEC File No. 0-24001), Item 7(c), Exhibit 10.02.
10.11             Promissory Note dated August 3, 1998 in the original principal
                  amount of $50,000  made payable by the Company to the order of
                  Equitrust  Mortgage  Corporation  is  incorporated  herein  by
                  reference from the Company's  Current Report on Form 8-K dated
                  July 31,  1998  (SEC File No.  0-24001),  Item  7(c),  Exhibit
                  10.02.
21.01             Subsidiaries of Registrant
99.01             The Company's 1998  Consultant  Compensation  Plan is  incorporated  herein by reference
                  from the Company's  Registration  Statement on Form S-8 (SEC File No.  333-55979)  filed
                  June 3, 1998, Item 8, Exhibit 4.2.

</TABLE>