<PAGE>

                     U.S. SECURITIES & EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  Form 10-KSB

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

                  For the fiscal year ended December 31, 1999
                        Commission File Number 0-22351

                                FirstQuote Inc.
                                ---------------

          (Name of small business issuer as specified in its charter)

        Delaware                                                98-0162893
   ---------------------                                  --------------------
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                            Identification No.)

12, Ave des Morgines, 1213 Petit-Lancy 1, Geneva,
-------------------------------------------------
                Switzerland                                         N/A
                -----------                                   ---------------
   (Address of principal executive offices)                      (Zip Code)

                                41-22-879-0879
                                --------------
                          (Issuer's telephone number)

Securities To Be Registered Under Section 12(b) Of The Act:

           None                                               N/A
   ---------------------                              --------------------
   (Title of each class                         (Name of each exchange on which
   to be so registered)                         each class is to be registered)

Securities To Be Registered Under Section 12(g) Of The Act:

   Common Stock, $.001 par value
   -----------------------------
        (Title of class)

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

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K contained in this form, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [_]

The market value of the voting stock held by non-affiliates of the registrant as
of March 20, 2000 was approximately $56,407,568. As of March 20, 2000 the
registrant had 6,573,409 shares of its common stock, par value $0.001, issued
and outstanding.

                   Documents Incorporated By Reference: None
<PAGE>

Part I

Item 1.  Description of Business

Business Development
--------------------

    FirstQuote Inc. (previously Virtual Telecom, Inc), a Delaware corporation
(the "Company" or "FirstQuote"), is engaged in the business of developing and
marketing real-time market data and financial information services as well as
online brokerage capabilities via a range of client interfaces based on Internet
technologies. Its services are marketed under the brand name "FirstQuote"
primarily on a business-to-business basis, enabling banks and brokerages to
offer such services to their client bases by outsourcing the service to
FirstQuote. The Company also provides related supporting network services to
users of its financial information services.

    The Company was organized on July 3, 1996 under the laws of the State of
Delaware.

    During the past three years, the Company has issued various classes of its
securities pursuant to a number of private placement arrangements, summarised as
follows:

    .  During the first quarter of 1997, the Company sold 534,063 shares of
       Common Stock for gross proceeds of $873,000.

    .  During the second quarter of 1997, the Company sold 204,000 units ( each
       unit consisting of two shares of Common Stock and one warrant entitling
       its holder to purchase one share of Common Stock at an exercise price of
       $3.50 per share) for gross proceeds of $1,020,000.

    .  In December 1997, the Company sold 1,923,716 Series B Preferred Shares
       for $3,000,000

    .  In January 1999 the Company sold 3,783,784 Series C Preferred Shares for
       $7,000,000.

    .  In March 2000, the Company sold 1,061,057 shares of its Common Stock to a
       number of existing and additional venture capital and private investors
       for a total consideration of $7,155,184.

    More comprehensive details about the above transactions are presented in the
Notes to the Annual Financial Statements.

    In December 1999, the Company acquired all of the outstanding capital shares
of Stockdata Amsterdam BV, a limited liability company organized under the laws
of The Netherlands and located in Amsterdam, The Netherlands. Stockdata is
engaged in the distribution of real-time market data products to the Benelux
region, primarily through the use of datacast technologies via cable networks.

    The acquisition was conducted pursuant to a Securities Purchase Agreement
dated December 24, 1999 between FirstQuote and the stockholders of Stockdata.
Pursuant to the agreement, the Stockdata stockholders transferred to FirstQuote
all of the outstanding capital shares of Stockdata in consideration of
FirstQuote's payment of up to US$3,750,000, payable as follows: US$245,031 in
cash; US$1,059,239 in the assignment of Stockdata receivables; and FirstQuote's
issuance of 197,815 shares of Series D preferred stock and 148,450 shares of
common stock, all such shares being valued at approximately US$6.50 per share.
An additional 30,000 FirstQuote common shares are issuable to the sellers'
subject to their satisfaction of certain post-closing conditions.

    Unless the context otherwise requires, all references to the Company or
FirstQuote include its wholly-owned subsidiaries, FirstQuote SA, a Swiss
corporation, FirstQuote Limited, an English corporation, and FirstQuote
Stockdata BV, a Dutch corporation. The Company's executive offices are located
at 12 Avenue des Morgines, 1213 Petit-Lancy 1, Geneva, Switzerland; telephone
number +41 (22) 879 0879.
<PAGE>

Business of the Company
-----------------------

General

    FirstQuote is engaged in the business of developing and marketing a range of
Internet-based financial information and transactional services to the European
investment community. The Company provides business-to-business and business-to-
consumer services to the financial marketplace. The Company's services are
provided to its corporate clients for internal use as well as for redistribution
to their customer bases. The Company provides real-time or delayed market data,
news and other financial information as well as electronic brokerage
capabilities over the Internet to a range of customized interfaces, including
desktop client-server applications, web-browser based interfaces, as well as via
wireless services such as the Short Messaging Service ("SMS") and the Wireless
Application Protocol ("WAP"). Therefore, the Company operates as both a content
service provider ("CSP") as well as an application service provider ("ASP").

    The Company's financial information services are offered on a direct
subscription basis or as a co-branded business-to-business service to financial
institutions such as banks and brokerage firms, financial media and publishing
organizations and Internet service providers, who desire to offer financial
content and related services directly to their own customers. The Company also
offers to institutional clients turnkey solutions for Internet-based electronic
brokerage capabilities. In order to provide an end-to-end solution, the Company
also derives revenue from the provision of underlying Internet access and
network connectivity services to its corporate and institutional clients.

    The Company's services are available via its own wide-area Internet network
backbone by dial-up or dedicated access, as well as from any other Internet
point of access world-wide.

Products and Services

    The Company provides real-time or delayed market data, news and fundamental
financial information using Internet technologies. The Company's services are
marketed to European financial institutions, including brokerage firms, banks,
insurance companies, fund managers, professional traders, and private investors.
The market data comprises securities, including stocks, futures and options on
stocks, major stock and option indices, commodities and foreign exchange rates,
from over 150 exchanges worldwide, including major European, American and Asian
exchanges. The Company consolidates and manages information on its own data hub
for over 800,000 securities instruments. The above content is received on data
feeds from stock exchanges and third party providers and is processed on a
number of servers within a common financial data hub, embodying database,
analytical and transactional functionality. Access to such content and
functionality is governed by a permissioning database which controls users'
access to different content or applications to which the user interfaces. In
this manner, customers can access the data via a range of user interfaces
including Windows compliant desktop resident `client' applications, dynamic or
static web browsers, as well as SMS or WAP devices which are fed content on a
real-time or delayed basis, according to each user profile.

    The above content is distributed across the Company's network backbone
directly to permanently connected users or via the public Internet. As a result,
the Company's services can be organized over the public Internet, virtual
private networks, intranets, extranets and local or wide area networks using IP
technology.

    Additional information about the Company's institutional oriented services
is obtainable directly from its website at www.firstquote.com or about it's
                                           ------------------
retail oriented services at www.firstquote.net.
                            -------------------

    The Company's services are categorised as follows, tailored to different
segments of the investment community:

    FirstQuote Pro Services:

    FirstQuote Professional: The service employs a sophisticated desktop
resident decision support interface targeted at institutional investors,
brokerage firms and their more active clients. It provides real-time data
coverage across a variety of financial instruments, sophisticated analytical
tools, alarm settings, historical data, news and all investment indicators
regularly used by professional traders. FirstQuote Professional displays
financial information in multiple windows on multiple pages, each of which can
be configured to suit individual requirements, and stored
<PAGE>

for retrieval. FirstQuote Professional customers are granted a floating license,
allowing the software to be installed and used on multiple machines, for example
an office PC, home PC and portable PC, and thus providing a highly mobile
solution. However only one simultaneous access is permitted per subscription.

    The principal features of the FirstQuote Professional include:

    Market Minder        A quote screen with rows of symbols and
                         columns of prices and other data related to
                         the symbols (name, last price, bid, ask,
                         etc.)

    MultiQuote           Detailed fundamental information on a symbol
                         in a customizable layout

    Ticker               Scrolling ticker window showing trade price
                         and volume information.

    Time & Sales         Tabular display of each transaction showing
                         transaction type price and volume.

    News                 A scrolling list of searchable headlines and
                         full news stories.

    Charts               Graphical analysis of market data with a
                         variety of technical studies available.

    Forex                Foreign exchange cross rates

    Table                Exportable tabular display of market data for
                         a given symbol

    Turbo Options        Advanced options quote screen

    Market Makers        Comparative table of market maker bids and
                         asks indicating market depth.

    Alarm                Automated event-monitoring tool.

    Internet Browser     Drag and drop functionality enables seamless
                         look up of financial information from public
                         Internet databases (such as Yahoo and Edgar
                         On-line) or private intranet databases.

    DDE Link             Links real-time data into a spreadsheet for
                         further analysis and modeling.


    FirstQuote Lite: This service is designed for corporate treasurers,
portfolio managers, smaller brokers and sophisticated private investors. The
service provides real-time data and news, and includes a reduced range of
analytical tools and functions when compared to FirstQuote Professional. The
service consists of a fixed page market data screens featuring (from the above
table) Market Minder; MultiQuote; Ticker; Time and Sales; News; Charts; and
Internet Browser. The fixed page nature of this product provides for
customizable configurations to be implemented for larger groups, which are then
non-modifiable by users.

    FirstQuote Trader: Seamlessly integrated with either of the above two
products, the Company also offers electronic brokerage functionality under the
name FirstQuote Trader. The service is offered as an outsourced solution to
banks and brokerage firms providing them the ability to offer Internet-based
electronic brokerage services to their clients. The service involves the design
of appropriate network architectures as well as the integration of the Company's
licensed trading server platform software with the institution's existing
settlement and account risk management systems. The Company provides the
electronic order entry and routing technologies as well as the security systems,
while the institution's existing computer systems provide order approval and
execution functions. As a result the institution's clientele is offered a
complete order entry, execution, and real time profit/loss portfolio information
via the Internet. Since the FirstQuote Trader elements of the interface are
embedded within the FirstQuote Professional or FirstQuote Lite services, the
Company provides a complete and real-time package of decision support, order
entry, order routing and portfolio monitoring capability.

    The Company is not a licensed bank or securities brokerage firm nor does it
intend to obtain any such licenses at this time. Therefore, the Company intends
for the foreseeable future to offer electronic brokerage services on a co-
branded outsourced basis to licensed banks and brokerage firms. The Company's
electronic brokerage technology is based on a software license from Townsend
Analytics. See "Trademarks and Technology Licenses" below for a summary of the
terms and conditions of the Company's license agreement with Townsend Analytics.
<PAGE>

    FirstQuote.net Services:

    The FirstQuote.net range of services complement the FirstQuote Professional
range, by offering similar content and applicable functionality over Web and
wireless technologies, targeted at clients of banks, brokerages, financial media
companies and Internet Service Providers seeking to add financial content to
their portal audiences. In this way the Company is able to reach broader bands
of the investment community, with the objective of seamlessly upgrading certain
of the more sophisticated users to higher value services, such as which are
provided under the FirstQuote Professional range of products.

    FirstQuote.net is a component-based service offering, providing businesses
in the finance sector with an array of browser-based investor content combined
with ease-of-use functionality. The browser-based application components allow
real-time customer interaction for finance, content management and trade
lifecycle support. The offering provides banks and brokerage institutions with
the capability to provide their clients with multiple points from which to
access market data, news, analyses, brokerage reports, fundamental data,
portfolio services, market risk, trade and order management services, to any one
of a number of desktop or wireless devices, based on a common client profile. As
the applications are component-based, fully customised solutions can be rapidly
created, addressing the `speed to market' issue.

    FirstQuote.net components are centered around the following product ranges:

    SnapQuote       Static (refresh updated) web-based modules for
                    market data, charts and news

    StreamQuote     Dynamically updating content, including screen
                    tickers, charts, as well as real-time browser-
                    based electronic brokerage functionality

    MarketRisk      Decision support analyses presented via a range of
                    graphical interfaces

    SMS             Alert features based on pre-defined user-
                    configured parameters

    WAP             Wireless access to market data, charts, news and
                    electronic brokerage functionality, based on WAP
                    enabled devices such as mobile telephones and
                    personal digital assistants.

    FirstQuote Network Services:

    In order to offer a complete end-to-end package of services, the Company
also provides network development and enterprise connectivity services including
Internet access and network security services to its corporate and institutional
clients.

    The Company maintains its own wide-area Internet protocol network backbone,
enabling clients to access the market data, financial information and online
dealing services directly by way of dial-up or dedicated lines, where speed and
performance is an issue and thus connectivity is not entrusted to the public
internet. The Company's Internet backbone is currently operative throughout
Switzerland, as well as in Paris and Frankfurt and is being extended to London
and Amsterdam. The Company also leases bandwidth from various European
telecommunications carriers further enabling access to the Company's services
from any Internet access point worldwide.

Market environment and corporate strategy

    The Company believes that the market for online investor services in Europe,
including both informational and transactional services, will provide
significant opportunities for the provision of the underlying technology and
content. While this market has developed rapidly in the USA over the past three
years, the European marketplace is characterised by particular parameters which
will require a distinctly different approach in order to capitalise on the
opportunities presented. As a result, the Company believes that significant
market opportunities exist for a provider of financial information and
electronic brokerage services that is able to address the interests and
requirements of the European investor.

    The Company believes that the key drivers influencing the market opportunity
which it faces are as follows:
<PAGE>

    Internet penetration: While the European private and business internet
connectivity currently lags behind that of the USA, recent studies indicate this
will be redressed over the next three years. Internet connectivity for European
business users is estimated to reach 70% penetration by the year 2004 or about
5.75 million companies (Datamonitor). Particularly noteworthy is the extension
of the Internet to a range of wireless devices which the Company believes will
further increase penetration, as well as the demand for investment information
and transactional services. Emerging demand for such wireless services is
believed to be growing strongly in Europe due to the large installed base of GSM
mobile phones.

    Growth in online banking: The number of Europeans using Internet banking is
expected to grow by 30% to 21 million by the year 2004 (Datamonitor). For
traditional banks to move into online banking is a rational move as the costs of
online transactions cost up to 12 times less to process than transactions made
in person. Online customers tend to be more sophisticated and able to look after
their own finances.

    Direct equity ownership: The trend towards greater financial flexibility and
self-determination amongst the European investment community is being driven
both by an emerging class of information- and technology-enabled individuals as
well as government pressure to encourage individual retirement planning outside
of traditional state controlled pension funds.

    Availability of investment products: The scope of investment possibility has
been significantly extended during the past three years with the emergence of
several `new market' exchanges in Europe (commonly referred to as EURO.NM),
largely geared towards new-economy equities. While European mid-size companies
are privately held to a greater extent than their US counterparts, the
succession of ownership to a next generation who are not always willing to
remain in control is creating flotation opportunities in many cases.

    Number of online accounts: The number of online securities accounts in
Europe is currently about 1.3 million (Forrester Research), estimated to grow to
14 million by 2002

    Cross border investment tendencies: European investors have traditionally
invested within their own local markets. However, related to currency and trade
harmonisation initiatives currently being adopted by European countries, the
Company believes that a demand for cross-border investment opportunities will
emerge.

    Pressure on European financial institutions to offer online services: Over
the past three years, European financial institutions have committed significant
resources to the introduction of the Euro as well Y2K issues. The Company
believes that presently, many such financial institutions will perceive an
increased need to offer or improve online investment services to their clients,
with an emphasis on speed to market, in order to maintain clients, capitalise on
additional revenue opportunities, reduce costs, and counter competition from
especially US based service providers penetrating European markets.

    Cross-selling demand from other internet franchises for financial services:
Following from possibilities created by the Internet-economy, the Company
believes that many enterprises currently commanding the attention of large
franchises of Internet-enabled communities, will seek to add complementary
financial services to their product offering in an attempt to capitalise on
overall e-commerce opportunities, thus requiring access to the services that the
Company provides.

    The Company's objective is to be a leading provider of Internet-based
services and solutions to the European investment community. The Company plans
to achieve these objectives through:

    .  the development of strategic alliances with banks and securities
       brokerages, financial service providers, financial news organizations,
       financial middle-ware companies and Internet service providers throughout
       Europe, whereby its services can be leveraged across existing client
       bases

    .  its own direct sales channels targeted at sophisticated private investors
       as well as corporate clients

    .  the development and operation of co-branded content-enabled web-sites
       catering to emerging Internet-communities, for the purpose of offering
       basic investor services, which serve a marketing platform for the
       Company's more sophisticated higher value services.

    Key elements of the Company's strategy include:
<PAGE>

    State of the Art Technology: The Company's technologies and services include
software licensed from Townsend Analytics Ltd. The Company believes that
Townsend Analytics is a recognized world leader in the development and
commercialization of software and technologies dedicated to Internet-based
market data, trading and exchange activities. The owner and President of
Townsend Analytics, Mr. Stuart Townsend, has served on the Board of Directors of
the Company since April 1997.

    European Focus: The Company believes that it offers Internet-based
information and electronic brokerage services that are uniquely European in
nature. Until now, the dominant providers of Internet-based information and
brokerage services in Europe have been US based companies which, in the opinion
of the Company, offer a service that is distinctly US in nature. The Company's
market data and financial services cover all major world markets and exchanges.
However, in the opinion of management, the Company's services provide greater
focus on pan-European markets and exchanges than other competing services. In
the case of joint-venture arrangements for the provision of a co-branded
service, the Company works with its local partner to customize the offered
service to suit the cultural need and investment profile of the partner's
existing and targeted clientele.

    Strategic Alliances (business-to-business model): By focusing on the
development of co-branded information and brokerage services pursuant to
strategic alliances, the Company will acquire an access to existing target
client bases. The Company plans to enter into one or more strategic
relationships with banks and securities brokerages, financial services
providers, financial news organizations, middle-ware providers and Internet
service providers in each of the major investment and geographical communities
of Western Europe. The Company believes that this strategy will accelerate the
expansion of its services throughout Europe and, at the same time, reduce the
marketing costs typically associated with the rollout of a service of this
nature throughout an area made up of several large and culturally diverse
communities.

    Development of FirstQuote Brand Name: The Company has applied for trademark
registration of the FirstQuote mark in the USA, Switzerland and throughout the
European Union. The Company intends to market its services and solutions
throughout Europe under the FirstQuote brand name. The Company shall endeavor to
create a high degree of consumer awareness of the FirstQuote name and the
association of quality and reliable services with such name in the European
investment and banking communities. The Company intends to leverage its
FirstQuote brand-name through the future development and marketing of additional
services, including a portal web-sites linking the customer to an array of
Internet based financial and investment services.

Competition

    The market for financial information and on-line brokerage services over the
Internet is rapidly evolving and becoming increasingly competitive. The Company
expects competition to continue and intensify in the future.

    In the area of market data and financial services, the Company faces direct
competition from several companies that provide for the delivery of financial
data over the Internet or other electronic means. At the more sophisticated end
of the Company's product offering, the Company believes its primary competitors
include Reuters, Bloomberg, and Bridge. In the web-browser based arena,
companies such as GlobalNet Financial and Atos currently also offer content-
enabled web material.

    In the area of electronic brokerage services, the Company seeks to enter
into partnering arrangements with licensed banks and brokerage firms enabling
them to provide the service in turn to their own clients. Such arrangements will
to an extent compete with electronic brokerage firms as the eSchwab division of
Charles Schwab & Co., Inc., E-Trade Group and DLJdirect, and in the more-
European context, Consors and e-Cortal who develop proprietary market data and
internet brokerage systems. However, the Company believes that these same
electronic brokerage firms may solicit either content or specific applications
from FirstQuote to supplement their existing technologies. The above partnering
arrangements may also encounter competition from brokerage firms offering full-
service brokerage operations.

    Many of the Company's competitors have longer operating histories and
significantly greater financial, technical, marketing and other resources than
the Company. In addition, many of the Company's competitors offer a wider range
of services and financial products, and thus may be able to respond more quickly
to new or changing opportunities, technologies and customer requirements. There
can be no assurance that the Company will be able to compete effectively with
current or future competitors or that such competition will not have a material
adverse affect on the Company's business, financial condition and operating
results.
<PAGE>

Third Party Providers

    The Company employs the services of the following businesses:

    Content Originators: The Company has entered into contractual arrangements
with a number of securities and commodities exchanges as well as proprietary
financial news providers, in order to have the necessary rights to redistribute
such content to its subscribers and website users.

    Content Distributors: The Company receives market data information and news
either directly from the content originators or pursuant to agreements with
revendors of such content which provide real-time or delayed data by satellite
or landline transmission.

    Network Infrastructure and Capacity: In order to distribute its services
over its own network backbone as well as via the public Internet, the Company
leases infrastructure and bandwidth from a number of pan-European and
international telecommunications companies.

Strategic Partnering Arrangements

    The Company's business plan focuses on the development of significant
partnering arrangements throughout Europe. The purpose of these partnering
arrangements is to provide investment services, such as market data and
financial information services or on-line brokerage activities, to a targeted
clientele as a co-branded service of the Company and the particular partner. The
Company has targeted the following areas where such partnerships are being
pursued:

    Financial institutions:  Banks and securities brokerages not currently
offering or looking to expand their range of online investment services are
faced with a buy-or-build decision as well as a speed-to-market requirement. The
Company believes that many such institutions will opt for an outsourced service
in order to achieve a rapid entry into a potentially unfamiliar market
territory.

    Media organizations: Traditional media groups are currently challenged to
offer electronic new-media services, especially regarding the provision of
financial data, and do not necessarily have the resources or the online
infrastructure (functionality or contractual content) to be able to complement
their traditional distribution channels.

    Financial middle-ware providers: The providers of traditional financial
systems have generally not included real-time content, decision support user-
interfaces or order-execution transactional functionality, all of which requires
network and contractual infrastructure beyond their core offerings. The Company
believes that its content and electronic brokerage process know-how can be
effectively combined with such providers in order that their products may cater
to a more complete package of requirements.

    Internet service providers: The providers of Internet access have
traditionally had large populations of users which pass through their networks.
They have embraced the concept of `web portals' in order to maximise additional
e-commerce opportunities offered to these users. The Company believes that such
service providers and web portal operators will require access to content and
transactional functionality such as it could provide.

Trademarks and Licenses

    The Company has registered, or has applied for registration, for the
trademarks FirstQuote in Switzerland and the European Union. The Company has
applied for a US registration of the FirstQuote mark.

    The Company's high-end market data and financial information services and
its electronic brokerage solutions are based on software licensed to the Company
by Townsend Analytics Ltd. of Chicago, Illinois. Pursuant to a Computer Software
License Agreement dated January 16, 1997 between Townsend Analytics and the
Company, Townsend Analytics has appointed the Company as a non-exclusive
distributor for the sale, support and servicing of Townsend Analytics'
proprietary software programs relating to market data and financial information
services and on-line brokerage activities. Pursuant to the agreement, the
Company is authorized to implement and resell these software programs in return
for agreed royalty payments. The agreement is renewable on an annual basis.
<PAGE>

    In December 1998, the Company and Townsend Analytics amended their agreement
to restrict the right of Townsend Analytics to grant certain further software
licensing rights in certain European regions, thus providing the Company with a
limited exclusivity until December 31, 2000.

    The Company's information services and brokerage solution are substantially
dependent on the technologies licensed to the Company by Townsend Analytics. In
the event the Company's continued access to the licensed software is terminated
or interrupted for a significant length of time, the Company would have to
either develop or acquire suitable replacement software, of which there can be
no assurance, or discontinue its present operations.

Government regulation

    The Company's market data and financial and on-line brokerage services are
not currently subject to direct regulation by Swiss, European Union or other
law, other than regulations applicable to businesses generally. Changes in the
regulatory environment relating to the Internet content or connectivity
industries, including regulatory changes that directly or indirectly affect
telecommunications costs, could have a material adverse affect on the Company's
business. The Company cannot predict the impact, if any, that future regulation
or regulatory changes may have on its business.

Employees

    At March 1, 2000, the Company was staffed with 50 full-time employees, 2
part-time employees and 5 full-time consultants at present, 9 of whom are
involved in administration, 18 of whom are involved in software development and
engineering and 30 of whom are involved in sales, sales support and marketing.

Item 2.  Description of Property.

    The Company's executive offices are located in Geneva, Switzerland and
consist of 586m2 of leased premises. The Company's lease for these premises
expires on April 30, 2002 and provides for monthly rent of approximately
$15,000.

    In addition the Company rents office space in Zurich, Switzerland (360m2)
for a monthly rent of approximately $9,000, Paris, France (39m2) for a monthly
rent of approximately $5,300, and London, United Kingdom (25m2) for a monthly
rent of approximately $3,900.

Item 3.  Legal Proceedings.

    There are no pending legal proceedings to which the Company or the
properties of the Company are subject. In addition, no proceedings are known to
be contemplated by a governmental authority against the Company or any officer
or director of the Company.

Item 4.  Submission Of Matters To A Vote Of Security Holders.

    Not applicable.
<PAGE>

PART II

Item 5.  Market For Common Equity And Related Stockholder Matters.

Market For Common Shares
------------------------

    The Company's Common Stock has been listed on the OTC Bulletin Board under
the symbol "FSQT" (previously "VITE") since November 18, 1996. During the fiscal
year ended December 31, 1999, the high and low closing prices were $11.00 and
$1.375, respectively. These high and low prices reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent actual
transactions. The following table reflects the Company's stock price movements
in more detail:

<TABLE>
<CAPTION>
                                            Year ended December 31,
                                    ---------------------------------------
                                         1999                    1998
                                    ----------------       ----------------

                 Quarter             High      Low          High      Low
               -----------          ------   -------       ------   -------
               <S>                  <C>      <C>           <C>      <C>
               Fourth               $ 7.50    $ 4.00       $ 2.00    $ 0.69
               Third                 10.00      5.25         1.13      0.91
               Second                11.00      3.31         2.00      1.00
               First                  5.00      1.38         2.13      1.56
</TABLE>

    The Company considers its Common Stock to be thinly traded and that any
reported bid or sale prices may not be a true market-based valuation of the
Common Stock. As of March 1, 2000, there were approximately 313 record holders
of the Company's Common Stock.

    The Company has not paid any cash dividends since its inception and does not
contemplate paying dividends in the foreseeable future. It is anticipated that
earnings, if any, will be retained for the operation of the Company's business.

Recent Sales of Unregistered Securities
---------------------------------------

    During 1999 the Company issued 194,650 shares of Common Stock pursuant to
the exercise of 194,650 Unit Warrants at a strike price of $3.50.

    In January 1999, the Company issued 3,783,784 shares of its Series C
Preferred Stock for a total consideration of $7,000,000.

    In July 1999, the Company granted 15 of its employees options to purchase an
aggregate of 261,300 shares of Common Stock pursuant to the Company's 1997 Stock
Option Plan, as amended. The options had an exercise price of between $4.75 and
$6.00 per share, have a one-year vesting period and expire in December 2002. The
options were issued pursuant to Section 4(2) of the 1933 Act. There was no
underwriter involved in this issuance.

    In December 1999, the Company granted 34 of its employees options to
purchase an aggregate of 220,000 shares of Common Stock pursuant to the
Company's 1997 Stock Option Plan, as amended. The options had an exercise price
of $4.00 per share, have a one-year vesting period and expire in December 2001.
The options were issued pursuant to Section 4(2) of the 1933 Act. There was no
underwriter involved in this issuance.

    In December 1999, the Company issued 197,815 shares of Series D preferred
stock and 148,450 shares of Common Stock, all such shares being valued at
US$6.50 per share, as a partial consideration for the acquisition of Stockdata
B.V. An additional 30,000 shares of Common Stock are issuable subject to the
completion of certain post-closing conditions.
<PAGE>

Item 6.  Management's Discussion And Analysis Or Plan Of Operation

Background
----------

    FirstQuote is a European technology provider of financial information and
electronic brokerage solutions. The Company offers a comprehensive range of
real-time market data and electronic brokerage systems for both the
institutional and individual investor. The financial information systems are
offered via the Internet or through virtual private networks using Internet
technology. The Company also provides related network services to users of its
financial information and electronic brokerage products. Further description of
the Company's activities and products can be found at www.firstquote.com or at
                                                      ------------------
www.firstquote.net.
------------------

    Effective May 7, 1999, the Company amended its Certificate of Incorporation
to change its corporate name to FirstQuote Inc.

    Effective December 24, 1999, the Company acquired 100% of Stockdata
Amsterdam BV, a company located in Amsterdam, for a consideration of up to
$3,750,000. Stockdata is engaged in the distribution of real-time market data
products to the Benelux region, primarily through the use of datacast
technologies via cable networks.

    Regarding the Company's plan of operations for the 2000 fiscal year, it will
continue to targeted strategic alliances in key European financial centers from
which to leverage its growth. It plans to market its financial market
information, analytical tools and electronic brokerage systems both under its
own product names and as co-branded implementations with institutional clients.

    Currency Exchange Rates: Although the Company reports its results in US
dollars, virtually all of its revenues and expenses are denominated in other
currencies, primarily Swiss francs, Euros and Pounds sterling. Consequently, the
Company's net results are directly affected by changes in the exchange rate
between the US dollar on the one hand, and the Swiss franc, Euros or Pounds
sterling on the other. Transactions of the Company and its subsidiaries are
recorded based on the functional currency of each particular company. The
Company's main operating subsidiary maintains a Swiss franc functional currency
and has a US dollar denominated current account with its parent company. This
results in foreign exchange differences being recorded based on variations in
the USD/CHF rate of exchange, which are carried forward on consolidation.

    Assets and liabilities of the Company and its subsidiaries are translated at
the exchange rate in effect at each year-end. Income statement accounts are
translated at the average rate of exchange prevailing during the year.
Translation adjustments arising from differences in exchange rates from period
to period are included in the cumulative translation adjustment account in
stockholders' equity.

Results of Operations
---------------------

    Revenue for the year ended December 31, 1999 was $1,778,459, an increase of
233% over that of $534,715 for the corresponding prior year. Revenue is
comprised primarily from the provision of financial market data and related
network connectivity and web-operation services, but also includes revenue from
development and integration projects (which generally lead to a resultant
revenue stream) as well as transaction related revenue linked to electronic
brokerage activity.

    Revenue for the fourth quarter of 1999 was only marginally increased from
that of the previous quarter, resulting principally from an increased foreign
exchange rate between European currencies in which revenue is recorded and the
US Dollar, in which revenue is reported, as well as `year 2000' factors which
caused certain business to be shifted into the first quarter of 2000.

    Cost of revenue for the year ended December 31, 1999 was $2,157,659, an
increase of 78% above the amount of $1,209,387 for the corresponding prior year.
Cost of revenue as a percentage of revenue has decreased from 226% in the prior
year to 121%, reflecting the economies of operation at a larger scale. Cost of
revenue includes network expenses, data feeds and commissions.

    Selling & Market Development expenses for the year ended December 31, 1999
were $405,256 or 83% above the amount of $221,210 for the corresponding prior
year. Corporate and product marketing expenses have
<PAGE>

increased in conjunction with the corporate name change to FirstQuote and the
continued rollout of the Company's services in Europe.

    General and administrative expenses for the year ended December 31, 1999
were $4,796,643, an increase of 68% from the amount of $2,861,662 for the
corresponding prior year. Staff costs represent the major component of this
expense and have increased 101% from $1,232,645 to $2,483,326. Operating
expenses have increased 50% from $1,108,596 to $1,666,618, and depreciation
charges have increased by 24% from $520,421 to $646,699.

    Operating loss for the year ended December 31, 1999 was $5,581,099, an
increase of 49% from the amount of $3,757,544 for the prior year. Expressed as a
percentage of revenue the operating loss has improved from 703% to 314% of
revenue.

    Foreign exchange gains and losses arise essentially from the revaluation of
amounts due by FirstQuote SA to FirstQuote Inc., which are denominated in US
dollars. The functional currency of FirstQuote SA is the Swiss Franc, and the
resultant loss on revaluation in Swiss Francs is carried forward in
consolidation. The USD/CHF rate of exchange was 1.3760 at December 31, 1998 and
1.5915 at December 31, 1999.

    Net loss for the year ended December 31, 1999 was $6,840,368, compared with
$3,421,229 for the corresponding prior year.

Liquidity and Financial Condition
---------------------------------

    As of December 31, 1999, the Company had negative working capital of
$872,336 and stockholders' equity of $3,939,695.

    In January 2000 the Company obtained bridge financing of $510,000 from its
existing financial investors, essentially to finance the acquisition of
Stockdata, and pending the closing of a private placement of 1,061,057 of its
Common shares for a total amount of $7,155,184, which was concluded during March
2000. The price of the shares placed under this arrangement was fixed at
February 21, 2000 and was based on a moving average of closing market prices to
that date.

    During the year ended December 31, 1999, the Company received $681,275
following the exercise of 194,650 warrants at $3.50. Subsequent to December 31,
1999, a further 130,000 warrants have been exercised for a consideration to the
Company of $455,000. As at March 1, 2000, a further 163,131 warrants are in
existence, all exercisable at $3.50.

    During the year ended December 31, 1999, the Company also received $20,000
following the exercise of 10,000 employee stock options at $2.00.

    The Company continues to generate negative cashflows from operations since
its cost base exceeds its revenues from operating activities. The net `cash
burn' rate from operations was approximately $461,000 per month during the
fourth quarter of 1999 compared with an average of approximately $390,000 per
month during the year ended December 31, 1999, reflecting the increased level of
operations.

    The plan of operations for the next 12 months will require increases in the
amounts of operating and capital expenditure above those incurred to date. As of
the date of this report, and subsequent to the recently concluded private
placement, the Company believes that it has sufficient capital in order to
finance operations and capital expenditures over the next 12 months. However,
should additional capital be required, at this time there are no firm
commitments or agreements on the part of any party to provide any additional
debt or equity capital to the Company and there can be no assurance that the
Company will be able to obtain additional capital. The Company's inability to
increase revenue or obtain additional debt or equity capital on a timely basis
will, in all likelihood, materially adversely affect its future planned growth
of operations and revenues.
<PAGE>

Year 2000 Compliance
--------------------

    Subsequent to the efforts invested in ensuring that its systems were
compliant with the information processing requirements of the next millenium,
the Company experienced no adverse effects resulting from the passage of time to
January 1, 2000.

    The Company estimates that it has spent to date approximately $100,000 in
internal and equipment costs resulting from year 200 issues. No further
expenditure is planned to address other date-specific processing issues that may
arise.

Safe Harbor
-----------

    This report contains various forward-looking statements that are based on
the Company's beliefs as well as assumptions made by and information currently
available to the Company. When used in this report, the words "believe,"
"expect," "anticipate," "estimate" and similar expressions are intended to
identify forward-looking statements. Such statements are subject to certain
risks, uncertainties and assumptions referred to herein, including, without
limitation, the Company's recent commencement of commercial and marketing
operations and the risks and uncertainties concerning the market acceptance of
its services and products; technological changes; increased competition; and
general economic conditions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, estimated, or projected. The Company
cautions potential investors not to place undue reliance on any such forward-
looking statements, all of which speak only as of the date made.
<PAGE>

Item 7.   Financial Statements.

<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
<S>                                                                                                           <C>
Independent Auditors' Report..............................................................................
Consolidated Balance Sheets at December 31, 1999 and 1998.................................................
Consolidated Statements of Operations for the years ended December 31, 1999 and 1998......................
Consolidated Statements of Cash Flows for the years ended December 31, 1999 and 1998......................
Consolidated Statements of Stockholders' Equity (Deficit) for the years ended December 31, 1999 and 1998..
Notes to Consolidated Financial Statements................................................................
</TABLE>
<PAGE>

Report of Independent Auditors

To the Board of Directors and Shareholders

FirstQuote Inc.

We have audited the accompanying consolidated balance sheets of FirstQuote Inc.
and its subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
FirstQuote Inc. and its subsidiaries as of December 31, 1999 and 1998, and the
consolidated results of their operations and their cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States.

ARTHUR ANDERSEN S.A.
Geneva, Switzerland
March 29, 2000
<PAGE>

                       FIRSTQUOTE INC. AND SUBSIDIARIES

         Consolidated Balance Sheets As Of December 31, 1999 and 1998
                           (Currency - U.S. dollars)

                                    ASSETS
                                    ------

<TABLE>
<CAPTION>
                                                           December 31,
                                                  ------------------------------
                                                       1999             1998
                                                  --------------   -------------
<S>                                               <C>              <C>
CURRENT ASSETS
  Cash and cash equivalents                         $  1,093,629    $    229,450
  Trade accounts receivable, net                         616,168         191,229
  Prepaid expenses and other receivables                 486,385          16,270
  Other current assets                                   324,223          45,838
                                                    ------------    ------------
     Total current assets                              2,520,405         482,787
                                                    ------------    ------------

NON-CURRENT ASSETS
  Property and equipment, net                          1,525,400       1,130,563
  Goodwill, net                                        3,307,110              --
  Other assets                                             8,699          28,487
                                                    ------------    ------------
     Total non-current assets                          4,841,209       1,159,050
                                                    ------------    ------------

     Total Assets                                   $  7,361,614    $  1,641,837
                                                    ============    ============
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>

                       FIRSTQUOTE INC. AND SUBSIDIARIES

         Consolidated Balance Sheets As Of December 31, 1999 and 1998
                           (Currency - U.S. dollars)

                     LIABILITIES AND STOCKHOLDERS' EQUITY
                     ------------------------------------

<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                                ------------------------------
                                                                                     1999             1998
                                                                                --------------   -------------
<S>                                                                             <C>              <C>
CURRENT LIABILITIES
  Trade accounts payable                                                         $   1,547,058   $     658,700
  Accrued expenses                                                                     807,341         102,274
  Current portion of capital lease obligations                                         142,626         146,481
  Convertible loans from stockholders                                                       --       1,000,000
  Deferred income                                                                      895,747         170,808
                                                                                  ------------    ------------
    Total current liabilities                                                        3,392,742       2,078,263
                                                                                  ------------    ------------

LONG-TERM CAPITAL LEASE OBLIGATIONS
  Capital lease obligations, net of current portion                                     29,177         166,621
                                                                                  ------------    ------------

STOCKHOLDERS' EQUITY
  Preferred Stock, $0.001 par value,
    10,000,000 shares authorized;
     Class A: 6,500 and 68,500 shares issued and outstanding                                 7              69
     Class B: 1,923,716 shares issued and outstanding                                    1,924           1,924
     Class C: 3,783,784 shares issued and outstanding                                    3,784              --
     Class D: 197,815 shares issued and outstanding                                        198              --
  Common Stock, $0.001 par value,
    20,000,000 shares authorized;
    6,423,409 and 5,781,309 shares issued and outstanding                                6,423           5,781
  Additional paid-in capital                                                        16,703,758       6,381,315
  Cumulative translation adjustment                                                    907,495        (148,610)
  Accumulated deficit                                                              (13,683,894)     (6,843,526)
                                                                                  ------------    ------------
    Total stockholders' equity                                                       3,939,695        (603,047)
                                                                                  ------------    ------------

    Total Liabilities and Stockholders' Equity                                   $   7,361,614   $   1,641,837
                                                                                  ============    ============
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>


                       FIRSTQUOTE INC. AND SUBSIDIARIES

                     Consolidated Statements Of Operations
                For The Years Ended December 31, 1999 and 1998
                           (Currency - U.S. Dollars)


<TABLE>
<CAPTION>
                                                                          Year Ended December 31,
                                                                      ------------------------------
                                                                           1999             1998
                                                                      --------------   -------------
<S>                                                                   <C>              <C>
REVENUE                                                                $   1,778,459   $     534,715

OPERATING EXPENSES
  Cost of Revenue                                                          2,157,659       1,209,387
  Selling & Market Development Expenses                                      405,256         221,210
  General and Administrative Expenses                                      4,796,643       2,861,662
                                                                        ------------    ------------
                                                                           7,359,558       4,292,259

                                                                        ------------    ------------
OPERATING LOSS                                                            (5,581,099)     (3,757,544)

OTHER INCOME AND EXPENSES
  Interest Income / (Expense), net                                            99,536          (3,441)
  Foreign Exchange (Loss) / Gain, net                                     (1,358,805)        339,756
                                                                        ------------    ------------
                                                                          (1,259,269)        336,315

                                                                        ------------    ------------
NET LOSS APPLICABLE TO COMMON SHAREHOLDERS                             $  (6,840,368)  $  (3,421,229)
                                                                        ============    ============

Basic and diluted net loss per common share                            $       (1.14)  $       (0.59)
                                                                        ============    ============

Basic and diluted weighted average number of common shares                 5,995,689       5,781,309
                                                                        ============    ============
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>


                       FIRSTQUOTE INC. AND SUBSIDIARIES

                     Consolidated Statements Of Cash Flows
                For The Years Ended December 31, 1999 and 1998
                           (Currency - U.S. Dollars)


<TABLE>
<CAPTION>
                                                                                         Year Ended December 31,
                                                                                     ------------------------------
                                                                                          1999             1998
                                                                                     --------------   -------------
<S>                                                                                  <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Loss                                                                              $(6,840,368)    $(3,421,229)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Exchange loss / (gain)                                                                1,358,805        (339,756)
    Depreciation of property and equipment                                                  646,699         520,421
    Amortisation of goodwill                                                                 21,336              --
    Provision for doubtful debtors                                                           88,875          15,840
    Interest accrued on loans payable                                                            --           5,417
    Stock issued for license                                                                125,000              --
  Change in operating assets and liabilities
    Trade accounts receivable                                                              (447,155)       (141,138)
    Prepaid expenses and other receivables                                                 (259,622)         75,999
    Trade accounts payable                                                                  320,886         463,766
    Accrued expenses                                                                        249,912         (77,174)
    Deferred income                                                                         179,516         137,052
                                                                                       ------------    ------------
    Net cash used-in operating activities                                                (4,556,116)     (2,760,802)

CASH FROM INVESTING ACTIVITIES:
  Purchase of equipment                                                                    (532,243)       (464,211)
  Purchase of subsidiary                                                                   (245,031)             --
  Other non-current asset movements                                                          19,788          (2,613)
                                                                                       ------------    ------------
    Net cash used in investing activities                                                  (757,486)       (466,824)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of Preferred Stock                                                             6,000,000              --
  Commission on issuance of Preferred Stock                                                 (70,000)             --
  Issuance of stock upon exercise of warrants                                               681,275
  Issuance of stock upon exercise of options                                                 20,000
  Collection of stock subscriptions receivable                                                   --       2,000,000
  Advances from stockholders and related parties                                                 --       1,000,000
  Reimbursements of advances from stockholders and related parties                               --         (96,089)
  Payment of capital lease obligations                                                     (150,795)        (75,537)
                                                                                       ------------    ------------
    Net cash provided by financing activities                                             6,480,480       2,828,374

Effect of exchange rate changes on cash and cash equivalents                               (302,699)         59,438

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS                                      864,179        (339,814)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                              229,450         569,264
                                                                                       ------------    ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                                $ 1,093,629     $   229,450
                                                                                       ------------    ------------
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>

                       FIRSTQUOTE INC. AND SUBSIDIARIES

          Consolidated Statements Of Changes in Stockholders' Equity
                For The Years Ended December 31, 1999 and 1998
                           (Currency - U.S. Dollars)

<TABLE>
<CAPTION>
                                                                       Class A               Class B                Class C
                                                Common stock       Preferred stock        Preferred stock       Preferred stock
                                            Shares      Amount    Shares      Amount     Shares     Amount     Shares     Amount
                                          ----------   --------  --------    --------  ----------  --------  ----------  --------
<S>                                       <C>          <C>       <C>         <C>       <C>         <C>       <C>         <C>
Balance at December 31, 1997               5,375,272      5,375   147,938         148   1,923,716     1,924           -         -

Issuance of common stock to repay
 convertible loan                            145,161        145
Conversion of preferred to common stock      158,876        159   (79,438)        (79)
Issuance of common stock as a result of
 price reset on private placement units      102,000        102
Net loss
Currency translation loss
                                          ----------   --------  --------    --------  ----------  --------  ----------  --------
Balance at December 31, 1998               5,781,309      5,781    68,500          69   1,923,716     1,924           -         -

Conversion of preferred to common stock      124,000        124   (62,000)        (62)
Issuance of preferred stock through
 private placement of offering                                                                                3,783,784     3,784
Issuance of common stock pursuant to
 agreement with Townsend Analytics, Ltd.     135,000        135
Issuance of common stock pursuant to
 exercise of warrants                        194,650        195
Issuance of common stock pursuant to
 exercise of stock options                    10,000         10

Issuance of stock pursuant to purchase
 of Stockdata B.V.                           178,450        178
Net Loss
Currency translation gain
                                          ----------   --------  --------    --------  ----------  --------  ----------  --------
Balance at December 31, 1999               6,423,409      6,423     6,500           7   1,923,716     1,924   3,783,784     3,784
                                          ==========   ========  ========    ========  ==========  ========  ==========  ========

<CAPTION>
                                                Class D                         Cumulative                  Total
                                            Preferred stock   Additional paid-  translation Accumulated Stockholders' Comprehensive
                                           Shares     Amount     in capital     adjustment    deficit      equity         loss
                                          --------   -------- ----------------  ----------- ----------- ------------- -------------
<S>                                       <C>        <C>      <C>               <C>         <C>         <C>           <C>
Balance at December 31, 1997                     -          -        6,156,642      131,707  (3,422,297)    2,873,499

Issuance of common stock to repay
 convertible loan                                                      224,855                                225,000
Conversion of preferred to common stock                                    (80)                                     -
Issuance of common stock as a result of
 price reset on private placement units                                   (102)                                     -
Net loss                                                                                     (3,421,229)   (3,421,229)   (3,421,229)
Translation loss                                                                   (280,317)                 (280,317)     (280,317)
                                          --------   -------- ----------------  ----------- ----------- ------------- -------------
Balance at December 31, 1998                     -          -        6,381,315     (148,610) (6,843,526)     (603,047)   (3,701,546)
                                                                                                                      =============
Conversion of preferred to common stock                                    (62)                                     -
Issuance of preferred stock through
 private placement of offering                                       6,926,216                              6,930,000
Issuance of common stock pursuant to
 agreement with Townsend Analytics, Ltd.                               249,865                                250,000
Issuance of common stock pursuant to
 exercise of warrants                                                  681,080                                681,275
Issuance of common stock pursuant to
 exercise of stock options                                              19,990                                 20,000
Issuance of stock pursuant to purchase
 of Stockdata B.V.                         197,815        198        2,445,354                              2,445,730
Net Loss                                                                                     (6,840,368)   (6,840,368)   (6,840,368)
Translation gain                                                                  1,056,105                 1,056,105     1,056,105
                                          --------   -------- ----------------  ----------- ----------- ------------- -------------
Balance at December 31, 1999               197,815        198       16,703,758      907,495 (13,683,894)    3,939,695    (5,784,263)
                                          ========   ======== ================  =========== =========== ============= =============
</TABLE>

                                     -20-
<PAGE>

                       FIRSTQUOTE INC. AND SUBSIDIARIES

                Notes to the Consolidated Financial Statements
                       As of December 31, 1999 and 1998
               (Amounts in US Dollars, unless otherwise stated)

1.  Description of the Company and its subsidiaries

    FirstQuote Inc. (previously Virtual Telecom, Inc., the "Company") was
    incorporated in Delaware on July 3, 1996 for the purpose of holding all the
    shares of FirstQuote SA (previously Virtual Telecom SA), a Swiss corporation
    formed in 1994. The owners of FirstQuote SA contributed all of the
    FirstQuote SA shares in consideration for 3,194,540 common shares of
    FirstQuote Inc. The accompanying financial statements have been prepared as
    if the acquisition had occurred at FirstQuote SA's inception (May 19, 1994),
    using the historical costs of each entity.

    Unless the context otherwise requires, all references to the Company include
    its wholly owned subsidiaries, FirstQuote SA, a Swiss corporation,
    FirstQuote Limited, an English corporation founded in December 1997, and
    FirstQuote Stockdata BV, a Dutch corporation.

    The Company has incurred operating losses and negative cash flows since
    inception. As of December 31, 1999 the Company had a working capital deficit
    of $872,337. In March 2000, the Company sold 1,061,057 shares of Common
    Stock for a total consideration of $7,155,184. The plan of operations for
    2000 and thereafter will require increases in expenditures above those
    incurred to date. The ability of the Company to continue operations as
    planned will be dependent on the ability of the Company to generate
    increased revenues, produce positive margins and/or raise additional
    finance.

2.  Summary of significant accounting policies

    a)  Principles of consolidation

        The consolidated financial statements include the accounts of the
        Company and its wholly owned subsidiaries. All significant intercompany
        accounts and transactions have been eliminated.

    b)  Use of estimates

        The preparation of financial statements in conformity with generally
        accepted accounting principles in the United States requires management
        to make estimates and assumptions that affect the reported amounts of
        assets and liabilities and disclosure of contingent assets and
        liabilities at the date of the financial statements and the reported
        amounts of revenues and expenses during the reporting period. Actual
        results could differ from these estimates.

    c)  Revenue recognition

        The Company develops, installs, and maintains systems that allow its
        clients to access the financial information and market data services
        that it provides over an Internet connection as well as to access the
        Internet at large. The Company therefore derives both single
        installation and recurring revenues.

        Installation revenues and related costs are recognized upon completion
        of installation. Where installation revenues exceed installation costs,
        then installation revenues are recognized over the service period.

                                      -21-
<PAGE>

        Recurring revenues for financial data services and network services are
        normally invoiced in advance. The resulting amount of unearned income
        not attributable to the period of invoicing is reflected under current
        liabilities as deferred revenue, and recognized in the profit and loss
        account according to the month of applicability of the underlying
        services.

    d)  Foreign currency translation

        The Company accounts for foreign currency transactions in accordance
        with Statement of Financial Accounting Standard (SFAS) No. 52, "Foreign
        Currency Translation" which provides for the translation of assets and
        liabilities at the end of period current rate and of operations and cash
        flows at the rates existing at the date of the transaction, or
        appropriate average. Foreign currency transactions are translated into
        the functional currency at the rate existing at the date of the
        transaction and outstanding balances are revalued at the year-end rate
        with the resulting exchange gain or loss being included in the statement
        of operations.

        The functional currency of the Company's main operating subsidiary
        FirstQuote SA, is the Swiss Franc (CHF), and of FirstQuote Stockdata BV
        is the Dutch Guilder (NLG). The functional currency of FirstQuote Inc.
        and FirstQuote Limited is US dollars.

        The resulting gain or loss on translation into the reporting currency is
        included as a separate component of equity under "cumulative translation
        adjustment".

    e)  Cash and cash equivalents

        The Company considers all highly liquid debt instruments with an initial
        maturity of three months or less to be cash equivalents.

    f)  Property and equipment

        Property and equipment is stated at cost and depreciated using the
        straight-line method over their estimated useful lives, ranging from 3
        to 5 years. Leasehold improvements are depreciated over the shorter of
        the life of the lease or the life of the asset. Upon sale, any gain or
        loss is included in the statement of operations. Maintenance and minor
        replacements are charged to operations as incurred.

    g)  Goodwill

        Goodwill is computed as being the difference between the purchase price
        and the fair value of the net assets acquired.

        Goodwill is amortized over the estimated product or technology cycle of
        the underlying acquisition, generally being three years.

    h)  Income taxes

        The Company utilizes the liability method to account for income taxes.
        Under this method, deferred taxes are determined based on the
        differences between the financial statement and tax bases of assets and
        liabilities, using enacted tax rates in effect for the year in which the
        differences are expected to reverse. Valuation allowances are
        established when necessary to reduce deferred tax assets to the amounts
        to be more likely than not realized.

        The Company's subsidiary, FirstQuote SA, is incorporated in Switzerland.
        The tax charge in Switzerland is an accumulation of the taxes due to the
        city, the canton (state) and the federal authorities.

    i)  Stock-based Compensation

        The Company account for stock based compensation in accordance with
        Statement of Financial Accounting Standards No. 123, "Accounting for
        Stock-Based Compensation", which provides for a fair value based method
        of accounting for grants of equity instruments to employees or suppliers
        in return for goods or services. With respect to stock-based
        compensation to employees, SFAS No. 123 permits the continued
        application of the provisions prescribed by APB Opinion No. 25. However,
        pro

                                      -22-
<PAGE>

        forma disclosures of net income and earnings per share must be presented
        as if the fair value based method had been applied in measuring
        compensation cost.

        The Company has elected to continue with the accounting method
        prescribed by APB Opinion No. 25 and presented the required pro forma
        disclosures of SFAS 123 in Note 12.d).

    j)  Fair value of financial instruments

        The carrying value of financial instruments included in current assets
        and liabilities approximates fair value because of the short maturity of
        these items.

    k)  Segment Reporting

        Statement No. 131, Disclosures about Segments of an Enterprise and
        Related Information requires certain disclosures about segments of an
        enterprise, if applicable and major customers. The Company manages its
        activities as one segment under the guidelines of this standard.

    l)  Advertising expenditure

        Advertising is expensed as incurred.

    m)  Net loss per common share

        Net loss per common share is based on the net loss divided by the
        weighted average number of common shares outstanding.

        Convertible preferred stock and outstanding warrants have not been
        included, as their effect would be antidilutive.

    n)  Recent Accounting Pronouncements

        Statement No. 133, Accounting for Derivative Instruments and Hedging
        Activities (Issue Date 6/98) establishes accounting and reporting
        standards requiring that every derivative instrument (including certain
        derivative instruments embedded in other contracts) be recorded in the
        balance sheet as either an asset or liability measured at its fair
        value. The Statement requires that changes in the derivative's fair
        value be recognized in earnings unless specific hedge accounting
        criteria are met. Special accounting for qualifying hedges allows a
        derivative's gains and losses to offset related results on the hedged
        item in the income statement, and requires that a company must formally
        document, designate, and assess the effectiveness of transactions that
        receive hedge accounting. Statement No. 133 is effective for fiscal
        years beginning after June 15, 1999and must be applied to (a) derivative
        instruments and (b) certain derivative instruments embedded in hybrid
        contracts that were issued, acquired, or substantively modified after
        December 31, 1997. The Company has not yet quantified the impact of
        adopting Statement No. 133.

    o)  Reclassifications

        Certain reclassifications have been made to the prior year financial
        statements to conform to the current year's presentation.

                                      -23-
<PAGE>

3.      Trade Receivables

<TABLE>
<CAPTION>
                                                                         December 31,
                                                               --------------------------------
                                                                   1999                1998
                                                               ------------         -----------
        <S>                                                    <C>                  <C>
        Trade accounts receivable                              $    727,050         $   205,764
        Less: Allowance for doubtful accounts                      (110,882)            (14,535)
                                                               ------------         -----------
        Trade accounts receivable, net                         $    616,168         $   191,229
                                                               ============         ===========
</TABLE>

4.  Acquisition of Stockdata Amsterdam BV

    In December 1999, the Company acquired all of the outstanding capital shares
    of Stockdata Amsterdam BV, a limited liability company organized under the
    laws of The Netherlands and located in Amsterdam, The Netherlands. Stockdata
    is engaged in the distribution of real-time market data products to the
    Benelux region, primarily through the use of datacast technologies via cable
    networks. Subsequent to the acquisition, the name of the acquired company
    was changed to FirstQuote Stock data BV.

    The acquisition was conducted pursuant to a Securities Purchase Agreement
    dated December 24, 1999 between FirstQuote and the stockholders of
    Stockdata. Pursuant to the agreement, the Stockdata stockholders transferred
    to FirstQuote all of the outstanding capital shares of Stockdata in
    consideration of FirstQuote's payment of up to US$3,750,000, payable as
    follows: US$245,031 in cash; US$1,059,239 in the assignment of Stockdata
    receivables; and FirstQuote's issuance of 197,815 shares of Series D
    preferred stock and 148,450 shares of common stock, all such shares being
    valued at approximately US$6.50 per share. An additional 30,000 FirstQuote
    common shares are issuable to the sellers' subject to their satisfaction of
    certain post-closing conditions.

    The acquisition was accounted for under the purchase method of accounting.
    The results of operations of Stockdata for the period from the date of the
    acquisition have been included in the consolidated financial
    statements. The excess of cost over the estimated fair value of net assets
    acquired amounted to $3,328,446 and was allocated to goodwill to be
    amortised over three years.

    The following unaudited pro forma information presents the results of
    operations of the Company as if the acquisition had taken place on January 1
    of each year:

<TABLE>
<CAPTION>
                                                                         December 31,
                                                               --------------------------------
                                                                   1999               1998
                                                               -------------      -------------
        <S>                                                    <C>                <C>
        Revenue                                                  $ 4,036,237        $ 3,170,274
        Net loss, after amortised goodwill                        (7,874,477)        (4,597,184)
        Amortised goodwill included in net loss                   (1,136,591)        (1,314,245)
        Basic and diluted net loss per share                           (1.28)             (0.77)
</TABLE>

    The unaudited consolidated pro forma information is not necessarily
    indicative of the combined results that would have occurred had the
    acquisition occurred on those dates, nor is it indicative of the results
    that may occur in the future.

                                      -24-
<PAGE>

5.  Property and Equipment

    Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                      December 31,
                                                    -----------------------------------------------
                                                          1999                          1998
                                                    ----------------               ----------------
    <S>                                             <C>                            <C>
    Software                                           $      20,008                 $       23,761
    Computer equipment                                     1,775,514                        773,837
    Computer equipment under capital leases                   41,840                         48,393
    Furniture and fixtures                                   159,435                        112,387
    Vehicles under capital leases                             74,851                         61,065
    Network equipment under capital leases                   759,186                        878,085
                                                    ----------------                ---------------
                                                           2,830,834                      1,897,528
    Less: Accumulated Depreciation                        (1,305,434)                      (766,965)
                                                    ----------------                ---------------
                                                      $    1,525,400                 $    1,130,563
                                                    ----------------                ---------------
</TABLE>

    Depreciation for the year amounted to $646,699 and (1998: $520,421),
    including $295,837 (1998: $301,828) in depreciation of assets under capital
    leases.

6.  Goodwill

    Goodwill consists of the following:

<TABLE>
<CAPTION>
                                                                            December 31,
                                                                -------------------------------------
                                                                     1999                   1998
                                                                ---------------        --------------
    <S>                                                         <C>                    <C>
    Goodwill upon acquisition of subsidiary                      $   3,328,446          $          --
    Less: Accumulated amortisation                                     (21,336)                    --
                                                                --------------          -------------
    Goodwill, net                                                $   3,307,110          $          --
                                                                --------------          -------------
</TABLE>

7.  Capital lease obligations

    The Company's Swiss subsidiary is obligated under capital leases (network,
    computer and cars) and operating leases (offices) expiring at various dates
    through September 2002.

                                      -25-
<PAGE>

    Minimum lease payments for leases that have initial or remaining non-
    cancelable terms in excess of one year are:

<TABLE>
<CAPTION>
                                                           Operating Leases                   Capital Leases
                                                         --------------------               ------------------
    <S>                                                  <C>                                <C>
    Future minimum lease payments:
         2000                                               $         394,681                  $       157,173
         2001                                                         337,671                           13,533
         2002                                                         196,580                            9,532
         2003                                                         125,302                              808
         2004                                                              --                               --
                                                            -----------------                  ---------------
    Minimum lease payments                                  $       1,054,234                  $       181,046
                                                            -----------------
    Less: Amount representing interest (5.6% to 8.1%)                                                    9,243
                                                                                               ---------------
                                                                                                       171,803
    Less: Current maturities                                                                           142,626
                                                                                               ---------------
    Long-term capital lease obligations                                                        $        29,177
                                                                                               ===============
</TABLE>

8.  Advances and convertible loans from stockholders and related parties

    As at December 31, 1998 the Company owed $1,000,000 in respect of a loan
    convertible into preferred stock of the Company upon the conclusion of
    additional equity financing, or redeemable, at the option of the lender. In
    January 1999, the loan was converted into 540,541 shares of Series C
    Preferred Stock (see Note 12.b)

9.  Related party transactions

    a)  Software Solution provider

        In January 1997 the Company entered into a software distributor
        agreement with a financial software solution provider as disclosed in
        Note 10.c)

    b)  Employment agreements

        Commencing May 1, 1996, the Company entered into five-year term
        employment agreements with two stockholders. Both agreements provide for
        compensation of at least approximately $5,600 per month plus monthly car
        allowances of approximately $400 per month. The agreements can be
        extended up to three additional three-year terms and are subject to
        yearly consumer price index increases. Total compensation paid under
        these agreements amounted to $221,426 (1998: $144,480).

    c)  Office lease

        The Company entered into a month to month sublease agreement with a
        company affiliated with a stockholder, whereby the Company recovers
        certain costs for the use of its premises, utilities and computer
        systems usage. The agreement was terminated in June 1999. Amounts
        charged to the affiliate during the year amounted to approximately
        $5,400 (1998: $9,000).

                                      -26-
<PAGE>

10. Major agreements

    a)  Network equipment service agreement

        In September 1996, the Company entered into an equipment purchase and
        network maintenance service agreement with a major computer equipment
        manufacturer, whereby the Company committed to outsource the maintenance
        and operation of the network for a total of approximately $635,000 from
        1997 through 2000. Decreasing cancellation fees apply if the Company
        terminates the agreement before the end of the four-year term of the
        agreement, ranging from approximately $480,000 to $100,000.

        During December 1998, the Company concluded negotiations to take over
        certain operations and maintenance elements envisaged within the
        agreement for a reduction in the amount of ongoing payments.

        There are other major suppliers of similar equipment and services. A
        change in supplier, however, could cause disruption in service and a
        possible loss of revenues which would adversely affect future operating
        results.

    b)  License to use and disseminate stock market information

        In August 1996, the Company entered into a 30-month license agreement to
        use and disseminate stock market information. After the initial term,
        the agreement is renewable in twelve-month increments, with a 90-day
        cancellation notice period. According to the default terms of the
        agreement, a twelve-month renewal period commenced in February 2000.

    c)  Financial software solution provider

        In January 1997 the Company entered into a 3-year software distributor
        agreement with a financial software solution provider based in the USA
        controlled by a director of the Company. Under the agreement, the
        Company is required to pay royalties based on the number of its clients
        using the software. After the initial term, the agreement is renewable
        on a 12 monthly basis. A 90-day cancellation period applies throughout
        the contract.

        In December 1998 the Company extended the scope of this agreement
        whereby the software provider agreed not to undertake any new licensing
        agreements for Switzerland, Germany, France, and the Benelux countries
        until December 31, 2001. Under the terms of the agreement, the Company
        was committed to paying a single amount of $500,000 ($250,000 of which
        was settled in February 1999 in cash and the remainder in March 1999
        through the issuance of 135,000 common shares), and is further committed
        to minimum royalty payments of $50,000 per month from July 1, 1999,
        $100,000 per month from January 1, 2000 and $150,000 per month from July
        1, 2000.

        While there are other providers of related financial software solutions
        on the market, the specialist nature of the software solutions provided
        under the agreement means that the Company places significant reliance
        on this supplier in terms of securing future revenues.

11. Income Taxes

    Deferred income tax assets and liabilities are provided for temporary
    differences between financial statement income and amounts currently
    taxable.

                                      -27-
<PAGE>

    For US tax reporting purposes the Company has a net operating loss carry
    forward of approximately $1,786,144 (1998: $1,034,443) to offset federal
    income taxes which expire at different dates through the year 2013. These
    net operating losses could be restricted due to a change in the Company's
    ownership.

    For Swiss reporting purposes the Company has a net operating loss carry
    forward of $11,987,490 (1998: $5,826,944) to offset future income taxes in
    Switzerland which expires between the years 2003 and 2006.

    Temporary differences that give rise to deferred income tax assets and
    liabilities are:

<TABLE>
<CAPTION>
                                                            December 31,
                                              ---------------------------------------------
                                                   1999                           1998
                                              --------------                 --------------
    <S>                                       <C>                            <C>
    Net operating loss carry forward          $    3,484,374                 $    1,760,666
    Less: Valuation allowance                     (3,484,374)                    (1,760,666)
                                              --------------                 --------------
    Net deferred tax asset                    $           --                 $           --
                                              --------------                 --------------
</TABLE>

    A valuation allowance is used to reduce the deferred tax asset to a level
    which, more likely than not, will be realized. A valuation allowance for the
    full amount of deferred tax assets has been recorded since certain doubts
    exist regarding the use of the tax losses carried forward to offset future
    taxable income.

12. Stockholders' equity

    a)  Common Stock

        The Company is authorized to issue 20,000,000 shares of Common Stock,
        $.001 par value ("Common Stock"). As of December 31, 1999, 6,423,409
        shares were issued and outstanding and held by approximately 313
        stockholders of record.

        As of December 31, 1999, there are no outstanding options, warrants or
        other securities, which upon exercise or conversion entitle their holder
        to acquire shares of Common Stock, other than the Unit Warrants, Series
        A, B and C Preferred Stock and options issued under the Stock Option
        Plan, described below.

        Holders of shares of Common Stock are entitled to one vote per share on
        all matters to be voted upon by the stockholders. The approval of
        proposals submitted to stockholders at a meeting other than for the
        election of directors requires the favorable vote of a majority of the
        shares voting, except in the case of certain fundamental matters (such
        as certain amendments to the Certificate of Incorporation, and certain
        mergers and reorganizations), in which case Delaware law and the
        Company's Bylaws require the favorable vote of at least a majority of
        all outstanding shares. Stockholders are entitled to receive such
        dividends as may be declared from time to time by the Board of Directors
        out of funds legally available therefore, and in the event of
        liquidation, dissolution or winding up of the Company to share ratably
        in all assets remaining after payment of liabilities. The holders of
        shares of Common Stock have no pre-emptive, conversion, subscription or
        cumulative voting rights.

        In April 1998, the Company issued 145,161 shares of its common stock in
        conversion of $225,000 of loan principal at a price of $1.55 per share.

        In March 1999, the Company issued 135,000 shares in settlement of half
        of the amount due to the financial software solution provider as
        reflected in Note 10.c).

                                      -28-
<PAGE>

        In December 1999, the Company issued 178,450 shares as an element of the
        purchase consideration for the acquisition of Stockdata BV, as reflected
        in Note 4.

        In March 2000, by way of a private placement, the Company sold 1,061,057
        shares of its Common Stock for a total consideration of $7,155,184.
b)      Preferred Stock

        The Company is authorized to issue 10,000,000 shares of preferred stock,
        $.001 par value ("Preferred Stock"). The Company's Board of Directors is
        authorized to issue from time to time, without shareholder
        authorization, in one or more designated series or classes, any or all
        of the authorized but unissued shares of Preferred Stock with such
        dividend, redemption, conversion and exchange provisions as may be
        provided in the particular series.

        The Board of Directors of the Company designated an initial series of
        Preferred Stock as "Series A Preferred Stock" consisting of 750,000
        authorized shares with a par value of $0.001 and a liquidation
        preference of $3.50. In November 1997 the conversion price of the Series
        A Preferred Stock was reset to $1.75 per share, which allows converting
        one Series A Preferred Stock into two shares of Common Stock. The Series
        A Preferred Stock does not carry dividend rights or any other rights
        senior to the Common Stock and has equal voting rights with the Common
        Stock. The Series A Preferred Stock is redeemable by the Company, at a
        price equal to the liquidation preference plus any unpaid dividends, at
        the earlier of one year from the date of initial issuance or upon the
        closing of a public offering of the Company's Common Stock where
        immediately following such offering the Common Stock is listed on the
        New York Stock Exchange or the NASDAQ Stock Market. No shares of Series
        A Preferred Stock shall be redeemed without the consent of the majority
        of outstanding shares of Series B Preferred Stock.

        During 1996, the Company issued 283,781 units of its securities
        ("Units"), each Unit consisting of one share of Series A Preferred stock
        and one Common Stock purchase warrant ("Unit Warrant") for a total
        consideration of $875,520, net of $117,713 in issuance costs. In
        connection therewith, the Company also issued 200,000 shares of its
        common stock to related parties as commissions for the issuance of the
        Units. The shares were valued at $.25 a share, the opening trading price
        of the Company's stock in November 1996, resulting in a $50,000
        deduction from the Preferred Stock proceeds.

        As at December 31, 1999 277,281 shares of Series A Preferred Stock had
        been converted into 554,562 Common Shares (of which 62,000 shares of
        Series A Preferred Stock were converted during 1999), and 6,500 shares
        of Series A Preferred Stock remained outstanding. In February 2000, a
        further 5,000 shares of Series A Preferred Stock were converted.

        In December 1997, the Board of Directors of the Company designated a
        second series of preferred shares as "Series B Preferred Stock"
        consisting of 1,923,716 authorized shares with a par value of $0.001. On
        December 30, 1997, the Company sold 1,923,716 shares of its Series B
        Preferred Stock to three affiliated Alta-Berkeley venture capital funds
        (collectively referred to as "Alta-Berkeley") for $3,000,000 of which
        $1,000,000 was received in December 1997 and $2,000,000 in March 1998.

        In January 1999, the Board of Directors of the Company designated a
        third series of preferred shares as "Series C Preferred Stock"
        consisting of 3,783,784 authorized shares with a par value of $0.001. On
        January 25, 1999, the Company sold 3,783,784 shares of its Series C
        Preferred Stock to five parties, including Alta-Berkeley, two other
        venture capital funds, a bank and a private investor, for a total
        consideration of $7,000,000.

        Concurrent with the issuance of the Series B Preferred Stock, the
        Company and Alta-Berkeley entered into an Investors' Rights Agreement,
        which has been amended to include the holders of the Series C

                                      -29-
<PAGE>

        Preferred Stock. Pursuant to the terms of this agreement, the Company
        increased the authorized number of its directors to nine. Holders of the
        shares of both the Series B Preferred Stock as a class, and the Series C
        Preferred Stock as a class, are each entitled to elect two members of
        the Company's Board (four in total). In addition, the Company has
        granted the holders of the Series B Preferred Stock and the Series C
        Preferred Stock (the "Holders") the right of first refusal to purchase a
        pro rata share of any new equity securities which the Company may issue.
        The right of first refusal expires on January 24, 2006. The Investors'
        Rights Agreement also grants the Holders registration rights in certain
        circumstances as well as certain approval and disclosure rights over
        certain management and strategic matters.

        The shares of both the Series B Preferred Stock and the Series C
        Preferred Stock have a liquidation preference of the greater of (i)
        $3.50 per share if the event of liquidation, dissolution or winding up
        occurs on or before December 31, 2000 and thereafter of $5.20 per share
        and (ii) $1.85 plus a pro-rata share of any excess liquidation proceeds
        accruing to the common shareholders. The shares are all convertible at
        any time into shares of the Company's Common Stock on a one-for-one
        basis, subject to adjustment pursuant to certain anti-dilution rights,
        and have full voting rights.

c)      Warrant Issues

        During 1996, the Company issued 283,781 units ("Units") of its
        securities, each Unit consisting of one Series A Preferred Share and one
        Common Stock purchase warrant ("Unit Warrant").

        During 1997, the Company issued a further 204,000 units ("Units") of its
        securities, each Unit consisting of two Common Shares and one Unit
        Warrant.

        Each Unit Warrant entitles its holder to purchase one share of Common
        Stock at an exercise price of $3.50 per share until December 31, 2000,
        at which time the unexercised Unit Warrants shall expire by their own
        terms. The Unit Warrants are subject to anti-dilution provisions.

        As at December 31, 1999 194,650 Unit Warrants had been exercised and
        293,131 Unit Warrants remained outstanding. In February 2000, a further
        130,000 Unit Warrants were exercised.

d)      Stock Option Plan

        During 1997, the Company adopted a Stock Option Plan (the "Plan"). As at
        December 31, 1999 a total of 2,000,000 shares of Common Stock may be
        issued under the Plan and have been reserved by the Directors for that
        purpose.The Board of Directors determines the terms and exercise prices
        of all options to be granted.

        Officers and directors of the Company, as well as consultants,
        independent contractors or other service providers are eligible for
        "Non-qualified Options". Only employees of the Company or its
        subsidiaries (including officers and directors) are eligible to receive
        grants of "Incentive Stock Options". No option may be granted under the
        Plan after March 19, 2008, but options granted before that date may be
        exercisable after that date. Options granted under the Plan are subject
        to a minimum vesting period of one year.

                                      -30-
<PAGE>

        Pro forma information concerning the Company's net loss and earnings per
        share had compensation cost on all options granted been determined
        consistent with SFAS No. 123, is as follows:

<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                              ----------------------------------
                                                                    1999             1998
                                                              ---------------  ----------------
          <S>                                                 <C>              <C>
          Net loss, as reported                                 $ 6,840,368       $ 3,421,229
          Net loss, pro forma                                     8,370,902         3,470,629

          Basic and diluted loss per share, as reported         $      1.14       $      0.59
          Basic and diluted loss per share, pro forma                  1.40              0.60
</TABLE>

        The effects of applying SFAS No. 123 in this pro-forma disclosure are
        not indicative of future amounts.

        The following additional information has been used in determining the
        above disclosures regarding the Plan:

<TABLE>
<CAPTION>
                                                                                          Year Ended December 31,
                                                                                     --------------------------------
                                                                                           1999             1998
                                                                                     ---------------  ---------------
        <S>                                                                          <C>              <C>
        Weighted-average assumption information used:
          Risk-free rate                                                                    5.00%               5.00%
          Expected life (days)                                                               992               1,113
          Expected volatility                                                                101%                 57%

        Weight-average grant-date fair value of options                             $       3.18         $      0.13

        Options granted during the year:
          Directors and employees                                                        481,300             380,000
        Fair value of options granted during the year:
          Directors and employees                                                   $  1,530,534         $    49,400
</TABLE>

        A summary of the status of the Company's stock option plan as of
        December 31, 1999 and 1998 is presented below:

<TABLE>
<CAPTION>
                                                                                       Year ended December 31,
                                                             ----------------------------------------------------------------------
                                                                            1999                                 1998
                                                             ---------------------------------      -------------------------------
                                                                                    Weighted-                            Weighted-
                                                              Number of             Average             Number of        Average
                                                               Options          Exercise Price          Options      Exercise Price
                                                             -----------       ----------------       -----------    --------------
        <S>                                                  <C>               <C>                    <C>            <C>
        Outstanding at the beginning of the year                 655,000       $          2.00           310,000      $       3.33
        Add:  Granted during the year                            481,300                  5.85           380,000              2.00
        Less: Exercised during the year                           10,000                  2.00                --                --
              Forfeited during the year                               --                    --            35,000              2.00
                                                             -----------       ---------------        ----------      ------------
        Outstanding at the end of the year                     1,126,300       $          2.97           655,000      $       2.00
        Weighted average remaining contractual life                  718 days                                910 days
        Exercisable at the end of the year                       645,000       $          2.12           200,000      $       2.00
                                                             -----------       ---------------        ----------      ------------
</TABLE>

        In March 1998, the strike price applicable to all of the options
        existing at that time was reset to $2.00. Since the revised fair value
        of the options based on the reset strike price was lower than the amount
        originally recorded as compensation cost, no adjustment was made as a
        result of the reset.

                                      -31-
<PAGE>

13. Retirement plans

    All of the Company's Swiss-based employees, including its executive
    officers, are required to participate in the pension or retirement plans
    required by law in Switzerland, which are similar to defined contribution
    plans.

    The Assurance Vieillesse et Survivants ("AVS") is a state-administered plan,
    under which the Company and the employee each contribute an amount of 5.05%
    of salary to the AVS fund. The Prevoyance Professionnelle plan ("LPP") is
    administered by an independent insurance company whereby amounts of between
    5% and 15% of each employee's compensation are contributed to the LPP fund.
    The Company and employees each contribute 50% of this cost. In addition to
    the legally required plans, the Company undertakes supplemental LPP programs
    for its management.

    The Company has no pension or retirement liability other than its obligation
    to make employer and employee contributions to the AVS and LPP funds.
    Amounts charged to income during the year in respect of the AVS and LPP
    plans (including supplemental programs) for executive officers and other
    employees was $361,068 (1998: $176,561).

    All of the Company's Dutch-based employees, including its executive
    officers, are required to participate in the pension or retirement plans
    required by law in the Netherlands, which are similar to defined
    contribution plans.

    The Algemene Ouderdoms Wet ("AOW") is a state-administered plan under which
    the employees contribute an amount of 17,9% of salary to the AOW fund. The
    Collectieve Pensioenregeling is administered by an independent insurance
    company whereby amounts starting at 6% of the employee's compensation are
    contributed to the Collectieve Pensioenregeling. The employee contributes
    the first 6% and the company provides the balance such that, combined with
    the AOW, a pension of 70% of the employee's annual compensation can be
    provided commencing at the age of 65.

    The company has no pension or retirement liability other than its obligation
    to make employer and employee contributions to AOW and Collectieve
    Pensioenregeling. Amounts charged to income during the year in respect of
    the AOW and Collectieve Pensioenregeling were approximately NLG 65.000
    (1998: NLG 90.000). The Company does not maintain any plans for other post-
    employment or post-retirement employee benefits.

14. Subsequent events

    On March 20, 2000, the Company sold 1,061,057 shares of its Common Stock for
    a total consideration of $7,155,184, as disclosed in Note 12.a).

                                      -32-
<PAGE>

15. Supplementary disclosure to cash flow statement
<TABLE>
<CAPTION>

                                                                                     Year ended
                                                                 -------------------------------------------------
                                                                    December 31, 1999          December 31, 1998
                                                                 ----------------------     ----------------------
    <S>                                                          <C>                        <C>
    Cash paid during the year for:

      Interest                                                    $      12,020              $       5,417

    Non-cash operating activities:
      Marketing services received as payment for                        150,479                          -
      revenue recognized


    Non-cash investing and financing activities:

      Conversion of amount due to stockholders to                     1,000,000                          -
      Preferred Stock

      Capital leases relating to finance equipment                        7,233                    197,545

      Common stock issued in consideration for                          250,000                          -
      prepaid license fees

      Common stock issued to repay a bridging loan                             -                    225,000

      Issuance of stock pursuant to purchase of
      Stockdata B.V.                                                  2,445,730                          -
</TABLE>

                                      -33-
<PAGE>

PART III.

Item 9.  Directors, Executive Officers, Promoters And Control Persons;
         Compliance With Section 16(A) Of The Exchange Act.

Directors And Executive  Officers
---------------------------------

     Sets forth below are the directors and officers of the Company.
<TABLE>
<CAPTION>
     Name                  Age     Position
     ----                  ---     --------
     <S>                   <C>     <C>
     Neil Gibbons           51     Chairman of the Board, Chief Executive Officer and President
     Daniel Huber           32     Vice President, Chief Operating Officer, Secretary and Director
     Mark Benn              36     Chief Financial Officer
     William Cordeiro       54     Director
     Stuart Townsend        53     Director
     Bryan Wood             54     Director
     Frank Verschoor        39     Director
     Paul Goossens          44     Director
</TABLE>

     Mr. Gibbons co-founded FirstQuote SA in 1994 and has served as Chief
Executive Officer, President and director of the Company since its inception in
July 1996. From 1991 to 1994, Mr. Gibbons was engaged as an independent
investment manager and marketing consultant in the financial services industry.
Mr. Gibbons holds an MBA (Cum Lauda) from IMD, Lausanne, Switzerland.

     Mr. Huber co-founded FirstQuote SA in 1994 and has served as Vice
President, Chief Operating Officer, Secretary and director of the Company since
its inception in July 1996. Since 1992, Mr. Huber has also served as Chief
Executive Officer of Profilinvest SA, an investment management firm founded by
Mr. Huber. Mr. Huber holds a degree in portfolio management and financial
analysis.

     Mr. Benn has served as Chief Financial Officer of the Company since April
1998. From January 1994 to March 1998 he was finance manager for Radcliffes
Trustee Company S.A., an international financial services company. Mr. Benn
holds a B.Com (Hons) in Information Systems and is a qualified Chartered
Accountant.

     Mr. Cordeiro has served as director of the Company since July 1996. Since
1990, Mr. Cordeiro has served as Professor of Management at California State
University, Los Angeles. Mr. Cordeiro holds a Ph.D. in Executive Management from
the Peter F. Drucker Graduate Management Center of the Claremont Graduate
School.

     Mr. Townsend has served as a director of the Company since April 1997. Mr.
Townsend is the founder of Townsend Analytics, Ltd., a developer of financial
data software, and for the past five years has served as its President.

     Mr. Wood has served as a director of the Company since December 1997. Mr.
Wood is a founder of Alta-Berkeley Associates, a privately held venture capital
group, which was formed in 1982 and, for the past five years, has served as its
Senior Partner. Mr. Wood holds an MBA from Harvard Business School and BSc in
Industrial Engineering from Virginia Polytechnic Institute.

     Mr. Verschoor has served as a director of the Company since February 1999.
Since February 1998, he has served as the Investment Director of the NeSBIC CTE
Fund. From January 1997 to January 1998, he was managing partner of FMR
International BV, a Dutch information technology consulting firm. From 1994 to
December 1996, Mr.

                                      -34-
<PAGE>

Verschoor held several positions in USoft UK Ltd., a development tools software
company. Mr. Verschoor holds an MBA from Rotterdam School of Management/Erasmus
University.

    Mr. Goossens has served as a director of the Company since February 1999.
He is currently a Senior Investment Manager and was previously a portfolio
manager with GIMV, having commenced there in September 1996. From September 1995
to August 1996 he completed a MBA at Nijenrode University in the Netherlands.
Previously, since 1994, he worked in the field of high-tech services to the oil
industry. Mr. Goossens also holds a degree in Electromechanical engineering from
Leuven University in Belgium.

    Those required to make filings under Section 16(a) have done so on a timely
basis.

Item 10.  Executive Compensation.

Cash Compensation of Executive Officers
---------------------------------------

    The following table sets forth the cash compensation paid by the Company to
its executive officers for services rendered during the fiscal years ended
December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                Annual Compensation                             Long Term Compensation
                    ---------------------------------------------      ------------------------------------------
                                                                                              Commomn Shares           All Other
                                                                        Restricted Stock    Underlying Options       Compensation
Name & Position      Year       Salary        Bonus        Other            Awards($)        Granted (Shares)             (1)
---------------     ------    -----------   ----------    -------       ----------------   --------------------   ------------------
<S>                 <C>       <C>           <C>           <C>           <C>                <C>                    <C>
Neil Gibbons, CEO      1999   CHF 156,000   CHF 13,000         --                    --                15,000          CHF 7,200
                       1998   CHF 120,000           --         --                    --                40,000          CHF 7,200
                       1997   CHF  96,000           --         --                    --                50,000          CHF 7,200

Daniel Huber, COO      1999   CHF 156,000   CHF 13,000         --                    --                15,000          CHF 7,200
                       1998   CHF 120,000           --         --                    --                40,000          CHF 7,200
                       1997   CHF  96,000           --         --                    --                50,000          CHF 7,200

Mark Benn, CFO (2)     1999   CHF 108,000   CHF  9,000         --                    --                15,000                 --
                       1998   CHF  81,000           --         --                    --                95,000                 --
</TABLE>

(1) Represents an allowance of CHF 600 per month
(2) Commenced April 1998

    The following table sets forth the options granted by the Company to its
executive officers for services rendered during the current fiscal year:

<TABLE>
<CAPTION>
                                          Option/SAR Grants in Last Fiscal Year
                                                    Individual Grants
-------------------------------------------------------------------------------------------------------------------
                                                    % of Total Options
                             Number of Securities    /SARs Granted to
                              Underlying Options    Employees in Fiscal    Exercise or Base
Name                          /SARs Granted (#)           Year              Price ($/Share)     Expiration Date
------------------           --------------------  --------------------  -------------------  ---------------------
<S>                          <C>                   <C>                   <C>                  <C>
Neil Gibbons, CEO                  15,000                  3%                    4.00             12/31/2001
Daniel Huber, COO                  15,000                  3%                    4.00             12/31/2001
Mark Benn, CFO                     15,000                  3%                    4.00             12/31/2001
</TABLE>

Compensation of Directors
-------------------------

    Mr. Cordeiro receives a $500 per month director's fee. All directors receive
reimbursement for out-of-pocket expenses in attending Board of Directors
meetings. From time to time the Company may engage certain members of the Board
of Directors to perform services on behalf of the Company. The Company will
compensate the members for their services at rates no more favorable than could
be obtained from unaffiliated parties.

                                      -35-
<PAGE>

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

     The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock as of March 1, 2000 by (i) each person
who is known by the Company to be the beneficial owner of more than five percent
(5%) of the issued and outstanding shares of Common Stock, (ii) each of the
Company's directors and executive officers and (iii) all directors and executive
officers as a group.

<TABLE>
<CAPTION>
     Name And Address                              Number Of Shares    Percentage Owned
     ----------------                              ----------------    -----------------
     <S>                                           <C>                 <C>
     Neil Gibbons (1)                                  1,486,770 (2)          19.2%
     Daniel Huber (1)                                  1,186,770 (2)          15.4%
     William Cordeiro (3)                                 12,000 (4)            (5)
     Stuart Townsend (6)                                 185,000 (7)           2.4%
     Bryan Wood (8)                                    2,464,257 (9)           25.8%
     Frank Verschoor (10)                              1,351,351 (11)          17.0%
     Paul Goossens (12)                                1,081,081 (13)          14.4%
     Alta-Berkeley (8)                                 2,464,257 (9)           25.8%
     NeSBIC CTE Fund (10)                              1,351,351 (11)          17.0%
     GIMV (12)                                         1,087,081 (13)          14.4%
     European Financial Services Venture Fund
      (General Partners) Limited                         449,500 (14)           5.9%
     Directors and executive officers as a group       7,868,230               52.8%
</TABLE>

________________________________________________________________________________
(1)  Address is 12, Av. des Morgines, 1213 Petit-Lancy 1, Geneva, Switzerland.

(2)  Includes 90,000 shares of Common Stock underlying presently exercisable
     options.

(3)  Address is 23852 Pacific Coast Highway, Suite 283, Malibu, California
     90265.

(4)  Includes 10,000 shares held by Bartik, Cordeiro Associates, Inc., of which
     Mr. Cordeiro is a shareholder.

(5)  Less than one percent.

(6)  Address is Townsend Analytics, 100 South Wacker Drive, Suite 1500, Chicago,
     Illinois.

(7)  Includes 50,000 shares of Common Stock underlying immediately exercisable
     options, and 135,000 shares of Common Stock held by Townsend Analytics,
     Ltd. of which Mr. Townsend is President and owner.

(8)  Address is Alta-Berkeley Associates, 9 Saville Row, London, England W1X
     IAF.

(9)  Represents shares of Common Stock issuable upon conversion of Series B and
     C Preferred Stock held by Alta-Berkeley V, C.V. and two affiliated funds.
     Mr. Bryan Wood is the Senior Partner of Alta-Berkeley Associates which
     serves as manager of the three funds.

(10) Address is NeSBIC CTE Fund, Savannahweg 17, 3542 AW, RM Utrecht,
     Netherlands

(11) Represents shares of Common Stock issuable upon conversion of Series C
     Preferred Stock held by the NeSBIC CTE Fund. Mr. Frank Verschoor is the
     investment director of the NeSBIC CTE Fund.

(12) Address is GIMV, Karel Oomsstraat 37, B-2018 Antwerp, Belgium

(13) Represents shares of Common Stock issuable upon conversion of Series C
     Preferred Stock held by the GIMV, and 6,000 shares held directly. Mr. Paul
     Goossens is an investment manager of the GIMV.

(14) Address is 15 Whitcomb Street, London, WC2H 7HA.

Item 12.  Certain Relationships and Related Transactions.

     Profilinvest: The Company's Chief Operating Officer, Daniel Huber, is also
Chief Executive Officer of Profilinvest SA, an investment management firm in
Geneva, Switzerland. At the present time and for the foreseeable

                                      -36-
<PAGE>

future, Mr. Huber intends to devote substantially all of his business time to
the Company. However, Mr. Huber's association with Profilinvest SA presents a
potential conflict between his provision of his services to the Company and to
Profilinvest.

    Townsend Analytics, Ltd.: Mr. Stuart Townsend, a director of the Company, is
the founder and president of Townsend Analytics, Ltd., the provider of the
financial software used extensively by the Company. In December 1998 the Company
extended the scope its agreement with Townsend Analytics, Ltd. whereby the
latter agreed not to undertake any new licensing agreements for Switzerland,
Germany, France, and the Benelux countries until December 31, 2001. Pursuant to
this, the Company was committed to paying a single amount of $500,000 ($250,000
of which was settled in February 1999 in cash and the remainder in March 1999
through the issuance of 135,000 common shares), and is further committed to
minimum royalty payments of $50,000 per month from July 1, 1999, $100,000 per
month from January 1, 2000 and $150,000 per month from July 1, 2000.

    Alta-Berkeley Associates: As At December 31, 1998 the Company owed
$1,000,000 to Alta-Berkeley Associates, holders of the Series B Preferred Stock.
This amount was converted into Series C Preferred Stock in January 1999.

    Alta-Berkeley Associates, NeSBIC CTE Fund, GIMV: During January 2000, the
Company received $170,000 from each of the above three existing investors. These
amounts were either repaid or converted into Common Stock in conjunction with
the private placement of Common Stock effected during March 2000.

Item 13.  Exhibits and Reports On Form 8-K.
<TABLE>
<CAPTION>
(a)  Index to Exhibits
     -----------------
     <S>        <C>
     3.1 (1)    Certificate of Incorporation of the Company

     3.2 (1)    Bylaws of the Company

     4.1 (1)    Specimen of Common Stock Certificate

     4.2        Amended Certificate of Designations of the Company

     10.1 (1)   Loan Agreement dated May 15, 1996 between Virtual Telecom SA and New Capital Investment Fund

     10.2 (1)   Partnership Outsourcing Agreement dated September 9, 1996 between Virtual Telecom SA and Digital Equipment
                Corporation

     10.3 (1)   Employment Agreement dated May 31, 1996 between Virtual Telecom SA and Neil Gibbons

     10.4 (1)   Employment Agreement dated May 31, 1996 between Virtual Telecom SA and Daniel Huber

     10.5 (1)   Computer Software License Agreement dated January 16, 1997 between Virtual Telecom SA and Townsend Analytics, Ltd.

     10.6 (1)   Information and Distribution License Agreement dated August 23, 1996 between Virtual Telecom SA and McGraw-Hill
                International (UK) Ltd.

     10.7 (1)   Agreement for Global Telecommunications Services dated October 1, 1996 between Virtual Telecom SA and BT Limited
                London (British Telecom)

     10.8 (1)   Unidata Frame Relay & Unimaster Services dated October 22, 1996 between Virtual Telecom SA and Swiss Telecom ITT

     10.9 (1)   News Distributor Agreement dated January 7, 1997 between Virtual Telecom SA and AFX News Limited

     10.10 (1)  1997 Stock Option Plan of the Company
</TABLE>

                                      -37-
<PAGE>

<TABLE>
     <S>        <C>
     10.11 (3)  Series B Preferred Stock Purchase Agreement dated December 18, 1997

     10.12 (3)  Investor Rights Agreement dated December 18, 1997

     10.13 (3)  Software License Agreement between the Company and IQ Net

     10.14 (4)  Series C Preferred Stock Purchase Agreement dated January 25, 1999

     10.15 (4)  Amended and Restated Investor Rights Agreement dated January 25, 1999

     10.16      Amendment to the Software Distributor Agreement of January 16, 1997 dated December 10, 1998 between Virtual Telecom
                SA and Townsend Analytics, Ltd.

     10.17 (5)  Sale and Purchase Agreement of the shares of Stockdata BV dated December 24, 1999, between FirstQuote Inc. and the
                stockholders of Stockdata B.V.

     10.18      Registration Rights Agreement pursuant to the Private Placement of Common Stock which was closed on March 20, 2000

     16.1 (2)   Letter from Raimondo, Pettit & Glassman regarding Change of Independent Public Accountant

     21.1       The Company has three subsidiaries, First Quote SA, a Swiss
                corporation, FirstQuote Limited, an English corporation, and
                FirstQuote Stockdata BV, a Dutch corporation.

     27.1       Financial Data Schedule
</TABLE>

________________________________________________________________________________
(1)  Previously filed as part of registration statement on Form 10-SB (SEC File
     No. 0-22351) filed with the Securities and Exchange Commission on April 7,
     1997.

(2)  Previously filed as part of Current Report on Form 8-K/A (SEC File No. 0-
     22351) filed with the Securities and Exchange Commission on December 23,
     1997.

(3)  Previously filed as part of annual report on Form 10-KSB (SEC File No. 0-
     22351) filed with the Securities and Exchange Commission on March 31, 1998.

(4)  Previously filed as part of annual report on Form 10-KSB (SEC File No. 0-
     22351) filed with the Securities and Exchange Commission on March 31, 1999.

(5)  Previously filed as part of Current Report on Form 8-K dated December 30,
     1999 (SEC File No. 0-22351) filed with the Securities and Exchange
     Commission.

(b)  Reports On Form 8-K
     -------------------

     The Company filed a Current Report on Form 8-K dated December 30, 1999 to
     report its acquisition of Stockdata Amsterdam BV.

                                      -38-
<PAGE>

                                   Signatures

    In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                    FIRSTQUOTE INC.

Date:  March 30, 2000               By: /s/ Neil Gibbons
                                        ------------------

                                    Neil Gibbons, Chief Executive Officer

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

     SIGNATURE                         TITLE                    DATE
     ---------                         -----                    ----

/s/ Neil Gibbons               Chief Executive Officer     March 30, 2000
-----------------------
Neil Gibbons

/s/ Daniel Huber               Chief Operating Officer     March 30, 2000
-----------------------
Daniel Huber

/s/ Mark Benn                  Chief Financial Officer     March 30, 2000
-----------------------
Mark Benn

                               Director
-----------------------
William Cordeiro

                               Director
-----------------------
Stuart Townsend

/s/ Bryan Wood                 Director                    March 30, 2000
-----------------------
Bryan Wood

/s/ Frank Verschoor            Director                    March 30, 2000
-----------------------
Frank Verschoor

                               Director
-----------------------
Paul Goossens

                                      -39-