SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark one)

     [X]  Annual  report  pursuant  to  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1999.

     [ ] Transition report under section 13 or 15(d) of the Securities  Exchange
Act of 1934 for the transition period from _________ to _____________.

Commission file number     0-27453

                    WORDCRUNCHER INTERNET TECHNOLOGIES, INC.
                    ----------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

         Nevada                                                 84-1370590
        --------                                                ----------
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

405 East 12450 South, Suite B, Draper, Utah                        84020
-------------------------------------------                        -----
(Address of principal executive office)                          (Zip Code)

                                  801.816.9904
                                  ------------
                           (Issuer's telephone number)

Securities to be registered under Section 12(b) of the Act:

     Title of Each Class                             Name of Each Exchange
     -------------------                              On Which Registered
                                                      -------------------
          None                                                None

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

                       Common Stock, par value $.001

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

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

     State the aggregate market value of the voting and non-voting common equity
held by  non-affiliates  of the registrant.  The aggregate market value shall be
computed by reference to the price at which the common  equity was sold,  or the
average bid and asked  prices of such  common  equity,  as of a  specified  date
within 60 days prior to the date of filing: $63,683,299.

     Indicate  the  number of  shares  outstanding  of each of the  registrant's
classes of common stock, as of the latest practicable date: 13,467,698.


<PAGE>



                                     Part I

Item 1.  Business.

         Introduction.  We  are a  development  state  company  engaged  in  the
development  and marketing of a focused  Internet site which serves the needs of
the business  professional.  Content and services  found at logio.com,  which we
launched on March 19,  2000,  are  tailored to provide,  under one roof, a broad
spectrum of the information and services that are required by business people in
their daily work activities.  Information  resources  include a unique,  readily
accessible  "drill-down" directory that organizes thousands of business-oriented
web sites  according to specific job function.  The directory is augmented by an
advanced search technology that can search either the abstracts or the full text
of all the sites listed in the  directory,  and then displays the search results
in a "hits in context" format. We couple this information with the services that
the  average  business  professional  uses on a daily  basis,  including  travel
arrangements,  stock quotes, news, weather, maps, financial calculators,  e-mail
and  calendaring.  This  combination  creates a full  service  destination  site
designed  specifically  for the business  professional.  We intend to expand the
delivery of this full service concept to other electronic means of communication
such as cell phones, pagers,  personal digital assistants and set top boxes. All
of these services will be marketed under the brand name "Logio."

         Although  there is a great deal of free  information  on the  Internet,
publishers  still own valuable  content that is not  currently  available on the
Internet.  This information can be very useful to business people.  For example,
research reports, market analyses, industry specific newsletters and commentary,
studies produced by analyst and research firms, are routinely sold in print form
to the  business  community.  We believe that sales and delivery of this kind of
content via the Internet is a logical  step in the  development  of  information
distribution  channels, and are positioning Logio to take a leading role in this
effort.  Logio is  developing a method  whereby  this type of  business-oriented
content can be sold and delivered through our Logio site.

         We  believe  that Logio will be used by  business  professionals  for a
number of different activities. Our objective is to have our customers naturally
keep Logio open ("on their  desktop") all day long,  and when they are away from
their computers, to access Logio-delivered  information using whatever device is
practical.

         The rapid  growth of the  Internet  and the  proliferation  of Internet
sites has increasingly  challenged consumers,  content providers and advertisers
to effectively reach one another. Consumers are often challenged to quickly find
the most  relevant  information,  products and services  related to a particular
interest or topic.  Content providers are typically  challenged to differentiate
their products and services in an increasingly  crowded  medium,  and to improve
the  visibility  of  their  web  sites.   Advertisers  are  challenged  to  more
effectively  deliver  their  advertising  messages to  interested  audiences and
target  groups.  Because of these trends,  Internet  development is in some ways
mirroring the recent history of the print publishing industry. For example, over
the past  thirty  years,  the  number of  newspapers  and  magazines  devoted to
specialized  subjects has  exploded  while  general  interest  publications  are
experiencing hard times.

         Logio has  chosen to  create a site  that  meets the needs of  business
people, and address some of the more  well-documented  functional  problems that
plague Internet  users.  For example,  most search engines do not  differentiate
between the types of sites they  search.  Hence,  a search  initiated  through a
general  interest  portal  is run  against  all the  sites  they  have  indexed,
regardless of category.  With  literally  billions of web pages on the Internet,
the body of information that is being searched is too broad. Logio has assembled
a team of  editors  that  constantly  combs the web to find only sites that deal
with business topics. This means that a business person who searches using Logio
has a much higher level of confidence  that search  results will come from sites
that pertain to the area of interest.

          Because we are focusing solely on the "business subset" of the web, we
can use a far more  specialized  and powerful  search engine that addresses some
common Internet user complaints.  General web portals  generally return lists of
hundred or even thousands of potential  pages for further  review.  As a result,
Internet users may spend substantial time searching through the list of returned
documents to find out which documents are relevant. This frequently requires the
user to call up the referenced page and either visually scan the page or conduct
another page search to find the specific reference in question.

         In contrast,  Logio provides advanced search  capabilities that display
the desired  search  result "in context,"  surrounding  several lines of text on
either side of the search result. This allows the user to make some judgement of
a web sites'  value  prior to leaving  the Logio site to more fully  examine the
search result. While Logio's "hits-in-context" display is not its sole method of
differentiating  itself  in  the  market,  it is  indicative  of  the  attention
management  has paid to refining the Internet  experience for the benefit of its
users.  For further  information on other Logio  advantages,  see "Our Solution"
below.

         Logio Markets.  We believe business  professionals  will use Logio. The
Internet is an interactive  worldwide network of computers and data systems that
allow  its  users  to  retrieve  data,  purchase  products,   send  and  receive
communications  and  purchase or provide  services.  The  Internet is based on a
technology platform that incorporates a series of standards that allow computers
in various locations and of various makes and models to communicate  effectively
with one another.  The use of the Internet has grown  substantially since it was
first  commercially  introduced  in the 1990s.  Forrester  Research  Corporation
estimates that by 2003,  approximately 200 million business people will be using
the  Internet.  The  significant  increase in the number of  Internet  users has
resulted in a rapid increase in the number of advertisers, products and services
on the Internet.  Forrester  estimates that approximately $3.3 billion was spent
on Internet  and online  advertising  in 1998,  growing to  approximately  $22.6
billion by the year 2002.

         We believe  Logio  will  become an  important  source not only for free
content, but also for business information that can be purchased for delivery in
electronic  form from the Internet.  According to a January 2000 study conducted
by Forrester Research, the market for business information sold via the Internet
will reach $11 billion by the year 2004.

         The magnitude of the  business-to-business  market,  estimated to be at
minimum  $1.3  trillion by 2003,  provides  Logio with an avenue to focus on the
needs of business people, regardless of industry, while most of the B2B websites
focus on very tight  vertical  markets  (such as steel,  waste water  treatment,
chemicals). We believe that Logio's `horizontal' focus will create opportunities
for networking and cooperation within the business-to-business marketplace.

         Our Solution.  Business professionals use the Internet for many reasons
-- to acquire needed information and/or knowledge, to make business connections,
to  obtain  business  tools  and to make  purchases.  All  these  resources  are
currently  available,  but  scattered  about in  traditional  places  and on the
Internet.  We seek to bring  these  solutions  together  at the  Logio  business
information  service.  The Logio.com  business  portal has the resources to help
business professionals quickly find information they seek:

     o    A focused, targeted directory of comprehensive information,  organized
          by occupation.
     o    A powerful,  superior  search function that returns results in context
          and suggests related concepts.
     o    News and current events, updated constantly.

         Logio also adds the tools and services business professionals generally
need to be efficient:

     o    Free email and Internet-based group calendaring and scheduling
     o    Travel services: city guides; hotel, car, airplane reservations
     o    Maps and directions
     o    Stock and financial information, portfolio tracking
     o    Weather information
     o    Financial calculators

         The  guiding  strategy  that  we  use to  achieve  our  objectives  and
differentiate  ourselves  from our  competitors  rests on a commitment to timely
relevance, to providing today's business professionals with what they need, when
they need it. This is achieved by constantly  identifying and then consolidating
in one  place the  content  and  services  that  business  people  use.  Current
components of Logio product and strategy include:

         Robust,  Proprietary Business Directory. One of Logio's most useful and
unique  information   resources  is  a  proprietary   business  directory.   The
directory's  organizational structure is simple, but unique. Sites are organized
among broad industries,  such as accounting,  finance,  marketing,  sales, human
resources and  administration.  Business  professionals  can scan the directory,
find  the  right  category  tree,  review  the  titles  and  abstracts  of sites
pertaining to a given subject, and find the ones that should help them get their
job done.  Logio's directory will start out with over twenty-five  thousand hand
picked business websites.

         "Hits in Context" Search Results. The Logio search engine overcomes one
of the most  tedious  and  time-consuming  problems  on the web.  After you do a
search, most search engines make you follow a hyperlink to see if search results
really have what you wanted.  Logio shows  "hits in  context."  In other  words,
several lines of text  surround the search terms you entered.  This way, you can
see at a glance if a hit is relevant without leaving the Logio site.

         Relevant  Products,  Services and Features.  Because  today's  business
people don't use the Internet just to find information,  part of Logio's charter
is to add features and  functionality  that will keep users there as much of the
time as possible.  Creating  individual and group calendars,  booking travel and
airline reservations,  checking the weather,  getting directions and maps, using
the free e-mail service, checking news, and keeping track of investments is just
a start.

         Personalization.  To develop product affinity with the target audience,
Logio is  flexible  and able to  adjust  to the  diverse  needs of the  business
community.  The ability to personalize the content stream and functional  layout
of the web pages  enables  the user to define a series of web pages  tailored to
their specific taste and needs.

         I-Commerce.  There are times  when  needed  information  is simply  not
available for free. At other times,  it is less  expensive and more efficient to
buy information than to search for it on the Internet. In both cases, the needed
data can  often be  acquired  from a  publisher  for a price.  We are  therefore
exploring  opportunities  and  technologies  that will  enable  Logio to deliver
pay-per-view access to a large and valuable library of business reports.

         Internationalization.  Over the period  between 2000 and 2002, our goal
is to create,  maintain and support a global presence and develop the ability to
distribute  content  to all major  geographies.  We  intend to make our  service
available in multiple languages and in multiple countries.

         Business  Model / Revenue  Generation.  Unlike  most other  information
services and e-commerce ventures, Logio's value proposition for its customers is
based on  convenience,  control and choice  rather than price.  Logio offers its
viewers  control and  personal  management  of the vast  offerings  for business
information and related  services.  We plan to generate revenue from several key
areas, including advertising, fee-based content, affiliate programs, e-commerce,
co-branding relationships, sponsorships, licensing and merchandising.

         Technology Infrastructure.  A successful  business-to-business Internet
site is available all the time. The Logio site architecture is state-of-the-art.
Designed to be highly available, technically advanced and readily scalable, this
hardware and software configuration can accommodate growth and flex to increased
loads on virtually a moment's notice.

         Portfolio of Broadcast Platforms. Although the primary initial platform
is the Internet,  we are aggressively  exploring  content  distribution to other
devices, information appliances and platforms.

         Partnering.   We  expect  to  create  long-term,   mutually  beneficial
partnerships.  These  partnerships  will focus on business  media and technology
companies  who  have  a  worldwide  presence  and/or  content.  We  are  seeking
affiliations  with companies that lend  credibility to the Logio brand,  and can
benefit from our forward-looking strategies.

         Our Business  Objectives  and Strategy.  Logio's  objective is to be an
indispensable   service  for   business   professionals   competing  in  today's
marketplace,  thereby  becoming  a leading  site on the  Internet  for  business
people.  We expect to provide the most popular  services  and the most  valuable
content to our customers,  with the goal of keeping them on our site for as many
of their  Internet-based  activities  as possible.  We will continue to pursue a
convergent  media  strategy so that we can give business  professionals  instant
access,  anywhere and anytime,  to information  and services.  By supplying them
with cutting edge,  comprehensive  content,  combined  with useful  features and
powerful tools that can be  personalized  to meet  individual  needs, we believe
that Logio will offer  today's  connected  business  professional  a competitive
edge.

         Our research  shows that business  people  typically fall into a highly
desirable  demographic profile.  They are often well-educated,  and possess both
disposable  income and business budget dollars to spend on personal and business
purchases.  As such,  they  represent  a target  market  that  advertisers  have
historically  been  willing  to  pay  a  premium  to  reach.  By  tailoring  our
destination  website to meet the needs of this target market, we believe we will
be able to more quickly generate revenues.  According to Zona Research,  focused
portals  and  directories  will have an  increased  impact on the  revenues  and
advertising  expenditures  on the  Internet.  During the next five years  online
directory  spending for focused portals and directories should increase from 10%
of the  overall  Internet  advertising  budget  to 80% of the  overall  Internet
advertising budget.

         We believe that, as business people become  increasingly  familiar with
and  dependent on the Internet for  information,  the market for "paid"  content
will  continue  to  accelerate.   Logio  is  positioning  itself,  from  both  a
technological  and a strategic  relationship  standpoint,  to capitalize on this
trend.

         We  intend to  achieve  our  business  objectives  using the  following
strategies:

                  Position  Logio  as  the  premier  Internet   destination  for
business  professionals.  We are developing a comprehensive  and strategic brand
strategy that we expect will position Logio as the premier business  information
service. Through advertising,  we are working to develop market awareness of our
product,  and provide strong site traffic.  We believe that the site  experience
will be such that users will develop loyalty to the brand.

                  Increase Logio Brand Recognition. We believe brand recognition
on the Internet will be crucial to the growth of Logio. We will actively seek to
develop  relationships  with companies  whose brands will lend  credibility  and
momentum to ours.

         Sales and  Marketing.  We  expect  that  Logio  will  generate  a large
percentage of its initial  revenue from sales of  advertising  on the site.  The
more  rapidly we can develop  traffic to the site,  the more  rapidly we will be
able  to  increase   advertising  sales.  Our  ability  to  fund  an  aggressive
advertising  program that will promote  Logio is  important.  This campaign will
consist of both online and offline components.  The online campaign will include
banners  and  sponsorships,   and  the  offline  campaign  will  include  radio,
newspaper,  outdoor and funds permitting,  television. The company's key partner
in developing the advertising  strategy in an  internationally  recognized firm,
Pittard / Sullivan, headquartered in Los Angeles, California.

         Logio's public relations  efforts are geared towards  developing strong
interest in the site. The company will undertake a full scale publicity campaign
at launch, targeting online, print, and broadcast press for maximum exposure and
site traffic.  Our key partner in developing  the public  relations  strategy is
Bailey Gardiner Communications, whose headquarters are in San Diego, California.

         The  site's   "personalization"   database   is   expected   to  occupy
increasingly  greater importance in the marketing  strategy.  When users come to
the Logio site, they have the option of  `customizing'  or  `personalizing'  the
view of the site that they see.  This means that they can choose which  industry
news feeds they require, what maps and weather reports are first available,  and
similar customized functionalities. Some of the information that we will ask for
includes  occupation,   business  type,  and  industry  and  information.  While
providing  this kind of  information  makes the site all the more  useful to the
individual  user, it also makes our customers more valuable to  advertisers.  We
will be able to provide e-mail updates on a periodic  basis,  and offer specials
based on user preferences.

         Customer Support and Services. We believe that our Internet site should
be available virtually all the time. The customer support and services aspect of
the  company is  therefore  reliant on a  round-the-clock  team that  constantly
monitors the operations of the Logio website.

         Competition.  Our market is new, very  competitive and subject to rapid
technological  and content change. We expect  competition to persist,  increase,
and  intensify  in the  future as the  markets  for our  products  and  services
continue to develop and as additional  companies enter our markets.  A number of
companies are now participating in the development and operation of portals. For
the sake of this discussion, we have divided them into three categories:

--------------------------------------------------------------------------------
       Type         Mega Portals      General Portals        Business Portals
--------------------------------------------------------------------------------
       Examples     AOL               Lycos                  Dowjones.com
                    Yahoo!            GO                     BizProLink
                    MSN               Snap                   VerticalNet
                                      Excite                 Brint.com
                                                             Office.com
--------------------------------------------------------------------------------

         The Mega Portals focus on satisfying  the needs of every internet user.
They are large,  well-funded  and  established  companies  that have millions of
daily users. Each has a section devoted to business.

         The General  Portals  compete  with the Mega Portals for a share of the
consumer  market.  The difference  between general and mega portals is primarily
related to prominence in the market. For example,  GO (owned by Disney) recently
announced that they were refocusing  their efforts and would be refocusing their
site on Entertainment and Recreational activities.  This decision occurred after
spending a year  trying to grow the number of unique  visitors  to the site.  We
believe  that  Go's   decision  is  a  good   indicator  of  the  trend  towards
specialization on the Internet.

         Business  Portals can be broken down into three different  groups.  The
first  group   represents  the  Internet   presence  of  an  established   print
publication.  The second group  specializes in delivering  information to highly
specialized  vertical  markets.  The third and final group is focused on meeting
the needs of small businesses.

         Several  of the  participants  in each of  these  market  sectors  have
established web presence and brands, and have been offering their services for a
number of years. The increased use and visibility of Logio will depend, in large
part,  on our  ability to  continue  adding  content  and  services to our site,
maintaining  operational  performance  levels,  and  effectively  marketing  our
product.  We also  believe  it will be  essential  for us to  develop  long-term
business  alliances  with  parties  with  which  we  can  enter  into  strategic
relationships.  We  believe  we will  need to make  significant  investments  in
research  and  development  in  order  to  keep up with  the  technological  and
operational  demands  imposed by the  anticipated  ongoing  developments  in the
Internet.

         At the present time, we have not  identified  any other  companies that
are using  precisely the same approach as Logio, or are targeting the horizontal
market as we are. Nonetheless,  there is always the potential that other, larger
interests  will  choose to enter the  market  we are  developing,  or that a new
market may emerge.  We may not be able to compete  effectively  with current and
future competitors.

         Product Development.

          The existing Logio site  represents  and  investment of  approximately
$3.5 million in equipment,  software,  interface design,  underlying application
development  software,  and general costs. The site is connected to the Internet
using  Cisco  gear,  and is  hosted  by  Qwest  communications.  The  technology
selection process for the site is governed by several fundamental principles.

     o    Internet  users  want  sites to be up  constantly,  and to load  fast.
          Hardware is chosen and code is written accordingly.
     o    The site must be easily  and  quickly  expanded  or  modified  without
          adversely affecting performance.
     o    Equipment and software is supplied by manufacturers  with proven track
          records and a commitment to timely and effective support.
     o    The solution must be cost effective.

         We elected to use Sun  Microsystems  Enterprise  computers for the core
hardware. These systems have been proven in Internet applications. They are also
readily  available  should we need to either  grow the system  quickly,  or if a
system should fail. All systems are built using standard  components,  such that
all hard drives in all systems are the same.  This means we have a  consolidated
inventory  list for  field  service,  and  enables  us to  reuse  or  re-purpose
individual systems or components as the need demands.

         In addition to our  proprietary  application  software,  the Logio site
uses iPlanet's (formerly the Sun/Netscape  Alliance)  Application and Enterprise
Servers,  Oracle's 8I Parallel  Database Server,  the Veritas Volume  Management
System, and Dataware's InQuery Search and Retrieval engine.

         Our initial  target  platform  for  distribution  of business  relevant
information  and  services  is the  Internet.  Logio will  aggressively  develop
distribution  capabilities for other digital-enabled devices. These may include;
Intranet,  personal digital assistants (PDA), pagers, cellular and smart phones,
electronic  books,   global  positioning   systems  (GPS),  set  top  boxes  and
traditional broadcast channels.

         Our  ability to  successfully  develop and  release  new  products  and
enhancements  to  Logio in a timely  manner  will be  subject  to a  variety  of
factors,  including our ability to solve  technical  problems and test products,
the  availability  of  financial,  sales  and  management  resources,  and other
factors,  some  of  which  we may  not be able  to  control.  We may  experience
difficulties   that  could   delay  or  prevent  our   successful   development,
introduction or marketing of new products and enhancements.

         Material Contracts.  We are a party to the following material contracts
and arrangements:

         Brigham  Young  University  License.  On February  14, 1997 we signed a
master  license  agreement  with BYU,  under  which we  obtained  the  exclusive
worldwide  rights  to  use,  develop,   manufacture,   market,  and  modify  the
WordCruncher  technology.  BYU retained the ownership rights to any improvements
to the  WordCruncher  technology  that we  develop.  We issued BYU (and  certain
individuals  who developed the licensed  technology  while they were employed by
BYU) 110,742  shares of common stock for this  license.  In July 1998, we issued
BYU an  additional  434,019  shares  of  common  stock  in  connection  with our
acquisition of WordCruncher Publishing Technologies. The WordCruncher technology
constitutes the core search technology we use in our "Logio" product.

         The term of this  license is for as long as allowed by law,  but it may
be terminated if we materially breach the license.  We are required to pay BYU a
royalty of 3% of our adjusted  gross sales.  Annual minimum  royalties  began in
January  1999,  and  $20,000  was due for 1999.  The  minimum  royalty  payments
increase annually and, in 2002, will be capped at $150,000. In addition, when we
acquired the License,  BYU had already  sublicensed  the  technology  to several
other parties for royalty  payments  ranging from 3% to 8% of the  sublicensee's
gross sales.  Under the term of the license,  we are required to pass through to
BYU 50% of the royalty payments we receive from these sublicenses.

         Dataware  License.  In July 1999 we  signed a three  year  source  code
software license agreement with Dataware  Technologies,  Inc. granting us access
to code for Dataware's proprietary search engine technology.  We intend to blend
this  technology  with our search  technologies  as we  continue  to develop our
overall  product  line.  The license has a two year  renewal  option and cost us
$350,000.  In  connection  with  this  agreement,  we also  signed a  Consulting
Agreement  with Acsiom Inc.,  an affiliate  of Dataware,  to provide  consulting
services  relating to the  integration  of the Dataware  search  engine into our
existing  technology,  including  our business  professional  portal site.  This
agreement requires us to pay hourly developer  consulting fees ranging from $100
- $150 per hour.

         Pittard Sullivan Contract. In July 1999 we retained Pittard Sullivan, a
marketing communications company in the media and entertainment  industries,  to
provide  us with brand  strategy,  brand  identity  and site  design  consulting
services.  Brand strategy and identity  efforts  include the  development of the
brand vision, brand mission,  brand positioning policies, and an articulation of
our core branding values.  Site development  consulting efforts include creative
conceptualization  and  strategic  analysis,  design  creation,  production  and
implementation,  and testing.  This  contract runs through year end 1999 and has
cost $365,000.

         Digital  Boardwalk  Agreement.  In June  1999  we  signed  a  strategic
agreement with Digital Boardwalk,  a commercial website developer and e-commerce
specialist,  to integrate  business  information  resources and services offered
within our portal site for  business  professionals.  Components  of this effort
include  specifications  and  development  of user  services and  features,  web
application  flow,  site  security,  third-party  data sources,  and methods for
connecting the application to our existing data infrastructure. The contract was
for  $50,000  and  expired  in  July,  1999.  We are  currently  negotiating  an
additional contract with Boardwalk that will be for approximately $200,000.

         Purchase Agreement. In February and March 1999, we sold 6,300 shares of
our newly designated Series A Preferred Stock to eight investors under the terms
of a purchase agreement. We received a total of $6.3 million in the transaction.
After we paid the  expenses  of the  placement  agent  ($378,000)  and our other
expenses for the transaction  ($15,000),  we netted $5,907,900 from the sale. In
connection with the transaction,  we also issued warrants to both the purchasers
and the placement  agent and granted those parties certain  registration  rights
for the shares of common  stock  they can  acquire  by  converting  the Series A
Preferred Stock and exercising the warrants.

         Columbia  Financial  Group  Services  Agreement.  In January  1999,  we
entered  into a services  agreement  with  Columbia  Financial  Group.  Columbia
provides  investor   relations  services  for  a  number  of  public  companies,
particularly those companies that are involved in the Internet  business.  Under
the agreement,  we agreed to grant Columbia  warrants to purchase for five years
up to 200,000 shares of our common stock for $5 per share.

         Sierra Systems Consulting and Development Agreement. In September 1999,
we entered into a consulting  and  development  contract  agreement  with Sierra
Systems Consultants,  Inc. Under the terms of the agreement, Sierra provides web
site  development  support  services for launching  our web site,  including the
development,  delivery, testing and debugging of our web site technology. We are
required to pay a fixed price of $500,000 in exchange for these services,  to be
paid in four installment payments based upon meeting certain milestones.

         Veritas Software Financial Agreement. In November 1999, we entered into
a software purchase agreement with Veritas Software. Under the agreement, we are
purchasing  software  products that will be used in the delivery of our web site
for $60,830. The purchase price must be paid in full by May 2000.

         Netscape  Software  Financial  Agreement.  In November 1999, we entered
into a  software  purchase  agreement  with  Netscape.  Under  the  terms of the
agreement, we are purchasing software products,  including maintenance services,
for the delivery of our web site. The purchase  price for the software  products
and maintenance services is $268,068.72,  which must be paid in full by November
2000.

         Oracle Software Agreement. In November 1999, we entered into a software
license agreement with Oracle Corporation.  Under the terms of the agreement, we
have a  non-exclusive  license to use certain  Oracle  software  products  which
manage  our  database.  The  purchase  price  under  the  license  agreement  is
approximately  $257,000,  which  is paid in four  quarterly  payments  after  an
initial  payment and includes  support  services  for one year.  The term of the
agreement is for two years, with a November 2001 expiration date.

         Sun Microsystems License Agreement. In December 1999, we entered into a
master lease agreement with Sun Microsystems Finance. Under the lease agreement,
we lease the server  equipment  necessary to host our web site.  The term of the
lease is for two years,  with a  December  2001  expiration  date.  The  monthly
payments under this agreement are  approximately  $28,500 per month, for the two
year period.

         Qwest Dedicated Internet Access Service Agreement.  In January 2000, we
entered into an internet access  agreement with Qwest Internet  Solutions,  Inc.
Under the terms of the agreement,  Qwest hosts and provides  internet  access to
our web site for a monthly fee of $2,200 and variable  charges based on usage of
our site. The term of the agreement is for two years,  expiring in January 2002,
but automatically renews for successive two year terms unless either party gives
60 days notice prior to the expiration date.

         Netdotworks  Consulting  and Support  Agreement.  In February  2000, we
entered into a consulting and support agreement with  Netdotworks,  Corporation.
Under the agreement, Netdotworks provides web site administration and management
consulting and support services for our web site. We are required to pay $90,000
per month for the initial 120 day term.  Upon  expiration of the initial 120 day
term, we have the option to extend the agreement for an additional 240 day term,
or on a month to month basis until February 2001.

         DoubleClick,  Inc. DART Service Agreement. In February 2000, we entered
into an  agreement  with  DoubleClick  Inc.  Under the  terms of the  agreement,
DoubleClick  provides  advertisement  delivery services for our web site. We are
required to pay monthly  service fees based on the number of banner  impressions
that are delivered to our web site through the service. The agreement expires in
December  2000,  after which we would have to  renegotiate a new agreement  with
DoubleClick if we wished to continue receiving the services.

         Corporate Development.  Our predecessor in interest was incorporated in
the State of  California  on May 2, 1997,  as Dunamis,  Inc.  Dunamis,  Inc. was
formed for the purpose of  publishing  and  marketing  books and audio and video
tapes.  On June  25,  1998,  Dunamis,  Inc.  completed  a  merger  with a Nevada
corporation  that had been created for the sole  purpose for  changing  Dunamis,
Inc.'s  domicile  from  California  to Nevada.  On July 14, 1998,  the surviving
entity in that  transaction  completed  a merger  with  WordCruncher  Publishing
Technologies,  Inc.,  formerly  known  as  Redstone  Publishing,  Inc.,  a  Utah
corporation. The Nevada corporation was the surviving entity in that transaction
and,  as part of the  transaction,  changed its name to  "WordCruncher  Internet
Technologies, Inc."

         Patents,  Licenses and Intellectual  Property. Our success will depend,
in part, on our ability to obtain and protect  patents,  maintain  trade secrets
and operate without infringing on the proprietary rights of others in the United
States and other countries.  We intend to file patent  applications  relating to
our technology, products and processes as the need arises. However, any of these
patents or patent applications could be challenged,  invalidated or circumvented
by our competitors.

         If we were to become involved in a dispute  regarding our  intellectual
property,  we may have to participate  in  interference  proceedings  before the
United States  Patent and Trademark  Office to determine who has the first claim
to the rights involved. We could also be forced to seek a judicial determination
concerning the rights in question.  These types of proceedings can be costly and
time consuming,  even if we eventually  prevail. If we did not prevail, we could
be forced  to pay  potentially  significant  damages,  obtain a  license  to the
technology in question, or stop commercializing a certain product.

         We also rely on trade secrets, proprietary know-how and confidentiality
provisions  in  agreements   with  employees  and  consultants  to  protect  our
intellectual  property rights. These other parties may not comply with the terms
of their  agreements  with us, and we may not be able to adequately  enforce our
rights against those parties.

         We have adopted a policy of requiring our  employees and  collaborators
to  execute   confidentiality   agreements  when  they  commence  employment  or
consulting  relationships  with us. These agreements  generally provide that all
confidential  information  developed or made known to the individual  during the
course of his or her  relationship  with us is to be kept  confidential  and not
disclosed to third parties, except under certain specific circumstances.  In the
case of employees,  the agreements also provide that all inventions conceived by
the  individual  in the course of his or her  employment  will be our  exclusive
property.

         Employees.  As of March 20, 2000,  we had 23  employees 19  independent
contractors.  Approximately  20 of our  employees  are  engaged  in  development
activities,  10  are  engaged  in  operational  activities,  6  are  engaged  in
administrative and finance  functions,  and 6 are engaged in sales or marketing.
Our employees are not presently covered by any collective  bargaining agreement.
We  believe  our  relations  with  our  employees  are  good,  and we  have  not
experienced any work stoppages.

Item 2.  Properties.

         On December  31, 1999,  we leased 3,600 square feet of  administrative,
office and developmental  space at the Town Square Professional Plaza in Draper,
Utah 84020.  On March 21,  2000,  we amended the lease to include an  additional
1,800 square feet of administration  and development  space, and the term of the
lease is from March 15, 1999 until March 31,  2002.  Beginning on April 1, 2000,
the rental  for the space will be $5,728 per month,  which we believe is typical
for similar  premises in the area.  We believe that our current  office space is
adequate for our needs.

Item 3.  Legal Proceedings.

         We are not a party to any proceeding or threatened proceeding as of the
date of this annual report.

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

         No matters  were  submitted  to a vote of our  stockholders  during the
fourth quarter of the fiscal year ended December 31, 1999.

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

         Since July 1998, our common stock has been traded  over-the-counter and
quoted on the OTC Electronic  Bulletin  Board under the symbol "WCTI."  Standard
Registrar  and Transfer  Company,  Inc.  currently,  acts as transfer  agent and
registrar for the common stock.  The following  table  presents the range of the
high and low bid prices of our common  stock as reported  by the Nasdaq  Trading
and Market  Services for each of the periods  indicated.  The  quotations  shown
below  represent  prices  between  dealers,  may  not  include  retail  markups,
markdowns, or commissions and may not necessarily represent actual transactions:

        Year         Quarter            High            Low
      ---------  -------------------  -----------  -----------
        1999      First Quarter         $36.25        $ 4.78
                  Second Quarter        $ 7.81        $ 3.56
                  Third Quarter         $ 6.13        $ 3.63
                  Fourth Quarter        $ 5.75        $ 3.19

                  First Quarter         $14.00        $ 5.75
        2000      (through 3/20/00)

         There were  approximately 147 holders of record of our common stock and
8 holders of record of our Series A Preferred Stock as of December 31, 1999.

         We have never  declared or paid any cash dividends on our common stock.
We do not  intend  to pay  any  cash  dividends  on our  common  stock  for  the
foreseeable future.

         The following  discussion  describes all securities we have sold within
the past three years without registration:

         On May 16, 1997 we issued 1,500,000  shares of WordCruncher  Publishing
common  stock for $1,500 in cash to Carol N.  Purcell and Wilford  Purcell,  the
founders  of  Dumanis,  Inc.  In July 1998,  these  shares  were  exchanged  for
1,500,000 shares of WordCruncher Internet Technologies common stock.

         Beginning on May 15 and ending on June 11, 1997,  we sold, in exchange,
1,500,000  shares of common stock at $.05 per share,  for an aggregate  offering
amount of $75,000 pursuant to Rule 504 of Regulation D of the Securities Act.

         On July 14, 1998, the Company  issued an aggregate of 2,433,334  shares
of common stock to the  stockholders of  WordCruncher  Publishing in a merger of
that company into ours.

         On July 1, 1998, we issued  13,500  shares of common  stock,  valued at
$13,000,  to M. Daniel Lunt, one of our officers and directors,  in satisfaction
of a note we issued to Mr. Lunt.

         On October 30, 1998 we issued an aggregate  of 39,000  shares of common
stock,  for $70,200,  to four  individuals  in  consideration  for services they
provided to us. Specifically, 29,000 restricted shares were issued to Timothy J.
Riker, 5,000 shares to Peter T. Stoop, and 5,000 shares to Robert J. Stevens.

         In October  1998, we issued 13,000 shares of common stock to Jeffrey B.
Peterson to acquire certain  intellectual  property rights held by Mr. Peterson.
We valued those shares at $24,000.

         In November  1998, we issued 25,000 shares of common stock to Universal
Business  Insurance  in  satisfaction  of  insurance  premiums we owed to it. We
valued those shares at $25,000. On December 7, 1999, we converted  approximately
$26,000 of debt to Universal  Business Insurance into 8,000 shares of our common
stock, which we valued at $3.25 per share.

         On  February  8 and March 15,  1999,  we issued an  aggregate  of 6,300
shares of Series A Convertible  Preferred  Stock to eight persons  pursuant to a
purchase agreement.  The Series A Convertible  Preferred Stock was issued for an
aggregate of $6.3 million.  Through March 2000, all of the holders of the issued
Series A Convertible  Preferred  Stock elected to convert such  preferred  stock
into 625,000  shares of our common stock.  We have issued an additional  727,756
shares of our common stock to our Series A  Convertible  Preferred  Stockholders
pursuant to the  provisions  of the purchase  agreement  by which the  preferred
stock was  purchased.  We also issued  61,650  shares of our common stock to our
Series A Convertible Preferred Stockholders through March, 2000, as a cumulative
dividend.

         In June,  1999 we issued 2,000  shares  valued at $22,000 to two of our
former employees in connection with their termination of employment with us.

         During  fiscal  year 1999,  our  employees  exercised  a total of 4,000
options at an  exercise  price of $.10 per share.  In each of January and March,
2000, we issued an additional  2,000 shares,  for a total of an additional 4,000
shares,  upon the exercise of options held by our employees at an exercise price
of $.10 per share.

         In January,  2000,  Columbia  Financial  Group exercised its warrant in
part and  purchased  from us 100,000  shares of our  common  stock at a price of
$5.00 per share.

         In March, 2000,  Cardinal Capital and three of its assignees  exercised
its warrant to purchase an aggregate of 58,000  shares of our common stock at an
exercise price of $7.00 per share.

         In connection with each of these isolated  issuances of our securities,
we believe that each  purchaser (i) was aware that the  securities  had not been
registered  under federal  securities laws, (ii) acquired the securities for its
own  account  for  investment  purposes  and not with a view to or for resale in
connection with any  distribution  for purposes of the federal  securities laws,
(iii) understood that the securities  would need to be indefinitely  held unless
registered or an exemption from registration  applied to a proposed  disposition
and (iv) was aware that the certificate representing the securities would bear a
legend  restricting their transfer.  We believe that, in light of the foregoing,
the sale of our  securities to the  respective  acquirers did not constitute the
sale of an unregistered security in violation of the federal securities laws and
regulations by reason of the exemptions  provided under ss.ss.  3(b) and 4(2) of
the Securities Act, and the rules and regulations promulgated thereunder.


Item 6.  Selected Financial Data.

         The  financial   information  set  forth  below  with  respect  to  our
statements  of  operations  for each of the years in the  two-year  period ended
December 31, 1998,  and with respect to our balance  sheets at December 31, 1997
and 1998 is derived from the financial  statements that have been audited by our
former independent  certified public accountants,  Crouch,  Bierwolf & Chisholm,
and is qualified by reference to such  financial  statements  and notes  related
thereto.  The  financial  information  set  forth  below  with  respect  to  our
statements of operations  for the one-year  period ended  December 31, 1999, and
with  respect to our  balance  sheet at December  31,  1999 is derived  from the
financial statements that have been audited by our current independent certified
public  accountants,  Grant  Thornton,  and is  qualified  by  reference to such
financial statements and notes related thereto. The following selected financial
data  should be read in  conjunction  with our  financial  statements  and notes
thereto and  "Management's  Discussion  and Analysis of Financial  Condition and
Result of Operations."

<PAGE>
<TABLE>
<CAPTION>

                                                                  Year Ended December 31,
                                                                  -----------------------
                                                            1999             1998            1997
                                                      -------------    -------------    -------------
Revenues:
<S>                                                   <C>              <C>              <C>
  Product Sales..................................     $     15,289     $     32,884     $     16,034
  Contract research revenues, royalties and
    license fees                                             8,066           49,794            8,450
                                                      -------------    -------------    -------------
      Total revenues.............................           23,355     $     82,678     $     24,484
  Cost of sales & royalties......................           15,071     $     15,864     $        806
                                                      -------------    -------------    -------------
Gross Profit (loss)                                          8,284           66,814           23,678

Operating costs and expenses:

  Research & development.........................        1,198,546          266,563          126,281
  Sales & marketing..............................          953,708           34,554            5,274
  General & administrative.......................        1,340,486          217,318          206,874
  Depreciation & amortization....................          179,169           10,406            6,419
  Compensation expense for common stock and
    options                                              1,452,610                -                -
                                                      -------------    -------------    -------------
      Total operating expense....................        5,124,519          528,841          344,848
                                                      -------------    -------------    -------------

Operating loss...................................       (5,116,235)        (462,027)        (321,170)

Other income and (expense)
  Interest income and other, net.................          196,310            7,276            3,077
  Interest expense...............................           (9,955)         (28,158)         (17,125)
                                                      -------------    -------------    -------------
      Total other income and (expense), net......          186,355          (20,882)         (14,048)

Loss before income taxes.........................       (4,929,880)        (482,909)        (335,218)

Provision for income taxes.......................                -                -                -
                                                      -------------    -------------    -------------
Net loss.........................................     $ (4,929,880)    $   (482,909)    $   (335,218)
                                                      =============    =============    =============

Deduction for dividends and accretion............       (6,469,861)               -                -
                                                      -------------    -------------    -------------
Net loss attributable to common stockholders.....     $(11,399,741)    $   (482,909)    $   (335,218)
                                                      =============    =============    =============

Basic and Diluted loss per common share..........           $(0.96)          $(0.08)          $(0.61)

Weighted average outstanding shares..............       11,879,919        6,100,679          545,535
                                                      =============    =============    =============

Balance Sheet Data:

Cash and cash equivalents........................     $  1,055,371     $    425,702     $     10,369
Total Assets.....................................        4,769,737          623,617          139,928
Long term liabilities, including current portion.          553,333          147,620          342,272
Deficit accumulated during the development stage.      (12,217,868)        (818,127)
Total Stockholders' Equity (deficit).............        3,164,054          441,084         (208,943)

See Notes to Financial Statements for information  concerning the computation of
per share amounts.
</TABLE>

<PAGE>

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

         The  following  Management's   Discussion  and  Analysis  of  Financial
Condition and Results of Operations  contains  forward-looking  statements  that
involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of a number of
factors.

         Overview.  We are a development  stage company and our initial product,
has only recently  been  available  for use in the  marketplace.  We launched on
website at  www.logio.com  on March 19, 2000.  We are  continuing to develop and
market Logio for the business professional.

         We have devoted most of our resources  since inception in November 1996
to the  research  and  development  of Logio  and are now  beginning  to  expend
additional  resources on the  development  of brand  awareness of "Logio." As of
December 31, 1999, we had an accumulated  earnings  deficit of  $12,217,868.  We
expect our operating  losses to continue until we develop a sufficient  customer
and advertising base to cover our operating expenses.

         Reverse  Acquisition   Treatment.   Our  predecessor  in  interest  was
incorporated in the state of California on May 2, 1997, as Dunamis, Inc. Dunamis
was formed for the purpose of publishing and marketing books and audio and video
tapes. On June 25, 1998,  Dunamis  completed a merger with a Nevada  corporation
that had been created for the sole purpose of changing  Dunamis'  domicile  from
California to Nevada. On July 14, 1998, the surviving entity in that transaction
completed a merger with WordCruncher  Publishing  Technologies,  Inc.,  formerly
"Redstone  Publishing,  Inc.", a Utah  corporation  that was formed in November,
1996. The Nevada  corporation was the surviving  entity in that transaction and,
as  part  of  the  transaction,  changed  its  name  to  "WordCruncher  Internet
Technologies,   Inc."  At  the  time  of  the  merger,  WordCruncher  Publishing
Technologies  held the  rights  to a  significant  portion  of the  intellectual
property upon which our site was initially designed.  As a result of the merger,
the former  shareholders  of  WordCruncher  Publishing  Technologies,  Inc. also
obtained a majority of the voting power of the combined companies.  Accordingly,
in conformance with generally  accepted  accounting  principles,  the merger has
been  accounted  for  as  a  "reverse  acquisition."   Consistent  with  reverse
acquisition  accounting  treatment,  our accounting statements are the financial
statements of  WordCruncher  Publishing  Technologies,  Inc. and differ from the
financial statements of Dunamis, Inc.

         Stock Split and Change in Par Value.  In July 1998,  we  authorized a 3
for 1  forward  stock  split.  We  have  retroactively  restated  our  financial
statements to reflect that stock split.  In connection  with the reverse  merger
with Dunamis,  we also changed the par value of our common stock to $.001.  That
change has also been retroactively applied in our financial  statements.  Unless
otherwise noted in this prospectus,  all share amounts reflect the forward stock
split.

         Results of  Operation.  The  following  summarizes  the  results of our
operations for the years ended December 31, 1999 and 1998 and 1997.

                                                     Year Ended December 31,
                                                     -----------------------
                                              1999          1998        1997
                                         ------------  -----------  -----------
Revenues                                     $23,355      $82,678       24,484

Cost of sales                                 15,071       15,864          806
                                         ------------  -----------  -----------
Gross profit (loss)                      $     8,284      $66,814      $23,678

Research & development                     1,198,546      266,563      126,281
Sales & marketing                            953,708       34,554        5,274
General & administrative                   1,340,486      217,318      206,874
Depreciation & amortization                  179,169       10,406        6,419
Compensation expense for common stock
and options                                1,452,610            -            -
                                         ------------  -----------  -----------

Total operating expense                    5,124,519      528,841      344,848

Operating Loss                           $(5,116,235)    (462,027)    (321,170)

Interest income                              196,310        7,276        3,077
Interest Expense                              (9,955)     (28,158)     (17,125)
                                         ------------  -----------  -----------
Total interest income (expense)              186,345      (20,882)     (14,048)

Net loss                                 $(4,929,880)  $ (482,909)  $ (335,218)
                                         ============  ===========  ===========

         Our expenses  have  exceeded our revenues for each fiscal  period since
our  inception.  The  revenues we have  generated  to date have been nominal and
almost exclusively  related to product sales and licensing fees for our personal
computer based version of our software. Those revenues will continue to decrease
as we switch our  development and marketing  emphasis to an Internet  version of
Logio. Accordingly,  we believe a comparison of the results of our operations on
a period-by-period  basis is of limited benefit.  We expect that, as we continue
to implement our business plan,  our revenues will grow,  along with the burdens
generally associated with larger revenues,  including increased expenses for our
managerial, accounting and technical personnel.

         Comparison  of Year  End  Periods.  Following  is a  comparison  of our
operating  results  for the year  ended  December  31,  1999 with the year ended
December 31, 1998:

                  Revenue.  Revenues decreased $59,323 from $82,678 for the year
ended December  31,1998,  to $23,355 for the year ended December 31, 1999.  This
72% decrease  was due to the  discontinuation  of our  PC-based  product and our
intense focus on the  development  of our Logio.com site which has only recently
become available to the marketplace.

                  Costs of Revenues.  Cost of revenues remained  relatively flat
with 1998 cost of sales amounting to $15,864 and 1999 amounting to $15,071. This
slight decrease in cost of sales in the face of significant  declines in revenue
is attributed to the added cost of discontinuing our PC based lines.

                  Research  &  Development.  Research  and  development  expense
increased  nearly 450% from $266,563 in 1998 to $1,198,546 in 1999. This was due
to the  significant  level of  expenditure  involved in the  development  of our
Logio.com site over the past 12 months.

                  Selling Expenses.  Sales and marketing expenses also increased
significantly  from  $34,554 in 1998 to $953,708 in 1999,  an increase of nearly
2800%,  as we prepared to and initiated the sales effort in connection  with our
Logio.com  site.  Nearly 50% of these monies were spent in  connection  with our
advertising  and branding  campaign with Pittard  Sullivan and a majority of the
balance was devoted to salaries and marketing fees.

                  General and Administrative. General and administrative expense
increased  significantly  in 1999,  as we  increased  staff in  preparation  for
commercial  operations.  During  1999,  as  compared  to 1998,  our  general and
administrative expenses increased 617% to $1,340,486 from $217,138.

                  Depreciation and  Amortization.  Depreciation and amortization
expense  increased from $10,406 in 1998 to $179,169 in 1999 primarily due to the
additional property,  equipment and software that we acquired in 1999 to support
our website operations.

                  Total Operating  Expenses.  Total operating expenses increased
$4,595,678  from $528,841 in 1998 to  $5,124,519 in 1999.  This 969% increase in
operating  expenses  resulted in an operating  loss for 1999 of  $5,116,235,  an
increased loss of $4,654,208 over the 1998 loss of $462,027.

                  Other Income.  Other income  increased  from $7,276 in 1998 to
$196,310 in 1999, a 2700%  increase,  as interest and dividends on invested cash
increased  significantly  based on higher cash balances associated with the cash
proceeds  received  from the  Series A  Preferred  Share  offering.  These  cash
balances  are  temporarily  invested  pending  their  ultimate  use  in  funding
development activities.

                  Interest  Expense.  As a result of  decreased  borrowing,  our
interest expense decreased from $28,158 in 1998 to $9,955 in 1999.

                  Net Loss. Our net loss for 1999 grew $4,446,971 to $4,929,880,
compared to a loss of $482,909 for 1998 as a result of our  increased  costs and
expenses  related  to  the  research,  development  and  implementation  of  our
Logio.com website operations.

                  Net Loss Attributable to Common Shareholders. Giving effect to
the beneficial conversion feature of our Series A Preferred Share offering,  our
total loss  attributable  to common  shareholders  was $11,399,741 in 1999. This
resulted  in an  increase  to  additional  paid in capital  and a  corresponding
accumulated  increase  in deficit.  This was the first year that the  beneficial
conversion feature was available to the preferred stockholders.

         Quarterly Trends. We do not anticipate  significant  "seasonal" changes
in our operations.  We expect revenues to grow  consistently  over the next five
years,  but we believe they should grow reasonably even from quarter to quarter.
We believe revenues will come initially from  advertising  sales at our site. We
believe  we  will  generate   additional   revenues   through  our   partnership
arrangements  with other  sites that use Logio in other  commerce-related  areas
over the Internet and through the sale of information through the Logio site.

         Liquidity and Capital  Resources.  Since our inception,  we have funded
our cash requirements through debt and equity financings. We have used the funds
from  those  transactions  to fund  our  investment  in the  development  of our
Logio.com  business  information  site,  provide working capital and for general
corporate purposes.  As of the year ended December 31, 1997, we had total assets
of $139,928,  and total  liabilities of approximately  $348,872,  resulting in a
negative net worth of $208,943.  Our operating  losses totaled  $335,218.  These
losses were funded  primarily  by related  party  loans,  which were backed by a
revolving  bank  line  of  credit.   In  connection   with  the  merger  between
WordCruncher  Publishing  Technologies,  Inc. and Dunamis, Inc. in July 1998, we
obtained a  significant  new  source of  operating  capital.  At the time of the
merger, Dunamis, Inc. held cash reserves of approximately $1 million, and had no
liabilities.  As a result of that  transaction,  our total  assets  for the year
ended  December 31, 1998 were $623,617,  including  cash or cash  equivalents of
$425,702.  Our liabilities totaled $182,533,  resulting in a stockholders equity
of  $441,084,  including  an  operating  loss of  $482,909  for the year  ending
December 31, 1998.  Cash provided by financing  activities in 1999 included $6.3
million,  from our sale of our Series A Preferred Stock to eight investors.  Our
expenses for the offering totaled  $392,100,  resulting in net proceeds to us of
$5,907,900.  As a result,  as of  December  31,  1999,  we had  total  assets of
$4,769,737.  Our  total  liabilities  as of that date  were  $1,605,683  and our
stockholders'  equity was  $3,164,054.  This includes an increase to accumulated
deficit  of  $6,469,861  and a  corresponding  increase  to  paid-in  capital in
recognition of the beneficial  conversion  feature of our convertible  preferred
shares issued during the period. We used $2,986,246 in cash for operations. Cash
was used to pay salaries  related to development,  marketing and  administrative
personnel,  building operating lease and other operating payables. Cash was used
in investing related activities,  including $1,260,831 in property and equipment
purchases and purchases of short-term investments totaling $1,454,207. Our cash,
cash  equivalents  and short term  investments  at  December  31,  1999  totaled
$2,517,518.

         A summary of our audited  balance  sheets for the years ended  December
31, 1999, 1998 and 1997 are as follows:

                                                  Year Ended December 31,
                                                  -----------------------
                                               1999         1998         1997
Cash and Cash Equivalents and Short-        -----------  -----------  ----------
   Term Investments                         $2,517,518    $425,702     $10,369
Current Assets                              $2,833,391    $425,702     $15,369

Total Assets                                $4,769,737    $623,617    $139,928

Current Liabilities                         $1,352,333    $170,919    $321,307
Total Liabilities                           $1,605,683    $182,533    $348,872

Total Stockholders' Equity                  $3,164,054    $441,084    $(208,943)
Total Liabilities & Stockholders' Equity    $4,769,737    $623,617    $139,928


         We have the  resources  to continue  our product  development  efforts,
commence  commercial  operations  and  to  initiate  our  sales,  marketing  and
promotional  activities  for Logio through the end of the third quarter of 2000,
based upon our current estimates of projected expenditures during the period. We
operate in a very competitive  industry that requires continued large amounts of
capital to develop  and  promote  its  products.  Many of our  competitors  have
significantly  greater  capital  resources.  We believe it will be  essential to
continue to raise additional capital,  both internally and externally to compete
in this industry.

         Our need to raise external  capital in the future will depend upon many
factors,  including,  but not  limited  to, the rate of sales  growth and market
acceptance of our product lines, the amount and timing of our necessary research
and  development  expenditures,  the amount and  timing of our  expenditures  to
sufficiently  market and promote our  products  and the amount and timing of any
accessory new product introductions.  In addition to accessing the public equity
markets,  we will pursue bank credit lines and equipment lease lines for certain
capital expenditures. However, there can be no assurance that we will be able to
access the capital we need.

         We currently  estimate that we will require between $25 and $30 million
to develop  our  products  and  launch our  operations  in  accordance  with our
business plan through 2002. The actual costs will depend on a number of factors,
including

     o    our ability to negotiate  favorable  prices for purchases of necessary
          portal components,

     o    the number of our customers and advertisers,

     o    the services for which they subscribe,

     o    the nature and success of the services that we offer,

     o    regulatory changes, and

     o    changes in technology.

         In addition,  our actual costs and revenues could vary from the amounts
we expect or budget,  possibly  materially,  and those  variations are likely to
affect  how  much  additional   financing  we  will  need  for  our  operations.
Accordingly,  there can be no  assurance  our  actual  financial  needs will not
exceed the amounts available to us.

         To the  extent  that we  acquire  the  amounts  necessary  to fund  our
business  plan  through the  issuance  of equity  securities,  our  then-current
shareholders  may  experience  dilution  in the value per share of their  equity
securities. The acquisition of funding through the issuance of debt could result
in a substantial  portion of our cash flows from  operations  being dedicated to
the payment of principal and interest on that indebtedness,  and could render us
more vulnerable to competitive and economic downturns.

         Recent Accounting Pronouncements . In June 1998, Statement of Financing
Accounting Standards No. 133 "Accounting for Derivative  Instruments and Hedging
Activities" was released.  The Statement requires recognition of all derivatives
as either assets or liabilities on a company's balance sheet and the measurement
of those  instruments  at fair market  value.  The  Statement  provides  for the
accounting  treatment of changes in the fair value of a derivative  depending on
the planned use of the derivative and the resulting designation. We are required
to implement the Statement in the first quarter of fiscal 2000. We have not used
derivative instruments,  however, and we believe that the impact of the adoption
of  this  Statement  will  not  have  a  significant  effect  on  our  financial
statements.

         In March 1998, the American  Institute of Certified Public  Accountants
issued  Statement of Position 98-1,  "Accounting for Costs of Computer  Software
Developed or Obtained for Internal  Use." The  Statement is effective for fiscal
years  beginning  after December 15, 1998. The statement  provides  guidance and
accounting for the cost of computer software  developed or obtained for internal
use by a  company.  We adopted  this  Statement  on January 1, 1999,  but do not
believe that it will have a significant effect on our financial statements.

         In March 1998, the American  Institute of Certified Public  Accountants
issued  Statement  of  Position  98-4,  "Deferral  of the  Effective  Date  of a
Provision of Statement of Position  97-2." The Statement of Position 98-4 defers
for one year the  application  of certain  provisions  of  Statement of Position
97-2, "Software Revenue  Recognition."  Different informal and non-authoritative
interpretations  of certain  provisions  of Statement of Position 97-2 have been
printed and, as a result, the American Institute of Certified Public Accountants
issued  Statement  of Position  98-9 in  December  1998 which is  effective  for
periods beginning on or after March 15, 1999. Statement of Position 98-9 extends
the  effective  date of  Statement  of  Position  98-4 and  provides  additional
interpretative  guidance.  The adoption of Statement of Position 97-2, Statement
of Position  98-4,  and  Statement  of  Position  98-9 have not have and are not
expected  to have a  material  impact on our  results of  operations,  financial
position or cash flows. However, due to the uncertainties related to the outcome
of these  amendments,  we cannot  determine  the impact of the  Statement on our
future financial results.

         Statement  of  Financial  Accounting  Standards,   or  SFAS,  No.  130,
"Reporting  Comprehensive  Income," requires that all items that are required to
be recognized under accounting  standards as components of comprehensive  income
be reported in a financial  statement that is displayed with the same prominence
as other  financial  statements.  We  adopted  the  provisions  of SFAS No.  130
beginning January 1, 1998, as required.  Our comprehensive losses and net losses
are not materially different for all periods presented.

         SFAS No. 131,  "Disclosures about Segments of an Enterprise and Related
Information,"  establishes  standards for reporting  information about operating
segments in annual  financial  statements  and  requires  reporting  of selected
information  about  operating  segments in interim  financial  reports issued to
shareholders.  It also  establishes  standards  for  related  disclosures  about
products and  services,  geographic  areas and major  customers.  We adopted the
provisions  of SFAS No. 131 for the year ending  December  31, 1998 as required.
Currently, we do not believe we have any separately reportable business segments
or other disclosure information required by the Statement.

         New Accounting  Pronouncements.  We have reviewed all recently  issued,
but not yet adopted, accounting standards to determine their effects, if any, on
our results of operations or financial position. Based on our review, we believe
that none of these  pronouncements will have a significant effect on our current
or future earnings or operations.

Item 8.  Financial Statements and Supplementary Data.


<PAGE>




<TABLE>
<CAPTION>
                                     WORDCRUNCHER INTERNET TECHNOLOGIES, INC.

                                           INDEX TO FINANCIAL STATEMENTS



                                                                                            Page
                                                                                            -----
INDEPENDENT AUDITORS' REPORTS

<S>                                                                                         <C>
    Report of Grant Thornton LLP, independent certified public accountants
        on the December 31, 1999 financial statements                                         F-2

    Report of Crouch, Bierwolf and Chisholm independent certified public accountants
        on the December 31, 1998 and 1997 financial statements                                F-3


CONSOLIDATED FINANCIAL STATEMENTS

    Balance Sheets as of December 31, 1999 and 1998                                           F-4

    Statements of Operations for the Years Ended
        December 31, 1999, 1998, 1997, and cumulative amounts since inception                 F-5

    Statement of Stockholders' Equity for the Years Ended
        December 31, 1999, 1998, 1997, and cumulative amounts since inception                 F-6

    Statements of Cash Flows for the Years Ended
        December 31, 1999, 1998, 1997, and cumulative amounts since inception                 F-9

    Notes to Financial Statements                                                            F-11
</TABLE>





                                       F-1
<PAGE>







                             REPORT OF INDEPENDENT

                          CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
WordCruncher Internet Technologies, Inc.


         We  have  audited  the  accompanying   consolidated  balance  sheet  of
WordCruncher  Internet  Technologies,  Inc. (a development stage company), as of
December  31,  1999,  and the related  consolidated  statements  of  operations,
stockholders'  equity and cash flows for the year then  ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit. The financial statements,  audited by other auditors,  for the period
from November 5, 1996  (inception)  to December 31, 1998 reflect total  revenues
and net loss of $107,162 and $818,127,  respectively, of the related totals. Our
opinion insofar as it relates to the cumulative amounts since inception included
for such prior period, is based solely on the report of other auditors.

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

         In our  opinion,  based on our audit and the report of other  auditors,
the 1999 financial  statements referred to above present fairly, in all material
respects,   the  consolidated   financial  position  of  WordCruncher   Internet
Technologies,  Inc. (a development stage company),  as of December 31, 1999, and
the consolidated  results of their operations and their  consolidated cash flows
for the year then ended and  cumulative  amounts  since  inception in conformity
with generally accepted accounting principles.

The Company is in the development stage as of December 31, 1999. Recovery of the
Company's  assets  is  dependent  on  future  events,  the  outcome  of which is
indeterminable.  In addition, successful completion of the Company's development
plan and its transition,  ultimately,  to attaining  profitable  operations,  is
dependent upon obtaining adequate financing to fulfil its development activities
and achieving a level of sales adequate to support the Company's cost structure.

         The accompanying  financial  statements have been prepared assuming the
Company will continue as a going concern. As shown in the financial  statements,
the Company has incurred  consolidated  cumulative  net losses  attributable  to
common  stockholders of $12,217,868 since inception of operations.  This factor,
among  others,  as  discussed  in  Note B to the  financial  statements,  raises
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans in regard to these matters are also described in Note B. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

                                                /s/GRANT THORNTON LLP
Salt Lake City, Utah
March 6, 2000




                                       F-2
<PAGE>








                          INDEPENDENT AUDITOR'S REPORT





To the Board of Directors and Stockholders
of WordCruncher Internet Technologies, Inc.



We have audited the  accompanying  consolidated  balance sheets of  WordCruncher
Internet  Technologies,  Inc. (a  development  stage company) as of December 31,
1998 and 1997 and the related statements of operations, stockholders' equity and
cash  flows  for the  years  ended  December  31,  1998,  1997 and 1996 and from
inception  of the  development  stage on November 5, 1996  through  December 31,
1998.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position  of  WordCruncher
Internet  Technologies,  Inc. (a  development  stage company) as of December 31,
1998 and 1997 and the results of its consolidated  operations and cash flows for
the years ended  December  31,  1998,  1997 and 1996 and from  inception  of the
development  stage on November 5, 1996 through  December 31, 1998 in  conformity
with generally accepted accounting principles.



Crouch, Bierwolf & Chisholm

Salt Lake City, Utah
January 21, 1999






                                      F-3
<PAGE>


<PAGE>

<TABLE>
<CAPTION>
                                     WordCruncher Internet Technologies, Inc.
                                           (a development stage company)

                                            CONSOLIDATED BALANCE SHEETS

                                                   December 31,
                                                      ASSETS
                                                                                  1999             1998
                                                                            ----------------  -------------
Current assets
<S>                                                                        <C>               <C>
    Cash and cash equivalents                                               $   1,055,371     $    425,702
    Short-term investments (Note C)                                             1,462,147                -
    Prepaid expenses                                                              311,199                -
    Interest receivable                                                             1,983                -
    Current maturities of notes receivable (Note F)                                 1,955                -
    Accounts receivable                                                               736                -
                                                                            ----------------  -------------
           Total current assets                                                 2,833,391          425,702
                                                                            ----------------  -------------

PROPERTY And Equipment, at cost (Note E)                                        1,930,335           81,419

NOTES RECEIVABLE, less current maturities (Note F)                                      -          100,200

Other assets (Note D)                                                               6,011           16,296
                                                                            ----------------  -------------
                                                                            $   4,769,737     $    623,617
                                                                            ================  =============

                             LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
    Current maturities of long-term obligations (Note G)                    $           -     $    120,000
    Current maturities of capital lease obligations (Note H)                      299,983           16,006
    Notes payable                                                                 659,682                -
    Accounts payable                                                              306,349           10,421
    Accrued expenses                                                               86,319           24,492
                                                                            ----------------  -------------
           Total current liabilities                                            1,352,333          170,919

CAPITAL LEASE OBLIGATIONS, less current maturities (Note H)                       253,350           11,614

COMMITMENTS (Notes H and I)                                                             -                -

Stockholders' equity (Notes B, C, I, J, K, M and N)
    6% preferred stock, par value $0.01; liquidation preference $1,000;
      authorized 15,000 shares; issued and outstanding 6,300 shares                    63                -
      in 1999 and none in 1998
    Common stock, par value $0.001; authorized 60,000,000 shares;
        issued and outstanding 11,891,002 shares in 1999
        and 11,877,002 shares in 1998                                              11,891           11,877
    Additional paid-in capital                                                 15,362,028        1,247,334
    Accumulated other comprehensive income                                          7,940                -
    Deficit accumulated during the development stage                          (12,217,868)        (818,127)
                                                                            ----------------  -------------
           Total stockholders' equity                                           3,164,054          441,084
                                                                            ----------------  -------------
                                                                            $   4,769,737     $    623,617
                                                                            ================  =============

                    The accompanying notes are an integral part of these statements.

                                      F-4
<PAGE>

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                     WordCruncher Internet Technologies, Inc.
                                           (a development stage company)

                                       CONSOLIDATED STATEMENTS OF OPERATIONS


                                                     Cumulative
                                                       amounts                  Year ended December 31,
                                                        since        -------------------------------------------------
                                                      inception           1999              1998              1997
                                                    --------------   ---------------  ----------------   --------------
<S>                                                 <C>              <C>              <C>                <C>
Revenues                                            $     130,517    $      23,355    $       82,678     $      24,484
Cost of sales                                              31,741           15,071            15,864               806
                                                    --------------   ---------------  ----------------   --------------
           Gross profit                                    98,776            8,284            66,814            23,678

Selling expenses                                          993,536          953,708            34,554             5,274
Research and development                                1,591,390        1,198,546           266,563           126,281
General and administrative                              1,764,678        1,340,486           217,318           206,874
Depreciation and amortization                             195,994          179,169            10,406             6,419
Compensation expense for common
   stock and options (Note K)                           1,452,610        1,452,610                 -                 -
                                                    --------------   ---------------  ----------------   --------------
           Total operating expenses                     5,998,208        5,124,519           528,841           344,848
                                                    --------------   ---------------  ----------------   --------------
           Loss from operations                        (5,899,432)      (5,116,235)         (462,027)         (321,170)

Other income (expense)
    Interest income and other                             206,663          196,310             7,276             3,077
    Interest expense                                      (55,238)          (9,955)          (28,158)          (17,125)
                                                    --------------   ---------------  ----------------   --------------
                                                          151,425          186,355           (20,882)          (14,048)
                                                    --------------   ---------------  ----------------   --------------
           Net Loss                                 $  (5,748,007)   $  (4,929,880)   $     (482,909)    $    (335,218)
                                                    ==============   ===============  ================   ==============
Deduction for dividends and accretion (Note J)      $  (6,469,861)   $  (6,469,861)   $            -     $           -
                                                    ==============   ===============  ================   ==============
Net loss attributable to common stockholders        $ (12,217,868)   $ (11,399,741)   $     (482,909)    $    (335,218)
                                                    ==============   ===============  ================   ==============
Net loss per common share - basic and diluted
   (Note M)                                         $       (2.09)   $       (0.96)   $        (0.08)    $       (0.61)
                                                    ==============   ===============  ================   ==============
Weighted-average number of shares outstanding
   - basic and diluted                                  5,850,408       11,879,919         6,100,679           545,535
                                                    ==============   ===============  ================   ==============

                           The accompanying notes are an integral part of these statements.
</TABLE>

                                      F-5
<PAGE>

<TABLE>
<CAPTION>
                                     WordCruncher Internet Technologies, Inc.
                                           (a development stage company)

                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

   Years ended December 31, 1999, 1998, 1997, and period from November 5, 1996 (inception) to December 31, 1996


                                                                               Preferred stock                Common stock
                                                                         ---------------------------   ---------------------------
                                                            Price per       Number                        Number
                                               Date           share       of shares        Amount       of shares        Amount
                                           -------------  -------------  ------------   ------------   ------------   ------------
<S>                                        <C>             <C>           <C>             <C>           <C>            <C>
Balances at November 5, 1996                        -      $        -              -     $        -              -    $         -

Net loss                                            -               -              -              -              -              -
                                                    -                -     ------------   ------------   ------------   ----------
Balances at December 31, 1996                        -              -              -              -              -              -

Issuance of stock for cash to                   Jan 97            0.001            -              -        622,500            623
   organizers

Issuance of stock for cash                      Feb 97            0.001            -              -         67,500             67

Issuance of stock for license                   Feb 97              -              -              -        110,742            111
   agreement (Note I)

Issuance of stock to employees                  Sep 97            0.333            -              -        252,450            252
   for services

Issuance of stock for services                  Aug 97            1.092            -              -         37,875             38
   performed

Net loss for the year                                -              -              -              -              -              -
                                                     -              -      ------------   ------------   ------------   ----------
Balances at December 31, 1997                        -              -              -              -      1,091,067          1,091

Issuance of stock for cash                      Jul 98             4.17            -              -        120,000            120

Reverse acquisition and                         Jul 98              -             -              -       9,885,435          9,886
   reorganization adjustment


                                                    (Continued)
</TABLE>


                                      F-6
<PAGE>


<TABLE>
<CAPTION>

                                     WordCruncher Internet Technologies, Inc.
                                           (a development stage company)

                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

   Years ended December 31, 1999, 1998, 1997, and period from November 5, 1996 (inception) to December 31, 1996

                                                  --CONTINUED--

                                                                                 Deficit
                                                              Accumulated       accumulated
                                              Additional         other            during
                                                paid-in       comprehensive     development
                                                capital          income           stage
                                              ------------   ---------------   ------------
<S>                                           <C>            <C>                <C>
Balances at November 5, 1996                  $       -      $        -         $      -

Net loss                                              -               -                -
                                              ------------   ---------------   ------------
Balances at December 31, 1996                         -               -                -

Issuance of stock for cash to                        52               -                -
   organizers

Issuance of stock for cash                            8               -                -

Issuance of stock for license                      (111)              -                -
   agreement (Note I)

Issuance of stock to employees                   83,898               -                -
   for services

Issuance of stock for services                   41,337               -                -
   performed

Net loss for the year                                 -               -         (335,218)
                                              ------------   ---------------   ------------
Balances at December 31, 1997                   125,184               -         (335,218)

Issuance of stock for cash                      499,880               -                -

Reverse acquisition and                          (8,550)              -                -
   reorganization adjustment
</TABLE>







                                      F-6(a)

<PAGE>


<TABLE>
<CAPTION>

                                     WordCruncher Internet Technologies, Inc.
                                           (a development stage company)

                            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - CONTINUED

   Years ended December 31, 1999, 1998, 1997, and period from November 5, 1996 (inception) to December 31, 1996


                                                                               Preferred stock                Common stock
                                                                         ---------------------------   ---------------------------
                                                            Price per       Number                        Number
                                               Date           share       of shares        Amount       of shares        Amount
                                           -------------  -------------  ------------   ------------   ------------   ------------
<S>                                        <C>            <C>            <C>            <C>            <C>            <C>
Issuance of stock for cash                      Jul 98            0.725            -              -        690,000            690

Issuance of stock for debt                      Jul 98             0.96            -              -         13,500             13
   conversion

Issuance of stock for services                  Oct 98             1.90            -              -         39,000             39

Issuance of stock for software                  Oct 98             1.80            -              -         13,000             13
   technology

Issuance of stock for insurance                 Nov 98             1.00            -              -         25,000             25
   coverage

Net loss for the year                                -              -              -              -              -              -
                                                                         ------------   ------------   ------------   ------------

Balances at December 31, 1998                        -              -              -              -     11,877,002         11,877

Issuance of warrants for                        Jan 99              -              -              -              -              -
   consulting services (Note K)

Issuance of preferred stock for                 Feb 99          1,000          6,100             61              -              -
   cash, net of offering costs
   (Note J)

Issuance of preferred stock for                 Mar 99          1,000            200              2              -              -
   cash, net of offering costs
   (Note J)


                                                    (Continued)
</TABLE>


                                      F-7
<PAGE>

<TABLE>
<CAPTION>
                                     WordCruncher Internet Technologies, Inc.
                                           (a development stage company)

                            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - CONTINUED

   Years ended December 31, 1999, 1998, 1997, and period from November 5, 1996 (inception) to December 31, 1996

                                                     --CONTINUED--

                                                                          Deficit
                                                        Accumulated     accumulated
                                        Additional         other           during
                                         paid-in       comprehensive    development
                                         capital          income           stage
                                       ------------   ---------------   ------------
<S>                                    <C>            <C>               <C>
Issuance of stock for cash                 499,310               -                -

Issuance of stock for debt                  12,987               -                -
   conversion

Issuance of stock for services              70,161               -                -

Issuance of stock for software              23,387               -                -
   technology

Issuance of stock for insurance             24,975               -                -
   coverage

Net loss for the year                            -               -         (482,909)-
                                       ------------   ---------------   ------------

Balances at December 31, 1998            1,247,334               -         (818,127)

Issuance of warrants for                   258,000               -               -
   consulting services (Note K)

Issuance of preferred stock for          5,719,839               -               -
   cash, net of offering costs
   (Note J)

Issuance of preferred stock for            187,998               -               -
   cash, net of offering costs
   (Note J)
</TABLE>









                                      F-7(a)
<PAGE>




<TABLE>
<CAPTION>

                                     WordCruncher Internet Technologies, Inc.
                                           (a development stage company)

                            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - CONTINUED

   Years ended December 31, 1999, 1998, 1997, and period from November 5, 1996 (inception) to December 31, 1996


                                                                               Preferred stock                Common stock
                                                                         ---------------------------   ---------------------------
                                                            Price per       Number                        Number
                                               Date           share       of shares        Amount       of shares        Amount
                                           -------------  -------------  ------------   ------------   ------------   ------------
<S>                                        <C>            <C>            <C>            <C>            <C>            <C>
Issuance of common stock to                     Jun 99             0.11            -              -          2,000              2
   employees for compensation

Issuance of common stock for                    Aug 99             0.10            -              -          4,000              4
   exercise of options

Issuance of common stock for                    Dec 99             3.25            -              -          8,000              8
   conversion of debt

Issuance of stock options to                 Jan-Dec 99             -              -              -              -              -
   employees for compensation

Accretion of intrinsic value of              Feb-Dec 99             -              -              -              -              -
   preferred stock (Note J)

Dividends on preferred stock (Note J)        Feb-Dec 99             -              -              -              -              -

Unrealized gain on marketable                       -               -              -              -              -              -
   securities (Note C)

Net loss for the year                                -              -              -              -              -              -
                                                                         ------------   ------------   ------------   ------------
Balances at December 31, 1999                        -              -          6,300    $        63     11,891,002    $    11,891
                                                                         ============   ============   ============   ============

                          The accompanying notes are an integral part of this statement.
</TABLE>



                                      F-8
<PAGE>
<TABLE>
<CAPTION>

                                     WordCruncher Internet Technologies, Inc.
                                           (a development stage company)

                            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - CONTINUED

   Years ended December 31, 1999, 1998, 1997, and period from November 5, 1996 (inception) to December 31, 1996

                                               --CONTINUED--


                                                                         Deficit
                                                       Accumulated     accumulated
                                       Additional         other           during
                                        paid-in       comprehensive    development
                                        capital          income           stage
                                      ------------   ---------------   -------------
<S>                                   <C>            <C>               <C>
Issuance of common stock to                21,998                 -               -
   employees for compensation

Issuance of common stock for                  396                 -               -
   exercise of options

Issuance of common stock for               25,992                 -               -
   conversion of debt

Issuance of stock options to            1,430,610                 -               -
   employees for compensation

Accretion of intrinsic value of         6,131,944                 -      (6,131,944)
   preferred stock (Note J)

Dividends on preferred stock (Note J)     337,917                 -        (337,917)

Unrealized gain on marketable                   -             7,940               -
   securities (Note C)

Net loss for the year                           -                 -      (4,929,880)
                                      ------------   ---------------   -------------
Balances at December 31, 1999          15,362,028    $        7,940    $(12,217,868)
                                      ============   ===============   =============

</TABLE>


                                      F-8(a)
<PAGE>


<TABLE>
<CAPTION>
                                      WordCruncher Internet Technologies, Inc.
                                          (a development stage company)

                                              STATEMENTS OF CASH FLOWS

                                                              Cumulative
                                                                Amounts                    Year ended December 31,
                                                                Since       -------------------------------------------------
                                                              Inception           1999             1998             1997
                                                           ---------------  ---------------  ---------------  ---------------
<S>                                                        <C>              <C>              <C>              <C>
Increase (decrease) in cash and cash equivalents
    Cash flows from operating activities

       Net loss                                            $  (5,748,007)   $  (4,929,880)   $    (482,909)   $    (335,218)
       Adjustments to reconcile net loss
         to net cash used in operating activities
           Depreciation and amortization                         195,994          179,169           10,406            6,419
           Issuance of common stock and
              options for compensation and
              other expenses                                   1,673,335        1,452,610           95,200          125,525
           Issuance of warrants for consulting services
                                                                 258,000          258,000                -                -
           Changes in assets and liabilities
               Prepaid expenses                                 (311,199)        (311,199)               -                -
               Interest receivable                                (1,983)           8,035           (7,141)          (2,877)
               Accounts receivable                                  (736)            (736)               -                -
               Accounts payable                                  301,349          295,928            4,251            1,170
               Accrued expenses                                   86,319           61,827           19,063            5,429
                                                           ---------------  ---------------  ---------------  ---------------
                  Total adjustments                            2,201,079        1,943,634          121,779          135,666
                                                           ---------------  ---------------  ---------------  ---------------

                  Net cash used in
                    operating activities                      (3,546,928)      (2,986,246)        (361,130)        (199,552)
                                                           ---------------  ---------------  ---------------  ---------------
    Cash flows from investing activities
       Purchases of property and equipment                    (1,279,458)      (1,260,831)         (18,627)               -
       Increase in short-term investments                     (1,454,207)      (1,454,207)               -                -
       Repayment of notes receivable
         from related parties                                    115,745          110,745            5,000                -
       Notes receivable issued to related parties               (117,700)         (12,500)         (23,200)         (82,000)
       Increase in deposits                                       (5,076)               -           (5,076)               -
                                                           ---------------  ---------------  ---------------  ---------------
                  Net cash used in investing activities       (2,740,696)      (2,616,793)         (41,903)         (82,000)
                                                           ---------------  ---------------  ---------------  ---------------
</TABLE>


                                                          (Continued)



                                      F-9
<PAGE>


<TABLE>
<CAPTION>
                                        WordCruncher Internet Technologies, Inc.
                                               (a development stage company)

                                            STATEMENTS OF CASH FLOWS - CONTINUED

                                                               Cumulative
                                                                Amounts                    Year ended December 31,
                                                                Since        ------------------------------------------------
                                                              Inception           1999             1998             1997
                                                           ---------------   --------------   --------------   --------------
<S>                                                        <C>               <C>              <C>              <C>
    Cash flows from financing activities
       Proceeds from issuance of common stock                  1,001,150               400        1,000,000              750
       Proceeds from issuance of preferred stock               6,300,000         6,300,000                -                -
       Payment of fees associated with issuance
         of preferred stock                                     (392,100)         (392,100)               -                -
       Proceeds from issuance of notes payable                   685,682           685,682                -                -
       Proceeds from issuance of long-term obligations
                                                                 313,000                 -           13,000          300,000
       Principal payments under capital lease obligations
                                                                (256,423)         (241,274)          (6,320)          (8,829)
       Principal payments of long-term obligations              (308,314)         (120,000)        (188,314)               -
                                                           ---------------   --------------   --------------   --------------
                  Net cash provided by
                    investing activities                       7,342,995         6,232,708          818,366          291,921
                                                           ---------------   --------------   --------------   --------------
                  Net increase in cash and
                    cash equivalents                           1,055,371           629,669          415,333           10,369

Cash and cash equivalents at beginning of period                       -           425,702           10,369                -
                                                           ---------------   --------------   --------------   --------------
Cash and cash equivalents at end of period                 $   1,055,371     $   1,055,371    $     425,702    $      10,369
                                                           ===============   ==============   ==============   ==============

Supplemental disclosures of cash flow information
    Cash paid during the period for:
       Interest                                            $      49,128     $       4,584    $      29,888    $      14,656
       Income taxes                                                    -                 -                -                -

Noncash financing activities
    Purchase of equipment through lease obligations        $     818,177     $     766,987    $           -    $      51,190
    Unrealized gain on available-for-sale securities               7,940             7,940                -                -
    Issuance of common stock for
      debt conversion                                             39,000            26,000           13,000                -

                                 The accompanying notes are an integral part of these statements.
</TABLE>



                                      F-10
<PAGE>


                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A summary of the significant accounting policies applied in the preparation
     of the accompanying financial statements follows:

     1. Organization and principles of consolidation

     WordCruncher Internet Technologies,  Inc. (the Company) was incorporated on
     November  5,  1996  in the  State  of  Utah  under  the  name  of  Redstone
     Publishing,  Inc.  On March  10,  1997,  the  Company  changed  its name to
     WordCruncher  Publishing  Technologies,  Inc. During July 1998, the Company
     merged  with  Dunamis,  Inc.  a public  company  organized  in the State of
     California. Dunamis had approximately $1 million of cash and essentially no
     other assets and liabilities. Management of Dunamis resigned and management
     of the Company now manages the consolidated entity. The merger was recorded
     as  a  reverse  acquisition,   therefore  WordCruncher  is  the  accounting
     survivor.

     In connection with the merger,  Dunamis,  the legal  survivor,  changed its
     name to WordCruncher Internet  Technologies,  Inc. and changed its domicile
     to the State of Nevada.  The Company's  headquarters  are in Draper,  Utah,
     where the Company is engaged in the development and marketing of a business
     information  Internet site.  The Internet site is specialized  for business
     professionals  and the  business-to-business  marketplace.  The Company has
     acquired a license  agreement from a University  wherein the Company has an
     exclusive,   worldwide   right  to  sell,   develop  and   manufacture  the
     "WordCruncher" technology.

     2. Stock split and change in par value

     In July 1998, the Company  authorized a 3 for 1 forward stock split.  These
     financial statements have been retroactively  restated to reflect the stock
     split. Pursuant to the reverse merger with Dunamis, the Company's par value
     of its common stock  changed to $.001 per share.  This change has also been
     retroactively applied.

     3. Development stage company

     The  Company  is  a  development   stage   company  and  is   concentrating
     substantially  all of its  efforts in raising  capital and  developing  its
     business information Internet site for future commercial release.

     4. Software development costs

     Software  development costs incurred in the development of software related
     products are charged to expense as incurred.  Material software development
     costs incurred subsequent to the establishment of technological feasibility
     are  capitalized.  Technological  feasibility is established by the Company
     upon completion of a working model.  Software development costs incurred by
     the   Company   subsequent   to   technological   feasibility   have   been
     insignificant.




                                      F-11
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     5. Recognition of revenue

     The  Company  recognizes  income  and  expense  on  the  accrual  basis  of
     accounting. During the development stage, the Company has received revenues
     for certain  services  provided  for indexing  printed  materials to online
     format.  Revenue is recorded when the services are  completed.  The Company
     also generates  revenues during the development  stage from the sale of its
     publishers'  proprietary  version of the  search  engine  technology.  This
     technology is sold separately  without future  performance such as upgrades
     or maintenance, and is not sold with support services, therefore revenue is
     recorded upon the sale and delivery of the product. Licensing fees are also
     received from the  sublicensing of this technology which is included in the
     software of certain sublicenses.  Licensing fees are recorded as revenue as
     software is reported as sold by the sublicensee.

     6. Cash and cash equivalents

     The  Company   considers  all  highly  liquid   investments  with  original
     maturities of three months or less when purchased to be cash equivalents.

     7. Short-term investments

     Short-term  investments  are  comprised of various  government  securities,
     commercial paper and other securities, which mature in one year or less and
     are  classified as  available-for-sale.  Available-for-sale  securities are
     measured  at fair value with net  unrealized  gains and losses  reported in
     equity.

     8. Fair value of financial instruments


     The fair value of the Company's  cash  equivalents,  receivables,  accounts
     payable  and  accrued  liabilities  approximate  carrying  value due to the
     short-term  maturity  of the  instruments.  The  fair  value  of  long-term
     obligations  approximate  carrying value based on their effective  interest
     rates compared to current market rates.

     9. Use of estimates

     In preparing the Company's financial statements,  management is required to
     make estimates and assumptions  that affect the reported  amounts of 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 significantly from those estimates.

     10. Depreciation and amortization

     Depreciation  of property and  equipment  is provided on the  straight-line
     method over the estimated useful lives of the assets.  Accelerated  methods
     of depreciation of property and equipment are used for income tax purposes.




                                      F-12
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     10. Depreciation and amortization - continued

     Property and equipment  under capital  leases are amortized over the lessor
     of the life of the asset or the term of the lease.

     Maintenance,  repairs,  and renewals  which neither  materially  add to the
     value of the  property  nor  appreciably  prolong  its life are  charged to
     expense  as  incurred.  Gains or losses on  dispositions  of  property  and
     equipment are included in earnings.

     11. Income taxes

     In 1997, WordCruncher Publishing Technologies, Inc. elected to file federal
     and state income taxes under the provisions of Subchapter S of the Internal
     Revenue  Code.  Under those  provisions,  the Company did not pay corporate
     income taxes on its taxable income during that period of time. Instead, the
     stockholders  were liable for individual  income taxes on their  respective
     shares of the Company's net operating income in their individual income tax
     returns. Effective July 1, 1998, the Company filed consolidated tax returns
     with its parent and terminated its S-Corporation status.

     Since July 1, 1998, the Company utilizes the liability method of accounting
     for  income  taxes.  Under  the  liability  method,   deferred  income  tax
     liabilities  are provided  based on the  difference  between the  financial
     statement  and tax bases of  assets  and  liabilities  as  measured  by the
     currently  enacted  tax  rates in  effect  for the  years  in  which  these
     differences are expected to reverse. Deferred tax expense or benefit is the
     result of changes in deferred tax assets and liabilities.

     12. Comprehensive income

     In 1998, the Company adopted  Statement of Financial  Accounting  Standards
     No. 130 (SFAS 130), "Reporting  Comprehensive Income." SFAS 130 establishes
     standards  for  disclosure  and financial  statement  display for reporting
     total  comprehensive  income and its individual  components.  Comprehensive
     income,  as defined,  includes  all changes in equity  during a period from
     nonowner sources. The Company's  comprehensive income includes net loss and
     unrealized  gains on  investments  and is  displayed  in the  statement  of
     stockholders' equity.

     13. Net loss per common share

     The   computation   of  net  loss  per   common   share  is  based  on  the
     weighted-average number of shares outstanding during each period presented.
     Diluted loss per common share would include the dilutive  potential effects
     of  options,  warrants,  and  convertible  and reset  features  of Series A
     preferred  stock,  but were not included in the  calculation of diluted EPS
     because their effects were antidilutive.




                                      F-13
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     14. Certain reclassifications

     Certain nonmaterial  reclassifications  have been made to the 1998 and 1997
     financial statements to conform to the 1999 presentation.

NOTE B - GOING CONCERN

     The accompanying financial statements have been prepared in conformity with
     generally accepted accounting principles, which contemplate continuation of
     the Company as a going concern. However, the Company is a development stage
     company,  has generated only limited revenue through December 31, 1999, and
     has  sustained  losses from  operations  each period  since  inception.  In
     addition,  it has a deficit  accumulated  during the  development  stage of
     $12,217,868.  Also, the Company has used cash in, rather than provided cash
     from, its operations.

     In view of the matters described in the preceding paragraph, recoverability
     of a major portion of the recorded asset amounts shown in the  accompanying
     balance sheets is dependent upon continued operations of the Company, which
     in turn is  dependent  upon the  Company's  ability  to meet its  financing
     requirements on a continuing  basis, to maintain  present  financing and to
     succeed in its future operations.  The financial  statements do not include
     any  adjustments  relating  to the  recoverability  and  classification  of
     recorded asset amounts or amounts and  classification  of liabilities  that
     might be necessary should the Company be unable to continue in existence.

     The  Company  has taken the  following  steps to revise its  operating  and
     financial  requirements  which it believes  are  sufficient  to provide the
     Company with the ability to continue in existence:

     o    During February and March 1999, Company received a total of $6,300,000
          for a preferred stock offering (Note J).

     o    During December 1999, the Company's pending S-1 Registration Statement
          became effective.

     o    Through  January  2000,  the  Company  entered  into  agreements  with
          prominent  ad serving and  reporting  technology  companies to utilize
          various technologies for its site management.

     o    Also  in  January  2000,  the  Company  has  selected  a  full-service
          advertising  agency  to  promote  its  planned  business   information
          Internet site.

     o    In  March  of  2000,  negotiations  were  underway  to  obtain  up  to
          $15,000,000 of additional financing.

     o    In March 2000,  the Company  completed a working  model of its planned
          business information Internet site.




                                      F-14
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE C - SHORT-TERM INVESTMENTS


     At  December  31,  1999,  the  cost,  fair  value  and  unrealized  gain on
     short-term investments are as follows:

        Fair value                         $   1,462,147
        Cost                                   1,454,207
                                            ------------

                   Unrealized gain         $       7,940
                                            ============


NOTE D - OTHER ASSETS

     Other assets consist of the following:

                                               1999             1998
                                           ------------    ------------
        Deposits                          $       5,076   $       5,076
        Other                                       935           1,202
        Interest receivable                           -          10,018
                                           ------------    ------------

                                          $       6,011   $      16,296
                                           ============    ============


NOTE E - PROPERTY AND EQUIPMENT

     Property and equipment, at cost and estimated useful lives are as follows:
<TABLE>
<CAPTION>
                                                                                  Estimated
                                                                                   useful
                                                      1999           1998           lives
                                                  ------------   -------------  -------------
<S>                                              <C>            <C>                   <C>
        Computer equipment                       $   1,217,668  $     54,352          5
        Furniture and fixtures                          49,392         5,358          7
        Software technology                            858,868        38,400          3
                                                  ------------   -------------
                                                     2,125,928        98,110
        Less accumulated depreciation                  195,593        16,691
                                                  ------------   -------------
                   Total property and equipment  $   1,930,335  $     81,419
                                                  ============   =============
</TABLE>




                                      F-15
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>

NOTE F - NOTES RECEIVABLE - RELATED PARTIES

         Notes receivable consist of the following:
                                                                                   1999            1998
                                                                              -------------   ------------
<S>     <C>                                                                   <C>             <C>
        8% note receivable from a former employee, interest and
           principal due in full April 2000, not collateralized               $      1,955    $          -

        8% note receivable from an officer, interest and principal
           due in full January 1, 2000, received in full in 1999                         -          66,700

        8% note receivable from an officer, interest and principal
           due in full January 1, 2002, received in full in 1999                         -          29,500

        8% note receivable from a corporation owned by an officer,
           interest and principal due in full January 1, 2000,
           received in full in 1999                                                      -           4,000
                                                                              -------------   ------------
                                                                                     1,955         100,200

        Less current maturities                                                      1,955               -
                                                                              -------------   ------------
                                                                              $          -    $    100,200
                                                                              =============   ============
</TABLE>


NOTE G - LONG-TERM OBLIGATIONS

       At December  31,  1998,  the  Company  had prime plus 1.5  percent  (9.25
       percent)  notes  payable to officers in the amount of $120,000.  Interest
       payments were due monthly,  and principal was due in December  1999.  The
       notes were not collateralized and were paid in full in 1999.

NOTE H - LEASES

       1.   Operating leases

       The Company  leases their  office  facilities  under an operating  lease,
       which  expires  in March  2002.  Future  minimum  lease  payments  are as
       follows:

        Year ending December 31,

            2000                            $     44,933
            2001                                  44,933
            2002                                  11,233
            Thereafter                                 -
                                             -------------
                                            $    101,099
                                             =============




                                      F-16
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE H - LEASES - CONTINUED

     2. Capital lease obligations

     Included  in property  and  equipment  is $818,177  and $51,101 of computer
     equipment under capital leases at December 31, 1999 and 1998, respectively.
     The related accumulated amortization is $56,411 and $16,333 at December 31,
     1999 and 1998, respectively.

     Future minimum lease payments at December 31, 1999, are as follows:

        Year ending December 31,

            2000                                                $   335,930
            2001                                                    260,923
            2002                                                      3,388
            Thereafter                                                    -
                                                                -------------
               Total minimum lease payments                         600,241

            Less amount representing interest                        46,908

                Present value of net minimum lease payments         553,333

            Less current maturities                                 299,983
                                                                -------------
            Noncurrent portion                                  $   253,350
                                                                =============


NOTE I - COMMITMENTS

     1. Licenses

     On February 14, 1997,  the Company  signed an exclusive  license  agreement
     with Brigham Young  University  (BYU),  a Utah  nonprofit  corporation  and
     educational  institution,  wherein the Company has the worldwide  rights to
     market,  modify,  develop and  manufacture the  "WordCruncher"  technology,
     which is a software  program used to search data for specific items (search
     engine). The term of the license covers the underlying period of the patent
     as provided for by federal law, which is 17 years.  The agreement calls for
     license fees and royalties of three percent of adjusted gross sales, and 50
     percent of royalty  payments from  sublicenses.  Annual  minimum  royalties
     begin for the calendar year 1999 and are due the quarter following the year
     end,  as  specified  below.  Minimum  royalty  payments  will be  capped at
     $150,000 from 2002 forward.  The Company acquired the license through stock
     issuance,  and was required to maintain BYU's equity interest of 10 percent
     through July 1998.




                                      F-17
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE I - COMMITMENTS - CONTINUED

     1. Licenses - continued

     The Company is committed to minimum royalty payments as follows:

              Year ending December 31,

              2000                           $    50,000
              2001                               100,000
              2002                               150,000
              2003                               150,000
              2004                               150,000
              Thereafter                       1,368,750
                                             -------------
                                             $ 1,968,750
                                             =============

     These  minimum  royalties  are due as long as the license  agreement  is in
     effect.

     2. Employment agreements

     The  Company has six  employment  and  severance  agreements  with  certain
     officers and a manager of the Company. Salaries covered by these agreements
     range from  $100,000 to $120,000  annually,  subject to annual  adjustment.
     Contracts with three  individuals  provide for annual  salaries of $120,000
     (plus  annual  increases  of  at  least  eight  percent  and  cash  bonuses
     determined by the board of directors or the  compensation  committee),  and
     are for terms of three  years  expiring  in  August  2001.  The  agreements
     provide  for  severance  equal to one year's  salary if the  individual  is
     terminated without cause.  Furthermore,  if there is a change in control as
     defined by these three  agreements,  the contracts provide for compensation
     equal to five times the average of the sum of amounts paid to the executive
     for salary for the five fiscal years immediately  preceding the date of the
     change in control. The other three contracts provide for annual salaries of
     $84,000  to  $100,000  (plus  monthly  commissions  equal to 50  percent of
     monthly base salary and/or annual incentive  bonuses equal to 30-60 percent
     of annual  base  salary),  and are for terms of two  years  expiring  April
     through  December 2001. The agreements  also provide for severance equal to
     90 days of the employee's  base salary plus the maximum amount of incentive
     pay the employee would have earned in the same 90 day period.  Furthermore,
     if there is a change  in  control,  as  defined  by these  agreements,  the
     contracts  provide for  compensation  equal to the  employee's  annual base
     salary.  There is no  provision  for any  severance  payments  under  these
     employment contracts.

     3. Consulting and development contract

     The Company has  entered  into a  consulting  and  development  contract in
     connection with the launch of its website. The Company is required to pay a
     fixed price of $500,000 in exchange for these services,  to be paid in four
     installments based upon meeting certain  milestones.  At December 31, 1999,
     $275,000 remains payable under this contract.




                                      F-18
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE J - PREFERRED STOCK

     In January of 1999, the Board of Directors  approved the creation of Series
     A Convertible  Preferred  Stock  (Preferred  Stock) and  authorized  15,000
     shares.  The Preferred Stock has a stated value of $1,000 per share,  and a
     cumulative  dividend of 6 percent.  The Company issued 6,100 and 200 shares
     of the  Preferred  Stock in February and March of 1999,  respectively.  The
     Preferred  Stock is  convertible  into a total  of  625,000  shares  of the
     Company's  common  stock at a  conversion  rate of $10.08  per  share.  The
     conversion  price is based on the average  closing  price of the  Company's
     common stock during the 20 day period immediately  preceding the closing of
     the preferred issuance. The Preferred shares hold no voting rights and have
     liquidation preferences of $1,000 per share and cumulative dividends.

     The  Preferred  shareholders  have a limited  right to  receive  additional
     shares of common stock  ("reset  shares") if the market price of the common
     stock is less than the  "reset  price" of  $12.096  per share for a ten day
     period of time  following  certain  reset  dates  (adjustment  price).  The
     additional shares are calculated as the difference  between the reset price
     and the adjustment price,  multiplied by one third of the purchase price of
     Preferred stock divided by the conversion price,  divided by the adjustment
     price.  The reset dates  commence 150, 240 and 360 calendar days  following
     the issuance of the Preferred  Stock.  As of December 31, 1999, the holders
     of Preferred  stock are entitled to receive  574,867 shares of common stock
     under this provision.

     On the dates that the Preferred Stock was issued,  the intrinsic  values of
     the beneficial  conversion feature were $10,995,740 and $31,994 in February
     and  March,  respectively.   The  intrinsic  values  were  derived  by  the
     difference  between the conversion price and the market value of the common
     stock on the day of the preferred  stock issuance  multiplied by the number
     of common shares into which the Preferred Stock is convertible. The closing
     price of the stock was $28.25 and $11.69 at each of the respective  closing
     dates. The proceeds received from the sale of these convertible instruments
     were $6,100,000 and $200,000, respectively. Because the intrinsic values of
     the beneficial  conversion features are greater than the proceeds received,
     the discounts  assigned to the  convertible  instruments are $6,100,000 and
     $31,944,  respectively,  creating  a  total  discount  of  $6,131,944.  The
     Preferred Stock became fully  convertible  into common stock as of November
     of 1999  and the  discount  was  accreted  accordingly  during  1999 and is
     reflected on the  statement of  operations as a deduction for dividends and
     accretion.

     Offering cost related to the issuance of Preferred Stock total $392,100 and
     have been netted with the proceeds for reporting purposes.

     Cumulative Preferred dividends total $337,917 as of December 31, 1999.




                                      F-19
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE K - STOCK OPTIONS AND WARRANTS

     1. Stock options

     The Company  provides for issuance of stock  options to certain  employees,
     directors,  officers and others. There has been no formal stock option plan
     adopted as of December  31, 1999.  The Board of Directors  has approved the
     granting of options as follows:

     Directors,  officers and key employees have been granted options to acquire
     1,079,000 shares of common stock. The options were granted at various dates
     at prices  ranging from $0.10 to $5.54 per share,  which amounts  represent
     prices below market price of the  Company's  shares on the dates granted as
     determined by the Board of Directors. The options vest periodically through
     November 2002 and expire through June 2003.

     Fair market value of options granted

     The Company has adopted  only the  disclosure  provisions  of  Statement of
     Financial   Accounting  Standard  No.  123  (SFAS  123),   "Accounting  for
     Stock-Based Compensation".  Therefore, the Company accounts for stock based
     compensation under Accounting  Principles Board Opinion No. 25, under which
     compensation  cost has been  recognized  using the intrinsic  value method.
     Under this method,  compensation cost is recognized over the vesting period
     based on the  difference,  if any,  on the date of grant  between  the fair
     value of the Company's stock and the amount an employee must pay to acquire
     the stock. Had compensation  cost been determined based upon the fair value
     of the options at the grant date consistent with the methodology prescribed
     by SFAS 123,  the  Company's  net loss and loss per share  would  have been
     changed to the following pro forma amounts:

                                                                      1999
                                                                ----------------
              Net loss attributable to         As reported     $  (11,399,741)
                  common stockholders          Pro forma          (11,453,549)

              Net loss per common share -      As reported               (.96)
                  basic and diluted            Pro forma                 (.96)

     The fair value of these  options was  estimated  at the date of grant using
     the  Black-Scholes   American   option-pricing  model  with  the  following
     weighted-average assumptions: expected volatility of 120 percent; risk-free
     interest  rate  of 6.5  percent;  and  expected  life of  3.50  years.  The
     weighted-average fair value of options granted was $4.75.

     Option pricing models  require the input of highly  sensitive  assumptions,
     including the expected stock price  volatility.  Also, the Company's  stock
     options have characteristics  significantly  different from those of traded
     options,  and changes in the subjective  input  assumptions  can materially
     affect  the  fair  value  estimate.  Management  believes  the  best  input
     assumptions available were used to value the options and that the resulting
     option values are reasonable.




                                      F-20
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE K - STOCK OPTIONS AND WARRANTS - CONTINUED

     Information with respect to the Company's stock options is as follows:
<TABLE>
<CAPTION>
                                                                                  Weighted-
                                                                                   average
                                                      Stock        Exercise       exercise
                                                     options         price          price
                                                  ------------   -------------  -------------
<S>                                               <C>            <C>            <C>
        Outstanding at January 1, 1997                      -    $         -    $         -
            Granted                                         -              -              -
            Exercised                                       -              -              -
            Canceled/expired                                -              -              -
                                                  ------------   -------------  -------------
        Outstanding at December 31, 1997                    -              -              -
            Granted                                         -              -              -
            Exercised                                       -              -              -
            Canceled/expired                                -              -              -
                                                  ------------   -------------  -------------
        Outstanding at December 31, 1998                    -              -              -
            Granted                                 1,079,000      0.10 - 5.54           1.79
            Exercised                                  (4,000)            0.10           0.10
            Canceled/expired                                -              -              -
                                                  ------------   -------------  -------------
        Outstanding at December 31, 1999            1,075,000    $ 0.10 - 5.54  $        1.80
                                                  ============   =============  =============
        Exercisable at December 31, 1999              116,833    $        0.10  $        0.10
                                                  ============   =============  =============
</TABLE>

     Additional  information regarding stock options outstanding and exercisable
     at December 31, 1999 is summarized as follows:

<TABLE>
<CAPTION>
                              Options Outstanding                                 Options Exercisable
          -----------------------------------------------------------   --------------------------------------
                                                           Weighted-
                                                            average       Weighted-                  Weighted-
                                                           remaining      average                     average
                                               Number     contractual     exercise     Number        exercise
          Range of exercise prices          outstanding   life (years)    price      xercisable       price
          ------------------------         -------------  -----------   -----------  ------------  -----------
<S>       <C>                              <C>            <C>            <C>         <C>            <C>
           $ 0.10                               440,000       13.3       $  0.10         116,833    $  0.10
           $ 2.72 - $ 2.77                      550,000       21.0          2.73               -         -
           $ 3.00 - $ 3.47                       35,000        1.3          3.17               -         -
           $ 5.54                                50,000        1.9          5.54               -         -
                                           -------------                             ------------
                                              1,075,000       37.5       $  1.80         116,833    $  0.10
                                           =============                             ============
</TABLE>




                                      F-21
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE K - STOCK OPTIONS AND WARRANTS - CONTINUED

     2. Warrants

     Series A, B and C warrants

     In connection  with the sale of Series A Convertible  Preferred Stock (Note
     J),  purchasers,  were  issued  Series A and B  warrants  to  purchase  the
     Company's common stock. Series C warrants were also issued to a third party
     for a finder's fee.

     Series A warrants  allow  holders to purchase up to an  aggregate of 71,069
     shares of common stock at a weighted-average price of $34.53 per share.

     Series B warrants  allow  holders to purchase up to an  aggregate of 47,380
     shares of common stock at a weighted-average of $41.44 per share.

     Series C warrants  allow holders to purchase up to 189,000 shares of common
     stock at a weighted-average price of $29.01 per share.

     All 307,449 Series A, B and C warrants expire in February 2004.

     Other warrants issued for services

     In  January  of  1999,  and in  conjunction  with  the  sale  of  Series  A
     Convertible  Preferred  Stock  (Note J), the  Company  issued  warrants  to
     purchase  200,000  shares of the  Company's  common  stock to its  investor
     relations  consultant.  The warrants were issued with an exercise  price of
     $5.00 per share and are fully vested at December  31, 1999.  The fair value
     of $1.29 was estimated as the value of the services  performed.  Consulting
     expenses relating to these warrants totaled $258,000 during 1999.

       Information with respect to the Company's warrants is as follows:
                                                                    Weighted-
                                                      Number          average
                                                    of shares     exercise price
                                                   ------------   -------------

        Outstanding at January 1, 1997                       -    $          -
            Granted                                          -               -
            Exercised                                        -               -
            Forfeited                                        -               -
                                                   ------------   -------------
        Outstanding at December 31, 1997                     -               -
            Granted                                          -               -
            Exercised                                        -               -
            Forfeited                                        -               -
                                                   ------------   -------------
        Outstanding at December 31, 1998                     -               -
            Granted                                    507,449    $      21.48
            Exercised                                        -               -
            Forfeited                                        -               -
                                                   ------------   -------------
        Outstanding at December 31, 1999               507,449    $      21.48
                                                   ============   =============
        Warrants exercisable at December 31, 1999      507,449    $      21.48
                                                   ============   =============




                                      F-22
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE L - INCOME TAXES

     The income tax  expense  (benefit)  reconciled  to the tax  computed at the
     federal statutory rate of 34 percent is as follows:

                                                          1999           1998
                                                      ------------   -----------
        Income tax benefit at statutory rate          $ (1,676,159)  $ (164,189)
        Income tax attributed to the S-Corporation              -        8,560
        State income tax benefit, net of federal
        tax benefit                                      (115,157)     (15,936)
        Nondeductible option compensation                 493,887            -
        Deductible stock option compensation               (6,068)           -
        Change in valuation allowance                   1,301,627      169,896
        Other, net                                          1,870        1,669
                                                      ------------   -----------
              Income tax expense                      $          -   $        -
                                                      ============   ===========

     Deferred income tax assets and liabilities
     are as follows:

                                                          1999           1998
                                                      ------------   -----------
        Deferred tax assets
            Deferred expenses                         $  146,465     $        -
            Net operating losses                       1,442,150        169,896
                                                      ------------   -----------

                                                       1,588,615        169,896
        Less valuation allowance                      (1,471,524)      (169,896)
                                                      ------------   -----------
                                                         117,091              -
                                                      ------------   -----------
        Deferred tax liabilities
            Deferred income                             (117,091)             -
                                                      ------------   -----------
              Net deferred tax assets (liability)     $         -    $         -
                                                      ============   ===========

     The  Company  has  sustained  net  operating  losses in each of the periods
     presented.  There  were no  deferred  tax  assets  or income  tax  benefits
     recorded  in  the  financial   statements  for  net  deductible   temporary
     differences or net operating loss  carryforwards  because the likelihood of
     realization of the related tax benefits cannot be established. Accordingly,
     a valuation  allowance  has been  recorded to reduce the net  deferred  tax
     asset to zero and consequently, there is no income tax provision or benefit
     for any of the period  presented.  The increase in the valuation  allowance
     was $1,301,628 and $169,896 for the years ended December 31, 1999 and 1998,
     respectively.

     As of December 31, 1999, the Company had net operating  loss  carryforwards
     for tax reporting purposes of approximately  $3,866,354 expiring in various
     years through 2019.

     Through June 30, 1998, the Company elected to file federal and state income
     taxes under the  provisions of  Subchapter S of the Internal  Revenue Code.
     Effective  July 1, 1998,  the  Company  revoked  its S  election,  and will
     therefore be a taxable  entity under the  provisions of Subchapter S of the
     Internal Revenue Code.




                                      F-23
<PAGE>



                    WordCruncher Internet Technologies, Inc.
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE M - NET LOSS PER COMMON SHARE

<TABLE>
<CAPTION>
                                                    Cumulative
                                                      amounts                 Year ended December 31,
                                                       since      --------------------------------------------
                                                     inception         1999           1998            1997
                                                   ------------   -------------   ------------   -------------
<S>                                                <C>            <C>             <C>            <C>
        Common shares outstanding during
           the entire period                                 -     11,877,002       1,091,067              -
        Weighted-average common shares
           issued during the period                  5,850,408          2,917       5,009,612        545,535
                                                   ------------   -------------   ------------   -------------
        Weighted-average common shares
           used in basic EPS                         5,850,408     11,879,919       6,100,679        545,535
        Dilutive effects of potential common
           shares                                            -              -               -              -
                                                   ------------   -------------   ------------   -------------
        Weighted-average number of common
           shares and dilutive potential
           common stock
           used in diluted EPS                       5,850,408     11,879,919       6,100,679        545,535
                                                   ============   =============   ============   =============
</TABLE>

     For the years ended  December 31, 1999,  1998 and 1997,  and for cumulative
     amounts  since  inception,   all  of  the  convertible  securities,   reset
     provisions,  options  and  warrants  discussed  in  Notes J and K were  not
     included in the computation of diluted EPS because to do so would have been
     antidilutive.

NOTE N - SUBSEQUENT EVENTS

     1. Company name change

     In January  2000,  the Company  began  conducting  business  under the name
     "Logio".

     2. Preferred stock conversion

     Through  March 2000,  6,300 shares of the  Company's  preferred  stock were
     converted  into 625,000  common  shares and 728,046  "reset  shares" of the
     Company's  common  stock were issued to  preferred  shareholders  (Note J).
     Also,  through  March 2000,  cumulative  dividends  were paid to  preferred
     shareholders in the form of 61,650 shares of the Company's common stock.

     3. Options granted

     Through March 2000,  options for 5,000 shares of the Company's common stock
     were granted to an employee.

     4. Options and warrants exercised

     Through  March 2000,  warrants  were  exercised  for 158,000  shares of the
     Company's  common stock and options were  exercised for 4,000 shares of the
     Company's common stock.




<PAGE>


Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosures.

         On February 1, 2000,  our Board of Directors  authorized the engagement
of Grant  Thornton  LLP as our auditor for the fiscal  year ended  December  31,
1999.  Our decision to change  accountants  was prompted by the ability of Grant
Thornton  LLP to  provide  audit  services  for us on an  extended  scale as our
operations  are expected to expand.  We entered into an  engagement  letter with
Grant Thornton on February 23, 2000, and concurrently  with that engagement,  we
dismissed Crouch Bierwolf & Chisholm,  P.C., which had served as our independent
accountants since 1998. Our Board of Directors  participated in and approved the
decision to change independent accountants.

         The reports of Crouch Bierwolf on our financial statements for the past
fiscal year  contained no adverse  opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty,  audit scope or accounting  principles.
In  connection  with its  audit  for the most  recent  fiscal  year and  through
February  23,  2000,  there were no  disagreements  with Crouch  Bierwolf on any
matter of accounting principles or practices, financial statement disclosure, or
auditing  scope  or  procedure,  which  disagreements  if  not  resolved  to the
satisfaction  of Crouch  Bierwolf  would have  caused  Crouch  Bierwolf  to make
reference thereto in their report on the financial statements for such year.

         During the most recent  fiscal year and through  February 23, 2000,  we
had not consulted with Grant Thornton LLP regarding either:  (i) the application
of  accounting  principles  to a  specified  transaction,  either  completed  or
proposed,  or the type of audit  opinion that might be rendered on our financial
statements,  and neither a written report was provided to us nor oral advice was
provided that Grant Thornton LLP concluded was an important factor considered by
us in reaching a decision as to the accounting,  auditing or financial reporting
issue;  or (ii) any matter  that was either the subject of a  disagreement  or a
reportable event.


Item 10.  Directors and Executive Officers of the Registrant.

         Our directors,  executive  officers and key  employees,  as of the date
hereof,  and their  respective  ages and positions  with us are set forth below.
Biographical  information for each of those persons is also presented below. Our
executive  officers  are  chosen  by our  Board of  Directors  and  serve at its
discretion.  There are no existing family relationships  between or among any of
our directors or executive officers.

Name                 Age    Position Held
-----------------    ---    ----------------------------------------------------
M. Daniel Lunt       46     President, Chief Executive Officer, Director
James W. Johnston    47     Chairman of the Board, Executive Vice President,
                            Director
Kenneth W. Bell      50     Senior  Vice  President,  Chief  Financial  Officer,
                            Treasurer,   Secretary, Director
Edward Sullivan      47     Director
David Grow           43     Director
Michael Fowler       56     Director
Peter T. Stoop       38     Vice President of Marketing
Martin E. Cryer      39     Vice President of Product Development


         M. Daniel Lunt:  Mr. Lunt was a co-founder of  WordCruncher  Publishing
and has served as our  President,  Chief  Executive  Officer and Director  since
November  1996. Mr. Lunt has over 20 years  experience in the computer  software
industry.  Between 1983 and 1993,  he was employed by  WordPerfect  Corporation,
most recently as Vice President of Worldwide Marketing. In that capacity, he was
responsible for the development and  implementation of WordPerfect's  marketing,
sales and support divisions.  After leaving WordPerfect in 1993, Mr. Lunt became
the  president  of a  residential  real  estate  development  company.  Mr. Lunt
attended Brigham Young University.

         James  W.  Johnston:   Mr.  Johnston  was  a  co-founder   WordCruncher
Publishing  and has served as our Director,  Chairman of the Board and Executive
Vice President  since November 1996. From December 1990 to November 1996, he was
president  of  Johnston & Company,  which  published  virtual  works using Logio
technology,  including the  Constitution  Papers (CD ROM).  Mr.  Johnston has 15
years of  expertise in  developing  and  marketing  products  involving  content
presentation, analysis software and virtual publishing.

         Kenneth W. Bell: Mr. Bell joined us as our Senior Vice President, Chief
Financial  Officer,  Secretary  and  Treasurer  and  Director in February  1997.
Between April 1990 and December 1996, he served as President and Chief Financial
Officer of Kelmarc Corporation,  a financial and management advisory company. He
has  twenty-five  years  experience  in a  variety  of  finance  and  management
positions, including employment in the commercial banking area for fifteen years
in Utah and California. Mr. Bell received his B.S. from BYU in 1972.

         Edward  Sullivan:  Mr.  Sullivan  joined us as one of our  directors in
February 2000. Since 1989, he served as President and Chief Executive Officer of
Pittard Sullivan, a brand and marketing communications company. Mr. Sullivan has
twenty years of experience in advertising,  marketing and media management, with
over 250 channel  launches  around the world.  Mr.  Sullivan was educated at the
University of  Cincinnati  and Central  Academy of Commercial  Arts. He has also
attended Harvard Business School's Accelerated Business  Administration  Program
as well as Carnegie Mellon's Oral Communications Program

         David R. Grow:  Mr. Grow joined us as one of our  Directors on February
1, 2000.  Since 1995,  Mr. Grow has served as Executive  Vice  President,  Chief
Operating Officer and Chief Financial  Officer for Daw Technologies,  Inc. Prior
to joining Daw Technologies,  Mr. Grow was employed by Novell, Inc. from 1992 to
1995, most recently as director of operations for Novell's $500 million software
applications  division.  Mr.  Grow  also  served  as  Corporate  Controller  for
WordPerfect  Corporation  from  1992 to 1994  where he was  responsible  for the
accounting,   financial   analysis   and   reporting   for  the  $700   million,
multi-national  software publishing company. He was employed by Price Waterhouse
as a Senior  Audit  Manager for the years 1982 to 1992.  Mr. Grow is a certified
public accountant, licensed in the State of Utah.

         Michael D.  Fowler:  Mr.  Fowler  joined us as one of our  Directors on
February 1, 2000.  Since 1997,  Mr. Fowler serves as the Vice  President,  Chief
Financial Officer of Howa  Construction,  Inc. During the period of 1995 through
1997,  Mr.  Fowler was a small  business  consultant  to  companies  involved in
medical  services,  microbrewery/restaurants,  telecommunications  and  employee
leasing. From 1990 to 1995, Mr. Fowler served as Vice President, Treasurer and a
director of Grand Valley Gas Company, where he was responsible for the company's
accounting, treasury, risk management, legal affairs and investor relations.

         Peter T. Stoop:  In  September  1998,  Mr.  Stoop joined us as our Vice
President of Sales and Marketing.  He was employed by Novell, Inc. from February
1994 through June 1997, most recently as senior  director of product  management
for  Novell's  $70  million  product  division.  Mr.  Stoop has  eight  years of
experience  in the computer  industry.  Mr. Stoop  received his MBA in marketing
from the William E. Simon School of Business at the  University  of Rochester in
1989.

         Martin  Cryer:  Mr.  Cryer  joined us as our Vice  President of Product
Development  in March  1999.  Mr.  Cryer has nearly 20 years  experience  in the
computer industry. He has designed and developed several generations of computer
systems, covering both symmetrical  multi-processing and parallel architectures.
Between  1996 and 1999,  Mr.  Cryer  oversaw  the Salt Lake City  based  Siemens
Research and  Development  Centre.  Mr. Cryer also served 12 years in the Unisys
UNIX Systems Group, contributing  significantly to many of its innovative server
system designs.  He graduated from Queen Mary College,  University of London and
has been residing in the United States for the past 10 years.

         Board of Directors. Our Board of Directors is comprised of six persons.
The number of directors can be increased as provided in our by-laws, which allow
either our board of directors  or our  stockholders  to approve the change.  Our
directors serve for terms of one-year.

         Board of Directors  Committees.  Our Board of Directors has established
three  committees,  the audit  committee,  the  compensation  committee  and the
executive  committee.  Each of these  committees is be  responsible  to the full
Board of  Directors,  and, in  general,  its  activities  will be subject to the
approval of the full Board of Directors.

         The  audit   committee  is   primarily   charged  with  the  review  of
professional services provided by our independent auditors, the determination of
the  independence of those auditors,  our annual financial  statements,  and our
system of internal  accounting  controls.  The audit committee also reviews such
other matters with respect to our accounting,  auditing and financial  reporting
practices  and  procedures  as it  finds  appropriate  or as is  brought  to its
attention, including our selection and retention of independent accountants. Our
audit committee is currently comprised of Messrs. Bell, Grow and Fowler.

         The  compensation  committee  is  charged  with the  responsibility  of
reviewing executive salaries,  administering bonuses, incentive compensation and
our stock option plans and approving our other executive officer  benefits.  The
compensation  committee also consults with our management  regarding pension and
other benefit plans, and our compensation policies and practices in general. Our
compensation  committee is currently  comprised  of Messrs.  Lunt,  Johnston and
Sullivan.

         The executive  committee is charged with the  performance of the duties
of the Board of Directors between regularly scheduled meetings of our Board, and
with the  functions  of the full  Board of  Directors  with  regard  to  matters
addressed by it. The executive committee is currently comprised of Messrs. Lunt,
Johnston and Bell.

         Compensation of Directors.  We do not have any standard arrangement for
compensating our directors for the services they provide to us in their capacity
as  directors,  including  services for committee  participation  or for special
assignments. We have, however, approved a stock option package for the year 2000
under which our independent  directors,  Messrs. Grow, Fowler and Sullivan,  may
each earn  options on up to 10,000  shares of our common  stock with an exercise
price of $5.86 a share.

         Employment  Agreements.  We have  adopted  a policy  of  entering  into
employment  agreements  with our senior  management,  and have entered into such
agreements with Messrs. Lunt, Bell, Johnston,  Cryer and Stoop. The terms of the
employment  agreements for Messrs. Lunt, Bell and Johnston begun on September 1,
1998 and have  initial  terms of three  years.  Under  the  agreements,  each is
entitled  to receive a base annual  salary of $102,000  during the first year of
the agreements. The salary will be increased annually, effective in September of
each year,  by an amount equal to the greater of 8% or an amount  determined  by
the Board of Directors.  In addition to the base salary amounts, each of Messrs.
Lunt,  Bell and Johnston will receive  incentive  bonuses,  as determined by our
Board of  Directors,  standard  benefits  such as  health  and  life  insurance,
disability payments and reimbursement of reasonable business expenses.

         We have also entered into an employment  agreement with each of Messrs.
Stoop  and  Cryer.  The  initial  term of each  agreement  is two years and each
provides for a base salary of $100,000. The agreements also provide for standard
health  and  medical  insurance,  incentive  bonuses,  disability  coverage  and
reimbursement for reasonable  business expenses.  In addition,  through of March
15, 2000 Mr.  Stoop  received  500,000  options and Mr. Cryer  received  300,000
options to acquire shares of our common stock vesting over a three year period.

         We may terminate the employment  contracts for cause, as defined in the
agreements,  or without cause. If the contract is terminated without cause or as
a result of a "change of control", as defined in the agreements, the employee is
generally  entitled  to  receive  severance  pay.  In the  event of a change  of
control,  Messrs.  Lunt,  Bell and Johnston will each receive a payment equal to
five times the sum of his average annual salary, bonus and profit sharing, based
on a per year  average  over the  five  preceding  years.  The term  "change  of
control" is defined in their agreements as

     o    any tender offer,  stock exchange offer or other  take-over  device in
          which any person  becomes the  beneficial  owner of 30% or more of the
          total voting power of our outstanding securities;

     o    any realignment of the Board of Directors or change in officers due to
          shareholder action;

     o    our sale by 30% or more of our assets; or

     o    any merger or reorganization  where we are not the surviving entity or
          our  shareholders  fail to  retain  substantially  the same  direct or
          indirect   ownership   in  us   immediately   after   the   merger  or
          reorganization.

         If Mr. Stoop or Cryer is terminated for cause under his  agreement,  he
will not be entitled to receive any severance  compensation.  If the termination
is without  cause,  we are obligated to pay him a severance  payment equal to 90
days' of base salary,  payable in three equal monthly  installments,  and if the
termination  is  because of a change of  control,  he is  entitled  to receive a
severance payment equal to his annual salary,  payable in three installments.  A
change of control is defined in his  agreement as any sale or other  disposition
by the us of all or substantially all of our assets, any merger or consolidation
with another  corporation  in which our  shareholders  as a group do not hold at
least  50% of the  voting  power of the  surviving  corporation,  or any  person
becomes the beneficial owner of 50% or more of our voting power.

         Section 16(a) of the Securities  Exchange Act of 1934. Section 16(a) of
the  Securities  Exchange  Act of  1934  requires  our  executive  officers  and
directors,  and persons who own more than ten percent of a  registered  class of
our equity  securities,  to file reports of  ownership  and changes in ownership
with  the  Securities  and  Exchange  Commission  ("SEC").  Executive  officers,
directors and greater than 10%  shareholders  are required by SEC  regulation to
furnish us with copies of all Section 16(a) forms they file. Based solely on our
review of the copies of such forms  received  by us, or written  representations
from certain  reporting  persons,  we believe that during fiscal 1999 all filing
requirements applicable to our executive officers and directors and greater than
10% shareholders were complied with, except that Messrs. Lunt, Johnston and Bell
each filed one report on Form 4 late.


<PAGE>



Item 11.  Executive Compensation.

         The following table  summarizes the  compensation  paid to or earned by
our  chief  executive  officer  and our four most  highly-compensated  executive
officers  whose total salary and bonus exceed  $100,000  during each of the past
two fiscal years:

<TABLE>
<CAPTION>
                                 Summary Compensation Table
-----------------------------------------------------------------------------------------------------------
                                                         Annual Compensation                Long-Term
                                                                                       Compensation Awards
                                           ----------------------------------------------------------------
                                                                      Other Annual    Securities Underlying
 Name and Principal Position     Year      Salary ($)    Bonus ($)  Compensation ($)   Options / SARs (#)
-----------------------------------------------------------------------------------------------------------
<S>                              <C>        <C>              <C>            <C>             <C>
M. Daniel Lunt                   1999       $120,000         -              -                   -
   President, CEO, Director      1998       $102,000         -              -                   -
James W. Johnston                1999       $120,000         -              -                   -
   Executive V.P.,Chairman       1998       $102,000         -              -                   -
Kenneth W. Bell                  1999       $120,000         -              -                   -
   Senior V.P., CFO, Director    1998       $102,000         -              -                   -
Peter Stoop                      1999       $100,000         -              -                500,000
   V.P. Sales and Marketing      1998        $66,200         -              -                   -
Martin Cryer                     1999       $100,000         -              -                300,000
   V.P. Product Development      1998           -            -              -                   -
-----------------------------------------------------------------------------------------------------------
</TABLE>


         The following  table  presents  additional  information  concerning the
option  awards  made  during  fiscal  year 1999 to each of our  named  executive
officers:

<TABLE>
<CAPTION>
                                        OPTION GRANTS IN LAST FISCAL YEAR
--------------------------------------------------------------------------------------------------------------------
                                                                                       Potential Realizable Value at
                                                                                       Assumed Annual Rates of Stock
                                              Individual Grants                        Price Appreciation for Option
                              --------------------------------------------------------              Term
                                           Percent
                                           of Total             Market
                               Number of   Options              Price
                              Securities   Granted   Exercise     on
                              Underlying   to Emp.   of Base    Grant
                                Options    in Fiscal  Price      Date    Expiration
            Name              Granted (#)  Year       ($/Sh)    ($/Sh)      Date          5% ($)      10% ($)
--------------------------------------------------------------------------------------------------------------------
<S>                             <C>        <C>         <C>       <C>       <C>         <C>          <C>
M. Daniel Lunt                     -          -          -         -          -              -           -
   President, CEO, Director
James W. Johnston                  -          -          -         -          -              -           -
   Executive V.P.,Chairman
Kenneth W. Bell                    -          -          -         -          -              -           -
   Senior V.P., CFO,
Director
Peter Stoop                     50,000       4.6%      $0.10     $2.375    3/21/02       $135,905     $160,959
   V.P. Sales and Marketing     250,000     23.2%      $0.10     $3.562    11/18/02     $1,031,637   $1,219,518
                                200,000     18.5%      $2.72     $3.625    6/23/03       $316,260     $469,224
Martin Cryer                    50,000       4.6%      $0.10     $8.875    9/22/02       $521,538     $615,162
   V.P. Product Development     250,000     23.2%      $2.72     $3.625    6/23/03       $395,325     $586,530
--------------------------------------------------------------------------------------------------------------------
</TABLE>

         The  intrinsic  value of each  respective  grant to Mr. Stoop as of the
date of such  grant was  $113,750,  $865,500,  and  $181,000  respectively.  The
intrinsic  value of each  respective  grant to Mr.  Cryer as of the date of such
grant was $438,750 and $226,250 respectively.


<PAGE>



         The following  table  summarizes  the exercise of stock options  during
fiscal  year  1999 by each  of our  named  executive  officers,  and the  fiscal
year-end value of unexercised stock options held by each of them:

<TABLE>
<CAPTION>
                     AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
-------------------------------------------------------------------------------------------------------------------
                                                                  Number of Securities             Value of
                                   Shares         Value          Underlying Unexercised       Unexercised In-The-
                                 Acquired on    Realized     Options at Fiscal Year-End (#)     Money Options at
             Name                Exercise (#)      ($)         Exercisable / Unexercisable      Fiscal Year-End ($)
-------------------------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>           <C>                             <C>
M. Daniel Lunt                        -             -                     -                            -
   President, CEO, Director
James W. Johnston                     -             -                     -                            -
   Executive V.P.,Chairman
Kenneth W. Bell                       -             -                     -                            -
   Senior V.P., CFO, Director
Peter Stoop                           -             -             103,333 / 396,667               $2,875,000
   V.P. Sales and Marketing
Martin Cryer                          -             -              5,000 / 295,000                $1,725,000
   V.P. Product Development
-------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>



Item 12.   Security Ownership of Certain Beneficial Owners and Management.

         The following table sets forth, as of December 31, 1999, the beneficial
ownership of our outstanding common stock by

     o    each of our executive officers,

     o    each of our directors, and

     o    all executive officers and directors as a group.

As of December 31, 1999, no other person held five percent or more of our common
stock.  Beneficial  ownership is determined in accordance  with the rules of the
SEC  and  generally   includes  voting  or  investment  power  with  respect  to
securities. For purposes of calculating the percentages shown in the chart, each
person listed is also deemed to  beneficially  own any shares issuable on either
the  exercise  of vested  options or  warrants  held by that person and that are
exercisable  within 60 days after  December  31,  1999.  Except as  indicated by
footnote,  the persons named in the table have sole voting and investment  power
with respect to all shares of common stock shown as beneficially  owned by them.
The  inclusion  of any  shares as  beneficially  owned  does not  constitute  an
admission of beneficial ownership of those shares. The percentage calculation of
beneficial  ownership is based on 11,891,002  shares of common stock outstanding
as of December 31, 1999.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                       Name of Beneficial Owner,              Common Stock Beneficially Owned
       Title of Class                     Relationship to Us                     Shares              Percent
--------------------------  ----------------------------------------------  -----------------  --------------------
                               Officers and Directors
<S>                            <C>                                            <C>                     <C>
        Common Stock           M. Daniel Lunt 1                               1,798,383               15.1%
                               President, CEO, Director
        Common Stock           James W. Johnston 2                            2,021,223               17.0%
                               Chairman of the Board, Executive V.P.
        Common Stock           Kenneth W. Bell 3                              1,510,608               12.7%
                               Senior V.P., CFO, Treasurer, Secretary,
                               Director
        Common Stock           Edward Sullivan 4                                2,500                   *
                               Director
        Common Stock           Michael Fowler 4, 5                              3,000                   *
                               Director
        Common Stock           David Grow  4                                    2,500                   *
                               Director
        Common Stock           Peter T. Stoop                                  103,333                  *
                               V.P. Marketing and Sales
        Common Stock           Martin Cryer                                     5,000                   *
                               V.P. Product Development
        Common Stock           All Executive Officers and Directors as        5,446,047               45.8%
                               a Group (8 persons)
------------------------------ -----------------------------------------------------------------------------------
</TABLE>

     1 Mr. Lunt shares  voting power and  investment  power with his wife,  Lori
Lunt.

     2 Mr. Johnston shares voting power and investment power of 1,953,339 shares
held jointly with his wife,  Catherine  F.  Johnston,  66,408 of such shares are
held in the name of his wife,  Catherine F.  Johnston.  He also  influences  the
investment  power and  voting  power of 1,476  shares  held by his son,  LeGrand
Johnston.  Mr. Johnston does not disclaim beneficial ownership of his wife's and
son's shares.

     3 Mr. Bell has sole voting power and investment power of 330,000 shares and
shares  voting power and  investment  power of  1,180,608  shares with his wife,
Roberta L. Bell.

     4  Represents  options to acquire  shares of our common  stock within sixty
days of the date of this report at an average  weighted  exercise price of $5.86
per share.

     5 Includes 2,500 options to acquire shares of our common stock within sixty
days of the date of this report at an average  weighted  exercise price of $5.86
per share.


Item 13.  Certain Relationships and Related Transactions.

         The following  information  summarizes certain  transactions  either we
engaged in during the past two years or we  propose to engage in  involving  our
executive  officers,  directors,  5% stockholders or immediate family members of
those persons:

         Management  Loans to Us. James  Johnston,  Kenneth Bell and Daniel Lunt
secured a line of credit in the amount of $250,000,  which they agreed to use to
loan us up to that  amount on a  revolving  basis,  and loaned us an  additional
$50,000, for a total of $300,000 in 1997. Mssers.  Johnston, Bell, and Lunt have
received no direct or indirect  consideration  for their  securing  this line of
credit.  We subsequently  drew down the entire $250,000 loan  commitment.  As of
December 31, 1998, we owed $120,000 of the $300,000.  In October 1998, we repaid
the $50,000  loan and the line of credit was paid down to zero in January  1999,
but it still remains  available to be drawn on, if we need it, through  December
31, 1999. In May 1998, Mr. Lunt loaned us $13,000,  which we repaid in July 1998
though our issuance of additional common stock to Mr. Lunt.

         Indebtedness  of  Management.  We  advanced a total of $66,700 to James
Johnston  during  1997 and 1998.  The amounts  outstanding  on these loans as of
December  31, 1998 was  $66,700.  The  interest  rate is 8%, with  interest  and
principle due on January 1, 2000, but was paid in full by Mr.  Johnston in March
1999. We also advanced a total of $29,500 to Kenneth Bell in 1997 and 1998.  Mr.
Bell repaid those amounts to us in March 1999. We also loaned an entity owned by
M. Daniel Lunt $10,000 in 1997, and loaned him $4,000  personally in 1998.  Five
thousand  dollars  of the  $10,000  loan was  repaid by  offsetting  amounts  we
otherwise owed Mr. Lunt, and the other $5,000 was repaid in cash, and the $4,000
loan was paid to us in March 1999.

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

         The following documents are filed as part of this Annual Report on Form
10-K.

         (a)      Financial Statements and Schedules.

         Consolidated Balance Sheets at December 31, 1999 and 1998
         Consolidated  Statements of Operations for the years ended December 31,
         1999, 1998 and 1997
         Consolidated  Statements  of  Shareholders'  Equity for the years ended
         December 31, 1999, 1998 and 1997
         Consolidated  Statements of Cash Flows for the years ended December 31,
         1999, 1998 and 1997
         Notes to Consolidated Financial Statements

         All schedules  have been omitted since the required  information is not
present,  is not  present in amounts  sufficient  to require  submission  of the
schedule  or because the  required  information  is  included  in the  financial
statements or notes thereto.

         (b)               Exhibits

    Exhibit Number       Description

         2.1*       Agreement and Plan of Reorganization between the Company and
                    WordCruncher  Publishing  Technologies,  Inc., dated July 14
                    1998
         3.1*       Articles of Incorporation of the Company
         3.2*       Articles of Merger, filed June 20, 1998
         3.3*       Articles of Merger, filed July 15, 1998
         3.4*       Articles of Merger
         3.5*       Certificate of Amendment, filed February 1, 1999
         3.6*       Bylaws of the Company
         4.1*       Reference is made to Exhibit 3.4
         4.2*       Specimen of Common Stock Certificate
         10.1*      Lease between the Company and SLT III, LLC,  dated  December
                    24, 1998
         10.2*      License  Agreement  between the  Company  and Brigham  Young
                    University, dated February 14, 1997
         10.3*      Purchase  Agreement  between  the  Company  and  Jeffrey  B.
                    Petersen, dated December 28, 1998
         10.4*      Employment  Agreement  between  the  Company  and Kenneth W.
                    Bell, dated September 1, 1998
         10.5*      Employment  Agreement  between  the  Company  and  James  W.
                    Johnston, dated September 1, 1998
         10.6*      Employment Agreement between the Company and M. Daniel Lunt,
                    dated September 1, 1998
         10.7*      Employment Agreement between the Company and Peter T. Stoop
         10.8*      Preferred Stock Purchase  Agreement  between the Company and
                    certain Series A Preferred investors, dated February 8, 1999
         10.9*      Letter   Amendment   Regarding   Preferred   Stock  Purchase
                    Agreement, dated April 21, 1999
         10.10*     Escrow Agreement among the Company,  the Goldstein Law Group
                    and certain Series A Preferred Investors,  dated February 8,
                    1999
         10.11*     Registration  Rights Agreement among the Company and certain
                    Series A Preferred Investors, dated February 8, 1999
         10.12*     Form  of  Warrant  issued  to  certain  Series  A  Preferred
                    Investors on February 8, 1999
         10.13*     Warrant issued to Placement Agent, dated February 8, 1999
         10.14*     Dataware License Agreement, dated July 1999
         10.15*     Pittard Sullivan Contract, dated July 1999
         10.16*     Digital Boardwalk Agreement, dated July 1999
         10.17*     Acsiom, Inc. Consulting Agreement, dated July 1999
         10.18      Columbia Financial Group Services Agreement,  dated January,
                    1999
         10.19      Sierra Systems Consulting and Development  Agreement,  dated
                    September, 1999
         10.20      Veritas Software Financial Agreement, dated November, 1999
         10.21      Netscape Software Financial Agreement, dated November,1999
         10.22      Oracle Software Agreement, dated November, 1999
         10.23      Sun Microsystems License Agreement, dated December, 1999
         10.24      Qwest  Dedicated  Internet Access Service  Agreement,  dated
                    January 2000
         10.25      Netdotworks   Consulting   and  Support   Agreement,   dated
                    February, 2000
         10.26      DoubleClick,  Inc. DART Service  Agreement,  dated February,
                    2000
         16.1**     Letter of Crouch, Bierwolf & Chisholm
         24.1       Power of Attorney (see signature page)
         27.1       Financial Data Schedule

-------------------------
*  Incorporated  by  reference  to  Registration  Statement  Form S-1,  File No.
333-79357,  filed on May 28, 1999, and amended on August 17, 1999, September 24,
1999, October 25, 1999, November 19, 1999 and December 6, 1999.

**  Incorporated  by reference to Current  Report Form 8-K, File No.  000-27453,
filed on March 1, 2000.



<PAGE>



                                   SIGNATURES

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

                                     WORDCRUNCHER INTERNET TECHNOLOGIES, INC.


                                     By: /s/
                                         ---------------------------------------
                                         M. Daniel Lunt, Chief Executive Officer
                                         Dated:



         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the Registrant and in the capacities indicated on March 30, 2000.

By:   /s/
     ----------------------------------------
     James W. Johnston, Chairman of the Board,
     Executive Vice President


By:    /s/
     ----------------------------------------
     Kenneth W.  Bell, Senior Vice President,
     Chief Financial Officer, Treasurer,
     Secretary, Director


By:    /s/
     ----------------------------------------
     M. Daniel Lunt, President, Chief
     Executive Officer, Director


By:    /s/
     ----------------------------------------
     Michael Fowler, Director