Exhibit No. 99.1
Form 10-KSB 2000, Amendment No. 1
BuyersOnline.com, Inc.
File No. 0-26917

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


                           FORM 10-KSB


[X]   Annual  report  pursuant to section  13  or  15(d)  of  the
Securities  Exchange  Act  of 1934  for  the  fiscal  year  ended
December 31, 2000, or

[ ]   Transition report pursuant to section 13 or 15(d)  of
the  Securities  Exchange act of 1934 for the  transition  period
from    to


                  Commission File No.  0-26917


                     BUYERSONLINE.COM, INC.
   (Name of Small Business Issuer as specified in its charter)

           Delaware                         87-0528557
(State or Other Jurisdiction of           (IRS Employer
Incorporation or Organization)         Identification No.)

         14870 Pony Express Road, Bluffdale, Utah 84065
      (Address of Principal Executive Offices and Zip Code)

Issuer's Telephone Number:   (801) 523-8929

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Act:

                 Common Stock, Par Value $0.0001

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

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

The   issuer's   revenues  for  its  most  recent  fiscal   year:
$7,355,559.

The aggregate market value of voting stock held by non-affiliates
computed  on the basis of the last sale price on March 30,  2001,
was $3,322,602.

As of December 31, 2000, the Registrant had outstanding 3,988,940
shares of Common Stock, par value $0.0001.


<PAGE>


Documents incorporated by reference:

Incorporated by reference in Part III of this report is the
definitive proxy statement of BuyersOnline for the 2001 annual
meeting of stockholders, which BuyersOnline proposes to file with
the Securities and Exchange Commission on or before April 30,
2001.

                        TABLE OF CONTENTS

ITEM NUMBER AND CAPTION                                              Page

Part I

1.   Description of Business                                          3

2.   Description of Properties                                        8

3.   Legal Proceedings                                                8

4.   Submission of Matters to a Vote of Security Holders              8

Part II

5.   Market for Common Equity and Related Stockholder Matters         8

6.   Management's Discussion and Analysis of Financial Condition
       and Results of Operations                                      9

7.   Financial Statements                                            11

8.   Changes in and Disagreements with Accountants
       on Accounting and Financial Disclosure                        12

Part III

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

10.  Executive Compensation                                           *

11.  Security Ownership of Certain Beneficial Owners and Mangement    *

12.  Certain Relationships and Related Transactions                   *

13.  Exhibits and Reports on Form 8-K                                17

*      These  items  are  incorporated  by  reference  from   the
definitive  proxy statement of BuyersOnline for the  2001  annual
meeting  of  stockholders  to be filed with  the  Securities  and
Exchange Commission on or before April 30, 2001.

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<PAGE>

                             PART I

                ITEM 1.  DESCRIPTION OF BUSINESS

General

     BuyersOnline.com, Inc., is a Delaware corporation that has
been engaged for the past five years in the business of selling
essential monthly services to its members--now representing a
"buying collective" of approximately 21,000 residential consumers
and small businesses across America.  BuyersOnline uses the
purchasing power of its membership to negotiate lower prices from
producers and resellers to provide what management describes as
"essential" products and services.  These are products and
services that are part of the monthly budget of most consumers
with incomes ranging from $30,000 to $100,000 per year.
Presently, the "essential" services we offer include long
distance and Internet service.  To join BuyersOnline as a member,
a consumer or small business owner must simply choose one or more
of the essential services that are currently offered by
BuyersOnline.  There are no membership fees.

     BuyersOnline is now expanding its program to include
additional consumer products and services.  In August 2000, we
unveiled our new Internet Portal that we believe will attract a
substantial number of online shoppers.  The Portal will take
advantage of the growing consumer trend to shop online by
offering added value to consumers in the form of rebates, that
are typically unavailable, and convert those shoppers into
"members" who spend monthly on the "essential" services available
through BuyersOnline.  Simply by choosing one or more of the
essential monthly services offered through BuyersOnline,
consumers may gain unrestricted access to a large variety of
products and services through the BuyersOnline Portal, and earn
rebates when they buy online.  Rebates earned from online
spending are applied directly against the monthly bills for
"essential" services of each member giving them the added benefit
of reducing their bill for the services they choose from
BuyersOnline.

     Until recently, BuyersOnline's marketing strategy has been
exclusively based on a "word of mouth" advertising campaign and a
member rebate program.  The member rebate program allows members
in BuyersOnline to reduce or "zero-out" the monthly bill for the
services they receive.  This is accomplished through a direct
rebate plan that recurs monthly based on service purchases by new
member referrals.

     We are now attempting to pursue multiple marketing avenues,
including the Internet, a new infomercial, independent agents,
and other advertising, to stimulate interest in our service
offerings to generate a substantial increase in membership.  We
launched our Internet Portal in 2000 to attract members through
expanded access to consumer products and services.  We have
developed an infomercial as part of our planned nationwide
advertising campaign, which uses the endorsements of Dick Clark,
Della Reese, and Marie Osmond.  They will carry BuyersOnline's
messages to potential members with nationwide television
broadcasting of a 28.5-minute infomercial and a series of thirty-
second, one-minute and two-minute commercials.  BuyersOnline has
tested the infomercial, and based on the results intends to
effect a nationwide roll out of the infomercial in the fall of
2001 provided we are successful in obtaining sufficient capital
to fund the roll out.  There are approximately 5,000 independent
telecommunications agents around the country that are responsible
for a substantial amount of annual U.S. telecommunication sales.
Since the middle of 2000, BuyersOnline has engaged over 1,000
independent agents to sell its telecommunications services.  In
addition to the infomercial, we intend to pursue an aggressive
advertising campaign over the Internet during the last three
calendar quarters of 2001.

     BuyersOnline's offices are located at 14870 Pony Express
Road, Bluffdale, Utah 84065, where our telephone number is (801)
523-8929.

Services and products

     "Essential" services we offer

     BuyersOnline offers long distance phone service and related
products, including travel cards and 800/888 service.  Long
distance and related services are provided by four different long
distance companies.  We offer

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domestic long distance service to
our members at rates ranging from 4.9 to 6.9 cents per minute,
and overseas long distance at discounted rates.  The long
distance rate to BuyersOnline for domestic charges is fixed by
agreement.  The long distance rate for overseas calls may be
adjusted by the long distance provider on seven days advance
notice to BuyersOnline.  All long distance charges are billed to
BuyersOnline and are due within 30 days.  BuyersOnline, in turn,
bills its members for their long distance calls.  We believe long
distance service at comparable rates is available from a number
of providers, and we continually seek out the lowest pricing for
our members.

     BuyersOnline launched an Internet service program in January
1999.  Internet services include unlimited local dial-up access
at approximately 2,100 locations across the country, free
filtering services, unlimited e-mail, web hosting for businesses,
and activity reporting.  Management plans to add online billing
capability for bundled goods and services, discount consolidating
with existing web sites, and manufacturer-direct web commerce
opportunities.  The Internet access program is provided by
Zaibon, based in Salt Lake City, Utah, beginning in April 2001,
under a contract terminable by either party at will.  The basic
Internet service is offered to members at $14.95 per month for
unlimited access, and web site hosting is offered at a monthly
rate of $9.95 for 50MB of server space. To date, revenues from
Internet services have not been material.

     BuyersOnline has no plans to acquire a long distance network
or establish its own infrastructure for other services it offers.
As a result, BuyersOnline depends on developing and maintaining
relationships with third party providers of the services and
products it offers.  BuyersOnline relies on the purchasing power
of its members to negotiate the terms of its arrangements with
providers.  An additional benefit to providers is that
BuyersOnline handles all billing and collection for the services
purchased by its members, so that the provider avoids this cost
of business.  BuyersOnline believes that it is on good terms with
its current providers.  In the event its relationship with a
provider terminates for any reason, management believes it could
obtain the same services or products from other providers on
terms similar to existing contracts.

     Web site products and services

     Beginning in July 2000, BuyersOnline offered to its members
through its new Internet Portal the opportunity to buy a wide
variety of consumer products and services directly from the
retailer.  We receive a rebate from the retailer for member
purchases, and pass this rebate on to our members on their
monthly billing statements for services offered directly by us.
Rebates range from 1% to 30% depending on the product or service
and the retailer.

     We now have contracts with 185 retailers to sell products
and services to our members online including auto parts, music,
clothing and accessories, computer products, health and beauty
products, sports products, travel services, toys, pet supplies,
home and garden products, specialty food items, and office
supplies.  All of the retailers offer nationally recognized, name
brand products and services.  BuyersOnline will continually
evaluate new products and services for inclusion in its Internet
Portal.

     Proposed services

     BuyersOnline has been developing a travel service product
for the past year.  The proposed BuyersOnline travel savings
program will include an exclusive Web site where members will
have access to savings on airfare, cruises, hotels, worldwide
condominiums, car rental and all-inclusive resorts.  We will
charge a monthly fee for access to the travel information and
programs.  The value for our members is derived from the
discounts on travel available through the program, so no rebates
will be paid to members on travel purchases.

     BuyersOnline is evaluating the purchase of a database
containing information on local and regional grocery store
savings and discounts.  We intend to offer this information to
members for a monthly access fee.  Since no products are
purchased from or through BuyersOnline, no rebates will be paid
in connection with this service.

     We are now developing a private label bill paying Web site,
which we intend to offer for a small monthly fee.  Members will
be able to pay all monthly bills, including utilities, water,
etc. through this Web site.

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<PAGE>

Marketing strategy

     Services everyone uses

     BuyersOnline believes consumers prefer to save money where
they spend it most, on services they must use each month and
year.  By becoming a member, a consumer or small business simply
makes a choice on where to purchase essential services, not on
whether to spend money on items outside its normal budget.
BuyersOnline began in 1996 by selling long distance service
because consumers and businesses use long distance every month
and look for ways to save money on this service.  This focus has
enabled BuyersOnline to build the size of its membership base.
With the recent explosion in Internet commerce, especially among
small businesses, BuyersOnline is now offering low-cost Internet
access to its members and Internet web-site hosting.

     Member referral strategy

     Management believes that member-generated, "word-of-mouth"
referral sales is a fast and cost-effective way for BuyersOnline
to increase its membership and its sales.  It has focused on this
marketing approach since its inception.  BuyersOnline believes
consumers are willing to share with their personal acquaintances
a satisfying and rewarding experience with its services and
products, and the recommendation of a personal acquaintance is
credible. As an inducement to share this experience, BuyersOnline
has adopted a rebate incentive program for members, which allows
them to benefit from identifying new prospective members for
BuyersOnline.  Under the incentive program, members who
successfully refer others to BuyersOnline receive a monthly
rebate of 10% of collected usage revenue on the essential
services their referrals purchase from BuyersOnline.  Collected
usage revenue is defined as the usage portion of a bill that is
paid in full within 45 days of the statement date.  The usage
portion of a member's monthly bill represents the amount of
essential services purchased during the month.  This rebate is
disbursed every month to members according to the amount of usage
generated by their referrals, and is applied first to payment of
the Member's bill for essential services in the next month.  If
the bill is paid in full and an excess rebate remains, it is
carried over to the next month if less than $100 or paid by check
to the member if more than $100.

     A member is not required to refer any new members to
BuyersOnline in order to purchase services and products from
BuyersOnline on the same terms as all other members.  The
services and products offered meet the needs of many members, who
simply want to save money on services and products.  The
incentive program allows members to obtain additional benefits
through rebates.  A member who refers a new prospective member
does not process or sign new member forms for BuyersOnline.
Members are not employees, independent contractors, or agents of
BuyersOnline, and have no authority to sign new members.

     National advertising

     BuyersOnline has developed and tested a national, direct-
response, marketing campaign using a 28.5-minute infomercial and
a series of thirty-second, one-minute and two-minute commercials
containing the endorsement of three very prominent television
celebrities: Dick Clark, Della Reese, and Marie Osmond.  The
infomercial is designed to increase awareness of BuyersOnline and
our services.  We believe direct response television via the
infomercial to be a leading source of new member acquisition.
The infomercial was tested on national and local television
between August and October of 2000.  The following television
stations aired the infomercial at various times of day: CNBC,
LIFETIME, COURT TV, KPXE, WIPX, MUCH, KTVX, WRNN, WUTB, KRCA,
WACH, KTNC, WTTA, ROMANCE, RCN and WGCB.  Based on the test
results for the infomercial, BuyersOnline plans to begin a
national rollout in the fall of 2001 to acquire new members who
will activate their memberships by choosing one or more of the
monthly services we offer.  We prepared a separate marketing plan
for the infomercial roll out that includes, demographic targets,
media planning and buying, budget and restrictions, seasonality,
and program flexibility.

     Each of the endorsement contracts with Dick Clark, Della
Reese, and Marie Osmond are for a one-year term commencing on the
date of infomercial rollout, subject to renewal for successive
one-year terms.  We paid to each of them $50,000 as a session fee
to cover their services during filming of the infomercial.  We
are obligated to

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pay Mr. Clark and Ms. Reese a royalty of $2.50
for each new member joining BuyersOnline during the term of the
agreements, an additional royalty of $1.25 for each such new
member who remains a member after one year, and an additional
royalty of $0.65 for each such new member who remains a member
after two years.  We are obligated to pay Ms. Osmond a royalty of
$1.00 for each new member joining BuyersOnline during the term of
the agreement, an additional royalty of $1.00 for each such new
member who remains a member after one year, and an additional
royalty of $1.00 for each such new member who remains a member
after two years.  Each of the agreements provide for minimum
guaranteed royalty payments of $1,500,000 in each year of the
agreements payable in installments.  After rollout, BuyersOnline
and Ms. Osmond may agree that she will act as spokesperson on QVC
for BuyersOnline, in which case she will receive an additional
royalty of $4.00 for each new member obtained through the QVC
appearance, an additional royalty of $2.00 for each such new
member who remains a member after one year, and an additional
royalty of $1.00 for each such new member who remains a member
after two years.  The agreements originally provided for rollout
of the infomercial to commence no later than January 1, 2001.
The parties have reached a preliminary agreement to extend the
rollout date to September 1, 2001.  In consideration of the
extension, BuyersOnline will pay to Mr. Clark, Ms. Reese, and Ms.
Osmond a fee of $50,000, shorten the initial term after rollout
to six months and add a second renewal term of six months, and
reduce the minimum guaranteed royalty for the first and second
six-month terms to $750,000 each.

     Agent sales

     This program was designed to cater to independent
telecommunications agents around the country that are responsible
for a substantial amount of annual U.S. telecommunication sales.
These independent agents work on "commission only" and are
attracted to BuyersOnline because of its back office support
infrastructure, incentive programs, customer retention efforts
and additional product/service revenue opportunities.  Since the
middle of 2000, BuyersOnline has engaged over 1,000 independent
agents to sell its telecommunications services.  The contract
with any of our independent agents can be terminated by either
party at any time.  Agents receive a commission ranging between
5.5 percent and 30 percent on telecommunications services sold to
the members they refer depending on the rate charged for
services.

     Internet advertising

     Online marketing is an effective tool to expose BuyersOnline
and its service offerings to millions of Internet users and
consumers.  Internet users are the Company's primary target
customer for 3 reasons:  first, they are familiar with the
Internet and understand its workings and marketing opportunities;
second, they buy products over the Internet and are the best
candidates to take advantage of the Company's online shopping
rebate program; and third, the Company can reduce its operating
expenses by billing these members online and can communicate with
them inexpensively.  BuyersOnline intends to capitalize on
Internet marketing by seeking opportunities to purchase or
affiliate with companies that control lists of Internet users
that have requested notification of service and savings
opportunities similar to services we offer.  Once the Company has
access to an Internet list, it will offer consumers incentives
through the BuyersOnline Internet Portal, such as free products,
travel opportunities, prize programs, etc. to attract Internet
consumers and introduce them to the benefits of membership in
BuyersOnline.  This strategy drives the Company's brand awareness
and makes all other member acquisition techniques more
efficacious.  The Company has targeted several companies that
control Internet lists to initiate this program.

Governmental Regulation

     Long distance telecommunications carriers currently are
subject to extensive federal and state government regulation,
including regulation of both domestic and international tariffs
for their services and certification or registration
requirements.  BuyersOnline is indirectly subject to these
regulations because it offers long distance service provided by
others.  Of particular relevance to BuyersOnline is federal and
state regulation of "slamming," which is the practice of changing
long distance service of a consumer without proper authorization.
To avoid violation of regulations in this area, BuyersOnline is
required in certain states to obtain from its members
authorization to change long distance service that meets certain
requirements.  BuyersOnline believes it is in compliance with
federal and state regulation of changing long distance service.

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Competition

     Presently we are a reseller of long distance and Internet
access services.  Many of our competitors are substantially
larger with greater financial and other resources.

     The U.S. long distance telecommunications industry is highly
competitive and significantly influenced by the marketing and
pricing practices of the major industry participants, AT&T,
Sprint and MCI WorldCom.  AT&T, Sprint and MCI WorldCom are
significantly larger than BuyersOnline and have substantially
greater resources.  BuyersOnline also competes with other
national and regional long distance carriers, which employ
various means to attract new subscribers, including television
and other advertising campaigns, telemarketing programs, network
marketing, cash payments and other incentives to new subscribers.
The ability of BuyersOnline to compete effectively will depend on
its ability to provide quality services at competitive prices.

     The Internet service provider industry is highly competitive
as well, and significantly influenced by the marketing and
pricing practices of the major industry participants.  America On
Line, MSN, and Earthlink are significantly larger than
BuyersOnline and have substantially greater resources.
BuyersOnline also competes with other national, regional and
local Internet service providers, which employ various means to
attract new subscribers, including television and other
advertising campaigns, telemarketing programs, network marketing,
cash payments and other incentives to new subscribers.  The
ability of BuyersOnline to compete effectively will depend on its
ability to provide quality services at competitive prices.

     Building recognition of our brand is critical to attracting
additional members and new strategic alliances.  Our failure to
promote and maintain our brand successfully may result in stunted
growth, loss of customers, loss of market share and loss of
strategic alliances.  Accordingly, we intend to continue pursuing
an aggressive brand-enhancement strategy, which includes
promotional programs and public relations activities.  We intend
to make significant expenditures in 2001 on these advertising and
promotional programs and activities, while other consumer product
and service companies with much greater resources are doing the
same.  These expenditures may not result in a sufficient increase
in net revenues to cover our advertising and promotional
expenses.  We cannot assure you that promoting our brand name
will enable us to be competitive or increase our net revenues.

Employees

     As of March 19, 2001, BuyersOnline employed a total of 62
persons, including five executives and 57 in member services,
technical operations, administration, and marketing.  None of its
employees is represented by a labor union. BuyersOnline has
experienced no work stoppages and believes that its relations
with its employees are good.

History

     BuyersOnline was formed as a Utah corporation under the name
"Linguistix, Inc.", in 1995 as a subsidiary of Twin Creek
Exploration Co., Inc. ("Twin Creek").  It received certain assets
of Twin Creek for its stock and was spun-off to the stockholders
of Twin Creek in connection with a business reorganization
between Twin Creek and an unrelated corporation.  In November
1997, BuyersOnline acquired WealthNet Incorporated, a Utah
corporation, through an exchange of 1,852,589 shares of
BuyersOnline common stock, or approximately 92% of the
outstanding shares, for all of the capital stock of WealthNet
Incorporated.  The transaction was accounted for as a reverse
purchase acquisition, in which WealthNet Incorporated was treated
as the acquiring company and BuyersOnline as the acquired
Company.  BuyersOnline adopted the name, "Buyers United
International, Inc.," and WealthNet changed its name to "Buyers
United, Inc."  Since that acquisition, we have pursued the
business described above, which was started by WealthNet in
January 1996.  In March 1999, we changed our corporate domicile
from Utah to Delaware through a merger with a Delaware
corporation formed for that purpose.  In connection with the
change in domicile, our name changed to BUI, Inc., and we
effected a 1-for-4 reverse split in the issued and outstanding
common stock.  On April 20, 2000, our name was changed to
BuyersOnline.com, Inc.

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               ITEM 2.  DESCRIPTION OF PROPERTIES

     BuyersOnline leases its executive offices in Bluffdale,
Utah, a suburb of Salt Lake City.  The offices consist of
approximately 30,000 square feet.  The current monthly lease rate
is approximately $30,000.  The lease for our office space expires
in January 2007, but we have an option to renew the lease for an
additional three to five years.  We believe that the office space
is adequate for BuyersOnline's anticipated needs for at least the
next 15 months.

                   ITEM 3.  LEGAL PROCEEDINGS

      BuyersOnline  is  currently not a  party  to  any  material
pending  legal proceedings, and to the best of its knowledge,  no
such proceedings by or against BuyersOnline have been threatened.

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

     At the Special Meeting of stockholders held on October 4,
2000, the stockholders voted on the following matters:

     (1)  The election of Theodore Stern, Rod Smith, Gary Smith,
          Edward Dallin Bagley, Steve Barnett, Harold C. McCray,
          and Steven Scott as directors of BuyersOnline to serve
          for a term of one year and until their successors are
          duly elected and qualified;

     (2)  Approval of an amendment to the Certificate of
          Incorporation to increase the number of authorized
          shares of common stock, par value $0.0001, to
          100,000,000;

     (3)  Approval of an amendment to our Long Term Incentive
          Stock Plan increasing the number of shares of common
          stock authorized for granting awards under the Plan;
          and

     (4)  Ratification of the appointment of Arthur Andersen LLP
          as independent auditors of BuyersOnline for 2000.

     Prior to the Special Meeting, Harold C. McCray tendered his
resignation as a director and did not stand for re-election.
Each of the foregoing matters was approved or ratified by the
stockholders.  The number of votes cast on the foregoing matters
is as follows:

                               For         Against       Abstain
Election of Directors
     Theodore Stern         2,296,897       1,072           0
     Rod Smith              2,105,376      192,593          0
     Gary Smith             2,296,896       1,073           0
     Edward Dallin Bagley   2,296,897       1,071           0
     Steve Barnett          2,293,804       4,165           0
     Steven Scott           2,293,784       4,185           0

Increasing authorized       2,255,967       30,823        11,179
common stock to
100,000,000 shares

Amendment to Long Term      1,708,947       42,252        10,917
  Incentive Stock Plan

Appointment of Arthur       2,276,648        116          3,135
Andersen LLP

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     Following the Special Meeting, Rod Smith resigned as a
director.  Consequently, the persons now serving as directors of
BuyersOnline are Theodore Stern, Gary Smith, Edward Dallin
Bagley, Steve Barnett, and Steven Scott.

                             PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The common stock of BuyersOnline trades sporadically in the
over-the-counter market.  The following table sets forth for the
respective periods indicated the prices of the common stock in
the over-the-counter market, as reported and summarized on the
OTC Bulletin Board.  Such prices are based on inter-dealer bid
and asked prices, without markup, markdown, commissions, or
adjustments and may not represent actual transactions.  In April
1999, BuyersOnline effected a 1-for-4 reverse split in the issued
and outstanding common stock in connection with the change of its
domicile to Delaware.  Prices for the first quarter of 1999 have
been adjusted retroactively to reflect the reverse split.

Calendar Quarter Ended    High Bid ($)        Low Bid ($)

March 31, 1999              4.25                  1.00
June 30, 1999               3.00                  3.00
September 30, 1999          2.88                  2.00
December 31, 1999           2.13                  1.13

March 31, 2000              5.75                  1.63
June 30, 2000               5.19                  1.75
September 30, 2000          3.50                  1.50
December 31, 2000           2.50                  0.88

     Since its inception, no dividends have been paid on the
common stock.  BuyersOnline intends to retain any earnings for
use in its business activities, so it is not expected that any
dividends on the common stock will be declared and paid in the
foreseeable future.  There are currently outstanding 1,875,000
shares of Series A Convertible Preferred Stock and 563,800 shares
of Series B Convertible Preferred Stock.  Under the terms of this
preferred stock, BuyersOnline cannot make any distributions on
its common stock without the approval of a majority of the
preferred stock.  At March 28, 2001, there were approximately
4,800 holders of record of the common stock.

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

Overview

     BuyersOnline is engaged in the business of selling to
consumers and small businesses long distance and Internet access
services.  The marketing strategy of BuyersOnline is based on a
membership concept under which members of BuyersOnline are
entitled to receive the services offered at low prices.
BuyersOnline uses the purchasing power of its membership to
negotiate lower cost or rebates from producers and resellers of
the services and products.  Lower costs allows BuyersOnline to
offer more competitive pricing to attract and retain members, and
makes it possible for BuyersOnline to offer rebate incentive
programs to its members for referring to BuyersOnline new
prospective members.  BuyersOnline's goal is to build a national
consumer membership organization.  Its strategy for achieving
this goal is to focus on expanding service and product offerings,
continue its member referral and rebate program, continue
development of its agent sales program, promote a television
advertising program, and pursue Internet advertising to attract
new members.

     BuyersOnline provides services that it believes are
perceived by consumers and businesses as essential or are
compatible with their normal annual expenditures.  Since its
inception in January 1996, BuyersOnline focused

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on selling long distance service.  This focus has enabled
BuyersOnline to build the size of its membership base.  With the
recent explosion in Internet commerce, especially among small
businesses, BuyersOnline is now offering low cost Internet access
to its members.

     We are now expanding our selection to include a broader
range of consumer products and services, including auto parts,
music, clothing and accessories, computer products, health and
beauty products, sports products, travel services, toys, pet
supplies, home and garden products, specialty food items, and
office supplies.  In the second half of 2000, BuyersOnline
launched its new web site that enables members to purchase these
products online and receive from BuyersOnline a rebate on each
product and service purchase.  By expanding its service and
product offerings, BuyersOnline believes that membership will be
attractive to a larger number of prospective members and existing
members will have added incentive for staying with BuyersOnline.

     BuyersOnline has over 21,000 members.  Its target market
includes networking professionals, small businesses, and middle-
class families with an annual household income between $30,000
and $100,000, as these are the most likely to respond actively to
the savings opportunity offered by BuyersOnline.  Members reside
mostly in high population centers and they tend to spend more
than the average on long distance services.  Approximately one-
third of the present membership consists of small businesses and
entrepreneurs who operate home-based businesses.

Results of Operations - Year Ended December 31, 2000 Compared to 1999

     Revenues increased 535% during 2000 to $7,355,559 as
compared to $4,755,687 during 1999.  The increase was due to higher
membership in general resulting from BuyersOnline's ongoing
promotional efforts, particularly those involving independent agents.
Membership at the end of 2000 increased 53% as compared to the previous
year.  In 1999, BuyersOnline began aggressively lowering its long
distance rates, but also began negotiating with additional vendors
to lower the cost of long distance service provided to members.  As a
result, BuyersOnline now uses four long distance wholesalers.  While the
costs of revenues increased 54% during 2000 to $4,773,707 as
compared to $3,096,490 during 1999 due to the increase in
members, the gross profit margin during 2000 remained relatively
steady at 35.1% vs. 34.9% for 1999.  We intend to continue
negotiating lower wholesale rates and improving our gross margins
as we expand and diversify our services base.

     Total operating expenses other than costs of revenues
increased 171% during the year ended December 31, 2000 compared
to 1999.  General and administrative costs in 2000 increased 136%
to $5,224,290 compared to $2,217,165 in 1999.  Selling and
promotion costs increased 240% to $3,855,241 during 2000 from
$1,132,616 during the same period in 1999.  The increases in
both areas stem from our ongoing efforts in significantly
expanding our business.  Toward the end of 1999, BuyersOnline
began to increase spending in strategic areas to prepare for
revenue growth during the year 2000.  In the sales and promotion
area, increases during 2000 stem in part from higher commissions
paid in proportion to higher revenue amounts, along with
additional employees hired to maintain and service the expanded
agent sales channel.  BuyersOnline also hired personnel to
continue expanding existing, and develop new sales channels.
Almost one-third of the increase in selling and promotion expense
resulted from the costs of production of an infomercial, which we
plan to televise during 2001.  In the general and administrative
categories, most of the higher costs resulted from an increase in
internal and external information technology personnel and other
resources obtained to significantly increase BuyersOnline's
ability to handle the higher order rate expected once the
infomercial begins regular broadcasts.  BuyersOnline also
developed and implemented a new web page launched in August 2000,
in part to prepare for infomercial marketing support, but also to
increase agent marketing support.  It also allows members to
purchase online varied unrelated products and services from
outside vendors through BuyersOnline's Internet Portal.  The
vendors then will pay BuyersOnline rebates which will be passed
on to the members.  In addition, general and administrative
expenses were higher due to executive support of the infomercial
development process, fund raising efforts conducted throughout
the year, and an overall increase in administrative support
personnel required to implement our increased activity during the
year.  During January 2001, the Company took steps to halt any
further significant increases in operating costs not directly
related to existing revenues such as costs of revenues or
commissions.  The Company feels that cost levels at the end of
2000 and beginning of 2001 are sufficient to enable it to
continue sales increases in existing channels, and does not plan
on increasing administrative support or promotional costs
associated with the infomercial until the related financing is
accomplished.

                              10
<PAGE>

     Interest income for 2000 was $21,943 as compared to $49,454
earned in 1999.  The difference is attributable to the amount of
funds on hand during 1999, primarily as a result of the Series A
preferred stock offering completed during 1999's third quarter.
Interest expense for 2000 was $1,626,212 as compared to $123,628
for 1999.  Interest expense for 2000 included $614,119
of amortization of discounts on notes payable.  The discounts
resulted from a portion of the debt proceeds being allocated to
warrants issued together with the loans.  Interest expense also
included an interest charge of $722,050 related to a beneficial
conversion feature associated with the modification and extension
of a $1,050,000 note payable.  Not inExcluding the discount
amortization and beneficial conversion feature, interest expense
increased 135% as a result of higher interest rates and higher
overall borrowings in 2000.

     During 2000, BuyersOnline recognized an extraordinary loss
of $1,024,574 on early extinguishment of debt.  BuyersOnline
obtained $2,545,000 of debt financing during 2000, which was
subsequently exchanged for Series B 8% cumulative convertible
preferred stock and warrants to purchase common stock.  The
difference between the estimated fair value of the Series B
preferred stock and warrants and the carrying amount of the debt
was recognized as a loss on early extinguishment of debt.

     As a result of the above factors, theoverall net loss before
preferred stock dividends increased 417% to $9,126,522 for
2000 as compared to $1,764,758 for 1999.  During 2000, preferred
stock dividends amounted to $2,481,592, consisting of $383,458
of 8% cumulative dividends on outstanding shares of Series A 8%
cumulative convertible preferred stock and Series B preferred
stock and $2,098,134 of preferred stock dividends related to the
beneficial conversion feature associated with the issuance of
453,800 shares of Series B preferred stock.  During 1999, $160,127
of preferred stock dividends were recorded related to Series A
preferred stock.

Liquidity and Capital Resources

     BuyersOnline has suffered recurring losses from operations.
During the years ended December 31, 2000 and 1999, our net loss
applicable to common stockholders was $11,608,114 and $1,924,885,
respectively.  As of December 31, 2000, we had a working capital
deficit of $3,866,430 and an accumulated deficit of $18,803,645.
During the years ended December 31, 2000 and 1999, our operations
used $3,476,070 and $1,910,397 of cash, respectively.  These
matters raise substantial doubt about the Company's ability to
continue as a going concern.  Subsequent to December 31, 2000,
the Company has obtained $1,100,000 of additional funding through
the sale of convertible preferred stock and warrants and has
received $390,000 of short-term debt financing.  However,
BuyersOnline needs additional capital to finance future
operations until its business objectives are implemented and
generate sufficient revenue to sustain the business.  Management
is attempting to raise additional capital to fund operations and
provide working capital; however, there can be no assurance that
additional funding will be available or, if available, that it
will be available on acceptable terms or in required amounts.  If
we do not obtain financing, there is no assurance that
BuyersOnline will succeed in achieving profitable operations.  We
estimate that we will need additional capital of approximately
$12 million to fund operating expenses, plus fund our proposed
marketing and expansion programs through the end of 2001.

     BuyersOnline's current ratio at the end of 2000 declined to
0.3:1 from 1.7:1 at the end of 1999.  The primary reasons for the
decline was the cash used to fund operations during the year and
the related increase in accrued liabilities and accounts payable.
Accrued liabilities rose due to higher accrued payroll and
commission costs resulting from the overall increases in
employees during the year and the higher revenue amounts,
respectively.  In addition, accrued dividends payable were higher
at the end of the year as a result of the additional preferred
stockholders from the Series B preferred stock offering.  Accrued
liabilities were also higher due to accrued severance costs
primarily payable to the former chief executive officer.
Accounts payable rose during the year due to the higher overall
level of costs attained during the year, along with
proportionately higher revenue-related excise taxes billed and
owing at the end of the respective periods.  In addition, current
liabilities rose as a result of reclassifying from long-term to
short-term a $1,050,000 note payable and from the addition of a
$100,000 short-term promissory note due to a member of the board
of directors.

     In March 2000, BuyersOnline reached an agreement to extend
repayment of the outstanding note payable in the amount of
$1,050,000 to April 15, 2001.  Under the terms of the extension,
BuyersOnline agreed to increase the interest rate on the note to
18% per annum beginning April 15, 2000, grant the holder the
right to convert the

                              11
<PAGE>

note to common stock at the rate of $3.00 of principal per share,
or a total of 350,000 shares, and grant the holder the right to
register the shares of common stock for resale under the Securities
Act of 1933 under certain circumstances.  In March 2001, the note
holder agreed to extend the due date to June 1, 2001.

     During 2000, BuyersOnline raised $2,795,000 in loans from
management and accredited investors as defined in Rule 501 of
Regulation D adopted under the Securities Act of 1933.  As an
inducement to make the loans, we issued to the lenders warrants
to purchase 1,432,500 shares of common stock at exercise prices
of between $2.00 and $2.50 per share.  In September, the Company
entered into a unit sales agreement with First Level Capital,
Inc., a stock brokerage firm, providing for the sale of up to
1,234,500 units, each unit consisting of one share of 8% Series B
8% cumulative convertible preferred stock and five common stock
purchase warrants at an offering price of $10.00 per unit or a
total of $12,345,000.  Loans in the amount of $2,545,000 were
exchanged in the offering for 254,500 units.  An additional
199,930 units were sold for cash of $1,993,000 before the
end of 2000 and 110,000 units have been sold for $1,100,000
in cash since the beginning of 2001.  All of these sales were
made to accredited investors.  Each share of Series B preferred
stock is convertible to five shares of common stock, subject to
adjustment under certain circumstances.  Each warrant included in
the units entitles the holder to purchase one share of common
stock at an exercise price of $2.50 per share and expire in
December 2002.  As commissions for its sales effort, First Level
Capital and its affiliates received cash payments of $476,840 and
warrants to purchase 351,800 shares of common stock on terms
identical to the warrants except that the term was for five years
instead of two.  All of the foregoing securities were offered and
sold in reliance on the exemptions from registration contained in
Section 4(2) of the Securities Act of 1933 and Rule 506 of
Regulation D.

     BuyersOnline will continue to pursue additional financing in
2001.  In February 2001, we entered into a financial advisory
agreement with Copp Wheelock Partners, LLC, of Addison, Texas,
under which Copp Wheelock will assist us in locating strategic
alliances or acquisitions related to products, services, and
marketing, and locating potential sources of financing for our
operations.  As compensation for these services we paid to Copp
Wheelock a base fee of $10,000, and have agreed to pay an
additional $10,000 upon obtaining additional financing.  Copp
Wheelock will also receive success fee ranging from 1.25% to
7.00% on each financing or strategic partner transaction
resulting from its services.  If Copp Wheelock locates at least
$1,000,000 in financing for BuyersOnline, we will pay a monthly
advisory fee of $10,000 over a term of not less than five months.
Further, we agreed to issue to Copp Wheelock warrants to purchase
up to 300,000 shares of common stock at an exercise price of
$2.50 per share over a term of five years that vest incrementally
based on financing of up to $3,000,000 obtained through Copp
Wheelock.  Additional warrants may be issued up to a maximum of
3% fully diluted equity interest in BuyersOnline for additional
financings obtained under the agreement.  In January 2001,
BuyersOnline entered into a finder agreement with Howard Bronson
Associates, Inc., of New York City, New York, under which we paid
Howard Bronson & Associates a $10,000 retainer and agreed to pay
an additional 3% of funds realized through any financing source
identified by Howard Bronson Associates.

     The Company is currently in the final stages of negotiations
with a financing company to provide a line of credit secured by
BuyersOnline's billed and unbilled accounts receivable.  In
addition, the Company has begun efforts with various parties to
secure additional financing in order to begin significant
infomercial broadcasting during the latter part of 2001.
However, there can be no assurance that the Company will
successfully complete its efforts to raise additional amounts
sufficient for the Company to achieve profitable results in the
long term.

Forward-looking statements

     The Private Securities Litigation Reform Act of 1985
provides a safe harbor for forward-looking statements made by
BuyersOnline.  All statements, other than statements of
historical fact, which address activities, actions, goals,
prospects, or new developments that BuyersOnline expects or
anticipates will or may occur in the future, including such
things as expansion and growth of its operations and other such
matters are forward-looking statements.  Any one or a combination
of factors could materially affect BuyersOnline's operations and
financial condition.  These factors include the availability of
capital, competitive pressures, success or failure of marketing
programs, changes in pricing and availability of services and
products offered to members, legal and regulatory initiatives
affecting long distance service, and conditions in the capital
markets.  Forward-looking statements made by BuyersOnline are
based on knowledge of its business and the environment in which
it operates as of the date of

                              12
<PAGE>

this report.  Because of the factors listed above, as well as
other factors beyond its control, actual results may differ from
those in the forward-looking statements.

                  ITEM 7.  FINANCIAL STATEMENTS

      The financial statements of BuyersOnline appear at the  end
of  this  report beginning with the Index to Financial Statements
on page F-1.

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

     There have been no changes in or disagreements with
accountants from January 2000 to the present.

                            PART III

     The information required by each of the Items listed below
is incorporated herein by reference to the definitive proxy
statement of BuyersOnline for the 2001 annual meeting of
stockholders, which BuyersOnline proposes to file with the
Securities and Exchange Commission on or before April 30, 2001:

     Information required by "Item 9.  Directors, Executive
Officers, Promoters and Control Persons; Compliance with Section
16(A) of the Exchange Act," is incorporated by reference to the
proposed caption "Directors and Executive Officers" in the proxy
statement;

     Information required by "Item 10.  Executive Compensation,"
is incorporated by reference to the proposed caption "Executive
Compensation" in the proxy statement;

     Information required by "Item 11.  Security Ownership of
Certain Beneficial Owners and Management," is incorporated by
reference to the proposed caption "Security Ownership of
Management and Principal Stockholders" in the proxy statement;
and

     Information required by "Item 12.  Certain Relationships and
Related Transactions," is incorporated by reference to the
proposed caption "Certain Relationships and Related Transactions"
in the proxy statement.

                            ITEM 13.
                EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

      Copies  of the following documents are included as exhibits
to this report pursuant to Item 601 of Regulation S-B.

Exhibit   SEC Ref.    Title of Document                     Location*
No.       No.

  1       (2)         Agreement and Plan of Merger dated   Form 10-SB
                       March 15, 1999

  2       (3)         Certificate of Incorporation         Form 10-SB

  3      (3)&(4)      Certificate of Designation of        Form 10-SB
                        Series A Preferred Stock

  4       (3)         By-Laws                              Form 10-SB

  5       (10)        Options granted to Rod Smith         Form 10-SB

                              13
<PAGE>

  6       (10)        Options granted to Gary Smith        Form 10-SB

  7       (10)        Options granted to G. Douglas Smith  Form 10-SB

  8       (10)        Options granted to Paul Jarman       Form 10-SB

  9       (10)        Long-Term Stock Incentive Plan       Form 10-SB

  10      (10)        Commercial Lease                     Form 10-SB

  11      (10)        Memorandum of Agreement with Gary    Form 10-SB
                        Smith dated May 11, 1999           Am. No. 1

  12      (10)        Consulting Agreement with First      Form 10-SB
                        Level Capital                      Am. No. 3

  13      (10)        Memorandum of Agreement with Gary    1999 Fm 10K
                        Smith dated July 20, 1999

  14      (10)        Note Restructuring Agreement with    1999 Fm 10K
                        George Brimhall dated
                        March 16, 2000

  15      (21)        List of Subsidiaries                 1999 Fm10K

  16     (3.16)       Series B Preferred Stock Designation   Page E-1

  17     (4.17)       Form of Registration Rights Agreement  Page E-9

  18    (10.18)       Selling Agent Agreement with First
                        Level Capital Dated
                        September 7, 2000                    Page E-20

  19    (10.19)       Form of Sales Agent Agreement          Page E-40

  20    (10.20)       Financial Advisory Services Agreement
                        with Copp Wheelock Partners dated
                        February 1, 2001                     Page E-46

  21    (10.21)       Financial Advisory Services Agreement
                        with Howard Bronson Associates dated
                        January 25, 2001                     Page E-56

  22    (10.22)       Internet Service Agreement with Zaibon
                        Dated March 13, 2001                 Page E-58

  23    (10.23)       Form of Warrant issued to lenders      Page E-68

  24    (10.24)       Form  of  Warrant issued as  part  of
                        units with Series B Preferred Stock  Page E-76

  25    (10.25)       Agreement with Olive Enterprises,
                        Inc., regarding the services of
                        Dick Clark dated April 25, 2000      Page E-84

  26    (10.26)       Agreement with D.R. JR., Inc.,
                        services of Della Reese dated
                        April 25, 2000                       Page E-94

                              14
PAGE>

  27    (10.27)       Agreement with Marie, Inc.,
                        regarding the services of Marie
                        Osmond dated June 15, 2000           Page E-104

*    Exhibits identified as in the "Form 10-SB" are incorporated
herein by this reference to the Registration Statement on Form 10-
SB filed by BuyersOnline with the Securities and Exchange
Commission on August 3, 1999. Exhibits identified as in "Form 10-
SB Am. No. 1" are incorporated herein by this reference to
Amendment No. 1 to the Registration Statement on Form 10-SB/A
filed September 21, 1999.  Exhibits identified as in "Form 10-SB
Am. No. 3" are incorporated herein by this reference to Amendment
No. 3 to the Registration Statement on Form 10-SB/A filed
November 15, 1999.  Exhibits identified as in "1999 Fm 10K" are
incorporated herein by this reference to the annual report on
Form 10-KSB for the year ended December 31, 1999, filed April 14,
2000.

Form 8-K Filings

     No reports on Form 8-K were filed in the last calendar
quarter of 2000.

                              15
<PAGE>

                           SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                                   BUYERSONLINE.COM, INC.

Date:   March  30, 2001            By:/s/Theodore Stern, Chief
                                   Executive Officer

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


Date:  March 30, 2001            /s/Theodore Stern,   Chief
                                 Executive Officer and Director


Date:  March 30, 2001            /s/ Paul Jarman,    Chief
                                 Financial Officer and Treasurer


Date:  March 30, 2001            /s/ Steve Barnett, Director


Date:  April 5, 2001             /s/ Steven Scott, Director


Date:  March 30, 2001            /s/ Gary Smith, Director


Date:  March 30, 2001            /s/ Edward Dallin Bagley,
                                  Director

                              16
<PAGE>

                BUYERSONLINE, INC. AND SUBSIDIARY

                Consolidated Financial Statements

                        TABLE OF CONTENTS


Report of Independent Public Accountants                      F-2

Consolidated Balance Sheet                                    F-3

Consolidated Statements of Operations                         F-4

Consolidated Statements of Stockholders' Equity (Deficit)     F-5

Consolidated Statements of Cash Flows                         F-8

Notes to Consolidated Financial Statements                   F-10


                              F-1
<PAGE>

            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To BuyersOnline.com, Inc.:


We have audited the accompanying consolidated balance sheet of
BuyersOnline.com, Inc. (a Delaware corporation, formerly BUI,
Inc.) and subsidiary as of December 31, 2000 and the related
consolidated statements of operations, stockholders' equity
(deficit), and cash flows for the years ended December 31, 2000
and 1999.  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 auditing standards
generally accepted in the United States.  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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of BuyersOnline.com, Inc. and subsidiary as of December 31, 2000
and the results of their operations and their cash flows for the
years ended December 31, 2000 and 1999 in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed
in Note 1 to the consolidated financial statements, the Company
has suffered recurring losses from operations.  During the years
ended December 31, 2000 and 1999, the Company's net loss
applicable to common stockholders was $11,608,114 and $1,924,885,
respectively.  As of December 31, 2000, the Company had a working
capital deficit of $3,866,430 and an accumulated deficit of
$18,803,645.  During the years ended December 31, 2000 and 1999,
the Company's operations used $3,476,070 and $1,910,397 of cash,
respectively.  These matters raise 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 1.
The accompanying financial statements do not include any
adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and classification of
liabilities that might result should the Company be unable to
continue as a going concern.


ARTHUR ANDERSEN LLP


Salt Lake City, Utah
March 29, 2001

                              F-2
<PAGE>


              BUYERSONLINE.COM, INC. AND SUBSIDIARY

                   CONSOLIDATED BALANCE SHEET

                     As of December 31, 2000


ASSETS
Current assets:
    Cash . . . . . . . . . . . . . . . . . .   $    56,825
    Restricted cash . . . . . . . . . . . . .      227,770
    Accounts receivable, net of allowance for
     doubtful accounts of $296,000. . . . .      1,547,282
    Other current assets . . . . . . . . . .       212,155
                                                ----------
        Total current assets. . . . . . . . .    2,044,032
                                                ----------
Property and equipment:
    Computer and office equipment  . . . . .       966,715
    Internal-use software and web-site
     development costs . . . . . . . . . . .     1,500,823
    Furniture and fixtures  . . . . . . . . .      204,975
    Less accumulated depreciation and
     amortization . . . . . . . . . . . . . .     (521,848)
                                                 ---------
      Property and equipment, net . . . . . .    2,150,665
                                                 ---------
Other assets . . . . . . . . . . . . . . . .       208,210
                                                 ---------

         Total assets. . . . . . . . . . . .   $ 4,402,907
                                               ===========

LIABILITIES AND  STOCKHOLDERS' DEFICIT
Current liabilities:
    Notes payable . . . . . . . . . . . . . .  $ 1,187,865
    Current portion of capital lease
     obligations . . . . . . . . . . . . . .       313,498
    Accounts payable . . . . . . . . . . . .     3,449,246
    Accrued liabilities. . . . . . . . . . .       660,421
    Accrued dividends payable on preferred
     stock . . . . . . . . . . . . . . . . .       223,896
    Accrued rebates. . . . . . . . . . . . .        75,536
                                                ----------
        Total current liabilities. . . . . .     5,910,462
Capital lease obligations, net of current
 portion. . . . . . . . . . .. . . . . . . .       314,756
                                                ----------
        Total liabilities. . . . . . . . . .     6,225,218
                                                ----------

Commitments and contingencies (Notes 1, 4 and 6)

Stockholders' deficit:
    Preferred stock, $0.0001 par value;
      5,000,000 shares authorized;
      Series A 8% cumulative convertible
      preferred stock; 1,875,000 shares
      issued and outstanding (liquidation
      value of $3,750,000). . . . . . . . . .         188
    Series B 8% cumulative convertible
       preferred stock; 453,800 shares
       issued and outstanding (liquidation
       value of $4,538,000). . . . . . . . . .         45
    Common stock, $0.0001 par value;
       100,000,000 shares authorized;
       3,988,940 shares issued and
       outstanding. . . . . . . . . . . . .           399
    Additional paid-in capital . . . . . . .   13,005,703
    Warrants and options outstanding . . . .    4,073,144
    Deferred consulting fees . . . . . . . .      (98,145)
    Accumulated deficit . . . . . . . . . . . (18,803,645)
                                               ----------
        Total stockholders' deficit . . . . .  (1,822,311)
                                               ----------
  Total liabilities and stockholders' deficit $ 4,402,907
                                              ===========

  See accompanying notes to consolidated financial statements.

                             F-3
<PAGE>

              BUYERSONLINE.COM, INC. AND SUBSIDIARY

              CONSOLIDATED STATEMENTS OF OPERATIONS


                                                Year Ended December 31,
                                                 2000      1999
Revenues:
    Telecommunications services . . . . . . .  $  7,311,520  $  4,728,343
    Other . . . . . . . . . . . . . . . . . .        44,039        27,344
                                                -----------   -----------
        Total revenues . . . . . . . . . . .      7,355,559     4,755,687
                                                -----------   -----------
Operating expenses:
    Costs of revenues . . . . . . . . . . . .     4,773,707     3,096,490
    General and administrative . . . . . . .      5,224,290     2,217,165
    Selling and promotion. . . . . .. . . . .     3,855,241     1,132,616
                                                -----------   -----------
        Total operating expenses. .  . . . .     13,853,238     6,446,271
                                                -----------   -----------
        Loss from operations. . . . .  . . .     (6,497,679)   (1,690,584)
                                                -----------   -----------

Other income (expense):
    Interest  income . . . . . . . . . . . .         21,943        49,454
    Interest expense . . . . . . . . . . . .     (1,626,212)     (123,628)
                                                 ----------   -----------
        Total other expense  . . . . . . . .     (1,604,269)      (74,174)
                                                 ----------   -----------
        Loss before extraordinary item . . .     (8,101,948)   (1,764,758)

    Extraordinary item - Loss on early
      extinguishment of debt . . . . . . . .     (1,024,574)            -
                                                 ----------   -----------

        Net loss . . . . . . . . . . . . . .   $ (9,126,522) $ (1,764,758)
                                                 ==========   ===========

Preferred stock dividends:
    8% dividends on Series A and B preferred
     stock . . . . . . . . . . . . . . . . .       (383,458)     (160,127)
    Beneficial conversion feature related to
     Series B preferred stock . . . . . . . .    (2,098,134)            -
                                                 ----------   -----------
        Total preferred stock dividends. . .     (2,481,592)      160,127)
                                                 ----------   -----------

Net loss applicable to common stockholders .  $ (11,608,114) $ (1,924,885)
                                                 ==========   ===========

Basic and diluted net loss per common share:
    Net loss applicable to common
      stockholders before extraordinary item .$       (2.84) $     (0.60)
    Extraordinary item - loss on early
      extinguishment of debt . . . . . . . . .        (0.28)           -
                                                -----------    ---------
    Net loss applicable to common
      stockholders . . . . . . . . . . . . . .$       (3.12) $     (0.60)
                                                ===========    =========
Weighted average common shares outstanding:
    Basic and diluted. . . . . . . . . . . .      3,724,671    3,223,090
                                                ===========    =========

  See accompanying notes to consolidated financial statements.

                             F-4
<PAGE>

              BUYERSONLINE.COM, INC. AND SUBSIDIARY
    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
                                                                                                   Additional
                                                      Preferred Stock           Common Stock        Paid-in
                                                     Shares      Amount       Shares    Amount      Capital
<S>                                                <C>           <C>       <C>         <C>       <C>
Balance at December 31, 1998 . . . . . . . . . . .           -   $     -   2,949,549   $   295   $  3,610,152
    Retirement of treasury shares. . . . . . . . .           -         -     (74,162)       (7)      (141,793)
    Issuance of common shares for cash. .  . . . .           -         -      47,000         5        150,653
    Issuance of  common shares upon exercise
      of options . . . . . . . . . . . . . . . . .           -         -      19,468         2         52,409
    Issuance of common shares for services . . . .           -         -       4,480         -          8,951
    Issuance of common shares upon
      conversion of note payable . . . . . . . . .           -         -      62,500         6        124,994
    Issuance of options for consulting
      services . . . . . . . . . . . . . . . . . .           -         -           -         -        126,971
    Issuance of Series A preferred stock,
      net of offering costs                          2,000,000       200     500,000        50      3,213,838
    Preferred stock dividends. . . . . . . . . . .           -         -           -         -              -
    Net loss . . . . . . . . . . . . . . . . . . .           -         -           -         -              -
                                                     ----------     -----  ----------     -----     ----------
Balance at December 31, 1999 . . . . . . . . . . .   2,000,000       200   3,508,835       351      7,146,175
    Issuance of common shares and warrants
      for cash . . . . . . . . . . . . . . . . . .           -         -     150,000        15        187,184
    Issuance of common shares for services . . . .           -         -      28,650         3         62,316
    Conversion of preferred shares to common . . .    (125,000)      (12)    125,000        12              -
    Issuance of warrants for services and in
      connection with consulting agreements. . . .           -         -           -         -              -
    Amortization of  deferred consulting fees. . .           -         -           -         -              -
    Issuance of warrants with notes payable. . . .           -         -           -         -              -
    Issuance of options for debt guarantee . . . .           -         -           -         -              -
    Beneficial conversion feature in connection
       with debt extension                                   -         -           -         -        722,050
    Imputed interest on notes payable . . . . . .            -         -           -         -         37,742
    Issuance of Series B preferred stock and
       warrants, net of offering costs                 199,300        20           -         -        909,285
    Issuance of Series B preferred stock and
      warrants upon conversion of notes payable        254,500        25           -         -      1,523,146
    Beneficial conversion dividend on Series B
       preferred stock . . . . . . . . . . . . . .           -         -           -         -      2,098,134
    Preferred stock dividends. . . . . . . . . . .           -         -           -         -              -
    Issuance of common shares as payment of
      accrued preferred stock dividends                      -         -     176,455        18        319,671
    Net loss  . . . . . . . . . . . . . . . . . .            -         -           -         -              -
                                                     ----------  --------  ---------    -------    ----------
 Balance at December 31, 2000 . . . . . . . . . .    2,328,800   $   233   3,988,940   $   399   $ 13,005,703
                                                     ==========  ========  =========    =======    ==========
</TABLE>

  See accompanying notes to consolidated financial statements.

              BUYERSONLINE.COM, INC. AND SUBSIDIARY
    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
                                                                            Warrants/     Deferred
                                                     Treasury Stock          Options     Consulting
                                                    Shares     Amount      Outstanding      Fees
<S>                                                <C>       <C>          <C>           <C>
Balance at December 31, 1998. . . . . . . . . . .  (74,162)  $ (141,800)  $    52,411   $        -
    Retirement of treasury shares . . . . . . . .   74,162      141,800             -            -
    Issuance of common shares for cash . .  . . .        -            -             -            -
    Issuance of  common shares upon exercise
      of options. . . . . . . . . . . . . . . . .        -            -       (52,411)           -
    Issuance of common shares for services. . . .        -            -             -            -
    Issuance of common shares upon
      conversion of note payable. . . . . . . . .        -            -             -            -
    Issuance of options for consulting
      services. . . . . . . . . . . . . . . . . .        -            -             -            -
    Issuance of Series A preferred stock,
      net of offering costs . . . . . . . . . . .        -            -       179,500            -
    Preferred stock dividends . . . . . . . . . .        -            -             -            -
    Net loss. . . . . . . . . . . . . . . . . . .        -            -             -            -
                                                   --------   ----------    ----------   ----------
Balance at December 31, 1999. . . . . . . . . . .        -            -       179,500            -
    Issuance of common shares and warrants
      for cash. . . . . . . . . . . . . . . . . .        -            -       112,801            -
    Issuance of common shares for services. . . .        -            -             -            -
    Conversion of preferred shares to common. . .        -            -             -            -
    Issuance of warrants for services and in
      connection with consulting agreements . . .        -            -       473,703     (429,069)
    Amortization of deferred consulting fees. . .        -            -             -      330,924
    Issuance of warrants with notes payable . . .        -            -     1,427,654            -
    Issuance of options for debt guarantee. . . .        -            -       103,200            -
    Beneficial conversion feature in connection
       with debt extension. . . . . . . . . . . .        -            -             -            -
    Imputed interest on notes payable . . . . . .        -            -             -            -
    Issuance of Series B preferred stock and
       warrants, net of offering costs. . . . . .        -            -       754,457            -
    Issuance of Series B preferred stock and
      warrants upon conversion of notes payable .        -            -     1,021,829            -
    Beneficial conversion dividend on Series B
       preferred stock. . . . . . . . . . . . . .        -            -             -            -
    Preferred stock dividends . . . . . . . . . .        -            -             -            -
    Issuance of common shares as payment of
      accrued preferred stock dividends . . . . .        -            -             -            -
    Net loss. . . . . . . . . . . . . . . . . . .        -            -             -            -
                                                   --------   ----------   -----------    ---------
 Balance at December 31, 2000 . . . . . . . . . .        -   $        -   $ 4,073,144   $  (98,145)
                                                   ========   ==========   ===========    =========
</TABLE>

  See accompanying notes to consolidated financial statements.

                              F-6
<PAGE>

              BUYERSONLINE.COM, INC. AND SUBSIDIARY
    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)



                                                Accumulated
                                                 Deficit        Total
Balance at December 31, 1998                   $(5,270,646)  $(1,749,588)
    Retirement of treasury shares . . . . . . .          -             -
    Issuance of common shares for cash . .  . .          -       150,658
    Issuance of  common shares upon exercise
      of options . . . . . . . . . . . . . . .           -             -
    Issuance of common shares for services . .           -         8,951
    Issuance of common shares upon
      conversion of note payable . . . . . . .           -       125,000
    Issuance of options for consulting
      services . . . . . . . . . . . . . . . .           -       126,971
    Issuance of Series A preferred stock,
      net of offering costs. . . . . . . . . .           -     3,393,588
    Preferred stock dividends. . . . . . . . .    (160,127)     (160,127)
    Net loss . . . . . . . . . . . . . . . . .  (1,764,758)   (1,764,758)
                                                ----------     ---------
Balance at December 31, 1999 . . . . . . . . .  (7,195,531)      130,695
    Issuance of common shares and warrants
      for cash . . . . . . . . . . . . . . . .           -       300,000
    Issuance of common shares for services . .           -        62,319
    Conversion of preferred shares to common .           -             -
    Issuance of warrants for services and in
      connection with consulting agreements              -        44,634
    Amortization of deferred consulting fees .           -       330,924
    Issuance of warrants with notes payable. .           -     1,427,654
    Issuance of options for debt guarantee . .           -       103,200
    Beneficial conversion feature in connection
       with debt extension . . . . . . . . . .           -       722,050
    Imputed interest on notes payable. . . . .           -        37,742
    Issuance of Series B preferred stock and
       warrants, net of offering costs . . . .           -     1,663,762
    Issuance of Series B preferred stock and
      warrants upon conversion of notes payable          -     2,545,000
    Beneficial conversion dividend on Series B
       preferred stock . . . . . . . . . . . .  (2,098,134)            -
    Preferred stock dividends. . . . . . . . .    (383,458)     (383,458)
    Issuance of common shares as payment of
      accrued preferred stock dividends                  -       319,689
    Net loss . . . . . . . . . . . . . . . . .  (9,126,522)   (9,126,522)
                                               -----------    ----------
 Balance at December 31, 2000. . . . . . . . .$(18,803,645)  $(1,822,311)
                                               ===========    ==========

  See accompanying notes to consolidated financial statements.

                              F-7
<PAGE>

              BUYERSONLINE.COM, INC. AND SUBSIDIARY

              CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                  Year Ended December 31,
                                                      2000         1999
                                                 ------------   ------------
Cash flows from operating activities:
    Net loss . . . . . . . . . . . . . . . . . . $ (9,126,522)  $ (1,764,758)
    Adjustments to reconcile net loss to net
     cash used in operating activities:
        Extraordinary item - loss on early
         extinguishment of debt . . . . . . . . .   1,024,574              -
        Interest expense associated with
         beneficial conversion feature in connection
         with debt extension . . . . . . . . . . .    722,050              -
        Amortization of discount on notes payable .   614,119              -
        Depreciation and amortization . . . . . . .   331,027        103,024
        Issuance of warrants for services and
         amortization of deferred consulting fees .   375,558        126,971
        Issuance of common shares for services. . .    62,319          8,951
        Amortization of interest imputed on
         notes payable. . . . . . . . . . . . . . .    36,356              -
        Changes in operating assets and liabilities:
            Restricted cash . . . . . . . . . . . .   (57,083)      (128,424)
            Accounts receivable . . . . . . . . . .  (657,385)      (258,573)
            Other current assets. . . . . . . . . .    67,011        (11,919)
            Accounts payable. . . . . . . . . . . . 2,727,418         41,221
            Accrued liabilities . . . . . . . . . .   434,362        (58,402)
            Accrued rebates . . . . . . . . . . . .   (29,874)        31,512
                                                   -----------    -----------
            Net cash used in operating activities .(3,476,070)    (1,910,397)
                                                   -----------    -----------
Cash flows from investing activities:
    Purchases of propertyfurniture, fixtures
     and equipment . . . . . . . . . . . . . . . . (1,409,157)      (178,093)
    Purchase of other assets . . . . . . . . . . .   (208,210)             -
                                                   -----------   -----------
            Net cash used in investing activities .(1,617,367)      (178,093)
                                                    ----------   -----------
Cash flows from financing activities:
    Proceeds from borrowings under notes payable. . 2,795,000         49,000
    Principal payments on notes payable . . . . . .  (169,148)      (396,285)
    Principal payments on capital lease obligations  (372,059)       (42,454)
    Issuance of common shares for cash. . . . . . .   300,000        165,000
    Issuance of preferred shares for cash . . . . . 1,993,000      4,000,000
    Payment of offering costs related to stock
     and note issuances . . . . . . . . . . . . . .  (485,238)      (620,754)
                                                    ---------      ---------
         Net cash provided by financing activities  4,061,555      3,154,507
                                                    ---------      ---------
Net increase (decrease) in cash . . . . . . . . . .(1,031,882)     1,066,017
Cash at the beginning of the year . . . . . . . . . 1,088,707         22,690
                                                    ---------      ---------
Cash at the end of the year . . . . . . . . . . .  $   56,825   $  1,088,707
                                                    =========      =========
  See accompanying notes to consolidated financial statements.

                              F-8
<PAGE>

              BUYERSONLINE.COM, INC. AND SUBSIDIARY

       CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)


                                               Year Ended December 31,
                                                  2000           1999
Supplemental cash flow information:
    Cash paid for interest. . . . . . . . . .   $  250,186   $  163,336
 . . . . . . . . . . . . .


Supplemental schedule of noncash investing and
  financing activities:
    Conversion of notes payable to common
     shares. . . . . . . . . . . . . . . . .    $2,545,000   $  125,000
    Exercise of stock options in connection
     with settlement of founders' agreements.            -       52,411
    Issuance of warrants in connection with
     the issuance of notes payable. . . . . .    1,427,654            -
    Issuance of warrants with preferred
     shares . . . . . . . . . . . . . . . . .    1,776,286      179,500
    Declaration of preferred stock dividends.      383,458      160,127
    Issuance of common shares as payment of
     preferred stock dividends. . . . . . . .      319,689            -
    Beneficial conversion dividend on Series
     B preferred shares . . . . . . . . . . .    2,098,134            -
    Retirement of 74,162 shares of treasury
     stock. . . . . . . . . . . . . . . . . .            -      141,800
    Equipment acquired under capital lease
     arrangements . . . . . . . . . . . . . .      719,954      197,650

  See accompanying notes to consolidated financial statements.

                              F-9
<PAGE>
              BUYERSONLINE.COM, INC. AND SUBSIDIARY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of the Company and Nature of Operations

 The Company was originally incorporated in Utah on January 16,
 1996 as WealthNet Incorporated ("WealthNet").  On November 13,
 1997, WealthNet was merged into Linguistix Acquisition Inc.
 ("LAI"), a Utah corporation and wholly-owned subsidiary of
 Linguistix, Inc. ("Linguistix") (the "Linguistix Merger").  LAI
 was the surviving corporation and changed its name to Buyers
 United, Inc. ("Buyers United") in connection with the
 Linguistix Merger.  In connection with the Linguistix Merger,
 Linguistix changed its name to Buyers United International, Inc.
 ("BUII").

 BUI, Inc. was incorporated in the state of Delaware on March
 15, 1999, for the purpose of reincorporating BUII as a Delaware
 corporation.  Effective April 9, 1999, BUII was merged into
 BUI, Inc. (the "BUI Merger").  In the BUI Merger, every four
 shares of BUII common stock and every four options to purchase
 shares of BUII's common stock were converted into one share of
 common stock of BUI, Inc. or options to purchase one share of
 BUI Inc.'s common stock.  The accompanying consolidated
 financial statements have been retroactively restated to
 reflect the effect of the BUI Merger.

 On April 20, 2000, BUI, Inc. changed its name to
 BuyersOnline.com, Inc. in connection with the Company's plan to
 advertise and promote its products and services through the
 Internet.

 BuyersOnline.com, Inc., BUI, Inc., BUII, Buyers United and
 WealthNet are collectively referred to herein as the "Company."

 The Company is a consumer buying organization with the
 objective of providing high quality consumer products and
 services at favorable prices to its members.  The Company forms
 strategic alliances with various consumer service providers in
 an effort to combine the purchasing power of its members to
 negotiate favorable prices from these providers.  The Company
 markets its products and services principally by offering
 incentives to its members to refer additional members to the
 Company's products and services.  During the years ended
 December 31, 2000 and 1999, the Company primarily provided
 discounted long distance telecommunication services to its
 members.

 The Company has suffered recurring losses from operations.
 During the years ended December 31, 2000 and 1999, the
 Company's net loss applicable to common stockholders was
 $11,608,114 and $1,924,885, respectively.  As of
 December 31, 2000, the Company had a working capital deficit of
 $3,866,430 and an accumulated deficit of $18,803,645.
 Additionally, as of December 31, 2000, the Company had past due
 accounts payable of $1,161,050.  During the years ended
 December 31, 2000 and 1999, the Company's operations used
 $3,476,070 and $1,910,397 of cash, respectively.  These
 matters raise substantial doubt about the Company's ability to
 continue as a going concern.  As discussed in Note 9,
 subsequent to December 31, 2000, the Company has obtained
 $1,100,000 of additional funding through the sale of
 convertible preferred stock and warrants and $390,000 of
 additional short-term debt financing.  However, the Company
 needs additional capital to finance future operations until its
 business objectives are implemented and generate sufficient
 revenue to sustain the business.   Management is attempting to
 raise additional equity capital to fund operations and provide
 working capital; however, there can be no assurance that
 additional funding will be available or, if available, that it
 will be available on acceptable terms or in required amounts.
 The financial statements do not include any adjustments
 relating to the recoverability and classification of asset
 carrying amounts or the amount and classification of
 liabilities that might result should the Company be unable to
 continue as a going concern.

                              F-10
<PAGE>

 The Company is subject to certain risk factors frequently
 encountered by companies lacking adequate capital and which are
 in the early stages of developing a business line that may
 impact its ability to become a profitable enterprise.  These
 risk factors include:

 a) The consumer buying organization industry is characterized
   by intense competition, and many of the Company's competitors
   are substantially larger than the Company with greater
   financial and other resources.  In addition, the Company is
   currently marketing telecommunications services, including
   long distance services, to its members.  The U.S. long
   distance telecommunications industry is highly competitive
   and significantly influenced by the marketing and pricing
   strategies of the major industry participants, which are
   significantly larger than the Company and have substantially
   greater resources.

 b) The Company's relationship marketing system is or may be
   subject to or affected by extensive government regulation,
   including without limitations, state regulation of marketing
   practices and federal and state regulation of the offer and
   sale of business franchises, business opportunities, and
   securities.  Long distance telecommunications carriers
   currently are subject to extensive federal and state
   government regulation.

 c) Additional funds will be required to finance the Company's
   operations until profitability can be achieved and to fund
   the repayment of debt obligations and other liabilities.
   There can be no assurance that the additional funding will be
   available or, if available, that it will be available on
   acceptable terms or in required amounts.


2. Summary of Significant Accounting Policies

 Principles of consolidation

 The accompanying consolidated financial statements include the
 accounts of BuyersOnline.com, Inc. and its wholly-owned
 subsidiary, Buyers United.  All significant intercompany
 accounts and transactions have been eliminated upon
 consolidation.

 Use of estimates in the preparation of financial statements

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


 Revenue recognition

 The Company's revenue recognition policy with respect to
 reseller agreements is to record gross revenues and receivables
 from customers when the Company acts as principal in the
 transaction, takes title to the products or services, and the
 Company has risks and rewards of ownership, such as risk of
 loss for collection, delivery, or returns.  With respect to
 commission or other agent or broker arrangements, the Company
 recognizes net commission revenues.  Revenues from sales of
 products are recognized upon shipment of the products to the
 customers and revenues from commissioned services are recognized
 as the services are provided.

 Property and equipment

 Property and equipment are stated at cost.  Major additions and
 improvements are capitalized, while minor repairs and
 maintenance costs are expensed when incurred.  In accordance
 with Statement of Position 98-1, "Accounting for the Costs of
 Computer Software Developed or Obtained  for Internal Use," the
 Company capitalizes certain costs incurred for the development
 of internal use software.  These costs include the costs
 associated with coding, software configuration, upgrades and
 enhancements.  In March 2000, the Emerging  Issues Task Force
 issued its consensus on Issue No. 00-2, "Accounting for Web
 Site Development Costs."  Pursuant to this pronouncement, the
 Company  has capitalized the direct costs of major development
 related to its web site.

                              F-11
<PAGE>

 Depreciation and amortization are computed using the straight-
 line method over the estimated useful lives of the related
 assets as follows:

   Computer and office equipment . . . .   2 to 3 years
   Internal-use software and web site
     development costs . . . . . . . . .   2 years
   Furniture and fixtures . . . . . . . .  3 to 7 years

 Upon retirement or other disposition of property and equipment,
 the book value is removed from the asset and related
 accumulated depreciation accounts, and the net gain or loss is
 included in the determination of net income (loss).

 Fair value of financial instruments

 The carrying amounts reported in the accompanying consolidated
 balance sheet for cash, receivables, and accounts payable
 approximate fair values because of the immediate or short-term
 maturities of these financial instruments.  The fair value of
 the Company's notes payable and preferred stock also
 approximate fair value based on current rates for similar debt
 and fixed-rate instruments.

 Member incentive payments

 Each month the Company rebates ten percent of collected usage
 revenue to its members under an incentive program.  Collected
 usage revenue is defined as the usage portion of a bill that is
 paid in full within 45 days of the statement date.  This rebate
 pool is disbursed every month to qualifying members according
 to the amount of usage generated by their referrals.

 The Company accounts for rebates by recording an accrual for
 the estimated rebates to be paid applicable to each month's
 revenues.  The rebates are included in selling and promotion
 expense in the accompanying statements of operations.  The
 rebates amounted to $467,596 and $380,375 during the years
 ended December 31, 2000 and 1999, respectively.  As of December
 31, 2000, accrued rebates amounted to $75,536.

 Income taxes

 The Company recognizes a liability or asset for the deferred
 income tax consequences of all temporary differences between
 the tax bases of assets and liabilities and their reported
 amounts in the financial statements that will result in taxable
 or deductible amounts in future years when the reported amounts
 of the assets and liabilities are recovered or settled.  These
 deferred income tax assets or liabilities are measured using
 the enacted tax rates that will be in effect when the
 differences are expected to reverse.  Recognition of deferred
 tax assets is limited to amounts considered by management to be
 more likely than not of realization in future periods.

 Net loss per common share

 Basic net loss per common share ("Basic EPS") excludes dilution
 and is computed by dividing net loss by the weighted average
 number of common shares outstanding during the year.  Diluted
 net loss per common share ("Diluted EPS") reflects the
 potential dilution that could occur if stock options or other
 common stock equivalents were exercised or converted into
 common stock.  The computation of Diluted EPS does not assume
 exercise or conversion of securities that would have an
 antidilutive effect on net loss per common share.

 Outstanding options to purchase 3,053,019 and 1,494,838 shares
 of common stock as of December 31, 2000 and 1999, respectively;
 4,144,000 and 2,000,000 shares of common stock issuable upon
 the conversion of preferred stock as of December 31, 2000 and
 1999, respectively; and 4,601,382 and 125,000 shares of common
 stock issuable upon exercise of warrants to purchase common
 stock as of December 31, 2000 and 1999, respectively, were not
 included in the computation of Diluted EPS because they would
 be antidilutive.

 Recent Accounting Pronouncements

 In June 1998, Statement of Financial Accounting Standards
 ("SFAS") No. 133, "Accounting for Derivative Instruments and
 Hedging Activities" was issued.  SFAS 133 establishes new
 accounting and reporting standards

                              F-12
<PAGE>

 for companies to report
 information about derivative instruments, including certain
 derivative instruments embedded in other contracts
 (collectively referred to as derivatives), and for hedging
 activities.  This statement, as amended, will be adopted by the
 Company effective January 1, 2001.  The adoption of this
 statement is not expected to have a material impact on the
 Company's results of operations, financial position or
 liquidity.


3. Notes Payable

 As of December 31, 2000, the Company had a $1,050,000 note
 payable to an individual bearing interest at 18 percent
 payable monthly and was due April 15, 2001.  The note was
 originally due April 15, 2000.  On March 16, 2000, the Company
 amended the terms of the note to extend the maturity.  The
 amended note provided a conversion feature whereby the holder
 may convert the note into common stock at $3.00 per share.  On
 the date of the amendment the quoted market value of the
 Company's common stock exceeded the conversion price of $3.00
 per share; therefore, the Company recorded a non-cash charge to
 interest expense of $722,050 representing the intrinsic value
 of the beneficial conversion feature.  The note is secured by
 certain assets of, and guaranteed by a director of the Company.
 In connection with the extension of the note term, the
 guarantor was issued options to purchase 50,000 common shares
 at $2.95 per share to extend his guarantee.  The estimated
 value of the options of $103,200, as determined by the Black-
 Scholes option pricing model, was recorded as debt financing
 costs and is being amortized to interest expense over the term
 of the note.  Subsequent to December 31, 2000, the noteholder
 has agreed to extend the due date to June 1, 2001, under the
 same terms and conditions.

 During 2000, the Company entered into an arrangement with a
 financing company to pay certain insurance premiums.  As of
 December 31, 2000, there was $39,252 still owing and due in
 monthly payments of $6,668 through March 2001.  The amount
 owed under the arrangement bears interest at 6.6 percent.
 The amount owed under this arrangement has been included in
 notes payable.

 Also during 2000, various investors, including three members of
 the Company's Board of Directors, loaned the Company $2,795,000
 under promissory note agreements.  Certain of the notes were
 non-interest bearing for an initial term and if not repaid bore
 interest at rates ranging from 12 to 18 percent.  The Company
 imputed interest of $37,742 for the non-interest periods which
 was recorded as a discount on the notes.  The other agreements
 bore interest at rates ranging from 12 to 18 percent.  One note
 for $150,000 was repaid, an 18 percent $100,000 note remained
 outstanding at December 31, 2000 with a carrying amount of $98,613,
 net of discount, and a due date of January 31, 2001.  The
 remaining $2,545,000 of notes were exchanged for shares of Series
 B 8% cumulative convertible preferred stock and warrants in
 October 2000 (see Notes 7 and 8).

 In connection with the loans described above, the Company issued
 1,432,500 warrants to the note holders and 32,500 warrants to the
 Placement Agent.  The warrants entitle the holders to purchase
 shares of common stock at prices ranging between $2.00 and
 $2.50 per share until June 30, 2005. The estimated fair value
 of the warrants of $1,427,654, based on using the Black-
 Scholes pricing model, was allocated to the warrants and
 recorded as a discount to the carrying value of the notes.
 The discount was being amortized to interest expense over the
 term of the notes.  When the notes were subsequently exchanged
 for Series B preferred stock and warrants to purchase common
 stock, the difference between the estimated fair value of the
 Series B preferred stock and warrants and the carrying amount
 of the debt was recognized as an extraordinary loss on early
 extinguishment of debt.  The extraordinary loss on early
 extinguishment amounted to $1,024,574.


4. Leases

 In December 2000, the Company moved all of its operations into
 one new building and entered into a noncancellable operating
 lease agreement for the office space.  The Company also has
 entered into operating leases for various pieces of office
 equipment.

                              F-13
<PAGE>

 The Company has two capital leases for software and computer
 equipment.  The Company has placed $175,000 in escrow as
 restricted cash as collateral for these leases.  The following
 is a schedule of future minimum payments under the leases as of
 December 31, 2000:

  Year ending December 31,               Capital     Operating
                                         leases       leases

   2001 . . . . . . . . . . . . . . . .$  377,331   $  341,257
   2002 . . . . . . . . . . . . . . . .   336,921      376,581
   2003 . . . . . . . . . . . . . . . .         -      379,906
   2004 . . . . . . . . . . . . . . . .         -      387,681
   2005 . . . . . . . . . . . . . . . .         -      397,373
    Thereafter. . . . . . . . . . . . .         -      824,797
                                         ---------   ---------
    Total future minimum lease payments   714,252   $2,707,595
   Less amount representing interest . .  (85,998)   =========
                                         ---------
    Total obligations under capital
     leases. . . . . . . . . . . . . . .  628,254
   Less current portion . . . . . . . .  (313,498)
                                         ---------
   Capital lease obligations, net of
    current portion                    $  314,756
                                         ========
 As of December 31, 2000, the Company leased software and
 equipment under capital leases with an original cost of
 $861,937 and accumulated amortization of $76,523.


5. Income Taxes

 The components of the Company's net deferred income tax assets
 and liabilities as of December 31, 2000, are as follows:

Deferred income tax assets:
  Net operating loss carryforwards . . . . .  $4,544,000
  Reserves and accrued liabilities . . . . .     313,000
  Other . . . . . . . . . . . . . . . . . . .    140,000
                                               ---------
       Total deferred income tax assets . . .  4,997,000
  Valuation allowance . . . . . . . . . . . . (4,586,000)
                                               ---------

      Net deferred income tax asset . . . . .    411,000
                                               ---------
Deferred income tax liabilities:
  Capitalized software costs . . . . . . . .    (293,000)
  Tax depreciation in excess of book
    depreciation . . . . . . . . . . . . . .    (118,000)
                                                --------
      Net deferred income tax liability . . .   (411,000)

      Net deferred income taxes . . . . . . . $        -
                                                ========

 As of December 31, 2000, the Company had net operating loss
 carryforwards for federal income tax reporting purposes of
 approximately $12,117,000.  For federal income tax purposes,
 utilization of these carryforwards is limited if the Company
 has had more than a 50 percent change in ownership (as defined
 by the Internal Revenue Code) or, under certain conditions, if
 such a change occurs in the future.  The Company has not
 performed an analysis to determine if any such limitations have
 occurred.   The tax net operating loss carryforwards will
 expire beginning in 2012.

                              F-14
<PAGE>

 No benefit for income taxes has been recorded during the year
 ended December 31, 2000.  As discussed in  Note 1, certain
 risks exist with respect to the Company's ability to continue
 as a going concern and due to this and other uncertainties,
 the Company's deferred income tax assets may not be realized.
 Accordingly, a valuation allowance has been recorded to reduce
 the deferred income tax assets.


6. Commitments and contingencies

 The Company is the subject of certain legal matters, which it
 considers incidental to its business activities.  It is the
 opinion of management, after discussion with legal counsel,
 that the ultimate disposition of these legal matters will not
 have a material impact on the financial position, liquidity or
 results of operations of the Company.


7. Capital Transactions

 Preferred Stock

 The Board of Directors is authorized to classify any shares of
 the Company's authorized but unissued preferred stock in one or
 more series.  With respect to each series, the Board of
 Directors is authorized to determine the number of shares which
 constitute such series; the rate of dividend, if any, payable
 on shares of such series; whether the shares of such series
 shall be cumulative, non-cumulative or partially cumulative as
 to dividends, and the dates from which any cumulative dividends
 are to accumulate; whether the shares of such series may be
 redeemed, and, if so, the price or prices at which and the
 terms and conditions on which shares of such series may be
 redeemed; the amount payable upon shares of such series in the
 event of the voluntary or involuntary dissolution, liquidation
 or winding up of the affairs of the Company; the sinking fund
 provisions, if any, for the redemption of shares of such
 series; the voting rights, if any, of the shares of such
 series; the terms and conditions, if any, on which shares of
 such series may be converted into shares of capital stock of
 the Company of any other class or series; whether the shares of
 such series are to be preferred over shares of capital stock of
 the Company of any other class or series as to dividends, or
 upon the voluntary or involuntary dissolution, liquidation, or
 termination of the affairs of the Company, or otherwise; and
 any other characteristics, preferences, limitations, rights,
 privileges, immunities or terms.

 Series A 8% Cumulative Convertible Preferred Stock

 During 1999, the Board of Directors authorized the issuance of
 2,000,000 shares of Series A 8% Cumulative Convertible
 Preferred Stock (the "Series A Preferred Stock") at an offering
 price of $2.00 per share.  Gross proceeds of $4,000,000 were
 raised upon sale of the shares.

 In connection with the offering, the Company agreed to pay the
 Placement Agent a sales commission and expense allowance
 aggregating 13 percent of the gross proceeds from the sale of
 the Series A Preferred Stock.  The Company also incurred
 approximately $91,000 of additional expenses in connection with
 the offering.  As additional consideration for the sale of the
 preferred stock, the Company agreed to sell to the Placement
 Agent 500,000 shares of the Company's common stock at a price
 of $0.01 per share.  The Company also agreed to enter into a
 two-year consulting agreement with the Placement Agent through
 which the Placement Agent will receive $3,000 per month for
 investment banking and advisory services provided to the
 Company.  Pursuant to the terms of the offering, the Placement
 Agent designated two members of the Company's Board of
 Directors for two-year terms.

 As part of the Series A Preferred Stock offering, the Company
 issued warrants to purchase 125,000 shares of common stock to
 six individuals who purchased shares in the offering.  The
 warrants expire five years after issuance and are exercisable
 at $1.25 per share.  The Company allocated $179,500 of the
 proceeds received to the warrants based upon values determined
 by the Black-Scholes pricing model.  All costs incurred and
 equity instruments issued in connection with the offering have
 been netted against the gross proceeds of the offering in
 additional paid-in capital.

                              F-15
<PAGE>

 The Series A Preferred Stock is convertible to common stock at
 any time at the election of the holder and - under limited
 circumstances - at the election of the Company.  The conversion
 rate is one for one, subject to adjustment in the event of a
 recapitalization, reorganization, or other corporate
 restructuring or in the event that the Company shall sell or
 otherwise issue securities at a price below $2.00 per share or
 the then adjusted conversion price.  The Series A Preferred
 Stock can be redeemed at the Company's election at any time
 commencing January 1, 2005, at a redemption price of $2.00 per
 share plus all accrued dividends as of the redemption date.
 During 2000, certain stockholders converted 125,000 Series A
 preferred shares into common shares.

 Series B 8% Cumulative Convertible Preferred Stock

 In September 2000, the Board of Directors authorized the
 issuance of 1,234,500 shares of Series B 8% Cumulative
 Convertible Preferred Stock (the "Series B Preferred Stock")
 and related warrants to purchase common shares at an offering
 price of $10.00 per unit.  Each unit consists of one share of
 Series B Preferred Stock and five warrants to purchase one
 share of common stock at an exercise price of $2.50 per share.
 As discussed in Note 3, during 2000 various investors made
 loans to the Company and subsequently elected to exchange their
 promissory notes for units.  In addition to the converted loans
 of $2,545,000, the Company raised an additional $1,993,000
 through the issuance of units through December 31, 2000 and
 subsequent to December 31, 2000, through the end of March 2001
 had raised an additional $1,100,000.

 In connection with the unit offering, the Company agreed to pay
 the Placement Agent a sales commission and expense allowance
 aggregating 13 percent of the gross proceeds from the sale of
 the Series B Preferred Stock, in addition to 10 percent of the
 gross proceeds of certain related bridge financing.  The
 Company also incurred approximately $23,000 of direct expenses
 in connection with the offering.  As additional consideration,
 the Company agreed to issue to the Placement Agent warrants to
 purchase 319,300 shares of the Company's common stock at an
 exercise price of $2.50 per share.

 As part of the Series B Preferred Stock offering, the Company
 issued 2,269,000 warrants to purchase common stock at $2.50 per
 share.  The Company allocated the net proceeds from the
 offering of $4,208,762 between the Series B Preferred Stock and
 the warrants based on estimated relative fair values.  The
 Series B Preferred Stock was recorded at $2,432,476 and the
 warrants were recorded at $1,776,286.  The estimated fair value
 of the warrants was determined using the Black-Scholes pricing
 model. The Series B Preferred Stock is convertible to common
 stock at any time at the election of the holder and - under
 limited circumstances - at the election of the Company.  The
 conversion rate is five for one, subject to adjustment in the
 event of a recapitalization, reorganization, or other corporate
 restructuring or in the event that the Company shall sell or
 otherwise issue securities at a price below $2.00 per share or
 the then adjusted conversion price.  On most of the dates the
 Series B preferred shares were issued, the quoted market price
 of the Company's common stock exceeded the $2.00 conversion
 price.  Accordingly, the Company measured the intrinsic value
 of the beneficial conversion feature as the difference between
 the quoted prices of the common stock into which the Series B
 preferred shares are convertible and the recorded value of the
 Series B preferred shares of $2,432,476.  The total intrinsic
 value of the beneficial conversion feature of $2,098,134 has
 been reflected in the accompanying consolidated financial
 statements as a preferred stock dividend and as an increase to
 additional paid in capital.

 The Series B Preferred Stock can be redeemed at the Company's
 election at any time commencing January 1, 2004, at a
 redemption price of $10.00 per share plus all accrued dividends
 as of the redemption date.

 Cumulative dividends accrue on both Series A and B Preferred
 Stock at the rate of eight percent per annum from the date of
 original issue and are payable semi-annually on June 30 and
 December 31 of each year out of funds legally available for the
 payment of dividends.  Dividends are payable in cash or common
 stock at the election of the Company.  If paid in common stock,
 the number of shares issued will be based on the average of the
 closing bid prices for the common stock over the five trading
 days immediately prior to the dividend payment date.  If the
 Company fails to pay any dividend within 60 days of its due
 date, the conversion price (see below) is adjusted downward by
 $0.25 per share for each occurrence.  During the year ended
 December 31, 2000, the Company declared dividends aggregating
 $383,458, and to satisfy payment obligations issued a total of
 176,455 shares of common stock.  As of December 31, 2000, the
 Company had accrued dividends payable in the amount of

                              F-16
<PAGE>

 $223,896.  In February 2001, the Company settled the dividend
 payable by issuing 210,669 shares of common stock.

 The Series A and B Preferred Stock have no voting rights,
 except as required by the General Corporation Laws of Delaware
 that require class votes on certain corporate matters and
 matters affecting the rights of the holders of the Preferred
 Stock.  The Preferred Stock is senior in right of payment in
 the event of liquidation and with respect to dividends to the
 common stock and all other subsequent preferred stock issuances
 that may be authorized.  The  Series A Preferred Stock has a
 liquidation preference of $2.00 per share and the Series B
 Preferred Stock has a liquidation preference of $10.00 per
 share.

 Issuance of  common stock

 In August 2000, the Company sold 150,000 shares of common stock
 to an individual for $300,000.  The individual also received
 warrants to purchase 200,000 additional shares of common stock
 at $2.00 per share.  Proceeds from the sale were allocated
 between common stock and the warrants based on the relative
 fair values.  The estimated fair value of the warrants was
 determined using the Black-Scholes option pricing model.  The
 common stock was recorded at $187,199 and the warrants were
 recorded at $112,801.

 During 1999, the Company sold 47,000 shares of common stock in
 a private placement at prices ranging from $2.00 to $4.00 per
 share.

 Warrants to purchase common shares

 As mentioned above, the Company issued warrants in connection
 with its Series B preferred stock offering.  In addition, the
 Company issued warrants when it issued and converted certain
 notes payable more fully described in Note 3.  During 2000, the
 Company issued warrants in connection with the sale of 150,000
 shares of common stock as described in the preceding paragraph.
 The Company also issued 223,082 warrants at prices ranging from
 $2.00 to $5.13 per share to various outside consultants and
 sales agents in exchange for services which were valued
 at $473,703.  All of the warrants were  exercisable at
 December 31, 2000.  The following tables summarize the warrant
 activity for 2000 and 1999:

                                                           Weighted
                                                            Average
                                                           Exercise
                                   Warrants   Price Range     Price
   Balance at December 31, 1998           -          -           -
       Issued . . . . . . .         125,000      $1.25       $1.25
                                 ----------
   Balance at December 31, 1999     125,000      $1.25       $1.25
       Issued . . . . . . .       4,476,382  $2.00 - $5.13   $2.47
                                 ----------
   Balance at December 31, 2000   4,601,382  $1.25 - $5.13   $2.44


 Long-term Stock Incentive Plan

 Effective March 11, 1999, the Company established the Buyers
 United International, Inc. Long-term Stock Incentive Plan (the
 "Stock Plan").  The Stock Plan provides for a maximum of
 1,200,000 shares of common stock of the Company to be awarded
 to participants and their beneficiaries.  A Committee, as
 determined by the Board of Directors, determines and designates
 the eligible participants and awards to be granted under the
 Stock Plan.  The Committee may grant incentive stock options,
 non-qualified options, stock appreciation rights ("SAR") and,
 on a limited basis, grant stock awards.  The terms and exercise
 prices of options and SARs will be established by the
 Committee; except that the exercise prices cannot be less than
 100 percent of the fair market value of a share of common stock
 on the date of grant.  As of December 31, 2000, 572,451 options
 had been granted under this particular plan.

                              F-17
<PAGE>

 Stock options

 The Company's Board of Directors has from time to time
 authorized the grant of stock options to directors, officers,
 key employees, and consultants as compensation and in
 connection with obtaining financing. The following tables
 summarize the option activity for 2000 and 1999:

                                                              Weighted
                                                               Average
                                                              Exercise
                                  Options      Price Range       Price
   Balance at December 31, 1998  1,339,645    $0.06 - $9.00     $2.82
       Granted . . . . . .         772,927    $2.00 - $5.39     $2.57
       Exercised . . . . .         (19,468)        $0.06        $0.06
       Canceled or expired        (598,266)   $2.00 - $5.39     $3.44
   Balance at December 31, 1999  1,494,838    $2.00 - $9.00     $2.40
       Granted . . . . . .       2,026,633    $2.00 - $5.13     $2.85
       Canceled or expired        (468,452)   $2.00 - $9.00     $2.67
   Balance at December 31, 2000  3,053,019    $2.00 - $9.00     $2.66

 A summary of the options outstanding and options exercisable at
 December 31, 2000 is as follows:
<TABLE>
<CAPTION>

             Options Outstanding                  Options
                                                Exercisable
                              Weighted
                               Average                      Options
   Range of                   Remaining     Weighted      Exercisable   Weighted
   Exercise        Options   Contranctual    Average      at December    Average
   Prices        Outstanding    Life      Exercise Price    31, 2000   Exercise Price
-------------   ------------  ----------  --------------   ----------  ------------
<C>               <C>         <C>            <C>         <C>          <C>
  $2.00 - $3.99   2,728,879   5.8 years       $2.39      1,944,095    $2.23
  $4.00 - $5.99     321,640   4.5 years       $4.88        301,640    $4.87
  $6.00 - $9.00       2,500   1.0 years       $9.00          2,500    $9.00
                  ---------                              ---------
                  3,053,019   5.7 year        $2.66      2,248,235    $2.59
                  =========                              =========
 Stock-based compensation

 The Company applies Accounting Principles Board Opinion No. 25
 and related interpretations in accounting for its grants of
 options to purchase common shares to employees.  SFAS No. 123,
 "Accounting for Stock-Based Compensation," requires pro forma
 information regarding net income (loss) as if the Company had
 accounted for its stock options granted under the fair value
 method of the statement.  The fair value of the stock options
 was estimated at the grant date by the Company based on the
 Black-Scholes option pricing model.  The following assumptions
 were used in the Black-Scholes model: a weighted-average risk-
 free interest rate of 6.2 and 5.5 percent, a dividend yield of
 0 and 0 percent, a weighted average volatility of 104.3 and
 71.0 percent, and weighted-average expected lives of 5.8 and
 8.1 years for the years ended December 31, 2000 and 1999,
 respectively.  The weighted average fair value of options
 granted during the years ended December 31, 2000 and 1999, was
 $2.66 and $2.13, respectively.  The net losses applicable to
 common stockholders under SFAS No. 123 for the years ended
 December 31, 2000 and 1999, would have been increased to the pro
 forma amounts indicated below:


                                        2000            1999
        Net loss applicable to
        common stockholders:
            As reported . . . . . . $ (11,608,114)  $ (1,924,885)
            Pro forma. . . . . . .    (13,526,510)    (2,203,921)

        Basic and diluted net loss
        per common share:
            As reported . . . . . . $       (3.12)  $      (0.60)
            Pro forma. . . . . . .          (3.63)         (0.68)

                              F-18
<PAGE>
 Due to the nature and timing of option grants, the resulting
 pro forma compensation cost may not be indicative of future
 years.


8. Related party transactions

 In October 2000, the Board approved a consulting agreement with
 Theodore Stern, Chairman of the Board of Directors.  Mr. Stern
 was to earn a monthly fee of $6,000 plus expense reimbursement
 in connections with duties performed as the Company's Chief
 Executive Officer.  The Board also approved a five-month
 consulting agreement for Gary Smith, also a member of the
 Board.  In exchange for fund-raising and other services, Mr.
 Smith was to receive a monthly fee of $5,000.  For the year
 ended December 31, 2000, Mssrs. Stern and Smith earned, $22,400
 and $12,500 in fees, respectively.  None of the fees have yet
 been paid, pending successful fund-raising efforts.  As a
 result, these amounts were owed to these Directors as of
 December 31, 2000.

 During the first part of 2000, Steve Barnett was engaged as an
 outside consultant before becoming a director.  The Company
 incurred $24,500 in fees billed by Mr. Barnett, of which $8,300
 remained unpaid at December 31, 2000.

 During 2000, directors Theodore Stern, Dal Bagley, and Harold
 C. McCray loaned the Company a total of $595,000, $275,000, and
 $150,000 as bridge financing, respectively.  The Company issued
 14% and 18% promissory notes, with maturity dates ranging from
 July 31, 2000 to June 30, 2001.  On September 1, 2000 the
 Company repaid the loan to Mr. McCray and the rest of the notes
 were converted into Series B Convertible Preferred Stock and
 related warrants (see Notes 3 and 7).  The directors also
 received warrants as part of their promissory notes and
 preferred stock conversions.  The five- and two-year warrants
 have an exercise price of  $2.50 per share.  The total number
 of warrants issued to the three directors was 680,000,
 275,000,  and 75,000, respectively.

 Mr. Stern also loaned the Company $100,000 in December 2000.
 The Company issued a promissory note, payable on demand.  The
 note is secured by the Company's accounts receivable and
 accrues interest at 12 percent.  If the note hadn't been paid
 by February 1, 2001, 10,000 shares of common stock were to be
 issued.    The note wasn't repaid at that time and the Company
 has since complied with the additional terms.


9. Subsequent Financing

 Subsequent to December 31, 2000, the Company received
 approximately $1,100,000  of proceeds from the issuance of
 110,000 shares of Series B Preferred Stock and 550,000 warrants
 to purchase common stock (see Note 7).  The Company also
 received $390,000 from the issuance of various notes payable to
 a director of the Company.  The notes bear interest at 12
 percent, are due and payable on demand, and are secured by
 accounts receivable.  In connection with the issuance of these
 notes, the Company issued 41,000 shares of common stock.

                              F-19
<PAGE>




</TABLE>