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

                                    FORM 10-K
(Mark One)

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

                   For the fiscal year ended December 31, 1999

                                       OR

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

                        Commission file number 000-26425

                           NextPath Technologies, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         NEVADA                                                  84-1402416
 -----------------------                                     -------------------
 (State of incorporation                                      (I.R.S. Employer
    or organization)                                         Identification No.)

                 1615 N. 24th West Avenue, Tulsa, Oklahoma 74127
               --------------------------------------------------
               (Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code: (918) 295-8289

Securities registered pursuant to section 12(b) of the Act:      None

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

    Title of each class                Name of each exchange on which registered
    -------------------                -----------------------------------------

Common Stock ($0.001 par value)                       None (OTCBB)

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

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

        The  aggregate   market  value  of  the  voting  common  stock  held  by
non-affiliates as of April 10, 2000 was $410,638,680.

        At April  10,  2000,  there  were  41,695,775  shares  of  Common  Stock
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
        None



<PAGE>


                                     PART I

"Safe Harbor"  Statement Under  the Private  Securities Litigation Reform Act of
1995.

        This 10-K contains  statements  that plan for or anticipate  the future.
Forward-looking  statements  include  statements about future business plans and
strategies and most other statements that are not historical in nature.  In this
10-K,   forward-looking   statements  are  generally  identified  by  the  words
"anticipate,"   "plan,"   "believe,"   "estimate,"   and   the   like.   Because
forward-looking  statements  involve future risks and  uncertainties,  there are
factors  that  could  cause  actual  results  to differ  materially  from  those
expressed  or  implied,  including,  but not  limited  to, our ability to obtain
infusion of equity capital or financing on terms reasonably  satisfactory to us,
competition,  changes in consumer trends, and competitors' marketing strategies.
See Item 7.  Management's  Discussion  and Analysis of Financial  Condition  and
Results of Operations-Risk  Factors. These forward-looking  statements are based
on our current  expectations or those of the preparer of the statement.  Readers
of this 10-K are  cautioned not to place undue  reliance on the  forward-looking
statements.  The forward-looking statements included in this 10-K are made as of
the date of this 10-K and we don't  undertake  any  obligation to update them to
reflect subsequent events or circumstances.

        The terms  "NextPath,"  the  "Company,"  "we,"  "our" and "us"  refer to
NextPath  Technologies,  Inc. and its  subsidiaries  and  affiliates  unless the
context suggests otherwise.

ITEM 1. BUSINESS

Our Organizational History

        We were  organized as  Petrogenics,  Inc. under the laws of the State of
Colorado on March 23, 1984.  On May 12, 1997,  we completed a change of domicile
merger with FSC  Holdings,  Inc.,  a Nevada  corporation,  thereby  changing our
domicile from Colorado to Nevada and changing our name to FSC Holdings,  Inc. On
January 27, 1998,  Compact Power  International,  Inc.  merged with and into us.
Pursuant  to  the  Articles  of  Merger,   our  name  was  changed  to  Hyperion
Technologies,   Inc.  On  July  22,  1999,  we  changed  our  name  to  NextPath
Technologies,  Inc. and our OTC  Bulletin  Board  trading  symbol from "HYPE" to
"NPTK." On November 11, 1999, we were the surviving corporation in a merger with
Epilogue  Corporation  and  became a  reporting  company  under  the  Securities
Exchange Act of 1934 as a result of the merger.

        We are a development stage holding company that identifies, acquires and
manages  what  we  believe  to be  state-of-the-art  technology  companies  that
together  form a  community  of shared  resources.  We are  organized  into four
operating groups as follows:  Precision  Technologies Group, Internet E-Commerce
Group, Environmental Technologies Group and Health Products Group.

Our Acquisitions

        During  most  of  1999,  we sought,  negotiated  and closed  acquisition
agreements  with  several  target  companies.  The following is a summary of our
acquisitions:

o       On  June 12,  1999,  we signed an Option Agreement with PriMedium,  LLC.
        (the "PriMedium Transaction").   We are  evaluating  whether  or not  to
        enter into a definitive agreement and  there can  be no  assurances that
        one will ultimately  be  consummated.   See  Internet   and   E-Commerce
        Group-PriMedium, LLC.

o       On October 21,  1999,  we  acquired  1,000  shares of  non-voting Series
        A Preferred Stock of United Paper,  Inc., a Dallas,  Texas based primary
        independent paper distributer.

o       On October 18, 1999,  we  acquired  LaserWireless, Inc.

o       On  November 2, 1999,  we  acquired   Willow  Systems  Limited  and  its
        subsidiary, NextWave Photonics, LLC.
<PAGE>

o       On November 11, 1999, we acquired the Epilogue Corporation.

o       On December 14, 1999, we acquired Sagebrush Technology, Inc.

o       On January 21, 2000, we acquired Essentia Water, Inc.

Other Transactions

o       In addition  to  the acquisitions  set forth in "Our  Acquisitions,"  we
        entered into the following transactions:

o       On January 28, 2000, our wholly owned subsidiary, NextPath Environmental
        Services,  Inc.  ("NES"),   formed  a  limited  liability  company  with
        Thermogenics,  Inc. named NextPath  Thermogenics,  LLC,  but NES has not
        made all of its intitial required $1,750,000 capital contribution.

o       On January 24, 2000, NES formed a limited  liability company with  Tetra
        Separation Systems, LLC named NextPath Separation  Solutions,  LLC,  but
        NES  has  not  yet  made  its   initial   required  $5,000,000   capital
        contribution.

o       Our  wholly   owned  subsidiary,  NextPath   AES,  Inc.   ("NAES")   has
        negotiated  an Asset  Purchase  Agreement  to acquire  all of the assets
        of Agri-Covers,  Inc., but a definitive  agreement  has not  been signed
        pending funding by NAES.

o       On April 4, 2000,  we executed a definitive  agreement to acquire 20% of
        US  Certified  Letters,  LLC  ("USCL"), which  has licensed the right to
        proprietary  technology  for  transmitting any instruments by  certified
        mail via the Internet or other medium (the "C-mail Technology")   within
        the   continential  United  States,   Alaska  and   Hawaii   (the  "USCL
        Transaction").  Closing is set to occur on or before June 4, 2000.

o       On April 4, 2000, our wholly owned  subsidiary,  Global Certified  Mail,
        Inc.  ("GCM"),  signed  a  License  Agreement  by which it licensed  the
        C-mail  Technology for  use outside of the continential  United  States,
        Alaska and Hawaii in exchange  for  which  GCM   transferred  20% of its
        stock to the Licensor (the "GCM Transaction").   Closing is set to occur
        on or before June 4, 2000.

Our Business

        Through our wholly owned  subsidiaries,  we're currently involved in the
following businesses:

o       We design, develop,  manufacture and market positioning sevices known as
        gimbals.

o       We design and market motion control systems.

o       We design and market wireless communication technology.

o       We  design  and  market  fiber  optic  switching  and  other fiber optic
        technology.

o       We  bottle  and  market  alkaline and electrolyte enhanced premium water
        products.

o       We develop energy and micro economic systems technology.

o       Upon   making  the  required  capital  contribution   to  the   NextPath
        Thermogenics, LLC, we will design, engineer, fabricate, own, sell, lease
        and operate systems which convert waste products to energy.
                                       2
<PAGE>

o       Upon  making  the  required  capital  contribution   to   the Separation
        Solutions,  LLC,  we  will  design,  engineer,  fabricate, own, operate,
        market and sell systems which remove waste products from soil and water.

o       Upon   closing   the   USCL  Transaction,   we  will  be involved in the
        commercialization  and marketing  of   the  C-mail   Technology   within
        the continental United States, Alaska and Hawaii.

o       Upon   closing  the   GCM  Transaction,   we  will  be  engaged  in  the
        commercialization  and  marketing  of  the C-mail Technology outside the
        continental United States, Alaska and Hawaii.

Our Growth Strategy and Plan of Operation

        Our goal is to  enhance  shareholder  value  by  increasing  cash  flow,
earnings and the value of our common stock. To  successfully  reach our goal, we
believe we must implement the following  growth  strategy and plan of operations
for  the  foreseeable  future:  o We  must  continue  to  identify,  pursue  and
capitalize   acquisitions  that  provide  attractive  investment  opportunities,
particularly  where  we can  add  value through our technical expertise.

o       We must effectively integrate our businesses and technologies.

o       We  must  grow  our  business   nationally   and   internationally    by
        effectively  developing,  marketing  and   expanding  our   products and
        services and our market base.

o       We  must  continue  to  identify, attract, retain and motivate qualified
        personnel.

o       We must continue to identify and close sources of working capital.

        In view of our current working capital,  we will need to raise or borrow
additional funds during the foreseeable future to meet the expenditures required
for operating our business.  We are actively  engaged in negotiations  with debt
and  equity  sources  and we will  continue  to pursue  all such  options  on an
aggressive basis.

Our Proprietary Rights

        We regard the  protection  of our patents,  trademarks,  trade  secrets,
websites, and other proprietary rights as important to our success. We rely on a
combination  of  patent,  trademark,  service  mark and  trade  secret  laws and
contractual  restrictions  to  protect  our  proprietary  rights in  technology,
products  and  services.  We have  entered,  and will  continue  to enter,  into
confidentiality  and  invention   assignment   agreements  with  our  employees,
consultants and contractors.

                         THE PRECISION TECHNOLOGY GROUP
                         ------------------------------

In General

        The Precision  Technologies  Group (the "PTG")  consists of three wholly
owned   subsidiaries:   LaserWireless,   Inc.   ("LaserWireless"),    Lancaster,
Pennsylvania;  Willow Systems,  Inc.  ("Willow"),  Albuquerque,  New Mexico; and
Sagebrush  Technology,  Inc.  ("Sagebrush"),  Albuquerque,  New Mexico. In turn,
Willow  owns  NextWave  Photonics,  LLC and  holds a stock  position  in  Skycam
Systems, Inc. Together, these entities design, engineer, manufacture, and market
precision   motion  control   systems,   laser   communications   systems,   and
purpose-designed,  precision-controlled imaging systems.  Additionally,  Willow,
through NextPath Photonics, is engaged in feasibility and design work on a solid
state optical switching system.

                                       3
<PAGE>

Sagebrush Technologies, Inc.
---------------------------

Overview

        Sagebrush is an engineering and  manufacturing  company  specializing in
providing  innovative  solutions  based  primarily on its  patented  Roto-Lok(R)
rotary drive technology.  Its principal executive offices are located at 10300-A
Constitution,  NE, Albuquerque,  New Mexico 87112. Its telephone number is (505)
299-6623. Its website is www.sagebrushtech.com.

Growth Strategy and Plan of Operations

        Sagebrush  designs,  develops,   manufactures  and  markets  positioning
devices.  Its objective is to bring the latest technologies and best engineering
talents  together to address its clients' needs.  Its business  philosophy is to
provide  products  that meet  specifications,  are safe to use,  are kind to the
environment,  are fairly priced,  and are delivered on time.  Sagebrush's growth
strategy  will be to increase its  production of  positioning  devices and other
quality  products  and  to  expand  its  customer  base  through  an  aggressive
advertising  and marketing  campaign to publicize its products.  Key elements of
its growth strategy include:

        Products.  Sagebrush  provides products, systems and Original  Equipment
Manufacture (OEM) activators  for  applications  that  require  state of the art
precision,  smoothness, reliability  and  cost  effective   performance  in  all
types of  environment.  Its  specialties include:

o       laser communications gimbal systems

o       low earth orbit satellite tracking systems

o       stabilized platforms and gimbals

o       medical and industrial activators and turntables

        Gimbals are positioning devices. The mechanism that supports a telescope
so it can look at all different parts of the sky is a typical gimbal. It is most
often  called a telescope  mount but it can gimbal or swing in two axes,  up and
down and side to side.  Most people have seen  gyroscopes  that are mounted in a
gimbal  arrangement so the gyroscope  wheel stays oriented in the same direction
even when the base of the gimbal is rotated.  Gyroscopic gimbal systems are used
in ships,  airplanes,  missiles and many other applications to indicate a stable
reference  plane,  even  when the  vehicle  is  pitching,  rolling  or  changing
direction.

        Antenna  positioners  are the devices  that point  antennas at a target.
Satellite antennas that are portable such as those used by the military,  by the
networks or by local television  stations  require  positioners that can lay the
antenna  down  flat  during  transit,  then  quickly  raise  it up and  point it
accurately  at a satellite.  The large surface area of an antenna acts as a sail
in high  winds.  To keep the  antenna  pointed  at the  satellite,  the  antenna
positioner  must be extremely  stiff.  The  Sagebrush  Roto-Lok(R)  rotary drive
provides the stiffest drive currently available.

        Sagebrush manufactures and sells several innovative products including a
20 lb. capacity Model-20 Pan & Tilt Gimbal.

        Product Research and Development. Sagebrush believes that strong product
research and  development  capabilities  are essential to maintain a competitive
edge with its  products.  Since  inception,  it has  focused  its  research  and
development  efforts on  developing  the finest  gimbals  and other  positioning
devices available. Its research and development efforts will continue.

        Target Market. A major part of Sagebrush's  business is supplying rotary
drive  systems  on an OEM basis for  military,  industrial,  space,  commercial,
aerospace,  medical and research  applications.  Its products can be provided to
fit a customer's particular application.

                                       4
<PAGE>

        The basic idea of the  Roto-Lok(R)  drive is the essence of  simplicity.
But what this  simplicity  delivers to  Sagebrush's  customers  is  unparalleled
performance  and cost  benefits  that go right to their  bottom  line.  For some
customers the  Roto-Lok(R)  drive solution allows them to proceed with a project
that  otherwise  might not be  possible  to  complete  - at any cost.  For other
customers,  Roto-Lok(R) drive technology is providing a major advantage in their
quest for superior quality and cost effectiveness.

        Sagebrush Technology.  Sagebrush owns all rights to United States Patent
No.  5,105,672  issued on April 21, 1992 and entitled  "Rotary  Drive  Apparatus
Having One Member with Smooth Outer Peripheral  Surface." It also owns all title
to the registered trademark  "Roto-Lok," Serial No. 73-451065  (Registration No.
1347219) dated July 9, 1985.

        The  Roto-Lok(R)  rotary drive is an  elegantly  simple,  yet  powerful,
technology that utilizes the averaging  effect of many cables - each sharing the
load - wrapped  around a drive  capstan  and a driven  drum.  It was  originally
invented as an inexpensive way to rotate large observatory telescopes accurately
and smoothly.  Traditionally,  precision  gears have been used to position those
loads.  However,   even  the  best  gears  suffer  from  high  friction,   drive
irregularities  and backlash,  and they are expensive.  They also require costly
precision  sealed housings to support the gears and their lubricants and to keep
them clean.  All  Roto-Lok(R)  rotary drive  machined  components are smooth and
round,  making the parts easy to produce.  The many cables  serve to average the
rotation rate so that  imperfections,  dirt or other slight  irregularities on a
single cable or drum do not have a  significant  effect.  This results in superb
drive smoothness with no cogging or drive rate irregularity.

        The following are some of the many advantages  and benefits of the Roto-
Lok(R) rotary drive:

o       The load bearing elements (cables) are statically  tensioned to increase
        the no-load stiffness  of the drive.  In a gear drive,  that  tensioning
        will  create friction  and shorten the useful  zero-backlash life of the
        gears.

o       Many load  bearing  elements can be  paralleled  to meet  the peak  load
        requirements    without   significantly   impacting   the   cost   while
        simultaneously improving the precision of the drive.

o       The  use  of  multiple  cables virtually  eliminates  "cogging" found in
        traditional gear drives.  Near-perfect smoothness can be attained with a
        properly  designed  drive  because  of  the averaging effect of the many
        cables.

o       Where weight and power are at a premium,  the Roto-Lok(R)  drives  excel
        because they  produce  superior  performance  along  with  a  60% to 70%
        savings  in  both  weight  and  power.   Because  the drive is stiff and
        efficient,  smaller  motors,  wiring and power supplies can be used.

        The three primary performance attributes of the Roto-Lok(R) rotary drive
are its extremely high torsional  stiffness,  its high torque capacity,  and its
total freedom from backlash.

        Manufacturing Strategy.  Sagebrush's ongoing manufacturing strategy will
be designed to increase capacity, improve quality, and reduce costs. It plans to
gradually  increase its production in order to sustain its projected  growth. In
any given year, its ability to reach its targeted  production  level will depend
upon,  among other  factors,  its ability to (i) continue to realize  production
efficiencies at its existing  production  facilities  through  implementation of
innovative manufacturing techniques and other means, (ii) successfully implement
production  capacity  increases  in its  facility,  and  (iii)  sell  all of the
products it can produce.

        Sagebrush will not  manufacture any of the parts it needs to produce its
products and it'll have to rely on outside suppliers to provide them.

        Sagebrush's income projections are as follows:

                                       5
<PAGE>


                          Sagebrush Income Projections
<TABLE>
<CAPTION>

                                  2000          2001         2002        2003
                                  ----          ----         ----        ----
<S>                              <C>         <C>          <C>         <C>
Net Sales                        4,739,450   5,269,750    8,049,750   8,199,750
Operating Costs and Expenses     5,894,168   4,681,178    7,043,531   7,051,785
                                 ---------   ---------    ---------   ---------
Income (Loss) From Operations   (1,154,718)    578,573    1,006,219   1,147,965
Other income (Expenses)                 --          --           --          --
Net Income (Loss)               (1,154,718)    578,573    1,006,219   1,147,965
</TABLE>

        Marketing Strategy. Sagebrush will conduct an aggressive advertising and
marketing  campaign to  publicize  its  products.  Sagebrush  believes  that its
potential  customers  can best be reached  through  advertising  in trade shows,
technical publications and direct marketing and on the Internet.

Sagebrush Facility

        Sagebrush's executive offices and manufacturing  facility are located in
a light  industrial area in Albuquerque.  They consist of  approximately  10,650
square feet of leased space under a lease which expires in July 2000.

Competition

        Sagebrush   believes  that  it  is  at  the  forefront  in  the  design,
development and manufacturing of positioning  devices and related  products.  It
emphasizes  quality,   reliability,   cost-effectiveness  and  timely  delivery.
Nonetheless,  other  companies  are  engaged  in  the  design,  development  and
manufacturing  of  positioning   devices  and  related  products  which  may  be
competitive with Sagebrush's products. Many of those entities have substantially
greater financial, technical,  manufacturing,  marketing,  distribution or other
resources than Sagebrush. Sagebrush's profitability will depend upon its ability
to compete in its market area.

Product Liability

        The sale of its  products  may expose  Sagebrush  to  product  liability
claims. It believes that its products are, and will be, safe and that it will be
able to obtain product liability insurance at a reasonable cost. However, in the
event of an uninsured or inadequately insured product liability claim, or in the
event of an  indemnification  claim by a third party,  Sagebrush's  business and
financial condition could be materially adversely affected.

Regulation

        Sagebrush's  products and business may be subject to federal,  state and
local  regulations,   including  environmental   regulations.   Sagebrush  can't
calculate  exactly how much it will cost to comply with  government  regulation,
but it will try to ensure  that its  facilities  and  products  comply  with all
applicable  regulations  and standards.  In any event, it doesn't think that the
cost of compliance will materially affect its financial condition.

Management

        Sagebrush is currently  managed by August  Sanchez,  its Vice President.
Don Carson,  the founder of Sagebrush and the inventor of the Roto-Lok(R)  drive
system with  nearly 40 years  experience  developing  precision  mechanical  and
opto-mechanical systems for worldwide research, industrial, military, aerospace,
medical and commercial  customers,  serves as a consultant to Sagebrush  under a
Consulting Agreement which expires in December, 2003.

Employees

        As  of  April  10,  2000,  Sagebrush  employed  twenty-seven   full-time
employees  and  two  part-time  employees.  None  of  Sagebrush's  employees  is
represented by a union and management believes its employee relations are good.

                                       6
<PAGE>

Operating Results

        The  following  unaudited  financial  information  summarizes  the  more
complete  historical  financial  information  of Sagebrush to be contained in an
amendment  to this 10-K.  Sagebrush's  1999,  1998 and 1997  audits are  nearing
completion.  The  results in the  following  table do not  necessarily  indicate
results Sagebrush will achieve in the future.

                           Sagebrush Operating Results
<TABLE>
<CAPTION>


                                               Year Ended December 31,
                                             1998        1997       1996
                                            ------      ------     -----
Income Statement Data:
<S>                                       <C>          <C>        <C>
Revenues                                  $1,758,747   $658,191   $1,039,318
Cost of Goods Sold                          957,345     366,381      781,760
Selling, General and Administrative         743,845     362,101      300,267
                                           ---------   ---------    --------
Expenses
Income (Loss) from Operations                47,217     (72,458)     (49,051)
Other Income                                130,900      92,294      (11,642)
Net Income (Loss)                           178,117      19,836      (60,693)
Accumulated Deficit, Beginning of Year     (264,404)   (284,240)    (223,547)
                                           ---------   ---------    ---------
Accumulated Deficit, End of Year           $(86,287)  $(264,404)   $(284,240)
                                           =========  ==========   =========
Balance Sheet Data
Total Assets (1)                           $282,734     $62,106           (2)
Total Liabilities                           318,191     326,370           (2)
Paid In Capital                                 140         140           (2)
Accumulated Deficit                         (86,287)   (264,404)          (2)
</TABLE>
--------------------------------

(1)     Net of accumulated depreciation and amortization.
(2)     Not available.

Willow Systems, Inc.

Overview

        Willow is an  engineering  and  manufacturing  company  specializing  in
providing  custom  real-time  motion  control  and  electronics  solutions.  Its
principal executive offices are located at 15100 Central Avenue SE, Albuquerque,
New  Mexico  87193.  Its  telephone  number is (505)  299-2486.  Its  website is
www.willowsystems.com.

Growth Strategy and Plan of Operations

        Willow   specializes  in  translating  its  customers'   motion  control
requirements into reliable, low-cost custom hardware solutions. Its objective is
to bring the  latest  technologies  and best  engineering  talents  together  to
address its clients' needs. Its business  philosophy is to provide products that
meet  specifications,  are safe to use, are kind to the environment,  are fairly
priced, and are delivered on time.  Willow's growth strategy will be to increase
its  production  of motion  control  devices and other  quality  products and to
expand  its  customer  base  through an  aggressive  advertising  and  marketing
campaign to publicize its products. Key elements of its growth strategy include:

        Willow  designs  and  markets  custom  motion   control,   robotics  and
electronics solutions with leading edge technologies in the areas of gimbals and
photographic/electro-optical  systems.  Willow has the  capability  to translate
real-time  motion  control   requirements  into  reliable,   low  cost  hardware
solutions,  and its technologies  have potential  application in a wide range of
businesses.

                                       7
<PAGE>

        Willow is also engaged in the business of designing and  developing  new
and  innovative   MicroElectro   Mechanical  Systems  ("MEMS")   technology  and
associated controls and electronics,  primarily for optical  applications.  MEMS
are machines so small that they are imperceptible to the human eye.

        Willow is also  developing  a  high-speed  fiber optic  switch that will
control  communications  routing over fiber optic networks.  This switch will be
compatible with the high capacity wavelength division  multiplexed ("WDM") fiber
optic  systems  that are  expected  to dominate  the fiber optic  communications
market over the next decade.

        Products.   Willow provides gimbals, camera and electro-optical systems.
Its specialties include:

o       Gimbals and pedestals

o       real-time control systems

o       specialized board designs

o       analog designs

o       camera systems

o       real-time micro controller, DSP, and state machine designs

        Product  Research and  Development.  Willow believes that strong product
research and  development  capabilities  are essential to maintain a competitive
edge with its  products.  Since  inception,  it has  focused  its  research  and
development  efforts on developing the finest motion control systems  available.
Its research and development efforts will continue.

        Target  Market.  A major part of Willow's  business is supplying  motion
control  systems on an OEM basis for military,  industrial,  space,  commercial,
aerospace, and motion picture applications.  Its products can be provided to fit
a customer's particular application.

        Willow uses focused system engineering  approach to all of its projects.
It is able to do this  because it  possesses a very broad range of  expertise in
all aspects of precision  motion  control and  electro-optical  systems,  and in
supporting engineering  disciplines.  Willow specializes in precision-engineered
solutions  -  cutting-edge  design,  engineering,  manufacturing,  testing,  and
customer support - to provide maximum value for its customer's program dollar.

        Willow   applies  this  systems   approach  using   integrated   product
development  teams.  Each  development  team  typically  includes  not  only the
internal engineering and management capabilities required for a project, but its
customers and key suppliers as well. Regular technical  interchange ensures that
Willow remains focused on its customers'  needs and provides  timely  visibility
throughout the design process.  Involvement of essential  suppliers helps ensure
that components and subsystems meet design  parameters.  This integrated product
development  approach  helps to provide  its  customers  with a product  that is
reliable,  manufacturable,  high-quality  and that will  test to the  customer's
specifications.

        Manufacturing Strategy.  Willow's ongoing manufacturing strategy will be
designed to increase  capacity,  improve quality,  and reduce costs. It plans to
gradually  increase its production in order to sustain its projected  growth. In
any given year, its ability to reach its targeted  production  level will depend
upon,  among other  factors,  its ability to (i) continue to realize  production
efficiencies at its existing  production  facilities  through  implementation of
innovative manufacturing techniques and other means, (ii) successfully implement
production  capacity  increases  in its  facility,  and  (iii)  sell  all of the
products it can produce.

        Willow will assemble its products;  however Willow will not  manufacture
all of the parts it needs to  produce  its  products  and it'll  have to rely on
outside suppliers to provide most of them.

                                       8
<PAGE>

        Willow's income projections are as follows:

                            Willow Income Projections
<TABLE>
<CAPTION>

                                 2000          2001         2002        2003
                                 ----          ----         ----        ----
<S>                           <C>          <C>          <C>         <C>
Net Sales                     1,234,664    20,164,000   45,823,250  91,726,000
Operating Costs and Expenses  1,109,562    18,066,944   40,920,162  61,6363,140
                              ---------    ----------   ----------  -----------
Income (Loss) From Operations   125,100     2,097,056    4,903,088   10,089,860
Other income (Expenses)              --            --           --           --
Net Income (Loss)               125,100     2,097,056    4,903.088   10,089,860
</TABLE>

        Marketing  Strategy.  Willow will conduct an aggressive  advertising and
marketing campaign to publicize its products. Willow believes that its potential
customers can best be reached  through  advertising  in technical  publications,
trade shows and direct marketing and on the Internet.

Willow Facility

        Willow's  executive offices and manufacturing  facility are located in a
light industrial area in Albuquerque. They consist of approximately 5,960 square
feet of leased space under a lease which expires in October 2001.

Competition

        Willow  believes that it is at the forefront in the design,  development
and manufacturing of motion control devices and related products.  It emphasizes
quality, reliability, cost-effectiveness and timely delivery. Nonetheless, other
companies are engaged in the design,  development  and  manufacturing  of motion
control  devices and related  products  which may be  competitive  with Willow's
products.   Many  of  those  entities  have  substantially   greater  financial,
technical,  manufacturing,  marketing,  distribution  or  other  resources  than
Willow.  Willow's  profitability  will depend upon its ability to compete in its
market area.

Product Liability

        The sale of its products may expose Willow to product  liability claims.
It believes that its products are, and will be, safe and that it will be able to
obtain product liability  insurance at a reasonable cost.  However, in the event
of an uninsured or inadequately insured product liability claim, or in the event
of an  indemnification  claim by a third party,  Willow's business and financial
condition could be materially adversely affected.

Regulation

        Willow's  products  and  business  may be subject to federal,  state and
local regulations,  including environmental regulations.  Willow can't calculate
exactly how much it will cost to comply with government regulation,  but it will
try to ensure  that its  facilities  and  products  comply  with all  applicable
regulations  and  standards.  In any event,  it  doesn't  think that the cost of
compliance will materially affect its financial condition.

Management

        Willow is currently  managed by Doug  Elerath,  its  President,  and Sam
Rogers, Jr., its Vice President.

Employees

        As of April 10, 2000, Willow employed twenty-two full-time employees and
two part-time  employees.  None of Willow's  employees is represented by a union
and management believes its employee relations are good.

                                       9
<PAGE>

Operating Results

        The  following  unaudited  financial  information  summarizes  the  more
complete  historical  financial  information  of  Willow to be  contained  in an
amendment  to this  10-K.  Willow's  1999,  1998 and  1997  audits  are  nearing
completion.  The  results in the  following  table do not  necessarily  indicate
results Willow will achieve in the future.

                            Willow Operating Results
<TABLE>
<CAPTION>

                                             Year Ended December 31,
                                           1998        1997        1996
                                          ------      ------      -----
Income Statement Data:
<S>                                     <C>           <C>          <C>
Revenues (Net Sales)                    $1,039,117    $551,331     $33,298
General and Administrative Expenses        862,798     455,509      12,719
Income from Operations                     176,319      95,822      20,579
Other Income                                    40          --          --
Income Before Taxes                        176,359      95,822      20,579
Income Taxes                                64,607      24,651       4,103
                                          --------    --------    --------
Net Income                                 111,752      71,171      16,476
Retain Earnings, Beginning of Year          87,647      16,476
                                          --------    --------
                                                                        --
Retained Earnings, End of Year            $199,399     $87,647     $16,476
                                          ========     =======     =======
Balance Sheet Data:
Total Assets (1)                          $370,580    $146,359         (2)
Total Liabilities                          159,530      52,558         (2)
Deferred Income Taxes                       11,451       5,954         (2)
Paid In Capital                                200         200         (2)
Retained Earnings                          199,599      87,847         (2)
</TABLE>
-----------------------------------

(1)     Net of accumulated depreciation and amortization.
(2)     Not available.

LaserWireless, Inc.

        LaserWireless,  which  was  only  formed  in  1999,  specializes  in the
development, sale and support of state-of-the-art wireless optical communication
systems capable of  transmitting  video,  voice,  telephone and data through the
atmosphere using eye-safe laser  technology.  This capability  offers a solution
for private communications where a leased line cannot be used, for example, when
land is not owned between two sites or where physical barriers,  such as rivers,
highways,  parking lots, etc.,  prevent use of conventional  cables. The systems
include full time electronic  tracking for maximum  availability.  Its principal
executive  offices are located at 2145 Lincoln Plaza,  Lancaster,  Pennsylvania.
Its telephone number is (877) 527-3757. Its website is www.laserwireless.com.

Growth Strategy and Plan of Operations

        LaserWireless    designs,    develops,    manufactures    and    markets
state-of-the-art  atmospheric laser  communications  equipment for voice, video,
phones and data.  Its  objective  is to bring the latest  technologies  and best
engineering  talents  together  to address  its  clients'  needs.  Its  business
philosophy is to provide products that meet specifications, are safe to use, are
fairly priced, and are delivered on time. LaserWireless' growth strategy will be
to increase its  production  of laser  communications  systems and other quality
products and to expand its customer base through an aggressive  advertising  and
marketing  campaign  to  publicize  its  products.  Key  elements  of its growth
strategy include:

        Products.  There is a growing  need in  today's  information  society to
augment   existing   communication   systems  with   reliable,   high  bandwidth

                                       10
<PAGE>

communication  capability.  Laser  communication  systems  provide users with an
alternative   to   traditional   copper   or  fiber   communications   pathways.
LaserWireless systems facilitate immediate communication  enhancements with full
network interface support.

        The  LaserWireless   LightBridge  155   communication   system  features
electronic  tracking to ensure  continuous  alignment of both  transmitting  and
receiving optical links. A typical system consists of two Laser Transceivers and
two Digital Remote Status Monitors.  The Laser Transceivers provide a high speed
full-duplex data link between sites,  while the Remote Status Monitors allow the
user to verify  correct  system  operation.  Two  advance  features  - Full Time
Electronic  Tracking and Remote Factory  Diagnostics - ensure the highest levels
of reliability and availability. Currently the system will support data rates to
155 million bits per second (Mbps) with a range to 2.5  kilometers  (1.5 miles).
Development plans include systems supporting  tomorrow's  ultra-high data rates.
Other features include remote status monitoring and diagnostics,  both supported
by 24-hour technical support.

        Product  Research and  Development.  LaserWireless  believes that strong
product  research  and  development  capabilities  are  essential  to maintain a
competitive edge with its products. Since inception, it has focused its research
and  development  efforts on developing the finest laser  communication  devices
available. Its research and development efforts will continue.

        Target Market.  Current applications for LaserWireless  products include
university and office campuses,  building-to-building  communications,  military
mobile   communications,   emergency   communication   networks  and   temporary
communications.  Important military  applications include mobile, high bandwidth
communications  using a  battery-powered  system  that is easily  transportable,
non-detectable,  and  secure.  Emergency  communication  needs arise in disaster
areas where  damage has occurred to above  ground or  underground  communication
systems. Other temporary  communication needs include conventions,  expositions,
trade shows, and mobile command and control.

        LaserWireless  is preparing for the future of high-speed  communications
with  system  development  efforts  focused  on  providing  622 Mbps and 2+ Gbps
communication capabilities.

        LaserWireless Technology. LaserWireless' system is the latest technology
in optical  communications  for distances up to 2.5 kilometers with greater than
95% availability.  The system incorporates full real-time electronic tracking to
ensure continuous  alignment.  The transmitters are easy to install and operate,
requiring only a clear line-of-sight and solid supporting locating for mounting.
Any problems in the field can be diagnosed by the factory using  standard  phone
lines.  The  transceivers are field repairable and include full factory support.
There are no license or right-of-way requirements.

The following are some of the features of the LaserWireless system:

o       data rates from 1 to 155 Mbps

o       2.5 kilometer range (1.5 miles)

o       electronic tracking system

o       no licensing required

o       D.C. operational

o       remote status monitor

o       complete diagnostics from factory

o       7 plus years MTBF

o       waterproof, modular design

o       protocol transparent

                                       11
<PAGE>

o       highly cost effective

o       secure transmission

o       very high bandwidth capabilities

o       compatible with all network interfaces

o       eye-safe design

o       certified CSA, UL, CDRH and CE

        Manufacturing  Strategy.  LaserWireless'  ongoing manufacturing strategy
will be designed to increase  capacity,  improve  quality,  and reduce costs. It
plans to gradually  increase its  production  in order to sustain its  projected
growth.  In any given year, its ability to reach its targeted  production  level
will depend upon,  among other  factors,  its ability to (i) continue to realize
production   efficiencies  at  its  existing   production   facilities   through
implementation  of innovative  manufacturing  techniques  and other means,  (ii)
successfully  implement production capacity increases in its facility, and (iii)
sell all of the products it can produce.

        LaserWireless  will not manufacture any of the parts it needs to produce
its products and it'll have to rely on outside suppliers to provide the rest.

        LaserWireless' income projections are as follows:

                        LaserWireless Income Projections
<TABLE>
<CAPTION>

                                  2000        2001         2002          2003
                                  ----        ----         ----          ----
<S>                            <C>         <C>         <C>           <C>
Net Sales                      2,311,932   5,064,74    10,775,318    20,599,640
Operating Costs and Expenses   2,018,832   4,001,145    7,679,160    10,923,880
                               ---------   ---------   ----------    ----------
Income (Loss) From Operations    293,100   1,063,595    3,096,158     9,675,760
Other income (Expenses)               --          --           --            --
Net Income (Loss)                293,100   1,063,595    3,096,158     9,675,760
</TABLE>

        Marketing Strategy. LaserWireless will conduct an aggressive advertising
and marketing  campaign to publicize its products.  LaserWireless  believes that
its potential  customers can best be reached through  advertising in trade shows
and direct marketing and on the Internet.

LaserWireless Facility

        LaserWireless'  executive offices and manufacturing facility are located
in  a  light  industrial  area  in  Lancaster,  Pennsylvania.  They  consist  of
approximately  10,500 square feet of leased space under a lease which expires in
January 2003.

Competition

        LaserWireless  believes  that  it is at the  forefront  in  the  design,
development and  manufacturing  of laser  communication  systems.  It emphasizes
quality, reliability, cost-effectiveness and timely delivery. Nonetheless, other
companies  are  engaged  in the  design,  development  and  manufacturing  laser
communication  systems which may be competitive  with  LaserWireless'  products.
Many  of  those  entities  have  substantially  greater  financial,   technical,
manufacturing,  marketing,  distribution or other resources than  LaserWireless.
LaserWireless'  profitability  will  depend  upon its  ability to compete in its
market area.


                                       12

Product Liability

        Although  LaserWireless  believes  its laser  systems  to be safe at any
distance, the sale of its products may expose LaserWireless to product liability
claims. It believes that its products are, and will be, safe and that it will be
able to obtain product liability insurance at a reasonable cost. However, in the
event of an uninsured or inadequately insured product liability claim, or in the
event of an indemnification claim by a third party,  LaserWireless' business and
financial condition could be materially adversely affected.

Regulation

        LaserWireless'  products and  business may be subject to federal,  state
and local regulations, including environmental regulations.  LaserWireless can't
calculate  exactly how much it will cost to comply with  government  regulation,
but it will try to ensure  that its  facilities  and  products  comply  with all
applicable  regulations  and standards.  In any event, it doesn't think that the
cost of compliance will materially affect its financial condition.

Management

        LaserWireless is currently managed by Richard Walter, its President.

Employees

        As of April 10, 2000,  LaserWireless  employed nine full-time  employees
and one part-time employee. None of LaserWireless' employees is represented by a
union and management believes its employee relations are good.

Operating Results

        LaserWireless was only formed in 1999. The following unaudited financial
information  summarizes the more complete  historical  financial  information of
LaserWireless to be contained in an amendment to this 10-K.  LaserWireless' 1999
audit  is  nearing  completion.  The  results  in  the  following  table  do not
necessarily indicate results LaserWireless will achieve in the future.

                         LaserWireless Operating Results
                         -------------------------------
<TABLE>
<CAPTION>

                                         Year Ended December 31, 1999
                                         ----------------------------

<S>                                               <C>
Income Statement Data:
Revenues (Net Sales)                             $        -0-
General and Administrative Expenses                397,103.98
Income from Operations                            (397,103.98)
Other Income                                              -0-
Income Before Taxes                               (397,103.98)
Income Taxes                                              -0-
Net Income                                        (397,103.98)
Retain Earnings, Beginning of Year                        -0-
Retained Earnings, End of Year (1)                (397,103.98)
Balance Sheet Data:
Total Assets (2)                                   274,139.48
Total Liabilities                                  671,243.86
Deferred Income Taxes                                     -0-
Paid In Capital                                           -0-
Retained Earnings                                (397,103.98)
</TABLE>
-------------------------------

(1)     Before depreciation of any assets.
(2)     Net of accumulated depreciation and amortization.

                                       13
<PAGE>

                              HEALTH PRODUCTS GROUP
                              ---------------------

Essentia Water, Inc.

Overview

        Essentia Water,  Inc.  ("Essentia") is a Woodinville,  Washington  based
bottled water marketing  company  acquired by NextPath on January 21,  2000. Its
principal  executive offices  are  located at 24100 State Route 9 SE,  Bldg.  A,
Woodinville,  Washington.  Its phone number is  (425) 488-9400.  Its  website is
www.essentiawater.com.

Growth Strategy and Plan of Operations

        Essentia  is  engaged  in the  business  of  developing,  manufacturing,
packaging, and marketing bottled alkaline and electrolyte enhanced premium water
products  with  health  and  hydration  benefits.  Essentia  water is  initially
pre-filtered  and purified using reverse  osmosis and ozonation to achieve 99.9%
purity.  A  bio-available  electrolyte  formulation of  bicarbonate,  magnesium,
potassium,  sodium and  calcium is added and the water is then  processed  using
Essentia's ionic  separation  technology to increase its alkalinity to assist in
balancing the acidic  nature of American  diets and to aid in producing a smooth
taste.
Key elements of its growth strategy include:

        Products.  Bottled in 20 oz., 1.0 liter and 1.5 liter recyclable  P.E.T.
(Polyethylene  Terephtalate)  bottles,  Essentia  water is  distributed  through
natural/health  food and retail grocery channels  (natural sets only) throughout
the United States. In addition to manufacturing bottled water products under its
own name,  Essentia bottles under private labels such as Wild Water(TM) for Wild
Oats Community Markets, the second largest national chain of health food stores;
BonH2O(TM) for The Bon Marche, a flagship brand of Federated  Department Stores;
and PETsMART.

        In  contrast  to so many  bottled  waters,  Essentia  avoids  the use of
"source"  water  from  springs,  glaciers,  mountains,  etc.  because  of  their
inconsistencies.  Instead,  Essentia's  unique process  involves first purifying
water to its essence through reverse osmosis, then adding nutrient minerals that
are more bio-available (absorbable) by the body.

        As a result,  no other  bottled water has the unique  biological  active
properties  of Essentia  Water.  Certified  lab analysis  verifies that Essentia
(compared  to other  bottled  waters)  provides  an  abundant  source  of active
hydrogen that "quenches free  radicals;"  has less cohesion  (better  saturating
water) thus promoting faster  hydration;  is higher in alkalinity (+/- 9.5) thus
assisting  the body in  maintaining  proper pH  balance by  neutralizing  acidic
conditions;  and  delivers  a  proprietary  formula of pure  minerals  for vital
cellular electrolyte replenishment.

        All these active  properties  enhance the body's innate  ability to heal
itself.  These unique processes mean Essentia can bottle Essentia Water anywhere
in the world,  consistently and within stringent quality assurance standards set
forth by  Essentia  while  incorporating  federal  and state  guidelines  as the
foundation.  Thus,  Essentia  Water is lab  certified,  user  endorsed  and 100%
satisfaction  guaranteed  to  ensure  consumer  trust  - an  important  part  of
continued purchases and long term brand loyalty.

        Product Research and Development.  Essentia believes that strong product
research and  development  capabilities  are essential to maintain a competitive
edge  with  its   products.   Essentia  is  committed  to  making   Essentia  an
international  brand.  Essentia realizes that a successful brand is not built by
accident,  but  requires  the brand to become the focal  point of the  company's
vision.  Essentia  has  gathered  a seasoned  team of  business  executives  and
industry  professionals  all  committed  to  research,  development  and product
engineering to further the Essentia vision.

        Target Markets.  Essentia currently  co-packs,  markets,  and sells high
alkaline  (pH) and  electrolyte  enhanced  bottled  water  under the brand  name
Essentia Water. Bottled in PET - 20 oz., 1.0 liter and 1.5 liter sizes, Essentia
Water is  distributed  through  natural/health  food  stores and retail  grocery
channels (natural sets only) throughout most of the United States.  Essentia has
developed a national distribution infrastructure for catalog and Internet sales,
which provides direct delivery to Essentia's  customers,  adding to its national
distribution capabilities.

                                       14
<PAGE>

        Essentia Technology.  We believe Essentia Water is the only water of its
kind in the market  today.  Unlike  source waters  (spring,  glacier,  mountain,
etc.),  Essentia,  using its unique  process,  removes all foreign  minerals and
contaminates  commonly  known  as TDS  (total  dissolved  solids)  that  survive
standard filtration.

        Essentia  specifications require our water to be purified to -three  (3)
parts per million  (PPM) TDS.  Some  source  waters have been tested and contain
over 100 times more TDS than Essentia  Water.  The amount and class of TDS found
in source water as compared to Essentia  Water will change from bottle to bottle
giving little consistency to the water taste and profile.

        Once Essentia  Water is purified,  our  proprietary,  pure  electrolyte,
formulation is added.  This formulation  contains vital pure minerals  including
calcium, magnesium,  potassium, sodium and bicarbonates the human body requires.
Compared to source water,  these minerals can be easily assimilated by the body.
Additionally, our proprietary formulation is tasteless,  colorless, odorless and
water soluble.

        After the electrolytes  have been added, the purified water runs through
our proprietary  Ionic  Separation  Technology.  This  technology  separates the
water's  alkaline  ions  (negative  charged)  from  the  acidic  ions  (positive
charged).  Essentia bottles only the alkaline water we call "negative  charged."
Essentia  water has a pH level to +/- 9.5  compared  to source  water  having an
average  pH  level  of  7.0.  A  diagram  of  our   process   can  be  found  at
www.essentiawater.com.

        Marketing  Strategy.   Essentia's  marketing  strategy  is  designed  to
increase sales by (i) expanding its product lines,  (ii)  continuing to increase
its distribution  network, and (iii) adding a new east coast production facility
(co-packer).  In any given year,  its ability to reach its targeted  sales level
will depend  upon,  among  other  factors,  (i) its ability to obtain  financial
resources,  (ii) market acceptability of its new products, and (iii) its ability
to successfully increase its East coast production capacity.

        Financial Summary.  Since its inception in July 1998,  Essentia has seen
product  sales grow from 18,000 cases in the second half of 1998 to 75,000 cases
in 1999. Essentia expects sales of 200,000 cases in year 2000.
<TABLE>
<CAPTION>

Results of Operations:                        2000 (forecast)  2001 (forecast)
----------------------                        ---------------  ---------------
<S>                                              <C>              <C>
    Net Revenues                                 $ 3,111,300      $ 5,093,900
    Cost of Goods Sold                             1,929,400        2,995,900
                                              ---------------  ---------------
    Gross Profit                                   1,181,900        2,098,000
    Operating Expenses                             1,715,700        1,872,000
    Depreciation & Amortization                       86,700          111,200
                                              ---------------  ---------------
    Loss from Operations                            (620,500)         114,800
    Other Income (Expense), Net                       57,400           44,600
                                              ===============  ===============
    Net Income                                    $ (563,100)      $  159,400
    (Loss)
                                              ===============  ===============
</TABLE>

        These  financial  forecasts  do not reflect an increase in net  revenues
from sources other than those derived by Essentia's normal course of business in
the natural and health foods channels, in both branded and private label product
sales.

Essentia Facility

        Essentia's  executive  offices are located in  Woodinville,  Washington,
which is located outside Seattle.  They consist of approximately 800 square feet
of leased  space under a lease  which is month to month.  Essentia is planning a
corporate  office move to Phoenix,  Arizona within the next 90 days.  Essentia's
current  business  strategy is to continue to "partner"  with  contract  packing
companies to produce its products under Essentia'a  product  specifications  and
quality   control   standards.   Essentia   believes   that   contract   packing
("co-packing")  provides the most flexibility and the least capital  investment.
Essentia  anticipates  having multiple plants  strategically  located around the
United States by the end of 2000. Currently Essentia's co-packers are California
Bottling  Company  located in  Roseville,  California  and  Renegade  of America
located in Glendale, Arizona.

                                       15
<PAGE>

Competition

        Essentia  believes that Essentia  Water is the only water of its kind in
the market today.  However, many other water bottlers have substantially greater
financial,  technical,  bottling,  marketing or other  resources  than Essentia.
Essentia's  profitability  will depend upon its ability to compete in its market
area.

Product Liability

        The sale of its  products  may  expose  Essentia  to  product  liability
claims. It believes that its products are, and will be, safe and that it will be
able to obtain product liability insurance at a reasonable cost. However, in the
event of an uninsured or inadequately insured product liability claim, or in the
event of an  indemnification  claim by a third  party,  Essentia'a  business and
financial condition could be materially adversely affected.

Regulation

        Essentia's  products and  business may be subject to federal,  state and
local regulations, including environmental regulations. Essentia can't calculate
exactly how much it will cost to comply with government regulation,  but it will
try to ensure  that its  facilities  and  products  comply  with all  applicable
regulations  and  standards.  In any event,  it  doesn't  think that the cost of
compliance will materially affect its financial condition.

Management

        Essentia is currently  managed by Kenneth  Uptain,  its Chief  Executive
Officer, and by James Tonkin, its President and Chief Operating Officer.

Employees

        As of April 10, 2000, Essentia employed five full-time employees and one
part-time employee plus four contract consultants, two of whom are full-time and
two of whom are  part-time.  None of Essentia'a  employees is  represented  by a
union and management believes its employee relations are good.

        The  following  financial  information   summarizes  the  more  complete
historical  financial  information of Essentia contained elsewhere in this 10-K.
The results in the following table do not necessarily  indicate results Essentia
will achieve in the future.

                           Essentia Operating Results
                           --------------------------
<TABLE>
<CAPTION>

                                            Year Ended December 31,
                                            -----------------------
                                           1999     (July-December) 1998
                                         --------   ---------------------
Income Statement Data:
<S>                                     <C>              <C>
Revenues (Net Sales)                    $ 177,466        $ (25,067)
Operating Expense                         821,903          475,565
                                         ---------        --------
Operating Loss                           (644,437)        (500,632)
Interest Expense                           43,713            2,948
                                         ---------        --------
Net Loss                                $(688,150)       $(503,580)
                                        ==========       ==========
Balance Sheet Data:
Current Assets                          $ 263,964        $ 118,350
Property and Equipment-At Cost, Net       280,010          312,763
                                        ----------       ---------
Current Liabilities                       676,857          375,846
Paid In Capital                         1,058,847          558,847
Accumulated Deficit                    (1,191,730)       (503,580)
</TABLE>

                                       16
<PAGE>

                        ENVIRONMENTAL TECHNOLOGIES GROUP
                        --------------------------------

Overview

        The  Environmental  Technologies  Group  ("ETG") was created in October,
1999,  is  headquartered  in  Tulsa,   Oklahoma,   and  is  concerned  with  the
acquisition,  development,  and application of specific,  environmentally-benign
technologies.

NextPath AES, Inc.

        In General.  NextPath AES, Inc. ("NAES"),  a wholly  owned subsidiary of
NextPath,  was formed in  November  1999.  AES  (Agro-Economic  Systems)  is the
acronym used to denote our self-sustaining, integrated agribusiness initiatives.

        Status and Mission.  Home-based in Tulsa, Oklahoma, NAES was established
to design, build, own, and operate AES facilities worldwide.  Our AES facilities
are being  designed to grow,  process,  and package  fresh produce and fish on a
continuous,  year-round basis. To the maximum extent possible,  produce and fish
are to be certifiable as "organically"  or "naturally"  grown in accordance with
national  organic  growing  standards.  Commercial  facilities  are  to  include
self-contained energy systems. Light, temperature,  humidity,  nutrient streams,
water  quality,  effluent,  and emissions at our AES  facilities are to be fully
controlled. Fish-tank water is to be used in plant nutrition ("aquaponics"), and
effluent  water from  plant-beds  and  processing  lines is to be  filtered  and
recycled. Waste products are to be recycled as fuel for the energy system.

        Design Productivity.  The target  design-productivity of our typical AES
facility  is to be  considerably  greater  than  that  of  known  hydroponic  or
aquaponic systems.  Production and processing is to occur on a continuous basis,
and AES  facilities  are to be able to schedule  just-in-time  (JIT) delivery of
fresh food to  retailers,  with  consequent  savings in cold  storage  costs and
reduction in spoilage.  Additionally,  production costs are to be reduced by not
having to accommodate harvesting and processing "surges." Thus, processing lines
can be smaller,  with fewer employees  needed for harvesting and processing.  At
the same time, technical tasks will be more sophisticated and varied,  requiring
a larger proportion of trained, salaried workers.

        Two Models.  Two models are being developed:  a large-scale,  commercial
version  and  a  "community  food  security"  (CFS) model devised for developing
economies.  Needful  Provision, Inc. (NPI), a  non-profit  organization  located
in Tahlequah, Oklahoma, which licenses  proprietary  processes  and  sub-systems
to  NextPath, has been engaged to develop the CFS model, test basic bio-systems,
and provide training for operations and technical personnel.

        Support  Entities.  A Tulsa  architectural  and construction  management
firm, Ragsdale and Associates, has been engaged to oversee facilities design and
engineering. A gasifier-based energy system, designed and built by Thermogenics,
Inc., Albuquerque,  New Mexico, has been selected for use at our AES facilities.
Our AES will employ proprietary aquaponics systems and technologies developed by
Agri-Covers,  Ltd.,  of  Gridley,  Illinois.  We have  negotiated  a  definitive
agreement to acquire the assets and  intellectual  property of Agri-Covers,  but
await funding to close the acquisition.

        Prototype  Commercial Facility. A number of potential Oklahoma sites are
being considered for the prototype  facility.  Upon completion of current design
and  engineering  work,  contracts  will  be let to  construct  and  equip  that
facility.

        Production and Installation Standards. AES facilities are to be built in
modules.  Each module is to represent a specific  set of growing and  processing
conditions and  production  objectives.  Energy  requirements,  and,  therefore,
self-contained  heating and  electrical  systems,  are to be sized  accordingly.
Modular  structures,  fixtures,  and  operating  equipment  are  to  incorporate
appropriate  ISO  9001,  ASME,  and  DIN  specifications.   Products,   outputs,
environmental  control  features,  and sizes of our AES facilities  will vary by

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<PAGE>

market region.  Modular  structures and equipment sets are to be supplied in kit
configuration,  suitable for  containerized  shipment to foreign sites.  The AES
program envisions installation of facilities at land reclamation sites, in urban
locations,  in areas where severe climate prevents outdoor  cultivation,  and in
lesser-developed regions in order to enhance general nutrition. In some locales,
we may supplement  production through contract growers using  company-prescribed
techniques and systems under our supervision.

        Marketing Plan and Revenue  Sources.  Revenues are to come from the sale
of bulk and packaged  vegetables,  fish,  herbs,  plant oil extracts  (including
health-related  products), and ornamental plants. Facilities are to be sized for
economies of scale, with some  installations  requiring more than fifty acres of
installation  space.  Target profit margins of 25% or greater per year have been
projected for AES facilities in developed-nation configurations. These are to be
achieved through precise selection of the types of produce grown and value-added
processing.  Wholesale  lots are to be marketed  over the  Internet  and through
direct,  forward supply contracts to large retailers.  Some health-food  related
products are to be direct-marketed  through NextPath's Health Products Group. We
are studying the  possibility of marketing  fresh produce and fish via overnight
air delivery service.

        Estimated Near-Term Capital Requirements. We estimate that approximately
$14,000,000 will be required to implement our business plan for NAES in the near
term.

NextPath Environmental Services, Inc.

        In General.  NextPath Environmental Services, Inc. ("NES"), also located
in Tulsa,  Oklahoma,  was formed in November  1999 to develop,  sell,  own,  and
operate  systems  that  convert  waste  to  energy,   clean-up  water  and  soil
contaminated  by fuel,  oil,  and  chemical  spills,  provide  potable  water at
locations that have no water treatment  systems,  and provide  on-site  effluent
control,  filtration  and treatment  systems,  and, more  recently,  to acquire,
develop,  and market devices to drastically reduce exhaust emissions from, while
increasing the energy efficiency of, internal combustion  engines.  Two entities
are,  or  are  targeted  to  be,  included  under  the  NES  umbrella,  NextPath
Thermogenics, LLC and NextPath Separation Solutions, LLC.

        NextPath Thermogenics, LLC.

        In General.  NextPath Thermogenics,  LLC (the "Thermogenics,  LLC") is a
limited  liability  company owned 51% by Thermogenics,  Inc.,  Albuquerque,  New
Mexico,  and owned 49% by NES. The  Thermogenics,  LLC designs,  fabricates  and
sells proprietary  gasification systems that use virtually any hydrocarbon-based
waste product as fuel to create a low-temperature, high-quality gas.

        Technology  Base.  This  gas is  known as  "producer  gas" or  "syngas".
Depending  on  the  design  of  the  system,  the  gas  can be  either  low-  or
medium-heating  value.  The  process  involves a first  stage  high  temperature
decomposition  without combustion in a low-oxygen  environment.  The system uses
neither a  combustion  process nor  incineration.  Further,  when  coupled to an
engine,  gas  turbine  or  boiler,  there  are no  gaseous  emissions  from  the
gasification  system and  therefore  the system can meet  rigorous  air  quality
standards.  This gas can be cleanly burned,  liquefied, or used in a bio-process
to produce ethanol. The Thermogenics,  LLC is actively pursuing opportunities in
this regard with existing  process  equipment and catalyst  suppliers as well as
with waste  generators and academic  research  facilities.  Typically,  this gas
would be combusted  to produce heat for heat  exchangers  or steam  boilers,  or
directly  fed to an  internal  combustion  or gas  turbine  engine  linked to an
electricity  generation  device.  Thus,  these units can be used for small-scale
electrical power generation (co-generation). For these reasons, the Thermogenics
unit was selected as the on site energy  system for  NextPath's  AES  facilities
(see above).  The unit itself has no regulated  emissions.  Inert solid residues
from the reaction  process can be safely  land-filled or mixed with a binder and
used as a paving or building material.

        Mission.  The purpose of the  Thermogenics,  LLC is to build,  own,  and
operate waste-to-energy systems installed for specific waste disposal and energy
generation  tasks.  This normally  would involve  multiple  units  configured to
handle various waste streams,  including municipal solid waste (MSW),  discarded
tires, oil sludge, trap grease, animal wastes, plant residues,  dewatered sewage
sludge,  coal tailings,  textile waste,  automobile  shredder waste,  industrial
wastes such as paint  sludge and used oils,  food  processing  wastes,  and wood
products  waste.  After removal of larger metallic  solids,  these wastes can be
batched or blended, depending upon energy output requirements.

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<PAGE>

        Peripheral  Equipment  Requirements  While  Thermogenics,  Inc.  is  the
provider and manufacturer of patented gasification systems that form the core of
the Thermogenics, LLC's waste-to-energy business, complete projects will utilize
equipment from a variety of  international  manufacturers  for the processing of
waste and the  conversion of the gas produced by the  gasification  systems into
different forms of energy. This could include shredders, grinders, a briquetting
system, various conveyor systems, internal combustion engines configured for use
with liquid  petroleum or natural gas, gas turbines,  electrical  generators and
turbo-alternators    steam   boilers,    heat-exchangers,    distillation    and
bio-conversion units (ethanol production) and other peripherals.

        System Control,  Safety,  and Standards.  Waste-to energy and peripheral
systems are to be electronically  controlled  through desktop  computers,  using
proprietary control logic,  circuit boards, and software.  All systems are to be
equipped with automated safety and shut-down  systems.  Facilities and equipment
designed and supplied by the  Thermogenics,  LLC are to be compliant  with local
environmental  regulations.  The  Thermogenics,  LLC has  committed to bring its
equipment and facilities  into  conformance  with ISO 9000 and 9001 standards at
the earliest possible date.

Project Types and Bases

        Build, Own, Operate (BOO). This type of project is to be a long-term (10
years or more) commitment by the Thermogenics,  LLC to design, build and operate
a  waste-to-energy  facility.  Typically a local  partner  will be involved  and
contribute  a portion  of the  equity,  while  Thermogenics,  LLC  provides  the
majority of the funding. Long-term contracts for the supply of the waste and for
the sale of energy would be involved. In most cases the land for the facility is
supplied  under a lease  agreement  with the customer with only a nominal rental
fee. In some cases  improvements to the site are  cost-shared  with the customer
and landowner.

        Build-Own-Operate-Transfer  (BOOT). A BOOT project is similar to the BOO
project,  except that there would be a predetermined time in the future, usually
3 to 5 years when ownership  would be  transferred to a governmental  or private
entity. The Thermogenics, LLC would usually continue to operate and maintain the
facility under a long-term contract with the new owner.

        Turn-Key  With a Management  Contract.  This project type would allow an
owner  to  place a single  contract  for the  entire  facility,  sometimes  even
including the site preparation and civil work, and the  Thermogenics,  LLC would
serve  as  General  Contractor,  working  with  local  contractors,  to  design,
construct,  install and start-up the entire plant. The Thermogenics,  LLC could,
at the owner's option, facilitate construction financing, with full payment made
when the  installation  and start-up phase is completed and the plant is in full
operation. The Thermogenics, LLC could then, under a long-term contract with the
owner,  be responsible for operation and maintenance of the facility on a fee or
cost-plus basis.

        Straight Turn-Key. While less attractive to the Thermogenics,  LLC, this
form of project could be expedient when special financing conditions,  or a need
for the technical skills dictate.  In this instance the Thermogenics,  LLC would
be paid progress payments during the design and construction  phases,  and fully
paid off when the plant is accepted and ready to begin full operation. Completed
facilities  would remain  under the  Thermogenics,  LLC service and  maintenance
agreements for an indefinite period. Operators would be trained and certified by
the Thermogenics, LLC.

        Development  Plan.  The  initial  development  plan  envisions  10 to 12
projects  in  the  Western  United  States  and  Europe.  Project  costs  to the
Thermogenics,  LLC include  manufacture  and  procurement of systems and related
equipment, and the hiring and training of operators. Some foreign projects could
involve  co-ventures  with  waste  management  and  power  companies.   In  some
instances,   bank  financing  and  economic  development  incentives  have  been
proffered.  The  Thermogenics,  LLC is  exploring a number of public and private
project finance options.

        Revenue Sources.  Revenues are to be derived from on-site waste disposal
contracts;  tipping fees (fees for the handling of  waste--some  running to more
than $400 per ton of waste received);  contract  management of the Thermogenics,
LLC provided waste-to-energy facilities;  consulting services for purpose-design
of facilities to dispose of particular  wastes or produce  energy for particular
industrial purposes (for example, an ethanol plant, a foundry, AES facilities, a
sugar plant, and a wood products plant);  generation of electrical power (in the

                                       19
<PAGE>

range of  approximately  three to 20 megawatts);  generation of heat for central
steam heating systems; production of derivative fuels including liquid petroleum
gas and  ethanol/methanol;  other byproducts (including ash, carbon dioxide, and
carbon monoxide);  and the sale or leasing of complete systems.  Rates of return
for these operations are being assessed; however, the Thermogenics, LLC criteria
for  acceptance  of  contract  proposals  includes a  requirement  of  projected
internal rates of return on equity greater than 20%.

        Estimated Near-Term Capital Requirements. We estimate that approximately
$16,000,000   will  be  required  to  implement   the  business   plan  for  the
Thermogenics, LLC in the near term.

        NextPath Separation Solutions, LLC.

        In  General.   NextPath  Separation  Solutions,   LLC  (the  "Separation
Solutions,  LLC")  is a  limited  liability  company  owned  51%  by  the  Lewis
Corporation (Tetra, Separation Systems, LLC), Pocatello, Idaho, and owned 49% by
NES.

        Technology  Base.  Tetra,   Separation  Systems,   LLC  /Lewis  designs,
fabricates,  and sells  proprietary  oil-water  separation and soil  remediation
systems that feature  patented and  proprietary  components.  These  systems are
transportable  (skid-mounted) or mobile,  and are capable of on-site clean-up of
petroleum  and  chemical  spills,  with  accompanying   on-site  restoration  of
contaminated soils as required.  Systems are automated for two-person operation.
Independent  laboratory  test  results  disclose  that these  systems can reduce
petroleum  contamination in soil to less than 100 parts per million and volatile
organic  compounds  (VOC's)  to trace  levels in a  single-pass  operation.  Oil
contamination   in  water  can  be  virtually   eliminated  in  a  single  pass.
Demonstrations have been successfully conducted for environmental protection and
quality authorities.

        Mission.  The Separation  Solutions,  LLC has been formed to build, own,
and operate these systems for contract clean-up and remediation.  Operations can
involve  three  systems,  the sump system,  the soil system,  and the  oil-water
system.  Operating  systems  would be  installed  at clean-up  sites such as gas
stations and fuel depots,  environmental cleanup zones,  industrial waste dumps,
waste transfer stations, and landfills.

        Development Plan. Two production model systems are already in operation.
The initial  development  plan envisions  equipping 18 operating  locations with
sump systems.  This includes  manufacturing  and  procurement of the systems and
related equipment,  localized marketing efforts,  and the hiring and training of
operators.  Initial target markets include the western and southwestern  regions
of the United States.  This plan would be accelerated to accommodate  additional
domestic and European markets that have been  identified.  Depending upon market
conditions,  and demand, the Separation Solutions,  LLC is prepared to establish
up to 200 operating sites within the first seven years.

        Revenue Sources.  Revenues are to be derived from on-site water and soil
cleanup contracts. For example, a sump system operating at an average rate of 50
gallons  per minute can  process  24,000  gallons  per  8-hour  day.  Processing
contracts,  typically  bring an  average  of $1 per gallon on a range of $.50 to
$1.50 per gallon.  Therefore,  the Separation  Solutions,  LLC projects  average
operating-day  revenue  per sump  system to be  approximately  $24,000,  or $5.4
million per year if operated for 225 days per year. Current projections indicate
potential average margins exceeding 40% beginning in the third year.

        Estimated Near-Term Capital Requirements. We estimate that approximately
$17,000,000  will be required to implement the business  plan of the  Separation
Solutions, LLC in the near term.

NextPath Bio-Products Research; Needful Provision, Inc.

        In General.  Applications  research is to be  sponsored  by all NextPath
entities; however, the main bio-product development arm for the company is to be
Needful Provision,  Inc, ("NPI"), an Oklahoma based non-profit organization that
licenses proprietary systems and processes to NextPath. David Nuttle, NextPath's
Chairman and interim  President and CEO, is also President,  CEO and Chairman of
NPI and the inventor of the proprietary  technology owned by NPI and licensed to
NextPath.  The scope of NPI  operations  for NextPath  remains  proprietary  and
budgets for grants and  research  contracts  to NPI are included in those of the
operating companies. NPI has been previously,  or is now, engaged in cooperative

                                       20
<PAGE>

research  activities  with  Oklahoma  State  University,  North  Carolina  State
University/Research  Triangle  Institute,  and  the  National  Renewable  Energy
Laboratory. NextPath has a first right-of-refusal for commercialization of NPI's
products and processes. Some of NPI's development work on our behalf includes:

o       development  of  genetic  stocks of fish,  plants,  and  micro-organisms
        for AES operations;

o       applied research into photo-flash  methods for stimulating plant growth;

o       applied  research  into  the  production and refinement of biofuels from
        fresh water micro-algae;

o       applied  engineering  of  effluent control systems using  bio-filtration
        and vegetative filter beds;

o       applied research and engineering of aquaculture and hydroponic systems;

o       applied  research  into  the  nutritional   properties  of high-protein,
        naturally occurring  grains and  "ethno-botanicals"  (plants  cultivated
        and used for nutrition and medicinal purposes by indigenous peoples);

o       applied research into   lipid/oil   extraction   from   vegetation   and
        micro-organisms;

o       applied research into the natural enhancement and control  of  nutrients
        for hydroponic plants and aquaculture fish;

o       training  curricula  and  contract   training  for  AES   operators  and
        technicians; and

o       information compendia for bio-systems development.

                          INTERNET AND E-COMMERCE GROUP
                          -----------------------------

PriMedium, LLC

        On June 12, 1999,  NextPath  signed an Option  Agreement with PriMedium,
LLC, a Dallas,  Texas,  based  software  development  firm that  specializes  in
creating websites for Internet sales and purchase  ordering.  One of the primary
reasons NextPath signed the Option Agreement was to develop the means for direct
sale of NextPath and its subsidiaries' products and sales over the Internet with
all of  NextPath  websites  linked.  Among  other  terms,  the Option  Agreement
provides that NextPath  would pay  $1,500,000,  issue 600,000 shares of NextPath
common stock,  and grant an annual royalty payment of ten percent (10%) based on
the pre-tax profits of PriMedium to the equity owners of PriMedium. Although the
shares were issued by NextPath at the direction of our former President and CEO,
neither  the Option  Agreement  nor the  issuance  of the stock was known to, or
approved  by,  the  Board.  We are  reevaluating  whether or not to enter into a
definitive  agreement and there can be no assurances that one will ultimately be
consummated.

US CertifiedLetters LLC

        US  CertifiedLetters   LLC  ("USCL")  was  formed  for  the  purpose  of
licensing,   developing   and   commercializing   proprietary   technology   for
transmitting instruments by certified mail via the Internet or other medium (the
"C-mail Technology") in the continental United States, Alaska and Hawaii. C-mail
Technology  will  enable  postal  customers  to send  certified  mail  over  the
Internet.  On April 3, 2000,  NextPath signed a definitive  agreement to acquire
20% of USCL. The purchase price will consist of a combination of cash and stock,
of which  NextPath has advanced  $2,750,000.  The parties expect to complete the
acquisition by June 4, 2000.  There are no assurances that this transaction will
be closed within the anticipated timeframe or that it will close consistent with
terms of the initial agreement.

        USCL provides electronic  business-to-business  and business-to-consumer
mail services,  and has developed Internet  technologies to provide new and more

                                       21
<PAGE>

efficient mail processing capabilities to consumers, particularly in the area of
certified  mail.  USCL  believes it is the first and only  company to be granted
approval by the USPS to provide  certified mail processing  services online.  In
1998, the U.S.  Postal Service  processed  510,878,000  pieces of certified mail
(according  to the USPS website,  www.usps.gov,  and 1998 annual  report).  USCL
expects to capture a portion of this market.

        Through  its  proprietary  web  site,  www.USCertifiedLetters.com,  USCL
believes that it will be one of the most reliable  ways to send  certified  mail
within the continental United States, Alaska and Hawaii.  William T. Carter, the
Manager  and  founder of USCL,  has also  developed  www.globalcertifiedpost.com
(GCP) for overseas certified mail delivery.

        USCL's   licensed  new  generation  of   proprietary,   patent  pending,
information  software,  Automated  Certified  Mail, has been test  marketed,  is
approved by the USPS and is ready to mass market.  This software allows the user
to  create a  letter  (or  insert  one from a word  processing  program)  at the
www.USCertifiedLetters.com.  site,  pay on-line,  and then send the letter.  The
automated certified mail system verifies the address,  adds the barcode,  prints
and folds the letter, and automatically  completes the certification  forms with
just a few clicks of a mouse.  The customer can expect a return receipt within 4
to 6 days, compared to the average of 10 to 12 days for manual processing.

Global Certified Mail

        Global  Certified Mail,  Inc.  ("GCM") was formed by NextPath in October
1999 to commercialize the same proprietary  electronic certified mail system for
areas outside the continental United States,  Alaska and Hawaii. Many businesses
and  organizations in other countries  require  verification of mail delivery to
the United  States,  but  traditional  delivery  methods are  expensive and time
consuming.

        On April 3,  2000,  NextPath  signed  an  agreement  to  exchange  a 20%
interest  in GCM  for a  license  from  William  T.  Carter  to use  his  C-mail
Technology  to enable global postal  customers to send  certified  mail over the
Internet  outside of the  continental  United  States,  Alaska and  Hawaii.  The
Company will  maintain an 80% ownership  interest in GCM. The parties  expect to
complete this  transaction  by June 4, 2000.  There are no assurances  that this
transaction  will be closed  within the  anticipated  timeframe  or that it will
close consistent with terms of the initial agreement.

        USCL is currently  developing  the web site to be used by GCM, where the
process  will be similar  to that of  www.USCertifiedLetters.com.  However,  all
letters  will  be  processed  at one  facility  in  Birmingham  into a  standard
certified letter, making the "point of origin" for the letter a point within the
United States,  rather than a foreign city.  This will reduce the delivery time,
speed return  receipts,  and reduce costs compared to the current  alternatives.
GCM intends initially to target multinational businesses, financial institutions
and law firms in Europe.

        USCL recently chose IBM Global  Services  (NYSE:  IBM) and  ITC^DeltaCom
(Nasdaq: ITCD) to design, manage and host both the new USCL site.

ITEM 2. PROPERTIES

        Our  executive  offices are located at 1615 N. 24th West Avenue,  Tulsa,
Oklahoma. We occupy approximately 6,000 square feet of space and are negotiating
a month to month lease.

        Each  of  our  subsidiaries maintains executive office and manufacturing
facilities,  as the case may be, as described  in ITEM 1.  BUSINESS.  We believe
that our facility and those  of our  subsidiaries are adequate for our and their
current needs.

ITEM 3. LEGAL PROCEEDINGS

        NextPath and its former  President,  James R. Ladd, are two of the named
defendants  in the case of Tim McMurray vs. James R. Ladd,  Robert Wehle et al.,
District Court of Dallas County,  Texas (No.  00-00170)  filed January 10, 2000.

                                       22
<PAGE>

The  action  alleges  "tortious  interference  with  existing  and/or  potential
business   relations,"  "civil   conspiracy,"  and  negligence  and  also  seeks
injunctive  relief.  NextPath  believes that this action is wholly without merit
and intends to vigorously defend it.

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

        No matters  were  submitted  to a vote of  security  holders  during the
quarter ended December 31, 1999.

                                     PART II

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

Market  Information

        The Company's  authorized common equity securities  consist of par value
$0.001 common stock.

        From January 27, 1998 until July 23,  1999,  our common stock was quoted
on the OTC Bulletin  Board under the symbol  "HYPE."  Since July 23,  1999,  our
common stock has been quoted on the OTC Bulletin  Board under the symbol "NPTK."
Prior to January 27, 1998, there was no established public market for our common
stock.  The  following  table sets forth the high and low closing bid prices per
share of our common  stock for each full  quarterly  period  during the two most
recent fiscal years as reported by the OTC Bulletin Board:
<TABLE>
<CAPTION>

                                                               High      Low
                                                               ----      ---
        Year Ended December 31, 1998
<S>                                                           <C>      <C>
                First Quarter ...........................     $ N/A    $ N/A
                Second Quarter ..........................       .50      .38
                Third Quarter ...........................       .44      .38
                Fourth Quarter ..........................       .63      .38
        Year Ended December 31, 1999
                First Quarter ...........................     $1.00    $ .44
                Second Quarter ..........................      2.38      .88
                Third Quarter ...........................      7.00     1.93
                Fourth Quarter............................     25.00     7.00
</TABLE>

        Bid prices for the OTC Bulletin Board reflect  inter-dealer  prices,  do
not include retail mark-ups,  mark-downs and commissions, and do not necessarily
reflect actual transactions.

Holders

        As of April 10, 2000,  there were  approximately  1,230  shareholders of
record of our common stock.  On April 10, 2000,  the last reported sale price of
our common stock on the OTC Bulletin Board was $10 per share.

Dividends

        We haven't  declared or paid any  dividends  on our common  stock in the
past,  and  we  don't  anticipate  declaring  or  paying  any  dividends  in the
foreseeable future. We intend to retain future earnings,  if any, to reinvest in
our business.  Any future  determination  as to the  declaration  and payment of
dividends will be at the discretion of our board of directors and will depend on
then  existing  conditions,   including  our  financial  condition,  results  of
operations, capital requirements,  business prospects, and such other factors as
the board deems relevant.

Recent Sales of Unregistered Securities

        On March 17, 2000, James Ladd,  NextPath's  Chairman,  President,  Chief
Executive  Officer and Treasurer,  resigned due to persistent  problems with his
health.  On March 30,  2000,  Douglas  McClain,  a member of  NextPath's  Board,
resigned for personal  reasons.  Since that time,  our new  management  team and
reconstituted  Board has been using  their best  efforts to  ascertain  the full
extent to which NextPath,  at the direction of Messrs.  Ladd and McClain without
notice to the Board and without Board approval, may have sold securities, or may
have  benefited  from the sale of our stock held by Messrs.  Ladd,  McClain  and
others,  since January 27, 1998,  which were not registered under the Securities

                                       23
<PAGE>

Act of 1933.  As of April  10,  2000,  we are  aware of the  following  sales of
unregistered  securities and transactions involving securities which were issued
in exchange for property,  services,  or other securities.  The transactions set
forth  below  are not  intended  to be all  inclusive  and  there  may be  other
transactions,  the  exact  facts  and  details  of which  we are  investigating.
However,  should other  transactions be discovered,  they will be disclosed,  if
required, in an amended 10-K or other appropriate report.

        (a)    Compact Power Merger.  In connection  with our acquisition of all
               of the  issued and  outstanding  common  stock of  Compact  Power
               International,  Inc. on January 27, 1998, we issued approximately
               5,480,000  shares of  restricted  common  stock to the  following
               shareholders  of  Compact  Power  ("CP")  in  a   stock-for-stock
               transaction for shares of CP:
<TABLE>
<CAPTION>

                           Name                   Shares        CP Shares
                           ----                   ------        ---------
<S>                                            <C>               <C>
               James R. Ladd                   4,223,000         1,175
               Mary W. Harrison                  580,000           150
               Joseph P. Kane                    387,000           100
               Willow Holdings, Inc.             290,000            75
                                               ---------         -----
                       Total                   5,480,000         1,500
</TABLE>

               This   transaction  was  exempt  from   registration   under  the
               Securities  Act  pursuant  to Section  4(2) on the basis that the
               transaction did not involve a public offering.

        (b)    First  1998  504  Offering.  On  February  1,  1998,  we  offered
               1,500,000  shares of common  stock for $.25 per share to  certain
               qualified investors in a private placement.  This transaction was
               exempt from the  registration  requirements of the Securities Act
               pursuant to Section 3(b) and Rule 504 of Regulation D.

        (c)    Second 1998 504 Offering. On March 10, 1998, we offered 1,100,000
               shares of common  stock for $.25 per share to  certain  qualified
               investors in a private  placement.  This  transaction  was exempt
               from the registration requirements of the Securities Act pursuant
               to Section 3(b) and Rule 504 of Regulation D.

        (d)    1999 504  Offering.  On  January 1,  1999,  we offered  1,500,000
               shares of common  stock for $.40 per share to  certain  qualified
               investors in a private  placement.  This  transaction  was exempt
               from the registration requirements of the Securities Act pursuant
               to Section 3(b) and Rule 504 of Regulation D.

        (e)    Regulation  S  Transaction.  During  1999,  we  sold  and  issued
               approximately  1,365,000  shares of  restricted  common stock for
               approximately $15,430,000 to European investors. This transaction
               was exempt from the  registration  requirements of the Securities
               Act as an offshore transaction pursuant to Regulation S.

        (f)    NPI License.  On September 23, 1999, we issued  500,000 shares of
               restricted  stock to Needful  Provision,  Inc. as required by our
               License Agreement with NPI dated June 1, 1998.

        (g)    Sagebrush Acquisition.  In connection with our acquisition of all
               140,000   shares  of   outstanding   common  stock  of  Sagebrush
               Technology, Inc. ("Sagebrush") on December 14, 1999, we paid cash
               and  issued   600,000   shares  of  common   stock  to  the  four
               shareholders of Sagebrush in exchange for their restricted common
               stock  in  Sagebrush.   This  transaction  was  exempt  from  the
               registration  requirements  of the  Securities  Act  pursuant  to
               Section 4(2) on the basis that the  transaction did not involve a
               public offering.

        (h)    Willow Acquisition. In connection with our acquisition of all 200
               shares of the outstanding  common stock of Willow Systems Limited
               ("Willow") on November 2, 1999,  we paid cash and issued  500,000
               shares of  restricted  common  stock to the two  shareholders  of
               Willow  in  exchange  for  their  common  stock in  Willow.  This

                                       24
<PAGE>

               transaction was exempt from the registration  requirements of the
               Securities  Act  pursuant  to Section  4(2) on the basis that the
               transaction did not involve a public offering.

        (i)    Reflex LLC Purchase Agreement. In connection with our acquisition
               of Willow, we also acquired complete ownership of its subsidiary,
               Reflex  LLC.  On November  2, 1999,  we issued  50,000  shares of
               restricted  common  stock to the owner of one-third of Reflex LLC
               for his interest in Reflex.  This transaction was exempt from the
               registration  requirements  of the  Securities  Act  pursuant  to
               Section 4(2) on the basis that the  transaction did not involve a
               public offering.

        (j)    LaserWireless Acquisition.  In connection  with  our  acquisition
               of all 100 shares   of   the   outstanding    common   stock   of
               LaserWireless, Inc. ("LaserWireless")  on  October 18,  1999,  we
               paid cash and issued 200,000 shares of  restricted  common  stock
               to the sole  shareholder  of  Laser  Wireless in exchange for his
               common stock in LaserWireless.  In addition,  we  placed  300,000
               shares of restricted common stock in a Restricted  Stock Plan for
               the benefit of the employees of LaserWireless.  This  transaction
               was exempt from the registration  requirements  of the Securities
               Act pursuant to Section 4(2)  on the  basis that  the transaction
               did not involve a public offering.

        (k)    NextWave   Photonics   Acquisition.   In   connection   with  our
               acquisition of all 200 shares of the outstanding member interests
               of NextWave Photonics,  L.L.C.  ("NextWave") on November 2, 1999,
               we  issued  50,000  shares  of  restricted  common  stock to John
               Hodges,  an  equity  owner  of  NextWave,  in  exchange  for  his
               membership interest in NextWave. This transaction was exempt from
               the  registration  requirements of the Securities Act pursuant to
               Section 4(2) on the basis that the  transaction did not involve a
               public offering.

        (l)    IC Holdings Agreement. On May 6, 1999, we issued 60,000 shares of
               restricted  common  stock  to IC  Holdings  III,  LLC as  partial
               compensation for investor relations services to be provided by IC
               Holdings to us. This transaction was exempt from the registration
               requirements  of the  Securities  Act pursuant to Section 4(2) on
               the basis that the transaction did not involve a public offering.

        (m)    IPA Consulting Agreement.  We issued 550,000 shares of restricted
               common stock to International Profit Associates,  Inc. as partial
               compensation for consulting  services to be provided by IPA to us
               pursuant to a Consulting Agreement dated September 15, 1998. This
               transaction was exempt from the registration  requirements of the
               Securities  Act  pursuant  to Section  4(2) on the basis that the
               transaction did not involve a public offering.

        (n)    Essentia  Water,  Inc. In connection  with our acquisition of all
               3,657,966  shares of outstanding  common stock of Essentia Water,
               Inc. ("Essentia") on January 21, 2000, we issued $7,654,294 worth
               of  our  restricted   common  stock   (585,760   shares)  to  the
               shareholder  of Essentia in exchange  for its common  stock.  The
               transaction was exempt from the registration  requirements of the
               Securities  Act  pursuant  to Section  4(2) on the basis that the
               transaction did not involve a public offering.

        (o)    PriMedium,  Inc.  On or about  July 12,  1999,  NextPath,  at the
               direction  of James Ladd,  issued  800,000  shares of  restricted
               stock to the owners of PriMedium,  Inc., notwithstanding that the
               issuance had not been brought to the attention of the Board,  let
               alone authorized by the Board. We are reevaluating whether or not
               to  enter  into  a  definitive  agreement  and  there  can  be no
               assurances that one will ultimately be consummated.

        (o)    Consulting  Agreements.  We now believe that at the  unauthorized
               direction  of Mr. Ladd,  restricted  common stock was issued to a
               number  of  individuals  and  entities   pursuant  to  consulting
               agreements, including but not limited to, the following:

                      Name                                       Shares
                      Douglas McClain                           5,000,000
                      W.O.W. Consulting Group                   6,000,000
                      BLISS Unlimited, Inc.                     2,500,000

                                       25
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

        Prior to our merger  with  Compact  Power  International  on January 27,
1998,  we had no operating  history.  Since that merger,  we have been  involved
primarily in activities  related to the  acquisition  of our  subsidiaries.  Our
subsidiaries also have limited operating histories.

        While  the  December  31,  1999 and 1998  audits of  Essentia  have been
completed,  our 1999  audit and the 1999 and  prior  year  audits  of  NextPath,
Sagebrush,  Willow and  LaserWireless are nearing  completion.  The consolidated
financial  data as of December 31, 1999 will be included in an amendment to this
Form 10-K.

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

Overview

        We don't have any significant  operating  history other than that of our
wholly  owned  subsidiaries.  We  currently  derive all of our revenue  from the
operations  of our wholly  owned  subsidiaries  and from our other  investments.
During 1999, most of our efforts have been directed to the raising of sufficient
capital to finance our operations and costs  associated with the negotiation and
closing of acquisition  agreements with our subsidiaries.  We intend to continue
to  identify  and  pursue  acquisitions  which  provide  attractive   investment
opportunities,  particularly  when  we  can  add  value  through  our  technical
expertise.   Our   operating   expenses   are   comprised  of  our  general  and
administrative overhead and the expenses of our subsidiaries.

        We intend to provide our subsidiaries with sufficient funds so that they
can  grow  their  businesses   nationally  and  internationally  by  effectively
developing,  marketing and expanding their  products,  services and market base.
However,  absent an infusion of equity capital or financing on terms  acceptable
to us,  we do not  believe  that we have the  liquidity  and  capital  resources
necessary  to  operate  our  business  and  those  of our  subsidiaries  for the
foreseeable future. We are actively engaged in negotiations with debt and equity
sources and we will continue to purse all such options on an aggressive basis.

Results of Operations

        A table setting forth the pro forma  consolidated  results of operations
as  a  percentage   of  sales  for  those   subsidiaries,   Sagebrush,   Willow,
LaserWireless  and Essentia,  for the year ended December 31, 1999 will be filed
by amendment to this 10-K.

Liquidity and Capital Resources

        We do not believe that our existing  working  capital,  the  anticipated
revenues  of our  subsidiaries,  and the  anticipated  revenues  from our  other
investments  will be sufficient to fund our cash  requirements and capital needs
for the  foreseeable  future.  See ITEM 1.  BUSINESS.  The extent of  additional
financing  needed will depend on the success of our  business and our ability to
identify and pursue additional  acquisitions that provide attractive  investment
opportunities.   While  to  the  extent   possible  we  intend  to  fund  future
acquisitions  primarily with our common stock, most acquisitions  require that a
portion  of the  consideration  be in the  form  of  cash.  If we  significantly
increase the operations of our subsidiaries or our  acquisitions  beyond planned
levels or if our  revenues  are lower than  anticipated,  our cash needs will be
increased.  In addition, our future capital requirements will depend on a number
of other factors,  including the level of our product  research and development,
the level of market  acceptance of our goods and services,  and the  feasibility
and extent of international expansion.

        Competition  from  larger  and more  established  companies  may  hamper
marketability.  NextPath and its subsidiaries may face intense  competition from
similar, more  well-established  competitors,  including national,  regional and
local companies possessing substantially greater financial, marketing, personnel
and other  resources than  NextPath.  NextPath may not be able to market or sell
its products if faced with direct product  competition from these larger or more
established companies.

                                       26
<PAGE>

        Patents, trademark protection and proprietary marks. Notwithstanding any
potential registration of patents and certain trade names with the United States
Patent Office and the United States Trademark Office, there is no assurance that
NextPath or its subsidiaries  would be able to enforce against use of any of the
proprietary  products or marks of its  subsidiaries.  There is also no assurance
that NextPath will be able to prevent competitors from using the same or similar
products,  names,  marks,  concepts or appearances of it or its  subsidiaries or
that it will have the financial resources necessary to protect its marks against
infringing use.

        Issuance  of future  shares  may  dilute  investors'  share  value.  The
Articles of  Incorporation  as amended of NextPath  authorizes  the  issuance of
100,000,000  shares of common stock.  The future  issuance of all or part of the
remaining  authorized  common  stock may result in  substantial  dilution in the
percentage of our common stock held by our then existing shareholders. Moreover,
any common stock issued in the future may be valued on an arbitrary basis by us.
The  issuance  of our  shares  for  future  services  or  acquisitions  or other
corporate  actions may have the effect of diluting  the value of the shares held
by investors, and might have an adverse effect on any trading market.

        Current trading market for the Company's securities. Our common stock is
traded on the OTC Bulletin  Board  operated by Nasdaq under the symbol NPTK. The
NASD has  implemented  a change in its rules  requiring  all  companies  trading
securities on the OTC Bulletin  Board to be  registered as a reporting  company.
The Company was required to become a reporting  company by the close of business
on December 15, 1999. NextPath effected the merger with Epilogue on November 11,
1999 and became a successor issuer thereto in order to comply with the reporting
company requirements implemented by the NASD.

        Penny Stock  Regulation.  Our common  stock may be deemed a penny stock.
Penny stocks generally are equity securities with a price of less than $5.00 per
share other than securities  registered on certain national securities exchanges
or quoted on the Nasdaq Stock  Market,  provided  that current  price and volume
information  with respect to  transactions in such securities is provided by the
exchange or system.  Our  securities  may be subject to "penny stock rules" that
impose additional sales practice  requirements on  broker-dealers  who sell such
securities to persons other than established  customers and accredited investors
(generally  those with assets in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000  together with their spouse).  For transactions  covered by
these rules, the broker-dealer must make a special suitability determination for
the  purchase of such  securities  and have  received  the  purchaser's  written
consent  to  the  transaction  prior  to the  purchase.  Additionally,  for  any
transaction  involving a penny  stock,  unless  exempt,  the "penny stock rules"
require  the  delivery,  prior  to the  transaction,  of a  disclosure  schedule
prescribed by the SEC relating to the penny stock market. The broker-dealer also
must  disclose  the  commissions  payable  to  both  the  broker-dealer  and the
registered  representative and current  quotations for the securities.  Finally,
monthly  statements  must be sent  disclosing  recent price  information  on the
limited  market in penny  stocks.  Consequently,  the  "penny  stock  rules" may
restrict the ability of  broker-dealers  to sell our  securities.  The foregoing
required  penny  stock  restrictions  will not apply to our  securities  if such
securities  maintain a market price of $5.00 or greater.  As of the date of this
10-K,  the  trading  price of our common  stock is in excess of $5.00 per share,
although  there  can be no  assurance  that  the  price of our  securities  will
maintain such a level.

        We are currently  operating at a loss.  Until the recent  acquisition of
Sagebrush,  Willow, LaserWireless and Essentia, we had no operations or revenues
and we borrowed  funds or sold our  securities to begin our  operations and fund
our  acquisitions.  Our  ability to develop  operations  is  dependent  upon our
ability to acquire companies for which we will need to raise capital through the
placement of our  securities or from other debt or equity  financing.  If we are
not able to raise such  financing or to obtain  alternative  sources of funding,
management will be required to curtail operations. There is no assurance that we
will be able to continue to operate if additional sales cannot be generated.

        We have a limited operating  history.  We have only a limited history of
operations which to date have not been profitable. Our operations are subject to
the risks and  competition  inherent in the  establishment  of a relatively  new
business  enterprise.  There can be no assurance that future  operations will be
profitable.  Revenues and  profits,  if any,  will depend upon various  factors,
including market acceptance of its concepts,  market awareness,  reliability and
acceptance of the  Internet,  dependability  of its  distribution  network,  and
general  economic  conditions.  There is no  assurance  that we will achieve our
expansion  goals and the  failure  to achieve  such goals  would have an adverse
impact on us.

                                       27
<PAGE>

        Possible inability to finance acquisitions.  In transactions in which we
agree to  acquire a  company  for cash,  we will have to locate  financing  from
third-party  sources such as banks or other  lending  sources or we will have to
raise cash through the sale of our  securities.  There is no assurance that such
funding  will be  available  to us when  required to close a  transaction  or if
available on terms acceptable to us.

        Operation  of  LaserWireless   business  involves  the  use  of  lasers.
LaserWireless  utilizes lasers.  Although the lasers are of relatively low power
and to be located in  unpopulated  areas such as rooftops and although the laser
devices are marked with "hazard" signs, there can be no assurance that passersby
will not cross the path of a laser,  causing damage to the eyes or causing other
health hazards.

        Unforeseen risks of acquired  companies.  Companies that may be acquired
by us or with which we enter into business  relationships  may face  competition
from more-established or better financed companies. In addition, any one or more
of these  companies may produce or  manufacture  equipment,  technology or other
goods that pose inherent  risks in production or operation.  It is impossible to
foresee these risks herein, but we will consider such risks before entering into
any business combination.

        Our  acquisition  program  may  lead to  uncertain  liabilities.  We are
currently  engaged in an active  acquisition  program.  Although we evaluate all
potential acquisitions, the acquisition of going concerns could potentially lead
to the acquisition of the target  company's  liabilities,  including  patent and
trademark  infringement  claims,  product liability  claims,  breach of contract
claims,  or shareholder  derivative  claims.  There can be no assurance that any
companies that we acquire are free of potential liabilities.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The 1999  audit for  NextPath  and the 1999 and prior  year  audits  for
Sagebrush,  Willow and LaserWireless are nearing  completion.  The 1999 and 1998
audits for Essentia  have been  completed.  When  completed,  audited  financial
statements for NextPath and its four wholly owned  subsidiaries  consolidated as
of  December  31, 1999 and for prior  years,  as  required,  will be filed in an
amendment to this 10-K.

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

        Crouch, Bierwolf & Chisholm, Certified Public Accountants, whose address
is 50 West Broadway,  Suite 1130,  Salt Lake City,  Utah 84101,  the independent
accountant  which was  previously  engaged as the principal  accountant to audit
NextPath's  financial  statements,  was dismissed on February 8, 2000 so that we
could engage the services of Gray & Northcutt Inc.  Crouch,  Bierwolf & Chisholm
stated in its report on the  financial  statements  of NextPath for the past two
years  (1997 and 1998)  that they were  prepared  assuming  that  NextPath  will
continue as a going concern and the report contained the firm's opinion that the
Company's   recurring  operating  losses  and  lack  of  working  capital  raise
substantial doubt about its ability to continue as a going concern. The decision
to change accountants was recommended and approved by our Board of Directors.

        During  our two  most  recent  fiscal  years,  there  have  not been any
disagreements  with  Crouch,  Bierwolf  & Chisholm  on any matter of  accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedure.

        We  provided  Crouch,  Bierwolf  & Chisholm  with a copy of the  Current
Report on Form 8-K prior to its filing with the SEC and  requested  that Crouch,
Bierwolf  &  Chisholm  furnish  us with a letter  addressed  to the SEC  stating
whether it agrees with the  statements  made in the  Current  Report on Form 8-K
and,  if not,  stating the  respects  in which it does not agree.  The letter of
Crouch,  Bierwolf & Chisholm is attached as an exhibit to the Current  Report on
Form 8-K filed with the SEC February 14, 2000.

        Weinberg & Company, P.A., Certified Public Accountants, whose address is
6100  Glades  Road,  Suite 314,  Boca  Raton,  Florida  33434,  the  independent
accountant which was previously engaged as the principal accountant to the audit
financial  statements of Epilogue  Corporation,  with whom we merged on November
12, 1999, was dismissed on February 8, 2000 so that  NextPath,  as the surviving

                                       28
<PAGE>

corporation  in the merger,  could engage the services of Gray & Northcutt  Inc.
Weinberg  &  Company  audited  the  balance  sheet of  Epilogue  Corporation  (a
development  stage  company)  as of June 7, 1999 and the related  statements  of
operations,  changes is stockholder's  equity and cash flows for the period from
June 4, 1999 (inception) to June 7, 1999. The decision to change accountants was
recommended and approved by our Board.

        There  have not been any  disagreements  with  Weinberg & Company on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.

        We provided Weinberg & Company with a copy of the Current Report on Form
8-K prior to its  filing  with the SEC and  requested  that  Weinberg  & Company
furnish us with a letter addressed to the SEC stating whether it agrees with the
statements  made in the  Current  Report on Form 8-K and,  if not,  stating  the
respects  in which it does not  agree.  The  letter of  Weinberg  &  Company  is
attached as an exhibit to the  Current  Report on Form 8-K filed with the SEC on
February 14, 2000.

        On  February  8,  2000,  Gray &  Northcutt,  located in  Oklahoma  City,
Oklahoma, was engaged by us to audit the consolidated balance sheets of NextPath
and its wholly-owned subsidiaries.  Other than concerning its engagement, we had
not consulted with Gray & Northcutt Inc. prior to February 8, 2000.

        On  March 23,  2000,  Gray & Northcutt,  Inc.  resigned  from  the audit
engagement  of NextPath  effective  that  date.  Gray & Northcutt,  Inc.  agreed
to  complete  its  audits  of  our  subsidiaries,  Laser Wireless, Inc.,  Willow
Systems, Inc. and Sagebrush Technology, Inc.

        In its resignation letter, Gray & Northcutt, Inc. stated as follows: "In
the course of performing  our work, we have  concluded  that NextPath  lacks the
internal   controls   necessary  for  the  development  of  reliable   financial
statements.  Further,  information  has come to our  attention  that leads us to
conclude  that we  should  not  rely  upon  the  representations  of  NextPath's
management in place during the period covered by this audit".

        We do not disagree  with the  statements  of Gray &  Northcutt,  Inc. In
response to these  statements (i) we retained Robert Woodward as Chief Financial
Officer;  (ii) Mr.  Woodward has taken over our financial  books and records and
accounts;  (iii) our bank accounts are being moved from our Hillsborough,  North
Carolina headquarters to its new headquarters in Tulsa,  Oklahoma;  (iv) we have
retained  the services of an  accountant  to organize  our  financial  books and
records;  (v) we have  adopted the  financial  management  plan  proposed by Mr.
Woodward;  (vi) our Audit  Committee  has been  filled  with  three  independent
directors;  (vii) we have accepted the  resignations  of James Ladd,  our former
President,  CEO and Chairman, and of Douglas McClain, a former director;  (viii)
we engaged Crouch,  Bierwolf & Chisholm,  our former  auditors,  to complete the
audit of the Company  begun by Gray & Northcutt,  Inc. so that the Form 10-K for
the fiscal year ended December 31, 1999 and all required amended Form 8-K can be
filed as soon as possible; and (ix) three new directors have been elected to the
Board.

        We provided Gray & Northcutt,  Inc. with a copy of the Current Report on
Form 8-K prior to its filing with the SEC and  requested  that Gray & Northcutt,
Inc.  furnish us with a letter  addressed  to the SEC stating  whether it agrees
with the statements made in the Current Report on Form 8-K and, if not,  stating
the respects in which it does not agree. The letter of Gray & Northcutt, Inc. is
attached as an exhibit to the Current Report on Form 8-K dated April 3, 2000.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        The following table lists the names,  ages and all positions held by our
directors and executive officers as of April 10, 2000.


          Name              Age                              Position

David A. Nuttle             63     Chairman,   Interim   President   and   Chief
                                   Executive Officer, Secretary
Frederic F. Wolfer, Jr.     61     Vice President and Assistant Secretary
Robert Woodward             50     Director And Chief Financial Officer

                                       29
<PAGE>


Charles A. Gourd            51     Director
Kenneth E. Sweet            47     Director

        Mr.  Nuttle,  who had been a director  since January 1998, was appointed
Chairman and interim President and Chief Executive Officer on March 17, 2000. He
has over 40 years of economic and business  development  experience.  Since June
1995,  Mr. Nuttle has been  Chairman,  President and Chief  Executive  Office of
Needful  Provision,  Inc., a 503(c)(3) charity,  which has licensed  proprietary
technology to us.

        Mr. Wolfer joined us in October 1999 as Vice  President.  He was elected
President of the Environmental  Technologies  Group on April 1, 2000. From April
1998 to August 1999, Mr. Wolfer was a Consultant to NextPath. From February 1997
to December  1997,  he was a Country  Representative  for  Citizens  Network for
Foreign Affairs.  From March 1991 to February 1997, Mr. Wolfer was President and
Chief Executive  Officer of Controlled  Environment  Technologies,  Inc., a sole
proprietorship  consulting firm. Mr. Wolfer received a BA from the University of
North Carolina in 1960 and a M.A. from Central  Washington  State  University in
1973.

        Mr.  Woodward  became Chief  Financial  Officer of NextPath on March 17,
2000.  He was elected a director on April 1, 2000.  Since March 1999 he has been
employed  by  International  Profit  Associates  as a Business  Consultant.  Mr.
Woodward has over twenty-five years of management consulting,  public accounting
and senior management experience concentrated in the areas of strategic business
planning,  corporate financial management,  business infrastructure  development
and  administrative and operations  management.  From 1996 to 1999, Mr. Woodward
was  self-employed  as a Business  Consultant.  From 1989 to 1996,  he was Chief
Financial  Officer  for  Q-Com  Corporation,  a  California  environmental  high
technology  firm.  Mr.  Woodward  received a BBA degree in 1972 from St. Francis
College,  New York and an MBA degree in 1978 from Long  Island  University,  New
York.

        Dr. Gourd has been a Director since March 17, 2000.  From August 1995 to
October  1999, he was Special  Assistant to the Principal  Chief of the Cherokee
Nation.  From September 1993 to August 1995, Dr. Gourd was Director of Bilingual
Education  at Keys  Elementary  School in Park  Hill,  Oklahoma.  Dr.  Gourd has
extensive academic and professional  background in the practical  application of
Anthropology for purposes of economic development.  His professional  background
includes economic development in third world countries, as well as work with the
U.S.  State  Department on  multi-lateral  Trade  Agreements,  development of an
international  Free-Trade  Zone,  and is Fellow in the  Entrepreneurial  and MBA
Programs at Babson College in Boston,  Massachusetts  Dr. Gourd received his PhD
from the  University  of Kansas in 1984, a M.A.  degree from the  University  of
Oklahoma in 1976, and a BS degree in History from Northeastern  State University
in 1971.

        Mr. Sweet has been a director  since March 17, 2000.  Mr. Sweet has over
nine years of executive director experience in management  consulting,  business
valuation,  mergers and acquisitions,  and financial  advisory  services.  Since
1991, Mr. Sweet has been the Executive  Director of Consulting  Services and one
of  the  in-house  counsel  to  International   Profit   Associates   (IPA),  an
international  consulting firm. He has supervising and/or directing in excess of
21,000  client  engagements  to date.  Prior to joining IPA, he was President of
Windbrook Securities,  Inc., a broker/dealer,  and The Compass Investment Group,
Inc.,  registered as a Commodity  Trading  Advisor (CTA).  Mr. Sweet also worked
from  1981-1987  at E.F.  Hutton & Company,  Inc.  as an Account  Executive.  He
received a BS in both Business  Administration and Accounting,  graduating Magna
Cum Laude from the  University  of San Diego in 1974.  He also  received a Juris
Doctorate degree from Western State College of Law in December 1977.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

        The following  summarizes,  for the fiscal years  indicated,  and to the
knowledge of current  management,  the principal  components of compensation for
our Chief Executive Officer and our only other executive officer.  Mr. Ladd, our

                                       30


Chief Executive Officer and President, was our only employee in 1998.
<TABLE>
<CAPTION>

                                                       Long Term Compensation
                                                   -----------------------------

                       Annual Compensation               Awards         Payouts
                   -----------------------------   -------------------- --------
                                                                              Securities
                                                        Other                   Under-
                                                        Annual    Restricted    lying       LTIP          All
                                                        Compen-     Stock      Options/    Payouts       Other
Name and Principal Position     Year    Salary   Bonus  sation     Award(s)      SARs        (1)      Compensation
---------------------------    ------  --------  ------ --------  ----------  ---------   --------   -------------
James R. Ladd
<S>                             <C>    <C>           <C>      <C>  <C>              <C>        <C>            <C>
  Former Chairman,              1999         --      --       --                    --         --             --
  President (2)                 1998         --      --       --                    --         --             --
Richard F. Wolfer, Jr.          1999   $150,000                    100,000
  Vice President (3)
</TABLE>
-----------------------

(1)     Creativity Incentive Plan.
(2)     Mr. Ladd  resigned on March 17, 2000.  To our knowledge as of this date,
        he did not receive any compensation in the years indicated.
(3)     Mr. Wolfer was employed on November 1, 1999.

Options/SAR Grant In Last Fiscal Year

        Our  executive  officers were not granted any options or SARs during our
last fiscal year.

Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Values

        Our executive officers have not been granted any options or SARs.

Employment Agreements

        Mr. Wolfer has a five year  employment  agreement with us. It expires in
2004.

Compensation of Directors

        We anticipate  paying reasonable and customary fees to our directors who
are not officers for their services as directors and for  attendance,  in person
or by  telephone,  at  each  meeting  of the  board  of  directors,  but not for
committee  meetings.  Officers  who are  also  directors  will  not be paid  any
director fees.

Restricted Stock Plan

        As  part  of  the  consideration  we  paid  for  all  of  the  stock  of
LaserWireless,  Inc., we placed 300,000  shares of restricted  common stock in a
Restricted Stock Plan for the benefit of the employees of LaserWireless, Inc. An
employee  will  become  vested  with  respect  to the  shares  of  common  stock
represented  by  his  or her  Restricted  Stock  Award  Agreement  on the  fifth
anniversary of the date of the grant,  provided he or she continuously serves as
an employee of  LaserWireless,  Inc. or another of our subsidiaries at all times
beginning with the date of the grant and ending on the fifth  anniversary of the
grant.

Stock Option Plan

        We recognize the need to implement,  and we intend to propose and submit
to our  shareholders,  a stock option plan so that we may attract and retain the
high  quality  employees,  consultants  and  directors  necessary  to build  our
infrastructure  and to provide  ongoing  incentives to our employees by enabling
them to participate in our success.

401(k) Plan

        We  anticipate  that we will  adopt an  employee  investment  plan under
Section 401(k) of the Code.

                                       31
<PAGE>

Creativity Inventive Plan

        In order  to  encourage  and  reward  creativity,  we will  establish  a
Creativity Incentive Plan in 2000. Employees who develop materials,  inventions,
discoveries,  improvements  and designs will be eligible to  participate  in the
fruits of their  inventiveness over and above any salary and other benefits they
may derive from their employment.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        We have not issued any preferred  stock.  The following table sets forth
certain information regarding the ownership of our common stock, as of April 10,
2000, by (i) each director and nominee for director;  (ii) each of our executive
officers; (iii) all of our executive officers and directors as a group; and (iv)
all those  known by us to be  beneficial  owners  of more than 5% of our  common
stock:
<TABLE>
<CAPTION>


Name and Address of                   Shares Benefically
  Beneficial Owner                        Owned (1)           Percentage Owned
-------------------                   ------------------      ----------------


Directors and Executive Officers

<S>                                        <C>                     <C>
David A. Nuttle (2)                          475,000                 1%
114 South Churton Street, Suite 101
Hillsborough, NC 27278

Frederic F. Wolfer, Jr.                      100,000                 *

Charles A. Gourd                                  --

Kenneth E. Sweet (3)                          56,907                 *

Robert Woodward

All executive officers and directors as a    631,907                 1.5%
group
(5 persons)

5% Shareholders

James R. Ladd (4)                          2,263,000                 5.4%
7106 Sunrise Road
Chapel Hill, NC 27514

W.O.W. Consulting Group                    5,856,217                14.0%
18352 Dallas Parkway, #136-440
Dallas, TX 75287
</TABLE>
-----------------------

*       Less than one percent.

(1)     Beneficial  ownership is determined in accordance  with the rules of the
        SEC and generally  includes  voting or investment  power with respect to
        securities.  Shares of common  stock  subject  to  options  or  warrants
        currently  exercisable  or  convertible,  or  exercisable or convertible
        within  60 days of  September  30,  1999,  are  deemed  outstanding  for
        computing the  percentage  of the person  holding such option or warrant
        but are not deemed outstanding for computing the percentage of any other
        person.  Except as indicated in the footnotes to this table and pursuant
        to applicable  community  property  laws, the persons named in the table
        have sole  voting and  investment  power  with  respect to all shares of
        common stock beneficially owned.

(2)     Mr.  Nuttle is Chairman  and  President  of Needful  Provision,  Inc., a
        501(c)(3) charitable corporation in whose name this stock is registered.

(3)     Mr. Sweet has the  contractual  right to acquire an  additional  109,453
        shares  of  500,000  shares  currently  held  by  International   Profit
        Associates, with whom he has an agreement.

(4)     Mr.  Ladd's  daughter,  McGinnis  Ladd,  and his son,  Joshua Ladd,  own
        250,000 and 500,000 shares of common stock respectively.  We do not know
        if  Mr.  Ladd  claims  any  beneficial  interest  in the  shares  of his
        children.

                                       32
<PAGE>

Number, Terms and Election of Directors

        The number of directors is currently  set at seven.  Each  director will
serve for a term of one year or until the next annual meeting at which directors
are elected.  In the election of directors,  each stockholder is entitled to one
vote for  each  share of  common  stock he  holds.  There  are  currently  three
vacancies on our Board of Directors.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Directors and Executive Officers

        Loans.  Although our 1999 audit has not been completed,  we believe that
as  of  December  31,  1999  we  owed  Douglas   McClain,   a  former  Director,
approximately $2,500,000.

        Other  Transactions.  Mr.  Ladd's  departure as Chairman,  President and
Chief Executive  Officer,  Mr.  McClain's  departure as a Director,  and various
transactions by NextPath which occurred while they were affiliated with NextPath
in those  capacities  and which  were not  reported  to the Board but which were
recently  brought  to the  attention  of the  Board,  have  caused  the Board to
establish a Special  Committee which will review all transactions  engaged in by
NextPath since January 27, 1998. The effects of the  transactions to be reviewed
and their  materiality to our financial  condition and our operations  cannot be
fully  assessed until the Special  Committee has completed its review.  However,
once the  review  has been  completed,  we will  report  any and all  reportable
transactions to the SEC and our shareholders.

        Director,  Officer and Ten Percent  Stockholder  Securities  Reports. We
understand,  and have so advised our  officers and  directors,  that the Federal
securities  laws require  them, as well as persons who own more than ten percent
of our stock,  to file with the SEC initial  reports of ownership and reports of
changes in ownership of our stock owned by them.  We are aware of the  following
filings during 1999:
<TABLE>
<CAPTION>

                        Name                    Date        Filing
                        ----                    ----        ------
<S>                                           <C>          <C>
        James Ladd                            12/21/99      Form 3
        Frederic F. Wolfer, Jr.               11/24/99      Form 3
        David A. Nuttle                       11/24/99      Form 3
        TPG Capital Corporation               12/13/99     SC 13G/A
</TABLE>

        Based  solely on our  review of the  copies of the  reports we have been
furnished,  it appears that (a) except for Mr. McClain,  all of the officers and
directors  filed a Form 3 as  required,  (b) Messrs.  Ladd and McClain  have not
filed  a Form 4 or a Form  5, if  required,  (c) no  greater  than  ten  percent
beneficial  owners made any  required  filings,  and (d) Mr.  Nuttle,  if deemed
required to do so, did not file a Form 5 indicating  the  disposition  of 25,000
shares of stock by Needful  Provision,  Inc. ("NPI").  Mr. Nuttle has advised us
that he will file a Form 5,  notwithstanding  that the stock is owned by NPI and
he has no beneficial ownership interest in it.

                                     PART IV

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

FINANCIAL STATEMENTS

        (a) and (d) Financial Statements

        The 1999  audit of  NextPath  and the 1999 and prior  years  audits  for
Sagebrush,  Willow and LaserWireless are nearing  completion.  The 1999 and 1998
audits of Essentia have been completed.  All required Financial  Statements will
be filed in an amendment to this 10-K.

        (b)  Reports  on Form 8-K filed  during  the last  quarter of the period
        covered by this report.

                                       33
<PAGE>

        We filed a Form 8-K on November 12, 1999,  which reported the closing of
        an Agreement and Plan of Merger between Epilogue Corporation and related
        matters.

        We filed a Form 8-K on December 13, 1999, which reported our acquisition
        of Willow Systems Limited.

        We filed a Form 8-K on December 23, 1999, which reported our acquisition
        of Sagebrush Technology, Inc.

        We filed a Form 8-K on December 28, 1999,  which amended the Form 8-K we
        filed on  November  12,  1999 to  reflect  the  stock  ownership  of our
        officers and directors and those persons known to us to beneficially own
        more 5% of our stock.

        (c)  Exhibits

        The following exhibits are filed as part of this 10-K:


Exhibit No.     Description
-----------     ----------------------------------------------------------------

     2.1        Agreement  and  Plan of  Merger between Epilogue Corporation and
                NextPath Technologies, Inc. dated November 11, 1999

     2.2        Agreement  and Plan of Reorganization between FSC Holdings, Inc.
                and Compact Power International, Inc. dated January 19, 1998

     2.3        Agreement  and  Plan  of  Merger  between FSC Holdings, Inc. and
                Petrogenetics, Inc. dated May 8, 1997

     3.1        Articles of Merger of NextPath  Technologies,  Inc. and Epilogue
                Corporation as filed on November 16, 1999

     3.2        Certificate  of  Merger  of  Epilogue  Corporation into NextPath
                Technologies, Inc. as filed on November 12, 1999

     3.3        Articles of Merger for FSC Holdings, Inc. dated January 19, 1998
                (filed January 27, 1998)

     3.4        Certificate  of  Correction  to  the  Articles of Merger for FSC
                Holdings, Inc.                dated December 31, 1997

     3.5        Articles  of  Merger for  FSC  Holdings, Inc.  dated May 8, 1997
                (filed May 12, 1997 in NV)

     3.6        Articles  of Merger  for  FSC Holdings, Inc.  dated  May 8, 1997
                (filed May 12, 1997 in CO)

     3.7        Certificate  of  Amendment  to  Articles  of  Incorporation   of
                Hyperion Technologies, Inc. dated July 20, 1999

     3.8        Certificate  of Amendment  to the  Articles of Incorporation  of
                Peak Development, Inc. as filed May 7, 1997

     3.10       Articles  of Incorporation  for Petrogenetics, Inc.  dated March
                23, 1984

     3.11       Seconded  Amended  ByLaws  of  NextPath Technologies, Inc. dated
                November 1, 1999

     3.12       Amended  Bylaws  of  NextPath Technologies, Inc.  dated July 21,
                1999

     3.13       Bylaws of FSC Holdings, Inc.


                                       34
<PAGE>


                                   SIGNATURES

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

                         NEXTPATH TECHNOLOGIES, INC.

                         /s/ David A. Nuttle                     April 13, 2000
                         -----------------------------
                         David A. Nuttle
                         Chairman, Interim Chief Executive Officer and President
                         (principal executive officer)


                         NEXTPATH TECHNOLOGIES, INC.
                         /s/ Robert Woodward                      April 13, 2000
                         -----------------------------
                         Robert Woodward
                         Vice Chairman and Chief Financial Officer
                         (principal financial and accounting officer)

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

/s/ David A. Nuttle       Chairman of the Board of Directors      April 13, 2000
---------------------
David A. Nuttle

/s/ Kenneth Sweet         Director                                April 13, 2000
---------------------
Kenneth Sweet

/s/ Robert Woodward       Director                                April 13, 2000
---------------------
Robert Woodward

                                       35