September 28, 2000





United States Securities and Exchange Commission
450 5th Street, NW
Washington, DC 20549
Attn:    William C-L Friar
         Senior Financial Analyst

         Re:      Oxir Investments, Inc.
                  Form  10-KSB for the fiscal  year ended June 30, 2000
                  File No. 0-26377

Ladies and Gentlemen:

         We represent Oxir Investments,  Inc. (the "Company"). The enclosed Form
10-KSB,  which has been filed  electronically in accordance with Regulation S-T,
has been revised in response to the oral comments of William C-L Friar delivered
to me on  September  15, 2000 to the  Company's  Amendment  No. 4 to Form 10-SB,
filed with the Commission on September 7, 2000. Unless otherwise defined herein,
capitalized  terms and other terms used repeatedly  throughout this letter shall
have the same meaning set forth in the Form 10-KSB.

         Value of House:  The value of Mr.  Oxenuk's  interest in the Las Vegas,
Nevada house  purchased  for him by the Company is reflected in the Form 10-KSB.
See  Part  I,  Item  2,   "Properties,"   and  Part  III,  Item  10,  "Executive
Compensation,"  and  Part  III,  Item 12,  "Certain  Relationships  and  Related
Transactions."

         Payment for Moscow  Apartment:  The payment  terms for the apartment in
Moscow have been disclosed.  See Part I, Item 1, "Business - Russian Real Estate
Development  Project" and Part III, Item 12, "Certain  Relationships and Related
Transactions."

         We believe  the  foregoing  and the Form 10-KSB  fully  responds to the
staff's  comments.  If you have any further  questions or comments please do not
hesitate to call Kelly Matthews Gerber (202-861-1694) or me.

                                        Sincerely,



                                        By: /s/ Mario V. Mirabelli
                                        --------------------------
                                                Mario V. Mirabelli

<PAGE>

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

                                   FORM 10-KSB

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

     For the fiscal year ended June 30, 2000

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

     For the transition period from _____________ to _______________

                          Commission File No. 000-26377

                             OXIR INVESTMENTS, INC.
                 (Name of Small Business Issuer in its charter)

                   California                           88-0397134
                   ----------                           ----------
         (State or other jurisdiction of             (I.R.S. Employer
          incorporation or organization)            Identification No.)


         3980 Howard Hughes Parkway, Suite 340, Las Vegas, Nevada 89109
         --------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (702) 369-4260

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

       Title of each class      Name of each exchange on which registered
       -------------------      -----------------------------------------
              N/A                                  N/A

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

                           Common Stock, no par value

                                (Title of Class)

                                       1
<PAGE>

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

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

State issuer's revenues for its most recent fiscal year: $ 769,326

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days.  (See  definition  of affiliate in Rule
12b-2 of the Exchange Act.) NA

     (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Check  whether the issuer has filed all  documents  and  reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court.                     [ ] Yes [X] No

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 21,189,000 as of September 22, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly described them
and  identify  the part of the Form 10-KSB  (e.g.,  Part I, Part II,  etc.) into
which the document is incorporated:  (1) any annual report to security  holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities  Act"). The listed
documents should be clearly described for identification  purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).

Transitional Small Business Disclosure Format (Check one):    Yes ____; No __x__


                                       2
<PAGE>




                                     PART I

Item 1.  Description of Business

Business Development

         Oxir Investments, Inc. (the "Company") was incorporated in the State of
California  on  November  2, 1923 as Monte  Regio  Corporation  with the  stated
purpose of engaging in the  business  of real  estate  development.  The Company
continued in that endeavor for several years then  discontinued  operations.  On
March 1, 1972 the Company  changed its name to  Precision  Resources,  Inc.  The
Company  remained  dormant with no business  activity until  September 1998. The
Company changed its name to Oxenuk, Inc. on November 11, 1998.

         In  November  1998,   the  Company   consummated  a  merger  with  Oxir
Investments,  Inc., a California corporation ("Oxir-Private"),  which was formed
in  order to  pursue  international  investment  opportunities  in real  estate,
technology,  and  industrial  business,  particularly  in the United  States and
Russia,  and to introduce  eastern European  opportunities to the United States.
The Company was the surviving corporation of the merger. In association with the
merger, the Company changed its name to Oxir Investments, Inc.

         In May 1999, Vassili I. Oxenuk, the President, Chief Executive Officer,
Chairman of the Board of Directors  and  principal  stockholder  of the Company,
purchased Oxir Financial  Services,  Ltd., a British Virgin Islands  corporation
("OFS"),  and Oxir  Investments,  Ltd.,  a British  Virgin  Islands  corporation
("OIL").  At the time of the purchase by Mr. Oxenuk, OFS engaged  exclusively in
trading  securities for its own account and for its clients,  and OIL engaged in
real estate development and investment in technological and industrial  projects
in  Russia.  On June 29,  1999,  the  Company  purchased  all of the  issued and
outstanding  shares of each of OFS and OIL from Mr. Oxenuk for 5,270,000  shares
of the  Company's  common  stock,  no par value (the "Common  Stock").  Upon the
Company's  purchase of OFS and OIL, each became a wholly owned subsidiary of the
Company.  OFS, OIL and the Company were under common  control at the time of the
merger and,  therefore,  the acquisitions  have been accounted for at historical
costs in a manner similar to a pooling of interests.

         On  August  2,  1999,  Oxir  Internet   Solutions,   Inc.  ("OIS")  was
incorporated  under the laws of the State of Nevada as a  majority  owned  (51%)
subsidiary  of the  Company,  with the  balance of 49% owned by  management  and
employees. OIS was formed to develop e-commerce in Russia.

         In  addition  to OIS,  OIL and OFS,  the  Company  also owns 51% of the
outstanding stock of JSC "Oxir Consulting",  which started its operations during
the first quarter of 2000. An additional  39% of JSC "Oxir  Consulting" is owned
by OIS.  JSC "Oxir  Consulting"  has  entered  into three  contracts  to provide
accounting  services.  In November  1999,  OIS  purchased  "ISTAR-S,"  a Russian
private company.  "ISTAR-S"  subsequently changed its name to OXIRIS.  OXIRIS is
responsible  for the  purchase  and resale of  products,  shipping  and customer
service for the Company's  on-line store.  See Part I, Item 1,  "Description  of
Business -  Internet  Solutions."  Additionally,  the  Company is seeking  final
Russian registration of four other Russian  subsidiaries:  JSC "Oxir Insurance",
JSC "Oxir Fitness Club", " Oxir Imperial" and "Oxir  Informtour." The owners and



                                       3
<PAGE>

the  percentage  ownership  of JSC "Oxir  Insurance  Corporation"  will be:  the
Company (49%) and Mr. Oxenuk, the Company's President,  Chief Executive Officer,
Director  and  principal  stockholder  (51%).  The  owners  and  the  percentage
ownership of JSC "Oxir  Informtour" will be: the Company (60%) and OIS (40%). As
of June 30, 2000, these subsidiaries had not instituted operations.

         Through its subsidiaries, the Company operates in three areas:

1.       Through  OIS,  the Company  operates an Internet  shop and  web-hosting
center in Moscow, Russia.

2.       Through OFS, the Company offers a variety of financial services such as
asset  management  and  financial  consulting  to its  non-U.S.  clients with an
emphasis on asset  management.  In addition to  full-time  financial  management
services,  the  Company  helps its  clients  to define  their  financial  goals,
tolerance for market risks and investment objectives.

3.       Through OIL, the Company is an active  participant  in a number of real
estate projects  including the construction of a high-rise  apartment complex in
Moscow, Russia.

Internet Solutions

         Through OIS, the Company is providing  Internet services  consisting of
online sales (e-commerce),  set-up and support, and web site hosting,  primarily
to Russian clients.  Additional  services  provided are on-line payment systems,
web site advertising and promotion, and data security.

         Based on the  quarterly  Gallup  Media  report  dated  October 1999 and
reports  given  during the Internet  Marketing  Fall 1999  conference  in Moscow
(December  15-17,  1999), the number of Internet users in Russia is estimated at
between 2.5 and 3 million. In addition to the Russian-based  market,  management
believes  that a viable  market  exits  with  the  Russian  speaking  population
residing  in the  United  States,  Israel,  Canada,  Australia  and a number  of
European countries.

         Online Sales

         OIS has developed and implemented an online sales system. The Company's
web site  (http://www.oxiris.com)  (the "Web Site")  currently  offers books and
audio-video  products,  software,  household  supplies and  cleaning  agents and
electronics to Russian-  speaking  consumers for sale. The Web Site was launched
in February 2000 and the Company has begun to create a customer base.

         As of July 31, 2000, OIS has written agreements with the following book
manufacturers and distributors: "Master Kniga" dated May 4, 2000; "Sparrk" dated
April 25, 2000;  "Publishing  House Infra-M"  dated April 20, 2000;  "Top Kniga"
dated  February 10, 2000;  "Publishing  house  Priboy"  dated  February 4, 2000;
"Midiks"  dated April 12, 2000;  "Urist-Gardarika"  dated April 17, 2000;  "Book
Club Terra"  dated April 17,  2000;  "B.S.G.-Press"  dated April 19,  2000;  and


                                       4
<PAGE>


"Eksmo-Press" dated February 29, 2000, allowing the Company to offer products of
these entities online. The contracts provide for the delivery of books and other
goods,  priced by the seller and payable in Russian  rubles.  The agreements are
subject to Russian law and  disputes are to be settled by  arbitration.  Similar
agreements  have been  signed  with video and audio  distributors:  "Katakombus"
dated May 29, 2000;  "Yuliksis" dated May 25, 2000;  "Video Marketing" dated May
11, 2000; "Viking Video" dated April 24, 2000; "Savva Group Entertainment Video"
dated April 4, 2000; "Home Collection" dated April 14, 2000; "Varus Video" dated
April 17, 2000 and "Kvadro-Traid"  dated April 13, 2000.  Additional  agreements
for the  provision of household  supplies and cleaning  agents and software were
completed with  "Perfume-Light"  and "Laksti" on May 19, 2000 and July 13, 2000,
respectively.  The  Company is seeking  additional  agreements  with  publishing
houses and  merchandise  wholesalers  and  manufacturers  in order to expand the
types of products offered on the Web Site.

         Payment for Goods and Services

         The Company has contracted  with CyberCash to provide  confirmation  of
credit  card  payments  for  goods  and  services  purchased  via the Web  Site.
Confirmation or declination of a transaction is received within 40 seconds. Upon
approval of a transaction,  the product is shipped to the purchaser. The Company
pays CyberCash a per transaction cost of 2.5% of the transaction, with a minimum
cost of $0.50 per transaction. Credit card payments are made in U.S. Dollars.

         The  Company  also  accepts  payment in Russian  rubles.  Ruble  paying
customers have the following options:

         o    Pay cash to a courier on delivery.  The online customer inputs the
              desired time of delivery.  As soon as the order is completed,  the
              Company contacts the courier,  who contacts the customer by either
              phone or e-mail  to  confirm  the time of  delivery.  The  courier
              delivers  the order,  accepts the money and leaves a receipt.  The
              courier then remits the payment to the Company.  All couriers will
              be under contract to the Company. See Part I, Item 1, "Description
              of Business - Internet Solutions - Delivery of Goods."

         o    Prepayment made according to invoice.  After  completing an order,
              the customer prints out an automatically  generated  invoice and a
              money  transfer  form.  The completed form is taken to the Russian
              Savings Bank with branch offices throughout Russia. The payment is
              sent by the bank to the  Company  referenced  with the  customer's
              order  number.  As soon as the money is received,  the customer is
              sent the order by a choice of either mail or courier.

         Under each of the plans listed above, the customers have the capability
to track  their  order  status  on-line.  All  shipping  charges are paid by the
customers  with the exception of Moscow  deliveries  that are delivered  free of
charge.

         The Company does not intend to convert  ruble  payments  received  from
Russian customers to U.S. Dollars. Instead, the Company intends to use all ruble
payments to pay Russian  suppliers,  to cover current  expenses and to pay taxes
within the territory of the Russian Federation.

                                       5
<PAGE>

         Delivery of Goods and Services

         OIS delivers goods using several methods:

         o    Express  Delivery  provided  by  "United  Parcel  Service  (Rus),"
              pursuant  to an  agreement  dated  February  23,  2000,  and  "EMS
              Garantpost"  pursuant to an  agreement  dated  April  2000.  These
              couriers provide express  delivery,  within one to eight days, for
              goods delivered in Russia,  the Commonwealth of Independent States
              ("CIS"), the United States, Canada, and Israel.

         o    Traditional  Delivery  into  foreign  countries is provided by the
              Department of Russian Federal Mail Service  ("International Postal
              Service"), pursuant to an agreement dated April 20, 2000. Delivery
              is  usually  within  15  days to  CIS,  and 21 days to the  United
              States, Canada and Israel.  Delivery within the Russian Federation
              is  contracted  through the  Department  of Russian  Federal  Mail
              Service ("Moscow Postal Service"),  pursuant to an agreement dated
              April 19, 2000.  Delivery is usually within seven days  throughout
              Russia.

         For deliveries within the Moscow area, the Company has its own delivery
service.  Deliveries  within  Moscow  are  made  within  24  hours  of  complete
processing of an order.

         Currently,  product  inventories  are maintained by each of the product
suppliers.  Each supplier provides the Company daily an accurate update of their
stock and the on-line  store manager  updates  product  availability  on a daily
basis.  The manager  receives the orders placed on-line within 12 hours and then
fills the orders using a supplier priority system. If the main supplier does not
carry a  particular  item  ordered,  the manager will  continue  down a priority
supplier list until the order is complete. The items are then purchased from the
suppliers and delivered to the Company's  sorting  warehouse  located in Moscow,
Russia.  See Part I, Item 2, "Description of Property." The procurement  process
varies depending on the type of product.  For example,  video and audio products
may be  obtained  from the  supplier  within 48 hours while  certain  literature
products  take up to six days).  When all items on an order are  received by the
Company,  they are packaged and shipped using the customer's  selected  delivery
method.

         The Company  currently  sells  approximately  3300 movie  titles in VHS
format.  The  Company  expects  that  the  majority  of  movie  titles  will  be
Western-produced movies dubbed or subtitled in Russian, but less than 30 percent
of the offered movie titles are expected to be Russian  productions.  During the
next year the Company  expects to add  approximately  80 to 100 new movie titles
monthly.  The  average  price per video will be 90 to 120 rubles  (approximately
$3.00 to $4.00),  depending  on the film  category.  The price of the movies has
been determined by agreements with the Company's suppliers.

         At present,  the Web Site offers approximately 900 audio CDs ranging in
price  from $3 for  economic  versions  of  Russian  productions  to $15 for CDs
manufactured by Western standards.

         The  number  of book  titles  currently  for  sale  at the Web  Site is
approximately  42,000.  The prices vary  according  to type of  literature.  For


                                       6
<PAGE>


example,  popular fiction titles sell for 40 to 100 rubles  (approximately $1.40
to $4.00), while specialty titles such as technical multi-volume reference books
may be sold for up to 3000 rubles (approximately $105).

         The assortment of household  products,  available on the Web Site since
May 2000, comprises a large number of home cleaning agents with an average price
of $4, home appliances and electronics ranging in price from $20 and up.

         In June 2000, the Company launched three more departments  dealing with
computer software, consumer electronics and toys. The software products comprise
470 items  with an average  cost of $20;  59 items are  offered in the  consumer
electronics department and over 500 items are offered in the toys department.

         The Company  intends to create an opportunity  for a variety of Russian
businesses  to sell their  goods over the  Internet.  Those  businesses  will be
welcome to use the Company's payment system. However, to reduce the risk of loss
due to  charge  backs and  dishonest  sellers,  the  Company  intends  to obtain
deposits from the business equal to two or three weeks of expected revenues.

         Web-Hosting

         Through its project known as  "Webhosting.Russia,"  (http://www.wh.ru),
OIS intends to offer web-hosting  services  involving the provision of web sites
and/or    servers   to   its   clients.    The    Company's    main   web   site
(http://www.oxiris.net) contains a link to Webhosting.Russia.  The Company plans
to offer two types of  services  to its  web-hosting  clients:  co-location  and
virtual server.

         Co-location

         Under this  approach,  the client's  equipment is used on the Company's
premises.  The client defines the  configuration of its server and the Company's
technical  personnel  provide  support  services  and  data  backup.  With  this
alternative,  the client does not have the expense of  installing  a  high-speed
Internet connection at their location and maintaining its equipment. The Company
also  provides  uninterrupted  power  supply  systems  that protect the client's
servers in case of power  failures.  This  option is  important  to clients  who
expect a heavy volume of Internet traffic to their web site. The Company intends
to charge a fee of $200 per month for co-location services.

         Virtual Server

         A client who plans to  implement a relatively  small  Internet web site
(i.e. several hundred megabytes of content without complex interactive features)
and  expects a minor  traffic  load (less than 1,000 hits per day) may decide to
choose this option.  Under this alternative,  the client's web site is hosted on
the Company  servers.  The Company  provides the database  connectivity and also
supports a limited number of e-mail accounts.

         The Company intends to charge a fee of $15 to $95 per month for virtual
site  hosting.  This fee  structure  is based on the cost to the  Company of web


                                       7
<PAGE>


hosting,  including the costs of maintaining the servers, providing connectivity
and maintaining e-mail accounts.  The Company's  competitors in Russia,  such as
Demos and Zenon, have prices starting at $15 and $20 per month, respectively.

         Virtual site owners have the option of using the Web SiteMaster System,
designed and developed by OIS,  which allows them to administer  their web sites
by means of a regular  browser.  Using the Web  SiteMaster,  clients are able to
manage users and e-mail  addresses and review the  statistical  data on the site
visitors.  Using these data, the clients can plan their Internet activity,  such
as advertising, and analyze the results.

         Most Russian Internet traffic meets at one point, called M9-IX (a point
of mutual  exchange of  IP-traffic  located on Moscow  Intertown  Phone  Station
(MIPS-9)).  The Company's Internet center will be connected to the M9-IX traffic
exchange node by fiber optic channel  (single mode fiber,  approximate  length 3
kilometers) in October of 2000. As a result, the Company can offer its clients a
fast and reliable channel connection speed.

         In April 2000, OIS began  assigning its  Internet-related  contracts to
OIS-Russia,  a wholly  owned  subsidiary  of the  Company.  See Part I,  Item 1,
"Description of Business - Business Development."

Equity Market Investing and Asset Management

         Through  OFS,  the  Company  manages  funds of  private  and  corporate
non-U.S.  clients  in the stock  markets of the United  States.  Currently,  the
majority  of the  Company's  clients  are  concentrated  in Russia.  Neither the
Company  nor OFS  provide  financial  or  investment  advice to any  citizen  or
resident of the United States.

         OFS has opened on-line trading accounts with Datek,  Charles Schwab and
E-Trade. All trades conducted by the Company on behalf of itself and its clients
are directed through these brokers.  The Company's only  relationship with these
brokers is as a client. The Company has two principal types of accounts: (i) one
solely owned Company  account with Datek Online;  and (ii) two  customers'  fund
accounts with E-Trade and Charles Schwab.  Direct satellite links to information
centers permit the Company's fund managers to obtain stock market data online.

         Currently,  neither  OFS nor the  Company  are  licensed in the U.S. as
securities broker-dealers,  agents, or investment advisors, and neither provides
any such services within the U.S. The Company  anticipates  that it will address
this issue and apply for  licensing  in the U.S. at some future  date,  although
there can be no assurance that this will occur.  Until this process is completed
the Company has no intention  to provide any form of  financial  services in the
United States. In January 2000 the Company adopted a policy of holding less that
40% of its total assets in the form of securities.

         For  its own  account,  the  Company's  investment  goal is to  achieve
profits  in a  long-term  perspective  rather  than in  higher  risk  short-term
speculations.  The  Company's  portfolio  holdings  are  primarily  in stocks of
American  companies  belonging  to the high  technology  sector  (including  the
Internet), hardware and software products and telecommunications.  The Company's
assets  managers  consider a variety of  fundamental  and  technical  investment
criteria in selecting  the companies in which to invest.  The Company's  primary


                                       8
<PAGE>


trader is Michael Smirnov, the Company's Vice President, Chief Financial Officer
and Director, who was certified as a trader with a Diploma of the First Category
in 1994 by the Ministry of Finance of the Russian Federation. Mr. Smirnov is the
only person trading for the Company.

         For an individual  client  desiring to participate in on-line  trading,
OFS provides the following services:

         Consultancy  Services.   OFS  representatives   consult  clients  about
problems  that can  arise in their  relationships  with  on-line  brokers.  This
includes  an  explanation  of the terms  and  conditions  set forth in  customer
agreements of on-line brokers and the risks associated with on-line trading. The
Company  also  assists  clients  in  negotiating  settlements  of  disputes  and
conflicts  with  brokers.  Additionally,  the Company  helps the clients  choose
appropriate   trading  software  and  familiarizes   them  with  the  functional
capabilities of their chosen trading programs.

         Analytical  Research.  The Company  offers  recommendations  to clients
regarding stock purchases and financial instruments.

         Portfolio  Management.  The Company also  provides  asset and portfolio
management  for  its  clients.  The  following  steps  are  followed  to  form a
portfolio:

(1)      Obtaining an understanding of the risk tolerance of the client.

(2)      Screening the market for stocks that have the characteristics that meet
         the clients' needs.

(3)      Establishing the following parameters of each prospective investment:

         o     The business  should be  understandable.  Analysts  must know the
               business and the markets in which they compete.

         o     The business should have favorable long-term prospects.

         o     The  business  should  have a  good  management  history,  in the
               opinion of OFS's analysts.

(4)      Stock Evaluation.  The Company uses traditional  fundamental  valuation
         techniques in evaluating an investment.

Russian Real Estate Development Project

         The  Company,  through  OIL, is an  investor  in a high-rise  apartment
complex in Moscow,  Russia (the  "Project").  In 1994, 1995 and 1996, the Moscow
city government authorized a Russian construction  company,  "Kvartal 32-33", to
coordinate  construction  of five high-rise  apartment  buildings in two housing
blocks  in  Moscow.  The  goal of the  Project  is to  provide  modern  housing,
comparable to European  standards,  by building  high-rise  apartment  complexes
located at Leninski Prospect 116-1,  Leninski Prospect 128-1,  Leninski Prospect
98-1, Udaltzova Street 5-1, and Udaltzova Street 27-1.

                                       9
<PAGE>

         The  Project is being  financed  by private  investors,  including  the
Company,  "Kvartal 32-33,"  Zarubezhtsvetmet,  a Russian exporter of non-ferrous
metal, DTD Trading House, a Nizhnevartovsk  (Russia) oil company,  and Kvazar, a
Russian  publishing  company.  As of June 30,  2000,  the Company  has  invested
$4,103,214  in  the  Project.  The  Company's  investment  is  estimated  by the
developer to be less than 10% of the total Project.

         Management  believes  that the Company's  return on investment  will be
realized in two stages. During the first stage, OIL received unimproved space in
the building at Leninski  Prospect  116-1.  The Company  intends to develop this
space into a Fitness Center offering a workout area, fitness bar, sauna, massage
parlor, tanning salon, beauty salon, restaurant and a liquor bar, to be operated
by OIL (the "Complex"). The Complex offers 741 square meters (7,974 square feet)
in area.  The restaurant  will be designed to host up to 40 people,  the fitness
center will be designed to host 30 people and the salon will be designed to host
8 people.

         OIL also  received a  five-bedroom  apartment in Moscow  measuring  267
square meters (2,820 square feet),  which was used by Mr. Oxenuk,  the Company's
President,  Chief  Executive  Officer,  Chairman of the Board of  Directors  and
principal  stockholder.  In April 2000,  Mr.  Oxenuk agreed to pay the Company a
total of $1,790,465,  which includes $563,300 (apartment appraisal cost verified
by an  independent  third party  government  entity),  $50,000  (the cost of two
underground  garages) and $ 1,177,165 (tenant improvement cost), to be paid over
the next fifteen years No regular payments are required to be made; payments and
the  amount of any such  payments  may be made in Mr.  Oxenuk's  discretion.  No
interest is to be paid on the purchase  price.  Payment to the Company may be in
the form of cash or shares of the  Company's  Common  Stock.  Should Mr.  Oxenuk
decide to make payment with the Company's Common Stock, the value of such shares
shall be equal to the closing price of the Company's shares in the public market
on the date of such payment or, if there is no public market for the shares, the
book value per share.See Part III, Item  12,"Certain  Relationships  and Related
Transactions."

         The second stage of the Project entails the completion of the building,
located at Leninski  Prospect 128-1. It is expected to be completed in the first
quarter  of  2001.  A total  of  663.8  square  meters  (7,145  square  feet) of
undeveloped  space in this building has been  assigned to OIL by the  developer.
This  unimproved  space  consists  of  the  following:   (1)  two  three-bedroom
apartments,  151 square  meters (1,626 square feet) and 156 square meters (1,680
square feet),  respectively;  and (2) two four-bedroom apartments of 176 and 180
square meters (1,899 and 1,940 square feet,  respectively).  The Company intends
to sell the apartments, although there can be no assurance that this will occur.

Marketing

         Trade Shows

         In 1999, the Company  participated in Russian business forums and trade
shows. The Company attended the 2nd Russian Conference  "E-commerce "1999", held
November 11 and 12, 1999, in St.  Petersburg,  Russia. The Company also attended


                                       10
<PAGE>


the  Business@Internet.Russia  -"real business in a new world," December 7, 1999
in Moscow, and the 3rd Conference  "Internet  Marketing,  Fall 99" in Moscow. In
March 2000,  the  Company  participated  and co-  sponsored  the Fourth  Russian
Internet Forum (RIF). The Company's officers presented three reports. The thesis
of  all  the  reports  can be  found  at  the  RIF  web  site  (www.rif.ru).  By
participating  in shows and  exhibitions,  the  Company  intends to promote  its
services and products to the Russian speaking community.

         The Internet

         The Company has created an interactive web site  (http://www.oxir.com),
containing information about its major lines of business. The Web Site has links
to the Company's current projects.

         In order to determine the most effective way of reaching consumers, the
Company will  initially use the Internet  media to focus on banner  advertising.
The Company  displays its banners in banner  exchange nets,  namely RLE (Russian
Link Exchange) and in the major Russian search engines such as Rambler,  Yandex,
Aport, Atrus, and List.

         Paper Publications

         The Company regularly places  advertisements in such business guides as
Moscow Yellow Pages, Russian Yellow Pages, Stolitsa Kontakt, Moscow-Address, and
Golden  Business  of Moscow.  The  Company  employs a  marketing  strategy  that
involves  advertising in international  and local  publications  such as "Global
Review",  "The Economist",  "Expert",  "Banks and Technologies",  "Moya Moskva",
"Kompaniya",  "Gorod  Aeroport",  "Transaero-flight  UN", and "Moscow News." The
E-shop  advertisement  is published  monthly in "Internet"  and "Mir  Internet".
Besides paid advertisements,  non-commercial materials were published in Russian
newspapers  and  magazines,  such  as  "Kompaniya",   "Mir  Internet",  "Dengy",
"Kommersant-Vlast'" and newspapers: "Izvestia", "Segodnya",  "Kommersant-Daily",
"Trud", "Vremya",  "Moscow News", "Rossiyskaya Gazeta",  "Komsomolskaya Pravda",
"Ekonomika y zhizn'".

         Television and Radio

         In Sochi,  Russia, a television  program in the series "Business by All
Rules"  featured the  activities of the Company and Mr.  Oxenuk,  its President,
Chief  Executive  Officer,  Chairman  of the Board of  Directors  and  principal
stockholder.  The Company intends to advertise its e-commerce  project on CTC, a
Russian   television   station,   and   plans   to  do  radio   advertising   on
"Avtoradio-Narodnaya marka."

         Other Media

         The  Company  has  entered  into an  agreement  with  Aeroflot  Company
representing the interests of Aeroflot whereby Aeroflot will place the Oxir logo
and  advertisements  on air ticket  envelopes  for the first and business  class
passengers   for  regular   Aeroflot   flights  to  major  Russian   cities  and
international flights to the United States, Canada and Germany. The agreement is
for a period of three months during which Aeroflot will distribute 68,000 ticket
envelopes (14,000 within Russia;  10,000 on flights to Canada; 30,000 on flights
to USA; and 14,000 on flights to Germany). The Company has paid Aeroflot $8,206.

                                       11
<PAGE>

         The Company also uses  advertisement  billboards in strategic  areas of
Moscow, including the major international airport in Russia, Sheremetievo.

         The Company places monthly the  advertisement of its services on Moscow
ATM receipts (128  automatic  teller  machines using the credit cards of all the
major Russian payment systems such as Visa, Master Card, American Express, etc.)
The circulation of the Company  advertisements  amounts to approximately 800,000
receipts monthly.

Competition

         The  Company  has many  competitors  in the areas of  Internet  access,
financial  services  and  real  estate   development.   Many  of  the  Company's
competitors are larger,  established companies with greater assets and financial
reserves than the Company.  The Company's  future  success will partly depend on
its  ability  to  compete  with  these  businesses.  Presently,  there can be no
assurance that the Company will be able to compete with these businesses.

         Internet

         Those entities in direct competition with OIS's e-commerce  business in
Russia are Ozon (http://www.o3.ru/),  Mistral (http://www.mistral.ru),  Books of
Russia   (http://www.books.ru),   Knorus   (http://www.book.ru)   and  Y  Sitina
(http://www.kvest.com).  All of these companies offer products  similar to those
offered by the Company and some have a history of up to three years.

         Several  online  shops  offer  books,  videotapes  and CDs for  Russian
speaking  customers  outside of  Russia.  They  include  Russian  Shopping  Club
(http://www.russianshopping.com),     Sverdlov.com    (http://www.sverdlov.com),
Kniga.com  (http://www.kniga.com)  and Dom Knigi (http:  www.domknigi.com).  The
Company believes that these  competitors  have a limited  selection of goods and
relatively  high prices in comparison to the  Company's  site.  The Company also
believes that it competes  favorably with these other companies in its terms and
cost of delivery.

         Because the Company's  existing  competitors  are registered as Russian
businesses,  they are unable to establish  foreign merchant accounts which would
enable them to process credit card payments by respectable and reliable American
paying systems.  As a result, they are forced to use credit card payment systems
developed in Russia (for instance,  Assist). Management believes that its use of
the CyberCash  processing system gives it an advantage over competitors  because
CyberCash is the most widely known credit card processing on the Internet.

         The Company  also plans to employ the  traditional  payment  methods of
cash on delivery  and wire  transfers.  In addition to  providing a selection of
payment  methods,  the Company  also  offers a wide  selection  of products  and
services and delivery options.

         With  these  features  the Web Site aims to  attract  Russian  Internet
shoppers  and  retain  their  business  as repeat  customers.  According  to the
quarterly  report  published by Gallup Media in October 1999,  and reports given


                                       12
<PAGE>


during the Internet  Marketing Fall 1999 conference in Moscow  (December  15-17,
1999),  the number of Internet users in Russia is estimated at between 2.5 and 3
million.  The  majority of users (83%) is male and between the ages of 20 and 30
(67%).  Based on market research  conducted by OIS,  Russian Internet users, who
responded to an on-line  questionnaire,  indicated the following  preference for
payment  methods:  (1) cash on delivery (49%);  (2) credit cards (44%); (3) bank
account  transfers  (17%);  and (4) payment  forward (13%).  OIS has taken these
demographics  into  consideration in tailoring its online store contents and the
other choices it makes available to its customers.

         Financial Services

         The  principal  competitors  to OFS, the Company's  financial  services
subsidiary which provides  financial  services to Russian clients are Interstock
(http://www.interstock.ru/),  Global Market Online  (http://www.activtrade.com),
Nat  Invest  Securities   (http://www.natinvest.com),   Internet  Trading  Group
(http://www.internettrading.ru)  and  Infoline   (http://svn.edunet.ru/Stocks/).
Although the Company has a relatively short operating history, t believes it can
compete  in the  financial  services  business  because  of the  experience  and
expertise of its  personnel in dealing in the Russian  economy and  knowledge of
the U.S.  securities  markets.  The Company also offers smaller  initial minimum
investments and is price competitive for its services.

         Real Estate

         In the real estate development market in Moscow,  Russia, the Company's
main  competitors are Holding Conti,  Golden Keys,  Centre 2000 and MIAN.  These
companies are promoting  projects that are comparable to the Company's  Project.
Holding  Conti  currently  has a project  named  "Glebovo  Complex"  located  on
Begovaya  Street.  The cost per square meter of this property is between  $2,200
and $2,500. Golden Keys has a complex located on 1 Minskaya Street. Golden Keys'
prices per square  meter of this  property  range from $2,000 to $2,800.  Centre
2000's property on 11 Pozharski Pereulok is priced between $2,300 and $2,700 per
square meter. MIAN has three different properties.  The property located on 15/2
Krylatskie  Hills  sells for  $1,500 to $2,350 per  square  meter.  The cost per
square meter of the property on 10/2 Obydenski  Pereulok  starts at $2,300.  The
prices  for the  property  on 29 Novy  Arbat  Street  start at $2,900 per square
meter.

         By comparison,  the  condominiums at 116-1 Leninski  Prospect were sold
for $1,900, $2,100 and $2,150 per square meter. The condominiums in 128 Leninski
Prospect, the Company's second project, are priced at construction stage between
$1,380 and $1,890 per square meter. In addition to price, the Company's strategy
is to stress the location of its projects;  the amenities  provided to residents
including  full fitness and beauty  facilities,  restaurant,  and day care,  the
security system,  and the properties' modern technology  construction.  Further,
the  Company's  property has no structural  bearing walls within the  buildings.
This allows residents to determine the layout of their unit.

Doing Business in Russia

         Management  believes  that the  Company has an  advantage  as a foreign
resident entity,  which includes being subject to United States taxation instead
of Russian,  a developed  business network,  and certain forms of both legal and
financial  protection  and  guarantees  from  Russian  and  Moscow  governments.
However, an unstable Russian economy makes it difficult to predict the Company's
success.

                                       13
<PAGE>

         Under Russian Federal law, an American  company  operating in Russia is
not subject to taxation in Russia on certain categories of income. Categories of
income,  which  are tax  exempt at their  source,  include  those  not  directly
connected  with a  non-resident  company's  commercial  activity.  This includes
interest  received  from  bank  deposits,  loan or lease  agreements  and  stock
dividends. A non-resident company may be exempted from tax on income received as
a result of the  company's  commercial  activity  in Russia if such  activity is
indicated in the agreement between the United States and the Russian  Federation
of  June  17,  1992.  Guarantees  provided  by the  government  to  non-resident
companies are  enumerated in Russian  Federal law.  Under this law  non-resident
companies have the right to:

o        Legal  defense  of  foreign   investors'   activities  in  the  Russian
         Federation.
o        Use of different  forms of  investments in the territory of the Russian
         Federation.
o        Assignment of rights and duties to third persons.
o        Compensation in the event of property nationalization and confiscation.
o        Guarantee  against  an adverse  change in  legislation  of the  Russian
         Federation.
o        Appropriate settlement of disputes,  which may arise in connection with
         investments  and  business  activity  of  a  foreign  investor  in  the
         territory of the Russian Federation.
o        Use in the territory of the Russian  Federation and transfer  abroad of
         income, profits and other legally received funds.
o        Free  export  from the  Russian  Federation  property  and  information
         initially brought into the country as foreign investment.
o        Acquisition of securities.
o        Participation in privatization.
o        Utilization  of land,  natural  resources,  buildings  and  other  real
         property.

         Many of the  Company's  competitors  are subject to other Russian taxes
because they are Russian companies.

         All of the  Company's  sales,  reselling,  web hosting,  web design and
e-commerce in Russian are done by OXIRIS.

Patents, Trademarks and Licensing Agreements

         The  Company  has  filed  a  trademark  for  its  logo  in the  Russian
Federation,  but  has  not  registered  any  trademarks  in the  United  States.
Currently, the Company has no patent or licensing agreements except for standard
software  license  agreements  with Oracle,  Red Hat,  Microsoft,  CyberCash and
Apache Group, among others.

                                       14
<PAGE>

Research and Development

         The  Company  develops  its  own  software  for  the  creation  of  web
applications.  The  Company  also  develops  its own  system to create  Internet
stores.  At  present,  five  programmers,  a  systems  analyst  and  a  database
administrator are involved in this development process.

         The  application  server is in itself a platform for the convenient and
effective  creation  of  dynamic  Internet  sites  such  as  online  stores  and
information portals. Currently the programs are developed on the Win32 and Linux
platforms.  In the near future,  the programs will be transferred to the Solaris
SPARC and Solaris Intel systems.  Since the fall of 1999, the Company's Web Site
has been operating on the already developed software programs.

         The system for creating on-line stores is composed of a web application
server and a database (Oracle 8), designed for the rapid launching and effective
operation of e-commerce web sites. The database  consists of catalogue  modules,
designed  for  the  support  of the  store's  online  display,  and  back-office
operations  such as client order  processing,  inventory  support,  delivery and
accounting  preparation.  At present, this is the system used to operate the Web
Site.

         The Company also develops its own software for web-hosting  management.
Presently, four programmers are involved in this development process,  primarily
UNIX coding. The management systems, intended to simplify clients' access to the
information  concerning audience of their sites and/or content management,  were
launched in the fall of 1999.  The  development  is carried out with open source
software,  which is free from licensing fees like Linux operation system and GCC
C/C++ language compiler.

         If in the future the  Company  acquires  or becomes  associated  with a
business or entity that  requires  research and  development  of  products,  the
Company will allocate such funds as may be necessary for research activities. As
of the date hereof,  the Company does not  contemplate  such  activities  in the
immediate future.

Employees

         As of June 30, 2000, the Company  employs 105 people between the Moscow
(30 employees)  and Sochi (4 employees)  representative  offices,  Oxir Internet
Solutions,  Inc. - Moscow  representative  office of the Nevada  corporation (33
employees),  OXIRIS (23  employees),  Oxir Consulting (11 employees) and the Las
Vegas  corporate  office (4  employees).  Three  employees  allocate  their time
between more than one of the Company's  divisions.  In addition to its full-time
employees,  the  Company  occasionally  uses the  services of  consultants  on a
contract basis.

         Because the Company acts as an investor in, rather than a developer of,
construction projects in Russia, it is not necessary for the Company to maintain
a staff for these projects. All construction and affiliated jobs relating to the
Project  are  carried out by the Project  developer.  The  Company's  management
oversees the Project.

         Management  intends  to hire  additional  qualified  employees  only as
business  conditions  warrant  and  as  funds  are  available.  In  such  cases,
compensation  to management  will be consistent  with  prevailing  wages for the
services  rendered.  The Company does not anticipate in the immediate  future to
offer any employee a bonus, profit sharing or deferred compensation plan.

                                       15
<PAGE>

Facilities

         The Company's  principal  place of business and  corporate  offices are
located at 3980 Howard Hughes Parkway,  Suite 340, Las Vegas,  Nevada 89109. The
facilities  consist of  approximately  1,500 square feet of office space and are
leased for a term of five years at the rate of $4,063  per  month.  The  Company
believes  that its current  principal  offices are  adequate  for the  immediate
future.

         The Company  uses as its Moscow  representative  office the  facilities
acquired  from OFS and OIL  located at  Nauchny  Proezd 12 Office  #28,  Moscow,
Russia  117802.  The  facilities  are leased  for a term of one year.  The lease
includes an  automatic  renewal of the lease term  unless the Company  otherwise
notifies the lessor.  The facilities are leased at the rate of $15,184 per month
and consist of 790 square meters (8,500 square feet).

         The Company's Sochi representative office is located at Gagarina Street
5 Sochi Russia 354065. The facilities consist of approximately 1,076 square feet
and are leased for a term of one year. The lease  includes an automatic  renewal
of the lease term unless the Company otherwise notifies the lessor.

Litigation

         There are presently no material pending legal  proceedings to which the
Company or any of its subsidiaries is a party or to which any of its property is
subject and, to the best of its knowledge,  no such actions  against the Company
are contemplated or threatened.

Item 2.           Description of Property

         As of June 30,  2000,  the Company  has  invested  $4,103,214  into the
construction  of the Project in Moscow.  The  Company has applied  approximately
$1,069,460  from this  investment to develop the Complex in one of the apartment
buildings constructed in the Project.  There are no limitations on the ownership
and no liens on the property.

         The Complex will include a workout area,  fitness bar,  sauna,  massage
parlor,  tanning  salon,  beauty salon,  restaurant  and a liquor bar. The floor
space is approximately 7,974 square feet. It is currently undergoing the initial
construction stage and is scheduled to open by December 2000.

         The Company  maintains a sorting  warehouse  located in Moscow,  Russia
consisting  of 66 square  meters  (2,260  square feet) with a daily  capacity of
15,000  items.  The  facility  is leased for a term of one year with a right for
automatic renewal.

                                       16
<PAGE>

         On April 1, 1999, the Company  purchased a  single-family  house in Las
Vegas, Nevada for the price of $362,000 for Mr. Oxenuk and his family to occupy.
The Company  paid  $164,514 as a down payment  with the balance  mortgaged  with
GreenPoint  Mortgage  Company.  As of June 30, 2000, the Company has paid $1,711
and $206,173 is remaining to be paid on the mortgage principal.  The mortgage is
secured by a first lien on the single-family home and surrounding property.  The
Company was unable to qualify for the  mortgage  because it was newly  formed in
1998, accordingly the mortgage was obtained in the name of Mr. Oxenuk. The value
of the use of the house to Mr. Oxenuk was $29,761 for the fiscal year ended June
30, 2000. In the event  Mr.Oxenuk no longer  occupies the property  and/or is no
longer  associated with the Company as an officer and director,  Mr. Oxenuk will
have the option to purchase the property from the Company for an amount equal to
balance owing on the  mortgage,  subject to terms to be negotiated in good faith
between him and the  Company.  The  purchase  may be made in the form of cash or
shares of the Company's  Common Stock,  in Mr. Oxenuk's  discretion.  Should Mr.
Oxenuk decide to make payment with the Company's Common Stock, the value of such
shares shall be equal to the closing price in the public market on the date that
Mr. Oxenuk exercises his option or, if there is no public market for the shares,
the book value per share.  If Mr.  Oxenuk  elects not to purchase the  property,
legal title to the property will remain with the Company.

         The Company's  principal  place of business and  corporate  offices are
located at 3980 Howard Hughes Parkway,  Suite 340, Las Vegas,  Nevada 89109. The
facility  consists of  approximately  1,500  square feet of office  space and is
leased for a term of five years at the rate of $4,158  per  month.  The  Company
believes  that its current  principal  offices are  adequate  for the  immediate
future.

         The Company  uses as its Moscow  representative  office the  facilities
acquired  from OFS and OIL  located at  Nauchny  Proezd 12 Office  #28,  Moscow,
Russia  117802.  The  facilities  are leased  for a term of one year.  The lease
includes an  automatic  renewal of the lease term  unless the Company  otherwise
notifies the lessor.  The facilities are leased at the rate of $15,184 per month
and consist of 790 square meters or 8,500 square feet.

         The Company's Sochi representative office is located at Gagarina Street
5 Sochi Russia 354065. The facilities consist of approximately 1,076 square feet
and are leased for a term of one year. The lease  includes an automatic  renewal
of the lease term unless the Company otherwise notifies the lessor.

Item 3.  Legal Proceedings

         There are presently no material pending legal  proceedings to which the
Company or any of its subsidiaries is a party or to which any of its property is
subject and, to the best of its knowledge,  no such actions  against the Company
are contemplated or threatened.

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

         During the fourth quarter of the Company's fiscal year, no matters were
submitted to a vote of security holders.

                                       17
<PAGE>

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

         Upon  the  effectiveness  of  the  Company's  Form  10-SB  Registration
Statement  (the  "Registration  Statement"),  a portion of the Company's  Common
Stock could be publicly  traded.  However,  the Company is not yet registered to
trade on an  exchange.  The Company  intends to  initiate  trading of its Common
Stock on the Over The Counter - Bulletin  Board  ("OTC-BB") and has submitted an
application to the OTC-BB for ______ trading, but there can be no assurance that
the  Company  it will be able to do so.  In  1972,  the  Company  engaged  in an
intrastate  exempt offering in California.  The shares offered  pursuant to that
offering were restricted but such restrictions have expired.

         Except  for  the  application  to  the  OTC-BB,  there  are  no  plans,
proposals,  arrangements  or  understandings  with  any  person  concerning  the
development of a trading market in any of the Company's  securities.  Because to
date there has been no trading market for the Company's Common Stock, historical
price information is being omitted.

         As of June 30, 2000,  there were 180 holders of record of the Company's
Common  Stock.  As of June 30,  2000,  the  Company  has issued and  outstanding
21,189,000  shares of Common  Stock.  Of this  total,  approximately  19,944,378
shares were deemed "restricted securities" as defined by the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and certificates  representing such
shares bear an appropriate restrictive legend.

         Of the Company's total  outstanding  shares,  upon the effectiveness of
the Registration  Statement,  approximately 1,244,622 shares were eligible to be
sold,  transferred or otherwise traded in the public market without restriction,
unless held by an affiliate or controlling  stockholder of the Company.  None of
these shares have been identified as being held by affiliates.

         Of the total remaining  outstanding  shares,  approximately  16,149,400
became  eligible to be sold pursuant to Rule 144 subject to the volume and other
limitations set forth under Rule 144 as of September 25, 2000.

         In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned restricted shares of the
Company for at least one year,  including  any person who may be deemed to be an
"affiliate"  of the  Company  (as the term  "affiliate"  is  defined  under  the
Exchange Act), is entitled to sell, within any three-month  period, an amount of
shares that does not exceed the greater of (i) the average weekly trading volume
in the Company's  Common  Stock,  as reported  through the  automated  quotation
system of a registered  securities  association,  during the four calendar weeks
preceding such sale or (ii) 1% of the shares then  outstanding.  A person who is
not deemed to be an "affiliate" of the Company and has not been an affiliate for
the most recent three months,  and who has held  restricted  shares for at least
two years would be entitled  to sell such  shares  without  regard to the resale
limitations of Rule 144.

Dividend Policy

         The  Company  has  not   declared  or  paid  cash   dividends  or  made
distributions  in the past, and the Company does not anticipate that it will pay
cash dividends or make  distributions  in the  foreseeable  future.  The Company
currently   intends  to  retain  and  invest  future  earnings  to  finance  its
operations.

                                       18
<PAGE>

Recent Sales of Unregistered Securities

         Since July 1, 1999,  the Company issued shares of its Common Stock in a
private placement to the following investors in the following amounts:

       Name             No. of Shares       Purchase Price       Month Purchased
       ----             -------------       --------------       ---------------
Evgeni Shaposhnikov         1,600             $    8,000           October 1999
VAM Investment, Ltd.       30,000             $  150,000           October 1999
VAM Investment, Ltd.        8,000             $   40,000           February 2000
                          -------             ----------
         TOTAL:            39,600             $  198,000

         The private placements were conducted pursuant to Rule 504. To the best
knowledge of the Company,  the investors were either accredited investors or had
a  preexisting  personal or business  relationship  with Mr.  Oxenuk  and/or the
Company.  The Company  determined that each person was sophisticated and capable
of  assuming  the  risks  of  investing  in the  Company  or  had a  preexisting
relationship  with Mr.  Oxenuk  and/or the  Company  by  obtaining  a  completed
purchaser  questionnaire  from  the  purchasers  and the  Company's  preexisting
knowledge of such  purchaser.  The  proceeds  from the  issuances  were used for
general  corporate  operating  purposes  and  investments.  The  offerings  were
conducted by the Company.  The Company did not use an  underwriter in connection
with  the  offerings.   The  purchasers  were  the  only  persons  contacted  in
association with the offering.  No general  solicitation or general  advertising
was  made.  The  Company  presented  the  purchasers  with a  private  placement
memorandum summarizing the Company and the risks involved in any investment. The
Company  presented the purchasers with the information  required to be delivered
pursuant  to Rule  502  promulgated  under  Regulation  D  because  the  private
placement memorandum provided  information  regarding its business and financial
information  sufficient  to permit  the  offeree  to assess the risks of such an
investment equivalent to that presented in a registration statement.

         In September  1999,  the Company  issued 60,000 shares to First Liberty
Investments,  Inc. as part of its  compensation  for  providing  consulting  and
investment banking services to the Company.  The shares were valued at $5.00 per
share. In January 2000, the Company  repurchased 1,200 shares from a stockholder
for $6,000. The shares were retired.

         None of the  issuances of shares set forth above were  registered  with
the Securities and Exchange  Commission (the "Commission")  under the Securities
Act of 1933, as amended (the "Securities  Act"),  because the transactions  were
believed to be exempt from such registration pursuant to the exemptions provided
by  Section  4(2)  of  the  Securities  Act  and/or   Regulation  D  promulgated
thereunder.

                                       19
<PAGE>

Item 6.  Management's Discussion and Analysis or Plan of Operation

         The  following  information  should  be read in  conjunction  with  the
financial statements and notes thereto appearing elsewhere in the Form 10-SB.

Overview

         The Company continues to pursue strategic  alternatives to maximize the
value of its portfolio of businesses.  Some of these alternatives have included,
and will  continue  to include,  selective  acquisitions,  establishment  of new
projects and the launch of new subsidiaries.  The Company has provided,  and may
from time to time in the  future  provide,  information  to  interested  parties
regarding portions of its businesses for such purposes.

         Financial  information presented herein pertains to the Company for its
fiscal years ended June 30, 2000 and 1999. The Company has elected a fiscal year
ending June 30.

Results of Operations

         For the fiscal year ended June 30, 2000


                  The  Company  incurred  sales  during  the year ended June 30,
2000.  The sales  consisted  of books and other  products  retailed  through the
Company's Internet  subsidiary OIS. For the fiscal year ended June 30, 2000, the
Company had $18,882 in revenue  from sales  compared to no revenue from sales in
the previous  year.  During the fiscal year ended June 30, 2000,  the  Company's
primary business  activity was managing funds for private and corporate  clients
in stock and money  markets  and  engaging  in various  trading  activities  for
Company  accounts in the United States markets  through OIL. For the fiscal year
ended June 30, 2000, trading activities resulted in the Company realizing a gain
of $836,275 on the sale of marketable  securities and a net  unrealized  gain of
$28,814,  a decrease  compared  with the  previous  fiscal year of $857,812  and
$1,696,650,  respectively.  This  decrease  reflects  the  downturn of high-tech
stocks in the U.S. market during the fiscal year.

         The Company's  general and  administrative  expenses  during the fiscal
year ended June 30, 2000 increased by $2,011,492 to $2,486,075 . The increase is
the result of the Company's  expanded  operations  in Moscow,  Russia and in Las
Vegas, Nevada. The Company also incurred $204,167 of depreciation expense on its
fixed  assets and rent  expense of $257,647 on its office  facilities.  Interest
expense for 2000 increased  from the previous year by $10,863 to $95,763.  These
changes reflect the interest paid on the Company's margin accounts.

         The  financial  statement  for June 30, 2000 also reflects a full years
activity  compared to seven months for June 30, 1999.  The Company  recognized a
deferred tax benefit of $942,495 for the decreased  realized gains in marketable
securities which had been recorded as unrealized gains in the prior year and the
net operating  loss of $1,236,763  1,579,399  ($.06 per share) in the year ended
June 30, 2000.


         A tax  provision  has been made for the third  quarter  of 2000 and the
fiscal year ending June 30, 2000 based on pre-tax capital gains.

                                       20

<PAGE>

Liquidity and Capital Resources

         The Company has  satisfied its initial  working  capital needs from the
sale for cash of its Common  Stock and from income  generated  by the  Company's
trading  activities.  See Part II, Item 5, "Market for Common Equity and Related
Stockholder  Matters - Recent Sales of Unregistered  Securities." Total cash and
cash  equivalents  at June 30, 2000 was $64,705  compared to $52,627 at June 30,
1999.  Also at June 30, 2000,  the Company had $56,928 in investments in trading
securities  compared to $4,672,246 at June 30, 1999. The $4,615,318  decrease is
due to sale of securities to finance the Company's expansion.


         Net cash used by  operating  activities  for the  fiscal  year 2000 was
$1,426,385 while net cash provided for the fiscal year 1999 was $2,838,112.  The
299% decrease  during period ended June 30, 2000 is primarily  attributed to the
$1,236,763  net loss for the year 2000 compared to the $1,836,979 net income for
the year 1999,  increase in  depreciation  expense,  as well as the  issuance of
stock for services  valued at $300,000 and increase in clients funds payable for
the Company's managed investment portfolio.  Offsetting the decrease is a change
in provision for income taxes for fiscal year 2000.

         During the fiscal  year ended June 30,  2000,  the  Company's  net cash
provided by investing activities was $1,248,085 compared to $1,548,483 cash used
in the fiscal year ended June 30, 1999.  This was attributed to the $4,615,  318
decrease in trading  securities and partially offset by the $1,924,906  decrease
in margin account  balance and $1,442,327  used for the purchase of property and
equipment.


         During the fiscal  year ended June 30,  2000,  the  Company's  net cash
provided by financing  activities was $190,378  compared to $1,237,002 cash used
in fiscal  year  ended  June 30,  1999.  This was  primarily  attributed  to the
$2,337,867 advance to OIL, which funds were used for investing in the Project in
1999.  During the fiscal year ended June 30, 2000 the Company realized  $198,000
from the issuance of Common Stock for cash.


         At June 30,  2000 the  Company  had  total  assets  of  $5,471,765  and
stockholders'  equity of  $5,119,436  . In  comparison,  at June 30,  1999,  the
Company  had  total  assets of  $8,765,153  and  total  stockholders'  equity of
$4,335,748.  Working  capital  was  ($21,231  ) at June 30,  2000,  compared  to
$505,938 at June 30, 1999.

         In the next twelve months the Company  anticipates  meeting its working
capital  needs   primarily  with  revenues  from  its  operating  and  investing
activities or, if necessary,  from borrowings.  The Company has restructured its
cash demands and no longer has  commitment to invest in  additional  real estate
projects  with the  exception of ongoing  Complex  construction.  The  Company's
Internet  operations are  functioning  at the brake even level.  Any funds to be
raised  will be used to expand  ongoing  businesses  but those  businesses  will
function without any additional  capital.  Management is seeking  agreements for
additional sales of securities,  either through a private  placement or a public
offering.  Management also has plans to sell  investment  properties in Leninski
128  project in Moscow,  Russia  once the  building  is  completed  in the first
quarter of 2001.  There can be no  assurance  that the  Company  will be able to
successfully  secure funds either from the sale of its securities or from loans,
or that such funds may be  available on terms  favorable to the Company.  If the
Company's operations are not adequate to fund its operations and it is unable to
secure  financing from the sale of its securities or from private  lenders,  the
Company could experience a cash flow shortage, which could curtail the Company's
operations.  There can be no  assurance  that the Company will be able to obtain
financing.

         In the opinion of management,  inflation has not had a material  effect
on the operations of the Company.

                                       21

<PAGE>

Plan of Operation


         During the next twelve  months,  the Company will  continue to seek new
investment  opportunities  and  continue to develop its existing  projects.  The
Company has restructured its cash demands and no longer has commitment to invest
in  additional  real  estate  projects  with the  exception  of ongoing  Complex
construction.  The  Complex  has  been  divided  by  the  Company  into  smaller
sub-projects,  including a fitness  center,  restaurant/health  bar and a beauty
salon located in the Project.  All of the  sub-projects  have equal priority and
the Company is fully  responsible for all  sub-projects.  The beauty and fitness
center  will be  under  construction  until  approximately  March  2001  and are
expected  to be fully  operational  by June 2001.  The  approximate  cost of the
Complex is $960,000, allocated as follows: Fitness Center ($475,000), Restaurant
($255,000), Beauty Salon ($230,000). It is anticipated that the Company's second
real estate project will be completed in the first quarter of 2001.

         In  February   2000,  OIS  finalized  its   programming   and  database
preparation  for the  launching  of book,  audio and video  sales.  The  virtual
reality  store is fully  operational  and is  increasing  the sales volume every
month. In addition to book, audio and video sales, the goods offered by OIS have
been expanded to include  software,  household  supplies and cleaning agents and
electronics. The Company's Internet operations are functioning at the brake even
level.

         The  Company  does  not  anticipate  making  any  significant   capital
expenditures for office facilities or equipment.  There are no current plans for
the Company to become engaged in manufacturing of any products.  Management does
not  anticipate  hiring   additional   employees  until  warranted  by  business
conditions and availability of funds.

         The Company  anticipates  meeting its working  capital needs during the
next twelve  months  primarily  with  revenues  from its operating and investing
activities or, if necessary,  from borrowings.  Management is seeking agreements
for  additional  sales of the  Company's  securities,  either  through a private
placement  or a public  offering.  Any funds to be raised will be used to expand
ongoing  businesses but those  businesses  will function  without any additional
capital. Management also has plans to sell investment properties in Leninski 128
project in Moscow, Russia once the building is completed in the first quarter of
2001.  There can be no assurance  that the Company will be able to  successfully
secure funds either from the sale of its securities or from loans,  or that such
funds may be available  on terms  favorable  to the  Company.  If the  Company's
operations  are not adequate to fund its  operations  and it is unable to secure
financing from the sale of its securities or from private  lenders,  the Company
could  experience  a cash flow  shortage,  which  could  curtail  the  Company's
operations.  The  continuation  of the  Company as a going  concern is  directly
dependent  upon the  success  of its  future  operations  and  ability to obtain
additional financing.

Recent Accounting Pronouncements

         In June 1999, the FASB issued SFAS No. 133,  "Accounting for Derivative
Instruments  and  Hedging  Activities",   which  requires  companies  to  record
derivatives as assets or  liabilities,  measured at fair market value.  Gains or
losses  resulting  from  changes  in the  values of those  derivatives  would be
accounted  for depending on the use of the  derivative  and whether it qualifies
for hedge accounting. The key criterion for hedge accounting is that the hedging
relationship  must be highly effective in achieving  offsetting  changes in fair
value or cash flows. SFAS No. 133 is effective for all fiscal quarters of fiscal
years  beginning after June 15, 1999.  Management  believes the adoption of this
statement will have no material impact on the Company's financial statements.

                                       22

<PAGE>

Inflation

         In the opinion of management,  inflation has not had a material  effect
on the operations of the Company.

Forward Looking Statements

         This Report contains certain  forward-looking  statements.  The Company
wishes to advise  readers that actual  results may differ  materially  from such
forward-looking statements. Forward looking statements involve substantial risks
and  uncertainties  that could cause actual  results to differ  materially  from
those  expressed  in or implied by the  statements,  and which may be beyond the
Company's control,  including,  but not limited to, the following:  the possible
success of the Company's varied projects and subsidiaries, the volatility of the
financial  markets in which the Company  invests,  the ability of the Company to
fund its  current  and  future  projects  and its  ability  to meet its cash and
working capital needs, the industries in which the Company  operates,  and other
risks detailed in the Company's periodic report filings with the Commission. Any
statements  contained in this Report that are not statements of historical  fact
may be deemed to be forward looking statements.  Without limiting the generality
of the foregoing, words such as "may," "will," "expect," "anticipate," "intend,"
"could,"  "estimate," or "continue," or the negative or other variations thereof
or comparable terminology are intended to identify forward looking statements.

Item 7.  Financial Statements

         The financial statements required by this Item are included herewith as
a separate section of this Report, commencing on Page F-1.

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                        CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 2000


<PAGE>


                                 C O N T E N T S

Independent Auditors...................................................... F-3

Consolidated Balance Sheet................................................ F-4

Consolidated Statements of Operations......................................F-6

Consolidated Statements of Stockholders' Equity........................... F-7

Consolidated Statements of Cash Flows..................................... F-9

Notes to the Consolidated Financial Statements...........................  F-11


<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
OXIR Investments, Inc. and Subsidiaries
(A Development Stage Company)
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheet of OXIR Investments,
Inc. and Subsidiaries (a development  stage company) as of June 30, 2000 and the
related consolidated  statements of income,  stockholders' equity and cash flows
for the years  ended June 30, 2000 and 1999 and from  inception  on May 19, 1998
through  June  30,  2000.  These  consolidated   financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects the financial  position of OXIR  Investments,
Inc. and Subsidiaries (a development  stage company) as of June 30, 2000 and the
results of their  operations  and their cash flows for the years  ended June 30,
2000 and 1999  and from  inception  on May 19,  1998  through  June 30,  2000 in
conformity with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 9 to the
consolidated  financial  statements,  the Company is a development stage company
with no significant  operating  results to date, which raises  substantial doubt
about its ability to continue as a going concern.  Management's  plans in regard
to these matters are also  described in Note 9. The financial  statements do not
include any adjustments that might result for the outcome of the uncertainty.

By: /s/ HJ & Associates, LLC
----------------------------
        HJ & Associates, LLC
        Salt Lake City, Utah
        September 27, 2000


<PAGE>



                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                           Consolidated Balance Sheet

                                     ASSETS

                                                 June 30,
                                                  2000
                                               ----------
CURRENT ASSETS

   Cash and cash equivalents                   $   64,705
   Investment in trading securities (Note 3)       56,928
   Prepaid expenses                                 4,724
                                               ----------

     Total Current Assets                         126,357
                                               ----------

PROPERTY AND EQUIPMENT (Note 4)                 5,251,382
                                               ----------

OTHER ASSETS

   Income tax receivable                           75,000
   Related party receivable                         4,026
   Deposits                                        15,000
                                               ----------

     Total Other Assets                            94,026
                                               ----------

     TOTAL ASSETS                              $5,471,765
                                               ==========

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

                                       F-4


<PAGE>



                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                     Consolidated Balance Sheet (Continued)


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

                                                            June 30,
                                                             2000
                                                          ----------
CURRENT LIABILITIES

   Accounts payable                                       $   78,564
   Margin account (Note 6)                                    56,558
   Client funds payable                                       11,034
   Current portion - mortgage payable (Note 8)                 1,432
                                                          ----------

     Total Current Liabilities                               147,588
                                                          ----------

LONG-TERM LIABILITY

   Mortgage payable (Note 8)                                 204,741
                                                          ----------

     Total Long-Term Liability                               204,741
                                                          ----------

     Total Liabilities                                       352,329
                                                          ----------

COMMITMENTS (Note 5)

STOCKHOLDERS' EQUITY

   Common stock: 50,000,000 shares authorized of no
    par value, 21,189,000 shares issued and outstanding    4,519,220
   Retained earnings                                         600,216
                                                          ----------

     Total Stockholders' Equity                            5,119,436
                                                          ----------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $5,471,765
                                                          ==========

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

                                       F-5


<PAGE>



                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      Consolidated Statements of Operations
<TABLE>
<CAPTION>

                                                                             From
                                                                          Inception on
                                                     For the                May 19,
                                                    Year Ended            1998 Through
                                                     June 30,               June 30,
                                             2000             1999            2000
                                         ------------    ------------    ------------
<S>                                      <C>             <C>             <C>
SALES                                    $     18,812    $       --      $     18,812

COST OF GOODS SOLD                             19,507            --            19,507
                                         ------------    ------------    ------------

GROSS MARGIN (DEFICIT)                           (695)           --              (695)
                                         ------------    ------------    ------------

COST AND EXPENSES

   Depreciation expense                       204,167          40,175         244,342
   Rent expense                               257,647          34,148         291,795
   General and administrative               2,486,075         474,583       2,960,658
                                         ------------    ------------    ------------

     Total Costs and Expenses               2,947,889         548,906       3,496,795

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

     Net (Loss) From Operations            (2,948,584)       (548,906)     (3,497,490)
                                         ------------    ------------    ------------

OTHER INCOME (EXPENSE)

   Interest expense                           (95,763)        (84,900)       (180,663)
   Realized gain on sale of marketable
    securities                                836,275       1,694,087       2,530,362
   Net unrealized gain on marketable
    securities                                 28,814       1,725,464       1,754,278
   Dividends                                     --               128             128
                                         ------------    ------------    ------------

     Total Other Income (Expense)             769,326       3,334,779       4,104,105
                                         ------------    ------------    ------------

INCOME (LOSS) BEFORE TAXES                 (2,179,258)      2,785,873         606,615

INCOME (TAX) BENEFIT (Note 7)                 942,495        (948,894)         (6,399)
                                         ------------    ------------    ------------

NET INCOME (LOSS)                        $ (1,236,763)   $  1,836,979    $    600,216
                                         ============    ============    ============

BASIC INCOME (LOSS) PER SHARE            $      (0.06)   $       0.11
                                         ============    ============

FULLY DILUTED INCOME (LOSS) PER
 SHARE                                   $      (0.06)   $       0.11
                                         ============    ============

WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                        21,163,903      16,648,300
                                         ============    ============
</TABLE>

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

                                       F-6


<PAGE>



                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 Consolidated Statements of Stockholders' Equity

                                        Common Stock           Retained
                                    Shares        Amount       Earnings
                                 -----------   -----------    -----------
Balance at inception                    --     $      --      $      --

Net income from inception on
 May 19, 1998 through
 June 30, 1998                          --            --             --
                                 -----------   -----------    -----------
Balance, June 30, 1998                  --            --             --

Shares issued to founders at
 predecessor cost of $0.00 per
 share                            13,770,000          --             --

Shares issued for trading
 securities at $0.70 per share     1,350,000       939,764           --

Common stock issued for
 cash at $1.00 per share             600,000       600,000           --

Stock issuance costs                    --        (250,000)          --

Common stock issued for
 cash at $5.00 per share             100,600       503,000           --

Common stock issued for
 related party acquisitions,
 recorded at predecessor
 cost                              5,270,000       706,005           --

Net income for the year
 ended June 30, 1999                    --            --        1,836,979
                                 -----------   -----------    -----------
Balance, June 30, 1999            21,090,600   $ 2,498,769    $ 1,836,979
                                 -----------   -----------    -----------



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

                                       F-7


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
           Consolidated Statements of Stockholders' Equity (Continued)


                                      Common Stock            Retained
                                  Shares        Amount        Earnings
                               -----------    -----------    -----------
Balance, June 30, 1999          21,090,600    $ 2,498,769    $ 1,836,979

Common stock issued for
 cash at $5.00 per share            39,600        198,000           --

Common stock issued for
 services at $5.00 per share        60,000        300,000           --

Common stock retired at
 $5.00 per share                    (1,200)        (6,000)          --

Contributed capital by
 subsidiary                           --        1,528,451           --

Net loss for the year ended
 June 30, 2000                        --             --       (1,236,763)
                               -----------    -----------    -----------
Balance, June 30, 2000          21,189,000    $ 4,519,220    $   600,216
                               ===========    ===========    ===========


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

                                       F-8

<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                            From
                                                                                        Inception on
                                                                    For the               May 19,
                                                                  Year Ended            1998 Through
                                                                    June 30,              June 30,
                                                             2000            1999           2000
                                                          -----------    -----------    -----------
<S>                                                       <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES

   Net income (loss)                                      $(1,236,763)   $ 1,836,979    $   600,216
   Adjustments to reconcile net income to net cash
    provided by operating activities:
     Depreciation expense                                     204,167         40,175        244,342
     Common stock issued for services                         300,000           --          300,000
   Changes in assets and liabilities:
     (Increase) in prepaid expenses                              (746)        (3,978)        (4,724)
     (Increase) decrease in related party receivables           4,054         (8,080)        (4,026)
     (Increase) in deposits                                      --          (15,000)       (15,000)
     Increase in accounts payable                              79,505         32,382        111,887
     Increase (decrease) in accrued liabilities                (6,740)         6,740           --
     Increase in client funds                                 254,032           --          254,032
     Increase (decrease) in provision for income taxes     (1,023,894)       948,894        (75,000)
                                                          -----------    -----------    -----------

       Net Cash Provided (Used) by Operating Activities    (1,426,385)     2,838,112      1,411,727
                                                          -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

   Decrease (increase) in trading securities                4,615,318     (1,977,764)     2,637,554
   Increase (decrease) in margin account                   (1,924,906)     1,273,325       (651,581)
   Purchase of property and equipment                      (1,442,327)      (844,044)    (2,286,371)
                                                          -----------    -----------    -----------

       Net Cash (Used) Provided by Investing Activities     1,248,085     (1,548,483)      (300,398)
                                                          -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES

   Proceeds from notes payable                                   --          208,000        208,000
   Payments on notes payable                                   (1,622)          (205)        (1,827)
   Stock issuance costs                                          --         (250,000)      (250,000)
   Common stock issued for cash                               198,000      1,103,000      1,301,000
   Retirement of common stock                                  (6,000)          --           (6,000)
   Advances to related parties                                   --       (2,337,867)    (2,337,867)
   Cash from subsidiaries                                        --           40,070         40,070
                                                          -----------    -----------    -----------

       Net Cash (Used) Provided by Financing Activities       190,378     (1,237,002)    (1,046,624)
                                                          -----------    -----------    -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                      12,078         52,627         64,705

CASH AND CASH EQUIVALENTS AT BEGINNING OF
 PERIOD                                                        52,627           --             --
                                                          -----------    -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF
 PERIOD                                                   $    64,705    $    52,627    $    64,705
                                                          ===========    ===========    ===========
</TABLE>

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

                                       F-9


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>

                                                                                  From
                                                                               Inception on
                                                              For the            May 19,
                                                             Year Ended        1998 Through
                                                              June 30,           June 30,
                                                        2000          1999        2000
                                                      ----------   ----------   ----------
<S>                                                   <C>          <C>          <C>
SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for:

   Interest                                           $   95,763   $   78,160   $  173,923
   Income taxes                                       $   81,339   $     --     $   81,339

NON-CASH ITEMS

   Common stock issued for services                   $  300,000   $     --     $  300,000
   Contributed capital by subsidiary                  $1,528,451   $     --     $1,528,451
</TABLE>

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

                                      F-10


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2000


NOTE 1 -      ORGANIZATION AND DESCRIPTION OF BUSINESS

              Oxir Investments, Inc., a California corporation, was incorporated
              on  November 2, 1923 as Monte  Regio  Corporation  with the stated
              purpose to engage in the business of real estate development.  The
              Company   continued  in  that  endeavor  for  several  years  then
              discontinued operations. On March 1, 1972, the Company changed its
              name to Precision  Resources,  Inc. The Company  remained  dormant
              with no  business  activity  until  September  1998.  The  Company
              changed  its  name to  Oxenuk,  Inc.  after  reinstating  business
              operations  on November  11, 1998,  and again  changed its name to
              OXIR Investments, Inc. on November 25, 1998.

              In 1998, Oxenuk,  Inc.  initiated  negotiations to merge with Oxir
              Investments,  Inc., a private California  company  incorporated on
              May 19, 1998 (Oxir).  The merger was  consummated  on November 25,
              1998,  at which time  Oxenuk,  Inc.,  the  surviving  corporation,
              adopted the name of Oxir Investments,  Inc. Under the terms of the
              merger, Oxir was dissolved.

              Oxir was originally founded for the purpose of pursuing investment
              opportunities in real estate, technology and industrial businesses
              in the United States and internationally,  particularly in Russia,
              and to  introduce  eastern  European  opportunities  to the United
              States.

              On June 29,  1999,  the Company  executed an agreement to acquire,
              through a tax fee  exchange  of  shares,  100% of the  issued  and
              outstanding  shares of OXIR  Financial  Services,  Ltd.  (OFS),  a
              British  Virgin  Islands  corporation,  incorporated  on March 30,
              1995. OFS is actively involved in trading activities in the equity
              markets.

              On June 29,  1999,  the Company  executed an agreement to acquire,
              through a tax free  exchange  of  shares,  100% of the  issued and
              outstanding  shares  of OXIR  Investment,  Ltd.  (OIL),  a British
              Virgin Islands  corporation,  incorporated  on May 5, 1997. OIL is
              involved  in direct  investment  activities,  such as real  estate
              development projects in Russia.

              On August 2,  1999,  Oxir  Internet  Solutions,  Inc  ("OIS")  was
              incorporated  under the laws of the State of Nevada as a  majority
              owned (51%)  subsidiary  of the  Company,  with the balance of 49%
              owned by  management  and  employees.  OIS was  formed to  develop
              e-commerce in Russia.

              In addition to OIS, OIL and OFS, the Company has acquired  various
              Russian legal entities.  OXIR owns 51% of the outstanding stock of
              JSC  "Oxir  Consulting",   which  was  established  under  Russian
              registration  rules in November  1999.  An  additional  39% of JSC
              "Oxir  Consulting"  is owned by OIS.  JSC  "Oxir  Consulting"  was
              established to provide various  consulting  services.  In November
              1999,  OIS  purchased   "ISTAR-S,"  a  Russian  private   company.
              "ISTAR-S"  subsequently changed its name to OXIRIS on November 12,
              1999.  OXIRIS  is  responsible  for the  purchase  and  resale  of
              products,  shipping and customer service for the Company's on-line
              store.

                                      F-11


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2000


NOTE 1 -      ORGANIZATION AND DESCRIPTION OF BUSINESS (Continued)

              Additionally, the Company is seeking final Russian registration of
              four other Russian subsidiaries:  JSC "Oxir Insurance",  JSC "Oxir
              Fitness Club",  "Oxir Imperial" and "Oxir Informtour." The Company
              OXIR will own 60% of Oxir  Informtour  and OIS will own 40%.  OXIR
              will  own  49% of  Oxir  Insurance  Corporation.  Oxir  Investment
              Limited will own 100% of Oxir Fitness Club and Oxir  Imperial.  As
              of  June  30,  2000,   these   subsidiaries   had  not  instituted
              corporations.

              Oxenuk,   Inc.,  OFS,  OIL  and  OIS  were  all  acquired  form  a
              significant  shareholder  of the Company.  Accordingly,  they were
              recorded at this cost in the financial statement.

NOTE 2 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              a.  Accounting Method

              The Company's financial  statements are prepared using the accrual
              method of accounting. The Company has elected a fiscal year ending
              June 30.

              b.  Basic Income (Loss) Per Share

              The  computation  of basic income (loss) per share of common stock
              is based on the  weighted  average  number of  shares  outstanding
              during the period of the financial statements.
<TABLE>
<CAPTION>

                                                                            June 30,
                                                              ---------------------------------------
                                                                   2000                    1999
                                                              -----------------     -----------------
<S>                                                           <C>                    <C>
               Numerator - income (loss)                      $     ( 1,236,763)     $      1,836,979
               Denominator - weighted average number of
                 shares outstanding                                  21,163,903            16,648,300
                                                              -----------------     -----------------

               Income (loss) per share                        $           (0.06)    $           (0.11)
                                                              =================     =================
</TABLE>

              c. Financial Instruments

              The following  methods and assumptions were used by the Company to
              estimate  the fair values of  financial  instruments  as disclosed
              herein:

              Cash and  equivalents:  The Company  considers  all highly  liquid
              investments with a maturity of three months or less when purchased
              to be cash equivalents.

              Investment  securities:   For  trading  securities,  the  carrying
              amounts  approximate  fair value,  which is based on quoted market
              prices.

                                      F-12


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2000


NOTE 2 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

              d. Income Taxes

              Income  taxes are  provided  for the tax  effects of  transactions
              reported  in  the  financial   statements  and  consist  of  taxes
              currently due plus deferred taxes related  primarily to unrealized
              gains  on  trading   securities   for  financial  and  income  tax
              reporting.  Current  tax  benefits  are a result of  market  value
              decreasing  from values at the beginning of the year. The deferred
              tax liability  represents  the future tax return  consequences  of
              those differences, which will either be taxable or deductible when
              the securities are sold.

              e. Estimates

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

              f. Property and Equipment

              Property and equipment are recorded at cost.  Major  additions and
              improvements are capitalized. Minor replacements,  maintenance and
              repairs  that do not  increase  the useful  life of the assets are
              expensed as incurred.  Depreciation  of property and  equipment is
              determined using the straight-line method over the expected useful
              lives of the assets as follows:

                               Description                       Useful Lives
                               -----------                       ------------
                      Buildings                                   29.5 years
                      Leasehold improvements                        10 years
                      Furniture, fixtures and equipment              7 years
                      Automobiles                                    5 years
                      Computer equipment                             5 years

              g.  Deposits

              The Company has given a  refundable  deposit on its office  lease.
              This  deposit  is in the form of a 5-year  certificate  of deposit
              bearing  interest at 5.4%.  The interest is for the benefit of the
              Company.

              h.  Advertising

              The  Company   follows  the  policy  of  charging   the  costs  of
              advertising to expense as incurred.

                                      F-13


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2000


NOTE 2 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


              i.  Concentrations of Risk

              Trading Securities
              ------------------

              The Company purchases  trading  securities using a margin account.
              The  securities   purchased  are  subject  to  market  swings  and
              valuations.

              Foreign Operations
              ------------------

              The Company  intends to conduct  activities in Russia,  a country,
              with a developing economy.  Russia has experienced recently, or is
              experiencing   currently,   economic  or  political   instability.
              Hyperinflation,  volatile  exchange rates and rapid  political and
              legal change,  often  accompanied by military  insurrection,  have
              been common in this and certain  other  emerging  markets in which
              the Company may conduct operations.  The Company may be materially
              adversely affected by possible  political or economic  instability
              in Russia.  The risks  include,  but are not limited to terrorism,
              military  repression,   expropriation,  changing  fiscal  regimes,
              extreme  fluctuations in currency  exchange  rates,  high rates of
              inflation   and   the   absence   of   industrial   and   economic
              infrastructure.  Changes in  investment  policies or shifts in the
              prevailing   political  climate  in  which  the  Company  conducts
              business activities could adversely affect the Company's business.
              Operations  may be  affected  in  varying  degrees  by  government
              regulations  with  respect  to  production   restrictions,   price
              controls, export controls,  income and other taxes,  expropriation
              of property,  maintenance  of claims,  environmental  legislation,
              labor,  welfare benefit  policies,  land use, land claims of local
              residents,  water use and mine safety. The effect of these factors
              cannot be accurately predicted.

              Margin Account
              --------------

              The Company maintains a margin account which balance of $56,558 is
              99% of the trading securities balance of $56,928.  In the event of
              a market turndown,  the value of the trading securities may not be
              sufficient to pay off the margin account.

              j.  Change in Accounting Principle

              In June  1998,  the FASB  issued  SFAS No.  133,  "Accounting  for
              Derivative  Instruments  and Hedging  Activities"  which  requires
              companies to record derivatives as assets or liabilities, measured
              at fair market value.  Gains or losses  resulting  from changes in
              the values of those  derivatives  would be accounted for depending
              on the use of the  derivative  and whether it qualifies  for hedge
              accounting.  The key  criterion  for hedge  accounting is that the
              hedging   relationship  must  be  highly  effective  in  achieving
              offsetting  changes in fair value or cash  flows.  SFAS No. 133 is
              effective for all fiscal  quarters of fiscal years beginning after
              June 15, 1999.  Management believes the adoption of this statement
              will  have  no  material   impact  on  the   Company's   financial
              statements.

                                      F-14


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2000


NOTE 2 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

              k.  Principles of Consolidation

              The consolidated financial statements include the accounts of OXIR
              Financial   Services,   Ltd.,  OXIR  Investment,   Ltd.  and  OXIR
              Investments,  Inc. and Oxir Internet  Solutions.  All  significant
              intercompany accounts and transactions have been eliminated.

NOTE 3 -      INVESTMENT IN TRADING SECURITIES

              The Company has a diverse  portfolio of  investments in marketable
              equity   securities.   Management   determines   the   appropriate
              classification of the securities at the time they are acquired and
              evaluates  the  appropriateness  of such  classifications  at each
              balance sheet date.  All  securities  owned are held for resale in
              anticipation of short-term  fluctuations in market prices, and are
              therefore  classified as trading  securities.  Trading securities,
              consisting  primarily of actively  traded equity  securities,  are
              stated at fair value. Realized and unrealized gains and losses are
              included  in income.  A summary of  investment  earnings or (loss)
              recognized  as other  income  during the period  from July 1, 1999
              through June 30, 2000 is as follows:

              Trading Securities

                      Realized gains (losses), net         $         836,275
                      Unrealized gains (losses), net                  28,814
                                                           -----------------

                                                           $         865,089

NOTE 4 -      PROPERTY AND EQUIPMENT

              Property  and  equipment  at  June  30,  2000   consisted  of  the
              following:


              Construction in progress                     $       4,103,214
              Leasehold improvements                                  94,216
              Furniture and fixtures                                 498,590
              Automobiles                                             35,240
              Equipment                                              444,514
              House                                                  320,000
                                                           -----------------

                           Total                                   5,495,774

              Less accumulated depreciation                         (244,342)
                                                           -----------------

                      Property and Equipment - Net         $       5,251,382
                                                           =================

              Depreciation  expense  for the years  ended June 30, 2000 and 1999
              was $204,167 and $40,175, respectively.

                                      F-15


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2000


NOTE 5 -      COMMITMENTS

              a.  Employment Agreement

              The  Company  has  entered  into  employment  contracts  with  its
              President,  Chief  Executive  Officer and Chairman of the Board of
              Directors,  (CEO) and with its  Secretary/Treasurer  and Director.
              The CEO's agreement provides that the Company will pay his monthly
              personal  expenses,  which  are not to exceed  $120,000  per year.
              Payment   is  made   through   Visa   and   MasterCard   accounts.
              Additionally,  the  Company is to provide  housing for the CEO and
              his family and to pay all  expenses  related to the  property.  On
              April 1, 1999, the Company purchased a single-family  house in Las
              Vegas,  Nevada for the for the price of  $320,000  for the CEO and
              his family to occupy.  The Company paid $164,514 as a down payment
              with the balance mortgaged with GreenPoint Mortgage Company.  From
              July 1, 1999 to June 30,  2000,  the Company  has paid  $29,761 as
              compensations  for housing costs and related  expenses,  including
              mortgage  payments,  utilities and maintenance  fees. The value of
              the use of the house was  $29,761  for the fiscal  year ended June
              30,  2000.  In the event the CEO no longer  occupies  the property
              and/or  are no  longer  associated  with  Oxir as an  officer  and
              director,  he will have the option to purchase the  property  from
              the  Company  for an  amount  equal  to the  balance  owing on the
              mortgage,  subject to terms to be negotiated in good faith between
              him  and the  Company.  Payment  may be in the  form of cash or in
              shares of Oxir  Investments,  Inc.  common  stock.  Should the CEO
              decide to make payment  with the  Company's  shares,  the value of
              such  shares  shall be equal to the  closing  price in the  public
              market on the date that the CEO  exercises his option or, if there
              is no public market for the shares,  the book value per share.  If
              the CEO elects not to purchase the property,  legal and beneficial
              title to the property will remain with the Company.

              The  Secretary's  agreement  provides that the Company will pay an
              annual salary of $60,000.  In addition,  the Company issued to him
              270,000  shares  of the  Company's  common  stock as a cost of the
              original merger.


              b.  Lease Agreement

              The Company has leased an office space under a 60-month  operating
              lease.  The Company has placed a $10,000  deposit in a Citibank CD
              which  becomes  refundable  at the  end of the  lease  term  of 60
              months.  Accrued  interest  on the CD is for  the  benefit  of the
              Company.  The  rent  to be  paid  under  the  terms  of the  lease
              described above is summarized as follows:

                             During the Year
                                  Ended
                                 June 30,                   Amount
                                 --------                   ------
                      2001                          $            45,589
                      2002                                       45,589
                      2003                                       45,589
                      2004                                       20,892
                                                    -------------------

                                 Total due          $           157,659
                                                    ===================

NOTE 6 -      MARGIN ACCOUNT

              The  Company  buys  and  sells  equity  securities  using a margin
              account.  In the course of buying and selling the securities,  the
              Company  has  incurred a  liability  to the  brokerage  firm.  The
              balance of $56,558 carries an interest rate of 7.75% to 10.25% and
              is collateralized by the securities held in the account.

                                      F-16


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2000


NOTE 7 -      INCOME TAX MATTERS

              A previous deferred tax liability of $948,894 is eliminated due to
              the loss for the  current  period.  A further  benefit due to some
              valuations of prior period income is also included. The benefit is
              determined using a 39% tax calculation is made as follows:

                      Current loss before taxes                   $  2,179,258
                      Add non deductible items                          81,390
                      Taxable Loss                                   2,260,648
                      Tax rate                                              39%
                                                                  ------------
                                                                       881,652

                      Additional benefit due to
                       non-taxable items tax in prior year             830,153
                                                                           39%

                                                                       323,760

                      Total Benefit                               $  1,205,412
                                                                  ============

              It is unknown as to the  Company's  ability to fully  utilize this
              benefit, therefore, we have limited the use of this benefit to the
              actual  refund  anticipated  and not this tax benefit of 1,205,412
              from the loss that has been  generated.  This is determined in the
              following manner:

                      Prior deferred benefit (June 30, 2000)       $    948,894

                      Additional refund determined (June 30,2000)        75,000
                                                                   ------------

                      Total tax benefit                               1,023,894

                      Less taxes paid previously in current year        (81,399)
                                                                   ------------

                      Income benefit per income statement          $    942,495
                      (June 30, 2000)                              ============

              No other  benefit  or  liability  has been  established  since the
              ability to generate income has not been demonstrated.

NOTE 8 -       MORTGAGE PAYABLE

              The Company had the following long-term debt at June 30, 2000:

                Mortgage payable to Greenpoint Mortgage, bearing interest
                at 9.50%, requiring monthly payments of $1,749, due
                April 2029, secured by residential property.      $    206,173
                                                                  ------------

               Less current portion                                     (1,432)
                                                                  ------------

                        Long-Term Debt                            $    204,741
                                                                  ============

                                      F-17


<PAGE>

                     OXIR INVESTMENTS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2000


NOTE 8 -      MORTGAGE PAYABLE (Continued)

              Future maturities of long-term debt are as follows:

                                    2001                    $             1,432
                                    2002                                  1,575
                                    2003                                  1,731
                                    2004                                  1,903
                                    2005                                  2,114
                                    Thereafter                          197,418
                                                            -------------------

                                                            $           206,173
                                                            ===================

NOTE 9 -      GOING CONCERN

              The Company's  financial  statements are prepared using  generally
              accepted accounting principles applicable to a going concern which
              contemplates   the   realization  of  assets  and  liquidation  of
              liabilities in the normal course of business.  The Company has not
              yet established an ongoing source of revenues  sufficient to cover
              its operating  costs and allow it to continue as a going  concern.
              The  ability of the  Company  to  continue  as a going  concern is
              dependent on the Companys  ability to establish an ongoing  source
              of revenues or obtaining adequate capital to fund operating losses
              until it becomes profitable. If the Company is unable to establish
              an ongoing source of revenues or obtain adequate capital, it could
              be forced to cease operations.

              In order to continue as a going concern, develop a reliable source
              of revenues,  and achieve a profitable  level of  operations,  the
              Company  will  need,  among  other  things,   additional   capital
              resources.  Management's  plans  to  continue  as a going  concern
              include raising  additional capital through sales of common stock,
              the  proceeds  of which  would be used to  continue to develop its
              existing  projects  which  include a real  estate,  financial  and
              computer systems  activities.  Other plans may include the raising
              of additional capital and the continued development of its current
              and planned  operations.  Private placements and other sources are
              being   considered.   However,   management   cannot  provide  any
              assurances  that the Company will be successful  in  accomplishing
              any of its plans.

              The  ability of the  Company  to  continue  as a going  concern is
              dependent  upon its ability to  successfully  accomplish the plans
              described in the preceding  paragraph and eventually  secure other
              sources  of  financing  and  attain  profitable  operations.   The
              accompanying  financial  statements do not include any adjustments
              that might be  necessary if the Company is unable to continue as a
              going concern.

                                      F-18


<PAGE>




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

         There have been no changes in or disagreements with accountants.


                                       23
<PAGE>

                                    PART III

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

Executive Officers and Directors

         The executive officers and directors of the Company are:

Name                        Age             Position
----                        ---             --------
Vassili I. Oxenuk            36    President, CEO,
                                   Chairman of the Board of Directors
Michael Y. Smirnov           33    Vice President, CFO and Director
Alexander Sarkisian, Ph.D.   52    Vice President
Kirill M. Mendelson          29    Secretary, Treasurer and Director
Inna Batrakova               25    Vice President of Communications and Director

         All directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified.  Directors will
be elected at the annual  meetings  to serve for  one-year  terms.  There are no
agreements  with  respect to the  election  of  directors.  The  Company has not
compensated its directors for service on the Board of Directors or any committee
thereof.  Any  non-employee  director of the  Company  shall be  reimbursed  for
expenses  incurred for  attendance at meetings of the Board of Directors and any
committee of the Board of  Directors.  The  Executive  Committee of the Board of
Directors,  to the extent permitted under  California law,  exercises all of the
power and authority of the Board of Directors in the  management of the business
and affairs of the Company  between  meetings  of the Board of  Directors.  Each
executive  officer is appointed by and serves at the  discretion of the Board of
Directors.

         None of the  officers  and/or  directors of the Company are officers or
directors  of  any  other  publicly  traded  corporation,  nor  have  any of the
directors, officers, affiliates or promoters of the Company filed any bankruptcy
petition,  been  convicted  in or  been  the  subject  of any  pending  criminal
proceedings,  or the subject or any order,  judgment,  or decree  involving  the
violation of any state or federal securities laws within the past five years.

         The business  experience of each of the persons listed above during the
past five years is as follows:

Vassili I. Oxenuk, President,  Chief Executive Officer and Chairman of the Board
of Directors

         Mr.  Oxenuk is a graduate of the Moscow  State  University  Mathematics
Boarding School for Gifted Children and the Mojaysky Military Academy in Russia,
from which he  graduated  with a Masters  Degree in  Informational  Systems  and
Mathematical  Support. His career experiences include Analytical  Researcher for
the Russian Central Military  Intelligence Agency. From 1991 to 1995, Mr. Oxenuk
established OxMoSe Company ("OxMoSe") in Leipzig, Germany, which created a joint


                                       24
<PAGE>


venture  in  Russia  for  retail  sales  of  consumer  electronics,  as  well as
production  lines for milk and soft  drink  bottling.  In May 1998,  Mr.  Oxenuk
formed OXIR-Private, a California corporation, that subsequently merged with the
Company.  Mr.  Oxenuk is  currently  pursuing  his  Doctoral  Degree in Business
Administration at Kennedy-Western University, a non-accredited institution.

Michael Y. Smirnov, Vice President, Chief Financial Officer and Director

         Mr. Smirnov  graduated from the Mojaysky  Military Academy in Russia in
1989 with a Masters  Degree in information  systems  mathematical  support.  His
experience  includes  Analytical  Researcher  for the Russian  Central  Military
Intelligence  from 1989 to 1995 as well as investment and trading  experience in
world equity  markets.  He was certified as a trader with a Diploma of the First
Category in 1994 by the Ministry of Finance of the Russian  Federation.  In 1995
he accepted a position as Financial  Analyst  Manager for OxMoSe.  At the end of
1995, OxMoSe was dissolved and Mr. Smirnov  transferred to an identical position
with OFS.  Since the merger of the Company with  Oxir-Private,  Mr.  Smirnov has
served the Company as Director, Chief Financial Officer, Vice President, and the
Company's sole trader. Presently, Mr. Smirnov is currently pursuing his Doctoral
Degree   in   Business   Administration   at   Kennedy-Western   University,   a
non-accredited institution.

Alexander Sarkisian, Ph.D., Vice President

         Dr.  Sarkisian has a Ph.D.  in Economics and graduated  from the Moscow
State  Aviation  Institute  (Technical  University),  at which he is presently a
Professor of International  Business.  From 1986 through 1991, Dr. Sarkisian was
Vice  President  of  economic  affairs  at  the  state   scientific   production
amalgamation  Phazotron.  Dr. Sarkisian was Vice President of the  International
Association  "International  Dialog" from 1992 to 1994 and served as Chairman of
the  Board of the  Regionsotsbank,  engaged  in the  collecting  and  processing
communal  fees in Moscow,  Russia  from 1995 to 1998.  Dr.  Sarkisian  presently
serves as the Chairman of the Board of: Stenholm Invest ApS,  Denmark,  a Danish
investment  company  (Chairman since 1997);  Imkor  (Chairman  since 1994);  and
ASPEKT Ltd (Chairman since 1991).  Furthermore,  Dr. Sarkisian conducts lectures
at  the  Moscow  State  Aviation  Institute  (Technical  University),   Military
Production  Academy,  and at the Courses of Crisis  Management on the subject of
International Investment, Decision Making Theory and Management.

Kirill Mendelson, Secretary, Treasurer, Director

         Mr.  Mendelson  attended the Moscow Medical Academy in Russia from 1988
to 1991.  He received  his BS with a minor in Business  Administration  from the
University of Nevada Las Vegas, NV in 1995. From June 1995 to March 1998, he was
Vice President of Marketing for Europe and Russia and Executive  Director for US
Direct  Inc.,  a  Las  Vegas,   Nevada  company  engaged  in  pursuing  business
opportunities in emerging markets. His responsibilities  included consulting for
and  negotiating  contracts,  joint  ventures,  and export  and import  trade in
Russia,  Ukraine and the Baltic Republics.  He joined  Oxir-Private in September
1998.

                                       25
<PAGE>

Inna Batrakova, Vice President of Communications, Director

         Ms. Batrakova graduated from the Pyatigorsk State Linguistic University
with major in English and Psychology.  Upon graduation Ms. Batrakova was awarded
her  honors  bachelor  degree  in  Linguistics  and  Practical  Psychology.  Ms.
Batrakova also acquired a certified diploma of the Interpreter's  faculty at the
same  University.  Currently  Ms.  Batrakova is pursuing  her Masters  Degree in
Business   Administration  at  Kennedy-Western   University,   a  non-accredited
institution. Ms. Batrakova started her career with Oxir-Private in February 1997
and  accepted  the position of  Administrative  Assistant at its  representative
office in Moscow.  In November 1997, Ms.  Batrakova was promoted to the position
of the Executive Administrative Assistant and, in December 1998, she became Vice
President of Communications. Presently her responsibilities include coordinating
corporate  communications  with the  Company's  clients,  the  media  and  other
business  entities,   as  well  as  setting  up  a  liaison  structure  for  the
implementation of new marketing  programs.  She also directs and coordinates all
public  communications for the Company,  including soliciting media coverage and
media relationships,  development of corporate brochures,  newsletters and press
releases.

Section 16(a) Beneficial Ownership Reporting Compliance

         Pursuant to Section 16(a) of the Exchange Act, the Company's directors,
executive  officers and any person holding 10.0% or more of its Common Stock are
required to report their  beneficial  ownership  and any changes  therein to the
Commission.  Specific due dates for these reports have been  established and the
Company is required to report  herein any failure to file such  reports by those
due dates. Based solely on review of the copies of such reports furnished to the
Company or written  representations  that no other  reports were  required,  the
Company believes that, during its fiscal year ended June 30, 2000, its executive
officers,  directors and greater than 10.0% beneficial  owners complied with all
applicable Section 16(a) filing requirements with the exception of the filing of
Forms 3, which were not timely filed.

Item 10. Executive Compensation

         The Company has entered into employment  contracts with Mr. Oxenuk, its
President,  Chief Executive Officer and Chairman of the Board of Directors,  and
with Mr. Mendelson, its Secretary/Treasurer and Director. Mr. Oxenuk's agreement
provides that the Company will pay his monthly personal expenses,  which are not
to exceed  $120,000  per year.  Payment is made  through Mr.  Oxenuk's  Visa and
MasterCard  accounts.  Additionally,  the Company is to provide  housing for Mr.
Oxenuk and his family and to pay all expenses related to the property.  On April
1, 1999, the Company  purchased a single-family  house in Las Vegas,  Nevada for
the price of $362,000 for Mr. Oxenuk and his family to occupy.  The Company paid
$164,514 as a down payment with the balance  mortgaged with GreenPoint  Mortgage
Company.  As of June 30,  2000,  the  Company  has paid  $1,711 and  $206,173 is
remaining  to be paid on the  mortgage  principal.  The mortgage is secured by a
first lien on the single-family home and surrounding property.  The value of the
use of the house to Mr.  Oxenuk was  $29,761  for the fiscal year ended June 30,
2000.  In the event Mr.  Oxenuk no longer  occupies  the  property  and/or is no
longer  associated with the Company as an officer and director,  Mr. Oxenuk will
have the option to purchase the property from the Company for an amount equal to
balance owing on the  mortgage,  subject to terms to be negotiated in good faith
between him and the  Company.  The  purchase  may be made in the form of cash or
shares of the Company's  Common Stock,  in Mr. Oxenuk's  discretion.  Should Mr.
Oxenuk decide to make payment with the Company's Common Stock, the value of such
shares shall be equal to the closing price in the public market on the date that
Mr. Oxenuk exercises his option or, if there is no public market for the shares,
the book value per share.  If Mr.  Oxenuk  elects not to purchase the  property,
legal title to the property will remain with the Company.


                                       26
<PAGE>

         Mr. Mendelson's  agreement provides that the Company will pay an annual
salary of $60,000.  In addition,  the Company  issued to Mr.  Mendelson  270,000
shares of the Company's Common Stock as a cost of the original merger.

         The  following  table  sets  forth  all cash  compensation  paid by the
Company for services rendered to the Company for the fiscal years ended June 30,
2000 and 1999, to the Company's Chief Executive  Officer.  With the exception of
Mr.  Oxenuk,  no executive  officer of the Company  earned a salary greater than
$100,000 annually for the period depicted.

                           Summary Compensation Table

                                                           Other     All
                                                           Annual    Other
Name and               Fiscal                              Compen-   Compen-
Principal Position      Year       Salary (1)     Bonus    sation    sation
------------------      ----       ----------     -----    ------    ------
Vassili I. Oxenuk,      1999*       $64,465       $ -0-    $ -0-     $169,742(2)
President, C.E.O.       2000**      $99,989       $ -0-    $ -0-     $ 29,761(3)

------------------
*From July 1, 1998  through  June 30, 1999
** From July 1, 1999 through June 30, 2000.

(1)  Includes  $64,465 and $99,989 for the fiscal  years ended June 30, 1999 and
     2000,  respectively,  consisting  solely of Mr. Oxenuk's  monthly  personal
     expenses charged to his Citibank Visa and Mastercard accounts.

(2)  Includes $164,514 paid by the Company as a down payment for a single family
     home in Las Vegas, Nevada.

(3)  Compensation for Mr. Oxenuk's housing costs and related expenses, including
     mortgage payments, utilities and maintenance fees.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         The  following  table  sets  forth  information,  to  the  best  of the
Company's  knowledge,  as of June 30, 2000 with  respect to each person known by
the Company to own  beneficially  more than 5% of the outstanding  Common Stock,
each director and all directors and officers as a group.

                                       27
<PAGE>

 Name and Address                    Amount and Nature of             Percent
of Beneficial Owner                  Beneficial Ownership           of Class(1)

Vassili I. Oxenuk*                        12,449,319                    58.8%
3980 Howard Hughes Pkwy.
Suite 340
Las Vegas, NV 89109

EC Venture Capital Ltd. (2)                5,000,000                    23.6%
3980 Howard Hughes Pkwy.
Suite 340
Las Vegas, NV 89109

Vladimir N. Kishenin (2)                   5,000,000                    23.6%
3980 Howard Hughes Pkwy.
Suite 340
Las Vegas, NV 89109

Michael Y. Smirnov*                        1,350,000                     6.4%
3980 Howard Hughes Pkwy.
Suite 340
Las Vegas, NV 89109

Kirill M. Mendelson*                         270,000                     1.3%
3980 Howard Hughes Pkwy.
Suite 340
Las Vegas, NV 89109

Alexander Sarkisian, Ph.D*                   270,000                     1.3%
3980 Howard Hughes Pkwy.
Suite 340
Las Vegas, NV 89109

Inna Batrakova*                              300,000                     1.4%
3980 Howard Hughes Pkwy.
Suite 340
Las Vegas, NV 89109

All directors and officers                14,639,319                    69.1%
a group (5 persons)

*Director and/or executive officer

Note:    Unless otherwise indicated in the footnotes below, the Company has been
         advised  that each person  above has sole voting  power over the shares
         indicated above.
(1)      Based upon  21,189,000  shares of Common Stock  outstanding on June 30,
         2000.
(2)      Mr. Kishenin owns a controlling interest in EC Venture Capital Ltd. and
         therefore may be deemed to be a beneficial owner of such shares.

                                       28
<PAGE>

Item 12.           Certain Relationships and Related Transactions

         There have been no  transactions  between the Company and any  officer,
director,  nominee for election as director,  or any stockholder  owning greater
than five percent (5%) of the Company's  outstanding  shares,  nor any member of
the above referenced individuals' immediate family, except as set forth below.

         In June 1999, the Company finalized two separate agreements to acquire,
through tax free exchange of shares,  100% of the issued and outstanding  shares
of OFS, a British Virgin Islands corporation,  and OIL, a British Virgin Islands
corporation,  from Mr. Oxenuk, the Company's President, Chief Executive Officer,
Chairman of the Board of  Directors  and the  principal  stockholder.  Under the
terms of the agreements, Mr. Oxenuk received an aggregate of 5,000,000 shares of
the Company's  Common Stock.  Mr.  Oxenuk did not  participate  in the Company's
Board of Directors decision to make the acquisitions;  however, the transactions
were not  negotiated  on an arms  length  basis.  The Company did not receive an
independent valuation of either OFS or OIL.

         Pursuant to Mr. Oxenuk's  employment  agreement,  on April 1, 1999, the
Company  purchased a single-family  house in Las Vegas,  Nevada for the price of
$362,000 for Mr. Oxenuk and his family to occupy. The Company paid $164,514 as a
down payment with the balance mortgaged with GreenPoint  Mortgage Company. As of
June 30, 2000,  the Company has paid $1,711 and $206,173 is remaining to be paid
on the  mortgage  principal.  The  mortgage  is  secured  by a first lien on the
single-family home and surrounding  property.  The value of the use of the house
to Mr.  Oxenuk was $29,761 for the fiscal year ended June 30, 2000. In the event
Mr. Oxenuk no longer occupies the property  and/or is no longer  associated with
the  Company as an officer  and  director,  Mr.  Oxenuk  will have the option to
purchase the property  from the Company for an amount equal to balance  owing on
the  mortgage,  subject to terms to be  negotiated in good faith between him and
the  Company.  The  purchase  may be made in the form of cash or  shares  of the
Company's Common Stock, in Mr. Oxenuk's discretion.  Should Mr. Oxenuk decide to
make payment with the Company's  Common Stock, the value of such shares shall be
equal to the  closing  price in the  public  market on the date that Mr.  Oxenuk
exercises his option or, if there is no public  market for the shares,  the book
value per share. If Mr. Oxenuk elects not to purchase the property,  legal title
to the property will remain with the Company.  See Part III, Item 10, "Executive
Compensation."

         On January 4, 1999, the Company issued 1,350,000 shares of Common Stock
to Mr.  Smirnov,  the Company's  Vice  President,  Chief  Financial  Officer and
Director, in exchange for 27 publicly traded stocks, most of which are listed on
the New York Stock Exchange or the Nasdaq  National  Stock Market.  The value of
the  securities at the time of transfer was  $1,201,812.  This  transaction  was
valued at predecessor  cost, at $.70 per share, or an aggregate of $939,764.  On
the same  date,  the  Company  issued  270,000  shares  of  Common  Stock to Mr.
Mendelson, the Company's Secretary/Treasurer and Director. No value was assigned
to the  transaction  because the shares were treated as stock issuance costs and
were deemed founders shares in connection with the Company's  merger in November
1998.

         Also on January 4,  1999,  the  Company  issued  600,000  shares to Mr.
Oxenuk in exchange  for  $600,000.  On June 29,  1999,  Mr.  Oxenuk  transferred
300,000 shares to Ms. Batrakova,  Vice President of Communications and Director,
as a gift.

         In March  1999,  270,000  shares  were  issued  to Mr.  Sarkisian,  the
Company's Vice President,  for services related to Mr. Sarkisian's employment by
the Company.

                                       29
<PAGE>

         OIL also  received a  five-bedroom  apartment in Moscow  measuring  267
square meters (2,820 square feet),  which was used by Mr. Oxenuk,  the Company's
President,  Chief  Executive  Officer,  Chairman of the Board of  Directors  and
principal  stockholder.  In April 2000,  Mr.  Oxenuk agreed to pay the Company a
total of $1,790,465,  which includes $563,300 (apartment appraisal cost verified
by an  independent  third party  government  entity),  $50,000  (the cost of two
underground  garages) and $ 1,177,165 (tenant improvement cost), to be paid over
the next fifteen years No regular payments are required to be made; payments and
the  amount of any such  payments  may be made in Mr.  Oxenuk's  discretion.  No
interest is to be paid on the purchase  price.  Payment to the Company may be in
the form of cash or shares of the  Company's  Common  Stock.  Should Mr.  Oxenuk
decide to make payment with the Company's Common Stock, the value of such shares
shall be equal to the closing price of the Company's shares in the public market
on the date of such payment or, if there is no public market for the shares, the
book value per share.

         The  Company's  officers and  directors  are subject to the doctrine of
corporate  opportunities only insofar as it applies to business opportunities in
which the  Company has  indicated  an  interest,  either  through  its  proposed
business  plan or by way of an express  statement  of interest  contained in the
Company's minutes.  If directors are presented with business  opportunities that
may  conflict  with  business   interests   identified  by  the  Company,   such
opportunities  must be promptly  disclosed  to the Board of  Directors  and made
available to the Company.  In the event the Board shall reject an opportunity so
presented,  any of the Company's  officers and directors may avail themselves of
such an opportunity. Every effort will be made to resolve any conflicts that may
arise in favor of the Company.  There can be no assurance,  however,  that these
efforts will be successful.

Item 13. Exhibits and Reports on Form 8-K

         Except as otherwise  indicated,  the following  exhibits are filed with
this Report by reference to the Company's Registration Statement, filed with the
Commission:

Exhibit
No.                     Exhibit Name
-------                 ------------
3.1      Articles of Incorporation and Amendments
3.2      By-Laws of Registrant
10.1     Agreement of Merger
10.2     Employment Agreement with Kirill Mendelson (Revised)
10.3     Employment Agreement with Vassili Oxenuk
10.4     Purchase and Sale Agreement with B.S.G. Press Company Limited
10.5     Contract on Provision of Express Port Services with EMS Garantpost
10.6     Purchase and Sale Agreement with Home  Collection  Company Limited
10.7     Purchase and Sale Contract with ZAO Izdatelskii dom Priboy
10.8     Contract with ZAO  Izdatelstvo  Exmo-Press
10.9     Sale and Purchase Agreement with  Jurist-Gardarika
10.10    Purchase and Sale Agreement with Midix
10.11    Agreement with Moscow Post Office
10.12    Purchase and Sale  Agreement  with Quadro  Trade  Company  Limited
10.13    Purchase  and Sale  Agreement  with  Savva  Group  Entertainment  Video
         Company Limited
10.14    Sale and Purchase Agreement with Terra Knizhniv Club


                                       30
<PAGE>


10.15    Contract on Delivery of Printed Production with Top Kniga
10.16    Agreement on Provision of Express  Delivery  Transport  and  Expedition
         Services with United Parcel Services
10.17    Contract with Varus Video
10.18    Contract with Yuliksis
10.19    Contract with Publishing House INFRA-M
10.20    Contract with Katakombus
10.21    Contract with Laksti
10.22    Contract with Master-Kniga
10.23    Contract with Perfume-Light
10.24    Contract with Sparrk
10.25    Contract with Viking Video
10.26    Contract with Amrus Trading Company
10.27    Contract with Video Marketing
21.1     Subsidiaries
27.1     Financial Data Schedule*

*Filed herewith




                                       31
<PAGE>




                                   SIGNATURES

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

                                    OXIR INVESTMENTS, INC.
                                    (Registrant)

Date: September 28, 2000            By:  /s/ Vassili I. Oxenuk
                                         ---------------------
                                             Vassili I. Oxenuk
                                             President, Chief Executive Officer,
                                             Chairman of the Board of Directors

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

                                    OXIR INVESTMENTS, INC.
                                    (Registrant)

Date: September 28, 2000            By:  /s/ Vassili I. Oxenuk
                                         ---------------------
                                             Vassili I. Oxenuk
                                             President, Chief Executive Officer,
                                             Chairman of the Board of Directors


Date: September 28, 2000            By:  /s/ Michael Y. Smirnov
                                         ----------------------
                                             Michael Y. Smirnov
                                             Vice President, Chief Financial
                                             Officer and Director

Date:  September 28, 2000           By:  /s/ Kirill M. Mendelson
                                         -----------------------
                                             Kirill M. Mendelson
                                             Secretary, Treasurer and Director

Date:  September 28, 2000           By:  /s/ Inna Batrakova
                                         ------------------
                                             Inna Batrakova
                                             Vice President of Communications
                                             and Director

                                       32