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

                                   FORM 10-KSB

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

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

          For the transition period from ___________ to _______________

                         Commission File Number 0-22182

                              BROWSESAFE.COM, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

                    Nevada                             35-2090110
        -------------------------------        -------------------------
        (State or other jurisdiction of        (I.R.S. Empl. Ident. No.)
         incorporation or organization)

               7202 East 87th Street, Indianapolis, Indiana 46256

               (Address of principal executive offices) (Zip Code)

                                 (317) 915-9301

                           (Issuer's telephone number)

       Securities registered under Section 12(b) of the Exchange Act: NONE
         Securities registered under Section 12(g) of the Exchange Act:

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

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. YES [ ] NO [X]

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 the 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 $865.

The aggregate market value of the voting stock held by non-affiliates of the
registrant on March 6, 2000 was $36,095,566 based on a closing bid price of
$5.25 as reported on the National Quotation Bureau "Pink Sheets."

At March 6, 2000, 18,075,346 shares of common stock, par value $.001 per share
(the registrant's only class of voting stock) were outstanding.

                    DOCUMENTS INCORPORATED BY REFERENCE: None

<PAGE>
                                TABLE OF CONTENTS

                                                                          Page
                                                                          ----
                                     PART I
ITEM 1.  Description of Business                                            3
ITEM 2.  Description of Property                                           17
ITEM 3.  Legal Proceedings                                                 17
ITEM 4.  Submission of Matters to a Vote of Security Holders               18

                                     PART II

ITEM 5.  Market for Common Equity and Related                              18
           Stockholder Matters
ITEM 6.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                             18
ITEM 7.  Financial Statements                                              23
ITEM 8.  Changes in and Disagreements with Accountants on                  23
           Accounting and Financial Disclosure

                                    PART III

ITEM 9.  Directors, Executive Officers, Promoters and Control Persons;     24
           Compliance With Section 16(a) of the Exchange Act
ITEM 10. Executive Compensation                                            26
ITEM 11. Security Ownership of Certain Beneficial Owners and Management    29
ITEM 12. Certain Relationships and Related Transactions                    30

ITEM 13. Exhibits and Reports on Form 8-K                                  32




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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

     This Annual Report on Form 10-KSB, including all documents incorporated by
reference, includes "forward-looking" statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act and the Private
Securities Litigation Reform Act of 1995, and we desire to take advantage of the
"safe harbor" provisions thereof. Therefore, we are including this statement for
the express purpose of availing ourselves of the protections of such safe harbor
with respect to all of such forward-looking statements. The forward-looking
statements in this Report reflect our current views with respect to future
events and financial performance. These forward-looking statements are subject
to certain risks and uncertainties, including specifically the absence of
significant revenues, a history of losses, no assurance that we can review sites
accurately and on a timely basis due to the explosive growth of the Internet,
significant competition, the uncertainty of protecting our intellectual
property, uncertainty as to indemnification risks, possible adverse effects of
future sales of shares on the market, trading risks of low-priced stocks and
those other risks and uncertainties discussed herein, that could cause actual
results to differ materially from historical results or those anticipated. In
this report, the words "anticipates," "believes," "expects," "intends," "future"
and similar expressions identify certain of the forward-looking statements.
Readers are cautioned not to place undue reliance on the forward-looking
statements contained herein, which speak only as of the date hereof. We
undertake no obligation to publicly revise these forward-looking statements to
reflect events or circumstances that may arise after the date hereof. All
subsequent written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by this
section.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Products and Services.

     BrowseSafe is a web content review Company whose web program tool is called
"PlanetGood". PlanetGood is not a filter or blocker. The families, schools and
businesses using PlanetGood will be afforded Internet safety while still having
the freedom to choose the content they determine is appropriate for themselves
and their children. PlanetGood is a browsing device that includes a world-wide
site submission and review process and offers continual updating for its users.

     PlanetGood offers several levels or modes of protection when viewing the
Internet: (1) a mode called "PlanetWow" designed to direct children 10 and under
to educational and fun web sites; (2) a level called "PlanetCool" to direct
teens aged 11 to 16 to sites appropriate for teens; and (3) a level called
"PlanetHome" that allows adults to reach sites consistent with adult interests.

     PlanetGood compliments or replaces existing browsers, such as Microsoft
Internet Explorer or Netscape Navigator, with a PlanetGood customized version of
these browsers. PlanetGood installs a client-side program called PlanetGood
Stealth which can be customized by the parent (or teacher, system administrator,
librarian) and it runs transparently on the personal computer. The Stealth
program empowers the parent to allow or disallow non-protected browsers, chat
programs and audio or video utilities and has a selectable parental bypass
feature. PlanetGood can also be installed in networked environments.

     Once installed on a personal computer or in a networked environment, the
user is prompted to type in their personalized user name and password and is
directed to the PlanetGood's server-side technology. This technology allows
parents the flexibility to customize the Internet sites available to each member
of the family, depending upon their personal preferences and the ages of their
children. Parents are empowered to choose the web content by selecting browsing
variables for each member of their family. They also benefit from parental
controls such as "site preview" and "site over-ride" so they can further
customize the content and time frames for their children to view individual web
sites.

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     Each site which is available on PlanetGood is personally reviewed by
BrowseSafe's trained staff. A basic principle which governs BrowseSafe is that
the site review system is the only process that can insure accuracy. An
illustration of this feature is the area of nudity and sexual language. On the
web, these topics are seen in many forms and technology alone cannot decipher
the vast differences that may occur between a pornographic site, a photography
studio site containing nude pictures, a medical sexual anatomy site, a 16th
century art site containing nude paintings, a medical site containing sexually
related diagrams, a lingerie and intimate apparel site or sites that simply
discuss mature sexual language in an explicit way without any graphics or
pictures whatsoever. The only reliable way to properly analyze these diverse
sites is through human review. Further, without human review, there is no other
accurate way to segment a site so that parents can allow access to certain areas
of a site but restrict access to other areas of the site that they deem to be
inappropriate.

     During the review process, each site is given a topic and, if applicable,
may also be assigned a combination of any of the following characteristics:
Alcohol, Alternative Lifestyles, Art - Nudity, Chat, Extreme Beach / Intimate
Apparel, Firearms and Hunting, Gambling, Games, Illegal Drugs, Jokes & Humor,
Mature Sexual Language, Mature Subject Matter, Medical Anatomy, Medical
Terminology - Sexual, Message Boards, Music, New Age / Eastern Religions, News,
Occult, Ordering on-line, Paranormal, Personal Web Pages, Pop-Culture, Profanity
- Excessive, Profanity - Mild, Reviews & Critiques, Science-Fiction, Search
Engine, Sports, Television & Movies, Tobacco, Video or Audio, Violence - Mild,
Violence - Moderate and Violence - Excessive.

     For a web site to be accessible to any PlanetWow or PlanetCool account, the
site must have been reviewed and assigned a topic and, if appropriate,
applicable characteristics. If a PlanetWow or PlanetCool user wants to go to a
site that has not been reviewed, they can immediately submit the site for review
or the parent can preview the site to determine whether to allow access by a
child until the site has been reviewed by the BrowseSafe reviewer. Users of
PlanetHome may opt for the same level of security as either PlanetWow or
PlanetCool. In the alternative, the parent may utilize "Free Roam Browsing" or
choose to bypass the PlanetGood system altogether.

In order to stay ahead of demand, the Company has a review capacity of 10,500
sites per week as of March, 2000, with a goal of 25,000 by the second quarter of
2000. In order to grow to this capacity, the Company intends to triple the size
of its site review team.

     In addition, BrowseSafe is developing a fourth product that is currently a
pilot program scheduled for full release later in 2000 under the name
"PlanetGood Enterprise". This business productivity tool will be functionally
different than BrowseSafe's home product, however, it can be customized by each
business to give an unlimited number of employees predetermined safe access to
the Internet. PlanetGood Enterprise will have full reporting capabilities by
individual employee and will be easily managed by the business owner or system
administrator.

Employees and Training.

As of March, 2000, BrowseSafe has 13 full-time employees, including executive
officers. It also has 27 part-time employees and 26 outside sales
representatives. The Company does not have any agreements with labor unions, and
experiences a low turnover rate among its employees and independent contractors.
All of the employees are required to complete in-house training programs which
include an orientation, review of standard operating procedures manual, seminars

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in updated and new techniques and information and regular performance reviews.

     The review staff is provided with an initial intensive training program
that consists of an overview of the Company, its policies, products and the
basic technology, including topics and characteristics training. Reviewers must
then complete several rigorous training sessions interacting with BrowseSafe's
proprietary technology and incorporating the human interaction necessary to
provide accuracy in the content review process.

     During and after completion of training, each reviewer is monitored by and
in contact with their site review manager. New reviewers are evaluated by
managers and based on their level of competency, may receive more
responsibilities in the review process. The most efficient and competent
reviewers may move on to become site review managers and take on the added tasks
that are required by the site review manager's job description. Site reviewers
are regularly monitored for accuracy and further training is assigned as
warranted.

Competition.

     The Company under its business plan, which was completed in September,
1999, will be competing for a share of the Internet safety browser business
dominated presently by a number of large, full-service organizations. The
principal competitors include Cyber Patrol, Cyber Sitter, Net Nanny and Surf
Watch. Most Internet filters merely provide a list of prohibited web sites and
are weakened by changes in the Internet and by clever users who learn how to
circumvent them. PlanetGood provides a positive list of sites that have been
reviewed for content and are updated on BrowseSafe servers for all users to
freely access. Every web site viewable through "PlanetGood" has been viewed and
characterized for content by the Company's staff review team - sites are not
determined to be "good" or "bad", they are simply reviewed objectively for the
content actually contained on the site.

Business Development.

BrowseSafe, LLC was formed as an Indiana limited liability company in the first
quarter of 1998 in Indianapolis, Indiana, as a result of a growing demand by
families and businesses for a safe Internet browser. On July 28, 1998,
BrowseSafe.com, Inc. was incorporated as a Nevada corporation but conducted no
operations and had no assets until May, 1999.

In contemplation of the share exchange with Motioncast Television Corporation of
America described below, BrowseSafe, LLC and BrowseSafe.com, Inc. entered into
an Asset & Liability Contribution Agreement in May, 1999. The other parties to
the Asset & Liability Contribution Agreement were Minati Financial, Inc.,
Torquay Holdings, Ltd.,Vista Financial Corp., El Coyote Capital Corp., Jupiter
Financial Services, Inc., Kyline Investment Corp., Chariot Group, Ltd.,
Sid-Barney, Inc., Sterling Overseas Investments SA, Albury Capital Corp.,
Eivissa Capital Corp., Hemisphere & Associates, Ltd., Barisal Capital
Corporation and Fergus Capital Corporation (collectively the "Funding Group").

Pursuant to the Asset & Liability Contribution Agreement, the Funding Group
agreed to contribute or cause to be contributed the following funds to
BrowseSafe.com, Inc. $27,380 upon execution of the Agreement; $300,000 on or
before June 10, 1999; and $1,500,000 not later than November 30, 1999.

In exchange, BrowseSafe.com, Inc. agreed to issue 2,738,000 shares of its common
stock to the Funding Group. In addition, BrowseSafe, LLC agreed to contribute
all of its assets and liabilities, including its intellectual

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property to BrowseSafe.com, Inc. in exchange for 11,200,000 shares of its common
stock. For accounting purposes BrowseSafe LLC was treated as the acquirer. All
transferred assets and liabilities were recorded at their historical cost.

The primary business reasons for the Asset and Liability Contribution Agreement
were: 1) to raise additional funds for the operation of the business; and 2) to
contribute all assets to an entity that could then be merged into a corporation
whose stock was listed on the OTC Bulletin Board (a limited liability company
could not be merged into a corporation). At the time of the execution of the
Asset & Liability Contribution Agreement it was contemplated that the merger
candidate would be Motioncast Television Corporation of America.

Effective as of June 24, 1999, BrowseSafe.com, Inc. and its shareholders,
BrowseSafe, LLC and the Funding Group, entered into a Share Exchange Agreement
with Motioncast. Motioncast was a Nevada corporation incorporated on June 8,
1990, whose stock was listed on the OTC Bulletin Board under the trading symbol
MCTV. As of the date of the share exchange, Motioncast had no operations, had
assets consisting of only of cash and had minimal liabilities. Motioncast was
considered a development stage company.

The Share Exchange Agreement provided that 13,938,000 shares of the common stock
of BrowseSafe.com, Inc. would be exchanged for 13,938,000 shares of the common
stock of Motioncast. In addition, the Share Exchange Agreement provided for: a)
representations and warranties by BrowseSafe.com, Inc. and Motioncast, which
representations and warranties were typical of transactions of this nature; b)
an indemnity agreement by BrowseSafe.com, Inc and Motioncast; and c)conditions
precedent to the exchange all of which were satisfied prior to the closing. The
Share Exchange Agreement also required the Funding Group to contribute or cause
to be contributed additional funds to the Company and required the Company to
issue an additional 120,000 shares would be issued to the Funding Group.

On the date of the share exchange, certain members of the Funding Group were
also shareholders of Motioncast. The Company has identified the following
entities that were both members and shareholders: Barisal Capital Corp. (owned
100,000 shares of Motioncast), Eivissa Capital Corp. (owned 100,000 shares of
Motioncast), Fergus Capital Corp. (owned 100,000 shares of Motioncast) and
Albury Capital Corp. (owned 100,000 shares of Motioncast). It was the Company's
understanding that the Funding Group had direct or indirect control of
Motioncast prior to the date the Share Exchange Agreement was executed.

As a result of the share exchange, BrowseSafe.com, Inc. became a wholly owned
subsidiary of Motioncast. Motioncast changed its name to BrowseSafe.com, Inc.
and changed its trading symbol to PGPG. BrowseSafe.com, Inc. changed its name to
BrowseSafe Technology, Inc. As of November, 1999, all operations are conducted
in BrowseSafe Technology, Inc. For financial statement purposes, BrowseSafe
Technology, Inc. is considered the acquiring Company and the merger is treated
as a "reverse acquisition". Pursuant to this accounting treatment, BrowseSafe
Technology, Inc. is deemed to have issued stock for the acquisition of
Motioncast.

The Funding Group's direct obligation under the Share Exchange Agreement was to
contribute to the Company $600,000. Through November 8, 1999, the Funding Group
contributed approximately $440,000 ($402,200 net of expenses of $37,800).
Additionally, the Funding Group was obligated under the Asset & Liability
Contribution Agreement to cause the Company to receive at least $1,500,000 of
proceeds from the sale of common stock no later than November 30, 1999. The
Funding Group also failed to meet this obligation.

The Company has issued but has not delivered the 2,738,000 shares and has not
issued any

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of the 120,000 shares to the Funding Group due to its failure complete the
requirements of the two agreements. The Company advised all members of the
Funding Group in writing that they were in breach of the Share Exchange
Agreement and the Asset & Liability Contribution Agreement and provided them an
opportunity to remedy the breach.

The Company received two letters dated March 1, 2000, from an attorney, one of
which states that he represents the Funding Group aka Hemisphere Group of
Companies and the other stating that he represents the Funding Group aka Next
Millennium Management, Ltd. The letters demand that the Company deliver the
2,738,000 shares and alleges that the Form 10-SB filed by the Company contains
false and misleading disclosures relating to the Funding Group. The Company
disputes the Funding Group's claim to the 2,738,000 shares and believes that its
disclosures relating to the Funding Group are accurate. The Company's attorneys
are in discussions with the attorney for the Funding Group. The Company is
continuing to evaluate what actions to take with respect to this matter.

Intellectual Property.

     The Company, or its wholly owned subsidiary, BrowseSafe Technology, Inc.,
own all of the intellectual property assets utilized in the business of
BrowseSafe.

Trademarks and Trademark Registrations

The Company owns the following trademarks for which a registration has issued or
an application for registration is pending on the Principal Register of the U.S.
Patent and Trademark Office:

1.      Mark:         PLANETGOOD (typed form)
        Serial No.:   75-481,989
        Filing Date:  May 8, 1998
        Goods:        software for personal computer security while
                      accessing a global computer network
        Int'l Class:  09
        Status:       Registered (Reg. No. 2,288,288, issued October 19, 1999)

2.      Mark:         BrowseSafe (stylized form)
        Serial No.:   75-509,479
        Filing Date:  June 26, 1998
        Goods:        software for personal computer security while
                      accessing a global computer network
        Int'l Class:  09
        Status:       Registration application pending (Statement of Use filed;
                      non-final Office Action mailed on November 2, 1999)

3.      Mark:         PLANETHOME (typed form)
        Serial No.:   75-583,955
        Filing Date:  November 6, 1998
        Services:     computer services, namely, providing quality assurance
                      services and usability reviews in the field of web sites
        Int'l Class:  42
        Status:       Registration application pending (Statement of Use filed;
                      assigned to examiner on February 4, 2000)

4.      Mark:         PLANETWOW (typed form)
        Serial No.:   75-584,324
        Filing Date:  November 6, 1998
        Services:     computer services, namely, providing quality assurance
                      services and usability reviews in the field of web sites

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        Int'l Class:  42
        Status:       Registration application pending (Statement of Use filed;
                      assigned to examiner on February 4, 2000)

5.      Mark:         PLANETCOOL (typed form)
        Serial No.:   75-584,378
        Filing Date:  November 6, 1998
        Services:     computer services, namely, providing quality assurance
                      services and usability reviews in the field of web sites
        Int'l Class:  42
        Status:       Registration application pending (Notice of Allowance
                      mailed on January 25, 2000)

All registrations and applications are presently of record in the name of the
Company's predecessor-in-interest, BrowseSafe, LLC (an Indiana limited liability
company). BrowseSafe, LLC contributed all of its assets and liabilities,
including its intellectual property, to BrowseSafe Technology, Inc., a wholly
owned subsidiary of the Company pursuant to an Asset & Liability Contribution
Agreement in May, 1999. The Company intends to make the necessary filings with
U.S. Patent and Trademark Office to reflect this transfer.

The Company uses various designs, logos and composite marks on its product
packaging, promotional materials and website (found at (www.browsesafe.com))
which are trademarks of the Company, but for which no applications for
registration have been filed to-date with the U.S. Patent and Trademark Office
or any other registration authority. These include:

     1.   A logo depicting the planet Earth, sometimes used with the trade name
          "BrowseSafe.com" and a shadow grounding effect directly below (see
          website at: (www.browsesafe.com/aboutbrowsesafe/main)).

     2.   A logo consisting of a square block design with the letters "PG"
          depicted in large, bold letters against a gold color background in a
          center panel of the block, with narrower panels of blue and red across
          the top and bottom, respectively. This design is sometimes depicted
          with the trademark "PlanetGood" in the top panel and the phrase
          "Family Safe Internet Browsing" directly below the "PG" in the center
          and bottom panels. (see website at:
          (www.browsesafe.com/aboutplanetgood/main) and at:
          (www.browsesafe.com/newsandpress/order)).

     3.   The mark "PlanetBiz", which has been adopted by the Company and
          introduced on its website for a forthcoming Internet utilization
          control product intended for use by businesses.

        Trade Names

        The Company uses the trade names "BrowseSafe" and "BrowseSafe.com".

        Copyrights

        The Company holds copyrights in various computer programs, including
        existing versions of "PlanetGood" browser software and programs used
        in-house by the Company. The Company also holds copyrights in the
        technical manuals and instructional materials for its software
        products as well as promotional materials associated with its products
        and services. No applications for registration of a copyright in any
        of the Company's computer programs or other copyrightable works have
        been filed to-date.

        Licenses and Assignments by the Company

        Use of the Company's software products by consumers and others is
        subject to the terms and conditions of an end-user license agreement
        which accompanies the software. The Company authorizes various Internet
        Service Providers (ISP's) to promote and distribute the Company's
        products and services online to consumers and other end-users.

        Except for such licenses and authorizations, the Company has neither
        assigned nor otherwise transferred any of its intellectual property
        necessary to the conduct of its business.

        Licenses Granted to the Company

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        The Company has not been granted any licenses, know-how, technology
        and/or other intellectual property that is necessary to the conduct of
        its business, other than standard end-user licenses for the use of
        various commercially available software products used by the Company for
        office administration, management and operations.

        Patents

        The Company has no patents or patent applications.

Marketing.

The Company's core product, PlanetGood, has been in development for more than
two years. Since September 1999, PlanetGood has undergone extensive beta testing
from schools, individuals and ISPs from all over North America. The Company is
in the process of adding additional staff and is preparing for the public launch
of PlanetGood version 3.0.

The marketing plan as adopted by the Company has been divided into primary,
secondary and tertiary target market groups. These target market groups allow
the Company to tailor its marketing approach and concentrate campaigns on
specific segments that include public and private schools, libraries, retail,
business and organizations.

        The primary markets identified by the Company are:

Internet Service Providers (ISP)

        Key ISP's around the country will be solicited by the Company to
implement a three-month marketing plan designed specifically for their market.
The campaign will consist of materials to introduce the ISP's customers to
PlanetGood (e-mail, print ads, direct mail, etc.), materials for their web site
(FAQ's, online demo, downloadable product, etc.) and a local public relations
campaign.

Many small to medium sized ISP's are struggling to be profitable while offering
a $19.95 unlimited usage plan. BrowseSafe's plan will be to offer through ISP's
a value-added program to their current and future customers for an additional
fee added to customers' monthly bills. This fee will be divided between the ISP
and BrowseSafe. BrowseSafe will provide all of the marketing materials and will
provide the customized ISP's with public relations support to show them how to
promote the BrowseSafe products.

Direct Sales over the Internet

        The Company anticipates that this area has great potential as the US
population becomes accustomed to purchasing goods and services on the Internet.
By selling PlanetGood on the Internet, the market expands from a national to an
international audience.

Private Label

        The BrowseSafe private label national ISP program has been designed to
allow the Company to partner with organizations to offer privately branded
Internet access as a base product or as a compliment to their current line of
business. In addition to offering a service that organizations can resell, the
Company will also be able to offer unlimited Internet access to millions of
American households that have an Internet capable computer but are not currently
online. Although this Internet service was set up to assist the Private Label
organizations, the Company will be branding its own ISP service called Just
Browse It. In summary, the Company can realize additional revenue by offering
national ISP service as a stand alone product or in combination with PlanetGood.

Retail Market

        The Company will focus its initial marketing and sales efforts on
general retail, certain markets within computer retail and Christian retail

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segments because these markets allow the Company access to customers who fit a
target demographic profile without requiring the Company to buy shelf space or
pay advertising fees.

        General Retail

               The Company believes that there are millions of homes that own a
        computer but do not have Internet access. The Company also believes that
        a primary reasons given for not being connected to the Internet is the
        issue of on-line predators. Through groundwork already laid and a public
        relations campaign designed for retailers, BrowseSafe plans to enter
        into agreements to allow it the opportunity to position PlanetGood in
        retail outlets. A visual presence on the shelves of retailers will
        expose PlanetGood to a large volume of potential new customers.

        Computer Retail

               To enter into the computer retail market the Company is pursuing
        a professional computer sales representation firm with 24 local and
        regional representatives to position its product on the shelves of the
        independent computer software retailers. This effort encompasses the
        major national chains. A presence in this market is expected to enhance
        the position of the Company's product nationwide.

        Christian Retail

               The Company has entered into an agreement with Riverside Book &
        Bible House, Incorporated d/b/a Riverside Distribution & Fulfillment
        Services, a distributor which specializes in selling products to the
        Christian retail market. Through this organization, the Company's
        products will be sold to Christian stores allowing strategic product
        positioning. This retail segment is a natural market for PlanetGood as
        the demographics suggest a strong family orientation.

The secondary markets are:

Business

        This area has great potential since currently many businesses using the
Internet allow employees access to the Internet either directly or through a
network. The business owner or its system administrator will be able to
customize the PlanetGood Enterprise to allow employees only into areas and sites
that are most productive for the Company. Efficiencies can be gained by the
Company since employees will not be able to spend time in non-work related
sites.

Cable Companies

        As technology continues to improve, new methods of Internet access are
becoming available. One of these new avenues is the cable modem through which
cable companies can provide Internet access utilizing television cable that has
already been installed into customers' homes. Depending upon the acceptance by
consumers and marketing efforts by cable companies, this niche could grow
significantly over the next year. BrowseSafe plans to offer the same programs to
cable companies as it does to traditional ISP's.

Schools

        Schools are an important area of focus because of the concern for safety

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by parents and educators and their desire to offer children a positive
educational experience when browsing the Internet. Schools will be approached
with two options: The first will be the opportunity to purchase PlanetGood for
use in the classrooms. The second will be to use the fund raising program to
generate additional revenues for the school. The Company has targeted schools as
a secondary market only because there is generally a time line for
decision-making and budgeting.

        According to information provided by the U.S. Department of Education
for the school year 1999-2000, there are estimated over 80,000 public elementary
and secondary schools and over 26,000 private elementary and secondary schools
in the U.S. The Department of Education reports that over 95% of these 106,000
schools have computers, but less than 50% of the schools and 15% of the
computers are connected to the Internet. In the 26,000 private schools in the
U.S., there are over 626,000 computers with less than 9% of those computers
connected to the Internet. A main concern of schools without Internet
connections is exposure to unwanted or inappropriate information and sites.

Libraries

        Like schools, libraries are an important area of focus because of the
concern for safety by parents and educators. PlanetGood is a suitable tool for
libraries since it is not a "one size fits all" product. BrowseSafe's
classification of web site content will permit the library to select the type of
content for its internet access as it selects for the books it has on its
shelves.

Market OEM (Original Equipment Manufacture)

        This market segment is made up of computer and parts manufacturers. By
bundling PlanetGood within new computers, users will be able to install
PlanetGood with the initial setup of the computer.

Telecommunications Companies

        The telecommunications industry has recently begun to focus on the
Internet as a mean to gain new customers and keep current customers. Depending
upon the acceptance by consumers and marketing effort from the
telecommunications companies, this niche appears to be a growth area over the
next years. BrowseSafe plans to offer the same programs to these companies as it
does to traditional ISP's.

        The tertiary markets are:

Advertising Sales

        The Company intends to pursue the sale of advertising space on
PlanetWow, PlanetCool and PlanetHome web pages. Advertisers pay a premium for
search words so that their ad is displayed to people looking for their product
or service. BrowseSafe will be able to provide a better alternative because each
of the sites is age specific. This offers the Company the opportunity to achieve
a better target audience for a given advertiser.

e-Commerce

        As Internet sales continue to grow, BrowseSafe plans to offer special
products and services to its customer base through direct marketing as well as
through an online store. This area of expansion is still in the planning stages.

Market Research Information

                                       9
<PAGE>

        The list of reviewed web sites in combination with the characteristics
that describe their content will be a valuable marketing tool for marketers
around the world. The sales of segments of this list can provide an additional
revenue stream for the Company in the future.

Year 2000 Compliance.

        The Year 2000 problem is the inability of some software, hardware and
systems to determine the correct century. For example, software with
date-sensitive functions that are not Year 2000 compliant may not be able to
determine whether "00" means 1900 or 2000, which may result in computer failures
or the failure of the computer to produce accurate information.

        The Company made an assessment of the Year 2000 readiness of its
internal software and hardware systems. Its assessment plan also included:

        o      contacting third party vendors from whom the Company purchases or
               licenses its hardware, software, services and supplies;

        o      assessing repair, upgrade or replacement requirements and
               implementing repair, software patches, upgrade or replacement;

        o      testing certain internal and third party, hardware, software and
               systems; and

        o      contacting certain customers.

        Most of the Company's hardware is new and was already Year 2000 and
leap-year compliant, Based on the results of this assessment, the Company
upgraded its computer systems and determined that its software, hardware and
computer systems were Year 2000 compliant. In 1999, the Company spent
approximately $4,000 to upgrade its computer systems. These expenses were
related to time spent by employees and consultants in the evaluation process as
well as any needed repair, upgrade or replacement. The Company also verified
that its suppliers were Year 2000 compliant. The Company has experienced no Year
2000 compatibility problems with its equipment.

ITEM 2. DESCRIPTION OF PROPERTY

Office Space

        Effective March 13, 2000, the Company moved into new suburban offices at
7202 East 87th Street, Suite 109, Indianapolis, Indiana 46256 and is leasing
4,139 square feet of office space from New Boston Citimark Limited Partnership
at $11 per square foot which the prevalent market rental rates for comparable
office space in northeast suburban Indianapolis. The lease is for five years
with a right of first refusal to renew and certain expansion options.

The Company believes that this space will provide adequate office and working
space to build a "virtual office" model to support the Company's national
technical and administrative needs . Long-range future growth can be
accommodated by leasing additional space nearby if necessary.

Equipment

        BrowseSafe leases most of its computer system from two principal
computer leasing companies upon terms which are generally commercially
available. The system includes state-of-the-art server equipment from Compaq

                                       10
<PAGE>

and other leading server manufacturing companies. The equipment has built-in
redundant server architecture, including RAID hard drives and power supplies.
Each server is installed with an up-to-date system software configuration,
database applications, email servers, spider and robot technology and other
proprietary BrowseSafe software.

The Company also maintains three separate in-house programming test environments
which emulate the proprietary software that it uses for its PlanetGood service.
This includes both client-side and server-side emulations. Beyond this, the
Company also owns personal computer equipment, routers and hubs for its internal
operations and infrastructure.

Redundancy.

        The system has been designed so that the Company will have enough
hardware to handle double the number of current customers. If loss of a server
occurs, the other servers compensate for the unit that is down until the
disabled server is back online. In addition to having redundant server
architecture, each server has redundant power supplies with the RAID
configuration of hard drives. The Raid configuration allows for multiple drives
to fail in each server without the loss of data or functionality.

Exodus Communications, Inc.

        BrowseSafe also has a maintenance/operation agreement for its servers
from Exodus Communications, Inc. This Internet data facility is located on one
of the main Internet backbones and offers scalability, reliability and
manageability to run the Company's web applications. Exodus manages Internet web
sites and network infrastructure from Internet data centers located in various
major cities. The Exodus agreement is a one year agreement with monthly payments
approximating $4,300 per month prior to March 2000 and current payment is $4800
per month. This amount may increase as the Company determines the need to expand
the number of servers and/or increase the telecommunications bandwidth necessary
to facilitate its customer base. All amounts paid to Exodus are immediately
expensed by the Company. This relationship ensures that BrowseSafe customers are
given access to an Internet network with the monitoring and security as detailed
below:

The Network
o       OC-12c network architecture provides global network connectivity to
        businesses worldwide.
o       High-bandwidth capacity available in a variety of options ensures speed
        and performance for crucial Internet applications.
o       The Exodus network can sustain over 3 Gbps of traffic to the Internet so
        you can make sure your Web communications keep up with elevated Internet
        traffic.
o       Transmit data through shortest available paths thanks to an
        industry-leading combination of public and private peering
        relationships.
o       While ISPs commonly oversubscribe their networks by nearly four times
        their capacities, the Exodus network is designed for unanticipated
        spikes in demand. This means our network is managed to have excess
        capacity when needed.
o       Exodus uses redundant fiber paths to prevent any single point of failure
        in the Exodus backbone.

Services and Monitoring
o       24 x 7 service and monitoring
o       Secure private state-of-the-art Internet Data Center facilities

                                       11
<PAGE>

o       URL Monitoring checks URL for appropriate response times and pings
        your Web server application for status verification.
o       Complete access and routes to all peers
o       Usage based bandwidth services with reporting of bandwidth usage
o       Bandwidth allocation changes made within minutes
o       Tape and media management

Security
o       Biometric key-lock doors
o       Alarm systems
o       Video surveillance cameras
o       Air vents
o       Motion and temperature sensors
o       Locked-down floor tiles
o       Windows with horizontal privacy blinds
o       Dedicated services for power, lighting and fire suppression
o       Dedicated, shielded connections to the Exodus network

Exodus is experienced at hosting these prominent companies.
o       GeoCities
o       Hewlett-Packard
o       Lycos
o       MCI Worldcom
o       Microsoft Hotmail

o       MSNBC
o       Oracle
o       USA Today
o       Yahoo

ITEM 3. LEGAL PROCEEDINGS

        Due to the failure of a group of outside investors (the "Funding Group")
to complete the requirements of an Asset & Liability Contribution Agreement and
Share Exchange Agreement, the Company did not deliver 2,738,000 shares to the
Funding Group and has not issued an additional 120,000 shares to the Funding
Group. The Company advised all members of the Funding Group in writing that they
were in breach of the Share Exchange Agreement and the Asset & Liability
Contribution Agreement and provided them an opportunity to remedy the breach.
The Company received two letters dated March 1, 2000, from an attorney, one of
which states that he represents the Funding Group aka Hemisphere Group of
Companies and the other stating that he represents the Funding Group aka Next
Millennium Management, Ltd. The letters demand that the Company deliver the
2,738,000 shares and alleges that the Form 10-SB filed by the Company contains
false and misleading disclosures relating to the Funding Group. The Company
disputes the Funding Group's claim to the 2,738,000 shares and believes that its
disclosures relating to the Funding Group are accurate. The Company's attorneys
are in discussions with the attorney for the Funding Group. The Company is
continuing to evaluate what actions to take with respect to this matter.

        Keith Balderson, one of the Company's directors, is a principal of Next
Millennium Group, Ltd. In light of the attorney's letter stating that he
represented the Funding Group aka Next Millenium Group, Ltd., the Company
suggested to Mr. Balderson that he resign as a director. Mr. Balderson submitted
his resignation effective March 2, 2000, a copy of which has been included as an
exhibit to this report.

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

       None.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        The Company's common stock is publicly traded in the over-the-counter
market and quoted on the NASD OTC Bulletin Board maintained by the National
Association of Securities Dealers, Inc. under the trading symbol "PGPG". The
Company's stock

                                       12
<PAGE>

first began trading in the over-the-counter market on the OTC Bulletin Board
under the symbol "MCTV" in October, 1998. In August, 1999, the Company changed
its trading symbol to "PGPG". The OTC Bulletin Board is an electronic quotation
service that displays real-time quotes, last sale prices and volume information
in certain domestic and foreign issuers whose securities are traded in the
over-the-counter market.

        The following states the range of high and low bid prices for each
quarter from October 26, 1998 through December 31, 1999. No information is
available to trading prices prior to that time.

Calendar Quarter Ending             High           Low
------------------------------      ----           ---
December 31, 1998                 $ 34.375        $14.063 (1)
March 31, 1999                    $ 34.375        $0.0625 (1)(2)
June 30, 1999                     $ 5.6250        $0.0625 (3)
September 30, 1999                $ 3.6250        $0.9375
December 31, 1999                 $ 1.5313        $0.2000

(1)     On March 10, 1999, the Company effected a 25 to 1 reverse split
        decreasing the issued and outstanding shares of common stock to 400,000.
        The trading prices have been adjusted to give a retroactive effect of
        the reverse split.

(2)     On March 27, 1999, the Company issued an additional 500,000 shares of
        common stock at $0.10 per share pursuant to a Rule 504 offering.

(3)     On April 5, 1999, the Company issued an additional 1,000,000 shares at
        $0.10 per share pursuant to a second Rule 504 offering.

The High/Low bid prices for each quarter of the last fiscal year were obtained
from NASDAQ Trading and Market Services. The quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.

        No dividends on the Company's common stock have been declared or paid
since the Company's inception. The Company intends to retain earnings to finance
the growth and development of its business and does not anticipate paying cash
dividends on its common stock in the foreseeable future. As of December 31, 1999
there were approximately 40 holders of record of the Company's common stock.

        Eligibility Rule 6530 (the "Rule") was issued on January 4, 1999 by the
National Association of Securities Dealers, Inc. The Rule requires companies to
file annual and quarterly reports under to Sections 13 and 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") in order to be eligible for
listing on the OTC Bulletin Board. The Rule provides that companies which do not
file those reports will have their stock removed from the OTC Bulletin Board
under a phase-in schedule based upon the company's trading symbol on January 4,
1999. If a company's stock is removed from the OTC Bulletin Board, its stock may
be quoted on the National Quotation Bureau "Pink Sheets."

        Quotation of the Company's stock was removed from the OTC Bulletin Board
on January 20, 2000, due to its inability to clear comments received from the
Securities and Exchange Commission on its Form 10-SB prior to its compliance
date of January 20, 2000. The Company's Form 10-SB, which was filed on November
24, 2000, became effective by operation of law on January 22, 2000; however, the
Company did not clear the comments received from the Securities and Exchange
Commission in its review of the Form 10-SB until March 22, 2000. The Company's
common stock again became eligible for quotation on the OTC Bulletin Board on
March 28, 2000. During the period the stock was not quoted on the OTC Bulletin
Board, it was quoted on the National Quotation Bureau Pink Sheets.

Recent Sales Of Unregistered Securities.

        During the last three years, the Company has sold the following
securities without registering them under the Securities Act of 1933 (the
"Securities Act"):

        Prior to June, 1999, the Company's name was Motioncast Television
Corporation of America. Motioncast was incorporated in Nevada on June 8, 1990.
Its stock was listed on the OTC Bulletin Board beginning in October, 1998, under
the trading symbol MCTV. The Company had no operations, had assets consisting of
only of cash and had minimal liabilities and was considered a development stage
company.

                                       13
<PAGE>

        On March 10, 1999, the Company (which was still known as Motioncast
Television Corporation of America) issued 100,000 shares of the Company's common
stock (after a 25 to 1 reverse stock split) to Michael Zapara, the Company's
then president and director, in a transaction which was exempt from registration
under Section 4(2) of the Securities Act in exchange for a release of all claims
for salary due the previous two years. The issued shares were restricted and the
total valuation was recorded by the Company at $5,000. The Company valued the
shares at $.05 per share instead of the offering price of $.10 per share due to
the fact that the shares issued to Michael Zapara were restricted and the shares
issued in the offering were unrestricted.

        Also in March, 1999, the Company conducted an offering of 500,000 shares
of common stock at $0.10 per share under Rule 504 of Regulation D raising
$50,000. In April, 1999, the Company conducted a second Rule 504 offering of
1,000,000 shares at $0.10 per share, raising $100,000.

        In contemplation of the share exchange with Motioncast Television
Corporation of America described below, BrowseSafe, LLC and BrowseSafe.com, Inc.
entered into an Asset & Liability Contribution Agreement in May, 1999 with a
group of outside investors (the "Funding Group"). Pursuant to the Asset &
Liability Contribution Agreement, the Funding Group agreed to contribute or
cause to be contributed certain funds to BrowseSafe.com, Inc. In exchange,
BrowseSafe.com, Inc. agreed to issue in a private placement 2,738,000 shares of
its common stock to the Funding Group. In addition, BrowseSafe, LLC agreed to
contribute all of its assets and liabilities, including its intellectual
property to BrowseSafe.com, Inc. in exchange for 11,200,000 shares of its common
stock.

        Effective as of June 24, 1999, BrowseSafe.com, Inc. and its
shareholders, BrowseSafe, LLC and the Funding Group, entered into a Share
Exchange Agreement with Motioncast. The Share Exchange Agreement provided that
13,938,000 shares of the common stock of BrowseSafe.com, Inc. would be exchanged
for 13,938,000 shares of the common stock of Motioncast in a transaction which
was exempt from registration under Section 4(2) of the Securities Act of 1933.
The Share Exchange Agreement also required the Funding Group to contribute or
cause to be contributed additional funds to the Company and required the Company
to issue an additional 120,000 shares would be issued to the Funding Group.

        Since the Funding Group failed to fully perform their obligations under
the Asset & Liability Contribution Agreement and Share Exchange Agreement, the
Company has issued but has not delivered the 2,738,000 shares and has not issued
any of the 120,000 shares to the Funding Group.

        On September 19, 1998, BrowseSafe, LLC, BrowseSafe.com, Inc. and
Winthrop Associates executed a Management Consulting Agreement. The Consulting
Agreement provided that Winthrop Associates would provide services to assist in
locating funding sources, assist in strategic planning, assist as a liaison with
the financial community and assist by arranging access to a database of brokers
and analysts. The term of the agreement was a period of one (1) year. As
compensation, Winthrop Associates was to receive $2500 per month, reimbursement
of expenses, finder's fee equal to 2.5% of the gross dollar funding and 431,250
shares of BrowseSafe.com, Inc. common stock.

        Certain disputes arose between the parties to this agreement regarding
whether BrowseSafe.com obtained any funding from sources introduced by Winthrop
Associates. The Company believes that Winthrop did not provide the services
required by the agreement . These disputes were resolved in a Mutual Release and
Settlement Agreement dated October 11, 1999. Under the Settlement Agreement,
BrowseSafe.com, Inc. agreed to pay the owner of Winthrop Associates $200,000
within 120 days of the execution of the Settlement Agreement. In order to secure
the payment of this amount, BrowseSafe.com, Inc. issued 500,000 shares of its
common stock which was placed into escrow. The Company did not pay the $200,000
and the escrow agent distributed the 500,000 shares to the owner of Winthrop
Associates in February, 2000. The delivery of the 500,000 shares was in lieu of
payment of the $200,000. The shares are restricted securities subject to certain
piggy-back registration rights granted in connection with the Settlement
Agreement.

        In July, 1999, the Company agreed to issue to vendors approximately
11,000 restricted shares of common stock in settlement of approximately $33,000
owed to three vendors. At the time, the Company entered into these agreements in
order to conserve cash reserves and at the request of the vendors. The Company's
stock was trading at $3.00 per share on the date that the vendors decided to
accept stock. The Company recorded an expense of $33,000 representing the value
of the services provided by the vendors. In February, 2000, at the request of
one of the vendors, the Company paid the vendor in cash instead of stock. The
other two vendors will be issued 459 shares and 450 shares of restricted stock
in April, 2000.

        On December 6, 1999, the Company sold under Rule 504 of Regulation D of
the Securities Act of 1933 a Series A Senior Subordinated Convertible Redeemable
Debenture in a principal face amount not to exceed $750,000 to a single
accredited investor. The terms of the debenture allowed the investor to fund the
debenture through periodic payments to the Company;

                                       14
<PAGE>

however, all terms of the debenture, including interest rate, conversion
provisions and maturity date, were set and were not subject to negotiation. An
initial funding of $100,000 was required in connection with the closing on the
debenture; however, future funding was discretionary by the investor. The
debenture bore interest at 8% per annum and had a maturity date of December 6,
2001 at which time any outstanding principal and unpaid interest was due in
full.

        The debenture provided for the conversion of the outstanding principal
and interest into common stock at a conversion price equal to 75% of the lowest
closing bid price of the common stock as reported on the OTC Bulletin Board for
the three consecutive trading days immediately preceding the receipt of a notice
of conversion by the Company. At the time the investor exercised its conversion
option, no new or additional consideration was required. There were also
provisions that allowed the Company to terminate funding of the debenture prior
to the date the Company became a reporting company and required that all
conversions of outstanding principal to common stock must occur prior to the
date of funding termination. As of December 30, 1999, the investor had funded
$200,000 of the debenture and had converted all of this amount into 1,537,346
shares of common stock under the terms of the debenture (including 3,734 shares
issued for accrued interest of $476). The debenture was cancelled shortly before
the Company became a reporting company on January 22, 2000. The Company recorded
as interest expense the amount arising from the beneficial conversion feature
contained in the debenture. As of December 31, 1999, the discount was
approximately $65,000.

        In February, 2000, the Company sold 128,571 shares of common stock at
the then prevailing market price of $.35 per share in a private placement to a
single investor. The shares are restricted subject to piggy-back registration
rights.

        Also, in February, 2000, the Company entered into an agreement with
California Applied Research, Inc. ("CAR") (which is now known as
GenesisTank.com) under which CAR agreed to buy 6,000,000 shares of the Company's
common stock. The purchase price of the stock was $.50 per shares payable
$500,000 upon execution of the agreement, $1,000,000 on or before February 29,
2000 and $1,500,000 on or before March 31, 2000. The shares are restricted
subject to piggy-back registration rights. One-third of the shares may be sold
upon registration, one-third 90 days following registration and one-third 180
days following registration.

        In addition, the Company issued five-year warrants to Michael Mercier
for his services in arranging the CAR financing. The warrants provide for the
purchase of the Company's common stock at the lower of $.50 per share or the
lowest reset price (the terms of the warrant provide that the purchase price
will be reset every six months). The warrants were issued according to the
following schedule: (a) 475,000 warrants issued prorata as funds were received
by the Company, and (b) 75,000 warrants to be issued as a bonus when and if the
full $3,000,000 is received by the Company on or before March 31, 2000. The
Company has valued these warrants at approximately $250,000 using the
Black-Scholes model as of the contract date. The Company will record the
$250,000 as a reduction of the related equity proceeds.

        On February 9, 2000, , the Company agreed to issue 570,000 warrants to
purchase the Company's common stock to Swartz Private Equity LLC in connection
with an investment agreement . The warrants are exercisable as follows:

               150,000 upon completion of due diligence
               150,000 on closing the transaction
               150,000 within 6 months of the agreement
               120,000 six months after the effective date of an SEC
                       registration statement

The warrants are exercisable at the lower of .50 per share or the lowest closing
price during six-month periods coinciding with the closing date of the
agreement. The Company intends to record the fair value of the warrants using
the Black-Scholes model as a reduction of the related equity proceeds.

        In January 2000, the Company entered into a consulting agreement with
Victoria Lee whereby she is entitled to receive a fee for financing secured by
her. The fee is 4% of the transaction, payable 3% in shares of the Company's
common stock (based on a market price of $2.50) and 1% in cash. In connection
with the CAR financing, in March 2000, the Company issued 36,000 shares to Ms.
Lee and remitted $30,000. The cash paid and the value of the stock on the date
the financing is complete (the measurement date) will be recorded as a reduction
of the related financing proceeds. The Company estimates the value of the stock
issued to be approximately $160,000.

        On March 10, 2000, the Company entered into an Amended and Restated
Consulting Agreement for business advisory services with Len Shorkey in exchange
for 50,000 shares of common stock. The consultant is fully vested in the stock
as of the date of the contract. The Company will record this transaction based
on the quoted market value of the stock on the contract date ($225,000). The
amount will be expensed in 2000.

                                       15
<PAGE>

        On March 10, 2000, the Company also entered into an Amended and Restated
Consulting Agreement with Paladin Management Company, Ltd. and Don Gulliman to
provide financing, advisory and consulting services. The Company will issue up
to 450,000 shares of common stock if the quoted market price meets certain
levels.

        In March, 2000 the Company agreed in principle to enter into a
consulting contract with Wall Street Marketing Group, Inc. and Sherry Vega for
advisory services. The Company anticipates the final contract will require a
monthly fee of $10,000, issuing consultants 275,000 shares of common stock
(200,000 restricted shares and 75,000 non-restricted shares) and warrants to
purchase 300,000 shares of common stock at prices ranging from $5 to $15 per
share. Upon execution of the contract, the Company will value the stock at its
quoted market price on the contract date and value the warrants, using the
Black-Scholes method. The amounts will be expensed over the six month term of
the agreement.

ITEM 6. PLAN OF OPERATION

        The Company is a development stage company, has yet to generate any
material revenues and is seeking additional capital through an investment
capital company and other sources.

        The Company incurred a net loss of $1,755,725 from February 10, 1998
(date of inception) through December 31, 1999 due to expenses related to the
formation and operation of the Company, continuing costs of raising capital,
normal expenses of operating over an extended period of time, funds applied to
research and development, product development and development of the Company's
website.

        Total expenses increased from $541,420 for the period from February 10,
1998 (date of inception) to $1,214,305 for the year ended December 31, 1999. The
increase in expenses relates to a full year of operations, financing activities,
professional fees, product development expenditures and a $200,000 contract
settlement. The Company expects general and administrative expenses to increase
in the future as it completes development of its products, prepares for market
launch and begins to support its products. The Company will also begin to incur
additional sales and marketing expenses.

        Research and development costs increased from $16,130 in 1998 to $78,950
in 1999. The increase is primarily related to increased activity in the
development stage of its products.

        Interest expense of $91,378 increased significantly over interest
expense of $1,861 in 1998. This increase relates to increased debt and the
beneficial conversion feature of the convertible debentures issued in 1999.

        For the year ended December 31, 1999 the Company had a loss of
$1,214,305 as compared to a loss of $541,420 for period from February 10, 1998
to December 31, 1998. This increase was a result of higher general and
administrative expenses (including an increase in payroll and payroll related
costs), interest expense and a non-cash charge of $200,000 for a contract
settlement.

        As of December 31, 1999 the Company has obtained equity and debt
financing of approximately $1,261,000 since its inception. As of December 31,
1999 the Company has invested approximately $105,000 in purchased equipment
(including equipment subject to a capitalized lease of $74,000). The Company has
also invested approximately $101,000 in capitalized web site development costs
and approximately $79,000 in capitalized product development costs.

        In May, 1999, in contemplation of the share exchange with Motioncast
Television Corporation of America described below, BrowseSafe, LLC and
BrowseSafe.com, Inc. entered into an Asset & Liability Contribution Agreement
with a group of outside investors (the "Funding Group"). Pursuant to the Asset &
Liability Contribution Agreement, the Funding Group agreed to contribute or
cause to be contributed certain funds to BrowseSafe.com, Inc. In exchange,
BrowseSafe.com, Inc. agreed to issue in a private placement 2,738,000 shares of
its common stock to the Funding Group. In addition, BrowseSafe, LLC agreed to
contribute all of its assets and liabilities, including its intellectual
property to BrowseSafe.com, Inc. in exchange for 11,200,000 shares of its common
stock.

        Effective as of June 24, 1999, BrowseSafe.com, Inc. and its
shareholders, BrowseSafe, LLC and the Funding Group, entered into a Share
Exchange Agreement with Motioncast. The Share Exchange Agreement provided that
13,938,000 shares of the common stock of BrowseSafe.com, Inc. would be exchanged
for 13,938,000 shares of the common stock of Motioncast in a transaction which
was exempt from registration under Section 4(2) of the Securities Act of 1933.
The Share Exchange Agreement also required the Funding Group to contribute or
cause to be contributed additional funds to the Company and required the Company
to issue an additional 120,000 shares would be issued to the Funding Group.

        Since the Funding Group failed to fully perform their obligations under
the Asset & Liability Contribution Agreement and


                                       16
<PAGE>

Share Exchange Agreement, the Company has issued but has not delivered the
2,738,000 shares and has not issued any of the 120,000 shares to the Funding
Group.

         On December 6, 1999, the Company sold under Rule 504 of Regulation D of
the Securities Act of 1933 a Series A Senior Subordinated Convertible Redeemable
Debenture in a principal face amount not to exceed $750,000 to a single
accredited investor. The terms of the debenture allowed the investor to fund the
debenture through periodic payments to the Company; however, all terms of the
debenture, including interest rate, conversion provisions and maturity date,
were set and were not subject to negotiation. An initial funding of $100,000 was
required in connection with the closing on the debenture; however, future
funding was discretionary by the investor. The debenture bore interest at 8% per
annum and had a maturity date of December 6, 2001 at which time any outstanding
principal and unpaid interest was due in full.

        The debenture provided for the conversion of the outstanding principal
and interest into common stock at a conversion price equal to 75% of the lowest
closing bid price of the common stock as reported on the OTC Bulletin Board for
the three consecutive trading days immediately preceding the receipt of a notice
of conversion by the Company. At the time the investor exercised its conversion
option, no new or additional consideration was required. There were also
provisions that allowed the Company to terminate funding of the debenture prior
to the date the Company became a reporting company and required that all
conversions of outstanding principal to common stock must occur prior to the
date of funding termination. As of December 30, 1999, the investor had funded
$200,000 of the debenture and had converted all of this amount into 1,537,346
shares of common stock under the terms of the debenture (including 3,734 shares
issued for accrued interest of $476). The debenture was cancelled shortly before
the Company became a reporting company on January 22, 2000. The Company recorded
as interest expense the amount arising from the beneficial conversion feature
contained in the debenture. As of December 31, 1999, the discount was
approximately $65,000. These proceeds, net of fees and expenses associated with
obtaining the funding, were used in part to establish the backbone for the
private label internet service and to pay legal and accounting fees, payroll and
amounts due on equipment leases.

        In November 1999, the Company entered into a six-month investment
banking and consulting agreement with Ronald D. Ardt to perform such services as
participating with management of the Company, professionals and advisors to
provide advice and counsel in relation to Company's strategic business and
financial plans, and other strategies and participating with management of the
Company, professionals, affiliates and advisors to undertake due diligence on
proposed transactions affecting the Company. In exchange for the consulting and
advisory services, the Company agreed to pay fees of approximately $27,000,
issue 100,000 shares of the Company's common stock to Ardt and grant warrants to
purchase up to 50,000 shares of the Company's common stock at $1.00 per share
exercisable for a three-year period. The warrants had to be exercised if the
Company's stock traded above $2.00 for any thirty-day period. The agreement also
provides that placement and finders fees will be due if the consultant secures
financing for the Company.

        In accordance with the agreement, the shares and warrants were issuable
when the Company's Form 10SB became effective and upon the filing of the Form
S-8 registration statement. Management has estimated the value of the services
received in exchange for the issuance of the stock and warrants to be
approximately $125,000. The Company intends to expense these fees over the
corresponding term of the agreement. At December 31, 1999, $93,750 is included
in prepaid expenses relating to this agreement.

        In December 1999, the Company agreed to issue 100,000 shares of its
common stock and grant warrants to purchase 300,000 shares of the Company's
common stock to Ardt for additional consulting and advisory services. The
warrants were exercisable in 100,000 increments at .35, .70 and 1.40 per share
over a three-year period. The consultant is fully vested in the warrants and
stock upon grant. At December 31, 1999, the Company had not yet received the
additional services. These amounts will be expensed when the services are
received. The total amount included in prepaid assets relating to this contract
is $83,594, which approximates the fair value of the equity instruments issued
as of the date of the agreement. The value assigned to the common stock was
based on the quoted market value of $37,500. The warrants, which were
nonforfeitable, fully vested and exercisable immediately, were valued at
approximately $46,000 using the Black-Scholes model as of the contract date,
which is the measurement date.

        Following the filing of the Form S-8 by the Company in March 2000, the
consultant exercised all 350,000 warrants outstanding pursuant to the consulting
agreements for a total of $155,000. The Company also issued the 200,000 shares
of its common stock.

        In February, 2000, the Company entered into an agreement with California
Applied Research, Inc. ("CAR") (which is now known as GenesisTank.com) under
which CAR agreed to buy 6,000,000 shares of the Company's common stock. The
purchase price of the stock was $.50 per shares payable $500,000 upon execution
of the agreement, $1,000,000 on or before February 29, 2000 and $1,500,000 on or
before March 31, 2000. The shares are restricted subject to piggy-back
registration

                                       17
<PAGE>

rights. One-third of the shares may be sold upon registration, one-third 90 days
following registration and one-third 180 days following registration. The
proceeds from this financing are being used to obtain new office space and
equipment, hire staff, reduce debt, initiate a marketing and advertising
campaign and pay legal and accounting fees.

        In addition, the Company issued five-year warrants to Michael Mercier
for his services in arranging the CAR financing. The warrants provide for the
purchase of the Company's common stock at the lower of $.50 per share or the
lowest reset price (the terms of the warrant provide that the purchase price
will be reset every six months). The warrants were issued according to the
following schedule: (a) 475,000 warrants issued prorata as funds were received
by the Company, and (b) 75,000 warrants to be issued as a bonus when and if the
full $3,000,000 is received by the Company on or before March 31, 2000. The
Company has valued these warrants at approximately $250,000 using the
Black-Scholes model as of the contract date. The Company will record the
$250,000 as a reduction of the related equity proceeds.

        On March 14, 2000, the Company entered into an investment agreement with
Swartz Private Equity, LLC. The investment agreement entitles the Company to
issue and sell, at our option, common stock for up to an aggregate of
$30,000,000 from time to time during a three-year period commencing on the
effective date of a registration statement (a "Put Right"). The Company intends
to use the proceeds from the Swartz financing for production, server
infrastructure and bandwidth, marketing and public relations, internal
operations, research & development, programming, payment of creditors and
working capital.

        Put Rights

        In order to invoke a put right, the Company must have an effective
registration statement on file with the SEC registering the resale of the common
shares which may be issued as a consequence of the invocation of that put right.
Additionally, the Company must give at least ten but not more than twenty
business days' advance notice to Swartz of the date on which it intends to
exercise a particular put right and the Company must indicate the number of
shares of common stock it intends to sell to Swartz. At the Company's option, it
may also designate a maximum dollar amount of common stock (not to exceed
$2,000,000) which the Company will sell to Swartz during the put and/or a
minimum purchase price per common share, if applicable, at which Swartz may
purchase shares during the put. The designated minimum purchase price per common
share shall be no greater than 80% of the closing bid price of the common stock
on the advanced put notice date.

        The number of common shares sold to Swartz in a given put may not exceed
the lesser of:

        o      15% of the aggregate daily reported trading volume (excluding
               certain block trades) during a pricing period (excluding certain
               days where the common stock trade below a Company specified
               minimum price),

        o      the intended put amount,

        o      9.9% of the common stock outstanding upon completion of the put.

        For each common share, Swartz will pay the Company the lesser of the
market price for the applicable pricing period, minus $.05, or 92% of the market
price for the applicable pricing period. However, the purchase price may not be
less than the designated minimum per share price, if any, that the Company
indicated in its notice.

        Warrants

       The Company has delivered to Swartz warrants to purchase 570,000 shares
of common stock during a five-year period at an exercise price of the lower of
$.50 per share or the lowest reset price (the terms of the warrant provide that
the purchase price will be reset every six months). In addition to the common
stock purchased, Swartz will receive warrants to purchase an additional 10% of
the common stock equal to 110% of the market price on the last day of the
purchasing period, subject to further semi-annual adjustments if the price of
the common stock goes down.

        Non-Usage Fee

        On the last business day of each six-month period, if the Company has
not put $500,000 of our stock to Swartz, the Company will be required to pay
Swartz a non-usage fee equal to the difference between $50,000 and 10% of the
aggregate put amounts to Swartz during such six month period.

        Termination Of Investment Agreement

        The Company may also terminate its right to initiate further puts or
terminate the investment agreement by providing Swartz with notice of such
intention to terminate; however, any such termination will not affect any other
rights or obligations

                                       18
<PAGE>

the Company has concerning the investment agreement or any related agreement. In
the event of a termination by the Company, the Company will be required to pay a
termination fee equal to the difference between $100,000 and 10% of the
aggregate put amounts to Swartz during the term of the agreement.

        Right Of First Refusal

        During the term of the investment agreement and for one year after its
termination, the Company is prohibited from issuing or selling any capital stock
or securities convertible into the Company's capital stock for cash in private
capital raising transactions, without obtaining the prior written approval of
Swartz which Swartz has agreed to not unreasonably withhold. In addition, Swartz
has the option for 10 days after receiving notice to purchase such securities on
the same terms and conditions. This right of first refusal does not apply to
acquisitions, option plans or strategic partnership or joint ventures.

        The Company's short and long term capital requirements will depend upon
many factors, including the ability to continue to obtain adequate funding, the
rate of market acceptance of the Company's products, the level of resources
required to expand the Company's marketing and sales organization and other
factors, some of which may be beyond the Company's control. A slower than
expected rate of acceptance of the Company's products or lower than expected
revenues generated from the sale of the products and other costs associated with
upgrading the Company's equipment would materially adversely affect the
Company's liquidity.

        The Independent Auditor's Report dated March 10, 2000, and prepared by
Katz Sapper & Miller, LLP contains an explanatory paragraph regarding the
Company's ability to continue as a going concern. The Company believes that the
proceeds from the CAR financing will be sufficient to fund its working capital
needs through the date that cash proceeds become available under the Swartz
investment agreement. If they are not, there is substantial doubt about the
Company's ability to continue as a going concern.

        If the Company obtains funding from Swartz of the full $30,000,000, it
anticipates incurring additional research and development costs estimated at
$885,000 and computer programming and web design costs of $975,000 over the next
12 months of operations. The Company has used outside vendors for a substantial
portion of its computer programming and web design. The Company expects to bring
more of these services in-house where efficiencies and savings can be expected.
Updating and maintaining its web design is critical to attract users and
potential advertisers to the BrowseSafe web site. In addition, one of the
by-products of the BrowseSafe business is the accumulation of an extensive web
site content database. The Company intends to investigate the commercial value
of such data to a variety of businesses.

        The Company intends to use the proceeds from the Swartz financing to
fund equipment expenses over the next 12 months which are estimated at
$4,028,000 and will be largely related to acquiring additional servers and
increasing bandwidth. These expenses are necessary to service the volume of
users within the Company's telecommunications and server infrastructure. These
expenses also encompass wiring, routers, load balancing and back-ups, including
costs to maintain the servers, databases, tables of customer information, phone
equipment and support for web sites.

        Other uses of the Swartz proceeds will be marketing and public relations
costs of $13,444,851, internal operations expenses of $8,740,683, production
costs of $326,542, debt payments of $730,923 and working capital of $838,917.

         Over the next 12 months, the Company expects to add 20 full-time
employees to support technology, sales and service and marketing. The Company
also plans to hire managers in several key areas of the organization. In
addition, 35 to 40 part-time employees will be hired to support the web content
and review process.

ITEM 7. FINANCIAL STATEMENTS

       The financial statements required by this item begin on page F-1 with the
index to consolidated financial statements.

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

        In September, 1998, the Company, which was then known as Medical
Accounting & Computers, engaged Barry L. Friedman, P.C., 1582 Tulita Drive, Las
Vegas, Nevada 89123, to audit the balance sheets of the Company as of August 31,
1998, December 31, 1997, and December 31, 1996, and the related statements of
operations, stockholders' equity and cash flows for the period January 1, 1998
to August 31, 1998, and the two years ending December 31, 1997 and December 31,

                                       19
<PAGE>

1996. The Company's stock began trading in October, 1998, and is quoted on the
OTC Bulletin Board. The Company at that time had no operations, had assets
consisting of cash and only minimal liabilities and was considered a development
stage company. The engagement of Barry L. Friedman was limited to the
preparation of the financial statements described in this paragraph. Through the
mutual agreement of Mr. Friedman and the Company as approved by the board of
directors, Mr. Friedman did not stand for re-election as the company's
accountant. The Company did not have an active relationship with any accountants
between the end of Mr. Friedman's engagement and the selection of Katz Sapper &
Miller, LLP, the new accountants following the share exchange.

        Barry L. Friedman's report on the financial statements did provide for a
going concern opinion since the Company did not at that time have a current
source of revenue and was seeking additional capital through a merger with an
existing operating company. It did not otherwise contain an adverse opinion or
disclaimer of opinion, nor was it modified as to uncertainty, audit scope, or
accounting principles. There were no disagreements with Barry L. Friedman on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.

        In June, 1999, the Company which was then known as Motioncast Television
Corporation of America engaged in a share exchange with BrowseSafe.com, Inc. As
a result of the share exchange, BrowseSafe.com, Inc. became a wholly-owned
subsidiary of Motioncast. Motioncast changed its name to BrowseSafe.com, Inc.
and BrowseSafe.com, Inc. changed its name to BrowseSafe Technology, Inc.

        In connection with the share exchange, the Company elected a new board
of Directors. The newly-elected board of directors determined that the Company
required accountants with experience in preparing financial statements and other
disclosure documents required of reporting companies under the Securities
Exchange Act of 1934 and wished to establish a relationship with such firm with
offices in Indianapolis, Indiana. On August 12, 1999, the Company engaged Katz
Sapper & Miller, LLP, 11711 North Meridian Street, Suite 8800, Indianapolis,
Indiana 46240-0857, to audit the Company's predecessor, BrowseSafe, LLC's
financial statements for fiscal year ending December 31, 1998, in accordance
with generally accepted accounting principles. Katz Sapper & Miller has
continued its relationship with the Company and has audited the Company's
financial statements for the fiscal year ending December 31, 1999.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

Identification Of Directors And Executive Officers

        The Company's directors and executive officers are as follows:

               NAME                AGE          POSITION
               ----                ---          --------

        Mark W. Smith              42       President/Chief Executive
                                                   Officer/Director
        Ted P. O'Brien             34       Vice President of Sales and
                                                   Marketing/Director
        Gregory P. Urbanski        47       Chief Financial Officer/Director
        J. Marshall Gage           63       Vice President/Director

        Biographies of directors and executive officers are as follows:

                                       20
<PAGE>

        President/CEO/Director
        ----------------------

        Mark W. Smith, President, Chief Executive Officer and Director. Since
        1986, Mr. Smith has worked as an independent computer and management
        consultant for businesses throughout the Midwest. Since 1996, he served
        as Director of Electronic Publishing for Kirkbride Technology, a
        subsidiary of B.B. Kirkbride, a publisher of books and electronic media
        located in Indianapolis, Indiana. Over the past decade, Mr. Smith has
        overseen the development of nearly a dozen sophisticated computer
        software programs to the marketplace. His expertise is in development
        and oversight of database programs, Mr. Smith is one of the founders of
        BrowseSafe. Mr. Smith is a graduate of Anderson University, 1980, with
        degrees in Business Management and Marketing.

        Vice President/Director
        -----------------------

        Ted P. O'Brien, Secretary, Vice President of Sales & Marketing and
        Director. Since 1990, Mr. O'Brien has held management positions with
        publishing and distribution companies including Director of Publishing
        at B.B. Kirkbride, Director of Marketing for Riverside Distributors and
        Director of Marketing and Publishing Activity at World Publishing. Mr.
        O'Brien's prior experience is in the areas of sales management,
        diversified marketing and planning, product development, distribution
        and order fulfillment. Mr. O'Brien is a co-founder of BrowseSafe and is
        responsible for planning, budgeting and implementation of sales and
        marketing plans, sales and customer service supervision and strategic
        planning. Mr. O'Brien received a Bachelor of Science degree in Marketing
        and Business Administration from the University of South Dakota in 1998.

        Chief Financial Officer/Director
        --------------------------------

        Gregory P. Urbanski, Treasurer, Chief Financial Officer and Director.
        Prior to co-founding BrowseSafe, Mr. Urbanski served as the controller
        and operations manager with B.B Kirkbride, a publisher of books and
        electronic media, for 15 years. His responsibilities with the Company
        include day-to-day operations, purchasing, personnel and directing
        financial and investor relations for the Company. Mr. Urbanski graduated
        in 1975 with a Bachelor of Science Degree in Accounting from Butler
        University in Indianapolis.

        Vice President/Director
        -----------------------

        J. Marshall Gage, Vice President and Director. Mr. Gage is the CEO and
        principal shareholder of B.B. Kirkbride, a publisher of books and
        electronic media located in Indianapolis, Indiana. Mr. Gage has been
        affiliated with Kirkbride for more than 35 years, beginning in customer
        service and advancing through positions in credit management,
        advertising and promotion, sales, treasurer, vice president and
        ultimately becoming president of the organization. He has an in-depth
        understanding of the publishing business and is well known in the
        industry. He has served as a university trustee for Murray State
        University, has sat on the boards of directors of several companies and
        has served as chairman of numerous nonprofit associations. In 1960, Mr.
        Gage graduated from Murray State University with a degree in Business
        Administration.

                                       21
<PAGE>

    The other key employee is as follows:

        Erik A. Hannemann, 27, Director of Information Technology. Mr.
        Hannemann's expertise includes network development, implementation, and
        administration. In addition to these skills he has also developed and
        implemented database tools for business. The following are his areas of
        expertise:

        Technical Summary
                Operating Systems:          Database systems:    Languages:
                Windows 3.1                 SQL Server 7.0       Visual Basic
                Windows NT                  Microsoft Access     VBScript
                Windows 95                  File Maker Pro       Active Server
                Windows 98                                       Pages
                Windows 2000                                     HTML
                DOS                                              COBOL
                Linux                                            Borland Delphi

                Tools & utilities:  Office Products:
                Visual SourceSafe   MicroSoft Excel
                Visual InterDev     MicroSoft Access
                Microsoft           MicroSoft
                Information Server  PowerPoint
                PhotoShop           Microsoft Query
                CorelDraw           Microsoft Word
                GoldMine 4.0        WordPerfect/ Lotus
                MicroSoft Proxy     123
                Server
                Netscape SuiteSpot
                MicroSoft IEAK Kit
                Netscape CCK

                ADDITIONAL
                TRAINING
        o       Created Animated
                Movies Using
                Flash 4.0
        o       Configured Cisco
                Routers for a LAN
                environment.
                (Internet Access)
        o       Extensive
                knowledge of
                TCP/IP protocol.
        o       Setup and
                Administered
                Secure Web Sites

    Mr. Hannemann leads a programming team that collectively have expertise in
the following areas:

               Technical Summary of BrowseSafe's Programming Team
               --------------------------------------------------

                Operating Systems:          Database systems:    Languages:
                Windows 95                  Visual FoxPro        Visual Basic
                                            (3.0, 5.0)           (3.0, 4.0, 5.0)
                Windows 98                  SQL Server 7.0       VBScript

                                       22
<PAGE>

                Windows NT                  Sybase System 11     Active Server
                Windows 3.1                 Microsoft Access     Pages
                DOS                         (7.0)                Javascript
                UNIX limited                FoxPro for DOS       Paradox for
                Novell 3.11, 4.0            (2.0, 2.5, 2.6)      Windows (4.0,
                LANtastic                   FoxPro for Windows   7.0)
                                            (2.6)                Paradox for DOS
                                            Paradox              (3.0, 4.0, 5.0)
                                            IDMS                 Perl (Internet
                                            Oracle               CGI)
                                                                 HTML
                                                                 COBOL
                                                                 Assembler
                                                                 Borland C++
                                                                 JCL
                                                                 Borland Delphi
                Tools & utilities:          Office Products:
                Visual SourceSafe           Excel
                (4.0)
                Crystal Reports             Access
                (3.0, 4.0, 5.0,
                6.0)
                Multi 3rd Party             PowerPoint
                Products                    Microsoft Query
                Microsoft Word
                Certifications

                Microsoft Certified Professional Microsoft Certified Solution
                Developer Certified Sybase Professional DBA Oracle Certified
                Professional DBA Microsoft Visual Basic Microsoft Visual FoxPro
                Microsoft Access Microsoft Windows 95 Architecture Sybase System
                11 - SQL Microsoft SQL Server

        At present, there are no committees of the board of directors. There are
no arrangements or understanding between any director and any other person
pursuant to which any person was elected or nominated as a director.

        The Company's bylaws provide that the size of the board of directors
shall be between one and five members with the exact number within that range
determined from time to time by resolution of the board of directors. There are
presently five authorized positions as members of the board, one of which is
vacant. Keith Balderson, one of the Company's directors, submitted his
resignation effective March 2, 2000. The vacancy has not been filled.

        The five directors were originally appointed to the board in connection
with the closing of the share exchange effective as of June 24, 1999, to serve
until the next annual meeting of shareholders. The directors are elected by the
shareholders for one year terms. The Company anticipates expanding its board
when it has identified individuals who are prominent educators or have an
expertise in software development and other areas germane to the Company's
business.

Indemnification Of Officers, Directors And Others

        The Company's bylaws provide that it shall indemnify its officers and
directors, and its former officers and directors, against all expenses
(including attorney's fees), claims, judgments, liabilities, and amounts paid in
settlement arising out of his or her services on behalf of the Company subject
to the qualifications contained in Nevada law as it now exists, except that no

                                       23
<PAGE>

such persons shall be indemnified against, or be reimbursed for, any expense
incurred in connection with any claim or liability arising out of his or her own
negligence or willful misconduct. Nevada law provides the Company cannot
indemnify its officers, directors, employees and agents when it asserts a direct
claim against them and a court of competent jurisdiction finds that they are
liable to the Company except as allowed by a court of competent jurisdiction.

        Nevada law generally provides that a corporation shall have such power
to indemnify officers, directors, employees and agents to the extent they acted
in good faith in a manner they reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the conduct was unlawful.
Nevada law also generally provides in the event an officer, director, employee
or agent shall be judged liable, enter into a settlement, or any other
resolution of the claim, except when a claim is brought by the Company, such
indemnification shall apply if approved by the court in which the action was
brought, or by a majority vote of the board of directors (excluding any
directors who were party to such action), or by independent legal counsel in a
written opinion, or by a majority vote of stockholders. Nevada law also
generally provides that in the event an officer, director, employee or agent is
successful on the merits or otherwise in defense of any action, suit or
proceeding, the Company shall indemnify him or her against expenses including
attorneys' fees.

        As of November, 1999 the Company does not have, but reserves the right
to purchase and maintain, directors and officers insurance insuring its
directors and officers against any liability arising out of their status as
such, regardless of whether the Company has the power to indemnify such persons
against such liability under applicable law.

        Insofar as indemnification for liabilities arising under the Securities
Exchange Act of 1934 may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.

        Nevada Revised Statute Section 78.037 states that a Nevada corporation's
articles of incorporation may include provisions to the effect that directors of
the Company shall not be personally liable to the Company or its shareholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law, or (ii) for the payment of distributions under
Nevada Revised Statute Section 78.300. The Company's articles of incorporation
include provisions of the type permitted by Nevada Revised Statute Section
78.037.

Compliance With Section 16(A) Of The Exchange Act

       Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires
 the Company's officers, directors and persons who own more than 10% of a
class of the securities registered under Section 12(g) of the Act to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). Officers, directors and greater than 10% shareholders
 are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.

       Based on a review of copies of the reports the Company has received from
persons required to make such filings and our own records, the persons subject
to the Section 16(a) reporting requirements should have filed the required
reports

                                       24
<PAGE>

within five days of January 22, 2000, the date the Company's Form 10-SB
became automatically effective. However, the Company was still clearing comments
from the SEC on its Form 10-SB until March 22, 2000. The reports were filed by
the four current officers, directors and 10% shareholders on March 24, 2000. The
former director has not filed his report.

ITEM 10. EXECUTIVE COMPENSATION

        For the two fiscal years ending December 31, 1997 and 1998, the Company,
which was then known as Motioncast Television Corporation of America, had no
operations and was considered a development stage company. During that period,
it paid no compensation to executive officers and directors. As of June, 1999,
the Company engaged in a share exchange with BrowseSafe.com, Inc. which resulted
in BrowseSafe.com, Inc becoming a wholly owned subsidiary of Motioncast.
Motioncast changed its name to BrowseSafe.com, Inc. and BrowseSafe.com, Inc.
changed its name to BrowseSafe Technology, Inc. As a result of the share
exchange, the Company became an operating Company engaged in the business
activities described in this report.

        From inception to May 19, 1999, the BrowseSafe business was operated in
BrowseSafe, LLC, an Indiana limited liability company. The following table sets
forth certain information as to the Company's executive officers and directors
for the period ending December 31, 1998 and January 1, 1999 through December 31,
1999. Except as shown on the next table relating to Stock Options, no other
compensation was paid any such officers and directors.

                                                  LONG TERM
                        ANNUAL COMPENSATION      COMPENSATION
                        -------------------      ------------
Name and                                         Options       Other
Principal Position    Period            Salary   (Shares)   Compensation
--------------------- ------            ------   --------   ------------

Mark W. Smith         1998              $18,560 (1) -0-      -0-
Chief Executive       1/1/99-12/31/99   $91,000 (2) -0-      -0-
Officer

Ted P. O'Brien        4/3/98-12/31/98   $13,520 (1) -0-      -0-
Vice President        1/1/99-12/31/99   $78,000 (2) -0-      -0-
of Sales & Marketing

Gregory P. Urbanski   4/3/98-12/31/98   $5,000  (1) -0-      -0-
Chief Financial       1/1/99-12/31/99   $39,000 (2) -0-      -0-
Officer

J. Marshall Gage      4/3/98-12/31/98   $5,400 (1)  -0-      -0-
Senior Vice           1/1/99-12/31/99    -0-        -0-      -0-
President

(1)  In order to conserve cash flow, the Company accrued a portion of officers'
     salaries and deferred payment until the Company had the financial
     resources. Mr. Smith was paid $4,640 in salary in 1998 and was paid the
     accrued balance of $13,920 on March 10, 2000. Mr. O'Brien was paid $3,380
     in salary in 1998 and was paid the accrued balance of $10,140 on March 10,
     2000. Mr. Urbanski was paid $1,250 in salary in 1998 and was paid the
     accrued balance of $3,750 on March 10, 2000. Mr. Gage was paid $400 in
     salary in 1998 and was paid the accrued balance of $5,020 on March 10,
     2000.

(2)  In order to conserve cash flow, the Company accrued a portion of officers'
     salaries and is deferring payment until the Company has the financial
     resources later in 2000. Mr. Smith was paid $58,778 in salary in 1999. The
     Company has accrued $32,222 in deferred salary for Mr. Smith for 1999. Mr.
     O'Brien was paid $48,290 in salary in 1999. The Company has accrued 29,710
     in deferred salary for Mr. O'Brien. Mr. Urbanski was paid $15,670 in salary
     in 1999. The Company has accrued $23,330 in deferred salary for Mr.
     Urbanski.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth, as of March 6, 2000 the beneficial
ownership of the Company's common stock by (i) all persons known by the Company

                                       25
<PAGE>

to beneficially own more than 5% of the Company's voting securities; (ii) each
executive officer and directors; and (iii) all executive officers and directors
as a group.


                               Common Stock (1)
                            ----------------------
                                                           % of
Name or Group                Number of Shares        Voting Securities
-------------                ----------------        -----------------
Executive Officers
and Directors (2)

Mark W. Smith                   4,474,400                 24.7541%
Ted P. O'Brien                  2,237,200                 12.3771%
Gregory P. Urbanski             2,237,200                 12.3771%
J. Marshall Gage                2,237,200                 12.3771%
Officers and Directors         11,186,000                 61.8854%
as a group (4 persons)

5% Shareholders (2)

BrowseSafe, LLC                11,186,400                 67.6398%


(1)  Based upon a total of 18,075,346 shares outstanding as of March 6, 2000.
     Stock issuable upon exercise of outstanding stock options, warrants and/or
     convertible notes is shown on the table below.

(2)  All of the shares beneficially owned by the Executive Officers and
     Directors are held in the name of BrowseSafe, LLC, an Indiana limited
     liability company, which is wholly owned by the Executive Officers and
     Directors. Beneficial ownership of the shares is shown based upon the
     ownership of BrowseSafe, LLC. Unless otherwise indicated, the business
     address for the persons listed in the table is7202 East 87th Street, Suite
     109, Indianapolis, Indiana 462256.

        As of November 16, 1999, the Company adopted a stock option plan. The
Company may issue incentive stock options, as defined in the Internal Revenue
Code of 1986, or non-qualified stock options to purchase up to 3,000,000 shares
of common stock under the plan. The Company has issued stock options to purchase
an aggregate of 1,250,000 shares of common stock to its executive officers and
directors. The following table sets forth, as of December 31, 1999, the
beneficial ownership of options, warrants or rights to purchase the Company's
common stock by (i) all persons known by the Company to beneficially own more
than 5% of the Company's voting securities; (ii) each executive officer and
directors; and (iii) all executive officers and directors as a group. Except as
otherwise indicated, all options, warrants or rights are owned directly.


             Officers and Directors    No. of Options       Exercise Price
             ----------------------    --------------       --------------
             Mark Smith                    450,000                $0.5625
             Ted O'Brien                   350,000                $0.5625
             Greg Urbanski                 350,000                $0.5625

All options vest at a rate of at least 20% per year over a period of five years
with the first 20% becoming exercisable on the first anniversary of the date
when the options were granted.

        All options will lapse on the earliest of the following events:

                                       26
<PAGE>

     (i)  The tenth anniversary of the date of grant of the option;

     (ii) The first anniversary of the optionee's death;

     (iii) The first anniversary of the date when the optionee ceases to be an
           employee due to total and permanent disability or death;

     (iv) Thirty (30) days after the optionee ceases to be an employee for any
          reason other than total and permanent disability or death;

     (v)  On the date determined by the Board of Directors for an extraordinary
          corporate transaction such as a reorganization, consolidation,
          dissolution, etc.;

     (vi) The date the optionee files or has filed against him or her a petition
          in bankruptcy; or

     (vii) The expiration date specified in the optionee's stock option
           agreement.

       The Company has not awarded stock appreciation rights to any of its
employees and it has no long-term incentive plans, as that term is defined in
SEC regulations.

Compensation Of Directors

       No direct or indirect remuneration has been paid or is payable by the
Company to the directors in their capacity as directors other than the granting
of stock options. It is anticipated that during the next twelve months the
Company will not pay any direct or indirect remuneration to any of its directors
in their capacity as directors other than in the form of stock option grants or
the reimbursement of expenses of attending directors' or committee meetings.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        Prior to June, 1999, the Company, which was then known as Motioncast
Television Corporation of America, had no operations, had assets consisting of
only of cash and had minimal liabilities. Motioncast was considered a
development stage company. Its stock was listed on the OTC Bulletin Board as of
October, 1998.

        As of January 1, 1999, the Company entered into an employment agreement
for a period of two years with Michael Zapara, the principal shareholder of the
Company. Michael Zapara was hired as the Executive Manager of the Company to
perform such duties as were reasonably required of him in such capacity. The
compensation to be paid under this agreement was 200,000 shares of Company
common stock per year; however, pursuant to the mutual agreement of Michael
Zapara and the Company, such compensation was not paid. Effective upon the
closing of the Share Exchange Agreement, Michael Zapara and the Company agreed
to terminate the Employment Agreement in exchange for the issuance of 50,000
shares of the Company's common stock to Michael Zapara.

        In addition, as of February 1, 1999, the Company entered into a
Placement Agreement with Alexis Capital, Inc., ("Alexis") under which Alexis was
to serve as a placer and consultant in connection with the merger or sale of
Motioncast. To the best of the Company's current knowledge, Alexis was one
hundred percent owned by Michael Zapara. The compensation to be paid was 10% of
the amount of the transaction, 5% in cash and 5% in stock. Pursuant to the
mutual agreement of Alexis and the Company, such compensation was not paid.
Effective upon the closing of the Share Exchange Agreement, Alexis and the
Company agreed to terminate the Placement Agreement in exchange for the issuance
of 50,000 shares of the Company's common stock to Alexis.

        On November 1, 1998, the Company (which was still known as Motioncast)
also entered into a Securities Transfer Agent & Registrar Agreement with Alexis
Stock Transfer, under which Alexis Stock Transfer served as the transfer agent
and registrar for the Company. To the best

                                       27
<PAGE>

of the Company's current knowledge, Alexis Stock Transfer is one hundred percent
owned by Gina Zapara, the wife of Michael Zapara. Alexis Stock Transfer is
currently being compensated pursuant to its current fee schedule. The basic fees
are as follows:

        Setup Fee:  $500
        Monthly Maintenance Fee:  $100
        Cancel and Issue Certificate:  $25 per certificate
        Issuance of Rule 144/Restricted Certificate:  $50 per certificate
        Record Storage Fee:  $50 per month

Following the share exchange, the Securities Transfer Agent & Registrar
Agreement remained in effect subject to an amendment which bound the transfer
agent to maintain the fee structure in effect as of the date of the share
exchange through December 31, 2000. The Company pays the customary and usual
fees to the transfer agent associated with its services.

        In 1999, Mark Smith and Greg Urbanski, who are executive officers and
directors of the Company, made personal loans to the Company of approximately
$60,000 and $50,000, respectively, to fund operating expenses. These loans were
non-interest bearing and were not evidenced by promissory notes. The Company
repaid these loans without interest in February, 2000.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following is a list and index of Exhibits required by Item 601 of
Regulation S-B along with an indication of the location of the Exhibit:

                                       28
<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
  Exh. No.                                  Document                                 No.
------------------------------------------------------------------------------------------
<S>  <C>                                                                             <C>
     3.1       Articles of Incorporation of Orange County Bancorp, dated June 8,     (1)
               1990, incorporated by reference to Exhibit 2.1 to Form 10-SB12G
               dated November 24, 1999
------------------------------------------------------------------------------------------
     3.2       Bylaws of Medical Accounting & Computers (formerly Orange County      (1)
               Bancorp), dated June 8, 1990, incorporated by reference to
               Exhibit 2.2 to Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
     3.3       Certificate of Amendment of the Articles of Incorporation of          (1)
               Orange County Bancorp reflecting the Name change to Medical
               Accounting & Computers, dated December 30, 1992, incorporated by
               reference to Exhibit 2.3 to Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
     3.4       Certificate of Amendment of the Articles of Incorporation of          (1)
               Medical Accounting & Computers reflecting the Name Change to
               Motioncast Television Corporation of America and a 5 for 1 forward
               stock split, dated October 22, 1998, incorporated by reference to
               Exhibit 2.4 to Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
     3.5       Certificate of Amendment of the Articles of Incorporation of          (1)
               Motioncast Television Corporation of America reflecting a 25 to 1
               reverse stock split, dated February 26, 1999, incorporated by
               reference to Exhibit 2.5 to Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
     3.6       Articles of Incorporation of BrowseSafe.com, Inc., dated July 28,     (1)
               1999, incorporated by reference to Exhibit 2.6 to Form 10-SB12G
               dated November 24, 1999
------------------------------------------------------------------------------------------
     3.7       Bylaws of BrowseSafe.com, Inc., dated July 28, 1999, incorporated     (1)
               by reference to Exhibit 2.7 to Form 10-SB12G dated November 24,
               1999
------------------------------------------------------------------------------------------
     3.8       Secretary of State Corporate Charter for BrowseSafe.com, Inc.,        (1)
               dated July 28, 1999, incorporated by reference to Exhibit 2.8 to
               Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
     3.9       Certificate of Amendment of the Articles of Incorporation of          (1)
               BrowseSafe.com, Inc. reflecting the Name Change to, BrowseSafe
               Technology, Inc., dated July 28, 1999, incorporated by reference
               to Exhibit 2.9 to Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
    3.10       Certificate of Amendment of the Articles of Incorporation of          (1)
               Motioncast Television Corporation of America reflecting the Name
               Change to BrowseSafe.com, Inc., dated July 28, 1999, incorporated
               by reference to Exhibit 2.10 to Form 10-SB12G dated November 24,
               1999
------------------------------------------------------------------------------------------
    3.11       BrowseSafe LLC Operating Agreement, effective as of March 26,         (1)
               1998, incorporated by reference to Exhibit 2.11 to Form 10-SB12G
               dated November 24, 1999
------------------------------------------------------------------------------------------

<PAGE>

------------------------------------------------------------------------------------------
    3.12       BrowseSafe LLC Articles of Organization, dated March 26, 1998,        (1)
               incorporated by reference to Exhibit 2.12 to Form 10-SB12G dated
               November 24, 1999
------------------------------------------------------------------------------------------
    3.13       BrowseSafe LLC Articles of Correction, dated June 22, 1998,           (1)
               incorporated by reference to Exhibit 2.13 to Form 10-SB12G dated
               November 24, 1999
------------------------------------------------------------------------------------------
     4.1       Share Exchange Agreement by and among Motioncast Television           (1)
               corporation of America, BrowseSafe.com, Inc. and all of the
               shareholders of BrowseSafe, dated 1999, incorporated by reference
               to Exhibit 3.1 to Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
     4.2       Securities Subscription Agreement between BrowseSafe.com., Inc.
               and Rim Capital, dated December 6, 1999
------------------------------------------------------------------------------------------
     4.3       Escrow Agreement by and among Rim Capital Group, L.L.C. and Edward
               H. Burnbaum, dated December 10, 1999
------------------------------------------------------------------------------------------
     4.4       Warrant to Purchase Common Stock of BrowseSafe.com, Inc. by
               Michael Mercier, dated February 10, 2000
------------------------------------------------------------------------------------------
     4.5       Stockholder Lock-up Agreement between California Applied Research,
               Inc. and BrowseSafe.com, Inc. dated February 10, 2000
------------------------------------------------------------------------------------------
     4.6       Stockholder Lock-up Agreement between Michael Mercier and
               BrowseSafe.com, Inc. dated February 10, 2000
------------------------------------------------------------------------------------------
     4.7       Registration Rights Agreement by and among California Applied
               Research, Inc., Michael Mercier and BrowseSafe.com, Inc. dated
               February 10, 2000
------------------------------------------------------------------------------------------
     4.8       Investment Agreement between BrowseSafe.com, Inc. and Swartz
               Private Equity, LLC, dated March 14, 2000
------------------------------------------------------------------------------------------
     4.9       Registration Rights Agreement between BrowseSafe.com, Inc. and
               Swartz Private Equity, LLC, dated March 14, 2000
------------------------------------------------------------------------------------------
    4.10       Warrant to Purchase Common Stock of BrowseSafe.com, Inc. by Swartz
               Private Equity, LLC, dated March 14, 2000
------------------------------------------------------------------------------------------
    4.11       Warrant Side Agreement between BrowseSafe.com, Inc. and Swartz
               Private Equity, LLC, dated March 14, 2000
------------------------------------------------------------------------------------------
    10.1       Securities Transfer Agent & Registrar Agreement by and between        (1)
               Alexis Stock Transfer and Motioncast Television Corporation of
               America, dated November 1, 1998, incorporated by reference to
               Exhibit 6.1 to Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
    10.2       Note between Peoples Bank & Trust Company and BrowseSafe, LLC,        (1)
               dated November 9, 1998, incorporated by reference to Exhibit 6.2
               to Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
    10.3       Asset and Liability Contribution Agreement by and among               (1)
               BrowseSafe, LLC, BrowseSafe.com, Inc., Minati Financial, Inc.,
               Torquay Holdings, Ltd., Vista Financial Corp., El Coyote Capital
               Corp., Jupiter Financial Services, Inc., Kyline Investment Corp.,
               Chariot Group, Ltd., Sid-Barney, Inc., Sterling Overseas
               Investments SA, Albury Capital Corp., Eivissa Capital Corp.,
               Hemisphere & Associates, Ltd., and Magellan Holdings, Ltd.,
               incorporated by reference to Exhibit 6.3 to Form 10-SB12G dated
               November 24, 1999
------------------------------------------------------------------------------------------

<PAGE>

------------------------------------------------------------------------------------------
    10.4       Agreement by and between BrowseSafe, LLC, BrowseSafe.com, Inc.        (1)
               Barisal Capital Corporation and Fergus Capital Corporation, dated
               June 9, 1999, incorporated by reference to Exhibit 6.4 to Form
               10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
    10.5       Amendment to the Agreement between Motioncast Television              (1)
               Corporation of America and Alexis Stock Transfer, dated July 12,
               1999, incorporated by reference to Exhibit 6.5 to Form 10-SB12G
               dated November 24, 1999
------------------------------------------------------------------------------------------
    10.6       Mutual Release and Settlement Agreement between Jerry E. Blythe,      (1)
               Winthrop Associates, BrowseSafe, LLC, BrowseSafe.com, Inc. and
               BrowseSafe Technology, Inc., dated October 11, 1999, incorporated
               by reference to Exhibit 6.6 to Form 10-SB12G dated November 24,
               1999
------------------------------------------------------------------------------------------
    10.7       Browsesafe.com, Inc. Stock Option Plan dated November 17, 1999.       (1)
               incorporated by reference to Exhibit 6.7 to Form 10-SB12G dated
               November 24, 1999
------------------------------------------------------------------------------------------
    10.8       Confidential Investment Banking Consulting Agreement for              (1)
               BrowseSafe.com, Inc., incorporated by reference to Exhibit 6.8 to
               Form 10-SB12G dated November 24, 1999
------------------------------------------------------------------------------------------
    10.9       Riverside /Vendor Fulfillment Agreement, dated August 1, 1998,        (1)
               Consent letter from Barry L. Friedman, P.C., dated November 17,
               1999 incorporated by reference to Exhibit 6.9 to Form 10-SB12G/A
               dated January 11, 2000
------------------------------------------------------------------------------------------
    10.10      Exodus Communication, Inc., Internet Data Center Services             (1)
               Agreement, dated December 31, 1998, incorporated by reference to
               Exhibit 6.10 to Form 10-SB12G/A dated January 11, 2000
------------------------------------------------------------------------------------------
    10.11      Confidential Investment Banking Consulting Agreement with Ronald      (1)
               Ardt, incorporated by reference to Exhibit 4.1 to Form S-8 dated
               March 21, 2000
------------------------------------------------------------------------------------------
    10.12      Consulting Agreement with Len Shorkey, incorporated by reference      (1)
               to Exhibit 4.2 to Form S-8 dated March 21, 2000
------------------------------------------------------------------------------------------
    10.13      Consulting Agreement by and between Victoria L. Lee and
               BrowseSafe.com, Inc., dated January 5, 2000
------------------------------------------------------------------------------------------
    10.14      Lease Agreeement between Browsesafe.com, Inc. and new Boston
               Citimark Limited Partnership, dated March 1, 2000
------------------------------------------------------------------------------------------
     27        Financial Data Schedule incorporated by reference to Exhibit 27 to    (1)
               Form 10-SB12G/A dated February 16, 2000
------------------------------------------------------------------------------------------
    99.1       Consent letter from Barry L. Friedman, P.C., dated November 17,       (1)
               1999 incorporated by reference to Exhibit 10.1 to Form 10-SB12G
               dated November 24, 1999
------------------------------------------------------------------------------------------
    99.2       Consent letter from Barry L. Friedman, P.C., dated January 4,         (1)
               2000, incorporated by reference to Exhibit 10.2 to Form 10-SB12G/A
               dated January 11, 2000
------------------------------------------------------------------------------------------
    99.3       Resignation of Keith Balderson
------------------------------------------------------------------------------------------
</TABLE>

(1)     Previously filed in indicated registration statement or report.

<PAGE>

(b) Reports on Form 8-K

    No reports on Form 8-K were filed during the fourth quarter of 1999.


                                   Signatures

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


                           BROWSESAFE.COM, INC.


                           By: /s/ Greg Urbanski
                               -----------------------

                           Title:  Chief Financial Officer
                           Date:   April 6, 2000

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


                           By /s/ Greg Urbanski
                             -----------------------

                           Title: Chief Financial Officer
                           Date:  April 6, 2000


<PAGE>


                       BROWSESAFE.COM, INC. AND SUBSIDIARY
                          (A Development Stage Company)

                        CONSOLIDATED FINANCIAL STATEMENTS
                                       AND
                          INDEPENDENT AUDITORS' REPORT

                           December 31, 1999 and 1998








<PAGE>

                       BROWSESAFE.COM, INC. AND SUBSIDIARY
                          (A Development Stage Company)


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                     Page
                                                                     ----

Independent Auditors' Report                                         1-2

Consolidated Balance Sheets                                           3

Consolidated Statements of Operations                                 4

Consolidated Statements of Stockholders' Deficit                      5

Consolidated Statements of Cash Flows                                 6

Notes to Consolidated Financial Statements                           7-17


<PAGE>


                          Independent Auditors' Report



Board of Directors and Stockholders
BrowseSafe.com, Inc. (A Development Stage Company)



We have audited the accompanying consolidated balance sheets of BrowseSafe.com,
Inc. and Subsidiary as of December 31, 1999 and 1998, and the related
consolidated statements of operations, stockholders' deficit and cash flows for
the year ended December 31, 1999, the period from February 10, 1998 (date of
inception) to December 31, 1998, and the period from February 10, 1998 (date of
inception) to December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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
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 BrowseSafe.com, Inc.
and Subsidiary as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for the year ended December 31, 1999, the period
from February 10, 1998 (date of inception) to December 31, 1998, and the period
from February 10, 1998 (date of inception) to December 31, 1999, in conformity
with generally accepted accounting principles.


                                       1

<PAGE>


The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 8 to the
consolidated financial statements, the Company is in the development stage and
has incurred significant losses since its inception. The Company will require
significant additional financing and ultimately must continue development of its
product and distribution channels, generate revenues and successfully attain
profitable operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 8. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.





KATZ, SAPPER & MILLER, LLP
Certified Public Accountants

Indianapolis, Indiana
March 10, 2000

                                       2

<PAGE>

                       BROWSESAFE.COM, INC. AND SUBSIDIARY
                          (A Development Stage Company)

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS
                                                                               December 31,
                                                                                   1999            1998
                                                                                   ----            ----
<S>                                                                            <C>             <C>
CURRENT ASSETS
     Cash                                                                      $      6,475    $        418
     Inventories-finished goods                                                                       6,889
     Prepaid consulting expense-Note 12                                             177,344            --
     Prepaid expenses and other                                                      54,950            --
                                                                               ------------    ------------
        Total Current Assets                                                        238,769           7,307

OFFICE AND COMPUTER EQUIPMENT, at cost, less
 accumulated depreciation of $11,395 in 1999 and $516
 in 1998                                                                             93,281          21,137

WEB DESIGN COSTS, net of amortization of $50,430 in 1999                             50,430         100,860

DEPOSITS                                                                             24,034           1,460

PRODUCT DEVELOPMENT COSTS                                                            78,950            --
                                                                               ------------    ------------

        TOTAL ASSETS                                                           $    485,464    $    130,764
                                                                               ============    ============


                LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
     Bank line of credit-Note 4                                                $    198,944    $    106,066
     Accounts payable                                                               348,442         276,523
     Accrued payroll                                                                127,875          20,000
     Payable to related party-Note 3                                                105,847          70,095
     Accrued stock issuance-Notes 10 and 12                                         337,500
     Current maturities of long-term debt-Note 4                                     34,314
     Note payable-Note 3                                                            176,389           9,500
                                                                               ------------    ------------
        Total Current Liabilities                                                 1,329,311         482,184

LONG-TERM DEBT-Note 4                                                                29,310

CONTINGENCIES-Notes 5, 6, 8 and 16                                                     --              --
                                                                               ------------    ------------

        Total Liabilities                                                         1,358,621         482,184
                                                                               ------------    ------------

STOCKHOLDERS' DEFICIT
     Common stock, $.001 par value, 25,000,000 shares authorized, 19,075,346
      shares (11,200,000 shares in 1998) issued and 17,575,346 shares
      (11,200,000 shares in 1998) outstanding                                        17,575          11,200
     Additional paid-in capital                                                     864,993         178,800
     Accumulated deficit                                                         (1,755,725)       (541,420)
                                                                               ------------    ------------
        Total Stockholders' Deficit                                                (873,157)       (351,420)
                                                                               ------------    ------------

        TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                            $    485,464    $    130,764
                                                                               ============    ============
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                       3
<PAGE>

                       BROWSESAFE.COM, INC. AND SUBSIDIARY
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                       February 10,     February 10,
                                                           1998             1998
                                                        (Inception)     (Inception)
                                         Year Ended         to               to
                                        December 31,    December 31,    December 31,
                                            1999            1998            1999
                                        ------------    ------------    ------------
<S>                                     <C>             <C>             <C>

REVENUE                                 $        672    $       --      $        672
                                        ------------    ------------    ------------
MARKETING, GENERAL AND ADMINISTRATIVE
 EXPENSES
     Product development and internet
      expenses                                 1,940         117,471         119,411
     Marketing and advertising                79,086         224,721         303,807
     Payroll expenses                        387,330         110,752         498,082
     Legal and professional                  206,287          23,314         229,601
     Hardware lease expenses                  75,940             943          76,883
     Contract termination                    200,000                         200,000
     Depreciation and Amortization            61,310             516          61,826
     Interest expenses                        91,378           1,861          93,239
     Other expenses                          111,706          61,842         173,548
                                        ------------    ------------    ------------
        Total Expenses                     1,214,977         541,420       1,756,397
                                        ------------    ------------    ------------

Net Loss before Income Taxes              (1,214,305)       (541,420)     (1,755,725)

INCOME TAXES-Note 14                            --              --              --
                                        ------------    ------------    ------------

NET LOSS                                $ (1,214,305)   $   (541,420)   $ (1,755,725)
                                        ============    ============    ============

NET LOSS PER COMMON SHARE-Note 9        $     (0.087)   $     (0.048)

WEIGHTED AVERAGE SHARES OUTSTANDING       14,016,478      11,200,000
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                       4
<PAGE>

                       BROWSESAFE.COM, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                        Year Ended December 31, 1999 and
     Period from February 10, 1998 (date of inception) to December 31, 1998

<TABLE>
<CAPTION>
                                                                                                      Additional
                                                            Members'      Common        Paid-in       Accumulated
                                                            Deficit       Stock         Capital        Deficit         Total
                                                            -------       -----         -------        -------         -----
<S>                                                      <C>            <C>            <C>           <C>            <C>

Capital contributions from members of BrowseSafe LLC
 at inception on February 10, 1998                       $   190,000                                                $   190,000

Net loss                                                    (541,420)                                                  (541,420)

Reclassification of members' deficit to reflect
 contribution of BrowseSafe LLC assets and liabilities
 to BrowseSafe.com, Inc. in exchange for 11,200,000
 shares of BrowseSafe.com, Inc. common stock-Note 2          351,420    $    11,200    $   178,800   $  (541,420)   $      --
                                                         -----------    -----------    -----------   -----------    -----------

BALANCE AT DECEMBER 31, 1998                                    --           11,200        178,800      (541,420)      (351,420)

Issuance of common stock-Note 2                                               2,738         24,645                       27,383

Effect of transaction with Motioncast-Note 2                                  2,100        372,720                      374,820

500,000 shares issued and held in escrow as
 collateral for liability-Note 10

1,000,000 shares issued and held in escrow pursuant
 to consulting agreement-Note 12                                                                                           --

Warrants issued for services                                                                71,094                       71,094

Interest expense attributable to the beneficial
 conversion feature of debentures-Note 11                                                   66,667                       66,667

Conversion of debentures to common stock                                      1,537        151,067                      152,604

Net loss                                                        --             --             --      (1,214,305)    (1,214,305)
                                                         -----------    -----------    -----------   -----------    -----------

BALANCE AT DECEMBER 31, 1999                             $      --      $    17,575    $   864,993   $(1,755,725)   $  (873,157)
                                                         ===========    ===========    ===========   ===========    ===========
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                       5
<PAGE>

                       BROWSESAFE.COM, INC. AND SUBSIDIARY
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                        February 10,   February 10,
                                                                           1998           1998
                                                                        (Inception)    (Inception)
                                                         Year Ended         to             to
                                                         December 31,   December 31,   December 31,
                                                            1999           1998           1999
                                                            ----           ----           ----
<S>                                                      <C>            <C>            <C>
OPERATING ACTIVITIES
     Net loss                                            $(1,214,305)   $  (541,420)   $(1,755,725)
     Adjustments to reconcile net loss to net
      cash used by operating activities:
        Depreciation and amortization                         61,310            516         61,826
        Noncash services                                      31,250                        31,250
        Noncash settlement                                   200,000                       200,000
        Interest expense attributable to beneficial
         conversion feature of debentures                     66,667                        66,667
        (Increase) decrease in certain current assets:
           Inventories                                         6,889         (6,889)
           Prepaid expenses and other                        (54,950)                      (54,950)
        Increase in certain current liabilities:
           Accounts payable                                   71,919        276,523        348,442
           Due to related party                               35,752         70,095        105,847
           Accrued payroll                                   107,875         20,000        127,875
                                                         -----------    -----------    -----------
              Net Cash (Used) by Operating
               Activities                                   (687,593)      (181,175)      (868,768)
                                                         -----------    -----------    -----------

INVESTING ACTIVITIES
     Purchases of property and equipment                      (8,879)       (21,653)       (30,532)
     Increase in deposits                                    (22,574)        (1,460)       (24,034)
     Product development costs                               (78,950)                      (78,950)
     Web design costs                                           --         (100,860)      (100,860)
                                                         -----------    -----------    -----------
              Net Cash (Used) by Investing
               Activities                                   (110,403)      (123,973)      (234,376)
                                                         -----------    -----------    -----------

FINANCING ACTIVITIES
     Proceeds from note payable                              184,889          9,500        194,389
     Repayments of notes payable                             (18,000)                      (18,000)
     Repayments of capital lease                             (10,521)                      (10,521)
     Net proceeds of line of credit borrowings                92,878        106,066        198,944
     Proceeds from debentures                                152,604                       152,604
     Proceeds from issuance of common stock                  402,203                       402,203
     Contributed capital                                        --          190,000        190,000
                                                         -----------    -----------    -----------
              Net Cash Provided by Financing
               Activities                                    804,053        305,566      1,109,619
                                                         -----------    -----------    -----------

NET INCREASE IN CASH                                           6,057            418          6,475

CASH
     Beginning of Period                                         418           --             --
                                                         -----------    -----------    -----------

     End of Period                                       $     6,475    $       418    $     6,475
                                                         ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURES
     Cash paid for interest                              $    22,084    $       795    $    22,879
     Noncash investing and financing activities:
        Assets acquired through capital lease                 74,145                        74,145
        Conversion of debentures to common stock             152,604                       152,604
        Warrants issued for consulting services               71,094                        71,094
        Stock to be issued for consulting
         services                                            137,500                       137,500
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                       6
<PAGE>



                       BROWSESAFE.COM, INC. AND SUBSIDIARY
                          (A Development Stage Company)


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    General: BrowseSafe.com, Inc. (the "Company") is a development stage company
    which intends to develop and distribute computer software that will allow
    families to use the Internet safely while giving parents the freedom to
    choose what their children can and cannot access.

    Principals of Consolidation: The consolidated financial statements include
    the accounts BrowseSafe.com, Inc. and its wholly-owned subsidiary,
    BrowseSafe Technology, Inc., as well as the accounts of the Company's
    predecessor, BrowseSafe LLC, which was formed on February 10, 1998. All
    intercompany balances and transactions have been eliminated from the
    consolidated financial statements. See Note 2 regarding reorganization and
    merger.

    Estimates: Management uses estimates and assumptions in preparing these
    financial statements in conformity with generally accepted accounting
    principles. Those estimates and assumptions affect the reported amounts of
    assets and liabilities, the disclosure of contingent assets and liabilities
    and the reported revenues and expenses. Actual results could vary from the
    estimates that were used.

    Inventories are valued at the lower of cost or market as determined by the
    first-in, first-out (FIFO) method.

    Office and Computer Equipment are recorded at cost and are being depreciated
    over the estimated useful lives of the assets using accelerated methods.

    Cash: The Company maintains its cash in bank deposit accounts which, at
    times, may exceed federally insured limits. The Company has never
    experienced any losses in such accounts.

    Marketing and Advertising Costs are expensed as incurred and totaled $79,086
    in 1999 and $224,721 in 1998.

    Start-Up Costs are expensed as incurred.

    Research and Development Costs incurred by the Company to develop and
    enhance its software are expensed until the product reaches technological
    feasibility. Costs are then capitalized until the product is ready for the
    general public. No such costs were capitalized in 1998. $78,950 of costs was
    capitalized in 1999. These costs will be amortized at the greater of the
    ratio of current earnings to total anticipated revenues for the software
    times software costs or minimum straight-line amortization over the
    estimated remaining economic life of the product. Research and development
    costs were $63,257 for 1999 and $16,130 for 1998. See Note 5.

    Web Design Costs incurred subsequent to the preliminary project stage are
    capitalized until the website is operational. A total of $100,860 was
    capitalized in 1998. Capitalized web design costs are amortized on a
    straight-line basis over a period of 24 months. The Company began amortizing
    these costs in 1999. Costs of maintaining and operating the website are
    expensed as incurred.

                                       7

<PAGE>


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    Long-lived Assets, including the Company's equipment and web design and
    product development costs, are reviewed for impairment whenever events or
    changes in circumstances indicate that the carrying amount of an asset may
    not be recoverable. Recoverability is measured by comparison of the carrying
    amount to future net undiscounted cash flows expected to be generated by the
    related asset. If such assets are considered to be impaired, the impairment
    to be recognized is measured by the amount by which the carrying amount
    exceeds the fair market value of the assets. To date, no adjustments to the
    carrying amount of long-lived assets have been required.

    Stock Based Compensation: The Company accounts for stock-based awards to
    employees using the intrinsic value method in accordance with Accounting
    Principle Board Opinion No. 25, "Accounting for Stock Issued to Employees"
    (see Note 13).

NOTE 2 - REORGANIZATION AND MERGER

    In July 1998, BrowseSafe.com, Inc. was incorporated as a Nevada corporation.
    In May 1999, BrowseSafe LLC and BrowseSafe.com, Inc. entered into an Asset
    and Liability Contribution agreement. Pursuant to that agreement, BrowseSafe
    LLC exchanged all of its assets and liabilities for 80% (11,200,000 shares)
    of the outstanding common stock of BrowseSafe.com, Inc. Simultaneously, an
    outside group of investors agreed to contribute or cause to be contributed
    $27,380 and other consideration for 2,738,000 shares of common stock of
    BrowseSafe.com, Inc. Prior to this transaction, BrowseSafe.com, Inc. had not
    commenced operations and had no assets or liabilities. For accounting
    purposes, BrowseSafe LLC was treated as the acquirer. All transferred assets
    and liabilities were recorded at their historical cost.

    In June 1999, BrowseSafe.com, Inc. and its shareholder entered into a Share
    Exchange agreement with Motioncast Television Corporation of America
    (Motioncast). Pursuant to this agreement, all outstanding common shares
    (13,938,000 total shares, of which 11,200,000 shares were held by BrowseSafe
    LLC and 2,738,000 shares were held by the investment group as noted in the
    above transaction) of BrowseSafe.com, Inc. were exchanged for 13,938,000
    common shares of Motioncast. Prior to this transaction, Motioncast had
    2,100,000 common shares outstanding. Motioncast was a publicly traded entity
    in the development stage whose only asset was cash and had minimal
    liabilities. BrowseSafe.com, Inc. survived this merger as a wholly-owned
    subsidiary of Motioncast. Immediately following this transaction,
    BrowseSafe.com, Inc. changed its name to BrowseSafe Technology, Inc. and
    Motioncast changed its name to BrowseSafe.com, Inc. All ongoing operations
    are conducted in BrowseSafe Technology, Inc.

    Pursuant to the Asset and Liability Contribution agreement and the Share
    Exchange agreement, the outside investors were required to contribute funds
    of approximately $570,000 in exchange for 120,000 shares of common stock. To
    date, the outside investors have contributed approximately $440,000
    ($402,200 net of expenses of $37,800). Additionally, the outside investors
    were obligated to cause BrowseSafe.com, Inc. to receive at least $1,500,000
    of proceeds from the sale of common stock no later than November 30, 1999.

    The Company has issued but not delivered 2,738,000 shares and has not issued
    120,000 shares to the outside investors due to their failure to complete the
    requirements of the two agreements. Management has advised all these outside
    investors they were in breach of the agreement and provided them an
    opportunity to remedy the situation (see Note 16).

                                       8

<PAGE>


NOTE 2 - REORGANIZATION AND MERGER (CONTINUED)

    For financial statement purposes, BrowseSafe Technology, Inc. is considered
    as the acquiring company, and the merger was treated as a "reverse
    acquisition". Pursuant to this accounting treatment, BrowseSafe Technology,
    Inc. is deemed to have issued stock for the acquisition of Motioncast. Prior
    to this transaction, Motioncast had 2,100,000 common shares outstanding and
    tangible net assets (cash) of $374,820. The accompanying consolidated
    statement of stockholders' deficit for the year ended December 31, 1999,
    reflects this transaction as if BrowseSafe.com issued 2,100,000 common
    shares for Motioncast.

NOTE 3 - RELATED PARTY TRANSACTIONS

    The Company had a demand note payable of $37,120, which bears interest at
    12%, to a company controlled by one of its stockholders. This note was
    repaid in February 2000.

    The Company had non-interest bearing notes payable to its stockholders
    totaling $139,269 at December 31, 1999. These notes were repaid in February
    2000.

    The Company also leased office space from the above-mentioned related entity
    through February 2000. Rent expense paid to the entity was $8,140 in 1999
    and $11,030 in 1998.

    The Company also receives certain general and administrative services from
    the related entity. Total charges for these services were $32,541 in 1999
    and $50,000 for 1998. At December 31, 1999, the Company owed this entity
    $105,847 (for these services and unpaid rents), which is included in
    accounts payable. This amount was paid in February 2000.

NOTE 4 - DEBT AND CREDIT ARRANGEMENTS

    The Company had a secured line of credit for short-term bank borrowings of
    up to $200,000. Interest was payable monthly at the Bank's prime lending
    rate. The line of credit was subject to renewal in November 1999 and is
    guaranteed by certain stockholders of the Company. This line of credit was
    converted to a short-term note payable on November 9, 1999, due with accrued
    interest on February 15, 2000. The Company repaid this obligation in
    February 2000.

    At December 31, 1999, long-term debt of the Company was comprised of the
    following:

       Equipment lease obligation payable in quarterly installments
        of $10,521, including interest imputed at 15.2%, through
        July 2001. Secured by equipment recorded at a cost of
        $74,145 with accumulated amortization of $3,707 at
        December 31, 1999.                                          $ 63,624

       Less:  Current maturities                                      34,314
                                                                    --------

         Total Long-term Debt                                       $ 29,310
                                                                    ========

    At December 31, 1999, the future required capital lease payments for the
    above long-term obligation were as follows:

                                                          Capital Lease
             Payable In                                      Payments
             ----------                                      --------

                 2000                                        $ 42,084
                 2001                                          31,563
                                                             --------
       Total Required Lease Payments                           73,647
       Less:  Amount representing interest                     10,023
                                                             --------

         Net Lease Obligation                                $ 63,624
                                                             ========

                                       9
<PAGE>


NOTE 5 - ROYALTY AGREEMENT

    The Company's product was developed with a third party and the Company
    purchased software and technology from the third party. The purchase
    agreement requires the Company to remit 2.5% of gross revenues received from
    internet service providers (ISP's). Royalty payments continue for a two-year
    period commencing when the Company has 15,000 active ISP customers. At
    December 31, 1999 and 1998, the Company had not incurred any royalty
    expenses relating to this contract.

NOTE 6 - COMMITMENTS

    Rent and maintenance expense paid for computer hardware totaled $75,940 in
    1999. Minimum rental commitments at December 31, 1999, under an operating
    lease were as follows:

             Payable In                               Equipment Rentals
             ----------                               -----------------
                 2000                                        $ 17,491
                 2001                                           2,915
                                                             --------

       Total Required Payments                               $ 20,406
                                                             ========

    In March 2000, the Company entered into a five-year lease agreement for
    office space. This lease agreement calls for monthly lease payments of
    $3,794 for the first twenty-four months of the lease, $3,967 for months
    twenty-five through thirty-six and $4,122 for months thirty-seven through
    sixty.

NOTE 7 - STOCK TRANSFER AGREEMENT

    The Company has an agreement with a company related to one of its
    stockholders to act as the Company's agent for transfers of stock and other
    stock transactions. Total payments made under this agreement totaled $1,915
    in 1999.

NOTE 8 - GOING CONCERN UNCERTAINTY

    The Company is a development stage company which has incurred significant
    losses since its inception. The Company will require significant additional
    financing and ultimately must continue development of its product and
    distribution channels, generate revenues and successfully attain profitable
    operations.

    As discussed in Note 15 to the financial statements the Company has obtained
    financing of approximately $3,000,000. Additionally, the Company has entered
    into an agreement to sell up to $30,000,000 of its common stock upon the
    exercise of certain Put Rights (see note 15). The Put Rights become
    available upon the effectiveness of a registration statement to be filed
    with the Securities and Exchange Commission to register the stock that will
    be sold under the Agreement. Management intends to use these proceeds to
    fund its operations and expansion.

    Since the Company does not have a definitive alternative financing
    arrangement in place in the event the proceeds from private equity
    financings are not sufficient to fund working capital needs through the
    effectiveness of the registration statement described above, there is
    substantial doubt about the Company's ability to continue as a going
    concern. The consolidated financial statements do not include any
    adjustments to reflect the possible effects on the recoverability of assets
    and classification of liabilities that may result from the outcome of this
    uncertainty.

                                       10

<PAGE>


NOTE 9 - NET INCOME (LOSS) PER SHARE

    Basic and Diluted Net Income (Loss) per Share: Basic per share amounts are
    computed, generally, by dividing net income (loss) by the weighted-average
    number of common shares outstanding. Diluted per share amounts assume the
    conversion, exercise, or issuance of all potential common stock instruments
    unless the effect is antidilutive, thereby increasing the income per common
    share.

    The net income (loss) per share calculation is based on the number of share
    issued and outstanding pursuant to the recapitalization.

    The components of basic and diluted earnings per share were as follows:

                                                           1999          1998
                                                           ----          ----
    Net loss available for common shareholders          (1,214,305)   (541,420)

    Weighted average outstanding shares of common stock 14,016,478  11,200,000

    Earnings (loss) per share: Basic and Diluted            (.087)      (.048)

    Stock options, warrants and contingent stock agreements have been excluded
    from the diluted earnings per share calculation as their effect would be
    anti-dilutive.

NOTE 10 - CONSULTING CONTRACT TERMINATION

    On September 19, 1998, the Company entered into a consulting contract with a
    consultant. The consultant was to provide marketing and business consulting
    to the Company for a fixed fee of $2,500 per month. The agreement also
    required the Company to issue 431,250 shares of BrowseSafe.com, Inc. common
    stock. Additionally, the consultant was to assist the Company locate
    additional capital and would receive a "finder's fee". In 1999, certain
    disputes arose between the parties regarding whether the Company received
    any funding from sources introduced by the consultant. The Company believes
    the consultant did not provide the services required by the contract.
    Accordingly, the Company did not pay any fees or issue any stock to the
    consultant and notified the consultant that the contract was terminated. The
    Company did not recognize any expense in connection with this agreement
    during 1998.

    On October 11, 1999, the Company agreed to pay the former consultant
    $200,000 to settle their dispute. To secure the payment of this amount, the
    Company issued and placed in escrow 500,000 shares of its common stock.
    Because the $200,000 payment was not remitted within 120 days, the stock was
    delivered to the consultant in February 2000.

NOTE 11 - SENIOR SUBORDINATED CONVERTIBLE DEBENTURES

    In December 1999, the Company entered into an agreement to issue a senior
    subordinated convertible debenture (the debenture) to a single investor. The
    debenture (up to $750,000) bears interest at 8% and matures December 10,
    2001. An initial funding of $100,000 was required in connection with the
    closing of the debenture, however future funding is discretionary.

    The debenture is convertible (at the holder's option) into shares of the
    Company's common stock at a conversion price equal to 75% of the lowest
    closing bid price for the three days preceding the notice of conversion.
    Interest on the debenture is paid by issuing common stock of the Company
    based on 75% of the closing bid price for the three days preceding the
    monthly interest due date. All fundings outstanding must be converted to
    stock prior to January 19, 2000. In connection with the debenture, the
    Company placed 1,000,000 shares in escrow. The escrowed shares were returned
    to the Company and were cancelled in March 2000.

                                       11

<PAGE>


NOTE 11 - SENIOR SUBORDINATED CONVERTIBLE DEBENTURES (CONTINUED)

    The Company will record as interest expense the amounts arising from the
    beneficial conversion feature contained in the debenture. As of December 31,
    1999, $200,000 of funding had been issued, with a discount at the date of
    issuance of approximately $65,000. As of December 31, 1999 all of the
    funding has been converted into 1,537,346 shares of the Company's common
    stock (including 3,734 shares issued for $476 of accrued interest).

    This debenture agreement was terminated in January 2000.

NOTE 12 - CONSULTING AGREEMENT

    In November 1999, the Company entered into a six-month investment banking
    and consulting agreement. In exchange for the consulting and advisory
    services, the Company agreed to pay fees of approximately $27,000, issue
    100,000 shares of the Company's common stock and grant warrants to purchase
    up to 50,000 shares of the Company's common stock at $1 per share. The
    warrants are exercisable for a three-year period. The warrants had to be
    exercised if the Company's stock traded above $2 for any thirty-day period.
    The agreement also provides that placement and finders fees will be due if
    the consultant secures financing for the Company.

    In accordance with the agreement, the shares and warrants are issuable when
    the Company's Form 10SB is effective and the filing of the Form S-8
    registration statement. Management has estimated the value of the services
    received in exchange for the issuance of the stock and warrants to be
    approximately $125,000. The Company intends to expense these fees over the
    corresponding term of the agreement. At December 31, 1999, $93,750 is
    included in prepaid expenses relating to this contract.

    In December 1999, the Company agreed to issue 100,000 shares of its common
    stock and grant warrants to purchase 300,000 shares of the Company's common
    stock for additional consulting and advisory services from this same
    consultant. The warrants are exercisable in 100,000 increments at .35, .70
    and 1.40 per share. The warrants are exercisable over a three-year period.
    The consultant is fully vested in the warrants and stock upon grant.

    At December 31, 1999, the Company had not yet received the additional
    services. These amounts will be expensed when the services are performed.
    The total amount included in prepaid assets relating to this contract is
    $83,594, which approximates the fair value of the equity instruments issued
    as of the date of the agreement. The value assigned to the common stock was
    based on the quoted market value of $37,500. The warrants, which are
    nonforfeitable, fully vested and exercisable immediately, were valued at
    approximately $46,000 using the Black-Scholes model as of the contract date,
    which is the measurement date.

    In March 2000, the consultant exercised all 350,000 warrants outstanding
    pursuant to the consulting agreements for a total of $155,000. The Company
    also issued the 200,000 shares of its common stock.

NOTE 13 - STOCK OPTION PLAN

    In November 1999, the Company adopted a stock option plan. Under the terms
    of the Plan, options and other equity incentive awards to purchase 3,000,000
    shares of the Company's common stock may be granted to officers, directors,
    key employees and consultants at the then current market value of the
    Company's common shares, as determined by the Company's Board of Directors.
    All options vest at a rate of at least 20% per year over a five-year period
    with the first 20% becoming exercisable on the first anniversary of the date
    when the options were granted. The options generally expire the earlier of
    ten years, the recipient's death, termination of employment or one year
    after total disability.

                                       12

<PAGE>


NOTE 13 - STOCK OPTION PLAN (CONTINUED)

    On November 16, 1999, the Company granted options to key employees to
    purchase up to 1,250,000 shares of the Company's common stock at an exercise
    price of $0.5625 per share. At December 31, 1999, no outstanding options
    were exercisable.

    Transactions involving stock options are summarized as follows:

<TABLE>
<CAPTION>
                                                                              Weighted Average
                                                                   Option         Remaining
                                                     Shares        Price      Contractual Life
                                                     ------        -----      ----------------
<S>                                                  <C>           <C>               <C>
       Balance, December 31, 1998                        -            -                -

       Granted                                       1,250,000     $.5625            9.875
       Exercised                                       -              -
       Expired                                         -              -
                                                    ----------     ------

       Balance, December 31, 1999                    1,250,000     $.5625
                                                    ==========     ======
</TABLE>

    As discussed in Note 1, the Company accounts for its stock-based awards
    using the intrinsic value method in accordance with Accounting Principles
    Board Opinion No. 25, "Accounting for Stock Issued to Employees" and its
    related interpretations. Accordingly, no compensation expense has been
    recognized in the consolidated financial statements for employee stock
    arrangements which are granted with exercise prices equal to the fair market
    value at grant date.

    Had compensation cost for all of the stock-based compensation grants issued
    been determined based on the grant date fair values of awards, reported net
    loss attributable to common stockholders and net loss per common share would
    have been increased to the pro forma amounts shown below:

                                                                       1999
                                                                       ----

       Net loss attributable to common stockholders, as reported   $(1,214,305)

       Net loss attributable to common stockholders, pro forma      (1,224,722)

       Net loss per basic and diluted common share, as reported          (.087)

       Net loss per basic and diluted common share, pro forma            (.087)

    The above pro forma effects on net loss and net loss per share are not
    likely to be representative of the effects on reported net loss for future
    years because options vest over several years and additional awards may be
    made each year. The fair value of each option grant was estimated on the
    date of grant using the Black-Scholes option pricing model with the
    following weighted-average assumptions used for grants in 1999: expected
    option life of 2.5 years, dividend yield 0%, expected volatility of 97% and
    risk free interest rates of 6.25%. The weighted average fair value of
    options granted in 1999 was $.33.


                                       13

<PAGE>


NOTE 14 - INCOME TAXES

    During 1998 and through May 18, 1999, the Company's operated as a limited
    liability company and income, losses, credits, etc. were recognized for
    federal income tax reporting purposes by the individual members.
    Accordingly, no provision for federal or state income taxes on revenue or
    income was required or recognized in the accompanying 1998 financial
    statements and for the period from January 1, 1999 through May 18, 1999. On
    May 19, 1999, the net assets of BrowseSafe, LLC were contributed to
    BrowseSafe.com, Inc. pursuant to an Asset and Liability Contribution
    Agreement (Note 2). As a result, deferred tax assets and liabilities are
    recognized for activity occurring subsequent to May 18, 1999, for the future
    tax consequences attributable to differences between the financial statement
    carrying amounts of assets and liabilities and their respective tax bases.
    Deferred tax assets and liabilities are measured using enacted tax rates.
    The effect on deferred tax assets and liabilities of a change in tax rates
    is recognized in income in the period of enactment.

    The tax effect of the temporary differences comprising deferred income taxes
    for the year ended December 31, 1999 are as follows:

          Intangible assets                 $(336,000)
          Depreciation and amortization       (24,000)
          Other                                (8,600)
          Net operating loss carryforward     (18,500)
          Valuation allowance                 387,100
                                            ---------

            Total Deferred Income Taxes     $    -0-
                                            ========

    The provision for income taxes (benefit) differed from the tax provision
    (benefit) computed by applying the expected future federal (34%) and state
    (7.9) rates due primarily to the settlement of a liability through issuance
    of stock ($200,476), interest expense related to the beneficial conversion
    of debentures ($66,667) and through a valuation allowance of $387,100.

    At December 31, 1999, the Company had net operating loss carryforwards of
    approximately $44,200 that may be used to offset future taxable income. To
    the extent not utilized, the net operating loss carryforwards will begin to
    expire in 2014.

NOTE 15 - SUBSEQUENT EVENTS

    In February, 2000, the Company sold 128,571 shares of its common stock at
    the then prevailing market price of $.35 per share in a private placement to
    a single investor. The shares are restricted subject to certain registration
    rights.

    Also, in February, 2000, the Company entered into an agreement with
    California Applied Research, Inc. ("CAR" which is now known as
    GenesisTank.com) under which CAR agreed to buy 6,000,000 shares of the
    Company's common stock. The purchase price of the stock was $.50 per shares
    payable $500,000 upon execution of the agreement, $1,000,000 on or before
    February 29, 2000, and $1,500,000 on or before March 31, 2000. The shares
    are restricted subject to certain registration rights. One-third of the
    shares may be sold upon registration, one-third 90 days following
    registration, and one-third 180 days following registration.

    In addition, the Company issued five-year warrants to an individual for his
    services in arranging the CAR financing. The warrants provide for the
    purchase of the Company's common stock at the lower of $.50 per share or the
    lowest reset price (the terms of the warrant provide that the purchase price
    will be reset every six months). The warrants were issued according to the
    following schedule: (a) 475,000 warrants issued prorata as funds were
    received by the Company, and (b) 75,000 warrants to be issued as a bonus
    when and if the full $3,000,000 is received by the Company on or before
    March 31, 2000.


                                       14

<PAGE>


NOTE 15 - SUBSEQUENT EVENTS (CONTINUED)

    The Company has valued these warrants at approximately $250,000 using the
    Black-Scholes model as of the contract date. The Company will record the
    $250,000 as a reduction of the related equity proceeds.

    In January 2000, the Company entered into a consulting agreement whereby the
    consultant will receive a fee for financing secured by the consultant. The
    fee is 4% of the transaction, payable 3% in shares of its common stock
    (based on a market price of $2.50) and 1% in cash. In connection with the
    CAR financing, in March 2000, the Company issued 36,000 shares to this
    consultant and remitted $30,000. The cash paid and the value of the stock on
    the date the financing is complete (the measurement date) will be recorded
    as a reduction of the related financing proceeds. The Company estimates the
    value of the stock issued to be approximately $160,000.

    On March 14, 2000, the Company entered into an investment agreement with
    Swartz Private Equity, LLC. The investment agreement entitles the Company to
    issue and sell, at the Company's option, common stock for up to an aggregate
    of $30,000,000 during a three-year period commencing on the effective date
    of a registration statement (a "Put Right"). In order to invoke a put right,
    the Company must have an effective registration statement on file with the
    SEC registering the resale of the common shares which may be issued as a
    consequence of the invocation of that put right. Additionally, the Company
    must give at least ten but not more than twenty business days' advance
    notice to Swartz of the date on which it intends to exercise a particular
    put right and the Company must indicate the number of shares of common stock
    it intends to sell to Swartz. At the Company's option, it may also designate
    a maximum dollar amount of common stock (not to exceed $2,000,000) which the
    Company will sell to Swartz during the put and/or a minimum purchase price
    per common share, if applicable, at which Swartz may purchase shares during
    the put. The designated minimum purchase price per common share shall be no
    greater than 80% of the closing bid price of the common stock on the
    advanced put notice date.

    The number of common shares sold to Swartz in a given put may not exceed the
lesser of:

       15% of the aggregate daily reported trading volume (excluding certain
       block trades) during a pricing period (excluding certain days where the
       common stock trade below a Company specified minimum price);

       the intended put amount; and

       9.9% of the common stock outstanding upon completion of the put.

    For each common share, Swartz will pay the Company the lesser of the market
    price for the applicable pricing period, minus $.05, or 92% of the market
    price for the applicable pricing period. However, the purchase price may not
    be less than the designated minimum per share price, if any, that the
    Company indicated in its notice.

    In addition to the common stock purchased, Swartz will receive warrants to
    purchase an additional 10% of the purchased common stock equal to 110% of
    the market price on the last day of the purchasing period, subject to
    further semi-annual adjustments if the price of the common stock goes down.

    On the last business day of each six-month period, if the Company has not
    put $500,000 of our stock to Swartz, the Company will be required to pay
    Swartz a non-usage fee equal to the difference between $50,000 and 10% of
    the aggregate put amounts to Swartz during such six-month period.

                                       15

<PAGE>


NOTE 15 - SUBSEQUENT EVENTS (CONTINUED)

    The Company may also terminate its right to initiate further puts or
    terminate the investment agreement by providing Swartz with notice of such
    intention to terminate; however, any such termination will not affect any
    other rights or obligations the Company has concerning the investment
    agreement or any related agreement. In the event of a termination by the
    Company, the Company will be required to pay a termination fee equal to the
    difference between $100,000 and 10% of the aggregate put amounts to Swartz
    during the term of the agreement.

    During the term of the investment agreement and for one year after its
    termination, the Company is prohibited from issuing or selling any capital
    stock or securities convertible into the Company's capital stock for cash in
    private capital raising transactions, without obtaining the prior written
    approval of Swartz which Swartz has agreed to not unreasonably withhold. In
    addition, Swartz has the option for 10 days after receiving notice to
    purchase such securities on the same terms and conditions. This right of
    first refusal does not apply to acquisitions, option plans or strategic
    partnership or joint ventures.

    On February 9, 2000, the Company agreed to issue 570,000 warrants to Swartz
    to purchase the Company's common stock in connection with the investment
    agreement. The warrants are exercisable as follows:

       150,000 upon completion of due diligence
       150,000 on closing the transaction
       150,000 within 6 months of the agreement
       120,000 six months after the effective date of an SEC registration
               statement

    The warrants are exercisable at the lower of .50 per share or the lowest
    closing price during six-month periods coinciding with the closing date of
    the agreement. The Company intends to record the fair value of the warrants
    using the Black-Scholes model as a reduction of the related equity proceeds.

    The Company will also pay a consultant a 4% fee for this transaction. The
    consultant will receive 360,000 shares of the Company's common stock and up
    to $30,000 in cash. The cash will be paid as the Put Rights are exercisable.
    The Company will record as a reduction of the equity proceeds, the cash paid
    and the value of the stock based on the quoted market value.

    On March 10, 2000, the Company entered into an amended and restated
    consulting agreement for business advisory services with an individual in
    exchange for 50,000 shares of the Company's common stock. The consultant is
    fully vested in the stock as of the date of the contract. The Company will
    record this transaction based on the quoted market value of the stock on the
    contract date ($225,000). The amount will be expensed in 2000.

    On March 10, 2000, the Company also agreed to a contract with an
    organization and its principal owner to provide financing, advisory and
    consulting services. The Company will issue up to 450,000 shares of common
    stock if the quoted market price meets certain levels. The Company will
    record as an expense the value of the stock based on quoted market price on
    the date the stock is earned.

    In March 2000, the Company agreed in principle to enter into a contract with
    consultant for advisory services. The Company anticipates the final contract
    will require a monthly fee of $10,000, issuing consultant 275,000 shares of
    the Company's common stock (of which 200,000 shares are restricted) and
    warrants to purchase 300,000 shares of the Company's common stock at prices
    ranging from $5 to $15 per share. Upon execution of the contract, the
    Company will value the stock at its quoted market price on the contract date
    and value the warrants, using the Black-Scholes method. The amounts will be
    expensed over the term of the agreement.

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NOTE 16 - CONTINGENCIES

    The Company has certain disputes with a group of entities (the "Funding
    Group") which were parties to the Asset & Liability Contribution Agreement
    and Share Exchange Agreement under which the Funding Group agreed to provide
    or cause third parties to provide certain funding to the Company in 1999 in
    exchange for the issuance shares of the Company's common stock. The Company
    issued 2,738,000 common shares but has not delivered them to the Funding
    Group due to the Group's failure to provide all of the funding required by
    these agreements. In November 1999, the Company advised all members of the
    Funding Group in writing that they were in breach of the Share Exchange
    Agreement and the Asset & Liability Contribution Agreement and provided them
    an opportunity to remedy the breach. The Company received two letters dated
    March 1, 2000, from an attorney which stated that he represents the Funding
    Group. The letter demanded delivery of the 2,738,000 shares and contends
    that the Company made false and misleading disclosures about the Funding
    Group.

    The Company strongly disagrees with the Funding Group's allegations. The
    Company believes it will prevail if this matter results in a lawsuit. The
    Company's attorneys are in discussions with the attorney for the Funding
    Group. The Company is currently evaluating what actions to take with respect
    to the claims of the Funding Group.

NOTE 17 - OTHER

    In July 1999, the Company agreed to issue approximately 11,000 shares of its
    common stock to certain vendors in full satisfaction of a trade payable. The
    Company entered into these agreements in order to conserve cash reserves and
    at the request of the vendors. The Company has recorded the related expense
    at $33,000 representing the value of the services provided by the vendors.
    In February 2000, at the request of one of the vendors, the Company paid the
    vendor in cash instead of stock. The other two vendors will be issued 459
    shares and 450 shares of restricted stock in April 2000.





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