U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB


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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000,

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


            For the transition period from ___________ to ___________


                        Commission file number 000-27073


                              INTRACO SYSTEMS, INC.
                              --------------------
                 (Name of Small Business Issuer in its charter)

                    Nevada                               87-0381511
                    ------                               ----------
          (State or Other Jurisdiction of             (I.R.S. Employer
          Incorporation or Organization)              Identification No.)

              3998 FAU Boulevard
              Suite 210
              Boca Raton, Florida                           33431
              -------------------                           -----
     (Address of Principal Executive Offices)             (Zip Code)

     Issuer's Telephone Number, Including Area Code: (561) 367-0600
                                                     --------------

      Securities registered pursuant to Section 12(b) of the Exchange Act:
                                      None
      Securities registered pursuant to Section 12(g) of the Exchange Act:
                                  Common Stock

         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  [X]   No  [ ]

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

State issuer's revenues for its most recent fiscal year: $5,097,681.

The aggregate market value of the issuer's Common Stock, $.001 par value, held
by non-affiliates on February 28, 2001 was approximately $4,043,364.
<PAGE>

As of February 28, 2001, there were 17,501,550 shares of the issuer's Common
Stock, $.001 par value, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         None.

Transitional Small Business Disclosure Format (check one):  Yes [ ] No [X]


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<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

OVERVIEW

         Intraco is an information technology, data and voice service provider.
Beginning in 1999, Intraco shifted its business focus towards providing speech
recognition products and services. As of January 26, 2001, management eliminated
its systems/networks and service contract units to focus all of Intraco's
resources on the development of these new products and services. Intraco uses
in-house expertise with leading speech recognition technologies, such as voice
browsers and natural language engines, to create comprehensive services for
small and midsize businesses such as websites/e-commerce companies and larger
businesses such as telecommunications companies. Ultimately, Intraco intends
that its services will voice-enable a wide range of applications such as
websites, e-commerce, auctioning, paging, e-mail and unified messaging.

         Intraco believes that a significant market opportunity exists with the
emergence of the Internet, especially for business use, and the subsequent
expansion of "application service providers" who lease software and
telecommunications services over the Internet or private data networks.
According to Forrester Research, the business-to-business Internet market is
expected to grow from $109 billion in 1999 to $1.3 trillion in 2003,
representing a compounded annual growth rate of approximately 87%. Additionally,
the business-to-business market is estimated to be more than 12 times the size
of the business-to-consumer market in 2003. According to International Data
Corporation and Dataquest, Inc., a unit of the Gartner Group, the application
service provider market has been estimated to range from $7.8 billion to $25.3
billion by 2004. Intraco believes that it is well positioned to capture market
share as companies become increasingly familiar with and recognize the need for
advanced speech recognition technologies deployed on an application service
provider basis.

         Intraco currently offers several packages of speech recognition based
products and services designed for businesses to use the Internet and
telecommunications applications. As of the date of this report, Intraco has one
fully operational installation of its voice-enabled product. Intraco's products
include:


         o        The voice-enablement of websites, which will be offered on an
                  application service provider basis; and

         o        "Total office" systems including basic telephone services,
                  unified messaging and voice-driven e-mail facilitation, which
                  will also be offered on an application service provider basis.

         Intraco delivers it services over leased data lines from two rented
data centers currently located in Boca Raton, Florida and New York, New York.

         Intraco believes that it has been able to create these systems based
upon several advantages. Senior management has extensive knowledge of the voice
recognition industry. Intraco's chief executive officer, Walt Nawrocki, spent
more than 30 years with IBM pioneering new technologies, where he was ultimately
responsible for the creation and ongoing management of IBM's speech recognition
business. Subsequent to IBM, Mr. Nawrocki founded and served as chief executive
officer and president of Registry Magic Inc., where he established the Virtual
Operator as the industry standard for speech-driven auto-attendants.

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<PAGE>

         Intraco also believes that its extensive knowledge of the voice
recognition industry gives it the ability to identify those vendors that supply
the most advanced and effective technological components. Intraco's
relationships with these vendors, which include Motorola and Nuance, have
allowed it to establish long-term working relationships in the form of licensing
agreements. As a result, Intraco is able to benefit from the significant
investments already made by these outside firms. Finally, Intraco operates as a
systems integrator; in other words, it combines software packages developed by
others into a system that integrates several separate technologies into one
cohesive system.

         Intraco intends to sell its products and services on an application
service provider basis primarily through major national network service
providers such as UUNET, Intermedia Communications, Cable and Wireless, Leve13
Communications and Verio and through portals that cater to small and midsize
businesses. In both cases, the focus is on distributors instead of end-users.
Intraco does not intend to service individual consumers, but instead is
targeting other business customers through the network service providers and
portals. Additionally, Intraco's strategic relationships provide it with proven
marketing contacts, with a history of successful products and services.


PRINCIPAL CUSTOMERS

         Intraco's systems/networks and service contract units have been
dependent on a limited number of customers. Insci-Statements.com Corp
represented 21% of Intraco's revenues for the year ended December 31, 2000. In
January 2001, Intraco eliminated its systems/networks and service contracts
units. As a result, Intraco's customer base will be affected. Intraco has
shifted its sales and marketing efforts, as described below, in order to
increase its exposure to potential clients and to increase Intraco's client base
for its new products. Intraco cannot guarantee that its efforts will be
successful in this regard.


THE INTRACO SOLUTION

         Intraco's products and services are designed to use the Internet and
standard telecommunications applications. The key components of the Intraco
solution include:

         o        FIRST-TO-MARKET. Intraco believes it has a substantial head
                  start in the development of language and speech recognition
                  products and services. Through its relationships with firms
                  that have been instrumental in the development of speech
                  recognition products, such as Microsoft, Motorola and Nuance,
                  Intraco has had access to and in some cases has helped develop
                  the software that Intraco currently uses in its speech
                  recognition systems. These relationships, combined with
                  Intraco's ability to integrate the software using its
                  proprietary technology, has enabled Intraco to produce what it
                  believes are superior, first-to-market, commercially viable
                  solutions.


         o        LICENSING AGREEMENTS AND JOINT MARKETING RELATIONSHIPS.
                  Intraco has developed relationships with companies such as
                  Motorola, Microsoft and Nuance, which have provided Intraco
                  with access to newly developed speech recognition and other
                  technologies. Each of these firms has expended significant
                  amounts of resources developing these components, such as
                  voice browsers and natural language engines, but lacks the
                  ability to integrate these disparate pieces of software into a
                  set of services that can be delivered to the end-user. Intraco
                  believes that it has obtained access to these products because
                  of its expertise in the speech recognition sector and because
                  it is currently one of the few firms that can integrate these
                  applications into a commercially viable product.

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<PAGE>

         Intraco currently has the following agreements in place:

         o        Motorola: Definitive agreement for the joint marketing of
                  Motorola's VoxML Language Software, enabling voice access to
                  the Internet, using Intraco's application service provider
                  capabilities. The agreement is for a term of one year and is
                  renewable for successive one-year terms upon 90 days' notice.
                  Either party may terminate the agreement in certain
                  circumstances. Intraco paid certain royalty and set-up fees.
                  In addition, Intraco pays fees depending on the number of
                  terminals at which the software is used.

         o        Nuance: Definitive agreement pursuant to which Intraco has a
                  non-exclusive license to use Nuance's software for an
                  indefinite period of time. Intraco may terminate the agreement
                  at any time. Nuance has the right to terminate the agreement
                  if Intraco breaches the terms of the agreement and does not
                  cure the breach within 30 days of having received written
                  notice of the breach. Intraco pays license and annual support
                  fees to Nuance based on Nuance's standard rates.

         o        Microsoft: Definitive agreement pursuant to which Intraco is
                  authorized to provide services and products developed by
                  Microsoft. The agreement is for a term of one year and is
                  renewable for successive one-year terms provided Intraco meets
                  certain criteria. Either party may terminate the agreement
                  with 30 days' notice. Microsoft can terminate the agreement
                  immediately if Intraco: (i) breaches its obligations; (ii)
                  pirates its products; or (iii) transfers or assigns a
                  significant portion of its stock to a third party. Intraco
                  paid to Microsoft a "Certified Solution Provider Membership
                  Fee" and pays license fees based on Microsoft's standard
                  single and multi-use rates.

o        TECHNOLOGICAL EXPERTISE. Intraco has extensive experience in speech
         recognition technology, as well as in programming and software
         integration. This experience allows Intraco to create integrated
         technologies and quickly bring them to market. Intraco has the ability
         to identify which vendors supply the most advanced and effective
         technological components. Additionally, Intraco has significant systems
         integration experience that enables Intraco to integrate the most
         advanced and effective technological components into one cohesive
         system. Intraco also has a team of engineers with the in-house
         expertise to install and service both the hardware and software
         components.

o        MANAGEMENT EXPERTISE. Intraco's management team brings a highly
         qualified and diverse background with extensive experience in
         identifying and applying leading-edge technology. Walt Nawrocki, the
         chief executive officer, has significant experience in developing and
         integrating voice automation technologies. Mr. Nawrocki spent more than
         30 years with IBM, where he became manager for worldwide product
         development and business management. In that role, he managed a number
         of business areas, including speech recognition products, and was
         responsible for acquisitions, joint development and original equipment
         manufacturing licensing programs.

o        PRODUCTS WORK TODAY. Intraco entered into an agreement with Federal
         Express pursuant to which Federal Express was testing Intraco's
         automated call center. As of the date of this report, Federal Express
         accepted the product and Intraco has its first fully operational
         installation of one of its speech recognition products in a Federal
         Express facility. Pursuant to the terms of the agreement with Federal
         Express, Intraco received a set fee for the purchase of the product and
         will receive an additional fee based on the number of calls processed
         through the call center. Intraco believes it is the first to offer

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<PAGE>

         commercially viable speech recognition solutions for use in Internet
         applications. As such, Intraco believes it is positioned to capture
         substantial market share as companies become increasingly familiar
         with, and realize the need for, advanced speech recognition
         technologies.


INDUSTRY OVERVIEW

         Intraco provides several service packages, on an application service
provider basis, which take advantage of the convergence of speech recognition
technologies and the Internet.

         SPEECH RECOGNITION TECHNOLOGIES. Various types of speech recognition
technologies have existed for several years and the number of commercially
available speech enabled products continues to grow. Until recently, however,
speech recognition products have worked poorly and have been costly, thereby
limiting widespread acceptance.

         Historically, emphasis in the speech recognition industry was placed on
the development of "core speech recognition engine" technology, a set of
algorithms that interpret speech patterns. Many companies, including IBM, Dragon
Systems, Voice Control Systems, Nuance, Nortel, Speech Works and Lucent, have
spent substantial sums of money over the last quarter century in developing core
speech recognition engine technology for the telephone. The development of
speech recognition engine technologies requires the use of speech algorithms,
statistics, digital signal processing algorithms, digital signal processing
programming, phonetics, linguistics, information theory and coding theory. For
the most part, these speech recognition engine manufacturers have allowed others
to develop commercial speech applications.

         As new technologies are developed, their accessibility and simplicity
of operation directly effects how often and how widely they are used. The advent
of the Internet, combined with recent advances in speech recognition technology,
has provided both the accessibility and simplicity to increase the popularity of
speech recognition products. As of a few years ago, the integration of speech
recognition within a call center environment required extensive systems
integration expertise, money and time. Now, with the availability of improved
technologies, the ability to turn websites into speech-driven call centers can
be achieved with the right speech recognition and Internet development skills.

         Speech is the most natural, efficient and simple means of human
communication. With the increase in the power and capability of speech
recognition engine technologies and the increase in speed and reduction in the
cost of computer processors, the use of human speech to access the Internet via
a telephone is now feasible.

         GROWTH OF THE INTERNET. Internet usage and online commerce continue to
grow worldwide. Forrester Research estimates that revenue generated worldwide
from online commerce will grow to exceed $6.8 trillion in 2004.

         APPLICATION SERVICE PROVIDER MARKET. Application service providers are
service-oriented firms that provide contractual services, offering to deploy,
host, manage and enhance what is usually packaged application software from a
centrally managed facility. The application service provider provides services
remotely, either on line over the Internet or over dedicated telecommunications
lines. The application service provider hosts the software, builds and maintains
the network servers necessary to store and run the software application,
provides the systems necessary to deliver the software application directly to
the user's desktop, and provides the necessary information technology staff to
implement upgrades and provide support and maintenance functions. The
application service provider takes all administrative and technical

                                       6
<PAGE>

responsibilities from the client company, thereby cutting costs. Clients can use
leading business software applications without the cost and burden of owning
them.

The definition of an application service provider includes the following
characteristics:

         1. APPLICATION COMMERCIALLY AVAILABLE. Application service providers
     provide access to and management of a software application that is
     commercially available. This service is different from "business process
     outsourcing," where the outsourcing contract encompasses the management of
     entire business processes such as human resources or finance.

         2. "SELLING" APPLICATION ACCESS. Application service providers offer
     customers access to new applications without requiring the customer to make
     up-front investments in the application licenses, servers, people and other
     resources. The application service provider either owns the software or has
     a contractual agreement with the software vendor to license access to the
     software.

         3. CENTRALLY MANAGED. The services are managed from a central location
     rather than at each customer's site. Customers access applications
     remotely, such as over the Internet or via leased lines.

         4. ONE-TO-MANY SERVICE. The services are designed to be offered to many
     users. The application service provider partners with other vendors of
     standardized offerings that require little or no customization, that many
     companies will subscribe for over specific contract periods.

         5. DELIVERING ON THE CONTRACT. The application service provider is the
     firm that is responsible, in the customer's eyes, for delivering the
     agreed-upon service, ensuring that the application service is provided as
     promised.

         The application service provider industry is ideally suited for small
to midsize businesses. Unable to afford the huge fixed costs of network servers
and information technology staff to support them, small and midsize businesses
can turn to an application service provider to take care of the responsibility,
financial and staffing aspects. They pay a flat rate per user per month and
receive access to the latest and most sophisticated software applications that
otherwise may be too expensive. The application service provider can easily
expand the services it provides to meet the growth of the businesses it
supports. With the help of application service providers, small to midsize
businesses should be able to better compete with their larger competitors.
According to International Data Corporation, the number of customers of high-end
application service providers is expected to double or triple in the next few
years as they become more familiar with the benefits of the application service
provider model and more confident in its reliability.

         The application service provider industry has many strengths that could
make it very successful with resellers. First, more customers than ever have
remote and/or mobile workgroups with specific functions that are more easily
automated using Internet technologies. Second, the increasing costs of
information technology are making outsourcing a popular alternative. Third, the
privacy of networks is much more secure using an application service provider
server than individual in-house servers. Finally, large vendors such as Oracle
have shown great confidence in fledgling application service providers. The
application service provider industry offers products and services that provide
recurring revenue streams to resellers.

                                       7
<PAGE>

TECHNOLOGY

         The driving force behind Intraco's vision and technology is the
telephone, which should remain the preferred means of communication for the
foreseeable future. Statistically, there are 10 times as many telephones as
computers with Internet access, and telephones, especially cellular telephones,
are much more convenient to use. Via voice and speech recognition technologies,
users will be able to communicate by simply speaking, without having to press
keys, talk to an operator or agent, or use a visually based Web browser. The
communication will be completely automated and interactive, allowing for the
ease and practicality of voice recognition without sacrificing the functionality
of traditional services.

         The hardware for these systems has multiple voice telephone lines
coming in from the local exchange carrier's central office. This hardware
receives the incoming calls and can originate outgoing calls. The software
functions are:

         o        Voice browser -- this is the "voice gateway" through which the
                  computer-based conversation is managed.

         o        Authentication, billing and accounting -- to track all system
                  usage from which bills are created.

         o        Voice recognition -- to recognize and interpret responses to
                  prompts.

         o        Text-to-speech -- to playback text-based information retrieved
                  from the network in response to commands.

         The underlying technology that powers this capability was developed by
firms such as Microsoft, Motorola and Nuance, all having been instrumental in
the development of speech recognition software. For example, Motorola and
Microsoft each offers its own proprietary voice browser software enabling voice
access to the Web. Companies such as Nuance provide an extremely proficient
natural language engine. Each of these firms offers important technology
components of the overall solutions but lacks the overall expertise to integrate
these pieces. Intraco has recognized this opportunity, and as an early adopter
and leader in this technology, intends to make use of its strategic
relationships and apply its technological expertise to integrate each separate
capability into a single system.


SERVICE OFFERINGS

         In a very competitive global marketplace, businesses must focus on what
they do best and outsource other functions. Operating as an application service
provider enables small to midsize businesses to outsource their information
technology needs by allowing Intraco to provide these services. Initially,
Intraco will focus on the basic technology requirements of a business: Web
services, phone services, messaging and networks.

         VOICE-BASED SERVICES. The explosion of the Internet, especially the
business-to-business market, along with the expansion of the application service
providers, has led to the rapid expansion of the number of commercial websites
and the hosting of data centers that serve the websites. Through its voice-based
packages of services, Intraco believes that it can provide speech and voice
recognition services to these websites on an application service provider basis
through network service providers such as Verio and Exodus Communications, which
host the websites. These network service providers can incorporate Intraco's
voice-based capabilities with their own services.

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<PAGE>

         Intraco will provide this service directly and will also offer its
voice-based services to business-to-business portal websites, which will
subsequently offer the voice-based service as part of the websites' standard
service offerings. Additionally, Intraco will provide this new service directly
by hosting sites for customers as well as support services either on the
customer's premise or at an Intraco site.

         Within the voice-based service line, Intraco intends to focus on three
categories of products. The first is voice information that would enable a user
to call into a website and have specific information read to them over the
telephone. For example, a traveling sales executive can access his/her company's
website from a cellular telephone and get order status or pricing information
for his next customer call. The second product is voice commerce, which would
enable a user with a traditional paper catalog to call a retailer's website from
a standard telephone and order products without involving a person in the
transaction unless there is a need to do so. Not only does speech recognition
provide increased convenience for the customer but also allows businesses to
expand their distribution channels by providing customers website access via
standard telephones from anywhere. This capability substantially reduces missed
or dropped calls due to hold times and busy signals, while simultaneously
reducing personnel costs. The last product that stems from the voice browser is
voice alerts. This product will be used to provide information alerts for a
variety of users. One potential area that Intraco intends to target is
construction and machinery auction sites. As these users are typically onsite,
without computer access, they must be able to quickly react to pending contracts
or competitors' bids. This automated process would allow users, via cellular
telephones, to not only receive alerts and critical information instantly, but
to respond as well.

         "TOTAL OFFICE." With the "Total office" system, Intraco is developing
the basic building blocks for a business' telecommunications needs. The basic
services offered will include: voice-enabled e-mail, a service which allows a
person to access his/her e-mail and have it read to him/her over the phone;
unified messaging services including fax, e-mail and voicemail to a single
voice-enabled message box and global availability; and basic telephony services
such as call waiting and forwarding. This will be extremely useful to a small to
midsize company that does not want to expend resources to hire operators and/or
secretaries. Instead, even a start-up can portray a "high-tech" image by
subscribing to these services. Intraco intends to expand its services through
partnerships with providers of other applications typically needed by a
business.


SALES AND MARKETING

         Intraco markets its services by indirect sales through channels such as
telecommunications companies and distributors of telecommunications equipment.

         Intraco's strategy is to focus its sales efforts on the large and
growing business-to-business market. Intraco intends to focus its sales and
marketing efforts on the small and midsize business market sector in the U.S.
Intraco will specifically rely on indirect marketing by utilizing established
distribution channels such as telecommunications companies and distributors of
telecommunications equipment, which ultimately offer Intraco's services to
end-users.

         Through its strategic agreements, Intraco has built solid relationships
with many of the industry's leading technology companies, including Motorola,
Microsoft and Nuance. Intraco believes that these companies are fully committed
to the success of Intraco's speech recognition and voice-enabling products and
should provide a significant source of leads for Intraco, improve its technical
sales expertise, and offer significant name recognition for marketing events and
programs.

         Intraco's sales management team provides a strong ability to understand
existing and new technologies.

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         Intraco's marketing staff intends to promote Intraco as a leading
provider of voice-enabled services through an ongoing public relations program
including trade shows, professional seminars and other promotional venues.


SECURITY

         Intraco's services rely on encryption and authentication technology
licensed from third parties to provide the security required to safely transmit
confidential information. Breaches of this security could have severe
consequences for its clients. While Intraco has implemented a variety of
state-of-the-art network security systems to protect against unauthorized
access, computer viruses, other intentional acts and accidents, and disruptions
may nonetheless occur. Intraco's clients may experience service interruptions or
delays as a result of accidental or intentional disruptions, which could
jeopardize the security of confidential client information. This could
potentially result in liability to Intraco, loss of existing clients, or the
loss of reputation leading to difficulties in attracting new clients.

         Although Intraco plans to continuously upgrade its security systems,
security measures have been circumvented in the past and Intraco's security
could be circumvented in the future. In addition, the costs Intraco must incur
to prevent or eliminate computer viruses or to alleviate other security threats
are likely to be significant.


COMPETITION

         The application service provider market is new and rapidly changing.
The speech recognition for Internet applications sector is even further in its
infancy, which management believes is an advantage for Intraco. By combining
third-party software and technology with its own in-house expertise, Intraco
believes it maintains an advantage over any current competitor or potential
market entrant.

         Considering the extensive experience and advanced technology required
to successfully penetrate this market segment, current and new competitors may
not have the ability to offer comparable products and/or services without
significant speech recognition and systems integration expertise. Intraco
believes the principal competitive factors in this segment of the industry
include:

         o        Scope of services;
         o        Service delivery approach;
         o        Technical and industry expertise; and
         o        Perceived value;

         Intraco could potentially compete with a variety of competitors,
including:

         o        Voice-enabling companies - Tellme Networks, @Motion and Online
                  Anywhere, a company recently acquired by Yahoo! Inc.;
         o        Virtual assistant companies - General Magic, Wildfire
                  Communications and Webley Systems. These companies are
                  developing applications for interactive response and voice
                  verification for the Internet;
         o        Communication service providers - AccessLine Technologies,
                  Call Sciences and Intellivoice Communications; and
         o        Large manufacturers and developers - Motorola, Microsoft, IBM
                  and Lucent Technologies, all of which have significantly
                  greater financial, technical and marketing resources, but
                  which Intraco believes lack the expertise to integrate each of
                  the components into a single source commercial solution.

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<PAGE>

         Many of these competitors have significantly greater financial,
technical and marketing resources and greater name recognition than we have.
There can be no assurances that Intraco will complete successfully with its
existing competitors or with any new competitors.


INTELLECTUAL PROPERTY

         Intraco relies on a combination of nondisclosure and other contractual
arrangements and trade secret, copyright, and trademark laws to its protected
proprietary rights and the proprietary rights of third parties. Intraco enters
into confidentiality agreements with key employees, and limits the distribution
of proprietary information.

         Intraco's success is dependent, in part, on methodologies used in
designing, installing and integrating computer software and systems and other
proprietary intellectual property. Intraco relies on a combination of
nondisclosure and other contractual arrangements and trade secret, copyright and
trademark laws to protect its proprietary rights and the proprietary rights of
third parties. Intraco also enter into confidentiality agreements with its key
employees and limit distribution of proprietary information. There can be no
assurance, however, that the steps Intraco take will be adequate to deter
misappropriation of proprietary information or that management will be able to
detect unauthorized use and take appropriate steps to enforce its intellectual
property rights.


GOVERNMENT REGULATION

         At the present time, Intraco believes that its services are not subject
to regulation as telecommunications services. To the extent that local or long
distance telephone services are provided as part of a package of Intraco's
services, these telephone services are provided directly by a licensed carrier.

         Intraco may in the future determine to resell telephone services as
part of its packaged services. If so, Intraco will be required to obtain
certificates of authority or licenses from the telecommunications regulatory
agencies in each state in which it will provide such services. Intraco will also
be required to comply with various state law requirements, such as providing
"911" emergency services. The process to apply for these certificates or
licenses can be lengthy and expensive, and Intraco cannot guarantee that it will
be able to obtain them. If Intraco cannot obtain all necessary state
certificates or licenses, the services it will be able to resell directly will
be affected.

         As a reseller of telephone services, Intraco may also be subject to
federal regulation by the Federal Communications Commission with respect to the
resale of international long-distance services. The FCC requires resellers of
international telecommunications services to obtain authorization, the process
for which can also be lengthy and expensive. Without such authorization, Intraco
would be precluded from offering such services.


EMPLOYEES

         As of December 31, 2000, Intraco had a total staff of 35 employees,
composed of 11 technical professionals, 13 sales and marketing personnel, and 11
administrative personnel. No employees are represented by a labor union or
subject to a collective bargaining agreement. Management believes that employee
relations generally are good.

         Intraco's success depends, in larger part, on our ability to attract,
develop, motivate and retain technical professionals. As of December 31, 2000,
approximately 31% of its employees were technical professionals. Qualified
technical professionals are in great demand and are likely to remain a limited

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resource for the foreseeable future. Intraco's location in South Florida can
also make the recruiting process more difficult, as there are a limited number
of research universities in the area and regions of the U.S. other than South
Florida are often seen as being more attractive to technical professionals.


ITEM 2.  DESCRIPTION OF PROPERTY

         Intraco's corporate headquarters are located in approximately 6,800
square feet of leased office space in Boca Raton, Florida. The lease expires in
October 2003 and provides for annual payments ranging from $84,060 in the first
year to $98,431 in the fifth year. Intraco has two five-year renewal options.
Intraco believes that its current headquarters location is suitable for the next
year.


ITEM 3.  LEGAL PROCEEDINGS

         On October 29, 1999, Banker's Leasing Association filed a suit against
Intraco and Jack Berger in the Circuit Court of the Fifteenth Judicial Circuit
in and for Palm Beach County, Florida for breach of a master lease agreement and
personal guaranty related to computer equipment, software and services leased by
Intraco for the amount of $71,608. Intraco has filed a counterclaim based on
Banker's failure to provide services agreed to in the lease and breach of
fiduciary duty. Banker has answered Intraco's counterclaim and filed suit
against AIM Solutions, Inc., as successor to Enterprises Solutions Group, Inc.,
the third party responsible for setting up the computer equipment and software
and providing services. AIM has responded denying all liability for the claims
against it. Discovery has not yet commenced.


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

         None.

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<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock began trading under the symbol "INSY" on the OTC
Bulletin Board operated by the NASDAQ Stock Market, Inc. on April 29, 1999.
These quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commissions, and may not represent actual transactions. The quotations listed
below are the high and low closing prices and were obtained from the OTC
Bulletin Board.

Quarter Ended                      High                      Low
------------------------------     ---------------------     -------------------


June 30, 1999                      $7.750                    $1.500
September 30, 1999                 $2.250                    $1.750
December 31, 1999                  $2.625                    $0.875
March 31, 2000                     $8.850                    $1.500
June 30, 2000                      $5.687                    $1.562
September 30, 2000                 $3.000                    $1.031
December 31, 2000                  $1.250                    $0.156


HOLDERS

         As of February 28, 2001, there were approximately 468 holders of record
of Intraco's common stock.


DIVIDEND POLICY

         Intraco paid aggregate dividends of $8,483 and $27,084 on its Series A
Convertible Redeemable Preferred Stock in 1999 and 2000, respectively. Intraco
is obligated under an agreement with its Series A Convertible Redeemable
Preferred stockholders to pay dividends for the first twelve months after
issuance regardless of earnings.

         Intraco has not paid any cash dividends on its Common Stock since its
inception. Intraco presently intends to retain future earnings, if any, to
finance the expansion of its business and does not anticipate that any cash
dividends will be paid in the foreseeable future. Future dividend policy will
depend on Intraco's earnings, capital requirements, expansion plans, financial
condition and other relevant factors.


SALES OF UNREGISTERED SECURITIES

         In February 2000, the Company sold 160,000 restricted shares of common
stock and warrants to purchase 30,000 restricted shares of common stock at $0.75
per share for $200,000 to one accredited investor. The sale was exempt from
registration under the Securities Act pursuant to Section 4(2) thereof. To
Intraco's knowledge, the investor was sophisticated in financial investments and
received a variety of financial and other information about Intraco in
connection with the investor's due diligence. No public solicitation or general
advertising was done in connection with this offering. Intraco did not pay any
fees or commissions in connection with this sale.

         In March 2000, the Company sold 3,473,586 units for $4,805,799 net of
fees and expenses to a total of 11 accredited investors. Each unit consisted of
one restricted share of common stock and one warrant to purchase one restricted
share of common stock at $1.50 per share. The sale of the units was exempt from
registration under the Securities Act pursuant to Section 4(2) thereof and was
made pursuant to a term sheet and unit purchase agreement. In addition to
Intraco's representations in the purchase agreement, the investors were provided
with a variety of financial and other information about Intraco in connection

                                       13
<PAGE>

with their due diligence. No public solicitation or general advertising was done
in connection with this offering. Intraco issued a warrant to purchase 210,000
restricted shares of common stock at $2.00 per share, 196,560 restricted shares
of common stock and a warrant to purchase 196,560 restricted shares of common
stock at $1.50 per share and paid a cash fee of $381,200 as a commission for
this sale and paid legal, accounting and other miscellaneous expenses of
$67,323.

         In April 2000, Intraco issued 6,199 restricted shares of common stock
to one former employee upon the employee's exercise of stock options granted to
the employee under Intraco's stock option plan in connection with the person's
employment with Intraco. Intraco did not receive any proceeds from the exercise
of options because the option holder used the cashless exercise method. The
shares were valued at $22,068. The shares were issued pursuant to an exemption
from registration under Section 3(a)(9) and 4(2) of the Securities Act. The
employee had access to the Company's reports filed pursuant to the Exchange Act
and a copy of the stock option plan and was familiar with Intraco's operations
and financial condition. Intraco did not pay any fees or commissions in
connection with this issuance.

         From April 2000, to June 2000, Intraco issued 2,000 shares of
restricted common stock to Mark Wachs Associates, a public relations firm, in
connection with services provided to Intraco. The shares issued were valued at
$8,188. The shares were issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act. To Intraco's knowledge, management of the
firm was sophisticated in financial investments and was familiar with Intraco's
business and operations. No offering document was prepared, and no public
solicitation or general advertising was done in connection with this issuance.
Intraco did not pay any fees or commissions in connection with this issuance.

         In June 2000, Intraco issued 52,549 shares of restricted common stock
to four former employees upon the employees' exercise of stock options granted
to the employees under Intraco's stock option plan in connection with their
employment with Intraco. Intraco did not receive any proceeds from the exercise
of the options because the optionholders used the cashless exercise method. The
stock options were valued at an aggregate of $150,625. The shares were issued
pursuant to an exemption from registration under Sections 3(a)(9) and 4(2) of
the Securities Act. The individuals had access to the Company's reports filed
pursuant to the Exchange Act and a copy of the stock option plan and were
familiar with Intraco's operations and financial condition. Intraco did not pay
any fees or commissions in connection with these issuances.

         In August 2000, Intraco issued 36,487 shares of restricted common stock
to two former employees upon the employees' exercise of stock options granted to
the employees under Intraco's stock option plan in connection with their
employment with Intraco. Intraco did not receive any proceeds from the exercise
of the options because the optionholders used the cashless exercise method. The
stock options were valued at an aggregate of $125,625. The shares were issued
pursuant to an exemption from registration under Sections 3(a)(9) and 4(2) of
the Securities Act. The individuals had access to the Company's reports filed
pursuant to the Exchange Act and a copy of the stock option plan and were
familiar with Intraco's operations and financial condition. Intraco did not pay
any fees or commissions in connection with these issuances.

         In December 2000, Intraco issued 10,000 shares of restricted common
stock to First American Ventures, a financial consultant, in connection with
services provided to Intraco. The shares issued were valued at $2,500. The
shares were issued pursuant to an exemption from registration under Section 4(2)
of the Securities Act. To Intraco's knowledge, management of the firm was
sophisticated in financial investments and was familiar with Intraco's business
and operations. No offering document was prepared, and no public solicitation or
general advertising was done in connection with this issuance. Intraco did not
pay any fees or commissions in connection with this issuance.

                                       14
<PAGE>

         From February 2000, to October 2000, Intraco issued 488,300 shares of
common stock to preferred shareholders who converted a like number of shares of
preferred stock. The shares were issued pursuant to an exemption from
registration under Section 3(a)(9) of the Securities Act.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         You should read the following discussion and analysis in conjunction
with the consolidated financial statements and the notes included elsewhere in
this report.


OVERVIEW

         Intraco is an information technology, data and voice service provider.
Its products and services include computer hardware, computer networks, speech
recognition products and services, and voice-activated products and services.
Intraco is in the process of shifting its business focus from direct sales of
computer hardware and computer networks to be installed on customer premises to
providing speech recognition and voice command products delivered from Intraco
data centers for recurring monthly fees. This manner of providing products and
services from a remote location for a recurring service charge is referred to as
being an "application service provider."

         At present, Intraco has established two data centers, one in New York
City and another in Boca Raton, Florida. Both of these data centers are equipped
to deliver Intraco's new services. Intraco's current speech and voice services
include a speech recognition telephone "operator" that answers incoming
telephone calls and directs them to the appropriate extension by responding to
the caller's voice request and a voice-activated telephone dialing system that
places outgoing calls. Intraco has begun signing contracts with customers for
the sale of some of these new services and for the testing of others.

         Management believes Intraco's competitive advantage lies in its ability
to combine its in-house expertise with leading speech recognition technologies
available from third parties, including voice browsers and natural language
engines, to create comprehensive packages of technology and voice services for a
variety of businesses. Management believes the major market for these services
is small- to medium-sized businesses and branch offices of larger companies.
Intraco's primary sales channel for these new products will be through
telecommunications companies. At present, Intraco has a fully operational
installation of one of its voice-enabled products.

         By March 31, 2001, Intraco will require additional funding to pay its
current operating expenses as well as to continue selling, marketing, testing
and installation of its new products. Intraco's operating expenses total
approximately $350,000 per month. The total funds it will need will depend on
both the length of time it takes to raise the funds as well as the rate at which
its new products gain acceptance in the marketplace. Management believes that
the faster it can generate revenues from its new products, the more operating
profit will become available to offset some of its cash requirements for its
operations. Intraco has only recently started to generate limited revenues from
these new products, however, and there can be no assurance it will be able to
generate sufficient revenues from these new products in order to fund all or a
part of its operating expenses. Intraco is also unable to estimate when
sufficient revenues may be generated by sales of its new products. Therefore, it
is actively seeking a capital infusion of approximately $5 million, which it
believes will provide substantially all of the funding needed to meet its
operating expenses and its product development and testing cash needs, while it
develops additional sales channels so as to increase its sales to profitable
levels. There can be no assurances that Intraco will be able to increase sales
to profitable levels.

         Management is in the process of negotiating with potential private
investors for private equity and a convertible debt investment. The specific
terms of any investment have not yet been negotiated with the potential

                                       15
<PAGE>

investors. Intraco may also obtain funds through the exercise of certain
outstanding warrants. There can be no assurances, however, that it will be able
to complete any offerings or that any warrant holders will exercise their
warrants. If Intraco is not able to raise the required capital, then it will
reduce operations, seek a potential acquirer and/or discontinue operations.

         Intraco was incorporated in Florida in March 1990. In April 1999, it
completed a share exchange with Custom Touch Electronics, Inc., a Nevada
corporation with no material operations whose common stock traded on the OTC
Bulletin Board. Pursuant to the share exchange, all of the outstanding shares of
Intraco capital stock were exchanged for 10,531,500 Custom Touch shares.
Thereafter, Custom Touch changed its name to Intraco Systems, Inc.


RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2000, COMPARED TO YEAR ENDED DECEMBER 31, 1999.

         REVENUES. Revenues increased $2,167,714, or 74%, to $5,097,681 for the
year ended December 31, 2000, from $2,929,967 for the year ended December 31,
1999. This increase was due to two major factors. One factor was an unusually
large systems/networks sale of $1,079,045 to a single customer
(Insci-Statements.com Corp), and the second factor was an increase in the sales
and marketing staff to 13 people for the year ended December 31, 2000, from five
people for the corresponding period in 1999.

         COST OF REVENUES. Cost of revenues increased 95% to $4,231,251 for the
year ended December 31, 2000, from $2,165,581 for the year ended December 31,
1999. Cost of systems/networks revenues were $3,871,083, or 85.1%, of
systems/networks revenues for the year ended December 31, 2000, compared to
$1,823,773, or 79.5%, of systems/networks revenues for the corresponding period
in 1999. This increase reflects Intraco's increased sales and also increased
competition, which limits Intraco's ability to mark-up the hardware and software
sold. Cost of service contracts totaled $360,168, or 65.6%, of service contract
revenues for the year ended December 31, 2000, compared to $341,807, or 53.8%,
of service contract revenue for the corresponding period in 1999. The increase
in the cost of service contracts is a result of higher labor charges for
services Intraco contracts out.

         The overall gross profit margins for the year ended December 31, 2000,
and 1999 were 17% and 26%, respectively. The profit margins on Intraco's
systems/networks products and service contracts continue to erode due to
increased competition, which limits Intraco's ability to mark-up the hardware
and software it sells, and increased labor costs. The profit margins have,
therefore, been below management's targets of 35% on systems/networks products
and service contracts and 50% on new products. As a result, in January 2001,
management eliminated its systems/networks and service contract units, and
reduced Intraco's staff by seven people and is directing more resources toward
developing products and services with higher profit margins. Management
currently believes its voice-activated products, such as the voice-activated
auto attendant and telephone dialer, can be sold at higher profit margins.
Intraco's operating results do not yet reflect any changes in operating
strategy. There can be no assurances that this strategy will prove successful.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the year ended December 31, 2000, were $5,440,387
compared to $2,197,492 for the year ended December 31, 1999, an increase of
$3,242,895, or 148%. Of the dollar increase, $1,995,789 represented increased
payroll and commission costs in connection with the hiring of five additional
engineers, eight additional sales and marketing staff, and two additional
administrative personnel to begin developing new products and services and
entering new markets; $74,700 represented recruiting fees in connection with the
hiring of sales and engineering personnel; $102,108 represented increased
professional fees; $158,385 represented increased public relations costs in

                                       16
<PAGE>

connection with engaging a public relations firm; $54,682 represented increased
advertising expenses; $133,390 represented increased directors and officers,
health and worker's compensation insurance costs; $145,787 reflects increased
levels of depreciation and amortization due to capital investments; $194,440
represented increased network service charges for the new data centers; $87,738
represented increased accounting legal and printing costs in registering shares
of common stock with the Securities and Exchange Commissions, and $98,400
represented a one-time charge for the settlement of an employment contract. The
remaining increase was attributable to other additional selling, general and
administrative expenses.

         INTEREST INCOME. Interest income, net of interest expense, increased by
$88,127 to $79,921 for the year ended December 31, 2000, as compared to net
interest expense of $8,206 for the year ended December 31, 1999, reflecting the
interest earned on deposits and the repayment of long-term debt.

         NET LOSS. As a result of the foregoing, Intraco reported a net loss of
$4,479,359 for the year ended December 31, 2000, compared to a net loss of
$1,438,895 for the year ended December 31, 1999, an increase of $3,040,464.

         ACCOUNTS RECEIVABLE. Accounts receivable decreased $16,990, or 3%, to
$512,520 for the year ended December 31, 2000, from $529,510 for the year ended
December 31,1999. The average number of days outstanding for both 2000 and 1999
was 36 days. The average days outstanding was also skewed as of the end of 1999
because of a large sale to one customer in the fourth quarter of 1999, for which
payment was delayed. Excluding the effect of that sale, the average number of
days outstanding for Intraco's accounts receivable in 1999 was 12 days.
Therefore, the actual number of days outstanding increased by 24 days from 1999
to 2000. This increase represents a slowing of payments that management believes
was in response to general economic conditions. Management does not at this time
believe this represents a significant impairment in the collectibility of the
receivables, although management is monitoring this closely.

         ACCOUNTS PAYABLE. Accounts payable decreased $117,850, or 12.1%, to
$857,770 for the year ended December 31, 2000, from $975,620 for the year ended
December 31, 1999. The decrease was due to the use of a portion of the net
proceeds from Intraco's private offering in March 2000, to pay down outstanding
trade payables. Intraco was able to reduce accounts payable to a current status.
As a result of prior credit issues, Intraco is required to maintain current
payment terms with its vendors.

         PROPERTY AND EQUIPMENT. Property and equipment increased $929,308, or
247%, to $1,305,589 for the year ended December 31, 2000, from $376,281 for the
year ended December 31, 1999. The increase was due to the investment in
additional equipment to support our new speech and telecommunication services.


LIQUIDITY AND CAPITAL RESOURCES

         Intraco has historically incurred significant losses and has
substantial negative cash flow from operations. Intraco has included a footnote
in its annual financial statements for the year ended December 31, 2000, which
expresses concern about Intraco's ability to continue as a going concern unless
it can secure additional financing, reduce its operating expenses, and sell its
new products at higher profit margins. Intraco expects significant operating
losses to continue at least during the first half of 2001. Intraco will require
additional funding to cover current operations and the implementation of its
business plan after March 31, 2001. Intraco is actively seeking additional
financing which may be either debt or equity. There can be no assurances that
any additional funding will be available or, if available, that such funding can
be obtained on favorable terms.

                                       17
<PAGE>

         At December 31, 2000, Intraco's current assets totaled $1,215,206 and
current liabilities totaled $1,513,086, resulting in a negative working capital
ratio. Intraco had long-term liabilities of $21,315 at December 31, 2000.
Intraco had $619,340 in cash on hand at December 31, 2000, compared to $151,725
at December 31, 1999. Operating activities for the year ended December 31, 2000,
used cash of $4,055,408 primarily due to the net loss of $4,479,359. Net cash
used in investing activities was $979,308, reflecting the purchase of fixed
assets and a licensing agreement. Financing activities provided cash in the
amount of $5,502,331 primarily due to issuance of capital stock of $5,664,794,
which was partially offset by repayment of $126,065 of long-term debt.

         Since management believes it will continue to incur net losses and have
negative cash flow in the immediate future, Intraco will require additional
funding by March 31, 2001 to cover current operations and the implementation of
its business plan. Management is actively seeking to raise additional investment
capital, which is likely to be both convertible debt and equity financing.
Intraco has no material commitments for capital expenditures at the present
time. Management is in negotiations with potential investors. No assurance can
be made that such funding will be available and, if available, that such funding
will be available on terms acceptable to Intraco.


FACTORS THAT MAY AFFECT FUTURE RESULTS

         Certain important factors may affect Intraco's actual results and could
cause those results to differ materially from any forward-looking statements
made in this Annual Report on Form 10-KSB or that are otherwise made by Intraco
or on its behalf. "Forward-looking statements" are not based on historical facts
and are typically phrased using words such as "may," "will," "expect,"
"believe," "anticipate," "intend," "could," "estimate" or "continue" and similar
expressions or variations.

         Differences in actual results may be caused by factors such as those
discussed below, as well as those discussed elsewhere in this report and in
Intraco's filings with the SEC.

         Although Intraco believes that the expectations reflected in the
forward-looking statements are reasonable, Intraco cannot guarantee that they
will be achieved. Except as applicable law requires, Intraco does not intend to
update any of the forward-looking statements to conform these statements to
actual results.

         Any or all forward-looking statements in this document and in any other
public statements made may turn out to be wrong. They can be affected by
inaccurate assumptions or by known or unknown risks and uncertainties. In
addition to general economic conditions, many factors mentioned in the
discussion below will be important in determining future results.

         Neither Intraco nor its management undertake any obligation to publicly
update any forward-looking statements, whether as a result of new information,
future events or otherwise. The reader is advised, however, to consult any
further disclosures made on related subjects in Intraco's future filings with
the SEC.


INTRACO RECENTLY SHIFTED ITS BUSINESS FOCUS AWAY FROM NETWORK INSTALLATIONS TO
PROVIDING INFORMATION TECHNOLOGY AND VOICE SERVICES, INCLUDING SPEECH
RECOGNITION PRODUCTS AND SERVICES. INTRACO'S BUSINESS PLAN IS STILL UNDER
DEVELOPMENT.


         With the hiring of Walt Nawrocki in 1999 as chief executive officer,
Intraco has shifted its business focus towards providing speech recognition
products and services. As a result of this recent shift in focus, Intraco's
business plan is still in development. There can be no assurance that its new

                                       18
<PAGE>

business plan will be successful. Although Intraco is in discussions with
several prospective clients, Intraco has only just begun to sell its newly
developed speech recognition products and services and demand for these products
and services is uncertain. Additionally, Intraco's previous financial history is
not a good indication of how the business is doing or how it is evolving.


INTRACO HAS EXPERIENCED SIGNIFICANT LOSSES AND THESE LOSSES ARE EXPECTED TO
CONTINUE IN THE FUTURE.


         For the year ended December 31, 2000, Intraco reported net losses of
$4,479,359. As of December 31, 2000, Intraco had an accumulated deficit of
$6,563,661, and positive stockholders` equity of $775,336. The positive
stockholders' equity was a result of private offerings. There can be no
assurance that Intraco will operate profitably in the future and that Intraco
will not continue to sustain losses. Continued losses could materially and
adversely affect its business.


INTRACO WILL NEED SUBSTANTIAL ADDITIONAL CAPITAL IN ORDER TO CONTINUE ITS
OPERATIONS.


         Intraco requires substantial working capital to build its application
service provider systems, for marketing and promotion, and to fund its general
business operations. In addition, Intraco anticipates that it will regularly
need to make capital expenditures to upgrade and modify its management
information system, including software and hardware, as it grows and the needs
of its business change. Without any outside funding, Intraco currently
anticipates that it will have sufficient funds to meet its anticipated needs for
working capital and capital expenditures through March 31, 2001. After that, it
will need to raise additional funds. Intraco is actively seeking additional
financing, which is likely to be convertible debt and equity financing. After
that, it will need to raise additional funds. Intraco cannot be certain that any
additional financing will be available to them when needed and if available,
whether it will be on favorable terms. In addition, if Intraco raises additional
funds through the issuance of equity, equity-related or debt securities, the
securities may have rights, preferences or privileges senior to those of the
rights of its current shareholders and its shareholders may experience
additional dilution.


INTRACO'S SERVICES ARE BASED ON SOFTWARE OBTAINED FROM THIRD PARTIES. INTRACO
MAY HAVE TO DISCONTINUE OR SIGNIFICANTLY CHANGE ITS PRODUCTS OR SERVICES IF
THESE THIRD PARTIES CANCEL LICENSING AGREEMENTS OR DISCONTINUE PRODUCTION OF THE
SOFTWARE.


         Intraco obtains software products pursuant to agreements with Motorola,
Speechworks and Nuance and intends to enter into additional agreements as may be
necessary in the future. Obtaining this software, as well as any additional
software offerings, is critical to Intraco's expansion strategy because it
offers services based on the integration of these software packages to clients.
If one or more of Intraco's existing relationships with its key software
companies were to be terminated or not renewed, it could be faced with
discontinuing products or services or delaying or reducing introduction of
services unless it could find, license and offer equivalent software packages.

         All of Intraco's third-party agreements are non-exclusive. Intraco's
competitors could also license and offer software products that Intraco offers
as part of its services. Intraco cannot be sure that its current vendors will
continue to offer or support the software it currently licenses from them in
current form, nor can it be sure that it will be able to adapt its systems to
changes in such software.

                                       19
<PAGE>

INTRACO'S SERVICES INCLUDE INFORMATION, DATA AND VOICE SERVICES, SUCH AS E-MAIL
AND VOICE MAIL, THAT ARE OFTEN ESSENTIAL TO A BUSINESS. INTRACO COULD BE SUBJECT
TO LIABILITY IF IT DOES NOT PROVIDE ITS SERVICES TO THEIR CLIENTS IN ACCORDANCE
WITH THE TERMS OF THE AGREEMENTS.


         Many of the engagements Intraco has begun or plans to undertake involve
projects involving information, data and voice services that are critical to the
operations of its clients' businesses and provide benefits to its clients that
may be difficult to quantify. If Intraco fails or is unable to meet a client's
expectations in the performance of its services, its client's operations could
be adversely affected. This could give rise to claims against Intraco or damage
its reputation, adversely affecting its business, operating results and
financial condition.


ITEM 7.  FINANCIAL STATEMENTS

The financial statements are attached as Appendix A of this document.


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

         None.

                                       20
<PAGE>

                                    PART III

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

The following personnel serve as the directors and executive officers of
Intraco:


<TABLE>
<CAPTION>
NAME                       AGE     POSITION                                     DIRECTOR SINCE

<S>                        <C>     <C>                                          <C>
Walt Nawrocki              55      Chief Executive Officer and Director         2000
Jack S. Berger             46      President and Director                       1999
Robert Marcus              57      Chief Financial Officer, Secretary and       --
                                   Treasurer
Robert Hildreth, Jr.       66      Chairman of the Board of Directors           1999
William D. Hager           53      Director (Audit Committee Member)            2000
Benjamin W. Krieger        62      Director (Audit Committee Member)            2000
</TABLE>


         WALT NAWROCKI joined Intraco in November 1999 as chief executive
officer. In 2000, he was appointed to Intraco's Board of Directors. Prior to
joining Intraco, Mr. Nawrocki served as president, chief executive officer and
director of Registry Magic Inc. from June 1996 through July 1999. Under Mr.
Nawrocki's direction, Registry Magic positioned its Virtual Operator as the
industry sales leader for speech-driven auto-attendant products, and created the
largest dealer network and garnered the most awards in the speech recognition
industry. Mr. Nawrocki also forged agreements with Microsoft and Motorola to
speech-enable Internet websites using technology from both companies. Prior to
that, Mr. Nawrocki spent more than 30 years at IBM, where he held positions of
increasing responsibility, eventually becoming manager for worldwide product
development and business management in August 1992. He served in this position
until May 1996. In this capacity, he oversaw a number of business areas and was
responsible for acquisitions, joint development and OEM licensing programs. Mr.
Nawrocki assembled the speech recognition team at IBM. His working teams have
earned 17 industry awards for technology development and customer satisfaction.

         JACK S. BERGER founded the predecessor to Intraco in 1990 and has
served as its president since that time. He is currently Intraco's president and
director. Mr. Berger has more than 20 years of experience in the domestic and
international computer systems industry. Intraco initially specialized in
exporting computer hardware, and in doing so established strategic relationships
with major international information technology companies that continue today.
Mr. Berger later refocused the product and marketing strategy into higher
margin, higher value-added technology solutions, and shifted focus to the
domestic market. Prior to founding the predecessor to Intraco, Mr. Berger held
several key positions in the Real Time Products Division of Computer Products,
Inc. He supervised production control activity, and he also established and
managed the sales support department, which was responsible for supporting all
sales activity on a global basis. His leadership resulted in the division
meeting its quarterly revenue goals ahead of schedule for the first time. Mr.
Berger was then promoted to international sales manager, where he established
and managed a worldwide organization of distributors that continuously met its
revenue goals. Mr. Berger has a Bachelor of Science in Electrical Engineering
from the University of Miami.

                                       21
<PAGE>

         ROBERT MARCUS joined Intraco in January 1999 as chief financial
officer, secretary and treasurer. Prior to that, Mr. Marcus was employed at
Robert Marcus Associates providing financial consulting services to various
entities, from July 1998 to January 1999. From June 1997 to July 1998, Mr.
Marcus was a founder and partner in American Imprints, LLC, an advertising
specialty company. From July 1996 to June 1997, Mr. Marcus operated Professional
Processing Services, a sole proprietorship providing computer services to small
businesses. Prior to that, he served as chief executive officer of In-Store
Opportunities, Inc., a marketing and display company serving major food
manufacturers, from March 1991 to March 1996. While there he raised $8 million
in investment capital, and built a nationwide network of field representatives.
As chief operating officer of Pioneer Communications Network, a publicly traded
publishing company, Mr. Marcus managed the company's initial public offering. He
also worked in various positions for the information resources group of Xerox
Corporation from 1972 to 1985, including manager of financial planning and
analysis, assistant controller, and manager of business development, where he
was responsible for mergers and acquisitions. During this time, Mr. Marcus was
instrumental in completing the acquisition of the microfilm business of The New
York Times. He was also a member of the turnaround team that brought two of
Xerox's information group companies to profitability. Mr. Marcus earned a
Bachelor of Science from C.W. Post College and a Masters of Business
Administration from the University of Connecticut.

         ROBERT HILDRETH, JR. is the Chairman of the Board of Directors and was
the first member of Intraco's Board of Advisors formed in May 1998. Mr. Hildreth
brings a broad scope of experience to Intraco, with more than 30 years in the
domestic and international financial community. He is currently president of
Hildreth Associates, a consulting firm, and has served in that capacity since
1994. He was formerly the International Director of the law firm of LeBouef,
Lamb, Leiby & McRae, a Senior Utility Advisor to Goldman Sachs & Co., a Managing
Director of Investment Banking for Merrill Lynch, and a Director of Merrill
Lynch International Bank in London. Mr. Hildreth is also a director of
MerchantOnline.com, Inc., a provider of e-commerce services to merchants.

         WILLIAM D. HAGER was elected a director in March 2000,. He has been on
Intraco's Board of Advisors since its inception in 1998. He has been a principal
with Risk Metrics Corporation since 1998. Risk Metrics gathers and sells public
data to businesses. From 1990 to 1997, he was the president and chief executive
officer of NCCI, the nation's largest workers' compensation and health care
informatics corporation. During his service with NCCI, it employed 1,000 people
in 15 national offices and generated annual revenues approaching $150 million.
He is currently chairman of the board and chief executive officer of Cenetec
LLC, a technology accelerator located in Boca Raton, Florida.

         BENJAMIN W. KRIEGER was elected a director in March 2000,. He has been
on Intraco's Board of Advisors since its inception in 1998. Since 1990, he has
been a partner in Corporate Development International, which specializes in
identifying potential merger and acquisition opportunities for its business
clients. He specializes in the pulp and paper, packaging, graphic arts and
distribution industries. From 1983 to 1990, he was president and chief executive
officer of Ris Paper Company, a private paper distribution company with 26
distribution centers and annual sales of approximately $500 million.

         Intraco's directors hold their positions until the next annual meeting
of shareholders and until their successors have been duly elected and qualified.
During 2000, the Board of Directors established an audit committee, whose
members currently are William Hager and Benjamin Krieger. Our non-employee
directors receive compensation in the form of stock options upon appointment and
reimbursement of expenses incurred while attending Board of Directors' meetings.

         Our officers hold office until the first meeting of the Board of
Directors following the annual meeting of our shareholders and until their
successors have been chosen and qualified, subject to early removal by the Board
of Directors.

                                       22
<PAGE>

SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE

         To the Company's knowledge, based solely on a review of the copies of
the reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 2000, the
directors and executive officers of the Company complied with all applicable
filing requirements of section 16(a) of the Securities Exchange Act of 1934.


ITEM 10. COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY COMPENSATION TABLE

         The following table summarizes all compensation awarded to, earned by,
or paid for services rendered in each of the last three fiscal years to the
chief executive officer, president and chief financial officer (who are referred
to collectively as the "named executive officers"). Mr. Nawrocki and Mr. Marcus
each joined Intraco during 1999. No other executive officer earned total salary
and bonus in excess of $100,000 during the last three fiscal years.
<TABLE>
<CAPTION>

                                       Annual Compensation                    Long-Term Compensation
                        ------------------------------------------------   --------------------------
                                                                           Securities
                                                        Other              Underlying    All Other
Name and                                                Annual             Options       Compensation
Principal Position      Year   Salary ($)   Bonus ($)   Compensation ($)   (#)           ($)
--------------------    ----   ----------   ---------   ----------------   -----------   ------------

<S>                     <C>    <C>              <C>         <C>              <C>            <C>
Walt Nawrocki,          2000   $175,000         0           $11,340                  0      $3,960
Chief Executive         1999   $ 36,058         0                 0          4,000,000           0
Officer

Jack Berger,            2000   $160,000         0           $10,073                  0      $1,173
President               1999   $137,800         0                 0                  0           0
                        1998   $137,000         0                 0                  0           0

Robert Marcus,          2000   $145,000         0                 0                  0           0
Chief Financial         1999   $ 90,522         0                 0          2,000,000           0
Officer
</TABLE>


         The amounts shown in the table above for Mr. Nawrocki and Mr. Berger
under "Other Annual Compensation" reflect car allowances and under "All Other
Compensation" reflect premiums for term life insurance policies paid on their
behalf.


KEY PERSONNEL AND EMPLOYMENT AGREEMENTS

         Intraco entered into a three-year employment agreement with Jack S.
Berger, effective as of January 1, 1998, and amended effective January 1, 2000,
pursuant to which he serves as Intraco's president. The agreement now expires
December 31, 2002. The agreement provides for an annual salary of $160,000, with
base salary adjustments at the end of each year of employment at the discretion
of the Board of Directors.

         The agreement also provides that Mr. Berger's employment may be
terminated at Intraco's discretion at any time prior to December 31, 2002,
provided that Intraco shall pay Mr. Berger an amount equal to payment at his
base salary rate from the date of termination through December 31, 2002, plus an
amount equal to 50% of his base salary. In the event of such termination, Mr.
Berger is not entitled to any incentive salary payment or any other compensation
then in effect, prorated or otherwise. At its discretion, Intraco may also

                                       23
<PAGE>

terminate Mr. Berger any time after the initial term, provided that in such case
Mr. Berger shall be paid 50% of his then-applicable base salary. In the event of
such termination, Mr. Berger shall not be entitled to receive any incentive
salary payment or any other compensation then in effect, prorated or otherwise.

         In the event that Mr. Berger is in breach of any material obligation
owed to Intraco, habitually neglects the duties to be performed by him under the
agreement, engages in any conduct that is dishonest, damages the reputation or
standing of Intraco, or is convicted of any criminal act or engages in any act
of moral turpitude, then Intraco may terminate the agreement upon five days'
notice to Mr. Berger. In the event of such termination, Mr. Berger shall be paid
only at the then-applicable base salary rate up to and including the date of
termination, and shall not be paid any incentive salary payments or other
compensation, prorated or otherwise.

         Intraco entered into a three-year employment agreement with Walt
Nawrocki, effective as of September 24, 1999 and amended effective January 1,
2000, pursuant to which he serves as Intraco's chief executive officer. The
agreement provides for an annual salary of $175,000, with base salary
adjustments at the end of each year of employment at the discretion of the Board
of Directors. The agreement otherwise has similar terms to Mr. Berger's
agreement.

         Intraco entered into a three-year employment agreement with Robert
Marcus, effective as of January 18, 1999, as amended in September and December
1999, pursuant to which he serves as Intraco's chief financial officer. The
agreement provides for a base salary of $145,000 commencing in January 2000.
Further increases in base salary will be at the discretion of the Board of
Directors.

         Intraco's success is dependent on the services of Walt Nawrocki, the
chief executive officer, and Jack Berger, the president, both of whom have
significant experience in information, data and voice services and who developed
the change in the business plan to begin offering these services. The loss of
the services of Mr. Nawrocki, Mr. Berger or other key personnel could have a
material adverse effect on the business. Intraco has entered into employment
agreements with certain key personnel, including Mr. Nawrocki and Mr. Berger.
Intraco does not, however, currently maintain key man life insurance policies
for any of its officers or other personnel.


STOCK OPTION PLAN

         Intraco has adopted a stock option plan to attract and induce officers,
directors and key employees of Intraco to remain with Intraco. The plan provides
for the grant of options that qualify as incentive stock options under Section
422(a) of the Internal Revenue Code of 1986, as amended, and nonstatutory
options. The stock option plan was approved in 1998 and amended in January 2001
to increase the number of shares available for grant to 20,000,000.

         As of February 28, 2001, options to purchase an aggregate of 16,644,799
shares of common stock were outstanding under the plan with exercise prices of
$0.19 to $4.87. These options vest immediately or over a two to three year
period and expire from two years to 10 years from the date of grant. In 1999,
options to purchase an aggregate of 6,789,800 shares were granted, including
4,000,000 to Mr. Nawrocki and 2,000,000 to Mr. Marcus. In 2000, no options were
granted to and no options were exercised by the named executive officers. In
January 2001, options to purchase an aggregate of 7,305,000 shares were granted,
including 2,000,000 shares to each of the named executive officers.

         The Board may terminate the plan or may amend the plan as it may deem
advisable. The Board may unilaterally amend the plan and incentive awards as it
deems appropriate to ensure compliance with Rule 16b-3 and to cause incentive
awards to meet the requirements of the Internal Revenue Code and the regulations
thereunder.

                                       24
<PAGE>

         All present and future employees of Intraco or of any parent or
subsidiary of Intraco and any consultant retained to provide services to
Intraco, and who is selected by the committee to be eligible to receive
incentive awards under the plan, are entitled to receive options under the plan.

         All present and future non-employee directors are eligible to receive
nonstatutory options under the plan. Non-employee directors shall not be
entitled to receive any other form of incentive award under the plan.

         The exercise price of shares of common stock covered by an incentive
stock option cannot be less than 100% of the fair market value of such shares on
the date of grant; provided that if an incentive stock option is granted to an
employee who, at the time of the grant, is a 10% shareholder, then the exercise
price of the shares covered by the incentive stock option will not be less than
110% of the fair market value of such shares on the date of grant. The exercise
price of nonstatutory stock options will not be less than 85% of fair market
value of such shares on the date of grant.


     STOCK OPTIONS HELD BY OUR NAMED EXECUTIVE OFFICERS OF AS DECEMBER 31, 2000.

         The following table indicates the total number and value of exercisable
and unexercisable stock options held by named executive officers as of December
31, 2000. During the year ended December 31, 2000, the named executive officers
did not exercise any stock options.
<TABLE>
<CAPTION>

                                                                     Value of Unexercised
                       Number of Unexercised Securities              In-the-Money Options
                       Underlying Options at Fiscal Year End         at Fiscal Year End
                       ------------------------------------------    ---------------------------------------
Name                   Exercisable           Unexercisable           Exercisable           Unexercisable
-------------------    ------------------    --------------------    ------------------    -----------------
<S>                    <C>                   <C>                     <C>                   <C>
Walt Nawrocki          3,000,000             1,000,000               $        0            $        0
Jack S. Berger                 0                     0               $        0            $        0
Robert Marcus          1,750,000               250,000               $        0            $        0
</TABLE>


         The value of the unexercised in-the-money options is based on the
closing bid price of $0.22 on December 29, 2000.

         On January 12, 2001, Intraco's Board of Directors granted options to
purchase 2,000,000 shares of common stock to each of the name executive
officers. The options are exercisable immediately at $0.21 per share for Mr.
Berger, which was 110% of the closing price on the OTC Bulletin Board of
Intraco's common stock on the date of grant, and $0.19 per share for Mr Nawrocki
and Mr. Marcus, which was the closing price on the date of grant. The options
expire 10 years from the date of grant. If the options granted in January 2001
are included in the table above, the value of the unexercised in-the-money
options held by the named executive officers, based on the closing price of
Intraco's common stock on February 28, 2001, would total $494,000 each for Mr.
Nawrocki and Mr. Marcus and $454,000 for Mr. Berger.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following tables sets forth, as of February 28, 2001, certain
information with respect to common stock, Series A Convertible Redeemable
Preferred Stock and Series B Convertible Redeemable Preferred Stock owned of
record or beneficially by (i) each shareholder who we know is the beneficial

                                       25
<PAGE>

owner of more than of 5% of the outstanding shares of our common stock, Series A
Convertible Redeemable Preferred Stock, or Series B Convertible Redeemable
Preferred Stock; (ii) each director and executive officer; and (iii) all
directors and executive officers as a group. Each shareholder listed below has
sole voting and investment power. Unless otherwise indicated, the address of
each of the persons named below is 3998 FAU Boulevard, Suite 210, Boca Raton,
Florida 33431. As of February 28, 2001, a total of 17,501,550 shares of common
stock, 391,500 shares of Series A Convertible Redeemable Preferred Stock and
872,100 shares of Series B Convertible Redeemable Preferred Stock are issued and
outstanding. The shares of Series A Convertible Redeemable Preferred Stock and
Series B Convertible Redeemable Preferred Stock are convertible into a like
number of shares of common stock.

         In accordance with the SEC rules, shares that are not outstanding but
that are issuable upon the exercise of immediately exercisable options,
warrants, rights or conversion privileges have been included for the purpose of
computing the percentage of outstanding shares owned by the individual owning
the convertible security or right, but not when computing the percentage for any
other person. The number of shares reflected as owned by each of Messrs. Berger,
Nawrocki, Marcus, Hildreth, Hager and Krieger include 2,000,0000, 5,000,000,
3,750,000, 145,000, 36,667 and 36,667 shares of common stock issuable upon
exercise of options, respectively. In addition, Mr. Hildreth's holdings also
include 20,400 shares issuable upon conversion of preferred stock.
<TABLE>
<CAPTION>

         COMMON STOCK

                                                AMOUNT AND NATURE OF BENEFICIAL         PERCENT OF COMMON STOCK
         NAME AND ADDRESS                          OWNERSHIP OF COMMON STOCK               BENEFICIALLY OWNED
------------------------------------------    ------------------------------------     ---------------------------
<S>                                                       <C>                                     <C>
Jack S. Berger                                            10,109,000                              51.8%
Walt Nawrocki                                              5,000,000                              22.2
Robert Marcus                                              3,750,000                              17.6
Robert Hildreth, Jr.                                         185,400                               1.0
William D. Hager                                             136,667                                *
Benjamin W. Krieger                                           56,667                                *
All executive officers and directors
as a group (six persons)                                  19,237,734                              67.5

---------------------------------
      *Less than 1%
</TABLE>

         Messrs. Berger and Nawrocki have entered into a voting agreement with
respect to the shares they each beneficially own. The agreement provides that
each of Messrs. Berger and Nawrocki will grant the other an irrevocable proxy
for the voting of 50% of the shares of common stock owned by both of them. In
addition, they each agreed to vote their shares for their respective election to
the Board of Directors. The agreement will terminate at any time upon the
earlier of (i) the sale or merger of the company; (ii) the resignation of either
party as an officer or director; or (iii) January 31, 2003.

                                       26
<PAGE>
<TABLE>
<CAPTION>

           SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK

                                                                                             PERCENT OF SERIES A
                                                   AMOUNT AND NATURE OF BENEFICIAL          CONVERTIBLE REDEEMABLE
                                                  OWNERSHIP OF SERIES A CONVERTIBLE            PREFERRED STOCK
           NAME AND ADDRESS                          REDEEMABLE PREFERRED STOCK               BENEFICIALLY OWNED
---------------------------------------------    ------------------------------------    ----------------------------

<S>                                                             <C>                                   <C>
Peter Georg Studer, Sole Director                               100,000                               25.5%
   Alpenstein Holding AG
  Berkenstrasse 49
  Rotkreuz, SZ
Mario Franchi                                                    50,000                               12.8
  Sitel Corporation
  No. 15 Andar No. 3, Floor 1050
  Lisbon, Portugal
Rolf Frommel                                                     50,000                               12.8
  P.O. Box 53
  Taby, SW  18321
Osakeyhtio & Jukka Hallman                                       20,000                                5.1
  Haapaniemenkatu 28 KRS
  Kuspio, FI  70111
All executive officers and directors as a                             0                                  0
group (six persons)


           SERIES B CONVERTIBLE REDEEMABLE PREFERRED STOCK

                                                                                             PERCENT OF SERIES A
                                                   AMOUNT AND NATURE OF BENEFICIAL          CONVERTIBLE REDEEMABLE
                                                  OWNERSHIP OF SERIES A CONVERTIBLE            PREFERRED STOCK
           NAME AND ADDRESS                          REDEEMABLE PREFERRED STOCK               BENEFICIALLY OWNED
---------------------------------------------    ------------------------------------    ----------------------------
Peter Georg Studer, Sole Director                               401,200                               46.0%
   Alpenstein Holding AG
  Berkenstrasse 49
  Rotkreuz, SZ
Robert Hildreth, Jr.                                             20,400                                2.3
Song Lin                                                        100,300                               11.5
  4251 Coral Hills Drive
  Coral Springs, FL  33065
Richard A. Persson TTEE                                         401,200                               46.0
  Richard A. Persson Declaration
  625 Prestwick Drive
  Frankfort, IL  60423
All executive officers and directors as a                        20,400                                2.3
group (six persons)
</TABLE>

                                       27
<PAGE>

ITEM 12. CERTAIN TRANSACTIONS

         From time to time, Intraco has loaned funds and sold products to
Intraco Systems Pty., Ltd., an Australian corporation that is indirectly
controlled by Jack S. Berger, Intraco's president. Mr. Berger is a majority
stockholder in Intraco International, Inc., the corporation that owns a majority
interest in Intraco Systems Pty. In 1998, Intraco sold products to Intraco
Systems Pty. valued at $235,255 and received cash payments of $199,126. The
balance remaining due to Intraco for those products, together with the balance
due from the prior year's sales, totaled $169,539, of which $123,059 was
converted into a note receivable bearing interest at 6% per annum and payable in
36 monthly installments, with the balance of $46,480 being paid in 1999. In
1999, the note receivable was paid down by $74, 963 and the remaining balance of
$48,096 was determined to be uncollectible

         In May 1997, Intraco entered into a consulting agreement with Vestar
Capital Corporation pursuant to which Vestar provides organizational and
strategic planning services. Vestar assisted Intraco with an internal
reorganization in 1998 and assisted in the identification of potential
acquisitions. The compensation under this agreement provided for monthly fees of
$3,000 through February 1998, and $1,650 per week thereafter. Vestar received
891,000 restricted shares of Intraco common stock from the principal shareholder
of Intraco on behalf of Intraco, which represented 9.9% of the then outstanding
shares, and had the right to be issued warrants to maintain its 9.9% interest in
Intraco despite any further issuances of capital stock until May 2000, pursuant
to an anti-dilution provision in its consulting agreement. During November 1998,
Intraco issued to Vestar warrants to purchase 150,000 shares of common stock at
$0.25 per share in exchange for the cancellation of the anti-dilution clause of
its consulting agreement. The consulting agreement with Vestar was terminated
February 1, 2000.

         In April 1999, Intraco completed a share exchange with Custom Touch, a
Nevada corporation with no material operations whose common stock traded on the
OTC Bulletin Board. Under the share exchange agreement, all outstanding shares
of Intraco capital stock were exchanged for 10,531,500 Custom Touch shares,
which represented 81% of the total Custom Touch shares outstanding at the time
of the exchange. Upon the completion of the exchange, the prior shareholders and
promoters of Custom Touch held 2,429,489 shares and the Intraco shareholders
held 10,531,500 shares. Thereafter, Custom Touch changed its name to Intraco
Systems, Inc. A total of 1,487,298 shares were issued to Jensen Services and
Associates for services associated with the share exchange.

         In March 2000, Jack S. Berger and Walt Nawrocki entered into a voting
agreement pursuant to which they agreed to share equally in voting the shares
owned by each of them. Each also agreed to vote all of the shares of Intraco
securities to which he is entitled to vote in favor of the other person in the
election of Intraco directors and to not take any action, directly or
indirectly, that will assist, facilitate, encourage or solicit another party in
the removal of the other from Intraco board or from their current positions as
executive officers of Intraco.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits:

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

2.1                    Exchange Agreement dated April 9, 1999, between Intraco
                       Systems, Inc., and Custom Touch Electronics, Inc (1)

3.1                    Amended and Restated Certificate of Incorporation (1)

3.2                    Bylaws (1)

                                       28
<PAGE>

3.3                    Certificate of Correction (2)

3.4                    Certificate of Designation of Preferences, Rights and
                       Limitations of Series A Convertible Redeemable Preferred
                       Stock (2)

3.5                    Certificate of Designation of Preferences, Rights and
                       Limitations of Series B Convertible Redeemable Preferred
                       Stock (3)

4.1                    Form of Non-Callable A Warrants (3)

4.2                    Form of Callable B Warrants (3)

4.3                    Form of Callable C Warrants (3)

9.1                    Voting Trust Agreement dated February 1, 2000, between
                       Jack S. Berger and Walt Nawrocki (4)

10.1                   Stock Option Plan, as amended (5)

10.2                   Employment Agreement dated January 1, 1998 between
                       Intraco and Jack S. Berger (1)

10.3                   Amendment to Employment Agreement effective January 1,
                       2000, between Intraco and Jack S. Berger (2)

10.4                   Employment Agreement dated January 18, 1999 between
                       Intraco and Robert Marcus (1)

10.5                   Amendment to Employment Agreement effective January 1,
                       2000, between Intraco and Robert Marcus (4)

10.6                   Employment Agreement dated September 24, 1999 between
                       Intraco and Walt Nawrocki (4)

10.7                   Motorola Software License Agreement dated January 18,
                       2000, by and between Intraco and Motorola (5)

10.8                   Software License and Support Agreement between Nuance
                       Communications and Intraco (6)

10.9                   Microsoft Certified Solution Provider Agreement by and
                       between Intraco and Microsoft Corporation (6)

10.10                  Voice Enabled Customer Service Application Agreement (6)

23.1                   Consent of Daskal, Bolton, Manela, Devlin & Co.

(1)      Incorporated by reference to the Registrant's Registration Statement on
         Form 10-SB filed on August 18, 1999.
(2)      Incorporated by reference from Registrant's Amendment No.2 to the
         Registration Statement on Form SB-2, File No. 333-44268.
(3)      Incorporated by reference from Registrant's Amendment No.3 to the
         Registration Statement on Form SB-2, File No. 333-44268.
(4)      Incorporated by reference from the Registrant's Annual Report on Form
         10-KSB for the year ended December 31, 1999, as originally filed.
(5)      Incorporated by reference from the Registrant's Amendment No.1 to the
         Registration Statement on Form SB-2, File No. 333-44268.

                                       29
<PAGE>

(6)      Incorporated by reference from Registrant's Amendment No. 4 to the
         Registration Statement on Form SB-2, File No. 333-44268. (b) Intraco
         did not file any Reports on Form 8-K during the fourth quarter of the
         year ended December 31, 2000.

                                       30
<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant has caused the Annual Report on Form 10-KSB to be signed
on its behalf by the undersigned, thereunto duly authorized.


                                   INTRACO SYSTEMS, INC.

Date March 28, 2001                By: /s/ WALT NAWROCKI
                                       -------------------------------------
                                       Chief Executive Officer and Director
                                       (Principal Executive Officer)


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

       SIGNATURE                          TITLE                        DATE
---------------------------    ------------------------------    ---------------


/s/ JACK S. BERGER                President and Director          March 28, 2001
---------------------------
Jack S. Berger

                                  Chief Executive Officer         March 28, 2001
                                        and Director
/s/ WALT NAWROCKI              (Principal executive officer)
---------------------------
Walt Nawrocki

                              Chief Financial Officer, Secretary  March 28, 2001
                                       and Treasurer
                                 (Principal financial and
/s/ ROBERT MARCUS                   accounting officer)
---------------------------
Robert Marcus


/s/ ROBERT HILDRETH, JR.           Chairman of the Board          March 28, 2001
---------------------------
Robert Hildreth, Jr.


/s/ WILLIAM D. HAGER                     Director                 March 28, 2001
---------------------------
William D. Hager


/s/ BENJAMIN W. KRIEGER                  Director                 March 28, 2001
---------------------------
Benjamin W. Krieger

                                       31
<PAGE>

                                   APPENDIX A


                              INTRACO SYSTEMS, INC.

                              FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999


<PAGE>

                                TABLE OF CONTENTS



Independent Auditor's Report...................................................2

Financial Statements:

         Balance Sheets......................................................3-4

         Statements of Operations .............................................5

         Statements of Changes in Stockholders' Equity (Deficit).............6-7

         Statements of Cash Flows............................................8-9

Notes to Financial Statements..............................................10-18

                                       1
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
Intraco Systems, Inc.

We have audited the accompanying balance sheets of Intraco Systems, Inc., as of
December 31, 2000 and 1999, the related statements of operations, changes in
stockholders' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statements based on our
audits.

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

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

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 14 to the
financial statements, the Company has experienced substantial losses from
operations since its inception as well as negative cash flows from operations.
These matters raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans in regard to these matters are also
described in Note 14. The accompanying financial statements do not include any
adjustments relating to the recoverability and classification of recorded assets
or the amounts and classification of liabilities that might result from the
resolution of these uncertainties.



Boca Raton, Florida
February 26, 2001

                                       2
<PAGE>

INTRACO SYSTEMS, INC.
BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
================================================================================

                                     ASSETS
<TABLE>
<CAPTION>

                                                                   2000         1999
                                                                ----------   ----------
Current assets:
<S>                                                             <C>          <C>
   Cash                                                         $  619,340   $  151,725
   Accounts receivable, net of allowance of $2,516 and $6,639      516,054      535,422
   Inventory                                                            --       16,678
   Prepaid expenses                                                 79,812       86,395
                                                                ----------   ----------
               Total current assets                              1,215,206      790,220
                                                                ----------   ----------

Property and equipment, net                                        989,870      233,914
                                                                ----------   ----------

Other assets:
   Goodwill, net of amortization of $8,391 and $1,125               75,519       82,785
   License agreement, net                                           12,500           --
   Deposits                                                         16,642       15,064
                                                                ----------   ----------
               Total other assets                                  104,661       97,849
                                                                ----------   ----------

               Total assets                                     $2,309,737   $1,121,983
                                                                ==========   ==========
</TABLE>

(CONTINUED ON NEXT PAGE)


      See accompanying notes to financial statements and auditor's report.

                                       3
<PAGE>

INTRACO SYSTEMS, INC.
BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
================================================================================

(CONTINUED FROM PREVIOUS PAGE)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>

                                                                             2000           1999
                                                                         -----------    -----------
<S>                                                                      <C>            <C>
Current liabilities:
   Accounts payable                                                      $   857,770    $   975,620
   Deferred revenue                                                          107,406        165,494
   Accrued expenses                                                          271,935         47,530
   Customer deposits                                                          11,127          3,900
   Capital lease payable                                                      10,008          9,314
   Stock issuance cost payable                                               254,840             --
   Note payable                                                                   --        126,065
                                                                         -----------    -----------
               Total current liabilities                                   1,513,086      1,327,923
                                                                         -----------    -----------

Capital lease payable                                                         21,315         31,323

Stockholders' equity (deficit):
   Series A  convertible redeemable preferred stock, $.001 par value,
     2,500,000 shares authorized and 396,500 and 767,500 shares issued
     and outstanding                                                             397            768
   Series B  convertible redeemable preferred stock, $.001 par value,
     1,700,000 shares authorized and 872,100 and 989,400 shares issued
     and outstanding                                                             872            989
   Common stock, $.001 par value, 100,000,000 shares
     authorized, 17,496,550 and 13,020,989 shares issued
     and outstanding                                                          17,497         13,021
Subscriptions receivable                                                          --       (446,300)
Additional paid-in capital                                                 7,293,231      2,251,561
Outstanding stock warrants                                                    27,000         27,000
Accumulated deficit                                                       (6,563,661)    (2,084,302)
                                                                         -----------    -----------
               Total stockholders' equity (deficit)                          775,336       (237,263)
                                                                         -----------    -----------

               Total liabilities and stockholders' equity (deficit)      $ 2,309,737    $ 1,121,983
                                                                         ===========    ===========
</TABLE>

      See accompanying notes to financial statements and auditor's report.

                                        4

<PAGE>

INTRACO SYSTEMS, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2000 AND 1999
================================================================================

<TABLE>
<CAPTION>

                                                                     2000            1999
                                                                 ------------    ------------
<S>                                                              <C>             <C>
Revenues                                                         $  5,097,681    $  2,929,967

Cost of revenues                                                    4,231,251       2,165,581
                                                                 ------------    ------------

Gross profit                                                          866,430         764,386

General and administrative                                          5,440,387       2,197,492
                                                                 ------------    ------------

(Loss) from operations                                             (4,573,957)     (1,433,106)

Interest income                                                        94,827          32,195

Interest expense                                                      (14,906)        (40,401)

Other income                                                           14,677           2,417
                                                                 ------------    ------------

Net (loss)                                                       $ (4,479,359)   $ (1,438,895)
                                                                 ============    ============


Net loss per share (basic & diluted)                             $      (0.27)   $      (0.12)
                                                                 ============    ============

Weighted average number of shares outstanding and to be issued     16,418,137      12,067,309
                                                                 ============    ============
</TABLE>

      See accompanying notes to financial statements and auditor's report.

                                        5

<PAGE>

INTRACO SYSTEMS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 2000 AND 1999
================================================================================

<TABLE>
<CAPTION>
                                                      Preferred Stock A           Preferred Stock B             Common Stock
                                                  -------------------------   -------------------------   -------------------------
                                                    Shares        Amount        Shares        Amount        Shares        Amount
                                                  -----------   -----------   -----------   -----------   -----------   -----------
<S>                                                   <C>       <C>               <C>       <C>            <C>          <C>
Balance at December 31, 1998                           52,600            53            --            --     9,665,200         9,665

Issuance of preferred stock for cash - Series A       714,900           715            --            --            --            --

Issuance of preferred stock for cash - Series B            --            --       989,400           989            --            --

Warrants                                                   --            --            --            --            --            --

Costs associated with issuance of stock                    --            --            --            --            --            --

Issuance of common stock                                   --            --            --            --       866,300           866

Acquisition of CTE assets                                  --            --            --            --     2,429,489         2,430

Costs associated with recapitalization                     --            --            --            --            --            --

Issuance of common stock for acquisition                   --            --            --            --        60,000            60

Dividends paid                                             --            --            --            --            --            --

Subscriptions receivable                                   --            --            --            --            --            --

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

Balance at December 31, 1999                          767,500   $       768       989,400   $       989    13,020,989   $    13,021
                                                  -----------   -----------   -----------   -----------   -----------   -----------
</TABLE>
<TABLE>
<CAPTION>
                                                                  Additional    Outstanding
                                                 Subscriptions     Paid-in         Stock      Accumulated
                                                  Receivable       Capital        Options       Deficit         Total
                                                  -----------    -----------    -----------   -----------    -----------
<S>                                               <C>            <C>            <C>           <C>            <C>
Balance at December 31, 1998                               --        131,797             --      (645,407)      (503,892)

Issuance of preferred stock for cash - Series A            --        714,286             --            --        715,001

Issuance of preferred stock for cash - Series B            --        988,011             --            --        989,000

Warrants                                                   --             --         27,000        27,000

Costs associated with issuance of stock                    --       (244,848)            --            --       (244,848)

Issuance of common stock                                   --        865,434             --            --        866,300

Acquisition of CTE assets                                  --         (1,425)            --            --          1,005

Costs associated with recapitalization                     --       (283,151)            --            --       (283,151)

Issuance of common stock for acquisition                   --         89,940             --            --         90,000

Dividends paid                                             --         (8,483)            --            --         (8,483)

Subscriptions receivable                             (446,300)            --             --            --       (446,300)

Net loss for the year                                      --             --             --    (1,438,895)    (1,438,895)
                                                  -----------    -----------    -----------   -----------    -----------

Balance at December 31, 1999                      $  (446,300)   $ 2,251,561    $    27,000   $(2,084,302)   $  (237,263)
                                                  -----------    -----------    -----------   -----------    -----------
</TABLE>

(continued on next page)


      See accompanying notes to financial statements and auditor's report.

                                        6

<PAGE>

INTRACO SYSTEMS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 2000 AND 1999
================================================================================

(continued from previous page)
<TABLE>
<CAPTION>
                                                    Preferred Stock A            Preferred Stock B               Common Stock
                                                --------------------------   --------------------------   -------------------------
                                                  Shares         Amount        Shares         Amount        Shares         Amount
                                                -----------    -----------   -----------    -----------   -----------   -----------
<S>                                                 <C>        <C>               <C>        <C>            <C>          <C>
Conversion of preferred stock to common stock      (371,000)          (371)     (117,300)          (117)      488,300           488

Issuance of common stock                                 --             --            --             --     3,830,146         3,831

Issuance of common stock for services                    --             --            --             --        62,000            62

Exercise of options                                      --             --            --             --        95,115            95

Costs associated with issuance of stock                  --             --            --             --            --            --

Dividends paid                                           --             --            --             --            --            --

Receipt of stock subscription                            --             --            --             --            --            --

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

Balance at December 31, 2000                        396,500    $       397       872,100    $       872    17,496,550   $    17,497
                                                -----------    -----------   -----------    -----------   -----------   -----------


                                                               Additional     Outstanding
                                                Subscriptions    Paid-in         Stock      Accumulated
                                                 Receivable      Capital        Options       Deficit         Total
                                                 -----------   -----------    -----------   -----------    -----------
Conversion of preferred stock to common stock             --            --             --            --             --

Issuance of common stock                                  --     5,408,365             --            --      5,412,196

Issuance of common stock for services                     --       109,026             --            --        109,088

Exercise of options                                       --           (95)            --            --             --

Costs associated with issuance of stock                   --      (448,542)            --            --       (448,542)

Dividends paid                                            --       (27,084)            --            --        (27,084)

Receipt of stock subscription                        446,300            --             --            --        446,300

Net loss for the year                                     --            --             --    (4,479,359)    (4,479,359)
                                                 -----------   -----------    -----------   -----------    -----------

Balance at December 31, 2000                     $        --   $ 7,293,231    $    27,000   $(6,563,661)   $   775,336
                                                 -----------   -----------    -----------   -----------    -----------
</TABLE>


      See accompanying notes to financial statements and auditor's report.

                                        7

<PAGE>

INTRACO SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000 AND 1999
================================================================================

<TABLE>
<CAPTION>

                                                               2000           1999
                                                            -----------    -----------
<S>                                                         <C>            <C>
Cash flows from operating activities:
      Net (loss)                                            $(4,479,359)   $(1,438,895)
      Adjustments to reconcile net loss to net cash
        provided (used) by operating activities:
            Depreciation and amortization                       218,118         72,331
            Issuance of common stock for services               109,088             --
            Warrants                                                 --         27,000
            Allowance for note receivable - related party            --         48,096
            Changes in assets and liabilities:
      (Increase) decrease in:
            Inventory                                            16,678         49,162
            Accounts receivable                                  19,368       (485,522)
            Prepaid expenses                                      6,583         39,549
            Due from related parties                                 --         46,480
            Security deposits                                    (1,578)        (1,245)
      Increase (decrease) in:
            Accounts payable                                   (117,850)       643,144
            Deferred revenue                                    (58,088)        13,320
            Customer deposits                                     7,227       (168,295)
            Accrued expenses                                    224,405         50,332
                                                            -----------    -----------
Net cash (used) by operating activities                      (4,055,408)    (1,104,543)
                                                            -----------    -----------

Cash flows from investing activities:
      Purchase of property and equipment                       (929,308)      (145,316)
      Purchase of license agreement                             (50,000)            --
                                                            -----------    -----------
Net cash (used) by investing activities                        (979,308)      (145,316)
                                                            -----------    -----------

Cash flows from financing activities:
      Proceeds from issuance of stock, net                    5,664,794      1,579,006
      Proceeds from capital lease                                    --          9,363
      Repayment of capital lease                                 (9,314)        (9,363)
      Proceeds from note receivable - related party                  --         74,963
      Dividends paid                                            (27,084)        (8,483)
      Repayment of long-term debt                              (126,065)      (294,147)
                                                            -----------    -----------
Net cash provided  by financing activities                    5,502,331      1,351,339
                                                            -----------    -----------

Net increase in cash                                            467,615        101,480

Cash, beginning of year                                         151,725         32,245
                                                            -----------    -----------

Cash, end of year                                           $   619,340    $   151,725
                                                            ===========    ===========
</TABLE>


      See accompanying notes to financial statements and auditor's report.

                                        8
<PAGE>

INTRACO SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000 AND 1999
================================================================================

(CONTINUED FROM PREVIOUS PAGE)
<TABLE>
<CAPTION>

                                                                       2000          1999
                                                                   -----------   -----------
<S>                                                                <C>           <C>
Supplemental disclosure of cash flow information:
       Cash paid during the year for interest                      $    14,906   $    40,401
                                                                   ===========   ===========

Non-cash transactions affecting financing activities:
       Common stock issued for note                                $        --   $   446,300
                                                                   ===========   ===========
       Issuance of common stock for acquisition                    $        --   $    90,000
                                                                   ===========   ===========
       Assets acquired under capital lease                         $        --   $    50,000
                                                                   ===========   ===========
       Unpaid costs associated with the issuance of common stock   $   254,840   $        --
                                                                   ===========   ===========
</TABLE>

      See accompanying notes to financial statements and auditor's report.

                                        9
<PAGE>

INTRACO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Intraco Systems, Inc. (the "Company") was incorporated in Florida in March 1990.
In April 1999, Custom Touch Electronics ("CTE"), a public shell, acquired all of
the outstanding common stock of the Company. For accounting purposes, the
acquisition has been treated as an acquisition of CTE by the Company and as a
re-capitalization of the Company. As a result of the re-capitalization, the
Company is now a Nevada corporation. Intraco is an information technology, data
and voice service provider offering comprehensive commercial services that will
enable customers to eliminate or replace all on-site telephone, data systems and
server applications. Intraco's targeted customers include small and mid-size
businesses such as websites/e-commerce companies and larger businesses such as
telecommunications companies. Intraco's services will voice-enable a wide range
of applications such as websites, e-commerce, auctioning, paging, e-mail and
unified messaging.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH EQUIVALENTS

The Company considers all highly-liquid debt instruments with original
maturities of three months or less to be cash equivalents.


PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost and is depreciated using the
straight-line method over their estimated useful lives.


ADVERTISING COSTS

Advertising costs, which are principally included in general and administrative
expenses, are expensed as incurred. Advertising expense was $55,170 and $16,231
for the years ended December 31, 2000 and 1999, respectively.


USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.


REVENUE RECOGNITION

Generally, revenues from sales of products are recognized when products are
shipped unless the Company has obligations remaining under sales or licensing
agreements, in which case revenue is either deferred until all obligations are
satisfied or recognized ratably over the term of the contract. Revenues from
sales of maintenance contracts in 2000 and 1999 were $377,823 and $379,728,
respectively.


INVENTORY

Inventory consists primarily of computer equipment purchased for resale, and is
stated at the lower of cost or market, with cost determined on the first-in,
first-out (FIFO) method.

                                       10
<PAGE>
INTRACO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

AMORTIZATION OF GOODWILL

Goodwill represents the amount by which the purchase price of a business
acquired exceeds the fair market value of the net assets acquired under the
purchase method of accounting. Goodwill is being amortized on a straight-line
basis over 15 years. Accumulated amortization at December 31, 2000 and 1999 was
$8,391 and $1,125, respectively. The Company assesses whether its goodwill and
other intangible assets are impaired as required by SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets to be Disposed of" based on an
evaluation of undiscounted projected cash flows through the remaining
amortization period. If an impairment exists, the amount of such impairment is
calculated based on the estimated fair value of the asset.


NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

                                                  2000           1999
                                              -----------    -----------

          Leasehold improvements              $    57,908    $    51,971
          Equipment                             1,225,421        302,050
          Furniture and fixtures                   22,260         22,260
                                              -----------    -----------
               Total property and equipment     1,305,589        376,281

          Less: accumulated depreciation         (315,719)      (142,367)
                                              -----------    -----------
                Property and equipment, net   $   989,870    $   233,914
                                              ===========    ===========

Depreciation expense for the years ended December 31, 2000 and 1999 was $173,352
and $71,206, respectively.


NOTE 4 - OPERATING LEASES

The Company leases facilities and equipment under operating leases, with terms
from three to five years, payable in monthly installments. Total lease expense
for the years ended December 31, 2000 and 1999 was $173,275 and $152,904,
respectively.

Future minimum lease payments for leases with a term in excess of one year are
as follows:

            Years Ended December 31,
        ---------------------------------

                     2001                        $   117,834
                     2002                             95,268
                     2003                             82,026
                     2004                                 --
                                                 -----------
                                                 $   295,128
                                                 ===========

NOTE 5 - RECLASSIFICATIONS

Certain amounts previsouly reported for 1999 have been reclassified to conform
with the classifications used in 2000. Such reclassifications had no effect on
the reported net loss.

                                       11
<PAGE>
INTRACO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================


NOTE 6 - CAPITAL LEASES

Certain non-cancelable leases are classified as capital leases, and the leased
assets are included as part of "Property and equipment." Other leases are
classified as operating leases and are not capitalized. Details of the
capitalized leased assets are as follows:

                                                 2000             1999
                                             -----------      -----------

     Equipment                               $    50,000      $    50,000
     Less:  accumulated depreciation             (20,000)         (10,000)
                                             -----------      -----------
                              Total          $    30,000      $    40,000
                                             ===========      ===========


At December 31, 2000, the future minimum lease payments under the capital lease
are as follows:

                                                            CAPITAL
               YEARS ENDED DECEMBER 31,                     LEASES
     ---------------------------------------------        -----------

                         2001                             $    11,940
                         2002                                  11,940
                         2003                                  10,945
                                                          -----------
     Total minimum lease payments                              34,825
                                                          -----------
     Less:  amount representing interest                       (3,502)
                                                          -----------
     Present value of net minimum lease payments               31,323
                                                          -----------
     Less:  current maturities                                (10,008)
                                                          -----------
     Long-term obligation                                 $    21,315
                                                          ===========


NOTE 7 - LONG-TERM DEBT

At December 31, 2000 and 1999, long-term debt consists of the following:
<TABLE>
<CAPTION>

                                                                 2000          1999
                                                             -----------   -----------
<S>                                                          <C>           <C>
     Note payable due in monthly installments ranging from
     $12,000 to $39,000 including interest at 10%. The
     Company paid off this note during the year ended
     December 31, 2000                                       $        --   $   126,065
     Less: current portion                                            --      (126,065)
                                                             -----------   -----------
     Note payable - long term                                $        --   $        --
                                                             ===========   ===========
</TABLE>

Total interest expense for the years ended December 31, 2000 and 1999 was
approximately $14,900 and $40,400, respectively.

                                       12
<PAGE>

INTRACO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================


NOTE 8 - CONCENTRATION OF CREDIT RISK

The Company maintains its cash bank deposits at various financial institutions.
Accounts at these institutions are insured by the Federal Deposit Insurance
Corporation up to $100,000 and the balances, at times, may exceed federally
insured limits. At December 31, 2000 and 1999, the balances exceeding this limit
were approximately $421,700 and $147,000.

The Company routinely assesses the financial strength of its customers, and, as
a consequence, believes its trade accounts receivable exposure is limited.


NOTE 9 - MAJOR CUSTOMERS

Sales to one customer in 2000 represented approximately 21% of total sales, and
sales to another customer represented approximately 38% of total sales in 1999.


NOTE 10 - STOCKHOLDERS' EQUITY

In March of 2000, the Company sold approximately 160,000 shares of $0.001 par
value common stock to an investor at a cost of $1.25 per share with 30,000
warrants exercisable at $0.75 per warrant. The warrants were issued to the
outside investors and the discount was considered a cost of raising capital. The
discount of $.50 per warrant or $15,000, for the 30,000 warrants has been
included in additional paid-in capital. The Company also sold approximately
3,474,000 units for $1.50 per unit; each unit consists of one share of common
stock and one warrant exercisable at $1.50 per share. Fees associated with the
offerings consisted of cash, warrants, and common stock.

During the year ended December 31, 2000, Intraco issued 50,000 shares of
restricted common stock as settlement of an employment contract. The 50,000
shares issued for services were valued at the fair market value of Intraco's
common stock at the date of issuance or $1.97 per share, the quoted market price
on the close of the prior day. The $98,400 has been included in current year
general and administrative expense.

During the year ended December 31, 2000, Intraco issued 12,000 shares of
restricted common stock as payment of fees and issued 95,115 of restricted
common stock to six former employees in connection with the exercise of stock
options. The 12,000 shares issued for services were valued at the fair market
value of Intraco's common stock at the date of issuance or the quoted market
price on the close of the prior day. The $10,688 has been included in current
year general and administrative expense.

During the year ended December 31, 2000, preferred stock holders converted
488,300 shares of preferred stock to common stock.

In March of 1999, the Company sold 866,300 shares of $0.001 par value common
stock to an investment company at $1.00 per share for an interest-bearing note.
At December 31, 1999, the balance of the note was $446,300. At December 31,
2000, this note was paid in full.

In October of 1999, the Company began a Series B convertible redeemable
preferred stock offering, and, as a result of the offering, the Company issued
989,400 shares under Regulation S of preferred stock, for a total of $989,000.
Holders will have the right to convert the Series B convertible redeemable
preferred stock, in whole or in part, at any time, or from time to time, into
the common stock, par value $.001, of the Company. The initial conversion rate
is one-to-one and is subject to adjustment in certain circumstances including
proportional stock splits, stock dividends, and reverse stock splits. The shares
of Series B convertible redeemable preferred stock are subject to redemption, in
whole or in part, at any time and from time to time, at the option of the
Company, at the stated Preference Value of $1.00 per share and $0.99 for
subscriptions over $100,000.

                                       13
<PAGE>
INTRACO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================


NOTE 10 - STOCKHOLDERS' EQUITY, CONTINUED

In November of 1998, the Company sold 767,500 shares of Series A convertible
redeemable preferred stock at $1.00 per share. The shares of Series A
convertible redeemable preferred stock shall be subject to redemption at any
time at the option of the Company, at the stated Preferred Value of $1.00 per
share. The shares also contain a 7% cumulative dividend. Holders have the right
to convert the Series A convertible redeemable preferred stock, in whole or in
part, at any time, or from time to time, into the common stock, par value $.001,
of the Company. The initial conversion rate is on a one-to-one basis, and is
subject to adjustment in certain circumstances including proportional stock
splits, stock dividends, and reverse stock splits.


NOTE 11 - STOCK OPTION PLAN

STOCK OPTION PLAN

Under the Company's stock option plan, 10,000,000 shares of common stock were
reserved for issuance upon exercise of options granted to directors, officers
and employees of the Company. Options issued through December 31, 2000 carry
exercise prices equal to that of the fair market value on the date of the grant.
The options vest immediately or equally over a period of one to three years
following the date of grant and the unexercised portion of the options expires
and ceases to be exercisable on the earlier of the tenth year after the date of
the grant or specified date following termination of employment.

The Company has elected to account for the stock options under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and
related interpretations. Accordingly, no compensation expense has been
recognized on the stock options.

For purposes of the pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The effect of
Statement No. 123 resulted in a pro forma net loss of $6,917,260 and $2,977,899
for the years ended December 31, 2000 and 1999, respectively. In addition, the
pro forma net loss per share was $0.42 and $0.25 per share for the years ended
December 31, 2000 and 1999, respectively.

The fair value of each option is estimated on the date of grant using the fair
market option-pricing model with the assumption:

                                                        2000          1999
                                                     -----------   -----------

     Risk-free interest rate                              6%            6%
     Expected life (years)                               10             2
     Expected volatility                                137%           53%
     Expected dividends                                 None          None
     Weighted average remaining contractual life       9 years      9.5 years

                                       14
<PAGE>

INTRACO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================


NOTE 11 - STOCK OPTION PLAN, CONTINUED

A summary of option transactions during the years ended December 31, 2000 and
1999, is shown below:
<TABLE>
<CAPTION>

                                                                        WEIGHTED AVERAGE
                                      NUMBER OF            PRICE         EXERCISE PRICE
                                       OPTIONS           PER SHARE         PER OPTION
                                    -------------      -------------     -------------
<S>                                     <C>            <C>               <C>
Outstanding at December 31, 1998          815,000      $        0.25     $        0.25
Granted (1/1/99 - 3/31/99)                260,000               0.25              0.25
Granted (4/1/99 - 4/30/99)                 10,000               0.25              0.25
Granted (5/1/99 - 9/30/99)                270,000       1.50 to 2.18              1.97
Granted (10/1/99 - 12/31/99)            6,249,800               0.88              0.89
                                    -------------      -------------     -------------
Outstanding at December 31, 1999        7,604,800        .25 to 2.18              0.84
Granted (1/1/00 - 3/31/00)                685,000       2.06 to 4.87              2.76
Granted (4/1/00 - 6/30/00)                210,000       2.19 to 3.50              2.59
Granted (7/1/00 - 9/30/00)                895,000       1.13 to 2.88              1.82
Granted (10/1/00 - 12/31/00               614,000       0.19 to 1.03              0.53
Exercised                                 (95,115)       .25 to 4.87              0.88
Forfeited                                (427,285)       .25 to 4.87              0.96
                                    -------------      -------------     -------------
Outstanding at December 31, 2000        9,486,400      $ .25 to 4.87     $        1.08
                                    =============      =============     =============
</TABLE>


WARRANTS

In November, 1998 the Company granted 150,000 warrants to Vestar Capital
Corporation, a company controlled by a minority shareholder, as part of a
consulting agreement. Compensation expense for the warrants has been determined
based on the fair value of the warrants at the grant date consistent with the
methodology prescribed under Statement of Financial Standards No. 123,
"Accounting for Stock Based Compensation." Compensation expense of $27,000,
which is equal to the estimated fair market value of the warrants, was recorded
in 1999. Fair market value of $0.25 was used for the Company's common stock at
the date of issuance based on the offering price in the Regulation D 504 common
stock offering in November of 1998 of $0.25 per share. The fair value of each
warrant is estimated on the date of grant using fair market option pricing model
with the assumptions as stated above.
<TABLE>
<CAPTION>

                                                                        WEIGHTED AVERAGE
                                      NUMBER OF            PRICE         EXERCISE PRICE
                                      WARRANTS           PER SHARE         PER OPTION
                                    -------------      -------------     -------------
<S>                                       <C>          <C>               <C>
Outstanding at December 31, 1999          150,000      $        0.25     $        0.25
Granted                                        --                 --                --
                                    -------------      -------------     -------------
Outstanding at December 31, 2000          150,000      $        0.25     $        0.25
                                    =============      =============     =============
</TABLE>

The Company paid approximately $90,000 for the year ended December 31, 1999 to
Vestar Capital Corporation as part of a consulting agreement. The consulting
agreement was terminated at December 31, 1999.

                                       15
<PAGE>

INTRACO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================


NOTE 12 - INCOME TAXES

The Company has an unused net operating loss carryforward of $6,726,368
available for use on its future corporate federal and state income tax returns.
The Company's evaluation of the tax benefit of its net operating loss
carryforward is presented in the following table. The tax amounts have been
calculated using the 34% federal and 5.5% state income tax rates.

                                                          2000          1999
                                                      -----------   -----------

Taxes currently payable                               $        --   $        --
Deferred income tax benefit                             1,729,740       530,952
Change in beginning valuation allowance                (1,729,740)     (530,952)
                                                      -----------   -----------
Provision (benefit) for income taxes                  $        --   $        --
                                                      ===========   ===========

Reconciliation of the Federal statutory income tax rate to the Company's
effective income tax rate is as follows:

                                                          2000          1999
                                                      -----------   -----------

Computed at the statutory rates (34%)                 $(1,575,716)  $  (480,044)
Increase (decrease) resulting from:
      Non-deductible expenses                               8,577           344
State income taxes, net of federal income
  tax benefit                                            (162,601)      (51,252)
Reinstatement/change in deferred tax asset
  valuation allowance                                   1,729,740       530,952
                                                      -----------   -----------
Tax provision (benefit)                               $        --   $        --
                                                      ===========   ===========

The components of the deferred tax asset were as follows at December 31:

                                                          2000          1999
                                                      -----------   -----------
Deferred tax assets:
      Net operating loss carryforward                 $ 2,531,132   $   721,619
      Deferred revenue                                     40,417   $    62,275
      Deferred costs                                      (18,497)      (10,591)
                                                      -----------   -----------
              Total deferred tax asset                  2,553,052       773,303
                                                      -----------   -----------

Deferred tax liabilities:
      Depreciation expense                                (35,925)       (5,464)
      Allowance for receivables                               947        20,495
                                                      -----------   -----------
              Total deferred tax liabilities              (34,978)       15,031
                                                      -----------   -----------
              Net deferred tax asset                    2,518,074       788,334
                                                      -----------   -----------

Valuation allowance:
      Beginning of year                                  (788,334)     (257,382)
      Decrease (increase) during year                  (1,729,740)     (530,952)
                                                      -----------   -----------
              Ending balance                           (2,518,074)     (788,334)
                                                      -----------   -----------
              Net deferred taxes                      $        --   $        --
                                                      ===========   ===========

                                       16
<PAGE>

INTRACO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================


NOTE 12 - INCOME TAXES, CONTINUED

The net operating loss carryforward is summarized below:

                 YEAR LOSS ORIGINATED               YEAR EXPIRING      AMOUNT
       -----------------------------------------------------------   -----------

                  December 31, 1997                     2012         $   583,231
                  December 31, 1998                     2013              80,195
                  December 31, 1999                     2014           1,254,241
                  December 31, 2000                     2015           4,808,701
                                                                     -----------
         Total available net operating loss                          $ 6,726,368
                                                                     ===========

The utilization of the above loss carryforwards, for federal income tax
purposes, may be subject to limitation resulting from changes in ownership.


NOTE 13 - ACQUISITIONS

On June 7, 1999, the Company acquired the assets of Page Telecomputing. As
consideration, the Company issued 60,000 shares of its $.001 par value common
stock. The total value of the stock issued was $90,000. The acquisition was
accounted for using the purchase method of accounting. The results of operations
are included in the financial statements of operations from the date of
acquisition. Goodwill of $83,910 was recorded in the transaction, which is being
amortized over 15 years using the straight-line method. The estimated fair
market value of the net assets acquired was $6,090.


NOTE 14 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has experienced
substantial losses from operations since its inception as well as negative cash
flows from operations. These matters raise substantial doubt about the Company's
ability to continue as a going concern. The Company's ability to continue in
existence as a going concern is dependent upon its ability to increase sales and
to obtain equity and/or debt financing. Management believes that the Company's
products are viable and that with proper marketing, profitable operations are
attainable.

Management's plan to increase sales and obtain additional capital includes
several specific actions. On the sales side, all of the Company's efforts will
be placed on emerging technologies such as text to speech, voice recognition,
ASP services, and speech driven services as these areas have higher profit
margins and represent a market which is growing much more rapidly than the
Company's traditional services. For capital sourcing, management will continue
the private placement offerings of common stock. Additionally, the Company is
considering identifying a candidate for merger.


NOTE 15 - LITIGATION

The Company is party from time to time to various legal proceedings. None of
these proceedings are expected to have a material impact on its financial
position or results of operations.

                                       17
<PAGE>

INTRACO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================


NOTE 16 - SHARE EXCHANGE

In April 1999, CTE, an inactive public company, acquired all of the outstanding
common stock of the Company. For accounting purposes, the acquisition has been
treated as an acquisition of CTE by the Company and as a re-capitalization of
the Company. The exchange ratio of common shares was one-for-one. The estimated
fair market value of the net assets acquired was $1,005. Costs associated with
this re-capitalization totaled $283,151. As a result of the re-capitalization,
the Company is now authorized to issue 100,000,000 shares of common stock.
Following the share exchange, the former stockholders of CTE owned 2,429,489
shares of common stock of the Company.


NOTE 17 - LICENSE AGREEMENT

The Company obtained a software license agreement in March 2000 and it is being
amortized over one year, using the straight-line method. The Company assesses
whether its intangible assets are impaired as required by SFAS No.121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" based on an evaluation of undiscounted projected cash flows
through the remaining amortization period. If impairment exists, the amount of
such impairment is calculated on the estimated fair value of the assets.

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