<PAGE>
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 10-K

(MARK ONE)

<TABLE>
<C>        <S>
   /X/         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                                       OR

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                        COMMISSION FILE NUMBER: 01-25957
                            ------------------------

                            BIZNESSONLINE.COM, INC.

             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                            <C>
               DELAWARE                                     06-1519132
    (State or other jurisdiction of                      (I.R.S. Employer
    Incorporation or organization)                     Identification No.)

      1720 ROUTE 34, PO BOX 1347                              07719
               WALL, NJ                                     (Zip Code)
    (Address of principal executive
               offices)
</TABLE>

       Registrant's telephone number, including area code:  732-280-6408

          Registrant's fax number, including area code:  732-280-6409

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

<TABLE>
<CAPTION>
                  Title of each class                           Name of exchange on which Registered
<S>                                                       <C>
                         NONE.                                                 NONE.
</TABLE>

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

                           COMMON STOCK, $0.01 PAR VALUE
                                (Title of Class)

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes /X/    No / /

    Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 219.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.  /X/

    The aggregate market value of the registrant's common stock held by
non-affiliates of the registrant on March 24,2000, based upon the closing price
of the Common Stock on the NASDAQ National Market of $8.0625 on such day, was
approximately $44.5 million. The number of outstanding shares of the
registrant's Common Stock as of March 24, 2000, was approximately 8,609,574
shares.

                      DOCUMENTS INCORPORATED BY REFERENCE

    Portions of the definitive Proxy Statement to be delivered to stockholders
in connection with the Annual Meeting of Stockholders presently scheduled to be
held on Friday, May 5, 2000 are incorporated by reference into Part III of this
Form 10-K.

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<PAGE>
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                              PAGE
                                                                            --------
<S>          <C>                                                            <C>
PART I.
  Item 1     Business....................................................
  Item 2.    Properties..................................................
  Item 3.    Legal Proceedings...........................................
  Item 4.    Submission of matters to a vote of security holders.........

PART II.
             Market for the registrant's common stock and related
  Item 5     stockholder matters.........................................
  Item 6.    Selected financial data.....................................
             Management's discussion and analysis of financial condition
  Item 7.    and results of operations...................................
  Item 7A.   Quantitative and qualitative disclosure about market risk...
  Item 8.    Financial statements and supplementary data.................
             Changes and disagreements with accountants on accounting and
  Item 9.    financial disclosure........................................

PART III.
  Item 10.   Directors and executive officers............................
  Item 11.   Executive compensation......................................
             Security ownership of certain beneficial owners and
  Item 12.   management..................................................
  Item 13.   Certain relationships and related transactions..............

PART IV.
             Exhibits, financial statement schedules and reports on
  Item 14.   Form 8-K....................................................
             Signatures..................................................
</TABLE>

                                       ii
<PAGE>
                                     PART I

ITEM 1. BUSINESS

OVERVIEW

    BiznessOnline.com is one of the Northeast's largest providers of enhanced
Internet services, including server co-location, Web design and e-commerce
solutions, Web hosting, and high-speed Internet access. We are committed to
satisfying the increasing Web and Internet needs of small and mid-sized
businesses by offering customers high-performance information technology
management and other advanced Internet services in state-of-the-art Internet
Data Centers including a brand new 6,000 square feet facility which opened in
December 1999 and services our Albany area operations. We provide secure
broadband Internet connections via our fault-tolerant, fiber-optic backbone
network, which is supported by 24 hour X 7 day customer care and network
monitoring. We are focused on increasing our existing base of customers in the
Northeast and continuing to grow our Internet network infrastructure.

CORPORATE HISTORY

    BiznessOnline.com, Inc. was formed as a Delaware corporation on June 11,
1998 for the purpose of acquiring and operating businesses that provide Internet
access and related services to business and residential customers in the
northeastern United States outside of large metropolitan areas. We acquired our
first Internet service provider in January 1999 located in Albany, New York. We
acquired four additional Internet service providers in May 1999
contemporaneously with the closing of our initial public offering of
2.9 million shares of common stock which raised $29 million. Subsequently in
1999, we acquired four additional Internet service providers and two web
design/web hosting companies. We also entered into definitive agreements in
December 1999 to acquire a competitive local exchange carrier and its associated
Internet service provider based in Johnstown, New York which transaction is
expected to close on or about March 31, 2000. Our acquisitions are summarized in
the following table:

<TABLE>
<CAPTION>
                                                                           *% STOCK/
COMPANY                                   LOCATION       PURCHASE PRICE      % CASH      CLOSING DATE
-------                                ---------------   --------------   ------------   ------------
<S>                                    <C>               <C>              <C>            <C>
Global 2000 Communications, Inc......  Albany, NY         $ 3,300,000       82%/18%        1/31/99
AlbanyNet, Inc.......................  Albany, NY         $ 2,400,000        0%/100%       5/17/99
Borg Internet Services, Inc..........  Utica, NY          $ 2,000,000       75%/25%        5/17/99
Caravela Software, Inc...............  Middlefield, CT    $ 4,980,000       56%/44%        5/17/99
Ulsternet, Inc.......................  Kingston, NY       $ 1,450,000       55%/45%        5/17/99
Ascent Networking and Ascent Internet
  Holdings, Inc......................  Norwich, NY        $ 1,050,000        0%/100%       7/30/99
WebWay, LLC..........................  Albany, NY         $ 2,580,000       68%/32%        8/18/99
Infoboard, Inc.......................  Lynn, MA           $ 3,030,000       54%/46%        9/30/99
Cyberzone, LLC.......................  Hartford, CT       $ 3,504,300       50%/50%       12/14/99
NECAnet, Inc.........................  Storrs, CT         $ 3,500,000       55%/45%       12/15/99
Prime Communications Systems, Inc....  Amherst, NY        $ 7,000,000       82%/18%       12/29/99
Telecon Communications Corp.
  (expected to close by 3/31/00).....  Johnstown, NY      $15,000,000        0%/100%         --
Telesupport, Inc. (expected to close
  by 3/31/00)........................  Johnstown, NY      $ 3,000,000      100%/0%           --
</TABLE>

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

*   The dollar value of the stock portion of the purchase price in most of our
    acquisitions as shown above is based upon the average closing price of our
    common stock for the 20 business days prior to the closing date of the
    acquisition and may differ from the value used to record the acquisition for
    accounting purposes which utilizes the value of shares issued as of the
    closing for determining acquisition cost.

                                       1
<PAGE>
OUR GROWING MARKET

    Internet use is experiencing dramatic growth in the number of users and the
amount of user time spent on the Internet. International Data Corporation
estimates that at the end of 1998 there were approximately 77 million Internet
users in the United States and that by the end of 2002, the number of United
States Internet users will increase to over 148 million. In the northeastern
United States alone, Upside Magazine estimates that the number of Internet
service subscribers will increase by approximately 30 million in the next three
years. With respect to the use of the Internet and enhanced Web services by
businesses, International Data predicts that the percentage of small and medium
scale businesses with on-line access will double in the next three years.

    The functionality and accessibility of the Internet have made it an
increasingly attractive commercial medium by providing features that
historically have been unavailable through traditional distribution channels.
These advantages combined with the increasing availability of products and
services over the Internet, and the presence of more and more companies and
organizations on the Internet, have resulted in a huge demand for Web services.
eMarketer predicts that the demand for Web services (including Internet access,
Web hosting, Web site development, e-commerce solutions, Internet marketing
solutions, demand for bandwidth, etc.) which was $1 billion in 1998, will grow
to $14 billion by 2003.

PRODUCTS AND SERVICES

    We offer a comprehensive, cost-effective range of Web and Internet services
to business and residential customers in the Northeast. Our scalable,
state-of-the-art, network can address comprehensive data intensive applications,
including Voice Over Internet Protocol and unified messaging services, and
ensures the speed and performance necessary for mission-critical Internet and
Web applications in a commercial setting. Our products and services include:

    WEB HOSTING

    Our high capacity network services and state-of-the-art server technology
enable us to provide advanced Web hosting services. We provide our customers
with data back up and Web site firewall protection, a comprehensive
facility-wide security system, current Web traffic statistics for market
tracking, and 24-hour network and Web site technical support.

    WEB SITE DEVELOPMENT

    Our experienced Internet marketing professionals, Web designers and Web
programmers work together to build customized corporate Web sites from the
extraordinarily complex designs to the most simple. We can provide our clients
with e-commerce enabled, interactive Web sites which have on-line credit card
and check clearing, shopping baskets, search engines, password protected areas
and database management capabilities, as well as modest sites that can be
upgraded over time.

    SERVER CO-LOCATION, WHOLESALE AND MANAGED SERVICES

    Our modern Internet Data Center located in Albany, NY allows us to offer
server co-location, web hosting, private-label ISP and other managed services
which present clients with the convenience of having an in-house server or modem
banks without the responsibilities of supporting their own Web infrastructure.
Additionally, we expect to be providing managed services for outsource
applications, including the wholesaling of Voice over Internet Protocol gateway
services and unified messaging in the near future. Our Internet Data Center
features the latest technology, and reduces customers' bandwidth costs,
increases their available bandwidth, and extends redundancy. We provide our
customers with 24 hour X 7 day network and server monitoring.

                                       2
<PAGE>
    E-COMMERCE SOLUTIONS

    We develop cost-effective, standard or customized e-commerce solutions for
customers. Our e-commerce packages offer businesses a broad range of features,
including site tools that make it possible to accept electronic checks and
credit card payments from customers, track sales on a real time basis,
automatically control inventory, effectively manage storefront and products,
fully protect and secure transaction capabilities, and increase their customer
base worldwide.

    HIGH SPEED BROADBAND INTERNET ACCESS: DSL, FRAME RELAY, T-1, AND T-3

    We are currently providing businesses and residential customers with a
variety of broadband services, and we expect to be providing additional xDSL and
ADSL technology and ATM offerings in our markets in the near future. We believe
these additional product offerings accommodate the greater functionality and
user requirements of their target market while being more profitable than
existing solutions. We are working with existing xDSL and ADSL wholesalers to
provide underlying xDSL and ADSL capabilities, while maintaining the option of
deploying xDSL and ADSL on our own at some later point in time when deemed
economically feasible.

    INTERNET MARKETING/WEB MEDIA

    Our Internet technology and marketing teams develop Web media solutions
geared toward increasing traffic to a customer's site through specialized
design, programming and indexing. We monitor Web traffic via graphical tracking
and reporting tools, and establish on-line, strategic content and commerce
affiliates for our clients.

    DIAL-UP INTERNET ACCESS

    We provide fast, reliable dial-up access to the Internet. Our local call
centers offer 24 hour technical support and our subscribers have access to 500
national numbers to facilitate account portability.

    LOCAL AND LONG DISTANCE TELEPHONE SERVICE

    On March 15, 2000, the New York State Public Service Commission granted
approval for the transfer of the "Certificate of Public Convenience and
Necessity" held by Telecon Communications Corp., a competitive local exchange
carrier ("CLEC") based in Johnstown, New York to us in connection with our
planned acquisition of substantially all of Telecon's assets. We now expect to
close such transaction and the acquisition of an Internet service provider
affiliated with Telecon on or about March 31, 2000. In addition, we are in the
process of preparing CLEC filings in other New England states to enable us to
begin to resell local and long distance telephone services in such markets
beginning in the second half of 2000.

BUSINESS STRATEGY

    We continue to penetrate our target secondary markets in the Northeast by
acquiring profitable, secondary Web and Internet service providers, and to
strengthen our regional organization which is committed to being an efficient
source of global communication for our rapidly growing customer base. Our
philosophy is to deliver cost-effective, comprehensive, state-of-the-art Web
services while staying close to our customers.

    Following that philosophy, we are executing a multiple product line strategy
by providing combinations of Web and Internet services to our customers. Also,
we expect to expand our service offerings to include local and long distance
telephone services, as well as paging and wireless telephone services, upon the
closing of the acquisition of substantially all of the assets of Telecon
Communications Corp. and the filing of CLEC applications in certain other
markets that we serve. We have built a state-of-the-art Internet Data Center in
Albany, New York and we operate a second modern data center in Amherst, New
York. We

                                       3
<PAGE>
intend to build additional data centers in underserved secondary markets and
towards that end we have located suitable sites in Buffalo, NY and Hartford, CT
and are now in the process of negotiating leaseholds for such sites. We offer
wholesale Internet and related services to independent Internet service
providers, and we plan to partner with other companies whose products can be
sold via the Internet to its customer base. We will also continue to add
national content providers to our Web pages to increase site loyalty.

    TARGET MARKETS

    We plan to continue to penetrate secondary Northeastern markets through
acquisitions of existing Internet, web design/hosting and other
telecommunications service providers, and by consolidating and building enhanced
Internet services operations in secondary markets in the Northeast. We are
concentrating on small and medium size businesses in this segment because we
believe the following:

    - Small and medium size businesses typically outsource their Web service
      requirements due to capital and personnel constraints (unlike larger firms
      in primary metropolitan markets, which, in most cases, support their own
      Web and telecommunications infrastructure);

    - There are approximately 1 million small and medium size businesses in the
      Northeast (Source: Upside Magazine) many of which will need to develop
      e-commerce solutions to increase revenues and/or remain competitive;

    - The number of Internet subscribers in secondary markets in the Northeast
      alone could potentially rise by 30 million over the next three years
      (Source: eMarketer);

    - Small and medium sized businesses will exhibit higher customer loyalty and
      lower than average customer turnover;

    - Costs associated with providing services in secondary markets will be
      lower than the major urban markets, potentially resulting in higher
      margins;

    - Secondary markets are currently more fragmented because of
      undercapitalized local competitors, while still containing large customer
      bases;

    - There is greater potential to more quickly gain market share and secure
      market coverage through carefully selected acquisition candidates and an
      emphasis on customer service and product combinations; and

    - There is greater potential to develop strong regional brand recognition
      and brand equity in a shorter time.

    SALES & MARKETING

    We intend to become one of the leading brands in the enhanced Internet
services market in the Northeast. We sell our services via the Web, and through
knowledgeable sales force staffed by people native to our markets. We intend to
maintain our in-house sales staff and hire additional sales personnel, while
converting each acquired company's location into a regional sales office. Our
sales and marketing strategy is as follows:

    BUILD OUT OUR EXISTING DIRECT INTERNET SALES FORCE

    We are aggressively growing our existing sales force. We intend to hire a
sales manager to head each branch sales force, and to hire additional,
accomplished sales personnel who have Internet and telecommunications sales
experience in their respective regions. We expect to build our sales force in
each regional sales office to up to six people in the immediate term.

                                       4
<PAGE>
    PROACTIVE SALES PHILOSOPHY AND AGGRESSIVE ADVERTISING

    We are actively marketing our services to existing and potential customers
in the Northeast through a number of marketing initiatives aimed at building our
brand equity. Our marketing initiatives include or are planned to include: a
telemarketing program for current and prospective customers; participation in
customers' and industry trade shows; public relations exercises; aggressive
print, billboard, radio and television advertising in the Northeast; and direct
mail and e-mail customer solicitations. We plan to follow an aggressive pricing
strategy for all of our products and services, and to emphasize to existing and
potential customers our regional presence and state-of-the-art enhanced Internet
services infrastructure as an advantage over local and national competitors. We
are also currently developing alternative distribution channels, and engaging
potential agents or resellers who will retail our products and services. We plan
to take advantage of the cross merchandising opportunities presented by the
Internet by advertising and offering our bundled services on our resellers' Web
pages.

    PROMOTE VALUE-ADDED, BUNDLED SERVICES TO CUSTOMERS

    We offer value added, packaged services while retaining our regional focus
which will make us an attractive proposition for customers. We plan to bundle
Web, Internet, local dial tone, and long distance services while providing
convergent billing with real-time Web based access to account data. We also
offer our customers the option of using a credit card billing system for monthly
recurring local and flat rate charges.

    FOCUS ON CUSTOMER SERVICE

    We are focused heavily on customer service. We plan to maintain first-line
technical support at each branch and have established customer service
operations including fully convergent billing and customer care systems, and a
toll free telephone number for 24 hour, 7 days a week technical support.

    ACQUISITIONS

    A significant component of our growth strategy is to continue to penetrate
markets by acquiring well established Internet service providers and/or CLEC and
long distance service providers. We then plan to integrate and bundle their
services with our own, offering our customers an ever-widening, more
comprehensive suite of products and services, typically on one integrated
monthly bill.

    Our strategy is to initially purchase an "anchor" Web or Internet service
provider, CLEC or long distance service provider within our target markets, and
then acquire other, complementary local companies. We then utilize our
multiple-trunk fiber optic backbone network powered by state of the art Cisco
systems equipment purchased to integrate acquired companies' network and
administrative operations, while maintaining their various locations as regional
sales offices.

    As we execute our acquisition strategy, we integrate resources of the
acquired companies into our broader network in order to bring increased scope
and the benefits of economies of scale. Historically, networks and
administrative functions of newly acquired companies can be integrated into our
systems within 90 to 120 days. We further believe that economies of scale
advantages will facilitate a reduction in operating costs of acquired companies.
We plan to offer our complete product line to customers of our acquired
companies' immediately following their acquisition in an effort to rapidly
increase sales. We believe that our regional focus enables us to better control
costs and to maximize the financial, operating and marketing benefits of
consolidating local Web and Internet services providers.

COMPETITION

    The market for Internet access and related services is extremely
competitive. We expect competition to increase as Internet use grows and
established national Internet service providers, telecommunications

                                       5
<PAGE>
and computer related vendors expand their traditional products and services and
new start-ups emerge. The significant financial resources of many of our
competitors could lead to severe price cutting in an effort to secure market
share, which could have a negative effect on our revenues and results of
operations. Our competitors in the markets in which we operate include:

    - National and regional commercial internet service providers such as Verio,
      Earthlink and Mindspring;

    - Established on-line commercial information providers such as AOL, Prodigy
      and MSN;

    - Local internet service providers in Connecticut and Northeastern New York
      State who provide products and services that are similar to ours to small
      to medium sized businesses;

    - Cable television operators such as Time Warner and Tele-Communications,
      Inc;

    - National long distance telecommunications carriers such as AT&T, MCI
      Worldcom, and Sprint;

    - Computer hardware and software companies, such as IBM and Compaq;

    - Regional telephone operating companies such as Bell Atlantic, SBN and
      Citizens Telephone Company; and

    - New "free access" Internet services providers such as JUNO and NetZero.

    We also believe that new competitors will continue to enter the Internet
access market, such as large computer hardware and software companies, media and
telecommunications entities, and companies that provide direct service to
residential customers, including cable television operators, wireless
communication companies, local and long distance telephone companies and
electric utility companies.

    Many of our competitors are larger and have greater financial, technical,
and operating resources than we do. We will need to distinguish ourselves by our
product and service knowledge, our responsiveness to our targeted market of
small to medium sized businesses, our ability to market and sell customized
combinations of products and services within our market, and our capacity to
offer a diverse Internet product line. We also believe that our ability to be
flexible and to respond quickly in providing solutions to our customer's
Internet needs will be an advantage over some of our competitors.

EMPLOYEES

    As of December 31, 1999, we had 174 employees as follows:

<TABLE>
<S>                                                           <C>
Sales & Marketing...........................................     29
Support.....................................................     60
Technical...................................................     58
Administrative..............................................     27
                                                                ---
                                                                174
</TABLE>

                                       6
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTIES

    Our leased corporate headquarters are located in Wall, NJ. We also lease
additional facilities in the following locations for the following purposes:

<TABLE>
<S>                                      <C>
Albany, NY.............................  Data Center/Managed Services Facility
Albany, NY.............................  Development and Support
Amherst, NY............................  Data Center/Managed Services Facility
Buffalo, NY............................  Sales and support
Kingston, NY...........................  Sales and support
Norwich, NY............................  Sales and Support
Utica, NY..............................  Sales and Support
Lynn, MA...............................  Sales and Support
Hartford, CT...........................  Data Center/Managed Services Facility
Middlefield, CT........................  Sales and Support
Storrs, CT.............................  Sales and Support
</TABLE>

ITEM 3. LEGAL PROCEEDINGS

NONE

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

NONE

                                    PART II

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

    Our common stock commenced trading on the NASDAQ National Market on May 12,
1999 under the symbol "BIZZ". The following table sets forth the high and low
closing sales price for the common stock for each quarter during the last fiscal
year, as reported by the NASDAQ National Market.

<TABLE>
<CAPTION>
                                                               HIGH       LOW
                                                             --------   --------
<S>                                                          <C>        <C>
Fiscal 1999:
  Second Quarter...........................................  11.1875     7.3125
  Third Quarter............................................  10.75       6.50
  Fourth Quarter...........................................   9.375      5.8125
</TABLE>

    As of March 24, 2000, there were 115 holders of record of common stock who
held an aggregate of 8,609,574 shares of common stock as nominees for an
undisclosed number of beneficial holders.

    We have never declared or paid any cash dividends on our capital stock. We
anticipate that we will retain future earnings, if any, to fund the development
and growth of the business and therefore do not expect to pay any cash dividends
in the foreseeable future. Payment of future dividends, if any, will be at the
discretion of our board of directors after taking into account various factors,
including our financial condition, results of operations, current and
anticipated cash needs, and plans for expansion and additional acquisitions.

    Pursuant to Item 701(a)-(e) of Regulation S-K, the following information is
provided as to all equity securities of BiznessOnline.com, Inc. sold by the
Company during the period covered by this report that

                                       7
<PAGE>
were not registered under the Securities Act and have not previously been
reported in a quarterly report on Form 10-Q:

        1.  On December 14, 1999, the Company issued an aggregate of 271,904
    shares of its common stock to the two members of Cyberzone, LLC, a
    Connecticut limited liability company, comprising a portion of the purchase
    price paid to such persons by the Company pursuant to an Asset Purchase
    Agreement under which the Company acquired substantially all of the assets
    and assumed certain of the liabilities of Cyberzone. This sale was effected
    without registration under the Securities Act in reliance upon the exemption
    from registration set forth in Section 4(2) of the Securities Act.

        2.  On December 15, 1999, the Company issued an aggregate of 298,726
    shares of its common stock to the two stockholders of NECAnet, Inc. and New
    England Computer Associates, Inc., both Connecticut corporations
    (collectively, "NECAnet"), comprising a portion of the merger consideration
    paid to such persons pursuant to an Agreement and Plan of Merger and
    Reorganization by which NECAnet was merged into a wholly-owned subsidiary of
    the Company. This sale was effected without registration under the
    Securities Act in reliance upon the exemption from registration set forth in
    Section 4(2) of the Securities Act.

        3.  On December 29, 1999, the Company issued an aggregate of 720,000
    shares of its common stock to the three stockholders of Prime Communications
    Systems Incorporated, a New York corporation, comprising a portion of the
    purchase price paid to such persons by the Company pursuant to an Agreement
    and Plan of Merger and Reorganization by which Prime was merged into a
    wholly-owned subsidiary of the Company. This sale was effected without
    registration under the Securities Act in reliance upon the exemption from
    registration set forth in Section 4(2) of the Securities Act.

        4.  The issuances of common stock described in paragraphs 1, 2 and 3
    above were made in connection with acquisition transactions not involving a
    public offering. The members of Cyberzone and the stockholders of NECAnet
    and Prime, either directly or by way of a purchaser representative, each
    represented that they were sophisticated investors. All such individuals
    received a copy of a currently dated Information Statement regarding the
    Company. Each individual acknowledged and represented to the Company in
    writing that he or she understands and agrees that the shares of common
    stock to be issued in such transactions: have not been registered under the
    Securities Act of 1933; are being acquired solely for their own account
    without any present intention of resale or distribution; and will not be
    resold without registration under the Securities Act of 1933 or in
    compliance with an available exemption from registration. Each individual
    also acknowledged that he or she was able to bear the economic risk of an
    investment in the common stock and afford a complete loss of such
    investment, and that he or she had the opportunity to ask questions of and
    receive answers from the Company's management concerning any and all matters
    relating to the acquisition of the common stock of the Company.

    Pursuant to Item 701 (f) of Regulation S-K, the following information is
being furnished to disclose certain information regarding the uses of proceeds
by BiznessOnline.com, Inc. from its initial public offering of common stock.

        i. In February 1999, we filed a registration statement under the
    Securities Act of 1933 to sell up to 2.9 million shares of common stock in
    our initial public offering. The effective date of registration of the
    initial public offering was May 12, 1999, under Commission file number
    333-73067. The offering was managed by Joseph Stevens and Company, Inc,
    Schneider Securities, Inc., Neidiger, Tucker, Bruner, Inc. and Royce
    Investment Group, Inc. and closed on May 17, 1999.

                                       8
<PAGE>
        ii. Expenses related to the initial public offering and direct offering
    costs incurred through December 31, 1999 were as follows:

<TABLE>
<S>                                                           <C>
Underwriter's discounts and commissions.....................  $ 2,900,000
Accountants fees............................................      386,000
Legal fees..................................................      467,000
Printing expenses...........................................      177,000
Miscellaneous filing fees and expenses......................      425,000
                                                              -----------
Total.......................................................    4,355,000
                                                              ===========
  Net Proceeds..............................................  $24,645,000
                                                              ===========
</TABLE>

        iii. From the effective date of the initial public offering registration
    through December 31, 1999, the amount of net offering proceeds used for any
    purpose for which at least 5% of the offering proceeds or $100,000
    (whichever is less) was used is as follows:

<TABLE>
<S>                                                           <C>
Repayment of promissory notes to the stockholders of Global
  2000 Communications, Inc..................................  $   580,000
Payment of the cash portion of the purchase price due to the
  four Internet service providers we acquired in May 1999...    5,730,000
Acquisition of Ascent Networking............................    1,050,000
Acquisition of WebWay, LLC..................................      830,000
Acquisition of Infoboard, Inc...............................    1,380,000
Acquisition of Prime Communications, Inc....................    1,240,000
Acquisition of Cyberzone, LLC...............................    1,752,000
Acquisition of NECAnet, Inc.................................    1,575,000
Repayment of indebtedness of Internet service providers.....      276,000
Purchases of capital equipment, primarily relating to our
  data center in Albany, NY.................................    4,154,000
                                                              -----------
Total.......................................................  $18,567,000
                                                              ===========
</TABLE>

    The payments referred to above were not made directly or indirectly to any
officers or directors of BiznessOnline.com, Inc. or their associates, or to any
person owning 10% or more of any class of securities of BiznessOnline.com, Inc.
except for $435,000 of the $580,000 listed above which was paid to a director of
the Company and his spouse who were the former majority stockholders of Global
2000 Communications, Inc. in satisfaction of promissory notes constituting a
portion of the purchase price therefore.

                                       9
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA

                   SELECTED ACTUAL RESULTS OF OPERATIONS DATA

<TABLE>
<CAPTION>
                                                                                  PERIOD FROM JULY 1, 1999
                                                        YEAR ENDED                   (DATE OF INCEPTION)
                                                        DECEMBER 31               THROUGH DECEMBER 31, 1998
                                                  -----------------------       -----------------------------
                                                    1999           1999             1998            1998
                                                     $              %                 $               %
                                                  --------       --------       -------------   -------------
<S>                                               <C>            <C>            <C>             <C>
Revenues........................................   $6,741         100.0%              --              N/A
Costs and expenses:
  Connectivity and operations...................    3,721          55.2%              --               --
  Sales and marketing...........................    1,804          26.8%              --               --
  General and administrative....................    2,480          36.8%             126              N/A
  Stock compensation............................      322           4.8%              --               --
  Depreciation..................................      377           5.6%              --               --
  Amortization..................................    2,449          36.3%              --               --
  Loss from operations..........................   (4,412)        (65.5%)           (126)             N/A
Net loss........................................   (4,055)        (60.2%)           (126)             N/A
Earnings before interest, taxes depreciation and
  amortization..................................   (1,586)        (23.5%)           (126)             N/A
</TABLE>

                          SELECTED BALANCE SHEET DATA

<TABLE>
<CAPTION>
                                                              DECEMBER 31,   DECEMBER 31,
                                                                  1999           1998
                                                              ------------   ------------
<S>                                                           <C>            <C>
Total current assets........................................       9,135         $148
Property and equipment, net.................................       5,727           --
Goodwill and intangibles, net...............................      32,331           --

Total assets................................................     $47,262         $256
Total current liabilities...................................       6,117           99
Long term debt..............................................          95           --
Total stockholders' equity..................................      41,050           57
Total liabilities and stockholders' equity..................     $47,262         $256
</TABLE>

                                       10
<PAGE>
                     SELECTED HISTORICAL FINANCIAL DATA FOR
                         OUR INTERNET SERVICE PROVIDERS

    The selected financial data are derived in part from the more detailed
historical financial statements and accompanying explanatory notes of our
Internet service providers included elsewhere in this prospectus.

    The following selected financial data of the Internet service providers
acquired on January 31, 1999 and May 17, 1999 should be read in conjunction with
the historical financial statements and accompanying explanatory notes and
"Management's Discussion and Analysis of Financial Condition and Results of
Operation" included elsewhere in this Form 10-K. All of the Internet service
providers have fiscal years ending December 31.

    The following table presents selected historical financial data for such
Internet service providers for the stated periods.

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31
                                                              -----------------------
<S>                                                           <C>          <C>
                                                                 1997         1998
                                                              ----------   ----------
STATEMENTS OF OPERATIONS DATA:

ALBANYNET, INC.

  Revenues..................................................  $  838,807   $1,140,518

  Costs and expenses:
    Connectivity and operations.............................     658,329      768,400
    Selling, general and administrative expenses............      44,441       61,456
    Depreciation............................................      57,866       67,814
                                                              ----------   ----------
      Total costs and expenses..............................     760,636      897,670
                                                              ----------   ----------
  Income from operations....................................      78,171      242,848
  Other income, net.........................................      11,082        5,369
  Interest expense..........................................      (4,724)      (3,272)
                                                              ----------   ----------
  Net income................................................  $   84,529   $  244,945
                                                              ==========   ==========
  Net income per share basic and diluted....................  $   422.65   $ 1,224.73
  Weighted average shares outstanding.......................         200          200
                                                              ==========   ==========
  Approximate number of subscribers at year end.............       2,300        3,200
</TABLE>

                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31
                                                              -----------------------
<S>                                                           <C>          <C>
                                                                 1997         1998
                                                              ----------   ----------
BORG INTERNET SERVICES, INC.

  Revenues..................................................  $  505,970   $  832,734

  Costs and expenses:
    Connectivity and operations.............................     319,127      601,890
    Selling, general and administrative expenses............      64,978      136,025
    Depreciation............................................      64,909      102,581
    Amortization of intangibles.............................      21,534       21,534
                                                              ----------   ----------
      Total costs and expenses..............................     470,548      862,030
                                                              ----------   ----------
  Income (loss) from operations.............................      35,422      (29,296)
  Interest expense..........................................      (4,467)     (11,717)
                                                              ----------   ----------
  Income (loss) before income taxes.........................      30,955      (41,013)
  Income tax provision (benefit)............................      12,383      (12,056)
                                                              ----------   ----------
  Net income (loss).........................................  $   18,572   $  (28,957)
                                                              ==========   ==========
  Net income (loss) per share basic and diluted.............  $ 6,190.67   $(9,652.33)
  Weighted average shares outstanding.......................           3            3
                                                              ==========   ==========
  Approximate number of subscribers at year end.............       2,500        4,000

CARAVELA SOFTWARE, INC.

  Revenues..................................................  $1,516,112   $1,879,410
  Costs and expenses:
    Connectivity and operations.............................   1,328,076    1,520,192
    Selling, general and administrative expenses............     152,944      156,761
    Depreciation............................................     118,485      117,146
                                                              ----------   ----------
      Total costs and expenses..............................   1,599,505    1,794,099
                                                              ----------   ----------
  Income (loss) from operations.............................     (83,393)      85,311
  Other income (expense), net...............................         267      (67,901)
  Interest expense..........................................      (9,453)     (21,406)
                                                              ----------   ----------
  Income (loss) before income taxes.........................     (92,579)      (3,996)
  Income tax benefit........................................     (37,031)      (1,598)
                                                              ----------   ----------
  Net loss..................................................  $  (55,548)  $   (2,398)
                                                              ==========   ==========
  Net (loss) per share basic and diluted....................  $  (555.48)  $   (23.98)
  Weighted average shares outstanding.......................         100          100
                                                              ==========   ==========
  Approximate number of subscribers at year end.............       4,000        5,000
</TABLE>

                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31
                                                              -----------------------
<S>                                                           <C>          <C>
                                                                 1997         1998
                                                              ----------   ----------
GLOBAL 2000 COMMUNICATIONS, INC.

  Revenues..................................................  $1,108,980   $1,738,613
  Costs and expenses:
    Connectivity and operations.............................     809,374      927,769
    Selling, general and administrative expenses............     148,153      480,334
    Depreciation............................................      43,690       58,672
                                                              ----------   ----------
      Total costs and expenses..............................   1,001,217    1,466,775
                                                              ----------   ----------
  Income from operations....................................     107,763      271,838
  Other income, net.........................................      (7,502)     (18,493)
  Interest expense..........................................     (14,375)     (13,573)
                                                              ----------   ----------
  Net income................................................  $   85,886   $  239,772
                                                              ==========   ==========
  Net income per share basic and diluted....................  $   429.43   $ 1,198.86
  Weighted average shares outstanding.......................         200          200
                                                              ==========   ==========
  Approximate number of subscribers at year end.............       3,300        4,000

ULSTERNET, INC.

  Revenues..................................................  $  318,630   $  604,419
  Costs and expenses:
    Connectivity and operations.............................     290,309      491,327
    Selling, general and administrative expenses............       6,913       21,472
    Depreciation............................................      39,224       58,231
                                                              ----------   ----------
      Total costs and expenses..............................     336,446      571,030
                                                              ----------   ----------
  Income (loss) from operations.............................     (17,816)      33,389
  Interest expense..........................................      (8,480)      (9,784)
  Net income................................................  $  (26,296)  $   23,605
                                                              ==========   ==========
  Net income per share basic and diluted....................  $  (279.74)  $   251.12
  Weighted average shares outstanding.......................          94           94
                                                              ==========   ==========
  Approximate number of subscribers at year end.............       2,100        3,800
</TABLE>

                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                              DECEMBER 31
                                                                 1998
                                                              -----------
<S>                                                           <C>
BALANCE SHEET DATA:

AlbanyNet, Inc.
  Working capital...........................................   $ 142,000
  Total assets..............................................   $ 259,894
  Long term debt, less current portion......................   $   4,030
  Total stockholders' equity................................   $ 190,079

Borg Internet Services, Inc.
  Working capital (deficit).................................   $(192,274)
  Total assets..............................................   $ 348,614
  Long term debt, less current portion......................   $  78,608
  Total stockholders' equity (deficit)......................   $ (30,283)

Caravela Software, Inc.
  Working capital (deficit).................................   $(160,143)
  Total assets..............................................   $ 550,128
  Long term debt, less current portion......................   $   6,816
  Total stockholders' equity................................   $  68,021

Global 2000 Communications, Inc.
  Working capital...........................................   $  41,066
  Total assets..............................................   $ 622,536
  Long term debt, less current portion......................   $  96,496
  Total stockholders' equity................................   $ 192,023

Ulsternet, Inc.
  Working capital (deficit).................................   $(143,755)
  Total assets..............................................   $  88,217
  Long term debt, less current portion......................   $  25,205
  Total stockholders' equity (deficit)......................   $ (92,502)
</TABLE>

                                       14
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

    The following discussion and other sections of this report contain
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements, often identified by words such
as "expects", "anticipates", "intends", "plans", "believes", "estimates" and
similar expressions, reflect our current beliefs and expectations. However, they
are not guarantees of future performance and involve risks and uncertainties
that could cause our results to differ significantly from those expressed or
implied by such forward-looking statements. The risks and uncertainties include,
but are not limited to, the factors identified below under the caption "Factors
that could effect future results." We undertake no obligation to update publicly
any forward-looking statements, whether as a result of new information, future
events or otherwise.

INTRODUCTION

    The following discussion of results of operations and of the liquidity and
capital resources of BiznessOnline.com, Inc. should be read in conjunction with
our 1999 audited consolidated financial statements and the related notes thereto
appearing in this filing on Form 10-K.

OVERVIEW

    We derive revenues from a variety of sources. We provide Internet access,
web site development, e-commerce solutions and Internet marketing/web media
services. These services are predominantly utilized by small to medium sized
business and individuals looking to establish a presence on the world wide web.
We host commercial and individual web sites. We also provide our customers with
server co-location and managed services from our state-of-the-art Internet data
center located in Albany, New York. We also provide Internet access via
dedicated high-speed broadband products such as DSL, Frame relay, T-1 and T-3
connections along with dial up connectivity. Our customers are individuals and
small to medium sized businesses. Subscription fees for dial up connectivity
vary between $9.95 and $24.95 per month among our Internet service providers and
by the billing plans for a particular Internet service provider. Most of our
individual subscribers pay us by credit card automatically on a monthly basis.
Our revenue composition may change as we develop our strategy to provide
additional e-commerce and other enhanced Internet services to our clients.

RESULTS OF OPERATIONS

    Year ended December 31, 1999

    We were formed in June 1998, and conducted no significant operations between
then and January 31, 1999, the date we acquired Global 2000
Communications, Inc., an Internet service provider located in Albany, New York.
We acquired four additional Internet service providers on May 17, 1999, one
Internet service provider on July 30, 1999, a web application service provider
on August 18, 1999, a web hosting company on September 30, 1999, an Internet
service provider on December 14, 1999, an Internet service provider on
December 15, 1999 and another Internet service provider on December 29, 1999.

    We generated revenues of $6.7 million during the year ended December 31,
1999. We also incurred $3.7 million of connectivity and operations expenses,
$1.8 million of sales and marketing expenses, $2.5 million of general and
administrative expenses, $322,000 of non cash compensation expenses relating to
the issuance of stock options and warrants to outside consultants, $2.8 million
of depreciation and amortization costs, and we earned $419,000 of interest
income, net. Income tax expense for the year, consisting solely of state income
taxes, was $62,000. We had a net loss of $4.1 million, or $0.70 per share for
the year ended December 31, 1999. The acquisitions of the nine Internet service
providers and two web hosting and application providers have been accounted for
using the purchase method of accounting and

                                       15
<PAGE>
consequently, the results of their operations have been included in our results
since their respective acquisition dates.

    Connectivity and operations expenses consist of the cost of non-capital
equipment and the recurring telecommunication costs associated with providing
services to subscribers, including the cost of local telephone lines and the
cost of leased lines connecting the Internet and our operations centers. We
expect these expenses to increase over time to support our growing subscriber
base, however, as a percentage of sales, we expect these costs will decrease as
the customer base expands. Connectivity and operations expenses also include the
salaries and employee benefits of our personnel providing installation, web
development and technical services, the cost of the equipment to provide these
services, rent and utilities for our Internet service providers' offices, and
customer service and technical support personnel costs. We expect customer
service and support expenses to increase over time to support new and existing
subscribers. New subscribers tend to be particularly heavy users of customer
service and technical support.

    Sales and marketing expenses include the costs associated with acquiring
subscribers, including sales personnel bonuses, sales commissions and
advertising. Sales and marketing expenses are expected to increase with the
expected growth of the subscriber base. We plan to increase advertising in new
markets we enter as we acquire new Internet service providers. We also plan to
hire additional sales and marketing personnel in each market we enter.

    General and administrative expenses consist primarily of corporate, Human
Resources, finance and related staff, along with related benefits, as well as
legal and accounting costs. General and administrative costs are expected to
increase to support our growth, primarily the implementation of a common billing
system.

    Depreciation expense relates primarily to our equipment and is based on the
estimated useful lives of the assets ranging from three to five years using the
accelerated method. Depreciation expense is expected to increase as our Internet
service providers increase their networks to support new and existing
subscribers and as we finish our centralized data center and billing and
financial reporting system.

    Amortization expense primarily relates to the amortization of goodwill
resulting from acquisitions and is based upon the useful lives of these
intangibles. Amortization expense is expected to increase as additional
acquisitions are made and will vary based upon purchase prices and assets
acquired.

LIQUIDITY AND CAPITAL RESOURCES

    At December 31, 1999, we had $7.5 million of cash and cash equivalents, an
increase of $7.3 million from December 31, 1998. Net cash provided by operating
activities was $1.8 million. Net cash used for investing activities was
$18.3 million, primarily as a result of the acquisition of the nine Internet
service providers and two web hosting and application service providers during
the year ended December 31, 1999. Net cash provided by financing activities was
$23.9 million, primarily as a result of the initial public offering of common
stock, which closed on May 17, 1999.

    We expect our capital expenditures to increase as our operations continue to
expand. It is anticipated that financial resources will be utilized in acquiring
additional communications equipment and improvements to technology at our new
data centers in Buffalo, NY and Hartford, CT, which are expected to be
operational by the fourth quarter of 2000. These investments will allow us to
better support our current subscribers and newly acquired subscribers.

    We believe that our cash flow from operations and proceeds from our initial
public stock offering, which was completed on May 17, 1999, will provide the
cash required to fund existing operations through the remainder of 2000.
However, we intend to pursue our strategy of acquiring additional Internet
service providers, web hosts and e-commerce service companies through the use of
cash on hand, and the issuance of additional common stock, proceeds from debt
financing, such as the March 2000 $15 million borrowing from MCG Credit
Corporation, and cash flow from operations. However, if we do not secure
additional

                                       16
<PAGE>
sources of financing, we will not have the resources to continue to pursue our
acquisition strategy, and our growth will be slowed. In addition, as we continue
to expand the range of our e-commerce products and services to small to medium
sized businesses, we intend to broaden our acquisition strategy to more
comprehensively address the needs of such customers, including but not limited
to providing long distance and local telecommunication services, such as the
acquisition of Telecon Communications Corp. which is expected to close by
March 31, 2000. Any significant acquisitions or increases in our growth rate
could materially affect our operating and financial expectations and results,
liquidity and capital resources.

RECENT DEVELOPMENTS

    On March 15, 2000, the New York State Public Service Commission granted
approval for the transfer of the "Certificate of Public Convenience and
Necessity" held by Telecon Communications Corp., a competitive local exchange
carrier ("CLEC") based in Johnstown, New York to us in connection with our
planned acquisition of substantially all of Telecon's assets. We now expect to
close such transaction and the acquisition of an Internet service provider
affiliated with Telecon on or about March 31, 2000 for an aggregate purchase
price of $15 million payable in cash and $3 million payable in shares of common
stock of the Company. In addition, we are in the process of preparing CLEC
filings in other New England states to enable us to begin to resell local and
long distance telephone services in such markets beginning in the second half of
2000.

    On March 16, 2000, we closed a $15 million senior secured credit facility.
We plan to use the proceeds of this facility to fund the cash purchase price of
the Telecon acquisition. The credit facility is secured by all of the assets of
BiznessOnline.com and its operating subsidiaries. In connection with such
financing, the Lender received certain cash fees and a warrant to purchase
838,779 shares of our common stock at prices of $7.00 per share for 559,186
shares and $12.00 per share for 279,593 shares, subject to certain anti-dilution
and other adjustments. The Lender will also receive 71,429 shares of common
stock at the closing of the Telecom acquisition.

YEAR 2000 READINESS DISCLOSURE STATEMENT

    We did not experience any interruption in our business activities or incur
any impairment to our financial condition or results of operations as a result
of passing into calendar year 2000. We will continue to monitor our own internal
systems and products to determine the impact, if any, of problems associated
with the year 2000. To date, year 2000 costs are not considered to be material
to our financial condition nor have we incurred any significant unplanned
expenditures to address or remediate year 2000 problems.

UNAUDITED SUPPLEMENTAL COMBINED FINANCIAL INFORMATION

    The following unaudited supplemental combined financial information and
related management discussion and analysis does not purport to represent what
our financial position or results of operations would actually have been if such
transactions and events had in fact occurred on those dates or to project our
results of operations for any future period.

RESULTS OF OPERATIONS--SUPPLEMENTAL COMBINED

    The following unaudited supplemental combined financial information for the
year ended December 31, 1998 includes the results of BiznessOnline.com, Inc.
combined with the results on May 17, 1999 of the Internet service provider
acquired in January 1999, and the additional four Internet service providers
acquired on May 17, 1999, as if the acquisitions had occurred on January 1,
1998.

    The unaudited supplemental combined financial information for the year ended
December 31, 1999 includes the results of the additional Internet service
provider acquired in July 1999 and the three Internet service providers acquired
in December 1999, and the results of the web host and application providers
acquired in August 1999 and September 1999, as if these acquisitions had
occurred on January 1, 1999.

                                       17
<PAGE>
This unaudited supplemental combined financial information includes the effects
of (a) the acquisitions, (b) our initial public stock offering, and (c) the
amortization of goodwill and other intangibles resulting from the acquisitions.

<TABLE>
<CAPTION>
                                                                      SUPPLEMENTAL COMBINED RESULTS
                                                                    (IN THOUSANDS EXCEPT SHARE DATA)
                                                              ---------------------------------------------
                                                                         YEARS ENDED DECEMBER 31
                                                              ---------------------------------------------
                                                                      1999                    1998
                                                              ---------------------   ---------------------
                                                                  $           %           $           %
                                                              ----------   --------   ----------   --------
<S>                                                           <C>          <C>        <C>          <C>
Revenues....................................................     $14,874    100.0         $6,196    100.0
                                                              ----------    -----     ----------    -----
Costs and expenses:
  Connectivity and operations...............................       8,599     57.8          4,218     68.1
  Sales and marketing.......................................       2,537     17.1            929     15.0
  General and administrative................................       3,303     22.2            512      8.3
  Stock compensation........................................         322      2.2             --      0.0
  Depreciation..............................................         878      5.9            405      6.5
  Amortization..............................................       7,038     47.3          2,704     43.6
                                                              ----------    -----     ----------    -----

  Total costs and expenses..................................      22,677    152.5          8,768    141.5
                                                              ----------    -----     ----------    -----

  Loss from operations......................................      (7,803)   (52.5)        (2,572)   (41.5)

Other expense...............................................          (7)    (0.0)           (81)    (1.3)
Interest income, (expense), net.............................         367      2.5            (60)    (1.0)
                                                              ----------    -----     ----------    -----
Loss before income taxes....................................      (7,443)   (50.0)        (2,713)   (43.8)
Income taxes................................................          98     (0.7)            --      0.0
                                                              ----------    -----     ----------    -----

Net loss....................................................     $(7,541)   (50.7)       $(2,713)   (43.8)
                                                              ==========    =====     ==========    =====
Supplemental combined net loss per share, basic and
  diluted...................................................      $(0.88)                 $(0.39)
                                                              ==========              ==========
Weighted average shares outstanding, basic and diluted......   8,609,574               6,890,436
                                                              ==========              ==========
</TABLE>

YEAR ENDED DECEMBER 31, 1999--UNAUDITED SUPPLEMENTAL COMBINED

REVENUES:

    Revenues increased $8.7 million, or 140.1% from $6.2 million to
$14.9 million. The increase in revenues was a result of the three acquisitions,
which occurred during the third quarter of 1999, and the three acquisitions,
which occurred during the fourth quarter of 1999 (approximately 116% of the
growth) combined with internal growth (approximately 24% of the growth).

    The following table provides a comparison of connectivity and operations,
sales and marketing and general and administrative expenses as a percentage of
pro forma total revenues:

<TABLE>
<CAPTION>
                                                                    YEAR ENDED
                                                                    DECEMBER 31
                                                            ---------------------------
                                                              1999               1998
                                                            --------           --------
<S>                                                         <C>                <C>
Connectivity and Operations...............................    57.8%              68.1%
Sales and Marketing.......................................    17.1%              15.0%
General and Administrative................................    22.2%               8.3%
</TABLE>

                                       18
<PAGE>
CONNECTIVITY AND OPERATIONS:

    Connectivity and operations expenses increased $4.4 million, or 103.9%, from
$4.2 million to $8.6 million, primarily as a result of the increase in revenue
from subscriber usage. As a percentage of revenue, Connectivity and Operations
expenses decreased from 68.1% in 1998 to 57.8% in 1999. Connectivity and
operations costs included $664,000 of costs associated with integrating the
combined companies during 1999.

    Connectivity and operations expenses consist of the cost of non-capital
equipment and the recurring telecommunication costs associated with providing
services to subscribers, including the cost of local telephone lines and the
cost of leased lines connecting the Internet and our operations centers. We
expect these expenses to increase over time to support our growing subscriber
base, however, as a percentage of sales, we expect these costs will decrease as
the customer base expands. Connectivity and operations expenses also include the
salaries and employee benefits of our personnel providing installation, web
development and technical services, the cost of the equipment to provide these
services, rent and utilities for our Internet service providers' offices, and
customer service and technical support personnel costs. We expect customer
service and support expenses to increase over time to support new and existing
subscribers. New subscribers tend to be particularly heavy users of customer
service and technical support.

SALES AND MARKETING:

    Sales and Marketing expenses increased $1.6 million, or 173.1%, from
$929,000 to $2.5 million. The increase was primarily the result of recent
advertising expenses and additional sales and marketing personnel as a result of
the subsequent acquisitions. Approximately $85,000 of the costs in 1999 is
related to advertising the BiznessOnline.com, Inc. brand name.

    Sales and marketing expenses include the costs associated with acquiring
subscribers, including sales personnel bonuses, sales commissions and
advertising. Sales and marketing expenses are expected to increase with the
expected growth of the subscriber base. We plan to increase advertising in new
markets we enter as we acquire new Internet service providers. We also plan to
hire additional sales and marketing personnel in each market we enter.

GENERAL AND ADMINISTRATIVE:

    General and administrative expenses increased $2.8 million, or 545.1%, from
$512,000 to $3.3 million, primarily as a result of the increased corporate
personnel costs and costs associated with combining the acquired companies.

    General and administrative expenses consist primarily of administrative
staff and related benefits, as well as the cost of travel. General and
administrative costs are expected to increase to support our growth, primarily
the implementation of a common billing system. We have implemented a financial
reporting system in our corporate headquarters in New Jersey.

DEPRECIATION:

    Depreciation expense increased $473,000, or 116.8%, from $405,000 to
$878,000, primarily as a result of capital equipment purchases during 1999.
These purchases were related to the integration of the billing and accounting
system and the building of the centralized data center in Albany, NY.

    Depreciation expense relates primarily to our equipment and is based on the
estimated useful lives of the assets ranging from three to five years using the
straight-line and accelerated methods for the equipment. Depreciation expense is
expected to increase as our Internet service providers increase their networks
to support new and existing subscribers and as we finish our centralized data
center and billing and financial reporting system during 2000.

                                       19
<PAGE>
AMORTIZATION:

    Amortization expense increased $4.3 million, or 160.3%, from $2.7 million to
$7.0 million. This increase was a result of the acquisitions completed during
the third and fourth quarters of 1999.

    Amortization expense primarily relates to the amortization of goodwill
acquired in the acquisitions and is based upon the useful lives of these
intangibles. Amortization expense is expected to increase as additional
acquisitions are made and will vary according to purchase prices and intangible
assets. Our policy in future acquisitions will be to amortize the portion of the
purchase price attributable to goodwill and other intangibles over the
appropriate period.

INTEREST INCOME, (EXPENSE), NET

    Interest income, net was $367,000 for the year ended December 31, 1999, as
compared to interest expense, net of $60,000 for the year ended December 31,
1998.

INCOME TAXES:

    Income tax expense for year ended December 31, 1999 was $98,000. The Company
had no income tax expense for the year ended December 31 1998 on a pro rata
basis. The Company has not recorded any income tax benefit from non-deductible
amortization of goodwill.

NET INCOME:

    As a result of the above, net loss for the year ended December 31, 1999 was
$7.5 million, or $0.88 per share as compared to a net loss of $2.7 million, or
$0.39 per share during 1998.

RESULTS OF OPERATIONS

    The following tables set forth significant historical financial data and
this data as a percentage of revenues for the periods indicated.

GLOBAL 2000 COMMUNICATIONS, INC.

<TABLE>
<CAPTION>
                                                                YEAR ENDED             YEAR ENDED
                                                               DECEMBER 31            DECEMBER 31
                                                                   1997                   1998
                                                           --------------------   --------------------
                                                               $          %           $          %
                                                           ---------   --------   ---------   --------
<S>                                                        <C>         <C>        <C>         <C>
Revenues.................................................  1,108,980    100.0     1,738,613    100.0

Connectivity and operations..............................    809,374     73.0       927,769     53.4
Selling, general and administrative expense..............    148,153     13.4       480,334     27.6
Depreciation.............................................     43,690      3.9        58,672      3.4
                                                           ---------    -----     ---------    -----
Total costs and expenses.................................  1,001,217     90.3     1,466,775     84.4
                                                           ---------    -----     ---------    -----
Income from operations...................................    107,763      9.7       271,838     15.6
Other income (expense) net...............................     (7,502)     (.7)      (18,493)    (1.1)
Interest expense.........................................    (14,375)    (1.3)      (13,573)     (.8)
                                                           ---------    -----     ---------    -----
Net income...............................................     85,886      7.7       239,772     13.8
                                                           =========    =====     =========    =====
Approximate total subscribers at year end................      3,300                  4,000
</TABLE>

    GLOBAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR
ENDED DECEMBER 31, 1998.

                                       20
<PAGE>
Revenues:

    Revenues increased $629,633, or 56.8% from $1,108,980 to $1,738,613,
primarily as a result of an increase in the number of subscribers and increased
revenue per subscriber. The number of subscribers increased from 3,300 at the
end of 1997 to 4,000 at the end of 1998, an increase of 21.2%.

Connectivity and operations:

    Connectivity and operations expenses increased $118,395 or 14.6%, from
$809,374 to $927,769. This increase was a result of the increased subscriber
base.

Selling, general and administrative:

    Selling, general and administrative expenses increased $332,181, or 224.2%
from $148,153 to $480,334 primarily as a result of an increase in advertising
expenses.

Depreciation:

    Depreciation expenses increased $14,982, or 34.3%, from $43,690 to $58,672
as a result of the acquisition of fixed assets during 1998 of approximately
$103,000.

Other (expense) net:

    Other (expense) net increased $(10,991) from $(7,502) to $(18,493). This
change was a result of losses on disposal of fixed assets.

Interest expense:

    Interest expense decreased $802, from $14,375 to $13,573, primarily as a
result of the decrease in average principal outstanding of debt and capitalized
leases.

CARAVELA SOFTWARE, INC. D/B/A CONNIX

<TABLE>
<CAPTION>
                                                                YEAR ENDED             YEAR ENDED
                                                               DECEMBER 31            DECEMBER 31
                                                                   1997                   1998
                                                           --------------------   --------------------
                                                               $          %           $          %
                                                           ---------   --------   ---------   --------
<S>                                                        <C>         <C>        <C>         <C>
Revenues.................................................  1,516,112    100.0     1,879,410    100.0

Connectivity and operations..............................  1,328,076     87.6     1,520,192     81.0
Selling, general and administrative expense..............    152,944     10.1       156,761      8.3
Depreciation.............................................    118,485      7.8       117,146      6.2
                                                           ---------    -----     ---------    -----
Total costs and expenses.................................  1,599,505    105.5     1,794,099     95.5
                                                           ---------    -----     ---------    -----
Income (loss) from operations............................    (83,393)    (5.5)       85,311      4.5
Other income (expense) net...............................        267       .0       (67,901)    (3.6)
Interest expense.........................................     (9,453)     (.6)      (21,406)    (1.1)
                                                           ---------    -----     ---------    -----
Income (loss) before taxes...............................    (92,579)    (6.1)       (3,996)     (.2)
Income tax benefit.......................................    (37,031)    (2.4)       (1,598)     (.1)
                                                           ---------    -----     ---------    -----
Net loss.................................................    (55,548)    (3.7)       (2,398)     (.1)
                                                           =========    =====     =========    =====
Approximate total subscribers at year end................      4,000                  5,000
</TABLE>

    CONNIX' RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR
ENDED DECEMBER 31, 1998.

                                       21
<PAGE>
Revenues:

    Revenues increased $363,298, or 24.0%, from $1,516,112 to $1,879,410
primarily as a result of an increase in subscribers. The number of subscribers
increased from 4,000 at December 31, 1997 to 5,000 at December 31, 1998, an
increase of 25.0%.

Connectivity and operations:

    Connectivity and operations expenses increased $192,116, or 14.5%, from
1,328,076 to 1,520,192. The increase was primarily a result of the increase in
the number of subscribers.

Selling, general and administrative expense:

    Selling, general and administrative expenses increased $3,817, or 2.5%, from
$152,944, to $156,761. The slight increase in these expenses was a result of an
increase in advertising expenses, which was offset by a decrease in bad debt
expenses.

Depreciation:

    Depreciation expenses decreased $1,339, or 1.1%, from $118,485, to $117,146,
primarily as a result of disposals of fixed assets offset by new assets
acquired.

Other income (expense) net:

    Other income (expense), net changed from other income, net of $267, to other
expense, net of $(67,901). This change was a result of losses on disposal of
fixed assets in 1998.

Interest expense:

    Interest expense increased $11,953, from $9,453 to $21,406, primarily as a
result of the increase in average principal outstanding of debt.

Income tax benefit:

    Income tax benefit decreased from $37,031 to $1,598. The decrease was a
result of the smaller loss before income taxes during 1998. The effective rate
remained 40% for both years.

ULSTERNET, INC.

<TABLE>
<CAPTION>
                                                                  YEAR ENDED            YEAR ENDED
                                                                  DECEMBER 31           DECEMBER 31
                                                                     1997                  1998
                                                              -------------------   -------------------
                                                                 $          %          $          %
                                                              --------   --------   --------   --------
<S>                                                           <C>        <C>        <C>        <C>
Revenues....................................................  318,630     100.0     604,419     100.0

Connectivity and operations.................................  290,309      91.1     491,327      81.3
Selling, general and administrative expense.................    6,913       2.2      21,472       3.6
Depreciation................................................   39,224      12.3      58,231       9.6
                                                              -------     -----     -------     -----
Total costs and expenses....................................  336,446     105.6     571,030      94.5
                                                              -------     -----     -------     -----
Income (loss) from operations...............................  (17,816)     (5.6)     33,389       5.5
Interest expense............................................   (8,480)     (2.7)     (9,784)     (1.6)
                                                              -------     -----     -------     -----
Net income (loss)...........................................  (26,296)     (8.3)     23,605       3.9
                                                              =======     =====     =======     =====
Approximate total subscribers at year end...................    2,100                 3,800
</TABLE>

                                       22
<PAGE>
    ULSTERNET RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR
ENDED DECEMBER 31, 1998.

Revenues:

    Revenues increased $285,789, or 89.7%, from $318,630 to $604,419 primarily
as a result of an increase in subscribers. The number of subscribers increased
from 2,100 at December 31, 1997 to 3,800 at December 31, 1998, an increase of
81.0%.

Costs and expenses:

    Total costs and expenses increased $234,584, or 69.7% from $336,446 to
$571,030, primarily as a result of the increase in the number of subscribers.

Connectivity and operations:

    Connectivity and operations expenses increased $201,018, or 69.2%, from
$290,309 to $491,327. The increase was primarily a result of the increased
number of subscribers.

Selling, general and administrative expense:

    Selling, general and administrative expenses increased $14,559, from $6,913,
to $21,472.

Depreciation:

    Depreciation expenses increased $19,007, or 48.5%, from $39,224 to $58,231,
primarily as a result of capital equipment spending.

Interest expense:

    Interest expense increased $1,304, from $8,480 to $9,784, primarily as a
result of the increase in average principal outstanding of debt and capitalized
leases.

BORG INTERNET SERVICES, INC.

<TABLE>
<CAPTION>
                                                                  YEAR ENDED            YEAR ENDED
                                                                  DECEMBER 31           DECEMBER 31
                                                                     1997                  1998
                                                              -------------------   -------------------
                                                                 $          %          $          %
                                                              --------   --------   --------   --------
<S>                                                           <C>        <C>        <C>        <C>
Revenues....................................................  505,970     100.0     832,734     100.0

Connectivity and operations.................................  319,127      63.1     601,890      72.3
Selling, general and administrative expense.................   64,978      12.8     136,025      16.3
Depreciation................................................   64,909      12.8     102,581      12.3
Amortization of intangibles.................................   21,534       4.3      21,534       2.6
                                                              -------     -----     -------     -----
Total costs and expenses....................................  470,548      93.0     862,030     103.5
                                                              -------     -----     -------     -----
Income (loss) from operations...............................   35,422       7.0     (29,296)     (3.5)
Interest expense............................................   (4,467)      (.9)    (11,717)     (1.4)
                                                              -------     -----     -------     -----
Income (loss) before taxes..................................   30,955       6.1     (41,013)     (4.9)
Income tax provision (benefit)..............................   12,383       2.4     (12,056)     (1.4)
                                                              -------     -----     -------     -----
Net income (loss)...........................................   18,572       3.7     (28,957)     (3.5)
                                                              =======     =====     =======     =====
Approximate total subscribers at year end...................    2,500                 4,000
</TABLE>

                                       23
<PAGE>
    BORG RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR ENDED
DECEMBER 31, 1998.

Revenues:

    Revenues increased $326,764 or 64.6%, from $505,970 to $832,734, primarily
as a result of an increase in subscribers. The number of subscribers increased
from 2,500 at December 31, 1997 to 4,000 at December 31, 1998, an increase of
60.0%.

Connectivity and operations:

    Connectivity and operations expenses increased $282,763, or 88.6%, from
$319,127 to $601,890. The increase was primarily a result of the increase in the
number of subscribers.

Selling, general and administrative expense:

    Selling, general and administrative expenses increased $71,047, or 109.3%,
from $64,978 to $136,025. The increase was a result of increased advertising
expenses.

Depreciation:

    Depreciation expenses increased $37,672 or 58.0%, from $64,909 to $102,581,
primarily as a result of increased capital equipment spending.

Interest expense:

    Interest expense increased $7,250, from $4,467 to $11,717, primarily as a
result of the increase in average principal outstanding of debt and capitalized
leases.

Income tax provision (benefit):

    Income tax provision during 1998 of $12,383 changed to an income tax
(benefit) of $(12,056). The change was a result of a loss before taxes in 1998.

ALBANYNET, INC.

<TABLE>
<CAPTION>
                                                                 YEAR ENDED             YEAR ENDED
                                                                 DECEMBER 31           DECEMBER 31
                                                                    1997                   1998
                                                             -------------------   --------------------
                                                                $          %           $          %
                                                             --------   --------   ---------   --------
<S>                                                          <C>        <C>        <C>         <C>
Revenues...................................................  838,807     100.0     1,140,518    100.0

Connectivity and operations................................  658,329      78.5       768,400     67.4
Selling, general and administrative expense................   44,441       5.3        61,456      5.4
Depreciation...............................................   57,866       6.9        67,814      5.9
                                                             -------     -----     ---------    -----
Total costs and expenses...................................  760,636      90.7       897,670     78.7
                                                             -------     -----     ---------    -----
Income from operations.....................................   78,171       9.3       242,848     21.3
Other income, net..........................................   11,082       1.3         5,369       .5
Interest expense...........................................   (4,724)      (.6)       (3,272)     (.3)
                                                             -------     -----     ---------    -----
Net Income.................................................   84,529      10.0       244,945     21.5
                                                             =======     =====     =========    =====
Approximate total subscribers at year end..................    2,300                   3,200
</TABLE>

    ALBANYNET'S RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE
YEAR ENDED DECEMBER 31, 1998.

                                       24
<PAGE>
Revenues:

    Revenues increased $301,711 or 36.0%, from $838,807 to $1,140,518 primarily
as a result of an increase in subscribers. The number of subscribers increased
from 2,300 at December 31, 1997 to 3,200 at December 31, 1998, an increase of
39.1%.

Connectivity and operations:

    Connectivity and operations expenses increased $110,071 or 16.7% from
$658,329 to $768,400. The increase was primarily a result of the increased
number of subscribers.

Selling, general and administrative expense:

    Selling, general and administrative expenses increased $17,015, or 38.3%,
from $44,441 to $61,456.

Depreciation:

    Depreciation expenses increased $9,948, from $57,866 to $67,814, primarily
as a result of capital equipment purchases.

Interest expense:

    Interest expense decreased $1,452, from $4,724 to $3,272. The decrease was a
result of lower outstanding capital leases during 1998.

FACTORS THAT COULD AFFECT FUTURE RESULTS

    BECAUSE WE HAVE A LIMITED OPERATING HISTORY, WE MAY NOT BE ABLE TO
SUCCESSFULLY MANAGE OUR BUSINESS OR ACHIEVE PROFITABILITY.

    We were formed in June 1998 and acquired our first Internet/Web services
provider in January 1999. We have acquired an additional 10 companies during
1999. Our management team faces the challenge of successfully implementing
company-wide administrative and operating systems and managing our newly
acquired companies. We may not be able to successfully manage our business to
achieve or maintain profitability of any of our individual Internet service
providers, or overall. In addition, our pro forma financial results cover
periods when we did not control or manage our Internet service providers and may
not be indicative of our future financial results.

    OUR "GROWTH BY ACQUISITIONS" STRATEGY IS RISKY.

    Our business strategy depends largely on our ability to expand into new
markets and enhance our presence in our existing markets by acquiring additional
Internet service providers and telecommunications companies that meet our
financial, geographic and other acquisition criteria. Although our acquisition
strategy may provide opportunities for rapid growth, we will face numerous
risks, including the following:

    - difficulty in combining newly acquired operations, technology and
      personnel;

    - loss of subscribers as a result of ownership or management changes;

    - failure of acquired businesses to achieve expected results;

    - diversion of management's attention from existing operations;

    - possible acquisition of substantial contingent or undisclosed liabilities;

    - risks of entering markets in which we have no direct prior experience.

                                       25
<PAGE>
    We may not be successful in overcoming these risks or any other problems
encountered in connection with future acquisitions.

    COMPETING BIDS FOR INTERNET AND TELECOMMUNICATIONS SERVICE PROVIDERS MAY
DRIVE UP PURCHASE PRICES AND LIMIT OUR ABILITY TO CARRY OUT OUR GROWTH STRATEGY.

    Our business strategy depends largely on our ability to expand into new
markets and enhance our presence in our existing markets by acquiring additional
Internet service providers that meet our financial, geographic and other
acquisition criteria. We believe that competition from other companies, which
seek to acquire and consolidate Internet service companies, is significant and
that acquisition prices will rise with the growth in demand for these companies
in the future. We may not have sufficient financial resources to afford these
higher prices. The potential increase in acquisition prices could increase the
amount of goodwill and other intangibles allocated from the purchase price for
these companies, which could adversely affect our financial condition, and
operating results.

    OUR ACQUISITION OF TELECON COMMUNICATIONS CORP. IS OUR INITIAL ENTRY INTO
PROVIDING LONG DISTANCE AND LOCAL TELEPHONE SERVICE.

    While our Chairman & Chief Executive Officer has considerable prior
experience in the marketing and sales of telecommunications products and
services, our company to date has focussed on providing Internet access and
related services including web site design and hosting. The acquisition of
Telecon Communications Corp. which is expected to close on or about March 31,
2000 will be the initial entry by BiznessOnline.com, Inc. into the business of
providing local and long distance telephone service. We cannot provide any
assurance that we will be successful in this new undertaking.

    COVENANTS IN OUR $15 MILLION LOAN AGREEMENT RESTRICT OUR ABILITY TO BORROW
AND INVEST, WHICH COULD IMPAIR OUR ABILITY TO MAKE ADDITIONAL ACQUISITIONS OR
OBTAIN ADDITIONAL DEBT OR EQUITY FINANCING.

    The credit agreement dated March 16, 2000 governing our $15 million credit
facility imposes significant operating and financial restrictions that limit our
discretion on some business matters, which could make it more difficult for us
to acquire additional companies, finance our operations or otherwise expand or
engage in other business activities that may be of interest. Among other things,
these restrictions limit or prohibit our ability to:

    - Incur additional debt;

    - Pay dividends or make other distributions;

    - Make capital expenditures or enter into leasing transactions;

    - Make investments;

    - Pledge or mortgage assets;

    - Guarantee debt;

    - Sell assets;

    - Enter into transactions with related persons; and

    - Consolidate, merge or sell substantially all of our assets

    If we are unable to satisfy the financial or other covenants required by the
lender or otherwise default on the credit agreement, we could be forced into
bankruptcy or liquidation proceedings or otherwise lose all of our business and
assets to such lender in a foreclosure action.

                                       26
<PAGE>
    OUR SUCCESS DEPENDS ON OUR ABILITY TO RETAIN MARK MUNRO AND OTHER KEY
     PERSONNEL.

    We believe that the telecommunications and related management, sales and
marketing experience of Mark E. Munro, our president and chief executive officer
is critical to our success in the Internet business and in our growth by
acquisitions strategy and the loss of his services would have a detrimental
impact on our business. Our success will also depend on our ability to hire and
retain other qualified management, including competent marketing, technical and
sales personnel. We may be unable to locate and hire these personnel. We may
also be unable to retain or integrate the personnel of acquired Internet service
providers into our operations.

    BECAUSE WE WILL DEPEND ON OTHER COMPANIES FOR TELECOMMUNICATIONS PRODUCTS
AND SERVICES, WE MAY EXPERIENCE DELAYS AND INCREASED COSTS IF DEMAND FOR THESE
ITEMS CONTINUES TO INCREASE.

    We will depend on major companies such as UUNET, MCI Worldcom, Qwest and
Sprint to provide connectivity and equipment capacity to us. We will also depend
on third-party suppliers of hardware components. As we and other Internet
service providers grow, our suppliers will face significant demand for their
products; some of these suppliers may have limited resources and production
capacity. If our suppliers fail to adjust to meet increasing demand, they may be
unable to supply components and products in the quantities, at the quality
levels and at the times required by us, or at all. In addition, prices for these
components and products may increase significantly. If our suppliers fail to
provide equipment and we are unable to develop alternative sources of supply, we
will experience delays and increased costs in expanding our network.

    THE INTERNET SERVICE MARKET CHANGES RAPIDLY AND WE MAY NOT BE SUCCESSFUL IN
ADAPTING TO NEW TECHNOLOGIES OR ALTERNATIVE INTERNET ACCESS SYSTEMS.

    Our industry is characterized by rapidly changing technology, constantly
evolving industry standards, emerging competition and frequent new service
information. We are unable to predict whether we will have the necessary
resources to adapt to this changing marketplace. For example, our Internet
service providers provide Internet access across telephone lines to computers.
If the Internet becomes easily accessible by screen-based telephones, television
or other electronic devices, or if the means of delivery changes to satellite or
other wireless technology, we may need to change our network design and develop
new technology. Our pursuit of these technological advances would require
substantial time and expense. We cannot assure you that we will be successful in
adapting our business to alternative access systems or that new technologies
will be available or affordable for us.

    WE MAY FACE ADDITIONAL COSTS AND LOWER REVENUES AS A RESULT OF CHANGES IN
GOVERNMENT REGULATIONS.

    Our Internet services are not currently subject to direct regulation by the
Federal Communications Commission or any other agency, other than regulations
applicable to businesses generally. However, there is a risk that changes in
governmental regulations could increase our costs or lower our revenues as a
result of (i) the imposition of access charges on Internet service providers,
(ii) the loss of certain reciprocal compensation payments received by local
telephone companies, and (iii) required contributions to a universal service
fund to replace current subsidies and accomplish certain public policy
objectives, and (iv) other new federal, state or local taxes on Internet access
fees and e-commerce activities.

    ACCESS CHARGES.  Access charges are assessed by local telephone companies to
long distance companies for the use of the local telephone network to originate
and terminate long distance calls, generally on a per minute basis. Access
charges have been a source of dispute, with long distance companies arguing that
the access rates are substantially in excess of cost and local telephone
companies arguing that access rates are needed to subsidize lower local rates
for end user and other purposes. To date the Federal Communications Commission
has determined that Internet service providers should not be required to pay
interstate access charges to local telephone companies. However, there is no
guarantee that the Commission will not reconsider its decision in the future.
Our costs for doing business would increase if we were required to pay
interstate access charges.

                                       27
<PAGE>
    RECIPROCAL COMPENSATION.  To the extent that an end-user's call to an
Internet service provider is local rather than long distance, the local
telephone company that serves the Internet service provider may be entitled to
reciprocal compensation from the end-user's local telephone company. Reciprocal
compensation is a reimbursement from one local telephone company to a second one
for handling calls that originate with the first local telephone company and
terminate with the second one. This payment of reciprocal compensation reduces
the local telephone company's costs and ultimately reduces the Internet service
provider's costs. Although the FCC recently determined that most traffic to an
Internet service provider is interstate in nature, the Commission allowed state
commissions to determine payment issues in certain situations pending a final
resolution by the FCC. This determination could potentially eliminate the
payment of reciprocal compensation to the local telephone company which could
ultimately increase our costs.

    UNIVERSAL SERVICE FUND.  The FCC has to date determined that Internet access
providers should not be required to contribute to a universal service fund
established to replace current local rate subsidies and to meet other public
policy objectives, such as enhanced communications systems for schools,
libraries and health care providers. As a result, unlike telecommunications
providers, Internet access providers do not have to contribute a percentage of
their revenues to the federal universal fund and are not likely to be required
to contribute to similar funds being established at the state level. However,
both the access charges and universal service fund treatment are the subjects of
further FCC proceedings and could change. Telephone companies are actively
seeking modification or reversal of the FCC decisions, and their arguments are
gaining support as "telephone" service through computers begins to compete with
traditional telephone service. We would be adversely affected if in the future
our Internet service providers were required to contribute to the universal
service fund.

    TAXES.  New federal, state or local tax laws may also have an adverse impact
on our future revenues by imposing taxes on Internet access fees or e-commerce
activities. We may not be able to fully recoup these taxes from our subscribers
due to the competitive nature of our industry.

    WE MAY FACE POTENTIAL LIABILITY FOR INFORMATION DISSEMINATED OVER OUR
     NETWORK.

    The law relating to liability of Internet service providers for information
carried on or disseminated through their network is unsettled. Companies like
ours face potential liability for the actions of subscribers and others using
our systems, including liability for infringement of intellectual property
rights, rights of publicity, defamation, libel and criminal activity including
transmission of obscene materials. As the law in this area develops, our
potential liability for information carried on or disseminated through our
network could require us to implement measures to reduce our exposure to this
liability, which may require the expenditure of substantial resources or the
discontinuation of some product or service offerings, any of which could be
detrimental to our business, financial condition and results of operation.

    OUR SYSTEMS MAY BE VULNERABLE TO SECURITY RISKS OR UNINTENTIONAL
INTERRUPTIONS IN SERVICE.

    Our systems will be vulnerable to computer viruses, sabotage, unauthorized
access and other intentional or accidental actions of Internet users,
subscribers, employees or others which could result in temporary or prolonged
delays in providing Internet-related service. Unauthorized access could also
jeopardize confidential information of our customers stored in our or the
customer's computer systems, which may deter potential subscribers and result in
liability claims against us. Fixing problems caused by computer viruses or other
inappropriate uses or security breaches may require interruptions, delays, or
stops in service to our subscribers. Until more comprehensive and cost-effective
security technologies are developed, the security and privacy concerns of
existing and potential customers may inhibit the growth of the Internet service
industry in general, and our customer base and revenues in particular.

                                       28
<PAGE>
    Our business depends on our ability to deliver high quality uninterrupted
access to the Internet. However, there is a risk that our services will be
interrupted as a result of:

    - network equipment damage caused by natural disasters like earthquakes and
      fires;

    - hardware failures at our operational centers;

    - increased stress on network hardware and traffic management systems;

    - local power losses or other telecommunications systems failures; and

    - capacity constraints either at a particular telecommunications facility or
      system wide.

    Any system failure that causes interruption in our service, particularly
during our early stages of development, could have a negative effect on our
business, financial condition and results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

    We provide Internet access and related services to individuals and small to
medium sized businesses in northeastern New York state, Massachusetts and
Connecticut. We are not subject to changes in foreign currency exchange rates or
weak economic conditions in foreign markets. Our interest income is subject to
changes in the general level of U.S. interest rates, particularly since the
majority of our investments are in short-term instruments. Due to the nature of
our short-term investments, we have concluded that there is no material market
risk exposure. Therefore, no quantitative tabular disclosures are required.

    Our investment policy requires us to invest funds in excess of current
operating requirements in obligations of the U.S. government and its agencies
and investment grade obligations of state and local governments and U.S.
corporations.

                                       29
<PAGE>
ITEM 8. FINANCIAL STATEMENTS

                            BIZNESSONLINE.COM, INC.
                              AUDITORS' REPORT AND
                       CONSOLIDATED FINANCIAL STATEMENTS
                             AND SUPPLEMENTARY DATA

                               TABLE OF CONTENTS

<TABLE>
<S>                                                           <C>
                                                               PAGE
                                                                ----
<S>                                                           <C>

Report of KPMG LLP, Independent Auditors....................      31

Consolidated Balance Sheets as of December 31, 1999
  and 1998..................................................      32

Consolidated Statements of Operations for the year ended
  December 31, 1999 and the period July 1, 1998 (date of
  inception) through December 31, 1998......................      33

Consolidated Statements of Stockholders Equity for the Year
  Ended December 31, 1999 and the period July 1, 1998 (date
  of inception) through December 31, 1998...................      34

Consolidated Statements of Cash Flows for the Year Ended
  December 31, 1999 and the period July 1, 1998 (date of
  inception) through December 31, 1998......................      35

Notes to Consolidated Financial Statements..................      36
</TABLE>

                                       30
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

THE BOARD OF DIRECTORS
BIZNESSONLINE.COM, INC.:

    We have audited the accompanying consolidated balance sheets of
BiznessOnline.com, Inc. and subsidiaries as of December 31, 1999 and 1998, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for the year ended December 31, 1999 and the period from July 1, 1998
(date of inception) through December 31, 1998. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
BiznessOnline.com, Inc. and subsidiaries as of December 31, 1999 and 1998, and
the results of their operations and their cash flows for the year ended
December 31, 1999 and the period from July 1, 1998 (date of inception) through
December 31, 1998, in conformity with generally accepted principles.

                                          /s/ KPMG LLP

Providence, Rhode Island
February 25, 2000

                                       31
<PAGE>
                            BIZNESSONLINE.COM, INC.

                          CONSOLIDATED BALANCE SHEETS

                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                              DECEMBER 31,   DECEMBER 31,
                                                                  1999           1998
                                                              ------------   ------------
<S>                                                           <C>            <C>
                           ASSETS
Current assets:
  Cash and cash equivalents.................................     $ 7,481         $ 148
  Accounts receivable, net of allowance for bad debts of
    $482....................................................       1,274            --
  Prepaid expenses and other current assets.................         380            --
                                                                 -------         -----
  Total current assets......................................       9,135           148

Property and equipment, net.................................       5,727            --
Goodwill and intangibles, net of accumulated amortization of
  $2,400....................................................      32,331            --
Other assets................................................          69           108
                                                                 -------         -----
Total assets................................................     $47,262         $ 256
                                                                 =======         =====

            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long term debt.........................     $    23         $  --
  Current portion of obligations under capital leases.......         183            --
  Accounts payable..........................................       2,345            99
  Income tax payable........................................         109            --
  Accrued expenses..........................................       1,847            --
  Deferred revenue..........................................       1,610            --
                                                                 -------         -----

Total current liabilities...................................       6,117            99
Long term debt, net of current portion......................           6            --
Capital leases, net of current portion......................          89            --
                                                                 -------         -----
Total liabilities...........................................       6,212            99
                                                                 -------         -----
Preferred stock subscriptions...............................          --           100
Stockholders' equity:
  Preferred stock, $0.01 par value, 1,000 shares authorized,
    no shares issued and outstanding........................          --            --
  Common stock, $0.01 par value, 39,000,000 shares
    authorized, 8,609,574 and 3,147,186 shares issued and
    outstanding in 1999 and 1998 respectively...............          86            31
  Additional paid in capital................................      45,145           152
  Accumulated deficit.......................................      (4,181)         (126)
                                                                 -------         -----

Total stockholders' equity..................................      41,050            57
                                                                 -------         -----
Total liabilities and stockholders' equity..................     $47,262         $ 256
                                                                 =======         =====
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       32
<PAGE>
                            BIZNESSONLINE.COM, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                            PERIOD FROM JULY 1, 1998
                                                              YEAR ENDED      (DATE OF INCEPTION)
                                                              DECEMBER 31           THROUGH
                                                                 1999          DECEMBER 31, 1998
                                                              -----------   ------------------------
<S>                                                           <C>           <C>
Revenues....................................................  $    6,741           $       --
                                                              ----------           ----------
Costs and expenses:
  Connectivity and operations...............................       3,721                   --
  Sales and marketing.......................................       1,804                   --
  General and administrative................................       2,480                  126
  Stock compensation........................................         322                   --
  Depreciation..............................................         377                   --
  Amortization..............................................       2,449                   --
                                                              ----------           ----------
  Total costs and expenses..................................      11,153                  126
                                                              ----------           ----------

  Loss from operations......................................      (4,412)                (126)

Interest income, net........................................         419                   --
                                                              ----------           ----------
Loss before income taxes....................................      (3,993)                (126)

Income taxes................................................          62                   --
                                                              ----------           ----------

Net loss....................................................  $   (4,055)          $     (126)
                                                              ==========           ==========
Net loss per share, basic and diluted.......................  $    (0.70)          $    (0.04)
                                                              ==========           ==========
Weighted average shares outstanding, basic and diluted......   5,765,432            3,147,186
                                                              ==========           ==========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       33
<PAGE>
                            BIZNESSONLINE.COM, INC.

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                   COMMON STOCK         PREFERRED STOCK                                         TOTAL
                               --------------------   -------------------     ADDITIONAL      ACCUMULATED   STOCKHOLDERS'
                                SHARES      AMOUNT     SHARES     AMOUNT    PAID IN CAPITAL     DEFICIT        EQUITY
                               ---------   --------   --------   --------   ---------------   -----------   -------------
<S>                            <C>         <C>        <C>        <C>        <C>               <C>           <C>
Initial Capitalization.......        100     $--           --      $ --              --              --             --

Additional capital
  contributions..............         --      --           --        --             183              --            183

Effect of 10,000 for 1
  stock split................    999,900      10           --        --             (10)             --             --

Effect of 3.147186 for 1
  stock split................  2,147,186      21           --        --             (21)             --             --

Net loss.....................                 --           --        --              --            (126)          (126)
                               ---------     ---      -------      ----         -------         -------        -------

Balance December 31, 1998....  3,147,186     $31           --      $ --             152            (126)            57

Issuance of Preferred
  Stock......................         --      --       70,000         1             349              --            350

Conversion of preferred stock
  to common stock............     61,250       1      (70,000)       (1)             --              --             --

Issuance of common stock in
  connection with initial
  public offering, net of
  offering costs and
  underwriter discounts......  2,900,000      29           --        --          24,616              --         24,645

Issuance of common stock for
  Acquisitions...............  2,501,138      25           --        --          20,028              --         20,053

Net loss.....................         --      --           --        --              --          (4,055)        (4,055)
                               ---------     ---      -------      ----         -------         -------        -------

Balance December 31, 1999....  8,609,574     $86           --      $ --         $45,145         $(4,181)       $41,050
                               =========     ===      =======      ====         =======         =======        =======
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       34
<PAGE>
                            BIZNESSONLINE.COM, INC.

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                              PERIOD FROM JUNE 1, 1998
                                                                                (DATE OF INCEPTION)
                                                             YEAR ENDED               THROUGH
                                                          DECEMBER 31, 1999      DECEMBER 31, 1998
                                                          -----------------   ------------------------
<S>                                                       <C>                 <C>
Net loss................................................      $ (4,055)                 $(126)

Adjustments to reconcile net loss to net cash provided
  by (used in) operating activities:
    Depreciation and amortization.......................         2,826                     --
    Provision for bad debt..............................           257                     --
    Compensation charge for issuance of stock options
      and warrants......................................           322                     --
    Changes in net assets and liabilities:
      Increase in accounts receivable-trade.............          (369)                    99
      Increase in other current assets..................          (329)                     0
      Increase in accounts payable......................         2,038                      0
      Increase in accrued expenses......................         1,259                      0
      Increase in income taxes payable..................            65                     --
      Decrease in deferred revenue......................          (182)                    --
                                                              --------                  -----
        Net cash provided by (used in) operating
          activities....................................         1,832                    (27)
Cash flows from investing activities:
    Capital expenditures................................        (4,154)                    --
    Change in other assets..............................            60                     --
    Acquisition of businesses, net of cash acquired.....       (14,266)                    --
                                                              --------                  -----
        Net cash used in investing activities...........       (18,360)                    --
                                                              --------                  -----
Cash flows from financing activities:
    Capital contributions...............................            --                    183
    Repayments of capital lease obligations.............           (95)                    --
    Repayment of long term debt.........................          (504)                    --
    Repayment of long term debt to related parties......          (435)                    --
    Proceeds from preferred stock subscription..........            --                    100
    Proceeds from sale of preferred stock...............           250                     --
    Increase in deferred costs..........................            --                   (108)
    Issuance of common stock in initial public offering,
      net of underwriter discounts and commissions......        24,645                     --
                                                              --------                  -----
        Net cash provided by financing activities.......        23,861                    175
                                                              --------                  -----

Net increase in cash and cash equivalents...............         7,333                    148
Cash and cash equivalents at beginning of period........           148                     --
                                                              --------                  -----

Cash and cash equivalents at end of period..............      $  7,481                  $ 148
                                                              ========                  =====

Non--cash investing and financing:
    Notes payable.......................................           580                     --
    Issuance of common stock for acquisitions...........        20,053                     --
Interest paid...........................................      $     26                     --
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       35
<PAGE>
                            BIZNESSONLINE.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (A) NATURE OF BUSINESS

    BiznessOnline.com, Inc., a Delaware Corporation was incorporated on
June 11, 1998 (date of inception of operations, July 1, 1998) for the purpose of
acquiring Internet service providers and related businesses serving individuals
and small to medium-sized businesses. We acquired all of the stock or assets of
nine Internet service providers, one web development company, and one web
hosting company during 1999. The Company conducts all of its operations through
its operating subsidiaries covering a geographic footprint that includes upstate
New York, Connecticut and portions of Rhode Island, New Hampshire and
Massachusetts, and considers its operating subsidiaries to be one reporting
segment.

    (B) PRINCIPLES OF CONSOLIDATION

    The consolidated financial statements include the accounts of the Company
and all of its wholly owned subsidiaries. All significant inter-company accounts
and transactions have been eliminated in consolidation.

    (C) USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

    (D) CASH AND CASH EQUIVALENTS

    The company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

    (E) NET LOSS PER SHARE

    Basic loss per share is based upon the weighted average number of common
shares outstanding. Loss per share assuming dilution is based upon the weighted
average number of common and common equivalent shares outstanding assuming
dilution. Dilutive potential common shares outstanding at December 31, 1999 were
approximately 8.6 million. Options to purchase approximately 800,000 shares of
common equivalent shares were not included in the computation of net loss per
share because they were anti-dilutive. As a result, diluted loss per share is
the same as basic loss per share.

    (F) PROPERTY AND EQUIPMENT

    Property and equipment are recorded at cost. Depreciation is provided for
using the straight-line method over the estimated useful lives of the assets.
The Company leases certain of its data communications and other equipment under
capital lease agreements. The assets and liabilities under capital leases are
recorded at the lesser of the present value of aggregate future minimum lease
payments or the fair value of the assets under the lease. Assets under capital
lease are depreciated over the shorter of their estimated useful lives or the
lease term.

    (G) GOODWILL AND OTHER INTANGIBLE ASSETS

    Goodwill and other intangible assets represents the excess of purchase price
over fair value of net assets acquired and are amortized on a straight line
basis over the expected periods to be benefited, which

                                       36
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
is five years. The Company assesses the recoverability of its intangible assets
by determining whether the amortization over the remaining life can be recovered
through undiscounted future operating cash flows. The amount of goodwill
impairment, if any, is measured based on projected discounted future operating
cash flows using a discount rate reflecting the Company's average cost of funds.
The assessment of the recoverability of goodwill will be impacted if estimated
future operating cash flows are not achieved.

    (H) IMPAIRMENT OF LONG-LIVED ASSETS

    Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net undiscounted cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets.

    (I) FAIR VALUE OF FINANCIAL INSTRUMENTS

    The carrying amounts reported in the balance sheet for the Company's cash
and cash equivalents, accounts receivable, accounts payable and bank borrowings
and lease obligations approximate fair value due to their short-term nature or
borrowing rates that approximate market rates.

    (J) FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

    Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash and cash equivalents and
accounts receivable. Cash and cash equivalents include cash on deposit in
checking accounts, commercial paper and certificates of deposit. These cash and
cash equivalents consist of high credit quality instruments.

    The Company performs ongoing credit evaluations of its customers and
generally requires no collateral. The company maintains reserves for potential
credit losses; historically, such losses have not been material and have been
within management's expectations. At December 31, 1999, no customer accounted
for a significant percentage of accounts receivable.

    (K) REVENUE RECOGNITION

    The Company recognizes revenue when services are provided. Services for
Internet access are generally billed in advance. Advance billings are recorded
as deferred revenue and recognized as revenue when earned over the period of
service.

    (L) INCOME TAXES

    Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in earnings in the period that includes the enactment date.

                                       37
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
    (M) ADVERTISING COSTS

    All costs related to advertising the Company's services are expensed in the
period incurred. Amounts charged to expense were $858,000 during the year ended
December 31, 1999 and $0 during 1998.

    (N) EFFECTS OF INFLATION

    We do not believe that inflation has had a material impact on our results of
operations during the year ended December 31, 1999.

    (O) RECENT ACCOUNTING PRONOUNCEMENTS

    In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." Statement 133 changes the previous accounting
definition of "derivative" which focused on freestanding contracts like options
and forwards, including futures and swaps, expanding it to include embedded
derivatives and many commodity contracts. Under Statement 133, every derivative
is recorded in the balance sheet as either an asset or liability measured at its
fair value. Statement 133 requires that changes in the derivative fair value be
recognized currently in earnings unless specified hedge accounting criteria are
met. This Statement, as amended by Statement 137, is effective for fiscal years
beginning after June 15, 2000. Earlier application is allowed as of the
beginning of any quarter beginning after issuance. We do not anticipate that
Statement 133 will have a material impact on our financial position or results
of operations.

NOTE 2. ACQUISITIONS

    (A) GLOBAL 2000 COMMUNICATIONS

    On January 31, 1999, the Company acquired all of the shares of Global 2000
Communications, Inc., an Internet service provider located in Albany, NY, in
exchange for a $580,000 note payable at the initial public offering and
$2.7 million payable in shares of common stock. The Company issued 272,000
shares of common stock. The note was repaid at the initial public offering. The
total purchase price is $3.3 million.

    (B) ALBANYNET, INC.

    On May 17, 1999, the Company acquired all of the shares of AlbanyNet, Inc.,
an Internet service provider located in Albany, NY, in exchange for
$2.4 million payable in cash.

    (C) BORG INTERNET SERVICES

    On May 17, 1999, the Company acquired all of the shares of Borg Internet
Services, Inc., an Internet service provider located in Utica, NY, in exchange
for $500,000 in cash and $1.5 million payable in shares of common stock. The
Company issued 150,000 shares of common stock. The total purchase price is
$2.0 million.

    (D) CARAVELA SOFTWARE, INC.

    On May 17, 1999, the Company acquired all of the shares of Caravela
Software, Inc., an Internet service provider located in Middlefield, CT, in
exchange for $2.1 million in cash and $2.8 million payable in

                                       38
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. ACQUISITIONS (CONTINUED)
shares of common stock. The Company issued 280,000 shares of common stock. The
total purchase price is $5.0 million.

    (E) ULSTERNET, INC.

    On May 17, 1999, the Company acquired all of the shares of Ulsternet, Inc.,
an Internet service provider located in Kingston, NY, in exchange for $650,000
in cash and $800,000 payable in shares of common stock. The Company issued
80,000 shares of common stock. The total purchase price is $1.5 million.

    (F) ASCENT NETWORKING, INC.

    On July 30, 1999, we acquired substantially all the assets of a sole
proprietorship including all the capital stock of an affiliate of the
proprietorship, Ascent Internet Holdings, Inc., which together conduct business
as an Internet service provider under the name Ascent Networking in Norwich, New
York for $1.1 million in cash. Based on the operating results for 1999, we will
pay an additional $.2 million. This amount has already been recorded in the
financial statements.

    (G) WEBWAY, LLC

    On August 18, 1999 the Company acquired substantially all of the assets of
WebWay, LLC, a web development company located in Albany, NY, for $830,000
payable in cash and $1.8 million payable in shares of common stock. The Company
issued 200,046 shares of common stock. The total purchase price is
$2.6 million.

    (H) INFOBOARD, INC.

    On September 30, 1999 the Company acquired all the shares of
Infoboard, Inc., a web hosting company located in Lynn, MA, for $1.4 million in
cash and $1.6 million payable in shares of common stock. The Company issued
228,462 shares of common stock. The total purchase price is $3.0 million.

    (I) CYBERZONE, LLC

    On December 14, 1999 the Company acquired substantially all of the assets of
Cyberzone, LLC, an Internet service provider located in Hartford, CT, for
$1.8 million payable in cash and $1.8 million payable in shares of common stock.
The Company issued 271,904 shares of common stock. The total purchase price is
$3.5 million. Based on the operating results for 1999, the Company will increase
the purchase price by $.2 million, payable 50% in cash and 50% in shares in
common stock.

    (J) NECANET, INC.

    On December 15, 1999 the Company acquired all the shares of NECAnet, Inc., a
Internet service provider located in Storrs, CT, for $1.6 million in cash and
$1.9 million payable in shares of common stock. The Company issued 298,726
shares of common stock. The total purchase price is $3.5 million.

                                       39
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. ACQUISITIONS (CONTINUED)
    (K) PRIME COMMUNICATIONS, INC.

    On December 29, 1999 the Company acquired all the shares of Prime
Communications, Inc., a Internet service provider located in Amherst, NY, for
$1.2 million in cash and $5.8 million payable in shares of common stock. The
Company issued 720,000 shares of common stock. The total purchase price is
$7.0 million. The Company has also agreed to pay an additional amount based on
revenue and profitability for the first six months of 2000. The amount is 2.5
times revenue over $1.4 million, provided EBITDA is greater than 35% of revenue.

    In accordance with generally accepted accounting principles, the total
purchase price for these acquisitions has been allocated to the fair value of
assets purchased and liabilities assumed as shown in the following table.
Pursuant to the purchase method of accounting, the excess of purchase price over
fair value of net assets acquired has been recorded as goodwill and is being
amortized over 5 years. The amount of purchase price paid in common stock of the
Company has been recorded at the price on the date issued. This amount may
differ from the price paid per the purchase agreement, as the stock price was
generally, the average stock price for the 20 days prior to closing.

<TABLE>
<S>                                                           <C>
Working capital.............................................  $ (936,000)
Property and equipment......................................   1,950,000
Other assets................................................      74,000
Long term debt..............................................    (275,000)
Goodwill....................................................  35,544,000
</TABLE>

    The acquisitions were accounted for pursuant to the purchase method of
accounting and included all costs of acquisition, including legal and accounting
fees. The accompanying financial statements of BiznessOnline.com, Inc. include
the operating results of each of the acquisitions from their respective
acquisition dates. The pro forma results of operations for the acquired
companies have been included with the pro forma results of operations included
on Page 17.

NOTE 3. PROPERTY AND EQUIPMENT

    Property and equipment consisted of the following:

<TABLE>
<CAPTION>
                                                 ESTIMATED LIFE   DECEMBER 31, 1999
                                                 --------------   -----------------
<S>                                              <C>              <C>
Communication and computer equipment...........  3-5 years           $ 5,187,000
Purchased software.............................  3 years                 862,000
Office furniture and equipment.................  3-7 years               342,000
Leasehold Improvements.........................  Lease term            1,402,000
Vehicles.......................................  3 years                  74,000
                                                                     -----------
                                                                       7,867,000
Less accumulated depreciation..................                       (2,140,000)
                                                                     -----------
                                                                     $ 5,727,000
                                                                     ===========
Pro forma revenues.............................    $   14,874
Pro forma net loss.............................        (7,541)
Pro forma net loss per share...................         (0.88)
</TABLE>

                                       40
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4. NOTES PAYABLE

<TABLE>
<CAPTION>
                                                              DECEMBER 31, 1999
                                                              -----------------
<S>                                                           <C>
Notes payable consist of the following:
Note payable, due in monthly installments of $342, plus
  interest at 11%, balance due January 2002.................       $10,000
Note payable, due in monthly installments of $390, plus
  interest at 10.5%, balance due March 2000.................         1,000
Note payable, due in monthly installments of $894, plus
  interest at .9%, balance due July 2001....................        18,000
                                                                   -------
                                                                    29,000
Less current portion........................................        23,000
                                                                   -------
Long-term debt, net of current portion......................       $ 6,000
                                                                   =======
</TABLE>

    The aggregate maturities of long-term debt are as follows: 2000--$23,000 and
2001--$6,000.

    Total interest expense for the year ended December 31, 1999 was $20,000, and
is included in interest income, net.

NOTE 5. LEASE COMMITMENTS

    The Company leases its office facilities under various operating leases
expiring at various times through fiscal 2004. Future minimum annual rental
commitments under the lease agreements for the years ending December 31 are as
follows:

<TABLE>
<S>                                                           <C>
2000........................................................  $  499,000
2001........................................................     474,000
2002........................................................     414,000
2003........................................................     414,000
2004........................................................     253,000
                                                              ----------
                                                              $2,054,000
                                                              ==========
</TABLE>

    Total rent expense for the year ended December 31, 1999 and for the period
July 1, 1998 to December 31, 1998 was approximately $232,000 and $0,
respectively.

NOTE 6. CAPITAL LEASES

    The Company leases certain equipment under capital lease agreements that
expire at various dates through December, 2002. At December 31, 1999, the gross
amount of equipment and related accumulated amortization recorded under capital
leases were as follows:

<TABLE>
<S>                                                           <C>
Communications and computer equipment.......................  $460,000
Less accumulated amortization...............................   116,000
                                                              --------
                                                              $344,000
                                                              ========
</TABLE>

                                       41
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6. CAPITAL LEASES (CONTINUED)
    Future minimum lease payments under capital leases as December 31, 1999 are
as follows:

<TABLE>
<S>                                                           <C>
2000........................................................  $211,000
2001........................................................    81,000
2002........................................................    11,000
                                                              --------

Total minimum lease payments................................   303,000
Less amount representing interest...........................    31,000
                                                              --------
Present value of minimum capital lease payments.............   272,000
Less current installments of obligations under capital
  leases....................................................   183,000
                                                              --------
Obligations under capital leases, excluding current
  portion...................................................  $ 89,000
                                                              ========
</TABLE>

NOTE 7. INCOME TAXES

    No provision for federal income taxes has been recorded as the Company
incurred net operating losses for all periods presented. The Company incurred
state tax expense of $62,000 for the year ending December 31, 1999. No state tax
expense was recorded for the period ended December 31, 1998. The Company has
recorded a full valuation allowance against its deferred tax assets since
management believes that, after considering all the available objective
evidence, both positive and negative, historical and prospective, with greater
weight given to historical evidence, it is more likely than not that these
assets will not be realized. No income tax benefit has been recorded for all
periods presented because of the valuation allowance. Temporary differences
between the financial statement carrying amounts and tax

                                       42
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7. INCOME TAXES (CONTINUED)
bases of assets and liabilities that give rise to significant portions of
deferred tax assets (liabilities) are comprised of the following:

<TABLE>
<CAPTION>
DEFERRED TAX ASSETS:                                     12/31/1999   12/31/1998
--------------------                                     ----------   ----------
<S>                                                      <C>          <C>
Accounts receivable principally due to
  allowance for doubtful accounts......................  $  192,000          --
Deferred revenue.......................................     289,000          --
Compensation expense...................................     129,000          --
Net operating loss carryforwards.......................     462,000          --
Amortization...........................................     173,000          --
Other..................................................     117,000      49,000
                                                         ----------     -------

Total gross deferred tax assets........................  $1,362,000     $49,000
Less valuation allowance...............................   1,255,000      49,000
Net deferred tax assets................................     107,000           0

Deferred Tax Liabilities
Plant and equipment, principally due to differences In
  depreciation and amounts capitalized.................  $   15,000          --
Accrual to cash adjustments............................      92,000          --

Total deferred tax liabilities.........................     107,000          --
                                                         ----------     -------

Net deferred tax assets................................  $        0     $     0
                                                         ==========     =======
</TABLE>

    At December 31, 1999, the Company has net operating loss carryforwards for
federal income tax purposes of approximately $975,000 which are available to
offset future federal taxable income, if any, through 2019. At December 31, 1999
the Company also has net operating loss carryforwards for state income tax
purposes of approximately $850,000, $500,000, and $120,000 which are available
to offset future state taxable income, if any, through 2006, 2019, and 2004 in
New Jersey, New York, and Connecticut respectively.

    In accordance with FAS 109, the accounting for the tax benefits of acquired
deductible temporary differences, which are not recognized at the acquisition
date because a valuation allowance is established, and recognized subsequent to
the acquisitions will be applied first to reduce to zero, any goodwill and other
noncurrent intangible assets related to the acquisitions. Any remaining benefits
would be recognized as reduction of income tax expense. As of December 31, 1999,
$275,000 of the Company's deferred asset pertains to acquired companies, the
future benefits of which will be applied first to reduce to zero any goodwill
and other noncurrent intangible related to the acquisitions prior to reducing
the Company's income tax expense.

                                       43
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7. INCOME TAXES (CONTINUED)
    Income tax expense differed from the expected benefit computed by applying
the U.S. federal income tax rate of 34% to net loss as follows:

<TABLE>
<CAPTION>
                                                         1999          1998
                                                      -----------   ----------
<S>                                                   <C>           <C>
Computed expected tax benefit.......................  $(1,358,000)  $  (43,000)
Increase (reduction) in income taxes resulting from:
Change in the valuation allowance...................      771,000       43,000
Amortization of goodwill............................      600,000
State tax net of federal benefit....................       41,000           --
Other, net..........................................        8,000           --
                                                      -----------   ----------
Income Tax Expense..................................  $    62,000   $        0
</TABLE>

NOTE 8. ACCRUED EXPENSES AND OTHER ACCRUED LIABILITIES

    Accrued expenses and other accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                              DECEMBER 31, 1999
                                                              -----------------
<S>                                                           <C>
Accrued compensation and related benefits...................     $  543,000
Accrued acqui sition costs..................................        712,000
Other accruals..............................................        592,000
                                                                 ----------
                                                                 $1,847,000
                                                                 ==========
</TABLE>

NOTE 9. COMMITMENTS

    The company and its operating subsidiaries have entered into several
contracts with vendors that provide certain telephone related line access
services with various expiration dates. Following are the commitments for each
of the five years subsequent to December 31, 1999:

<TABLE>
<S>                                                           <C>
2000........................................................  $1,147,000
2001........................................................   1,022,000
2002........................................................     472,000
2003........................................................       5,000
2004........................................................       5,000
                                                              ----------
                                                              $2,651,000
                                                              ==========
</TABLE>

NOTE 10. STOCKHOLDERS' EQUITY

    (A) INITIAL PUBLIC OFFERING

    In February 1999, we filed a registration statement under the Securities Act
of 1933 to sell up to 2.9 million shares of common stock in our initial public
offering. The offering closed on May 17, 1999.

                                       44
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10. STOCKHOLDERS' EQUITY (CONTINUED)
Expenses related to the initial public offering and direct offering costs
incurred through December 31, 1999 were as follows:

<TABLE>
<S>                                                           <C>
  Underwriter's discounts and commissions...................  $ 2,900,000
  Accountants fees..........................................      386,000
  Legal fees................................................      467,000
  Printing expenses.........................................      177,000
  Miscellaneous filing fees and expenses....................      425,000
                                                              -----------
  Total.....................................................    4,355,000
                                                              ===========
Net Proceeds................................................  $24,645,000
                                                              ===========
</TABLE>

    From the effective date of the initial public offering registration through
December 31, 1999, the amount of net offering proceeds used as follows:

<TABLE>
<S>                                                           <C>
Repayment of promissory notes to the stockholders of
  Global 2000 Communications, Inc...........................  $   580,000
Payment of the cash portion of the purchase price due to the
  four
  Internet service providers we acquired in May 1999........    5,730,000
Acquisition of Ascent Networking............................    1,050,000
Repayment of indebtedness of Internet service providers.....      276,000
Acquisition of WebWay, LLC..................................      830,000
Acquisition of Infoboard, Inc...............................    1,380,000
Acquisition of Prime Communications, Inc....................    1,240,000
Acquisition of Cyberzone, LLC...............................    1,752,000
Acquisition of NECAnet, Inc.................................    1,575,000
Purchases of capital equipment, primarily data center.......    4,154,000
                                                              -----------
Total.......................................................  $18,567,000
                                                              ===========
</TABLE>

    The payments referred to above were not made directly or indirectly to any
officers or directors of BiznessOnline.com, Inc. or their associates, or to any
person owning 10% or more of any class of securities of BiznessOnline.com, Inc.
except for $435,000 of the $580,000 listed above which was paid to a director of
the Company and his spouse who were the former majority stockholders of Global
2000 Communications, Inc. in satisfaction of promissory notes constituting a
portion of the purchase price therefore.

    (B) COMMON STOCK

    Each stockholder of record is entitled to one vote for each outstanding
share of our common stock owned by that stockholder on every matter properly
submitted to the stockholders for their vote. Holders of common stock
participate with the holders of preferred stock in any dividend declared by our
board of directors out of funds legally available for this purpose. After the
payment of liquidation preferences to all holders of preferred stock, holders of
common stock will receive on a pro rata basis all our remaining assets available
for distribution to the stockholders in the event of our liquidation,
dissolution or winding up. Holders of common stock do not have any preemptive
right to become subscribers or purchasers of additional shares of any class of
our capital stock.

                                       45
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10. STOCKHOLDERS' EQUITY (CONTINUED)
    (C) PREFERRED STOCK

    Our board of directors is authorized, without further stockholder approval,
to issue up to 1,000,000 shares of preferred stock in one or more series and to
fix the rights, preferences, privileges and restrictions of these shares,
including dividend rights, conversion rights, voting rights, terms of redemption
and liquidation preferences, and to fix the number of shares constituting any
series and the designations of these series. These shares may have rights senior
to our common stock. The issuance of preferred stock may have the effect of
delaying or preventing a change in control of BiznessOnline. The issuance of
preferred stock could decrease the amount of earnings and assets available for
distribution to the holders of common stock or could adversely affect the rights
and powers, including voting rights, of the holders of the common stock.

    On February 15, 1999, we issued 70,000 shares of Class A preferred stock in
connection with the closing of a private offering of preferred stock. Upon
consummation of our initial public offering on May 12, 1999, these preferred
shares were converted into 61,250 shares of common stock.

    (D) STOCK OPTIONS

    Our 1999 stock incentive plan enables us to issue incentive and
non-qualified stock options to deserving employees, directors and non-employees
who perform services for the Company. Under this plan, we have reserved 500,000
shares of our authorized common stock for option grants. We believe that our
stock incentive plan will enhance our ability to attract and retain key
employees and other persons who are in a position to make significant
contributions to our success.

    Our 1999 non-employee director stock incentive plan enables us to issue
non-qualified stock options to non-employee directors. Under this plan, we have
reserved 50,000 shares of our authorized common stock for option grants. We
believe that our non-employee director stock incentive plan will provide
incentives for the continued service of these directors and for attracting new
directors to our board.

    The Company has elected to follow Accounting Principles Board Opinion
    No. 25, Accounting for Stock Issued to Employees ("APB 25") and related
    interpretations in accounting for its employee stock options. Accordingly,
    no compensation expense has been recognized in connection with granting
    options pursuant to these plans.

    SFAS 123 DISCLOSURES

    Pro forma information regarding net loss and loss per common and common
    equivalent share is required by SFAS 123, which also requires that the
    information be determined as if the Company has accounted for its employee
    stock options granted under the fair value method of that Statement. The
    fair value for these options was estimated using a Black-Scholes
    option-pricing model with the following weighted average assumptions:

<TABLE>
<CAPTION>
                                                              OPTIONS
                                                              --------
<S>                                                           <C>
Expected life (years).......................................        10
Interest rate...............................................      6.3%
Volatility..................................................       64%
Dividend....................................................      None
</TABLE>

                                       46
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10. STOCKHOLDERS' EQUITY (CONTINUED)
    The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions are fully
transferable. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options

    For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The company's
pro forma information is as follows:

    The pro forma compensation expense for the issuance of the options would
have been $912,000 for 1999. The Company recognized $167,000 of this expense on
the financial statements, as these options were granted to a consultant of the
Company and not an employee. If the entire amount had been recognized the pro
forma net loss and earnings per share for the year would have been:

<TABLE>
<S>                                                           <C>
Pro forma net loss..........................................   $4,800
Basic and fully diluted loss per share......................   $  .83
</TABLE>

    Option activity under the Company's stock option plans is summarized below:

<TABLE>
<CAPTION>
                                                                 WEIGHTED AVERAGE
                                                       SHARES     EXERCISE PRICE
                                                      --------   ----------------
<S>                                                   <C>        <C>
Outstanding at beginning of year....................        0           0.00
Granted.............................................  412,675          10.23
Expired or cancelled................................  (12,300)         10.00
Exercised...........................................       --             --
                                                      -------         ------

Outstanding at end of year..........................  400,375         $10.24
                                                      =======         ======
Exercisable at end of year..........................   37,500         $14.00
                                                      =======         ======
</TABLE>

    The following table presents weighted average price and life information
about significant option groups outstanding at December 31, 1999:

<TABLE>
<CAPTION>
                                     WEIGHTED AVERAGE
      EXERCISE           NUMBER      REMAINING YEARS
        PRICE          OUTSTANDING   OF CONTRACT LIFE   EXERCISABLE
---------------------  -----------   ----------------   -----------
<S>                    <C>           <C>                <C>
8.500                     20,000           9.62
8.934                     10,000           9.58
9.375                     20,000           9.94
10.000                   320,375           9.56            7,500
15.000                    30,000           9.54           30,000
---------------------    -------                          ------
8.50-15.00               400,375                          37,500
                         =======                          ======
</TABLE>

                                       47
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10. STOCKHOLDERS' EQUITY (CONTINUED)
    (E) WARRANTS

    During 1999 the Company granted warrants to purchase common stock. A total
of 335,000 warrants were granted to representatives of the underwriters of our
initial public offering and various consultants to the Company. The following
table shows the number of warrants, the exercise price and date of expiration.

<TABLE>
<CAPTION>
                                                NUMBER          EXERCISE
                                              OUTSTANDING        PRICE         EXPIRATION
                                              -----------       --------       ----------
<S>                                           <C>               <C>            <C>
                                                290,000           16.50           2009
                                                 30,000            7.00           2004
                                                 15,000            9.00           2002
                                                -------          ------
                                                                 $15.31(weighted
Total..................................         335,000                average)
                                                =======          ======
</TABLE>

    We have accounted for these warrants using Statement of Financial Accounting
Standards No. 123, accounting for Stock Based Compensation. The fair value for
these warrants was estimated at the date of grant using a Black-Scholes
option-pricing model with the following weighted-average assumptions.

    For the 290,000 warrants, an implied volatility of 0 was used resulting in
no compensation expense. For the remainder of the warrants, a volatility of 84%
and an interest rate of 5.3% were used. This resulted in a compensation charge
for these warrants of $155,000 during 1999. The Company recognized this expense
during the year.

NOTE 11. RELATED PARTY TRANSACTIONS

    In connection with our acquisition of Global 2000 Communications on
January 31, 1999, we issued a total of 204,000 shares of common stock to a
director and his wife former owners of Global 2000 and promissory notes in the
aggregate principal amount of $435,000. Their notes were repaid at the closing
of our initial public offering.

    On February 1, 1999, our Global 2000 Communications, Inc. subsidiary entered
into a lease with the director and his wife for approximately 2,000 square feet
of office space with a monthly rent of $2,000 plus utilities. The term of the
lease is five years although we may terminate this lease at any time upon thirty
days prior notice without further liability.

    On December 29, 1999, our Prime Communications, Inc. subsidiary entered into
a lease with Prime Business Park, a company partially owned by a shareholder of
the Company for approximately 6,780 square feet of office space with a monthly
rent of $7,486 plus utilities. The term of the lease is five years.

NOTE 12. QUARTERLY FINANCIAL DATA (UNAUDITED)

    The following quarterly financial data has been prepared from the financial
records of the Company without audit, and reflect all adjustments which, in the
opinion of management, were of a normal recurring

                                       48
<PAGE>
                            BIZNESSONLINE.COM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12. QUARTERLY FINANCIAL DATA (UNAUDITED) (CONTINUED)
nature and necessary for a fair presentation of the results of operations for
the interim periods presented. The operating results for any quarter are not
necessarily indicative of results for any future period.

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31, 1999
                                                -------------------------------------------------
                                                  FIRST        SECOND       THIRD        FOURTH
                                                 QUARTER      QUARTER      QUARTER      QUARTER
                                                ----------   ----------   ----------   ----------
                                                         IN THOUSANDS, EXCEPT SHARE DATA
<S>                                             <C>          <C>          <C>          <C>
Net revenue...................................       $ 424      $ 1,237      $ 2,141      $ 2,939
Loss from operations..........................        (139)        (647)      (1,247)      (2,379)
Net loss......................................        (140)        (547)      (1,217)      (2,151)

Net loss per share, basic and diluted.........      $ (.04)     $ (0.10)     $ (0.17)     $ (0.29)
Weighted average shares outstanding, basic and
  diluted.....................................   3,325,497    5,260,299    6,986,419    7,436,792
</TABLE>

NOTE 13. SUBSEQUENT EVENTS (UNAUDITED)

    On March 15, 2000, the New York State Public Service Commission granted
approval for the transfer of the "Certificate of Public Convenience and
Necessity" held by Telecon Communications Corp., a competitive local exchange
carrier ("CLEC") based in Johnstown, New York to us in connection with our
planned acquisition of substantially all of Telecon's assets. We now expect to
close such transaction and the acquisition of an Internet service provider
affiliated with Telecon on or about March 31, 2000 for an aggregate purchase
price of $15 million payable in cash and $3 million payable in shares of common
stock of the Company. In addition, we are in the process of preparing CLEC
filings in other New England states to enable us to begin to resell local and
long distance telephone services in such markets beginning in the second half of
2000.

    On March 16, 2000, we closed a $15 million senior secured credit facility.
We plan to use the proceeds of this facility to fund the cash purchase price of
the Telecon acquisition. The credit facility is secured by all of the assets of
BiznessOnline.com and its operating subsidiaries. In connection with such
financing, the Lender received certain cash fees and a warrant to purchase
838,779 shares of our common stock at prices of $7.00 per share for 559,186
shares and $12.00 per share for 279,593 shares, subject to certain anti-dilution
and other adjustments. The Lender will also receive 71,429 shares of common
stock of the Telecom acquisition.

                                       49
<PAGE>
ITEM 9. CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE

NONE.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The information required by Item 10 will be contained in the registrant's
Definitive Proxy Statement for its 2000 Annual Meeting of Stockholders ("2000
Proxy Statement") to be held in May 2000, which the registrant intends to file
with the Commission on or about March 30, 2000, and such information is
incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

    The information required by Item 11 will be contained in the registrant's
Definitive Proxy Statement for its 2000 Annual Meeting of Stockholders ("2000
Proxy Statement") to be held in May 2000, which the registrant intends to file
with the Commission on or about March 30, 2000, and such information is
incorporated herein by reference.

ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information required by Item 12 will be contained in the registrant's
Definitive Proxy Statement for its 2000 Annual Meeting of Stockholders ("2000
Proxy Statement") to be held in May 2000, which the registrant intends to file
with the Commission on or about March 30, 2000, and such information is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information required by Item 13 will be contained in the registrant's
Definitive Proxy Statement for its 2000 Annual Meeting of Stockholders ("2000
Proxy Statement") to be held in May 2000, which the registrant intends to file
with the Commission on or about March 30, 2000, and such information is
incorporated herein by reference.

ITEM 14. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES

    (a)  Consolidated Financial Statements and Financial Statement Schedules

    The following consolidated financial statements of the Company are included
in Item 8, pages 30-49:

        (1) (a)  Report of KPMG LLP, Independent Auditors

           (b)  Consolidated Financial Statements

               (i)  Consolidated Balance Sheets as of December 31, 1999 and
                    1998;

               (ii)  Consolidated Statements of Operations for the year ended
                     December 31, 1999 and for the period from July 1, 1998
                     (date of inception) through December 31, 1998;

               (iii) Consolidated Statements of Stockholders' Equity for the
                     year ended December 31, 1999 and for the period from
                     July 1, 1998 (date of inception) through December 31, 1998;

               (iv) Consolidated Statements of Cash Flows for the year ended
                    December 31, 1999 and for the period from July 1, 1998 (date
                    of inception) through December 31, 1998; and

                                       50
<PAGE>
     (v) Consolidated Notes to Financial Statements.

        (2)  Consolidated Financial Statement Schedules

           (a)  All other schedules for which provision is made in the
       applicable accounting regulation of the Securities and Exchange
       Commission are not required under the related instructions or are
       inapplicable and therefore have been omitted.

        (3)  For a list of exhibits filed herewith or incorporated by reference
    to exhibits previously filed with the Securities and Exchange Commission,
    refer to the exhibit index beginning on page 95. The registrant will furnish
    copies of exhibits for a reasonable fee (covering the expense of furnishing
    copies) upon request.

    Other historical financial statements are included herein as follows:

<TABLE>
<CAPTION>
                          COMPANY                               PAGE
                          -------                             --------
<S>                                                           <C>
Albany Net, Inc. Financial Statements.......................     52
Borg Internet Services, Inc. Financial Statements...........     60
Caravela Software, Inc. Financial Statements................     69
Global 2000 Communications, Inc. Financial Statements.......     78
Ulsternet, Inc. Financial Statements........................     86
</TABLE>

                                       51
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Stockholders
AlbanyNet, Inc.:

    We have audited the accompanying balance sheet of AlbanyNet Inc.
("AlbanyNet") as of December 31, 1998, and the related statements of income,
stockholders' equity and cash flows for each of the years in the two-year period
then ended. These financial statements are the responsibility of AlbanyNet's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 AlbanyNet Inc. as of
December 31, 1998, and the results of its operations and its cash flows for each
of the years in the two-year period then ended in conformity with generally
accepted accounting principles.

                                                      /s/ KPMG LLP

Providence, Rhode Island
January 29, 1999

                                      F-1
<PAGE>
                                ALBANYNET, INC.

                                 BALANCE SHEET

                               DECEMBER 31, 1998

<TABLE>
<S>                                                           <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................  $149,779
  Accounts receivable, net of allowance for doubtful
    accounts of $5,000......................................    58,006
                                                              --------
      Total current assets..................................   207,785
                                                              --------
Property and equipment (note 3):
  Computer and telecommunications equipment.................   214,788
  Less accumulated depreciation.............................   162,679
                                                              --------
      Net property and equipment............................    52,109
                                                              --------
      Total assets..........................................  $259,894
                                                              ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current installments of obligations under capital leases
    (note 3)................................................  $ 14,735
  Accounts payable..........................................     2,184
  Deferred revenue..........................................    48,866
                                                              --------
      Total current liabilities.............................    65,785
Long-term liabilities:
  Obligations under capital leases, excluding current
    installments (note 3)...................................     4,030
                                                              --------
      Total liabilities.....................................    69,815
                                                              --------
Stockholders' equity:
  Common stock, $1 par value; 200 shares authorized, issued
    and outstanding.........................................       200
  Retained earnings.........................................   189,879
                                                              --------
      Total stockholders' equity............................   190,079
                                                              --------
      Total liabilities and stockholders' equity............  $259,894
                                                              ========
</TABLE>

                 See accompanying notes to financial statements

                                      F-2
<PAGE>
                                ALBANYNET, INC.

                              STATEMENTS OF INCOME

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                1997       1998
                                                              --------   ---------
<S>                                                           <C>        <C>
Revenues....................................................  $838,807   1,140,518
                                                              --------   ---------
Operating expenses:
  Connectivity and operations...............................   658,329     768,400
  Sales and marketing.......................................    37,285      35,820
  General and administrative................................     7,156      25,636
  Depreciation and amortization.............................    57,866      67,814
                                                              --------   ---------
      Total operating expenses..............................   760,636     897,670
                                                              --------   ---------
      Operating income......................................    78,171     242,848
Other income (expense):
  Interest expense..........................................    (4,724)     (3,272)
  Interest income...........................................     2,507       5,369
  Other income..............................................     8,575      --
                                                              --------   ---------
      Total other income....................................     6,358       2,097
                                                              --------   ---------
      Net income............................................  $ 84,529     244,945
                                                              ========   =========
Net income per share--basic and diluted.....................  $ 422.65    1,224.73
                                                              ========   =========
Weighted average shares outstanding--basic and diluted......       200         200
                                                              ========   =========
</TABLE>

                See accompanying notes to financial statements.

                                      F-3
<PAGE>
                                ALBANYNET, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                          RETAINED         TOTAL
                                                                          EARNINGS     STOCKHOLDERS'
                                                              COMMON    (ACCUMULATED      EQUITY
                                                              STOCK       DEFICIT)       (DEFICIT)
                                                             --------   ------------   -------------
<S>                                                          <C>        <C>            <C>
Balance at December 31, 1996...............................    $200        (39,629)       (39,429)
  Net income...............................................    --           84,529         84,529
                                                               ----        -------        -------
Balance at December 31, 1997...............................     200         44,900         45,100
  Distributions to stockholders............................    --          (99,966)       (99,966)
  Net income...............................................    --          244,945        244,945
                                                               ----        -------        -------
Balance at December 31, 1998...............................    $200        189,879        190,079
                                                               ====        =======        =======
</TABLE>

                See accompanying notes to financial statements.

                                      F-4
<PAGE>
                                ALBANYNET, INC.

                            STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                1997       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Cash flows from operating activities:
  Net income................................................  $ 84,529    244,945
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Depreciation and amortization...........................    57,866     67,814
    Changes in net assets and liabilities:
      Increase in accounts receivable--trade................   (29,795)   (28,211)
      Decrease in accounts payable..........................    (3,168)    (7,236)
      Increase (decrease) in deferred revenue...............    24,931    (11,666)
                                                              --------   --------
        Net cash provided by operating activities...........   134,363    265,646
                                                              --------   --------
Cash flows from investing activities:
  Capital expenditures......................................   (55,413)   (30,014)
                                                              --------   --------
        Net cash used in investing activities...............   (55,413)   (30,014)
                                                              --------   --------
Cash flows from financing activities:
  Principal payments under capital lease obligations........   (25,355)   (30,859)
  Distribution to stockholders..............................     --       (99,966)
  Repayments of long-term debt..............................   (24,033)   (38,149)
                                                              --------   --------
        Net cash used in financing activities...............   (49,388)  (168,974)
                                                              --------   --------
        Net increase in cash and cash equivalents...........    29,562     66,658
Cash and cash equivalents at beginning of year..............    53,559     83,121
                                                              --------   --------
Cash and cash equivalents at end of year....................  $ 83,121    149,779
                                                              ========   ========
Supplemental cash flow information:
  Non-cash financing activities:
    Capital lease obligations of $35,808 and $13,829 were incurred in 1997 and
     1998, respectively.

    Interest paid was $4,724 and $3,272 in 1997 and 1998, respectively.
</TABLE>

                See accompanying notes to financial statements.

                                      F-5
<PAGE>
                                ALBANYNET, INC.

                         NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1998

(1) NATURE OF OPERATIONS

    AlbanyNet, Inc. ("AlbanyNet") was incorporated in 1996. AlbanyNet is a
provider of Internet access and offers a broad spectrum of Internet access
services to both individual and business customers ranging from dial-up services
to continuous access services using dedicated telephone connections and Web
hosting services.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (a) USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions, including estimates of the allowance for doubtful accounts and
provisions for sales credits, that affect the amounts reported in the financial
statements. Actual results may differ from those estimates.

    (b) REVENUE RECOGNITION

    AlbanyNet recognizes revenue when services are provided. Services are
generally billed in advance. Advance billings are recorded as deferred revenue
and recognized as revenue when earned over the period of service.

    (c) CASH AND CASH EQUIVALENTS

    For purposes of the statement of cash flows, AlbanyNet considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.

    (d) PROPERTY AND EQUIPMENT

    Property and equipment are recorded at cost. Depreciation is provided using
an accelerated method over the estimated useful lives of the assets for property
and equipment. The estimated useful lives of the assets range from three to five
years. AlbanyNet leases certain of its data communications and other equipment
under capital lease agreements. The assets and liabilities under capital leases
are recorded at the lesser of the present value of aggregate future minimum
lease payments or the fair value of the assets under the lease. Assets under
capital lease are depreciated over the shorter of their estimated useful lives
or the lease term.

    (e) INCOME TAXES

    As a subchapter S corporation, AlbanyNet's income is taxed at the
stockholder level, therefore except for certain local business income taxes, no
income tax provision has been included in the financial statements.

    (f) ADVERTISING COSTS

    AlbanyNet incurs advertising costs associated with the marketing of its
services. These costs of advertising are expensed as incurred. Advertising
expense totaled $36,635 and $28,894 for the years ended December 31, 1997 and
1998, respectively.

                                      F-6
<PAGE>
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    (g) IMPAIRMENT OF LONG-LIVED ASSETS

    Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets.

    (h) EARNINGS PER SHARE

    AlbanyNet adopted the provisions of SFAS No. 128, "Earnings per Share," on
December 31, 1997. This statement requires the presentation of basic and diluted
earnings per share for all periods presented. There were no common stock
equivalents outstanding for any of the periods presented; accordingly, basic and
fully diluted earnings per share are the same.

(3) LEASES

    AlbanyNet leases certain equipment under capital lease agreements that
expire at various dates through August 2000. At December 31, 1998, the gross
amount of equipment and related accumulated amortization recorded under capital
leases were as follows:

<TABLE>
<S>                                                           <C>
Computer and telecommunications equipment...................  $77,062
Less accumulated amortization...............................   57,832
                                                              -------
                                                              $19,230
                                                              =======
</TABLE>

    AlbanyNet has several operating leases for office space and office
equipment, with expiration dates through July 2000. Rental expense for operating
leases during 1997 and 1998 was $7,200 and $10,225, respectively.

    Future minimum lease payments under capital and operating leases as of
December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                           CAPITAL    OPERATING
YEAR ENDED DECEMBER 31:                                     LEASES     LEASES
-----------------------                                    --------   ---------
<S>                                                        <C>        <C>
        1999.............................................  $15,753     17,506
        2000.............................................    4,183      5,253
                                                           -------     ------
        Total minimum lease payment......................   19,936     22,759
                                                                       ======
        Less amount representing interest (at 10%).......    1,171
                                                           -------
        Present value of minimum capital lease
          payments.......................................   18,765
        Less current installments of obligations under
          capital leases.................................   14,735
                                                           -------
        Obligations under capital leases, excluding
          current installments...........................  $ 4,030
                                                           =======
</TABLE>

                                      F-7
<PAGE>
(4) COMMITMENTS

    AlbanyNet has entered into several contracts with vendors that provide
certain telephone related line access services and advertising. Following are
the commitments for each of the five years subsequent to December 31, 1998:

<TABLE>
<S>                                                           <C>
        1999................................................  $ 72,161
        2000................................................    71,160
        2001................................................    71,160
        2002................................................     5,160
        2003................................................     5,160
        Thereafter..........................................     6,020
                                                              --------
          Total.............................................  $230,821
                                                              ========
</TABLE>

(5) SUBSEQUENT EVENT (UNAUDITED)

    AlbanyNet's stockholders have entered into a merger and stock purchase
agreement whereby they will sell all of the shares in the Company to
BiznessOnline.com, Inc. (the acquirer) for cash concurrent with the consummation
of the initial public offering ("IPO") of the common stock of the acquirer. Upon
consummation of the offering, the acquirer will become the sole stockholder of
AlbanyNet. Subsequent to the acquisition, AlbanyNet will be merged into a
subsidiary of the acquirer.

                                      F-8
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Stockholders
Borg Internet Services, Inc.:

    We have audited the accompanying balance sheet of Borg Internet
Services, Inc. (Borg) as of December 31, 1998, and the related statements of
operations, stockholders' equity (deficit) and cash flows for each of the years
in the two-year period then ended. These financial statements are the
responsibility of Borg's management. Our responsibility is to express an opinion
on these financial statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 Borg Internet
Services, Inc. as of December 31, 1998, and the results of its operations and
its cash flows for each of the years in the two-year period then ended in
conformity with generally accepted accounting principles.

                                          /s/ KPMG LLP

Providence, Rhode Island
January 22, 1999

                                      F-9
<PAGE>
                          BORG INTERNET SERVICES, INC.

                                 BALANCE SHEET

                               DECEMBER 31, 1998

<TABLE>
<S>                                                           <C>
ASSETS

Current assets:
  Cash......................................................  $ 25,189
  Accounts receivable, net of allowance for doubtful
    accounts of $20,000.....................................    65,819
  Deferred tax asset........................................    13,658
  Other current assets......................................     3,349
                                                              --------
      Total current assets..................................   108,015
                                                              --------
Property and equipment, net (notes 3 and 4).................   197,532
Goodwill, net of amortization of $64,601....................    43,067
                                                              --------
      Total assets..........................................  $348,614
                                                              ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Notes payable (note 5)....................................  $ 37,581
  Current installments of obligations under capital leases
    (note 4)................................................    48,004
  Accounts payable..........................................    13,156
  Income taxes payable......................................    24,799
  Accrued expenses..........................................    57,654
  Deferred revenue..........................................   119,095
                                                              --------
      Total current liabilities.............................   300,289

Long-term liabilities:
  Obligations under capital leases, excluding current
    installments (note 4)...................................    78,608
                                                              --------
      Total liabilities.....................................   378,897
                                                              --------
Stockholders' equity (deficit):
  Common stock, $.01 par value; 25,000 shares authorized, 3
    shares issued and outstanding...........................         1
  Additional paid-in capital................................       299
  Accumulated deficit.......................................   (30,583)
                                                              --------
      Total stockholders' equity (deficit)..................   (30,283)
                                                              --------
      Total liabilities and stockholders' equity
       (deficit)............................................  $348,614
                                                              ========
</TABLE>

                See accompanying notes to financial statements.

                                      F-10
<PAGE>
                          BORG INTERNET SERVICES, INC.

                            STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                1997        1998
                                                              ---------   ---------
<S>                                                           <C>         <C>
Revenues....................................................  $ 505,970     832,734
                                                              ---------   ---------
Operating expenses:
  Connectivity and operations...............................    319,127     601,890
  Sales and marketing.......................................     35,046      90,687
  General and administrative................................     29,932      45,338
  Depreciation and amortization.............................     86,443     124,115
                                                              ---------   ---------
      Total operating expenses..............................    470,548     862,030
                                                              ---------   ---------
      Operating income (loss)...............................     35,422     (29,296)
Interest expense............................................     (4,467)    (11,717)
                                                              ---------   ---------
      Income (loss) before taxes............................     30,955     (41,013)
Income taxes (benefit) (note 6).............................     12,383     (12,056)
                                                              ---------   ---------
      Net income (loss).....................................  $  18,572     (28,957)
                                                              =========   =========
Net income (loss) per share--basic and diluted..............  $6,190.67   (9,652.33)
                                                              =========   =========
Weighted average shares outstanding--basic and diluted......          3           3
                                                              =========   =========
</TABLE>

                See accompanying notes to financial statements.

                                      F-11
<PAGE>
                          BORG INTERNET SERVICES, INC.

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                              RETAINED         TOTAL
                                                               ADDITIONAL     EARNINGS     STOCKHOLDERS'
                                                     COMMON     PAID-IN     (ACCUMULATED      EQUITY
                                                     STOCK      CAPITAL       DEFICIT)       (DEFICIT)
                                                    --------   ----------   ------------   -------------
<S>                                                 <C>        <C>          <C>            <C>
Balance at December 31, 1996......................    $  1         299         (20,198)       (19,898)
  Net income......................................    --         --             18,572         18,572
                                                      ----         ---         -------        -------
Balance at December 31, 1997......................       1         299          (1,626)        (1,326)
  Net loss........................................    --         --            (28,957)       (28,957)
                                                      ----         ---         -------        -------
Balance at December 31, 1998......................    $  1         299         (30,583)       (30,283)
                                                      ====         ===         =======        =======
</TABLE>

                See accompanying notes to financial statements.

                                      F-12
<PAGE>
                          BORG INTERNET SERVICES, INC.

                            STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                1997        1998
                                                              ---------   --------
<S>                                                           <C>         <C>
Cash flows from operating activities:
  Net income (loss).........................................  $  18,572   (28,957)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
    Depreciation and amortization...........................     86,443   124,115
    Changes in net assets and liabilities:
      Decrease (increase) in accounts receivable--trade.....    (60,930)    8,916
      Decrease (increase) in other current assets...........     (4,264)      917
      Increase (decrease) in accounts payable...............     34,646   (37,053)
      Increase (decrease) in income taxes payable...........     23,090    (1,349)
      Increase in deferred taxes, net.......................    (10,707)  (10,707)
      Increase (decrease) in accrued expenses...............     11,517   (18,745)
      Increase in deferred revenue..........................     22,174    57,968
                                                              ---------   -------
        Net cash provided by operating activities...........    120,541    95,105
                                                              ---------   -------
Cash flows from investing activities:
  Capital expenditures......................................   (111,652)  (53,553)
                                                              ---------   -------
        Net cash used in investing activities...............   (111,652)  (53,553)
                                                              ---------   -------
Cash flows from financing activities:
  Principal payments under capital lease obligations........         --   (15,727)
  Repayments of long-term debt..............................    (12,000)  (12,000)
                                                              ---------   -------
        Net cash used in financing activities...............    (12,000)  (27,727)
                                                              ---------   -------
        Net increase (decrease) in cash.....................     (3,111)   13,825
Cash at beginning of year...................................     14,475    11,364
                                                              ---------   -------
Cash at end of year.........................................  $  11,364    25,189
                                                              =========   =======
Supplemental cash flow information:
  Non-cash financing activities:
    Capital lease obligations of $142,339 were incurred in
      1998.

    Interest paid was $0 in 1997 and $4,039 in 1998.
</TABLE>

                See accompanying notes to financial statements.

                                      F-13
<PAGE>
                          BORG INTERNET SERVICES, INC.

                         NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1998

(1) NATURE OF OPERATIONS

    Borg Internet Services, Inc. ("Borg") was incorporated in 1995. Borg is a
provider of Internet access and offers a broad spectrum of Internet access
services to both individual and business customers ranging from dial-up services
to continuous access services using dedicated telephone connections and Web
hosting services.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (A) USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions, including estimates of the allowance for doubtful accounts and
provisions for sales credits, that affect the amounts reported in the financial
statements. Actual results may differ from those estimates.

    (B) REVENUE RECOGNITION

    Borg recognizes revenue when services are provided. Services are generally
billed in advance. Advance billings are recorded as deferred revenue and
recognized as revenue when earned over the period of service.

    (C) CASH AND CASH EQUIVALENTS

    For purposes of the statement of cash flows, Borg considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.

    (D) PROPERTY AND EQUIPMENT

    Property and equipment are recorded at cost. Depreciation is provided using
an accelerated method over the estimated useful lives of the assets for property
and equipment. The estimated useful lives of the assets range from three to five
years. Borg leases certain of its data communications and other equipment under
capital lease agreements. The assets and liabilities under capital leases are
recorded at the lesser of the present value of aggregate future minimum lease
payments or the fair value of the assets under the lease. Assets under capital
lease are depreciated over the shorter of their estimated useful lives or the
lease term.

    (E) GOODWILL

    Goodwill, which represents the excess of purchase price over fair value of
net assets acquired, is amortized on a straight-line basis over the expected
periods to be benefited, which is five years. Borg assesses the recoverability
of this intangible asset by determining whether the amortization of the goodwill
balance over its remaining life can be recovered through undiscounted future
operating cash flows of the acquired operation. The amount of goodwill
impairment, if any, is measured based on projected discounted future operating
cash flows using a discount rate reflecting Borg's average cost of funds. The
assessment of the recoverability of goodwill will be impacted if estimated
future operating cash flows are not achieved.

                                      F-14
<PAGE>
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    (F) INCOME TAXES

    Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

    (G) ADVERTISING COSTS

    Borg incurs advertising costs associated with the marketing of its services.
These costs of advertising are expensed as incurred. Advertising expense totaled
$21,641 and $49,559 for the years ended December 31, 1997 and 1998,
respectively.

    (H) IMPAIRMENT OF LONG-LIVED ASSETS

    Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets.

    (I) EARNINGS PER SHARE

    Borg adopted the provisions of SFAS No. 128, "Earnings per Share," on
December 31, 1997. This statement requires the presentation of basic and diluted
earnings per share for all periods presented. There were no common stock
equivalents outstanding for any of the periods presented; accordingly, basic and
fully diluted earnings per share are the same.

(3) PROPERTY AND EQUIPMENT

    Property and equipment consist of the following at December 31, 1998:

<TABLE>
<S>                                                           <C>
Computer and telecommunications equipment...................  $394,082
Office equipment............................................     2,824
                                                              --------
Property and equipment......................................   396,906
Less accumulated depreciation and amortization..............   199,374
                                                              --------
Net property and equipment..................................  $197,532
                                                              ========
</TABLE>

                                      F-15
<PAGE>
(4) LEASES

    Borg leases certain equipment under capital lease agreements that expire at
various dates through August 2001. At December 31, 1998, the gross amount of
equipment and related accumulated amortization recorded under capital leases
were as follows:

<TABLE>
<S>                                                           <C>
Computer and telecommunications equipment...................  $142,339
Less accumulated amortization...............................    17,726
                                                              --------
                                                              $124,613
                                                              ========
</TABLE>

    Borg has one operating lease for office space and office equipment on a
month to month basis. Rental expense for operating leases during 1997 and 1998
was $9,954 and $12,974, respectively.

    Future minimum lease payments under capital leases as of December 31, 1998
are as follows:

<TABLE>
<CAPTION>
                                                              CAPITAL
YEAR ENDED DECEMBER 31:                                        LEASES
-----------------------                                       --------
<S>                                                           <C>
        1999................................................  $58,504
        2000................................................   53,883
        2001................................................   31,488
                                                              -------
        Total minimum lease payments........................  143,875
        Less amounts representing interest (at 10%).........   17,263
                                                              -------
        Present value of minimum capital lease payments.....  126,612
        Less current installments of obligations under
          capital leases....................................   48,004
                                                              -------
        Obligations under capital leases, excluding current
          installments......................................  $78,608
                                                              =======
</TABLE>

(5) NOTES PAYABLE

    The notes payable are due to related parties. The notes bear interest at 10%
and are due and payable.

(6) INCOME TAXES

    Income tax expense (benefit) for the years ended December 31, 1997 and 1998,
consists of the following:

<TABLE>
<CAPTION>
                                                   CURRENT    DEFERRED    TOTAL
                                                   --------   --------   --------
<S>                                                <C>        <C>        <C>
1997:
  Federal........................................  $17,287     (8,000)     9,287
  State..........................................    5,803     (2,707)     3,096
                                                   -------    -------    -------
                                                   $23,090    (10,707)    12,383
                                                   =======    =======    =======
1998:
  Federal........................................  $(1,000)    (8,000)    (9,000)
  State..........................................     (349)    (2,707)    (3,056)
                                                   -------    -------    -------
                                                   $(1,349)   (10,707)   (12,056)
                                                   =======    =======    =======
</TABLE>

    Income tax expense (benefit) amounted to $12,383 for 1997 (an effective rate
of 40%) and $(12,056) for 1998 (an effective rate of 29%). The actual expense
(benefit) for both 1997 and 1998 differs from the

                                      F-16
<PAGE>
(6) INCOME TAXES (CONTINUED)
"expected" tax expense (benefit) for those years (computed by applying the U.S.
federal corporate income tax rate of 34% to income (loss) before income taxes)
as follows:

<TABLE>
<CAPTION>
                                                              1997       1998
                                                            --------   --------
<S>                                                         <C>        <C>
Computed "expected" tax expense (benefit).................  $10,525    (13,944)
Increase in income taxes resulting from:
    State income taxes, net of federal income tax
      benefit.............................................    2,403     (2,017)
    Other.................................................     (185)     3,905
                                                            -------    -------
                                                            $12,383    (12,056)
                                                            =======    =======
</TABLE>

    The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1997 and 1998 are presented below:

<TABLE>
<CAPTION>
                                                               1997       1998
                                                             --------   --------
<S>                                                          <C>        <C>
Deferred tax assets:
  Goodwill.................................................  $ --         5,658
  Bad debt reserve.........................................    4,000      8,000
                                                             -------     ------
      Gross deferred tax asset.............................    4,000     13,658
                                                             -------     ------
Deferred tax liability:
  Goodwill.................................................   (1,049)     --
                                                             -------     ------
      Gross deferred tax liabilities.......................   (1,049)     --
                                                             -------     ------
      Net deferred tax asset...............................  $ 2,951     13,658
                                                             =======     ======
</TABLE>

    Management has concluded that it is more likely than not that Borg will have
sufficient taxable income of an appropriate character within the carryback and
carryforward period permitted by current tax law to allow for the utilization of
the deductible amounts generating the deferred tax asset.

(7) COMMITMENTS

    Borg has entered into contracts with two vendors who provide certain
telephone related line access services. The contracts expire in April 1999, the
commitment for 1999 is $14,419.

(8) SUBSEQUENT EVENT (UNAUDITED)

    Borg's stockholders have entered into a merger agreement whereby they will
exchange all of the shares in the Company to BiznessOnline. Com, Inc. (acquirer)
in exchange for cash and shares of common stock of the acquirer concurrent with
the consummation of the initial public offering ("IPO") of the common stock of
the acquirer. Upon consummation of the offering, the acquirer will become the
sole stockholder of Borg. Subsequent to the acquisition, Borg will merge into a
subsidiary of the acquirer.

                                      F-17
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Stockholders
Caravela Software, Inc.:

    We have audited the accompanying balance sheet of Caravela Software, Inc.
(Caravela) as of December 31, 1998 and the related statements of operations,
stockholders' equity and cash flows for each of the years in the two-year period
then ended. These financial statements are the responsibility of Caravela's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 Caravela Software, Inc. as
of December 31, 1998, and the results of its operations and its cash flows for
each of the years in the two-year period then ended in conformity with generally
accepted accounting principles.

                                          /s/ KPMG LLP

Providence, Rhode Island
February 2, 1999

                                      F-18
<PAGE>
                            CARAVELA SOFTWARE, INC.

                                 BALANCE SHEET

                               DECEMBER 31, 1998

<TABLE>
<S>                                                           <C>
ASSETS

Current assets:
  Cash......................................................  $ 30,760
  Accounts receivable, net of allowance for doubtful
    accounts of $43,259.....................................   189,643
  Deferred tax asset........................................    94,745
                                                              --------
      Total current assets..................................   315,148
                                                              --------
Property and equipment, net (note 3)........................   234,923
Organizational costs, net of amortization of $611...........        57
                                                              --------
      Total assets..........................................  $550,128
                                                              ========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Note payable to stockholders (note 7).....................  $ 58,969
  Current portion of long-term debt (note 6)................    71,009
  Line of credit (note 5)...................................    50,000
  Accounts payable..........................................    55,133
  Accrued expenses..........................................    23,657
  Income tax payable........................................     7,925
  Deferred taxes (note 8)...................................    93,162
  Deferred revenue..........................................   115,436
                                                              --------
      Total current liabilities.............................   475,291

Long-term liabilities:
  Long-term debt (note 6)...................................     6,816
                                                              --------
      Total liabilities.....................................   482,107
                                                              --------
Stockholders' equity:
  Common stock, $10 par value; 5,000 shares authorized, 100
    shares issued and outstanding...........................     1,000
  Retained earnings.........................................    67,021
                                                              --------
      Total stockholders' equity............................    68,021
                                                              --------
      Total liabilities and stockholders' equity............  $550,128
                                                              ========
</TABLE>

                See accompanying notes to financial statements.

                                      F-19
<PAGE>
                            CARAVELA SOFTWARE, INC.

                            STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                 1997        1998
                                                              ----------   ---------
<S>                                                           <C>          <C>
Revenues....................................................  $1,516,112   1,879,410
                                                              ----------   ---------
Operating expenses:
  Connectivity and operations...............................   1,328,076   1,520,192
  Sales and marketing.......................................      73,455     151,261
  General and administrative................................      79,489       5,500
  Depreciation and amortization.............................     118,485     117,146
                                                              ----------   ---------
      Total operating expenses..............................   1,599,505   1,794,099
                                                              ----------   ---------
      Operating income (loss)...............................     (83,393)     85,311
                                                              ----------   ---------
Other income (expense):
  Loss on disposal of equipment.............................          --     (78,993)
  Interest expense..........................................      (9,453)    (21,406)
  Other income..............................................         267      11,092
                                                              ----------   ---------
      Total other income (expense)..........................      (9,186)    (89,307)
                                                              ----------   ---------
      Loss before income taxes..............................     (92,579)     (3,996)
Income tax benefit (note 8).................................      37,031       1,598
                                                              ----------   ---------
      Net income (loss).....................................  $  (55,548)     (2,398)
                                                              ==========   =========
Net income (loss) per share--basic and diluted..............  $  (555.48)     (23.98)
                                                              ==========   =========
Weighted average shares outstanding--basic and diluted......         100         100
                                                              ==========   =========
</TABLE>

                See accompanying notes to financial statements.

                                      F-20
<PAGE>
                            CARAVELA SOFTWARE, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                                        TOTAL
                                                               COMMON    RETAINED   STOCKHOLDERS'
                                                               STOCK     EARNINGS      EQUITY
                                                              --------   --------   -------------
<S>                                                           <C>        <C>        <C>
Balance at December 31, 1996................................   $1,000    124,967       125,967
  Net loss..................................................    --       (55,548)      (55,548)
                                                               ------    -------       -------
Balance at December 31, 1997................................    1,000     69,419        70,419
  Net loss..................................................    --        (2,398)       (2,398)
                                                               ------    -------       -------
Balance at December 31, 1998................................   $1,000     67,021        68,021
                                                               ======    =======       =======
</TABLE>

                See accompanying notes to financial statements.

                                      F-21
<PAGE>
                            CARAVELA SOFTWARE, INC.

                            STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                1997        1998
                                                              ---------   --------
<S>                                                           <C>         <C>
Cash flows from operating activities:
  Net income (loss).........................................  $ (55,548)    (2,398)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
    Depreciation and amortization...........................    118,485    117,146
    Loss on disposal of equipment...........................     --         78,993
    Changes in net assets and liabilities:
      Decrease (increase) in accounts receivable--trade.....     81,230    (52,390)
      Decrease in other current assets......................     --          1,000
      Increase (decrease) in accounts payable...............     79,278    (31,019)
      Increase (decrease) in income tax payable.............     26,103    (18,178)
      Increase (decrease) in deferred taxes.................    (76,782)    15,897
      Decrease in accrued expenses..........................    (49,085)    (6,658)
      Increase in deferred revenue..........................     27,954     34,491
                                                              ---------   --------
        Net cash provided by operating activities...........    151,635    136,884
                                                              ---------   --------
Cash flows from investing activities:
  Proceeds from disposal of equipment.......................     --          6,952
  Capital expenditures......................................   (182,737)  (151,929)
                                                              ---------   --------
        Net cash used in investing activities...............   (182,737)  (144,977)
                                                              ---------   --------
Cash flows from financing activities:
  Proceeds from issuance of long-term debt..................     85,009    107,430
  Principal payments under capital lease obligations........    (13,365)   (14,555)
  Repayments of long-term debt..............................    (19,605)   (75,000)
                                                              ---------   --------
        Net cash provided by financing activities...........     52,039     17,875
                                                              ---------   --------
        Net increase in cash................................     20,937      9,782
Cash at beginning of year...................................         41     20,978
                                                              ---------   --------
Cash at end of year.........................................  $  20,978     30,760
                                                              =========   ========
Supplemental cash flow information:
  Interest of $9,722 and $20,415 was paid in 1997 and 1998,
    respectively.
  Income taxes of $8,000 and $0 were paid in 1997 and 1998,
    respectively.
</TABLE>

                See accompanying notes to financial statements.

                                      F-22
<PAGE>
                            CARAVELA SOFTWARE, INC.

                         NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1998

(1) NATURE OF OPERATIONS

    Caravela Software, Inc. ("Caravela") was incorporated in 1994 and operates
under the name Connix. Caravela is a provider of Internet access and offers a
broad spectrum of Internet access services to both individual and business
customers ranging from dial-up services to continuous access services using
dedicated telephone connections and Web hosting services.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (A) USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions, including estimates of the allowance for doubtful accounts and
provisions for sales credits, that affect the amounts reported in the financial
statements. Actual results may differ from those estimates.

    (B) REVENUE RECOGNITION

    Caravela recognizes revenue when services are provided. Services are
generally billed in advance. Advance billings are recorded as deferred revenue
and recognized as revenue when earned over the period of service.

    (C) CASH AND CASH EQUIVALENTS

    For purposes of the statement of cash flows, Caravela considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.

    (D) PROPERTY AND EQUIPMENT

    Property and equipment are recorded at cost. Depreciation is provided using
an accelerated method over the estimated useful lives of the assets for property
and equipment. The estimated useful lives of the assets range from three to five
years. Caravela leases certain of its data communications and other equipment
under capital lease agreements. The assets and liabilities under capital leases
are recorded at the lesser of the present value of aggregate future minimum
lease payments or the fair value of the assets under the lease. Assets under
capital lease are depreciated over the shorter of their estimated useful lives
or the lease term.

    (E) INCOME TAXES

    Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. For income tax reporting purposes, Caravela is on the cash
method of accounting.

                                      F-23
<PAGE>
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    (F) ADVERTISING COSTS

    Caravela incurs advertising costs associated with the marketing of its
services. These costs of advertising are expensed as incurred. Advertising
expense totaled $49,416 and $96,804 for the years ended December 31, 1997 and
1998, respectively.

    (G) IMPAIRMENT OF LONG-LIVED ASSETS

    Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets.

    (H) EARNINGS PER SHARE

    Caravela adopted the provisions of SFAS No. 128, "Earnings per Share," on
December 31, 1997. This statement requires the presentation of basic and diluted
earnings per share for all periods presented. There were no common stock
equivalents outstanding for any of the periods presented; accordingly, basic and
fully diluted earnings per share are the same.

(3) PROPERTY AND EQUIPMENT

    Property and equipment consist of the following at December 31, 1998:

<TABLE>
<S>                                                           <C>
Computer, telecommunications and office equipment...........  $450,692
Less accumulated depreciation...............................   215,769
                                                              --------
Net property and equipment..................................  $234,923
                                                              ========
</TABLE>

(4) LEASES

    Caravela has two operating leases for office space on a month-to-month
basis. Caravela also had three capital leases for office equipment which were
paid in full during 1998. Rental expense for operating leases during 1997 and
1998 was $39,154 and $32,280, respectively.

(5) LINE OF CREDIT

    At December 31, 1998, Caravela maintained a $50,000 Revolving Line of Credit
with a bank. The Revolving Line of Credit bears interest at prime plus 2% (prime
rate was 7.75% at December 31, 1998) and is payable on demand.

                                      F-24
<PAGE>
(6) LONG-TERM DEBT

    Long-term debt at December 31, 1998 consists of the following:

<TABLE>
<S>                                                           <C>
9% note payable to bank in monthly installments of $3,426,
  including interest, due February 2000, secured by the
  personal guarantee of the stockholders and certain
  property and equipment owned by Caravela..................  $45,415
9.25% note payable to bank in monthly installments of $3,435
  per month, including interest, due November 1999 secured
  by the personal guarantee of the stockholders and certain
  property and equipment owned by Caravela..................   32,410
                                                              -------
                                                               77,825
Less current portion........................................   71,009
                                                              -------
Long-term debt, excluding current portion...................  $ 6,816
                                                              =======
</TABLE>

    The aggregate maturities of long-term debt for each of the two years
subsequent to December 31, 1998 are as follows: 1999, $71,009 and 2000, $6,816.

(7) NOTE PAYABLE TO STOCKHOLDERS

    The note payable is due to the stockholders of Caravela and bears interest
at 10%. The note payable will mature in 1999.

(8) INCOME TAXES

    Income tax expense (benefit) for the years ended December 31, 1997 and 1998,
consists of the following:

<TABLE>
<CAPTION>
                                                   CURRENT    DEFERRED    TOTAL
                                                   --------   --------   --------
<S>                                                <C>        <C>        <C>
1997:
  Federal........................................  $ 29,813   (57,587)   (27,774)
  State..........................................     9,938   (19,195)    (9,257)
                                                   --------   -------    -------
                                                   $ 39,751   (76,782)   (37,031)
                                                   ========   =======    =======
1998:
  Federal........................................  $(13,121)   11,923     (1,198)
  State..........................................    (4,374)    3,974       (400)
                                                   --------   -------    -------
                                                   $(17,495)   15,897     (1,598)
                                                   ========   =======    =======
</TABLE>

    Income tax expense (benefit) amounted to $(37,031) for 1997 (an effective
rate of 40%) and $(1,598) for 1998 (an effective rate of 40%). The actual
expense (benefit) for both 1997 and 1998 differs from the "expected" tax expense
(benefit) for those years (computed by applying the U.S. federal corporate
income tax rate of 34% to income (loss) before income taxes) as follows:

<TABLE>
<CAPTION>
                                                              1997       1998
                                                            --------   --------
<S>                                                         <C>        <C>
Computed "expected" tax expense (benefit).................  $(31,477)   (1,359)
Increase in income taxes resulting from:
  State income taxes, net of federal income tax benefit...    (5,554)     (239)
                                                            --------    ------
                                                            $(37,031)   (1,598)
                                                            ========    ======
</TABLE>

                                      F-25
<PAGE>
(8) INCOME TAXES (CONTINUED)
    The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1997 and 1998 are presented below:

<TABLE>
<CAPTION>
                                                             1997       1998
                                                           --------   --------
<S>                                                        <C>        <C>
Deferred tax assets:
  Accounts payable.......................................  $ 34,460    22,053
  Accrued expenses.......................................     5,544     9,214
  Bad debt reserve.......................................    24,000    17,304
  Deferred revenue.......................................    32,378    46,174
                                                           --------   -------
      Gross deferred tax asset...........................    96,382    94,745
                                                           --------   -------
Deferred tax liability:
  Accounts receivable....................................   (78,902)  (93,162)
                                                           --------   -------
      Gross deferred tax liabilities.....................   (78,902)  (93,162)
                                                           --------   -------
      Net deferred tax asset.............................  $ 17,480     1,583
                                                           ========   =======
</TABLE>

    Management has concluded that it is more likely than not that Caravela will
have sufficient taxable income of an appropriate character within the carryback
and carryforward period permitted by current tax law to allow for the
utilization of the deductible amounts generating the deferred tax asset.

(9) DEFINED CONTRIBUTION PLAN

    Caravela sponsors a 401(k) Plan for all employees meeting certain
eligibility requirements. Caravela contributes 35% of the employees'
contribution, up to 6% of each employee's eligible compensation. The employer
matching contribution was $5,436 and $9,487 in 1997 and 1998, respectively. In
addition the plan provides for a voluntary annual profit sharing contribution.
Caravela contributed $12,798 in 1997 and $0 in 1998.

(10) COMMITMENTS

    Caravela has entered into several contracts with vendors that provide
certain telephone related line access services with various expiration dates.
Following are the commitments for each of the two years subsequent to
December 31, 1998:

<TABLE>
<S>                                                           <C>
1999........................................................  $32,840
2000........................................................   23,200
                                                              -------
    Total...................................................  $56,040
                                                              =======
</TABLE>

(11) SUBSEQUENT EVENT (UNAUDITED)

    Caravela's stockholders have entered into a merger agreement whereby they
will exchange all of the shares in the Company to BiznessOnline.com, Inc. (the
acquirer) in exchange for cash and shares of common stock of the acquirer
concurrent with the consummation of the initial public offering ("IPO") of the
common stock of the acquirer. Upon consummation of the offering, the acquirer
will become the sole stockholder of Caravela. Subsequent to the acquisition,
Caravela will merge into a subsidiary of the acquirer.

                                      F-26
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
Global 2000 Communications, Inc.:

    We have audited the accompanying balance sheet of Global 2000
Communications, Inc. (Global 2000) as of December 31, 1998, and the related
statements of income, stockholders' equity and cash flows for each of the years
in the two-year period then ended. These financial statements are the
responsibility of Global 2000 management. Our responsibility is to express an
opinion on these financial statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 Global 2000
Communications, Inc. as of December 31, 1998, and the results of its operations
and its cash flows for each of the years in the two-year period then ended in
conformity with generally accepted accounting principles.

                                          /s/ KPMG LLP

Providence, Rhode Island
January 31, 1999

                                      F-27
<PAGE>
                        GLOBAL 2000 COMMUNICATIONS, INC.

                                 BALANCE SHEET

                               DECEMBER 31, 1998

<TABLE>
<S>                                                           <C>
ASSETS

Current assets:
  Cash and cash equivalents.................................  $260,131
  Accounts receivable--trade, net of allowance for doubtful
    accounts of $18,000.....................................   114,952
                                                              --------
      Total current assets..................................   375,083
                                                              --------
Property and equipment, net (note 3)........................   243,035
Other assets, net...........................................     4,418
                                                              --------
      Total assets..........................................  $622,536
                                                              ========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current maturities of long-term debt (note 6).............  $  7,288
  Obligations under capital lease (note 4)..................     3,846
  Accrued expenses..........................................    64,615
  Deferred revenue..........................................   258,268
                                                              --------
      Total current liabilities.............................   334,017

Long-term liabilities:
  Long-term debt, excluding current maturities (note 6).....    96,496
                                                              --------
      Total liabilities.....................................   430,513
                                                              --------
Stockholders' equity:
  Common stock, no par value; 200 shares authorized, issued
    and outstanding                                             27,500
  Retained earnings.........................................   164,523
                                                              --------
      Total stockholders' equity............................   192,023
                                                              --------
      Total liabilities and stockholders' equity............  $622,536
                                                              ========
</TABLE>

                See accompanying notes to financial statements.

                                      F-28
<PAGE>
                        GLOBAL 2000 COMMUNICATIONS, INC.

                              STATEMENTS OF INCOME

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                 1997        1998
                                                              ----------   ---------
<S>                                                           <C>          <C>
Revenues....................................................  $1,108,980   1,738,613
                                                              ----------   ---------
Operating expenses:
  Connectivity and operations (note 5)......................     809,374     927,769
  Sales and marketing.......................................      71,513     366,229
  General and administrative (note 7).......................      76,640     114,105
  Depreciation and amortization.............................      43,690      58,672
                                                              ----------   ---------
      Total operating expenses..............................   1,001,217   1,466,775
                                                              ----------   ---------
      Operating income......................................     107,763     271,838
Other income (expense), net:
  Interest and other income.................................       2,836       2,938
  Loss on disposal of equipment.............................     (10,338)    (21,431)
  Interest expense..........................................     (14,375)    (13,573)
                                                              ----------   ---------
      Total other income (expense), net.....................     (21,877)    (32,066)
                                                              ----------   ---------
      Net income............................................  $   85,886     239,772
                                                              ==========   =========
Net income per share--basic and diluted.....................  $   429.43    1,198.86
                                                              ==========   =========
Weighted average shares outstanding--basic and diluted......         200         200
                                                              ==========   =========
</TABLE>

                See accompanying notes to financial statements.

                                      F-29
<PAGE>
                        GLOBAL 2000 COMMUNICATIONS, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                                        TOTAL
                                                               COMMON    RETAINED   STOCKHOLDERS'
                                                               STOCK     EARNINGS      EQUITY
                                                              --------   --------   -------------
<S>                                                           <C>        <C>        <C>
Balance at December 31, 1996................................  $27,500      25,865       53,365
  Distributions to shareholders.............................    --        (81,000)     (81,000)
  Net income................................................    --         85,886       85,886
                                                              -------    --------     --------
Balance at December 31, 1997................................   27,500      30,751       58,251
  Distributions to shareholders.............................    --       (106,000)    (106,000)
  Net income................................................    --        239,772      239,772
                                                              -------    --------     --------
Balance at December 31, 1998................................  $27,500     164,523      192,023
                                                              =======    ========     ========
</TABLE>

                See accompanying notes to financial statements.

                                      F-30
<PAGE>
                        GLOBAL 2000 COMMUNICATIONS, INC.

                            STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                1997        1998
                                                              ---------   --------
<S>                                                           <C>         <C>
Cash flows from operating activities:
  Net income................................................  $  85,886    239,772
                                                              ---------   --------
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Depreciation and amortization...........................     43,690     58,672
    Net realized loss (gain) on investment..................       (694)     1,535
    Loss on disposal of property and equipment..............     10,338     21,431
    Changes in net assets and liabilities:
      Decrease (increase) in accounts receivable--trade.....    (64,271)    12,488
      Increase in other assets..............................     (1,360)    (1,988)
      Decrease in trade accounts payable....................     (9,964)       (75)
      Increase (decrease) in accrued expenses...............     39,807     (5,110)
      Increase in deferred revenue..........................     70,790     41,014
                                                              ---------   --------
        Net cash provided by operating activities...........    174,222    367,739
                                                              ---------   --------
Cash flows from investing activities:
  Proceeds from sale of investments.........................     36,384     25,614
  Acquisition of property and equipment.....................    (38,147)  (103,938)
  Proceeds from disposal of fixed assets....................     13,800      --
  Purchases of investments..................................    (52,174)   (10,656)
                                                              ---------   --------
      Net cash used in investing activities.................    (40,137)   (88,980)
                                                              ---------   --------
Cash flows from financing activities:
  Principal payments under capital lease obligations........     (8,049)   (10,090)
  Distributions to shareholders.............................    (81,000)  (106,000)
  Repayments of long-term debt..............................    (23,078)    (7,288)
                                                              ---------   --------
        Net cash used in financing activities...............   (112,127)  (123,378)
                                                              ---------   --------
        Net increase in cash and cash equivalents...........     21,958    155,381
Cash and cash equivalents at beginning of year..............     82,792    104,750
                                                              ---------   --------
Cash and cash equivalents at end of year....................  $ 104,750    260,131
                                                              =========   ========
Supplemental disclosures of cash flow information:
  Interest of $14,375 and $13,573 was paid in 1997 and 1998,
    respectively.
  Global 2000 incurred a capital lease obligation of $17,000
    in connection with an acquisition of equipment in 1997.
</TABLE>

                See accompanying notes to financial statements.

                                      F-31
<PAGE>
                        GLOBAL 2000 COMMUNICATIONS, INC.

                         NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1998

(1) NATURE OF OPERATIONS

    Global 2000 Communications, Inc. ("Global 2000") was incorporated in New
York State in 1994. Global 2000 is a regional provider of Internet access and
offers a broad spectrum of Internet access services to both individual and
business customers ranging from dial-up services to continuous access services
using dedicated telephone connections and Web hosting services.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (A) USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions, including estimates of the allowance for doubtful accounts, that
affect the amounts reported in the financial statements. Actual results may
differ from those estimates.

    (B) REVENUE RECOGNITION

    Global 2000 recognizes revenue when services are provided. Services are
generally billed in advance. Advance billings are recorded as deferred revenue
and recognized as revenue when earned over the period of service.

    (C) CASH AND CASH EQUIVALENTS

    For purposes of the statement of cash flows, Global 2000 considers all
highly liquid investments purchased with original maturity of three months or
less to be cash equivalents.

    (D) PROPERTY AND EQUIPMENT

    Property and equipment are recorded at cost. Depreciation is provided for
using the straight line method over the estimated useful lives of the assets.
The estimated useful lives of the assets range from three to forty years. Global
2000 leases certain of its computer and telecommunications equipment under
capital lease agreements. The assets and liabilities under capital leases are
recorded at the lesser of the present value of aggregate future minimum lease
payments or the fair value of the assets under the lease. Assets under capital
lease are depreciated over shorter of their useful life or the lease term.

    (E) INCOME TAXES

    As a subchapter S corporation, Global 2000's income is taxed at the
stockholder level, except for certain business income taxes, therefore, no
income tax provision has been included in the financial statements.

    (F) ADVERTISING COSTS

    Global 2000 incurs advertising costs associated with the marketing of its
services. These costs of advertising are expensed as incurred. Advertising
expense totaled $71,513 and $366,229 for the years ended December 31, 1997 and
1998, respectively.

                                      F-32
<PAGE>
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    (G) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

    Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets.

    (H) EARNINGS PER SHARE

    Global 2000 adopted the provisions of SFAS No. 128, "Earnings per Share," on
January 1, 1998. This statement requires the presentation of basic and diluted
earnings per share for all periods presented. There were no common stock
equivalents outstanding for any of the periods presented; accordingly, basic and
fully diluted earnings per share are the same.

(3) PROPERTY AND EQUIPMENT

    Property and equipment consist of the following at December 31, 1998

<TABLE>
<S>                                                           <C>
Computer, telecommunications and office equipment...........  $238,153
Software....................................................     9,730
Leasehold Improvements......................................   100,361
                                                              --------
                                                               348,244
Less accumulated depreciation...............................   105,209
                                                              --------
Property and equipment, net.................................  $243,035
                                                              ========
</TABLE>

    Depreciation expense for the years ended December 31, 1997 and 1998 was
$43,650 and $58,672, respectively. Estimated useful lives used in the
calculation of depreciation by major category of property and equipment are as
follows:

<TABLE>
<S>                                                           <C>
Computer, telecommunications and office equipment...........  3-7 years
Software....................................................  3 years
Leasehold improvements......................................  30-40 years
</TABLE>

(4) LEASES

    Global 2000 leases computer and telecommunications equipment under a capital
lease agreement that is due to expire on May 1, 1999. At December 31, 1998, the
gross amount of equipment under capital leases was $17,000 with accumulated
amortization of $13,460. Amortization of assets held under capital lease is
included with depreciation expense.

    Global 2000 also has several operating leases, primarily for office
equipment, with expiration dates through July 1, 2000. See note 5 for
information regarding rental of office space.

                                      F-33
<PAGE>
(4) LEASES (CONTINUED)
    Future minimum lease payments under operating leases with initial or
remaining noncancellable lease terms in excess of one year as of December 31,
1998 are as follows:

<TABLE>
<CAPTION>
                                                              OPERATING
YEAR ENDED DECEMBER 31:                                        LEASES
-----------------------                                       ---------
<S>                                                           <C>
        1999................................................   $30,150
        2000................................................     8,775
                                                               -------
        Total minimum lease payments........................   $38,925
                                                               =======
</TABLE>

(5) RELATED PARTY TRANSACTIONS

    Global 2000 rents office space from two of its primary shareholders on a
month-to-month basis. Rent expense in 1997 and 1998 was $6,000 and $21,000,
respectively.

(6) NOTE PAYABLE

    The note payable is owed to a financial institution. The note bears interest
equal to the financial institution's base rate plus 2% per annum and is payable
in monthly installments of $1,483, including interest through June 1, 2001, when
payment will be made for the entire unpaid principal balance and any accrued
interest. Maturities for the next three years are as follows: 1999--$7,288;
2000--$8,050 and 2001--$88,446.

(7) RETIREMENT PLAN

    Employees of Global 2000 with at least three years of service are included,
on a voluntary basis, in a contributory defined contribution pension plan
administered by Global 2000. The plan is a single-employer pension plan.
Contributions by Global 2000 totaled $39,648 and $53,535 for 1997 and 1998,
respectively.

(8) COMMITMENTS

    Global 2000 has entered into several contracts with vendors that provide
certain telephone related line access services with various expiration dates.
Following are the commitments for each of the two years subsequent to
December 31, 1998:

<TABLE>
<S>                                                           <C>
1999........................................................  $ 68,632
2000........................................................    64,632
                                                              --------
    Total...................................................  $133,264
                                                              ========
</TABLE>

(9) SUBSEQUENT EVENT

    Global 2000 was acquired by BiznessOnline.com, Inc. (the acquirer) on
January 31, 1999 in exchange for a note of $580,000 payable at the Initial
Public Offering (IPO) of the acquirer and $2,720,000 payable in shares of common
stock of the acquirer subject to adjustment at the IPO closing based on the IPO
price per share. Upon consummation of the agreement, the acquirer became the
sole stockholder of Global 2000. Subsequent to the acquisition, Global 2000 was
merged into a subsidiary of the acquirer.

                                      F-34
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Stockholders
Ulsternet, Inc.:

    We have audited the accompanying balance sheet of Ulsternet, Inc.
(Ulsternet) as of December 31, 1998, and the related statements of operations,
stockholders' equity (deficit) and cash flows for each of the years in the
two-year period then ended. These financial statements are the responsibility of
Ulsternet's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 Ulsternet, Inc. as of
December 31, 1998, and the results of its operations and its cash flows for each
of the years in the two-year period then ended in conformity with generally
accepted accounting principles.

                                          /s/ KPMG LLP

Providence, Rhode Island
January 25, 1999

                                      F-35
<PAGE>
                                ULSTERNET, INC.

                                 BALANCE SHEET

                               DECEMBER 31, 1998

<TABLE>
<S>                                                           <C>
ASSETS

Current assets:
  Cash......................................................  $  1,258
  Accounts receivable, net of allowance for doubtful
    accounts of $3,000......................................     5,530
  Prepaid expenses..........................................     4,971
                                                              --------
      Total current assets..................................    11,759
                                                              --------
Property and equipment, net (note 3)
  Computer and telecommunications equipment.................   220,984
  Less accumulated depreciation.............................   144,526
                                                              --------
      Net property and equipment............................    76,458
                                                              --------
      Total assets..........................................  $ 88,217
                                                              ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Current maturities of long-term debt (note 4).............  $  8,905
  Current installments of obligations under capital leases
    (note 3)................................................    27,698
  Accounts payable..........................................    12,843
  Accrued expenses..........................................       710
  Deferred revenue..........................................   105,358
                                                              --------
      Total current liabilities.............................   155,514

Long-term liabilities:
  Long-term debt, excluding current maturities (note 4).....    11,271
  Obligations under capital leases, excluding current
    installments (note 3)...................................    13,934
                                                              --------
      Total liabilities.....................................   180,719
                                                              --------
Stockholders' equity (deficit) (note 5):
  Common stock, no par value; 200 shares authorized, 94
    shares issued and outstanding...........................    10,200
  Accumulated deficit.......................................  (102,702)
                                                              --------
      Total stockholders' deficit...........................   (92,502)
                                                              --------
      Total liabilities and stockholders' deficit...........  $ 88,217
                                                              ========
</TABLE>

                 See accompanying notes to financial statements

                                      F-36
<PAGE>
                                ULSTERNET, INC.

                            STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                1997       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Revenues....................................................  $318,630   604,419
                                                              --------   -------
Operating expenses:
  Connectivity and operations...............................   290,309   491,327
  Sales and marketing.......................................     4,377     6,136
  General and administrative................................     2,536    15,336
  Depreciation and amortization.............................    39,224    58,231
                                                              --------   -------
      Total operating expenses..............................   336,446   571,030
                                                              --------   -------
      Operating income (loss)...............................   (17,816)   33,389
Interest expense............................................    (8,480)   (9,784)
                                                              --------   -------
      Net income (loss).....................................  $(26,296)   23,605
                                                              ========   =======
Net income (loss) per share--basic and diluted..............  $(279.74)   251.12
                                                              ========   =======
Weighted average shares outstanding--basic and diluted......        94        94
                                                              ========   =======
</TABLE>

                See accompanying notes to financial statements.

                                      F-37
<PAGE>
                                ULSTERNET, INC.

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                                           TOTAL
                                                                                       STOCKHOLDERS'
                                                               COMMON    ACCUMULATED      EQUITY
                                                               STOCK       DEFICIT       (DEFICIT)
                                                              --------   -----------   -------------
<S>                                                           <C>        <C>           <C>
Balance at December 31, 1996................................  $ --           --            --
  Capital Contributions.....................................   10,200        --            10,200
  Distributions.............................................    --          (54,688)      (54,688)
  Net loss..................................................    --          (26,296)      (26,296)
                                                              -------      --------       -------
Balance at December 31, 1997................................   10,200       (80,984)      (70,784)
  Distributions.............................................    --          (45,323)      (45,323)
  Net income................................................    --           23,605        23,605
                                                              -------      --------       -------
Balance at December 31, 1998................................  $10,200      (102,702)      (92,502)
                                                              =======      ========       =======
</TABLE>

                See accompanying notes to financial statements.

                                      F-38
<PAGE>
                                ULSTERNET, INC.

                            STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                1997       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Cash flows from operating activities:
  Net income (loss).........................................  $(26,296)   23,605
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
    Depreciation and amortization...........................    39,224    58,231
    Changes in net assets and liabilities:
      Decrease (increase) in accounts receivable............    (6,645)    1,115
      Increase in prepaid expenses..........................     --       (4,971)
      Increase in accounts payable..........................     7,413     5,430
      Increase in accrued expenses..........................       325       385
      Increase in deferred revenue..........................    82,944    22,414
                                                              --------   -------
        Net cash provided by operating activities...........    96,965   106,209
                                                              --------   -------
Cash flows from investing activities:
  Capital expenditures......................................   (55,344)  (31,860)
                                                              --------   -------
        Net cash used in investing activities...............   (55,344)  (31,860)
                                                              --------   -------
Cash flows from financing activities:
  Capital contributions.....................................    10,200     --
  Proceeds from long-term debt..............................    40,524     --
  Distributions to stockholders.............................   (54,688)  (45,323)
  Principal payments under capital lease obligations........   (18,806)  (26,271)
  Repayments of long-term debt..............................   (12,298)   (8,050)
                                                              --------   -------
        Net cash used in financing activities...............   (35,068)  (79,644)
                                                              --------   -------
        Net increase (decrease) in cash.....................     6,553    (5,295)
Cash at beginning of year...................................     --        6,553
                                                              --------   -------
Cash at end of year.........................................  $  6,553     1,258
                                                              ========   =======
Supplemental cash flow information:
  Ulsternet paid $8,480 and $9,784 in interest in 1997 and
    1998, respectively.
Non-cash financing activities:
  Capital lease obligations of $49,703 and $21,883 were incurred in 1997 and
    1998, respectively.
</TABLE>

                See accompanying notes to financial statements.

                                      F-39
<PAGE>
                                ULSTERNET, INC.

                         NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1998

(1) NATURE OF OPERATIONS

    Ulsternet, Inc. ("Ulsternet") was incorporated on November 7, 1996.
Ulsternet is a provider of Internet access and offers a broad spectrum of
Internet access services to both individual and business customers ranging from
dial-up services to continuous access services using dedicated telephone
connections and Web hosting services.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (A) USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions, including estimates of the allowance for doubtful accounts and
provisions for sales credits, that affect the amounts reported in the financial
statements. Actual results may differ from those estimates.

    (B) REVENUE RECOGNITION

    Ulsternet recognizes revenue when services are provided. Services are
generally billed in advance. Advance billings are recorded as deferred revenue
and recognized as revenue when earned over the service period.

    (C) CASH AND CASH EQUIVALENTS

    For purposes of the statement of cash flows, Ulsternet considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.

    (D) PROPERTY AND EQUIPMENT

    Property and equipment are recorded at cost. Depreciation is provided using
an accelerated method over the estimated useful lives of the assets for property
and equipment. The estimated useful lives of the assets range from three to five
years. Ulsternet leases certain of its data communications and other equipment
under capital lease agreements. The assets and liabilities under capital leases
are recorded at the lesser of the present value of aggregate future minimum
lease payments or the fair value of the assets under the lease. Assets under
capital lease are depreciated over the shorter of their estimated useful lives
or the lease term.

    (E) INCOME TAXES

    As a subchapter S corporation, Ulsternet's income is taxed at the
stockholder level, therefore except for certain local business income taxes, no
income tax provision has been included in the financial statements.

    (F) ADVERTISING COSTS

    Ulsternet incurs advertising costs associated with the marketing of its
services. These costs of advertising are expensed as incurred. Advertising
expense totaled $1,387 and $1,016 for the years ended December 31, 1997 and
1998, respectively.

                                      F-40
<PAGE>
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    (G) IMPAIRMENT OF LONG-LIVED ASSETS

    Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets.

    (H) EARNINGS PER SHARE

    Ulsternet adopted the provisions of SFAS No. 128, "Earnings per Share," on
December 31, 1997. This statement requires the presentation of basic and diluted
earnings per share for all periods presented. There were no common stock
equivalents outstanding for any of the periods presented; accordingly, basic and
fully diluted earnings per share are the same.

(3) LEASES

    Ulsternet leases certain equipment under capital lease agreements that
expire at various dates through July 2001. At December 31, 1998, the gross
amount of equipment and related accumulated amortization recorded under capital
leases were as follows:

<TABLE>
<S>                                                           <C>
Computer and telecommunications equipment...................  $91,930
Less accumulated amortization...............................   43,577
                                                              -------
                                                              $48,353
                                                              =======
</TABLE>

    Ulsternet has one operating lease for office space on a month-to-month
basis. Rental expense for the operating lease during 1997 and 1998 was $3,600
and $5,100, respectively.

    Future minimum lease payments under capital and operating leases as of
December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                              CAPITAL
YEAR ENDED DECEMBER 31:                                        LEASES
-----------------------                                       --------
<S>                                                           <C>
        1999................................................  $30,554
        2000................................................   12,974
        2001................................................    1,647
                                                              -------
        Total minimum lease payment.........................   45,175
        Less amount representing interest (at 10%)..........    3,543
                                                              -------
        Present value of minimum capital lease payments.....   41,632
        Less current installments of obligations under
          capital leases....................................   27,698
                                                              -------
        Obligations under capital leases, excluding current
          installments......................................  $13,934
                                                              =======
</TABLE>

                                      F-41
<PAGE>
(4) LONG-TERM DEBT

    Long-term debt consists of the following at December 31, 1998:

<TABLE>
<S>                                                           <C>
Note payable to a bank in monthly installments of $430,
  including interest at 10.5%, due January 2002, secured by
  equipment.................................................  $13,417
Note payable to a bank in monthly installments of $476,
  including interest at 11%, due May 2000, secured by
  personal property.........................................    6,759
                                                              -------
  Total long-term debt......................................   20,176
  Less current maturities...................................    8,905
                                                              -------
  Long-term debt, excluding current maturities..............  $11,271
                                                              =======
</TABLE>

    Maturities for the next three years are as follows: 1999--$8,905;
2000--$6,569 and 2001--$4,702.

(5) DISTRIBUTIONS TO STOCKHOLDERS

    Ulsternet is a cash-basis, subchapter S corporation for federal income tax
purposes. As such, income or loss is measured on the cash basis of accounting
for tax purposes and distributions are made based on those results. (For
financial statement purposes, Ulsternet is on the accrual method of accounting.)
The distributions made to date do not exceed Ulsternet's income tax basis and
therefore have been reflected as charges to accumulated deficit for financial
statement purposes rather than as returns of capital stock.

(6) COMMITMENTS

    Ulsternet has entered into several contracts with vendors that provide
certain telephone related line access services. The contracts have various
expiration dates, through 2002. Following are the commitments for each of the
four years subsequent to December 31, 1998:

<TABLE>
<S>                                                           <C>
1999........................................................  $104,625
2000........................................................    34,985
2001........................................................    33,078
2002........................................................    11,026
                                                              --------
    Total...................................................  $183,714
                                                              ========
</TABLE>

(7) SUBSEQUENT EVENT (UNAUDITED)

    Ulsternet's stockholders have entered into a merger agreement whereby they
will exchange their shares in the Company to BiznessOnline.Com, Inc. (acquirer)
in exchange for cash and shares of common stock of the acquirer concurrent with
the consummation of the initial public offering ("IPO") of the common stock of
the acquirer. Upon consummation of the offering, the acquirer will become the
sole stockholder of Ulsternet. Subsequent to the acquisition, Ulsternet will
merge into a subsidiary of the acquirer.

                                      F-42
<PAGE>
                                   SIGNATURES

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

<TABLE>
<S>                                                    <C>  <C>
                                                       BIZNESSONLINE.COM, INC.

                                                       By:              /s/ MARK E. MUNRO
                                                            -----------------------------------------
                                                                          Mark E. Munro
                                                                    CHAIRMAN OF THE BOARD AND
Date: March 29, 2000                                                 CHIEF EXECUTIVE OFFICER
</TABLE>

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

<TABLE>
<CAPTION>
                      SIGNATURE                                   TITLE                    DATE
                      ---------                                   -----                    ----
<C>                                                    <S>                          <C>
                                                       Chairman of the Board and
                  /s/ MARK E. MUNRO                      Chief Executive Officer
     -------------------------------------------         (Principal Executive         March 29, 2000
                    Mark E. Munro                        Officer)

                                                       Vice President and Chief
               /s/ DANIEL J. SULLIVAN                    Financial Officer
     -------------------------------------------         (Principal Financial and     March 29, 2000
                 Daniel J. Sullivan                      Accounting Officer)

                 /s/ S. KEITH LONDON
     -------------------------------------------       Executive Vice President       March 29, 2000
                   S. Keith London                       and Director

                   /s/ JOHN FRASER
     -------------------------------------------       Director                       March 29, 2000
                     John Fraser

                 /s/ JOSEPH LUCIANO
     -------------------------------------------       Director                       March 29, 2000
                   Joseph Luciano

                  /s/ ROBERT BYRNE
     -------------------------------------------       Director                       March 29, 2000
                    Robert Byrne

                  /s/ DAVID CONBOY
     -------------------------------------------       Director                       March 29, 2000
                    David Conboy
</TABLE>
<PAGE>
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS                         DESCRIPTION OF EXHIBIT
-------      ------------------------------------------------------------
<C>          <S>
  3.1        Certificate of Incorporation of Registrant (Filed as
             Exhibit 3.1 to the Registrant's Registration Statement on
             Form SB-2, File No. 333-73067, as declared effective on
             May 11, 1999, and incorporated herein by reference).

  3.2        Certificate of Amendment to Certificate of Incorporation of
             Registrant (Filed as Exhibit 3.2 to the Registrant's
             Registration Statement on Form SB-2, File No. 333-73067, as
             declared effective on May 11, 1999, and incorporated herein
             by reference).

  3.3        Certificate of Designation of Registrant (Filed as
             Exhibit 3.3 to the Registrant's Registration Statement on
             Form SB-2, File No. 333-73067, as declared effective on
             May 11, 1999, and incorporated herein by reference).

  3.4        Certificate of Amendment to Certificate of Incorporation of
             Registrant (Filed as Exhibit 3.4 to the Registrant's
             Registration Statement on Form SB-2, File No. 333-73067, as
             declared effective on May 11, 1999, and incorporated herein
             by reference).

  3.5        Certificate of Amendment to Certificate of Incorporation of
             Registrant (Filed as Exhibit 3.5 to the Registrant's
             Registration Statement on Form SB-2, File No. 333-73067, as
             declared effective on May 11, 1999, and incorporated herein
             by reference).

  3.6        By-Laws of Registrant (Filed as Exhibit 3.6 to the
             Registrant's Registration Statement on Form SB-2, File
             No. 333-73067, as declared effective on May 11, 1999, and
             incorporated herein by reference).

  4.1        Specimen Common Stock Certificate of Registrant (Filed as
             Exhibit 4.1 to the Registrant's Registration Statement on
             Form SB-2, File No. 333-73067, as declared effective on
             May 11, 1999, and incorporated herein by reference).

 10.1        Merger Agreement among the Company, Insite Internet I
             Acquisition Company, Global 2000 Communications, Inc.
             ("Global") and the shareholders of Global (Filed as
             Exhibit 10.1 to the Registrant's Registration Statement on
             Form SB-2, File No. 333-73067, as declared effective on
             May 11, 1999, and incorporated herein by reference).

 10.2        Merger Agreement among the Company, Insite Internet II
             Acquisition Company, Borg Internet Services, Inc. ("Borg")
             and the shareholders of Borg (Filed as Exhibit 10.2 to the
             Registrant's Registration Statement on Form SB-2, File
             No. 333-73067, as declared effective on May 11, 1999, and
             incorporated herein by reference).

 10.3        Merger Agreement among the Company, Insite Internet IV
             Acquisition Company, Ulsternet, Inc. ("Ulsternet") and the
             shareholders of Ulsternet (Filed as Exhibit 10.3 to the
             Registrant's Registration Statement on Form SB-2, File
             No. 333-73067, as declared effective on May 11, 1999, and
             incorporated herein by reference).

 10.4        Merger Agreement among the Company, Insite Internet V
             Acquisition Company, Caravela Software, Inc. ("Caravela")
             and the shareholders of Caravela (Filed as Exhibit 10.4 to
             the Registrant's Registration Statement on Form SB-2, File
             No. 333-73067, as declared effective on May 11, 1999, and
             incorporated herein by reference).

 10.5        Stock Purchase Agreement among the Company and the
             shareholders of AlbanyNet, Inc. (Filed as Exhibit 10.5 to
             the Registrant's Registration Statement on Form SB-2, File
             No. 333-73067, as declared effective on May 11, 1999, and
             incorporated herein by reference).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS                         DESCRIPTION OF EXHIBIT
-------      ------------------------------------------------------------
<C>          <S>
 10.6*       Employment Agreement with Mark E. Munro (Filed as
             Exhibit 10.6 to the Registrant's Registration Statement on
             Form SB-2, File No. 333-73067, as declared effective on
             May 11, 1999, and incorporated herein by reference).

 10.7*       Employment Agreement with S. Keith London (Filed as
             Exhibit 10.7 to the Registrant's Registration Statement on
             Form SB-2, File No. 333-73067, as declared effective on
             May 11, 1999, and incorporated herein by reference).

 10.8*       Employment Agreement with Daniel J. Sullivan (Filed as
             Exhibit 10.8 to the Registrant's Registration Statement on
             Form SB-2, File No. 333-73067, as declared effective on
             May 11, 1999, and incorporated herein by reference).

 10.9*       1999 Stock Incentive Plan (Filed as Exhibit 10.9 to the
             Registrant's Registration Statement on Form SB-2, File
             No. 333-73067, as declared effective on May 11, 1999, and
             incorporated herein by reference).

 10.10*      Form of Incentive stock Option Agreement for 1999 Incentive
             Stock Option Plan (Filed as Exhibit 10.10 to the
             Registrant's Registration Statement on Form SB-2, File
             No. 333-73067, as declared effective on May 11, 1999, and
             incorporated herein by reference).

 10.11*      Form of Non-Qualified Stock Option Agreement for 1999 Stock
             Incentive Plan (Filed as Exhibit 10.11 to the Registrant's
             Registration Statement on Form SB-2, File No. 333-73067, as
             declared effective on May 11, 1999, and incorporated herein
             by reference).

 10.12*      1999 Non-Employee Director Stock Incentive Plan (Filed as
             Exhibit 10.12 to the Registrant's Registration Statement on
             Form SB-2, File No. 333-73067, as declared effective on
             May 11, 1999, and incorporated herein by reference).

 10.13*      Form of Non-Qualified Stock Option Agreement for 1999
             Non-Employee Director Stock Incentive Plan (Filed as
             Exhibit 10.13 to the Registrant's Registration Statement on
             Form SB-2, File No. 333-73067, as declared effective on
             May 11, 1999, and incorporated herein by reference).

 10.14       Asset Purchase Agreement among Insite Internet III
             Acquisition Co., Inc., Ascent Internet Holdings, Inc. and
             the stockholder of Ascent (Filed as Exhibit 10.14 to the
             Registrant's Quarterly Report on Form 10-Q for the quarter
             ended September 30, 1999, as filed on November 15, 1999, and
             incorporated herein by reference).

 10.15       Asset Purchase Agreement among the Company, Insite Internet
             VI Acquisition Co., Inc., WebWay LLC and the members of
             WebWay (Filed as Exhibit 10.15 to the Registrant's Quarterly
             Report on Form 10-Q for the quarter ended September 30,
             1999, as filed on November 15, 1999, and incorporated herein
             by reference).

 10.16       Merger Agreement among the Company, BOL Acquisition
             Co. I, Inc., Infoboard, Inc. and the Stockholder of
             Infoboard (Filed as Exhibit 10.16 to the Registrant's
             Quarterly Report on Form 10-Q for the quarter ended
             September 30, 1999, as filed on November 15, 1999, and
             incorporated herein by reference).

 10.17       Merger Agreement among the Company, BOL Acquisition
             Co. V, Inc., NECAnet, Inc., New England Computer
             Associates, Inc. and the Stockholders of NECAnet and New
             England Computer Associates dated December 14, 1999.

 10.18       Asset Purchase Agreement among the Company, BOL Acquisition
             Co. VII, Inc., Cyberzone, LLC and the members of Cyberzone
             dated December 13, 1999.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS                         DESCRIPTION OF EXHIBIT
-------      ------------------------------------------------------------
<C>          <S>
 10.19       Merger Agreement among the Company, BOL Acquisition
             Co. X, Inc., Prime Communication Systems, Incorporated and
             the Stockholders of Prime dated December 28, 1999.

 10.20       Nontransferable Common Stock Purchase Warrant of the Company
             in favor of The Research Works, Inc. dated October 27, 1999

 10.21       Letter Agreement between the Company and Neidiger Tucker
             Bruner, Inc. dated October 27, 1999

 10.22*      Employment Agreement with Anthony Bruno dated as of May 22,
             1999, as amended by the First Amendment to Employment
             Agreement, dated as of May 22, 1999.

 10.23*      First Amendment to Employment Agreement with Anthony Bruno,
             dated as of February 1, 2000.

 10.24*      First Amendment to Employment Agreement with Daniel J.
             Sullivan, dated as of February 1, 2000.

 10.25       Merger Agreement among the Company, BOL Acquisition
             Co. II, Inc., Telesupport, Inc., and the Stockholders of
             Telesupport dated December 5, 1999

 10.26       Asset Purchase Agreement among the Company, BOL Acquisition
             Co. III, Inc., Telecon Communications, Corp. and the
             stockholders of Telecon Communications, Corp. dated
             December 5, 1999

 10.27       Letter Agreement between the Company and Prudential
             Securities Incorporated dated March 15, 2000

 10.28       Credit Facility Agreement among the Company and each of its
             direct and indirect Subsidiaries and MCG Finance Corporation
             dated March 16, 2000

 10.29       Term Loan Note of the Company and each of its direct and
             indirect Subsidiaries in favor of MCG Finance Corporation
             dated March 16, 2000

 10.30       Master Security Agreement, Collateral Assignment and Equity
             Pledge among the Company and each of its direct and indirect
             Subsidiaries and MCG Finance Corporation dated March 16,
             2000

 10.31       Warrant Agreement between the Company and MCG Finance
             Corporation dated March 16, 2000

 10.32       Escrow And Account Collateral Agreement among the Company
             and each of its direct and indirect Subsidiaries, Riggs
             Bank, N.A. and MCG Finance Corporation dated March 16, 2000

 10.33       Intellectual Property Security Agreement between the Company
             and MCG Finance Corporation dated March 16, 2000

 10.34       Intellectual Property Security Agreement between Caravela
             Software, Inc. and MCG Finance Corporation dated March 16,
             2000

 10.35       Intellectual Property Security Agreement between Global 2000
             Communications, Inc. and MCG Finance Corporation dated
             March 16, 2000

 10.36       Intellectual Property Security Agreement between
             Infoboard, Inc. and MCG Finance Corporation dated
             March 16, 2000

 10.37       Letter Agreement between the Company and Waller Capital
             Corporation dated March 17, 2000

 11.1        Calculation of Earnings per share
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS                         DESCRIPTION OF EXHIBIT
-------      ------------------------------------------------------------
<C>          <S>
 21.1        Subsidiaries of the registrant

 23.1        Consent of KPMG, LLP, Independent Auditors

 27.1        Financial Data Schedule
</TABLE>

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

*   Management contract or compensatory plan or arrangement.