<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                        -------------------------------

                                  FORM 10-KSB

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

                    For the Fiscal Year Ended May 31, 2000
                          COMMISSION FILE NO. 0-25773

                         INFORMATION HIGHWAY.COM, INC.
          (Name of small business issuer as specified in its charter)

           FLORIDA                                        65-015410
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                     Identification Number)

                          185 - 10751 SHELLBRIDGE WAY
                  RICHMOND, BRITISH COLUMBIA V6X 2W8, CANADA
 (Address, including postal code, of registrant's principal executive offices)

                                (604) 278-5996
                    (Telephone number including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act: NONE

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

  Indicate by check mark whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months,
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-B 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-KSB or any amendment to
this Form 10-KSB.

  The registrant's revenues for its most recent fiscal year were: $1,202,135

The Aggregate market value of the voting stock held by non-affiliates of
the registrant on August 18, 2000, computed by reference to the price at which
the stock was sold on that date: $6,758,042.50

  The number of shares outstanding of the registrant's Class A voting Common
Stock, no par value, as of August 18, 2000 was 8,113,334.

  Documents incorporated by reference: None.

  Transitional Small Business Disclosure Format (Check one): Yes [_] No [X]
<PAGE>

                         INFORMATION HIGHWAY.COM, INC.
                                  FORM 10-KSB

                               TABLE OF CONTENTS

<TABLE>
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                                                                              Page
                                                                              ----
<S>                                                                           <C>
PART I

Item 1.    Description of Business                                               1

Item 2.    Description of Property                                              12

Item 3.    Legal Proceedings                                                    13

PART II

Item 5.    Market for Common Equity and Related Stockholder Matters             13

Item 6.    Management's Discussion and Analysis or Plan of Operation            16

Item 7.    Financial Statements                                                 29

PART III

Item 9.    Director's Executive Officers, Promoters and Control Persons;
           Compliance with Section 16(a) of the Exchange Act                    30

Item 10.   Executive Compensation                                               31

Item 11.   Security Ownership of Certain Beneficial Owners and Management       33

Item 12.   Certain Relationships and Related Transactions                       34

Item 13.   Exhibits and Reports on Form 8-K                                     35
</TABLE>
<PAGE>

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

     Information Highway.com, Inc. serves as an Internet Service Provider, or
ISP, for companies and individuals that need access to the Internet in exchange
for a recurring fee. We have also developed and begun providing a compilation of
Internet-based services and information catering to business professionals known
collectively as www.theexecutive.com. We conduct our operations through the
following three wholly-owned Canadian subsidiaries:

     .YesIC Communications, Inc., acquired in February 1997;
     .World Tel Internet (Toronto) Ltd., acquired in February 1997; and
     .Blue Crow Internet Company, Ltd., acquired in December 1996.

     Information Highway, Inc., a Washington corporation, initially acquired
these subsidiaries. Then, in February 1999, Information Highway, Inc. engaged in
a reverse takeover of Florida Venture Fund, Inc., a Florida corporation. As a
result of the reverse takeover, the shareholders of Information Highway, Inc.
came to own approximately 95% of the outstanding shares of Florida Venture Fund,
Inc. In connection with the reverse takeover, Florida Venture Fund, Inc. changed
its name to Information Highway.com, Inc. Information Highway.com, Inc. is now
the ultimate parent company whose shares are traded on the OTC bulletin board
(symbol: IHWY). Information Highway.com, Inc.'s executive offices are located at
10751 Shellbridge Way, Suite 185, Richmond, British Columbia V6X 2W8, Canada,
our telephone number is (604) 278-5996 and our facsimile number is (604) 278-
3409.

Business Development

     Information Highway.com was incorporated in Florida in December 1988 as
Florida Venture Fund, Inc. Florida Venture Fund had not conducted any business
prior to February, 1999, when it engaged in a reverse takeover with Information
Highway, Inc., a Washington corporation. Information Highway, Inc. was formed in
October, 1996. It began to build the basis for the current business of the
Company by undertaking the following acquisitions:

     .YesIC Communications, Inc., acquired in February, 1997;
     .World Tel Internet (Toronto) Ltd., acquired in February, 1997; and
     .Blue Crow Internet Company, Ltd., acquired in December, 1996.

In a reverse takeover, the shareholders of an acquired company generally end up
owning all or most of the resulting combined company. The reverse takeover of
Florida Venture Fund, Inc. by Information Highway, Inc.was conducted pursuant to
an Agreement and Plan of Reorganization entered into on February 17, 1999 and
closed on February 23, 1999 between Florida Venture Fund, Inc., Information
Highway, Inc. and certain shareholders of Information Highway, Inc. Florida
Venture Fund, Inc. acquired 3,235,000 common shares of Information Highway, Inc.
(out of a total of 5,639,650 issued and outstanding common shares) in exchange
for 3,235,000 common shares of Florida Venture Fund, Inc. In connection with the
reverse takeover, FloridaVenture Fund, Inc. changed its name to Information
Highway.com, Inc. It is our intention
<PAGE>

to complete the exchange of shares of Information Highway.com common stock for
the remaining and outstanding common shares of Information Highway, Inc. on a
one for one basis. As of May 11, 2000 (date of exchange offering closing),
2,359,650 of the remaining 2,404,650 Information Highway, Inc. shares had been
exchanged for the same number of Information Highway.com shares. Information
Highway.com has allotted 45,000 shares in anticipation of the remaining shares
of Information Highway, Inc. being exchanged in the future. As part of the
Agreement and Plan of Reorganization, Information Highway.com caused 1,659,833
of its 1,979,500 common shares that were issued and outstanding, prior to the
closing, to be cancelled and assumed the obligations of Information Highway,
Inc. to issue common shares pursuant to warrants and stock options issued by
Information Highway, Inc. $100,000 was paid by Information Highway, Inc. to the
controlling shareholder of Information Highway.com to effect the Agreement and
Plan of Reorganization including the cancellation of 1,659,833 shares. In total,
to January 10, 2000, approximately 99% of Information Highway, Inc.shares had
been exchanged. Information Highway.com has allotted 45,000 shares in
anticipation of the remaining shares being exchanged. As part of the Agreement
and Plan of Reorganization, Information Highway.com caused 1,659,833 of its
1,979,500 common shares that were issued and outstanding prior to the closing to
be canceled and assumed the obligations of Information Highway, Inc. to issue
common shares pursuant to warrants and stock options issued by Information
Highway, Inc. Information Highway, Inc. paid $100,000 to the controlling
shareholder of Florida Venture Fund, Inc. as a finder's fee and to effect the
Agreement and Plan of Reorganization.

Overview of Information Highway.com's Business

     We serve as an Internet Service Provider , or ISP, for companies and
individuals that need access to the Internet in exchange for a recurring fee. We
intend to provide ISP services to a steadily growing number of cities in North
America as a Virtual ISP. A Virtual ISP provides Internet access to its
customers using the underlying telecommunications infrastructure of another
company, such as a telephone company. The Virtual ISP business model should
enable us to avoid purchasing and installing backbone communications equipment
and infrastructure in each city where we plan to offer ISP services.

     Our goal is to expand our ISP business throughout North America by
negotiating access to Virtual ISP backbone facilities and then repackaging that
access for sale to our customers and resellers (licensees). We have entered into
agreements that permit us to market access to the Internet user in the Northeast
United States and 20 cities (some in the Northeast) across the United States,
and in Canada. Toronto, Ontario is the first market in which we provided ISP
services, beginning about four years ago.

     We believe that Internet users will begin to base their selection of an ISP
in part on the value-added services that their ISP provides. Through our portal
site compilation of Internet-based services and information, we provide
localized and portal content catering to business professionals. Through
research, design, programming, co-branding, and licensing, we have compiled
Internet services and content in our portal site that we believe are useful to
companies, associations and professionals. Portal site web pages are designed
specifically for targeted user groups, and we believe they provide friendly,
easy to navigate interfaces. Our basic portal site
<PAGE>

may be accessed through the Internet at www.theexecutive.com. Other portal sites
are customized to the needs of specific Internet subscriber groups (whether by
geographic location or entity affiliation) and have different Internet
addresses.

Industry Background--The Internet

     The Internet is a global collection of thousands of interconnected computer
networks that links computers around the world and enables commercial
organizations, educational institutions, governmental agencies and individuals
to communicate electronically, access and share information and conduct
commerce. Unlike other public and private telecommunications networks that are
managed by businesses, governmental agencies or other entities, the Internet is
a cooperative interconnection of many such public and private networks. The
networks that comprise the Internet are connected in a variety of ways,
including the public-switched telephone network and dedicated high-speed leased
lines. Open communications on the Internet are enabled by TCP/IP, the common
Internet communications protocol, which enables communication across the
Internet regardless of the hardware and software used.

     Recent technological advances, combined with cultural changes and evolving
business practices, have led to integration of the Internet into the activities
of individuals and the operations and strategies of commercial organizations.
Use of the Internet by individuals and relatively small businesses and other
organizations has been accelerated by dramatic increases in cost-effective
processing power and data storage capabilities in personal computers, as well as
widespread availability of multimedia, fax/modem, and networking capabilities to
the home computing market. According to CyberAtlas, the Computer Industry
Almanac conducted a study that found that North America will remain the leading
region for Internet users until at least 2005, projecting that it will grow from
about 83 million Internet users at the end of 1998 to nearly 230 million by the
end of 2005. By the end of the year 2000, the Computer Industry Almanac projects
that Internet users in North America will number almost 149 million. The
Computer Industry Almanac defines Internet users as adults with weekly usage in
businesses and homes.

     Much of the recent growth in Internet use by businesses and individuals has
been driven by the emergence of a network of servers and information available
on the worldwide web. The worldwide web, which is based on a client/server model
and a set of standards for information access and navigation, can be accessed
using software that allows non-technical users to exploit the capabilities of
the Internet. The worldwide web enables users to find, retrieve and link
information on the Internet easily and consistently. The development of
worldwide web technology and associated easy-to-use software has made the
Internet easier to navigate and more accessible to a larger number of users and
for a broader range of applications.

     Until recently, individuals could access the Internet only through an
organization with a direct Internet connection, or through traditional online
services employing closed, proprietary networks that allow Internet access only
to limited Internet resources. With the growth and increasing commercialization
of the Internet, a number of Internet Service Providers, or ISPs, including
Information Highway.com, have emerged to provide direct access to individuals.
Traditional online services also have begun to increase the scope and capacity
of their access to the Internet. Access providers vary widely in geographic
coverage, subscriber focus and levels
<PAGE>

of Internet access. For example, access providers may concentrate on certain
types of subscribers (such as businesses or individuals) that differ
substantially in the type of service and support required. Providers may also
differ according to whether they provide direct or non-direct access to the
Internet. Direct access through Internet protocol such as PPP (Point-to-Point
Protocol) enable users to establish direct connections to other computers on the
Internet, including worldwide web sites or computers operated by other users,
and thereby have access to the full range of Internet resources. Like most
regional and national ISPs, we offer direct Internet access.

Principal Services

     We currently derive the overwhelming majority of our revenues
(approximately 98%) from our ISP business. However, in the near future we expect
that, with the advertising and e-commerce marketing plans currently undertaken,
an increase in our revenues will be generated from our licensed portal partners,
licensed resellers, and high speed Digital Subscriber Line (DSL) customers in
the North American market. Over the past 18 months, we have devoted significant
resources to developing our portal site, which provides localized and portal
content catering to business professionals. We believe that the portal site will
ultimately produce significant revenues, as well as complement our ISP services
by functioning as an Internet access gateway.

     Key strategic developments to date have included equipment, software and
robust network infrastructure acquisitions, acquisitions of licenses for web
content, research and development and marketing plan development. We possess
what management considers to be the latest in high-end computer management
systems. Hardware systems have been installed, tested, and are operating with
comprehensive redundancy and contingency plans (although we cannot guarantee
that we would maintain service in the face of every kind of natural disaster or
man-made disruption). We have the capacity to increase hardware storage
capabilities due to the modular nature of our equipment and without system
downtime.

ISP Services

     We serve as an ISP for companies and individuals that need access to the
Internet in exchange for a recurring fee. We began as a local ISP in Toronto and
Vancouver, purchasing and installing the backbone communications equipment and
infrastructure necessary to be a stand-alone ISP. Our costs of providing ISP
services have historically included equipment installation and ongoing service
and maintenance charges. We intend to provide ISP services to a steadily growing
number of cities in North America as a Virtual ISP by providing Internet access
to our customers using the underlying telecommunications infrastructure of other
companies, such as telephone companies. The Virtual ISP business model can
enable us to avoid purchasing hardware and installing backbone communications
equipment and infrastructure in each city where we plan to offer ISP services.
As we introduce our Virtual ISP presence in additional cities, each city will
represent an increased lease charge under our agreements with Internet access
providers due to the need to add bandwidth to accommodate the customer base in
the new market. As we expand our presence in a particular market, we will
require additional increases in bandwidth depending on data transmission
volumes.
<PAGE>

     Our goal is to expand our ISP business throughout North America by
negotiating access to the telecommunications backbone facilities of Internet
access providers and then repackaging that access for sale to our customers and
resellers (licensees). We have entered into agreements that permit us to market
access to the Internet in the Northeast United States and 20 cities (some in the
Northeast) across the United States, and in Canada. In September 1999, we
entered into an agreement with Bell Atlantic that lets us provide Internet
access in the Northeast United States on high-speed Digital Subscriber Lines, or
DSLs. The agreement has a three-year term and is subject to renewal annually
thereafter. Under the agreement, we pay fees to Bell Atlantic monthly based on a
per-user basis. In March 1999, we entered into an agreement with Level 3
Communications that lets us provide Internet access in 20 cities across the
United States using their fiber-optic backbone (a phone line). The agreement
does not have a specific term and is on a month-to- month basis. Under the
agreement, we pay fees to Level 3 Communications based on a per-port fee (each
port provides capacity for a certain volume of data transmission). In November
1998, we entered into an agreement with Metro Net Communications, recently
acquired by AT&T, which permits us to use their Canadian network of high-speed,
fiber-optic ATM links. The agreement has a five- year term and no stated renewal
clause. Under the agreement, we pay fees to Metro Net Communications based on a
per-port fee. We plan to pursue agreements with additional Internet access
providers based on the markets we seek to serve and the acceptability of the
terms offered by Internet access providers serving those markets. We must
develop and maintain our relationships with telecommunications companies in
order to implement our Virtual ISP business model and facilitate broad market
acceptance in North America of our services and enhance our sales.

     We select certain target markets in which we will offer our services and
commit corresponding resources for marketing and infrastructure. We base our
target market assessment on four years of research and development through our
involvement in the Internet industry. Because we do not have a universal
presence on the Internet as an ISP, our ability to achieve market penetration in
the target markets we select to serve has a significant effect on our ability to
maintain and increase our revenues. As of January 31, 2000, we had approximately
15,000 dial-up customers through our own ISP service and through our resellers
in North America. Maintaining market penetration successes by minimizing
customer turnover also has a significant effect on our ability to maintain and
increase our revenues. We have had an overall rate of customer turnover during
the past four years of approximately 6,000 ISP customers. A large portion of
this turnover has occurred due to some technical difficulties rolling out new
AT&T (formerly MetroNet) leased lines. A higher percentage of customers than
usual have terminated service due principally to slow transmission speeds and
inadvertent disconnection of transmissions. We are working with AT&T to correct
these problems. We expect customer turnover to increase in the future as
competition intensifies. We expect that service quality (i.e., data transmission
speed and periods of down time) and price will be the major factors that
influence ISP users to switch their ISP. We believe that the availability of
customized portal sites (and other such similar Internet link compilations
targeted to specific user groups) with our value-added services will
increasingly become another factor that ISP customers will consider in their
assessment of service quality.

     We currently have a significant market presence (more than 13,000 dial-up
ISP customers) in Toronto. In addition, we have begun to provide ISP services in
Vancouver and
<PAGE>

Calgary as a Virtual ISP. We can now offer through Level 3's fibre optic
backbone broadband ISP services in Seattle, Washington, D.C., Dallas, Houston,
Philadelphia, San Francisco, Miami, New York, Baltimore and Los Angeles. We will
add additional cities to our service area as we assess the market opportunities
and the terms available from Internet access providers.

Recent Developments

     In December 1999, we completed a license agreement with ISP Power
Corporation, whereby we licensed ISP's PRISM software that provides integrated
billing and customer care software solutions, which will consolidate all of our
billings and customer related management needs into one powerful, flexible and
automated package that reduces costs and increases profits. The PRISM software
integrates into the Microsoft Commercial Internet System. This software package
provides up-to-date information about customers and enables us to co-brand our
billing system to our Virtual ISP's, while allowing them to retain their own
identity, even when it relates directly to the billing of their customers. With
the installation of this new software and the implementation of Microsoft's MCIS
system, we can now scale up to 10,000,000 users by increasing its hardware.

     On August 24, 1999, we entered into a multi-user DSL agreement with Bell
Atlantic Data Solutions to sell multi-user ADSL (Asymmetric Digital Subscriber
line) service, Internet access and ancillary services. This enables us to offer
to our business customers ADSL Internet service for up to 30 users over one
phone line within the Bell Atlantic footprint in the United States, which
consists of thirteen states from Virginia to Maine. We will offer three types of
Infospeed DSL with downstream speeds of up to 7.1 Mbps and upstream speeds of up
to 680 Kbps.

     In February 2000, we launched our Voice Over Internet Protocol (VoIP)
analog program, beginning with production on its rollout program in Canada
utilizing AT&T's fibre optic backbone. With our gateway (www.ihwyphone.com)
basic and enhanced voice services over the Internet, including voice enhanced
web commerce and interactive multimedia communications are now offered.

     On February 17, 2000, we entered into a partnership agreement with
LinuxWizardry Systems, Inc. to distribute and market its Linux based, low cost
router to our customers. The Linux operating system allows for an easy
configuration of Internet routers and network appliances through a drag and drop
graphical user interface. The LinuxWizardry router will not require an expensive
network specialist to configure the LinuxWizardry router and will therefore
allow small businesses to take control of their networks.

     We selected Ramp Networks, Inc. to provide ADSL solutions to our small
businesses and residential markets in the Bell Atlantic footprint in the Eastern
United States, as well as selected cities served by Level 3 Communications
nationwide. High-speed ADSL service with the WebRamp 600I, Ramp's enhanced
platform for software and services, is available through our network of ISPs.
Ramp is also a licensed reseller of our Internet service and related services
through Ramp's value-added resellers.
<PAGE>

     In March 2000, we launched our Spanish portal site
(http://latino.theexecutive.com), which Portal site offers free access for
Spanish speaking users, allowing them access to all of our standard service on
its portals. We are also in the process of co-branding further content and
shopping resources with www.itiendas.com, www.espanol.com and CD NOW in Spanish.

     Effective March 2000, we commenced trading on the newly created High Risk
Market on the Hamburg Stock Exchange, which is a market that features
predominantly US companies listed on the OTC Bulletin Board or the NASDAQ
exchange.

     In June, 2000, we signed a non-exclusive license with The Eezinet
Corporation expanding a portal site previously granted for New York City, New
York to a nationwide portal throughout the United States. Eezinet was also
granted a license to resell our portals, with any revenues received to be
divided equally between Eezinet and Information Highway.com.

Our Portal Site

     We believe that Internet users will begin to select their ISP based in part
on the value-added services that their ISP provides. Through our portal site
compilation of Internet-based services and information, we provide localized and
portal content designed to cater to business professionals. Through research,
design, programming, co-branding, and licensing, we have compiled Internet
services and content in our portal site that we believe are useful to companies,
associations and professionals. Portal site web pages are designed specifically
for targeted user groups, and we believe they provide friendly, easy to navigate
interfaces. Our basic portal site may be accessed through the Internet at
www.theexecutive.com. Other portal sites are customized to the needs of specific
Internet subscriber groups (whether by geographic location or entity
affiliation) and have different Internet addresses.

     We are now licensing customized portal sites to other ISPs, companies and
individuals throughout North America. We also offer our clients the ability to
market their products and services to portal site users through our Virtual
Mall. We believe the portal site will be popular because most business
professionals do not want to spend a lot time surfing the Internet for the
information that they need. The portal site has assembled a functional portal
site to enable users to access the information they require immediately. Portal
site users will be able to:

     .Monitor and research the stock market;
     .Plan and book their next business trip;
     .Check the local news and weather;
     .Find a suitable restaurant in their area;
     .Participate in online forums;
     .Use of our virtual shopping mall;
     .Carry out electronic transactions via e-commerce; and
     .Use our Web-based Internet based Voice Over Internet Protocol service

     We do not charge a fee for access to our portal site. We charge a design
fee and a recurring maintenance fee for our portal site partners that we
customize for companies or
<PAGE>

associations. We also charge a monthly maintenance fee when we license portals
to other ISPs to display our customized portal site. We receive additional
revenues from advertising and e-commerce generated from each customized portal
site. Our portal site has two main purposes. One important purpose of the portal
site is to provide our value added services. Thus far the industry has focused
on providing high speed access to the Internet and has largely neglected the
content development market. The greatest difficulty in content development is
encouraging people to pay for the information they need. Some companies have
attempted to charge for information. However, information can always be found
free on the Internet. While people will not pay for raw information, we believe
that when information and services are properly bundled, Internet users will
find value in convenience, organization, relevance, and meaningful
communication. Internet content is now aimed at broad target markets doing
little to customize information to users needs. Our portal site aims to provide
content customized to the needs of our dial-up users, partners, specific
interest groups, companies, and associations.

Although anyone with Internet access will be able to visit the basic portal site
or the customized regional sites maintained by us, only our (or one of its ISP
licensee's) ISP customers will be able to access certain value-added services
available on the portal site. For example, we currently offer our ISP customers
e-mail with no additional charge, and plan to offer 100 minutes of voice-over
Internet Protocol or IP, phone service with no additional charge. Anybody
accessing a portal site who is not an ISP customer of ours (or one of our ISP
licensees) cannot access these value-added services without any additional
charge. We believe that by providing these value-added services, along with the
other useful services and content conveniently located at the portal site, we
will have a competitive advantage in attracting and retaining ISP customers. Our
portal site's second main purpose is to be a profit center. We believe that the
portal site will ultimately become a profit center in its own right. We believe
we can generate non-ISP revenues by providing information organized and packaged
for consumers and businesses. While people will not pay for raw information, we
believe that when information and services are properly bundled, two distinct
revenue streams are available. One revenue stream will be available from
licensees that wish to customize our portal site for their own targeted user
group. Such licensees would include other ISPs, companies and associations. We
believe that they will pay for the convenience, organization, relevance, and
meaningful communication provided by the pre-packaged portal site information
and services, and the tools required to organize and maintain them. A second
distinct revenue stream will be available by virtue of Internet users (whether
they are our ISP customers and licensees, or those of other unrelated ISPs)
visiting the portal site and accessing its information and services. This
revenue stream would include advertising and e-commerce commission revenues. Our
portal site is a new concept and, while we have high hopes for its ultimate
success, has yet to provide material revenues.

     We have committed significant resources to the development of the portal
site, and we intend to continue to commit significant resources to its
development, maintenance and marketing and advertising. Through research,
design, programming, co- branding, and licensing, we compile a collection of the
most compelling and functional Internet services. These services are then
synthesized into a single web interface. Finally, this web interface is
customized to function as a dedicated service for dial-up communities, interest
groups, associations, and companies, who in turn sell dial-up access to the
service to their users, members, associates,
<PAGE>

or employees. In other words, the portal site makes available Internet
comprehensive services such as stock quote systems, travel reservation systems,
shopping networks, and chat technologies, and then adds information and
directories unique to any given group or organization. In some cases, its
networks may even form the backbone of a corporate Intranet. Because of the
modular nature of the portal site's information and service components, we can
offer businesses and associations the components that they want as the basis of
their customized intranets or executive sites. An initial development and
licensing fee, together with monthly maintenance fees, will be charged for the
development of a customized portal site. The modular nature of the portal site's
information and service components will also facilitate establishing local
customized portal sites in those markets where we, or one of our licensees, seek
to establish or maintain an ISP presence.

     Our portal site, with its value-added services, is available to Internet
users, and a print and Internet advertising campaign is currently underway to
attract additional Internet users (prospective new ISP customers) to the portal
site. We also have succeeded in attracting some business advertising, and we
intend to seek additional advertising customers. We have also introduced our
Virtual Mall. The Virtual Mall provides links to web pages where Internet users
can view merchandise and make purchases using their credit cards. We either
receive a commission from the vendor when an Internet user makes a purchase
after entering a web page through the Virtual Mall or we receive rent from the
vendor for providing a link to the vendor's web page from the Virtual Mall.

     We also license portal sites to third parties that want to display their
own web pages. Since March 1999, we have licensed our portal site to five
partners in the United States. Pursuant to the licenses, we developed private-
labeled versions of the portal site for the licensees for their customers
throughout Canada and the United States. The licensees paid an initial set up
fee and pay a monthly maintenance fee. Each licensee also shares with us the
advertising and e-commerce revenues generated from the portals. In April 1999,
we also licensed a Spanish version of our portal site to an ISP in Mexico City,
Mexico. We believe that we will continue to enter into license agreements with
other ISPs, companies and associations in the future. We are currently pursuing
an aggressive advertising and marketing campaign underway throughout the United
States and Canada.

Although the portal site (www.theexecutive.com) does not yet provide a material
portion of our revenues, we believe that in the near future the revenues
generated by the licensing of portal sites will increase both in terms of
absolute dollars and as a percentage of total revenues. We constantly assess the
content of the portal site, adding, deleting or substituting information or
services when warranted. Currently the major components of the portal site
include:

     .  Ichat Rooms's chat room system
     .  Information Highway.com's Virtual Shopping Mall
     .  Information Highway.com's Travel and Destination Guides
     .  Yahoo Online Television Broadcast
     .  Screaming Media, a comprehensive service of entertainment, sports,
        stocks, weather, etc.
     .  Web-based E-mail
<PAGE>

     .  Online Education
     .  VoIP Web-based Internet Long Distance Phone Calls
     .  Paytrust Bill Payment System

     Some of this content is actually resident on our web pages, and some of it
is accessed by links to other websites. Compensation arrangements with content
providers are generally based on the number of Internet users that access a
particular item of content (known in the industry as hits). With respect to
advertising revenues derived from banner advertisements placed on various web
pages, we generally share revenue with the content provider for the web page. In
addition, we entered into a two year licensing and multicasting agreement with
broadcast.com. We will sell broadcast.com's services to associations, local
ISPs, portal site users, local dial-up, and national virtual ISP customers.
Services will include audio and video hosting, and live event broadcasting
(multicasting) including multimedia presentations, trade shows and conferences.
We will receive a percentage of revenues generated by these services for a
period of two years and will have the option to renew this contract annually.

     These components represent only a small sample of planned future content.
We anticipate entering into similar agreements in the future to fully develop
and expand the content in the portal site. New content suppliers are constantly
being identified for existing and potential portal sites. Additional content
will also be developed by associations and companies themselves.

Competitive Conditions

     The market for Internet products, services and advertising is new, rapidly
evolving and intensely competitive. We currently or potentially compete with
many other ISPs, providers of Web directories, search and information services,
as well as traditional media, for consumer attention and advertising
expenditures. We expect competition to intensify in the future. Barriers to
entry may not be significant, and current and new competitors may be able to
provide ISP services and to launch new websites at a relatively low cost.
Accordingly, we believe that our success will depend heavily upon achieving
significant market acceptance before our competitors and potential competitors
introduce competing services. We compete with other ISPs for ISP customers.
Although some affirmative effort is required to change ISPs, there are no
significant barriers to ISP customers changing their ISP in response to service
quality or price considerations.

     We compete with online services and other websites, as well as traditional
offline media such as television, radio and print, for a share of advertisers'
total advertising budgets. The number of companies offering e-commerce outlets
and selling web-based advertising, and the available inventory of related space
on web pages, has recently increased substantially. Accordingly, we may face
pricing pressure on our e-commerce commissions and for the sale of
advertisements.

     Many of our competitors, as well as potential entrants into our markets,
have longer operating histories, larger customer or user bases, greater brand
recognition and significantly greater financial, marketing and other resources
than we do. Many of these current and potential competitors can devote
substantially greater resources to promotion and website and systems
<PAGE>

development than we can. In addition, as the use of the Internet and other
online services increases, larger, well-established and well-financed entities
may continue to acquire, invest in or form joint ventures with ISPs, providers
of web directories, search and information services or advertising solutions,
and existing ISPs, providers of web directories, search and information services
or advertising solutions may continue to consolidate. In addition, providers of
Internet browsers and other Internet products and services who are affiliated
with ISPs or providers of web directories and information services in
competition with our portal site may more tightly integrate these affiliated
offerings into their browsers or other products or services. Any of these trends
would increase the competition we face.

Governmental Regulation

     The laws and regulations applicable to the Internet and to our services are
evolving and unclear and could damage our business. There are currently few laws
or regulations directly applicable to access to, or commerce on, the Internet.
Due to the increasing popularity and use of the Internet, it is possible that
laws and regulations may be adopted, covering issues such as user privacy,
defamation, pricing, taxation, content regulation, quality of products and
services, and intellectual property ownership and infringement. Such legislation
could expose us to substantial liability as well as dampen the growth in use of
the Internet, decrease the acceptance of the Internet as a communications and
commercial medium, or require us to incur significant expenses in complying with
any new regulations. The European Union has recently adopted privacy and
copyright directives that may impose additional burdens and costs on
international operations. In addition, several telecommunications carriers,
including America's Carriers' Telecommunications Association, are seeking to
have telecommunications over the Internet regulated by the Federal
Communications Commission, or FCC, in the same manner as other
telecommunications services. Because the growing popularity and use of the
Internet has burdened the existing telecommunications infrastructure and many
areas with high Internet usage have begun to experience interruptions in phone
services, local telephone carriers, such as Pacific Bell, have petitioned the
FCC to regulate the Internet and to impose access fees. Increased regulation or
the imposition of access fees could substantially increase the costs of
communicating on the Internet, potentially decreasing the demand for our
services. A number of proposals have been made at the federal, state and local
level that would impose additional taxes on the sale of goods and services
through the Internet. Such proposals, if adopted, could substantially impair the
growth of electronic commerce and could adversely affect us. Also, Congress
recently passed (and the President has signed into law) the Digital Millennium
Copyright Act, which is intended to reduce the liability of online service
providers for listing or linking to third-party Web sites that include materials
that infringe copyrights. Congress also recently passed (and the President has
signed into law) the Children's Online Protection Act and the Children's Online
Privacy Act, which will restrict the distribution of certain materials deemed
harmful to children and impose additional restrictions on the ability of online
services to collect user information from minors. Further, the United States
recently enacted the Protection of Children from Sexual Predators Act, which
mandates that electronic communication service providers report facts or
circumstances from which a violation of child pornography laws is apparent. We
cannot currently predict the effect, if any, that this legislation will have on
our business. There can be no assurance that this legislation will not impose
significant additional costs on our business or subject us to additional
liabilities. Moreover, the
<PAGE>

applicability to the Internet of existing laws governing issues such as property
ownership, copyright, defamation, obscenity and personal privacy is uncertain.
We may be subject t claims that our services violate such laws. Any new
legislation or regulation in the United States or abroad or the application of
existing laws and regulations to the Internet could damage our business.

     Due to the global nature of the Internet, it is possible that the
governments of other states and foreign countries might attempt to regulate our
transmissions or prosecute us for violations of their laws. We might
unintentionally violate such laws. Such laws may be modified, or new laws may be
enacted, in the future. Any such development could damage our business.

Other Information

     Our ability to successfully offer products and services and implement our
business plan in a rapidly evolving market requires an effective planning and
management process. We have increased, and plan to continue to increase, the
scope of our operations. Our staff has grown and will continue to grow
substantially. At August 1, 2000, we had a total of 34 employees. We are
continuing to expand our infrastructure, including hiring new employees when
required, including key employees in marketing and technology development. We
will need to expand our infrastructure, which will include hiring certain key
employees, including without limitation, key employees in marketing and
technology development. Hiring such employees has historically been difficult.

     We do not believe that environmental laws have or will have a significant
effect on our business. In their report on our financial statements, our
auditors have expressed doubt about our ability to continue in business as a
going concern. We will need additional funds to continue in business and to
implement our business plan as proposed, which we may not be able to obtain.
Equity or debt financing may not be available to us on terms acceptable to us,
or at all. We have undertaken steps to address Year 2000 Issues.

ITEM 2.  DESCRIPTION OF PROPERTY

     Our headquarters and executive offices are located at #185-10751
Shellbridge Way, Richmond, British Columbia V6X 2W8 and our telephone number is
(604) 278-7494. Our leases, on a month-to-month basis, approximately 200 square
feet of space at the aforementioned office from SMR Investments Ltd., a private
British Columbia company owned by Susanne Robertson, the wife of John G.
Robertson. The monthly rent fee is approximately $350.00 ($CN500.00). We also
lease facilities in Vancouver and Toronto. The Vancouver site supports both ISP
services and the portal site. The lease term is 28 months with monthly payments
of approximately $5,000.00 ($CN7,500.00). The Toronto offices support ISP
services. The lease term is 54 months with monthly payments of approximately
$4,150.00 ($CN6,230.00) We believe that our present facilities will be suitable
for the operation of our business for the foreseeable future. The facilities are
adequately insured against perils commonly covered by business insurance
policies. These locations could be replaced without significant disruption.

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

     A Writ of Summons and Statement of Claim was filed against Information
Highway.com in the Supreme Court of British Columbia on April 20, 1999 by a
former employee and spouse of the employee. The employee was retained by
Information Highway.com as a consultant on or about December 1996 and was
subsequently terminated for cause by Information Highway.com in December 1997.
The plaintiffs are seeking monetary damages related to the alleged remuneration
due pursuant to an agreement and a stock option between Information Highway.com
and the employee. The total damages claimed amount to $597,000, including
alleged unpaid remuneration and a stock option benefit. The plaintiffs are also
claiming 5% of business revenue from the operating subsidiary in Vancouver,
Canada. This subsidiary, Blue Crow Internet Company, Ltd., operated at a net
loss from operations during the period from acquisition in December 1996 to
date. Information Highway.com believes that the plaintiff's allegations are
without legal or factual basis and therefore it has not accrued any potential
losses resulting from this claim except for legal fees paid in establishing the
defense. Information Highway.com intends to vigorously defend this action. To
the knowledge of Information Highway.com's Executive Officers and Directors,
Information Highway.com is not a party to any other legal proceeding or
litigation and none of its property is the subject of a pending legal
proceeding. Further, the Officers and Directors know of no other threatened or
contemplated legal proceedings or litigation.

                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Price Of And Dividends On Capital Stock And Other Shareholder Matters

     There is a limited public market for the Common Stock of Information
Highway.com which has traded on the OTC Bulletin Board under the symbol "IHWY"
since February 24, 1999. The high and low bid prices for the stock each quarter,
through May 31, 2000, as reported by Nasdaq Trading & Market Services, are as
follows:

                                                           Bid Price
                                                       High         Low
                                                       --------------------
Quarter ended February 28, 1999...................     $7.375       $  0.00
Quarter ended May 31, 1999........................     $12.50       $ 3.375
Quarter ended August 31, 1999.....................     $13.00       $3.1875
Quarter ended November 30, 1999...................     $ 8.75       $  2.50
Quarter ended February 29, 2000...................     $ 6.25       $  3.94
Quarter ended May 31, 2000........................     $ 7.00       $ 1.875

     These quotations reflect inter-dealer prices, without retail mark-up, mark-
down or commission and may not represent actual transactions. As of August 18,
2000, there were 8,113,334 shares of Common Stock outstanding, held by 185
shareholders of record and by various broker/dealers on behalf of an
indeterminate number of street name shareholders. As of August 18, 2000,
1,601,900 shares of common stock were subject to issuance pursuant to
outstanding options at prices ranging from $0.50 to $6.22875 per share and
980,567 shares of common stock were subject to issuance pursuant to outstanding
warrants at prices ranging from $3.50 to $6.22875 per share.
<PAGE>

Number of
Shares                    Description
2,492,267     Currently issued and permitted to be sold in secondary market
              without restriction
1,601,900     Options that could be exercised and then the shares resold
              immediately in secondary market without restriction
125,817       Shares that may be sold beginning on various dates from December
              8, 2000 to March 2, 2001 in secondary market without restriction.
674,450       Shares that may be sold beginning on various dates from March 29,
              2000 to February 18, 2001 in secondary market without restriction
129,750       Shares that may be sold beginning on various dates from May 27,
              2000 to July 15, 2000 in secondary market without restriction
880,500       Shares that may be sold beginning February 23, 2001 in secondary
              market without restriction*
129,750       Shares that may be sold beginning on various dates from March 3,
              2001 to February 18, 2002 in secondary market without restriction*
674,450       Shares that may be sold beginning on various dates from May 27,
              2001 to July 15, 2001 in secondary market without restriction
125,817       Shares that may be sold beginning on various dates from December
              8, 2001 to March 2, 2002 in secondary market without restriction.
155,000       Shares that may be sold beginning on various dates from May 15,
              2001 to August 3, 2001
3,486,500     Shares held by affiliates that may be sold under either Rule 701
              or Rule 144 beginning March 29, 2000 and options held by
              affiliates that may be exercised either pursuant to Rule 701 or
              Form S-8
              (7 persons; each limited to 1% of outstanding shares every 3
              months)
____________
* Shareholders may sell earlier than date indicated subject to the limitation
that an affiliate may sell in the marketplace to approximately one percent of
outstanding shares of Information-Highway.com every three months.

In addition, Information Highway.com has 980,567 warrants outstanding that the
holders may exercise up until dates ranging from October 6, 2000 to December 1,
2002, entitling holders to purchase 980,567 shares of common stock at prices
ranging from $3.50 to $6.22875 per share.

     Information Highway.com also has 1,601,900 options available for grant
which may be exercised up until dates ranging from January 26, 2003 to December
1, 2004, entitling holders to purchase 1,601,900 shares of common stock at
prices ranging from $0.50 to $6.00 per share.

     To date, we have not paid any dividends on our Common Stock and do not
expect to declare or pay any dividends on such Common Stock in the foreseeable
future. Payment of any dividends will be dependent upon future earnings, if any,
our financial condition, and other factors as deemed relevant by our Board of
Directors.

Recent Sales of Unregistered Securities

     Set forth below is information regarding the issuance and sales of our
securities without registration during the past three years. No such sales
involved the use of an underwriter.
<PAGE>

     (1)  On December 1, 1999, we entered into an agreement with Garry Savage
issuing 100,000 warrants to acquire 100,000 shares exercisable at $4.00 per
share expiring December 1, 2002. Copies of the agreement and warrants attached
as exhibits to our February 24, 2000 10-QSB filing. The offer and sale of the
warrants were exempt from registration under Rule 506 and Section 4(2) of the
Securities Act of 1933.

     (2)  On March 3, 2000 we entered into a Securities Purchase Agreement with
Senasqua Investors LLC pursuant to which we issued debentures in the principal
amount of $1,500,000 maturing March 3, 2002, and warrants to acquire 225,000
shares exercisable at $6.22875 per share expiring March 3, 2002. The aggregate
purchase price for the debentures and warrants was $1,500,000. The offer and
sale of the warrants and debentures were exempt from registration under Rule 506
and Section 4(2) of the Securities Act of 1933.

     (3)  On May 31, 2000, we issued 8,750 shares pursuant to options exercised
at prices between $0.50 and $0.75 per share for total proceeds of $5,000. The
sale of the shares was exempt from registration under Rule 701 under Section
3(b) of the Securities Act of 1933. The sales were made on exercise of grants
under our written stock option plan, a copy of which we have provided to
participants. In the event Rule 701 is not available, we believe that 8,750
shares were also exempt from registration under Rule 506 under and Section 4(2)
of the Securities Act of 1933. If the foregoing exemptions are not available, we
further believe that these sales were also exempt under Regulation S under the
Securities Act of 1933, as amended, due to the foreign nationality of the
relevant purchasers.

     (4)  In May, 2000, we issued 50,000 shares to Capital Research Group Inc.
for financial consulting services. The offer and sale of the shares were exempt
from registration under Rule 506 and Section 4(2) of the Securities Act of 1933,
Regulation S under the Securities Act of 1933, and beyond the jurisdiction of
Section 5 of the Securities Act of 1933.

     (5)  In May, 2000, we issued 75,000 shares to Park Avenue Consulting Group
Inc. for financial consulting services. The offer and sale of the shares were
exempt from registration under Rule 506 and Section 4(2) of the Securities Act
of 1933, Regulation S under the Securities Act of 1933, and beyond the
jurisdiction of Section 5 of the Securities Act of 1933.

<PAGE>

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

       This prospectus contains forward-looking statements. The words
"anticipate", "believe", "expect", "plan", "intend", "estimate", "project",
"could", "may", "foresee", and similar expressions are intended to identify
forward-looking statements. The following discussion and analysis should be read
in conjunction with the our Financial Statements and the Notes thereto and other
financial information included elsewhere in this report which contains, in
addition to historical information, forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from the
results discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include those discussed below, as well as those
discussed elsewhere in this prospectus.

Overview

     We serve as an Internet Service Provider (referred to as an "ISP" in the
industry) for companies and individuals that need access to the Internet in
exchange for a recurring fee. We intend to provide ISP services to a steadily
growing number of cities in North America as a Virtual ISP . A Virtual ISP
provides Internet access to its customers using the underlying
telecommunications infrastructure of another company, such as a telephone
company. The Virtual ISP business model should enable us to avoid purchasing and
installing backbone communications equipment and infrastructure in each city
where we plan to offer ISP services.

     Our goal is to expand our ISP business throughout North America by
negotiating access to Virtual ISP backbone facilities and then repackaging that
access for sale to our customers and resellers (licensees). We have entered into
agreements that permit us to market access to the Internet in the Northeast
United States and 20 cities (some in the Northeast) across the United States,
and in Canada. Our Northeast United States Internet access agreements permit us
to
<PAGE>

provide Digital Subscriber Line, or DSL, access, which enables users to remain
connected to the Internet 24 hours a day, eliminating annoying busy signals, as
well as the time and cost of waiting to connect, without disrupting the
subscriber's normal telephone service. Toronto, Ontario is the first market in
which we provided ISP services, beginning about four years ago. We believe that
Internet users will begin to base their selection of an ISP in part on the
value-added services that their ISP provides. Through our portal site
compilation of Internet-based services and information, we provide localized and
portal content catering to business professionals. Through research, design,
programming, co-branding, and licensing, we have compiled Internet services and
content in our portal site that we believe are useful to companies, associations
and professionals. Portal site web pages are designed specifically for targeted
user groups, and we believe they provide friendly, easy to navigate interfaces.
Our basic portal site may be accessed through the Internet at
www.theexecutive.com. Other portal sites are customized to the needs of specific
Internet subscriber groups (whether by geographic location or entity
affiliation) and have different Internet addresses.

     We plan to market the portal site throughout North America, starting with
our Virtual ISP locations. We may also let other ISPs display customized portal
sites in certain markets. We also offer our commercial clients the ability to
market their products and services to portal site users through our newly
developed Virtual Mall. Our portal site has assembled a functional business site
to enable business professionals to immediately find what they need rather than
spending time searching the Internet for the information they need. Portal site
users are able to:

     . monitor and research the stock market;
     . plan and book their next business trip;
     . check the local news and weather;
     . participate in online forums;
     . carry out electronic transactions via e-commerce; and
     . find a suitable restaurant in their area.

     We do not charge a fee for access to the basic portal site. We charge a
design fee and a recurring maintenance fee for portal sites that we customize
for companies or associations. We also charge a monthly maintenance fee when we
license portals to other ISPs to display a customized portal site. We receive
additional revenues from advertising and e-commerce transactions generated from
each customized portal site.

We Conduct Our Operations Through One Wholly-owned US Subsidiary and Three
Wholly-owned Canadian Subsidiaries

     Information Highway, Inc., a Washington corporation, actually acquired
these subsidiaries. Then, in February 1999, Information Highway, Inc. engaged in
a reverse takeover of Florida Venture Fund, Inc., a Florida corporation. As a
result of the reverse takeover, the shareholders of Information Highway, Inc.
came to own approximately 95% of the outstanding shares of Florida Venture Fund,
Inc. In connection with the reverse takeover, Florida Venture Fund, Inc. changed
its name to Information Highway.com, Inc. and is now the ultimate parent company
whose shares are traded on the OTC bulletin board (symbol: IHWY).
<PAGE>

Effect of Reorganization During Fiscal 1999

     The reverse take-over was conducted pursuant to an Agreement and Plan of
Reorganization entered into on February 17, 1999 and completed on February 23,
1999 between Florida Venture Fund, Inc., Information Highway, Inc. and certain
shareholders of Information Highway, Inc. Florida Venture Fund, Inc. acquired
3,235,000 common shares of Information Highway, Inc. out of a total of 5,639,650
issued and outstanding common shares in exchange for 3,235,000 common shares of
Florida Venture Fund, Inc. It is Information Highway.com's intention to complete
the exchange of shares of its common stock for the remaining and outstanding
common shares of Information Highway, Inc. on a one for one basis. As of May 11,
2000 (date of exchange offering closing), 2,359,650 of the remaining 2,404,650
Information Highway, Inc. shares had been exchanged for the same number of
Information Highway.com shares. Information Highway.com has allotted 45,000
shares in anticipation of the remaining shares of Information Highway, Inc.
being exchanged in the future. As part of the Agreement and Plan of
Reorganization, Information Highway.com caused 1,659,833 of its 1,979,500 common
shares that were issued and outstanding, prior to the closing, to be cancelled
and assumed the obligations of Information Highway, Inc. to issue common shares
pursuant to warrants and stock options issued by Information Highway, Inc.
$100,000 was paid by Information Highway, Inc. to the controlling shareholder of
Information Highway.com to effect the Agreement and Plan of Reorganization
including the cancellation of 1,659,833 shares.

     For accounting purposes the acquirer was the legal subsidiary, Information
Highway, Inc., as approximately 95% of the issued and outstanding common shares
of Florida Venture Fund, Inc. at the time of the reverse takeover were owned by
the shareholders of Information Highway, Inc. and the Board of Directors of
Information Highway, Inc. now comprises Information Highway.com's Board of
Directors. As Information Highway, Inc. is the legal subsidiary of Information
Highway.com, Inc., the nature of the business combination is a reverse takeover
whereby the control of the assets and the business of Florida Venture Fund, Inc.
(as it was then named) was acquired by Information Highway, Inc. and the
consolidated financial statements are issued under the name of Information
Highway.com, Inc., but is a continuation of Information Highway, Inc. and not
Florida Venture Fund, Inc. The legal capital structure remains that of Florida
Venture Fund, Inc. but the stated shareholders' equity of Information Highway,
Inc. has replaced the stated shareholders' equity of Florida Venture Fund, Inc.
Similarly, Florida Venture Fund, Inc.'s statements of operations and cash flows
represent a continuation of Information Highway, Inc.'s consolidated financial
statements.

Factors Affecting Ongoing Operations

     Prior to acquiring Information Highway, Inc. in February, 1999, we had not
conducted any business since inception in 1988. The following discussion relates
to Information Highway, Inc.'s continuing operations and not that of the
Information Highway.com prior to the reverse takeover.

     Although planned principal activities have started producing significant
revenues, in our effort to rapidly expand infrastructure and network services
and develop the portal site, we have suffered net losses each quarter to May 31,
2000. At May 31, 2000, our accumulated deficit was
<PAGE>

$5,791,319 and our working capital was $ 579,367. We expect to incur substantial
operating losses, net losses and negative operating cash flow for the near term.

Revenues

     Revenue consists of mainly the provision of Internet dial-up services. We
receive limited revenue from banner advertisements, web-site development and
hosting, e-commerce commission revenue and the resale of products over the
Internet.

     We completed a license agreement with ISP Power Corporation in early
December. ISP Power Corporation's PRISM Software provides integrated billing and
customer care software solutions. The PRISM software will consolidate all of our
billing and customer related management needs into one powerful, flexible and
automated package that will help reduce costs and increase profits for
ourselves.

     The PRISM software integrates into the Microsoft Commercial Internet System
(MCIS), which enables us to provide up-to-the-minute billing information to
customers. In addition, we will be able to co-brand our billing system for
Virtual ISP's, thereby allowing us to retain our own identity, even when it
relates directly to the billing of our customers.

     Revenue is recognized at the time services are provided. All related costs
are recognized in the period in which they occur. Customer deposits for Internet
dial-up services to be provided in the future are treated as deferred revenues.
The following factors affect our revenue:

     .Service Offering--We derive most of our operating revenue from the ISP
     service we provide to our customers;

     .Penetration of Target Markets--We select certain target markets in which
     we will offer our services and commit corresponding resources for marketing
     and infrastructure. We base our target market assessment on two years of
     research and development through our involvement in the Internet industry.
     Our ability to achieve market penetration in the target markets we select
     to serve has a significant effect on our ability to maintain and increase
     our revenues;

     .Turnover--Maintaining market penetration successes by minimizing customer
     turnover also has a significant effect on our ability to maintain and
     increase our revenues. To date, customer turnover has been minimal. We
     expect customer turnover to increase in the future as competition
     intensifies. We expect that service quality (i.e., data transmission speed
     and periods of down time) and price will be the major factors that
     influence ISP customers to switch their ISP;

     .Portal site--Portal site revenues, which to date are mostly from
     advertising, are not yet material to our total revenues. We expect that
     advertising and e-commerce commission revenues related to our customized
     portal site, as well as fee-based revenues from customized portal site
     licensees, will grow in the future, both in dollar amount and as a
     percentage of our total revenues.

Cost of Revenues
<PAGE>

     Cost of revenues consists primarily of the cost of serving our Internet
dial-up service customers and the cost of developing web-sites for customers.
These costs include salaries for technical support and customer service,
depreciation of Internet dial-up and web-site hosting equipment, license fees,
equipment leasing costs, telephone line costs and rent to house equipment and
staff directly involved in serving customers. Our network and service costs have
historically included equipment installation and ongoing service and maintenance
charges. As we introduce our Virtual ISP presence in additional cities, each
city will represent an increased lease charge under our agreement with Internet
access providers due to the need to add bandwidth to accommodate the customer
base in the new market. We have entered into agreements that permit us to market
access to the Internet in the Northeast United States and 20 cities (some in the
Northeast) across the United States, and in Canada. Our Northeast United States
Internet access agreements permit us to provide Digital Subscriber Line, or DSL,
access, which enables users to remain connected to the Internet 24 hours a day,
eliminating annoying busy signals, as well as the time and cost of waiting to
connect, without disrupting the subscriber's normal telephone service. As we
expand our presence in a particular market, we will require additional increases
in bandwidth depending on data transmission volumes.

Other Operating Expenses

     Our other operating expenses include portal site development and
maintenance, information systems, billing and collections, general management
and overhead, and administrative functions. Head count in functional areas, such
as customer service, engineering and operations, along with expansion of our
portal site and the locations in which we provide ISP services and increases in
the number of our customers, will drive increases in expenses.

Results of Operations for the Year Ended May 31, 2000 as Compared to the Year
Ended May 31, 1999

Revenues

     Revenues increased by $193,000 (19%) to $1,202,000 from $1,009,000 in 1999.
This increase was due to an increased subscriber base in Vancouver and Toronto
and selling products over the Internet which totaled $22,000. Based on
assumptions about demand for our ISP services and our portal site, we anticipate
that the dollar amount of future revenues will increase over current levels. We
have switched on 50 ports (minimum per agreement with Level 3 Communications) in
each of 7 cities which enable us to service up to 500 customers in each city.
The cost of these portals for the year ended May 31, 2000 was $210,334 which was
charged against general and administrative expenses as there was no revenue
generated during the period from these ports.

     We are beginning to receive small amounts of revenue from banner
advertisements, developing web-sites for customers, reselling portal site
information and service modules pursuant to license agreements and reselling
product over the Internet. We have also sold product over the Internet pursuant
to a Resellers Agreement. Sales from this source were $ 22,000 and costs were
$18,000.
<PAGE>

Cost of Revenues

     Cost of revenues increased by $ 731,000 (94%) to $1,507,000 from $776,000
in 1999. One-time catchup Internet and telephone charges, totalling $220,000,
were paid or accrued during 2000. These are not expected to occur in future. The
largest components of cost of revenues are telephone costs and Internet and
license fees.  The increases in these costs are reflective of the increase in
our subscriber base. Sales increased by 21% while cost of revenues increased by
66% not including the one-time catchup charges. We realized some economy of
scale because some of the fixed cost of revenue relates to equipment and rent.

     We completed a license agreement with Virtual Plus Technologies, LLC to
sell dial-up, ADSL Internet access service, web design and hosting and e-
commerce solutions to the Washington, DC area in addition to a non-exclusive
license in the Baltimore, Maryland area. We also licensed our customized portal
site www.theexecutive.com site to Virtual Plus Technologies for use in
Washington, DC and Baltimore, Maryland. The agreement represents the first step
of our North American rollout, in which we will license our services to other
virtual Internet partners on an exclusive or non-exclusive basis utilizing Level
3 Communications' advanced fiber optic network. We plan to aggressively market
our services to several other major US cities including Seattle, Dallas, Boston,
Chicago, Atlanta, Cincinnati, Detroit, Los Angeles, Miami, New York, Orlando,
Philadelphia, San Diego, San Jose, Tampa and New Jersey.

Gross Profit

     After deducting the effect of the one-time catchup charges discussed above
gross profit decreased by $317,000 (136%) to ($304,000) from $233,000 in 1999.
Increased competition in the Internet Service Provider industry increases
pressure of fee reduction for new subscribers and renewing subscribers. We
intend to decrease the cost of telephone and Internet switching fees with new
agreements with backbone or bandwidth providers.

Marketing and Sales Expenses

     Marketing and sales expenses have increased by $254,000 (113%) to $478,000
from $224,000 in 1999.  The major component of this increase was a result of a
marketing plan to increase advertisements in industry specific publications
throughout Canada. We had very little marketing and sales effort in 1999.

General and Administrative Expenses

     General and administrative expenses for corporate overhead activities and
Internet business-related activities combined have increased by $2,340,000 to
$3,141,000 from $802,000 in 1999.

     General and administrative expenses relating to corporate overhead
activities, and not Internet business-related activities, have increased by
$2,104,000 to $2,582,000 from $478,000 in 1999. As a result of the reverse
takeover during February, 1999, we are now incurring
<PAGE>

expenses relating to being an active operating public company and are incurring
additional expenses relating to investor relations and financial consulting.

     Investor relations and financial consulting increased by $1,488,000 to
$1,594,000 as compared to $106,000 in 1999. Part of this increase was $679,000
paid in shares to IP Equity, Inc. for Internet-based marketing and financial
consulting services. Pursuant to this Agreement we were also committed to file a
Registration Statement registering these securities by November 6, 1999.  We
agreed to pay interest of $23,000 per month until such time as the commitment is
met. During the year $147,000 was paid and charged to operations. A company was
paid $60,000 and was issued warrants valued at $147,800 for a marketing and
advertising program including banner ads, newsgroup coverage and press release
distribution. A company was issued 20,000 shares valued at $73,000 for European
investor relations.

     Information Highway.com issued 130,000 common shares valued at $495,985 for
financial consulting services.

     Professional fees increased by $48,000 to $218,000 from $170,000 in 1999.
These additional costs relate to a number of security issuances and regulatory
matters.

     Another one-time charge was a $100,000 bonus declared payable to our
President for all prior services rendered.

     General and administrative expenses relating to Internet business related
activities increased by $26,000 to $349,000 from $323,000 in 1999. The major
components of these expenses were: amortization of goodwill of $135,000,
salaries and consulting fees of $123,000 (up by $26,000) and telephone costs of
$44,000.

Product Development Expenses

     Product development costs consist of expenses incurred by us in the
development and creation of our portal site. Product development costs include
compensation and related expenses for programmers, depreciation of computer
hardware and software, rent, telephone and costs incurred in developing features
and functionality of the service. Product development costs are expensed as
incurred.

     Product development expenses increased by $54,000 (35%) to $210,000 from
$156,000 in 1999. The major component of the increase in product development
expenses was salaries and consulting fees of $167,000 as we continue to expand
our services and improve our products.

Depreciation and Amortization Expenses

     Depreciation and amortization expense has been allocated to cost of
revenues, marketing and sales, general and administrative, and product
development based on the use of each capital asset. Approximately 60% of capital
assets was used in cost of revenues, 15% in marketing and sales, 10% in general
and administrative and 15% in product development. Depreciation and amortization
of capital assets increased by $39,000 to $129,000 as compared to $90,000 in
1999.
<PAGE>

     Purchased goodwill was amortized at $15,000 per month over its estimated
useful life of three years. The estimated useful life of three years was chosen
to reflect the short-term life of the related business because of increased
competition, the lack of a universal presence and technological advancements and
obsolescence in the industry. Amortization expense has been allocated to general
and administrative expense for the Internet business. Goodwill was fully
amortized by the end of the year.

     We anticipate entering into operating and capital leases for any network
equipment and software in the future to minimize capital expenditures.

Net Loss for the Year Ended May 31, 2000 as Compared to the Year Ended May 31,
1999

     Our business is carried on in one industry segment being the provision of
access to the Internet and providing services, including on-line publishing, to
individual and corporate subscribers.

     Up until May 31, 1999 we operated in one geographic segment, being Canada,
located in Vancouver, BC and Toronto, Ontario. Subsequent to May 31, 1999 we
began expansion of our ISP business into 22 cities in the United States by
setting up Virtual ISP's. We have switched on 50 ports (minimum per agreement
with Level 3 Communications) in each of 7 cities which enable us to service up
to 500 customers in each city. The cost of these portals for the year ended May
31, 2000 was $210,000. There was no revenue generated during the period from
these portals.

     Our head office is in Richmond, BC, Canada. The head office does not
conduct any business specifically related to the Internet. Our sole purpose is
to provide administration, investor relations services and services relating to
being a public company. Included in general and administrative expenses and net
loss is $2,604,000 relating to such activities. The net loss relating to
Internet activities in Canada amounted to $1,320,000 and the net loss relating
to U.S. portals was $210,000.

     Our net losses have come mainly from investor relations activities and
overhead costs associated with organization, restructuring and financing start-
up operations in Toronto and Vancouver, Canada and costs of developing new and
improved services and expanding our marketing plan into other North American
markets. Other operating activities conducted in the United States thus far were
expenses incurred including investor relations and professional fees.

Results of Operations for the Year Ended May 31, 1999 as Compared to the Year
Ended May 31, 1998

Revenues

     Revenues have increased by $150,000 to $1,009,000 as compared to $859,000
in the previous period, which is an increase of 17.5%. This increase is due to
an increased subscriber base in Vancouver and Toronto.  Based on assumptions
about demand for our ISP services and
<PAGE>

our portal site, we anticipate that the dollar amount of future revenues will
increase over current levels.

     We are beginning to receive small amounts of revenue from banner
advertisements, developing web-sites for customers and reselling product
pursuant to license agreements.

Cost of Revenues

     Cost of revenues have increased by $126,000 to $776,000 as compared to
$650,000 in the previous year, which is an increase of 19%. This increase is
approximately the same as the increase in revenues. The largest components of
cost of revenues is telephone costs of $266,000 as compared to $238,000 in the
previous year; Internet and license fees of $224,000 as compared to $197,000 in
the previous year; and salaries and consulting fees of $192,000 as compared to
$155,000 in the previous year. The increases in these costs are reflective of
the increase in our subscriber base.

Gross Profit

     Gross profit was 23.1% in fiscal 1999 as compared to 24.4% in fiscal 1998.
With increased competition in the Internet Service Provider industry there has
been increased pressure to reduce fees for new subscribers and renewing
subscribers. This reduction of fees results in lower gross profit as there is
not a reciprocal decrease in cost to service our customers. We plan to decrease
the cost of telephone and Internet switching fees with new agreements with
backbone or bandwidth providers.

Marketing and Sales Expenses

     Marketing and sales expenses have increased by $53,000 to $224,000 as
compared to $171,000 in the previous year, which is an increase of 31%. The
major component of this increase was a result of a marketing plan to increase
advertisements in industry specific publications which increased by $43,000 to
$103,000 as compared to $60,000 in the previous year. The other major component
of marketing and sales is salaries which increased by $8,000 to $64,000 as
compared to $56,000 in the previous year. Other costs relate to rent, telephone
and amortization of capital assets.

General and Administrative Expenses

     General and administrative expenses for corporate overhead activities and
Internet business related activities have increased by $350,000 to $800,000 as
compared to $450,000 in the previous year, which is an increase of 78%.

     General and administrative expenses relating to corporate overhead
activities, and not Internet business related activities, have increased by
$319,000 to $478,000 as compared to $159,000 in the previous year, which is an
increase of 200%. As a result of the reverse takeover, we incurred one-time
expenses relating to professional fees and investor relations advertising and
consulting. Professional fees such as legal and accounting increased by $115,000
to $158,000 as
<PAGE>

compared to $43,000 in the previous year. This increase relates to costs
incurred, or to be incurred, to complete and file various documents with the
NASD and the United States Securities and Exchange Commission on Form 10-SB, 10-
QSB, S-8 and 10-KSB in addition to legal fees to effect the reverse takeover;
the majority of these expenses were incurred in the final quarter ended May 31,
1999. Investor relations advertising and consulting increased by $157,000 to
$164,000 as compared to $7,000 in the previous year. The major components of
this increase was; $114,000 paid in shares and cash to two non-related companies
for Internet-based marketing and investor communications services including e-
mails to their respective data bases of customers. The remaining $50,000 was
paid to various consultants and companies for news releases and in-house
investor relations services. Office, rent and telephone increased by $58,000 to
$62,000 as a result of various office and telephone costs incurred during and
after becoming a public company. Salaries and management fees decreased by
$43,000 to $45,000 as a result of reapplying certain salaried employees to
Internet related business activities from corporate related activities. Travel
increased by $12,000 to $18,000 as a result of trips to New York, Toronto and
Las Vegas by our senior management. Transfer agent and various filing fees
increased by $11,000 to $11,000 as a result of becoming a public company.
Amortization of head office equipment increased by $5,000 to $10,000. The vast
majority of all of the above expenses were incurred in the final quarter of
fiscal 1999.

     General and administrative expenses relating to Internet business related
activities increased by $31,000 to $323,000 as compared to $292,000 in the
previous year, an increase of 11%. The major component of general and
administrative expenses was; amortization of goodwill of $160,000; salaries and
consulting fees of $97,000; office, rent and telephone of $46,000; legal and
accounting of $11,000 and bank charges of $9,000.

Product Development Expenses

     Product development costs consist of expenses incurred by us in the
development and creation of our portal site. Product development costs include
compensation and related expenses for programmers, depreciation of computer
hardware and software, rent, telephone and costs incurred in developing features
and functionality of the service. Product development costs are expensed as
incurred.

     Product development expenses increased by $11,000 to $156,000 as compared
to $145,000 in the previous year, an increase of 8%. The major component of
product development expenses was; salaries and consulting fees of $117,000, rent
and telephone of $25,000, and amortization of capital assets used directly in
product development activities of $13,000. Related expenses incurred in the
previous year were comparatively similar as incurred in fiscal 1999.

Depreciation and Amortization Expenses

     Depreciation and amortization expense has been allocated to cost of
revenues, marketing and sales, general and administrative, and product
development based on the use of each capital asset. During fiscal 1999 and 1998
approximately 60% of capital assets was used in cost of revenues, 15% in
marketing and sales, 10% in general and administrative and 15% in product
<PAGE>

development. Depreciation and amortization of capital assets increased by
$32,000 to $90,000 as compared to $58,000 in the previous year.

     Purchased goodwill has been amortized at $13,000 per month over its
estimated useful life of three years. The estimated useful life of three years
was chosen to reflect the short-term life of the related business because of
increased competition, the lack of a universal presence and technological
advancements and obsolescence in the industry. Amortization expense has been
allocated to general and administrative expense for the Internet business.
Goodwill will be fully amortized during fiscal 2000.

     We anticipate entering into operating leases for any network equipment and
software in the future to minimize capital expenditures.

Income Taxes

     We generated US and Canadian net operating losses, or NOL, carried forward
of $835,000 during the current year as compared to $424,000 for the comparative
year. Total NOL's from inception to May 31, 1999 totals $1,385,000. We expect
some consolidated losses for the foreseeable future which will generate
additional NOL's. However, our ability to use NOL's is dependant on generating
profits in the future and may also be subject to annual limitations. In
addition, income taxes may be payable during this time due to operating income
in certain tax jurisdictions. In the future, if we achieve operating profits and
the NOL's have been exhausted or have expired, we may experience significant tax
expense. We recognized no provision for taxes because we operated at a loss from
inception through to May 31, 1999. The deferred tax asset value has been reduced
to nil because we can not be assured that it is more likely than not that we
will utilize the NOL's carried forward in future years. If it was more likely
than not to realize these losses we would have recorded a deferred tax asset of
$525,000.

Net Loss for the Year Ended May 31, 1999 as Compared to the Year Ended May 31,
1998

     Our net losses have come mainly from overhead costs associated with
organization, restructuring and financing start-up operations in Toronto and
Vancouver, Canada and costs of developing new and improved services and
expanding our marketing plan into other North American markets. The only
operating activities conducted in the United States thus far were expenses
incurred in the going public process including investor relations and
professional fees. Our head office is in Richmond, BC, Canada which does not
conduct any business related to the Internet. Our sole purpose is to provide
administration, investor relations services and services relating to being a
public company. Included in general and administrative expenses and net loss is
$477,000 as compared to $159,000 in fiscal 1998, relating to such activities.
The net loss relating to Internet activities amounted to $471,000 as compared to
$398,000 in fiscal 1998.

Liquidity and Financial Resources at May 31, 2000

     We have historically satisfied our capital needs by borrowing from
affiliates in the short-term and by issuing equity securities.
<PAGE>

     We have also used these sources to provide a portion of our operating cash
requirements to make up for a cash shortfall from operating activities. During
the year, we used $3,652,000, generated by issuing equity securities, to fund
our operating cash shortfall of $2,469,000 to repay borrowings from affiliates
of $102,000, to make capital expenditures of $251,000 and to increase our cash
position by $820,000 to $858,000. The operation, development and expansion of
our business will likely require additional capital infusions for the
foreseeable future.

     We have working capital, as at May 31, 2000, of $579,000, and will require
additional funds to finance our ongoing operating activities for the foreseeable
future and will need some funds for capital expenditures. We plan to manage our
payables balances and satisfy our operating and capital needs partially by
generating cash (although at a shortfall) through our operating activities and
partially through issuing equity securities.

     We will require additional financing in order to carry out our business
plan as proposed. Our capital requirements may vary based upon: the timing and
success of our roll out and as a result of regulatory, technological and
competitive developments; demand for our services or our anticipated cash flow
from operations is less or more than expected; our development plans or
projections changing or proving to be inaccurate; it engaging in any
acquisitions; or it accelerating deployment of our network services or otherwise
altering the schedule or targets of our roll out plan.

     We will need additional funds to continue in business and to implement our
business plan as proposed.  On March 7, 2000 we received gross proceeds of
$1,500,000 (net proceeds of $1,332,727 after a commission of $150,000 and legal
fees of $17,272 were paid) pursuant to the issuance of our $1,500,000 principal
amount of 5% Convertible Debentures. We also issued to the Debenture holder a
warrant to acquire 225,000 of our shares exercisable at $6.22875 expiring March
3, 2002. We are incurring penalties pursuant to a Registration Rights Agreement
with the Debenture holder.  Until the Registration Statement of which this
Prospectus is a part is declared effective by the Securities and Exchange
Commission, we will incur penalties of $30,000 per month. We have been paying
these penalties each month as we receive invoices for the fees.

     By filing a registration statement to permit selling shareholders to sell
their shares of our common stock, our ability to raise funds through private
placements of our common stock will be curtailed.  We will have to be sure that
any private placement we undertake would not be considered to be in connection
with the public offering of our common stock by the selling shareholders under
the registration statement that includes this prospectus.  There can be no
guarantee that additional capital will be available to us on acceptable terms,
or at all.

     We have not achieved profitable operations since our inception and have
suffered mounting losses of $5,776,555 to May 31, 2000. In their Independent
Auditor's Report, our accountants state that there is risk that our ability to
continue as a going concern could be in jeopardy and our ability to continue as
a going concern is dependent upon our successful efforts to raise additional
equity financing over the next twelve months, and further develop the market for
our products and services.
<PAGE>

     On June 30, 2000, we entered into an agreement to purchase a travel agency
located in British Columbia, Canada for a total of $125,000 Canadian.  The
acquisition is contingent upon approval from the Registrar of Travel Services
and the International Air Transport Association.

     The principal capital expenditures incurred to date related to putting
networks in place in Toronto and Vancouver. The majority of the networking
equipment has been acquired in previous periods, and new equipment will be
leased under operating leases. Our strategy now is to create Virtual ISP
presences in new markets (i.e., North American cities) pursuant to our
agreements with Internet access providers, so that it will not have to commit to
capital expenditures to build out a network in each new market. We may need to
commit working capital, however, to fund increased lease payments to Internet
access providers until revenues from new subscribers begin to cover the increase
in monthly lease costs attributable to the new market. We have switched on 50
ports (minimum per agreement with Level 3 Communications) in each of 7 cities
which enable us to service up to 500 customers in each city. The cost of these
portals for the year ended May 31, 2000 was $210,000. There was no revenue
generated during the year from these portals. We expect our capital expenditures
to continue at a modest rate in future periods as necessary, arising primarily
from the purchase of some infrastructure equipment necessary for the development
and expansion of our defined markets. We made capital expenditures of $349,000
in the current year, principally to acquire hardware related to the development
and maintenance of the portal site. Included in this is $96,000 of computer
equipment acquired by way of a capital lease.

Year 2000 Issues

     We cannot provide assurance that we will not experience unanticipated
negative consequences from year 2000 problems, including material costs caused
by undetected errors or defects in the technology used in our internal systems
as we operate in the Year 2000.

We Did Not Experience Any Problems With Our Systems or Service Providers During
the Year 2000 Rollover Period

     Our online services and their associated and supporting tools, Web sites
and infrastructure were designed and developed to be year 2000 compliant. Our
internal systems, including those used to deliver our services, utilize third-
party hardware and software. Based on vendors' representations received thus far
and our experience with the Year 2000 rollover, we believe that the third-party
hardware and software it uses is year 2000 compliant.  To date, we have spent an
estimated $100,000, in part to address year 2000 issues. These expenditures
consisted mainly of purchases of new year 2000-compliant computer equipment, and
some of these purchases would have been made in the ordinary course of replacing
aging equipment. We presently estimate that the total remaining cost of
addressing year 2000 issues will not be material. These estimates were derived
utilizing a number of assumptions, including the assumption that we have already
identified any significant year 2000 issues. However, these assumptions may not
be accurate, and actual results could differ materially from those anticipated.
In view of our year 2000 review and remediation efforts to date, the recent
development of our services, the recent installation of our information
technology equipment and systems, we do not consider contingency planning to be
necessary at this time.
<PAGE>

     We believe that any lingering Year 2000 problems will occur in the
processing of financial transactions. We believe that our billing systems will
accurately invoice our subscribers and licensees. We will remain vigilant in our
review of invoices from our vendors to detect potential Year 2000 errors in
their charges to us. If we discover that certain of our services need
modification, or certain of our third-party hardware and software is not year
2000 compliant, we will try to make modifications to our services and systems on
a timely basis. We do not believe that the cost of these modifications will
materially affect our operating results. However, we cannot provide assurance
that we will be able to modify these products, services and systems in a

timely, cost-effective and successful manner, and the failure to do so could
have a material adverse effect on our business and operating results.

ITEM 7.  FINANCIAL STATEMENTS

Information Highway.com, Inc.

                  Index to Consolidated Financial Statements

                                   Contents

Report of Independent Auditors............................................  F-1

Consolidated Balance Sheets...............................................  F-2

Consolidated Statements of Operations.....................................  F-3

Consolidated Statements of Stockholders' Equity...........................  F-4

Consolidated Statements of Cash Flows.....................................  F-5

Notes to Consolidated Financial Statements................................  F-6



<PAGE>

                  [LETTERHEAD OF ELLIOTT TULK PRYCE ANDERSON]

Elliott Tulk Pryce Anderson
Chartered Accountants

 ...............................................................................



                        Report of Independent Auditors

The Board of Directors and Stockholders
Information Highway.com, Inc.


We have audited the accompanying consolidated balance sheets of Information
Highway.com, Inc. as of May 31, 2000 and 1999, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the years
ended May 31, 2000 and 1999. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 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 Information
Highway.com, Inc. as of May 31, 2000 and 1999, and the results of its
operations, and changes in its stockholders' equity and cash flows for the years
ended May 31, 2000 and 1999 in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has not achieved profitable operations since
inception and has suffered mounting losses totalling $5,776,555 to May 31, 2000.
These factors raise doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also discussed in
Note 1. These financial statements do not include any adjustments which might
result from the outcome of this uncertainty.

                                 s/ "Elliott, Tulk, Pryce, Anderson"

                                    Chartered Accountants
Vancouver, Canada
August 15, 2000


                                                                  [LOGO OF IGAF]



                                      F-1
<PAGE>

Information Highway.com, Inc.

Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                                                               May 31,
                                                                                                   -----------------------------
                                                                                                       2000               1999
                                                                                                         $                  $
<S>                                                                                                <C>                <C>
                                                           Assets
Current Assets
     Cash and equivalents                                                                             857,949             37,622
     Accounts receivable                                                                               32,839                  -
     Inventory (Note 5)                                                                               121,264              9,695
     Prepaid expenses                                                                                 150,420             70,487
     Advances to related parties (Note 7)                                                              36,391                  -
--------------------------------------------------------------------------------------------------------------------------------

Total Current Assets                                                                                1,198,863            117,804

Property, Plant and Equipment (Note 4)                                                                490,750            270,092

Goodwill                                                                                                    -            134,848
--------------------------------------------------------------------------------------------------------------------------------

Total Assets                                                                                        1,689,613            522,744
================================================================================================================================

                                          Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
     Accounts payable                                                                                 385,645            267,279
     Accrued liabilities                                                                              146,400             65,151
     Deferred revenues                                                                                 50,678             34,049
     Advances from related parties (Note 7)                                                                 -             65,186
     Current portion of obligations under capital leases (Note 6)                                      36,773                  -
--------------------------------------------------------------------------------------------------------------------------------

Total Current Liabilities                                                                             619,496            431,665

Obligations under Capital Leases (Note 6)                                                              61,717                  -

Convertible Debentures (Note 5)                                                                     1,346,437                  -
--------------------------------------------------------------------------------------------------------------------------------
Total Liabilities                                                                                   2,027,650            431,665
--------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies (Notes 1 and 10)
--------------------------------------------------------------------------------------------------------------------------------
Stockholders' Equity (Deficit)
Common Stock (Note 8), 50,000,000 shares authorized, par value $.0001
     per share, 8,141,334 and 6,469,951 issued and outstanding respectively                               814                647
     Additional Paid in Capital - Common Stock                                                      4,812,920          1,698,351
     Additional Paid in Capital - Stock Warrants                                                      651,120                  -
     Common Stock allotted and issued in subsequent year                                                    -             50,000
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                    5,464,854          1,748,998
--------------------------------------------------------------------------------------------------------------------------------
Preferred Stock, 10,000,000 shares authorized, par value
     $.0001 per share, none issued                                                                          -                  -
--------------------------------------------------------------------------------------------------------------------------------
Translation adjustments                                                                               (11,572)            (1,145)
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                    5,453,282          1,747,853
Accumulated Deficit                                                                                (5,791,319)        (1,656,774)
--------------------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity (Deficit)                                                                 (338,037)            91,079
--------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                                                          1,689,613            522,744
================================================================================================================================
</TABLE>

(See accompanying notes)

                                      F-2
<PAGE>

Information Highway.com, Inc.

Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                                      Years ended May 31,
                                                                                  ------------------------
                                                                                     2000         1999
                                                                                       $            $
<S>                                                                             <C>            <C>
Revenues                                                                           1,202,135    1,008,657
Cost of Revenues (Note 10)                                                         1,506,664      775,816
---------------------------------------------------------------------------------------------------------
Gross Profit                                                                        (304,529)     232,841
---------------------------------------------------------------------------------------------------------

Operating Expenses
     Marketing and sales                                                             478,301      224,492
     General and administrative                                                    3,141,278      801,702
     Product development                                                             210,437      155,520
---------------------------------------------------------------------------------------------------------
Total Operating Expenses                                                           3,830,016    1,181,714
---------------------------------------------------------------------------------------------------------
Net loss                                                                          (4,134,545)    (948,873)
=========================================================================================================
Basic loss per share                                                                    (.55)        (.18)
=========================================================================================================
Weighted average shares used to compute basic loss per share                       7,427,000    5,382,000
=========================================================================================================
</TABLE>
Diluted loss per share has not been presented as the result is anti dilutive.

(See accompanying notes)

                                      F-3
<PAGE>

Information Highway.com, Inc.

Consolidated Statement of Stockholders' Equity

<TABLE>
<CAPTION>
                                                                                        Common Stock
                                                                         ----------------------------------------
                                                                             No. of                    Additional
                                                                             Shares       Par Value      Paid-in
                                                                             Issued        $.0001        Capital      Deficit
                                                                                              $             $            $
<S>                                                                     <C>               <C>          <C>           <C>
Balance as at May 31, 1996, 1997, 1998 and prior to
     reverse takeover on February 23, 1999                                  1,979,500            198       28,530       (28,728)
  Reverse takeover adjustments (Note 3)
     Cancellation of shares for no consideration                           (1,659,833)          (166)         166             -
     Elimination of deficit of Company                                              -              -      (28,728)       28,728
     Deficit of Information Highway, Inc. as at May 31, 1998                                                           (707,901)
     Issuance of shares to effect reverse takeover                          5,639,650            564    1,355,634             -
     Cost of reverse takeover transaction                                           -              -     (100,000)            -
  Shares issued for cash pursuant to a private placement                       15,000              1       11,249             -
  Shares issued pursuant to stock options exercised                           237,334             24      125,476             -
  Shares issued for services                                                   15,000              1       53,749             -
  Shares issued for property                                                    3,000              1       11,999             -
  Shares issued pursuant to warrants exercised (Note 8(a)(i))                 240,300             24      240,276             -
Net loss for the year                                                                                                  (948,873)
-------------------------------------------------------------------------------------------------------------------------------

Balance as at May 31, 1999                                                  6,469,951            647    1,698,351    (1,656,774)
  Shares issued for cash pursuant to an offering
    memorandum (Note 8(a)(ii))                                                129,750             13      461,987             -
  Shares issued for cash pursuant to a private
    placement (Note 8(a)(iii))                                                125,817             13      503,255             -
  Less: Finders fee paid on private placement                                       -              -      (43,500)            -
       Value of warrants issued to a consultant in
         connection with the private placement                                      -              -     (270,820)            -
  Shares issued pursuant to stock options exercised                           523,266             52      658,323             -
  Shares issued pursuant to warrants exercised (Note 8(a)(i))                 565,050             56      564,994             -
  Shares issued for services (Note 8(b))                                      327,500             33    1,240,330             -

Net loss for the year                                                                                                (4,134,545)
-------------------------------------------------------------------------------------------------------------------------------
Balance as at May 31, 2000                                                  8,141,334            814    4,812,920    (5,791,319)
===============================================================================================================================
</TABLE>

(See accompanying notes)

                                      F-4
<PAGE>

Information Highway.com, Inc.

Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                             Years ended May 31,
                                                                                          ------------------------
                                                                                               2000        1999
                                                                                                $            $
<S>                                                                                       <C>           <C>
Cash Flows from Operating Activities:
     Net loss                                                                              (4,134,545)   (948,873)
     Adjustments to reconcile net loss to cash
         Depreciation and amortization                                                        128,617      89,776
         Amortization of goodwill                                                             134,848     159,748
         Services paid for by issuing common shares and warrants                            1,388,163     111,125
         Imputed interest on valuation of warrants                                             21,937           -

     Change in non-cash working capital items
         (Increase) decrease in accounts receivable                                           (32,839)      4,442
         (Increase) in prepaid expenses                                                       (79,933)    (67,486)
         (Increase) in inventory                                                             (111,569)     (9,695)
         Increase in accounts payable and accrued liabilities                                 199,615     125,822
         Increase in deferred revenues                                                         16,629      14,049
-----------------------------------------------------------------------------------------------------------------

     Net Cash Used in Operating Activities                                                 (2,469,077)   (521,092)
-----------------------------------------------------------------------------------------------------------------

Cash Flows from Financing Activities:
     Common stock issued                                                                    2,152,193     862,925
     (Decrease) in related party advances                                                    (101,577)   (196,598)
     Proceeds from convertible debentures                                                   1,500,000           -
     Capital lease obligations repaid                                                         (19,701)          -
-----------------------------------------------------------------------------------------------------------------

     Net Cash Provided by Financing Activities                                              3,530,915     666,327
-----------------------------------------------------------------------------------------------------------------

Cash Flows to Investing Activities:
     Acquisition of property, plant and equipment                                            (250,785)   (138,515)
-----------------------------------------------------------------------------------------------------------------

     Net Cash to Investing Activities                                                        (250,785)   (138,515)
-----------------------------------------------------------------------------------------------------------------
Translation Adjustments                                                                         9,274      (4,797)
-----------------------------------------------------------------------------------------------------------------
Increase in Cash and Equivalents During the Year                                              820,327       1,923

Cash and Equivalents - Beginning of Year                                                       37,622      35,699
-----------------------------------------------------------------------------------------------------------------

Cash and Equivalents - End of Year                                                            857,949      37,622
=================================================================================================================

Non-Cash Financing Activities
     Value of Common Shares issued for services                                             1,240,363     111,125
     Value of Warrants issued for services                                                    147,800           -
     Value of Shares issued for property                                                            -      12,000
-----------------------------------------------------------------------------------------------------------------

                                                                                            1,388,163     123,125
=================================================================================================================

Supplemental Disclosures:
     Interest paid in cash                                                                    204,987           -
     Income taxes paid in cash                                                                      -           -
=================================================================================================================
</TABLE>

(See accompanying notes)

                                      F-5
<PAGE>

Information Highway.com, Inc.

Notes to Consolidated Financial Statements


1.   Nature of Operations, Reorganization and Continuance of Business

     The Company was incorporated December 5, 1988 in the state of Florida.
     During 1997, the Company's common stock was submitted for quotation on the
     OTC Bulletin Board System. From inception to February 17, 1999 the Company
     did not engage in any business activity other than initial organization,
     financing and some business investigation activities.

     Pursuant to an Agreement and Plan of Reorganization entered into with
     Information Highway, Inc. on February 17, 1999, a business combination was
     completed by way of reverse takeover. All of the common stock of
     Information Highway, Inc. was, or will be, exchanged for common shares of
     the Company representing a change of control of the Company. (See Note 3.)
     As part of the Plan of Reorganization the Company's name was changed to
     Information Highway.com, Inc.

     Information Highway, Inc. was incorporated in the State of Washington on
     October 15, 1996. It owns three Canadian operating subsidiaries in the
     business of providing access to the Internet and providing services,
     including on-line publishing, to individual and corporate subscribers.

     The Company has not achieved profitable operations since inception and has
     suffered mounting losses of $5,776,555 to May 31, 2000. Although the
     Company currently has working capital of $579,367 there is risk that the
     Company's ability to continue as a going concern could be in jeopardy and
     the ability of the Company to continue as a going concern is dependent upon
     its successful efforts to raise additional equity financing over the next
     twelve months, and further develop the market for its products and
     services.

2.   Significant Accounting Policies

     Consolidated Financial Statements

     These consolidated financial statements include the accounts of the Company
     and its wholly owned US subsidiary, Information Highway, Inc. which owns
     three consolidated, wholly-owned, Canadian subsidiaries.

     Estimates and Assumptions

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

     Reclassification

     Certain amounts in the financial statements have been reclassified to be
     consistent and comparable from year-to-year.

     Cash and Cash Equivalents

     Cash and cash equivalents include cash on hand, in banks and all highly
     liquid investments with a maturity of three months or less when purchased.

     Concentration of Credit Risk

     The Company does not have any concentrations of credit risk as the majority
     of its customers prepay for services. For those instances when credit is
     extended it is based on an evaluation of the customer's financial
     condition, and generally collateral is not required. The Company does not
     have any customers that account for in excess of 10% of income.

     The Company places its temporary cash investments with high credit quality
     financial institutions and limits the amount of credit exposure to any one
     financial institution.

     Inventory

     Inventory is comprised of finished goods purchased to resell over the
     Internet. Finished goods are carried at the lower of landed cost or net
     realizable value.

                                      F-6
<PAGE>

2.  Significant Accounting Policies (continued)

    Property, Plant and Equipment

    Property, plant and equipment are recorded at cost. Depreciation is computed
    utilizing the declining balance method over an estimated useful life of the
    related asset. Computer equipment and software and production equipment is
    depreciated at 30% per annum and furniture and office equipment at 20% per
    annum. Leasehold improvements are amortized over ten years utilizing the
    straight-line method. Assets acquired pursuant to capital leases are
    amortized over the life of the lease utilizing the straight-line method.

    Financial Instruments

    The fair value of the Company's current assets and current liabilities were
    estimated to approximate their carrying values due to the immediate or
    short-term maturity of these financial instruments. See Note 5 for long-term
    financial instruments. The Company operates in Canada and virtually all of
    its assets and liabilities are giving rise to significant exposure to market
    risks from changes in foreign currency rates. The financial risk is the risk
    to the Company's operations that arise from fluctuations in foreign exchange
    rates and the degree of volatility of these rates. Currently, the Company
    does not use derivative instruments to reduce its exposure to foreign
    currency risk.

    Revenue Recognition and Deferred Revenues

    Revenue consists of the provision of Internet dial-up services, banner
    advertisements, Web-Site development and hosting and E-Commerce revenue
    sharing with various Internet partners.

    Revenue is recognized at the time services are provided. All related costs
    are recognized in the period in which they occur. Customers deposits for
    Internet dial-up services to be provided in the future are classified under
    current liabilities.

    Cost of Revenue

    Cost of revenue consists primarily of the cost of serving the Company's
    Internet dial-up service customers and the cost of developing Web-Sites for
    customers. Costs associated with revenue generating activities consists of
    salaries for technical support and customer service, depreciation of
    Internet dial-up and Web-Site hosting equipment, license fees, equipment
    leasing costs, telephone line costs and rent to house equipment and staff
    directly involved in serving customers.

    Product Development Costs

    Product development costs consist of expenses incurred by the Company in the
    development and creation of its Executive Site(TM) Web-Site. Product
    development costs include compensation and related expenses for programmers,
    depreciation of computer hardware and software, rent, telephone and costs
    incurred in developing features and functionality of the service. Product
    development costs are expensed as incurred.

    Accounting for Stock-Based Compensation

    SFAS No. 123, "Accounting for Stock-Based Compensation," requires that stock
    awards granted subsequent to January 1, 1995, be recognized as compensation
    expense based on their fair value at the date of grant. Alternatively, a
    company may account for granted stock awards under Accounting Principles
    Board Opinion (APB) No. 25, "Accounting for Stock Issued to Employees," and
    disclose pro forma income amounts which would have resulted from recognizing
    such awards at their fair value. The Company has elected to account for
    stock-based compensation expense under APB No. 25 and make the required pro
    forma disclosures for compensation expense.

    Foreign Exchange

    All of the Company's Canadian operating subsidiaries are operationally and
    financially independent of the parent and are considered self-sustaining. As
    such, the current rate method is used whereby assets and liabilities are
    translated into United States dollars at exchange rates in effect at the
    balance sheet dates. Shareholders' equity accounts are translated using
    historical exchange rates. Income and expense items are translated at
    average exchange rates for the periods. Accumulated net translation
    adjustments are included as a separate component of stockholders' equity.

    Current monetary assets and liabilities of the Company which are denominated
    in foreign currencies are translated at the exchange rate in effect at the
    balance sheet dates. Revenues and expenses are translated at rates of
    exchange prevailing on the transaction dates. Exchange gains or losses on
    the realization of current monetary assets and the settlement of current
    monetary liabilities are recognized currently to operations.

                                      F-7
<PAGE>

2.  Significant Accounting Policies (continued)

    Income Taxes

    The Company has adopted the provisions of Financial Accounting Standards
    Board Statement No. 109 (SFAS 109), Accounting for Income Taxes.

    Pursuant to SFAS 109 the Company is required to compute tax asset benefits
    for net operating loss carry forwards. Potential benefit of net operating
    losses has not been recognized in the financial statements because the
    Company cannot be assured that it is more likely than not that it will
    utilize the net operating loss carry forwards in future years.

    The Company's Canadian subsidiaries have Canadian tax losses of $482,000 to
    offset future years Canadian taxable income. These losses expire between
    fiscal 2003 and fiscal 2007:

    The Company has US tax losses of $903,000 to offset future years US taxable
    income. These losses expire between fiscal 2012 and fiscal 2015.

    The components of the net deferred tax asset, the statutory tax rate, the
    effective tax rate and the elected amount of the valuation allowance are
    scheduled below:

<TABLE>
<CAPTION>
                                                               2000                   1999
                                                                 $                      $
          <S>                                              <C>                   <C>
          Net Combined Canadian and US Operating Losses      3,942,000               835,000
          Statutory Combined Canadian and US Tax Rate               39%                   39%
          Effective Tax Rate                                         -                     -
          Deferred Tax Asset                                 1,537,000               328,000
          Valuation Allowance                               (1,537,000)             (328,000)
                                                           ---------------------------------
          Net Deferred Tax Asset                                     -                     -
                                                           =================================
</TABLE>

    Basic and Diluted Net Income (Loss) per Share

    The Company computes net income (loss) per share in accordance with SFAS No.
    128, "Earnings per Share" (SFAS 128). SFAS 128 requires presentation of both
    basic an diluted earnings per share (EPS) on the face of the income
    statement. Basic EPS is computed by dividing net income (loss) available to
    common shareholders (numerator) by the weighted average number of common
    shares outstanding (denominator) during the period. Diluted EPS gives effect
    to all dilutive potential common shares outstanding during the period
    including stock options, using the treasury stock method, and convertible
    preferred stock, using the if-converted method. In computing Diluted EPS,
    the average stock price for the period is used in determining the number of
    shares assumed to be purchased from the exercise of stock options or
    warrants. Diluted EPS excludes all dilutive potential common shares if their
    effect is anti dilutive.

3.  Business Combination

    Pursuant to an Agreement and Plan of Reorganization completed on February
    23, 1999, the Company acquired 3,235,000 common shares of Information
    Highway, Inc. out of a total of 5,639,650 issued and outstanding common
    shares in exchange for 3,235,000 common shares of the Company. As of May 11,
    2000 (date of exchange offering closing), 2,359,650 of the remaining
    2,404,650 Information Highway, Inc. shares had been exchanged for the same
    number of Company shares. The Company has allotted 45,000 shares in
    anticipation of the remaining shares of Information Highway, Inc. being
    exchanged in the future. As part of the Agreement and Plan of Reorganization
    the Company caused 1,659,833 of its 1,979,500 common shares that were issued
    and outstanding, prior to the closing, to be cancelled and assumed the
    obligations of Information Highway, Inc. to issue common shares pursuant to
    warrants and stock options issued by Information Highway, Inc. $100,000 was
    paid by Information Highway, Inc. to the controlling shareholder of the
    Company to effect the Agreement and Plan of Reorganization including the
    cancellation of 1,659,833 shares.

    For accounting purposes the acquirer was Information Highway, Inc. As
    Information Highway, Inc. is the legal subsidiary of the Company the nature
    of the business combination was a reverse takeover whereby the control of
    the Company was acquired by Information Highway, Inc. and the consolidated
    financial statements are issued under the name of the Company but is a
    continuation of Information Highway, Inc. and not the Company. The legal
    capital structure remains that of the Company but the stockholders' equity
    of Information Highway, Inc. replaced the stockholders' equity of the
    Company. Similarly, the Company's income statements and statements of cash
    flows represent a continuation of Information Highway, Inc.'s consolidated
    financial statements.

                                      F-8
<PAGE>

3.  Business Combination (continued)

    The $100,000 payment to the controlling shareholder of the Company was
    classified as a reduction of additional paid in capital and not as goodwill
    as the nature of the transaction was for Information Highway, Inc. to obtain
    a listing on the OTC Bulletin Board by way of reverse takeover. The cost is
    associated with publicly listing shares and not with any business associated
    with the Company.

4.  Property, Plant and Equipment

    Property, plant and equipment are stated at cost less accumulated
    depreciation and amortization.

<TABLE>
<CAPTION>
                                                                             Accumulated         2000            1999
                                                                           Depreciation and     Net Book       Net Book
                                                           Cost              Amortization        Value          Value
                                                             $                    $                $              $
<S>                                                       <C>              <C>                  <C>            <C>
Computer equipment                                        610,457              258,277          352,180        207,920
Office furniture and equipment                             53,345               21,198           32,147         31,669
Production equipment (Note 6(f))                           25,000               10,125           14,875         21,250
Leasehold improvements                                     11,567                3,471            8,096          9,253
Assets under capital lease                                 96,906               13,454           83,452              -
----------------------------------------------------------------------------------------------------------------------

                                                          797,275              306,525          490,750        270,092
======================================================================================================================

Depreciation and amortization per class of asset:

<CAPTION>
                                                                                                 2000           1999
                                                                                                   $              $
<S>                                                                                             <C>           <C>
Computer equipment and software                                                                 100,647         75,508
Office furniture and equipment                                                                    6,984          6,345
Production equipment                                                                              6,375          3,750
Leasehold improvements                                                                            1,157          1,158
Assets under capital lease                                                                       13,454              -
----------------------------------------------------------------------------------------------------------------------

                                                                                                128,617         86,761
======================================================================================================================
</TABLE>

5.  Convertible Debentures

    The Company issued, to one investor, three $500,000, two year convertible
    debentures bearing interest at 5%. Warrants to purchase 225,000 common
    shares exercisable at $6.2287 and expiring March 3, 2002 were also issued.
    The maturity date is March 3, 2002. The Company received $1,332,728 after
    paying to the Agent a 10%, or $150,000, financing fee and legal costs of
    $17,272. The debenture holders can convert their debentures into common
    shares based on the face value plus accrued interest divided by the lesser
    of the fixed price of $6.22875 and the average closing price for the 20 days
    prior to conversion. No amount has been allocated to the conversion feature
    in accordance with APB 14. Debt issue costs of $167,272 have been charged to
    operations and the value of the detachable share purchase warrants,
    totalling $175,500, was deducted from the proceeds of the convertible
    debenture as a valuation allowance and is being amortized to operations over
    two years. The Company has the right to redeem with cash.

    The Company is icurring penalties pursuant to the Registration Righs
    Agreement with the debenture holder in the amount of $30,000 per month until
    a registration statement for selling shareholders is declared effective by
    the SEC. The Company has been paying these penalties upon invoice. The
    Company's ability to raise funds through private placements of common stock
    will be curtailed until the offering by selling shareholders is closed. The
    Company must ensure that any private placement it undertakes would not be
    considered to be in connection with the offering by selling shareholders.

                                      F-9
<PAGE>

6.  Obligations Under Capital Leases

    The Company acquired computer equipment by way of capital leases.

                                                        Total
                                                        Lease
                                                      Payments
          Fiscal Year                                    $
          -----------
          2001                                         36,332
          2002                                         36,332
          2003                                         28,331
          2004                                          4,328
          2005                                          3,905
                                                     --------
                                                      109,228
          Less amount representing interest            10,738
                                                     --------
                                                       98,490
          Less current portion                         36,773
                                                     --------
                                                       61,717
                                                     ========

7.  Due To/From Related Parties

<TABLE>
<CAPTION>
                                                                                               2000             1999
                                                                                                 $                $
<S>                                                                                   <C>               <C>
    (a)   Amounts owing to the President of the Company and private companies
          under the President's control are from short-term cash loans, are due on
          demand, unsecured and non-interest bearing.                                         13,279            77,681

    (b)   Amounts owing from public companies that share office premises and have
          common President's are from expenses paid on behalf of these companies,
          are due on demand, unsecured, and non-interest bearing.                            (49,670)          (12,497)
                                                                                          ----------------------------
    Net amount owing (from) to related parties                                               (36,391)           65,184
                                                                                          ============================
</TABLE>

8.  Common Stock Issuances and Related Commitments

    Pursuant to the Agreement and Plan of Reorganization the Company assumed all
    common stock obligations of Information Highway, Inc. as they relate to
    stock based compensation plans and warrants issued to acquire common shares.

    (a) Private placements of common shares and warrants

        (i)  Prior to becoming public, the Company approved and completed two
             private placements of units and issued 814,150 units at $0.75 per
             unit to raise $610,612. These units were issued in December, 1998
             and contained one share and one warrant to acquire one additional
             share at $1.00 if exercised by December 30, 1999, some of which
             were extended to February 18, 2000. Of the 814,150 warrants issued,
             805,350 warrants were exercised by February 18, 2000 for proceeds
             of $805,350. Warrants with respect to 8,800 shares expired. No
             amount was allocated to warrants as there was no market for the
             stock prior to becoming a public company.

        (ii) The Company offered units pursuant to an Offering Memorandum. Each
             unit consisted of one common share, one Series "A" Warrant to
             acquire one additional common share at $4.00 per share expiring
             April 30, 2000 (expired), and one Series "B" Warrant to acquire one
             additional common share at $6.00 per share expiring April 30, 2001.
             The offering was completed on August 11, 1999. On completion of the
             offering, a total of 129,750 units were issued at $4.00 per unit
             for total proceeds of $519,000. The proceeds of this private
             placement were allocated on the following basis: $462,000 to common
             shares, $47,000 to Series A Warrants and $10,000 to Series B
             Warrants.

                                     F-10
<PAGE>

8.   Common Stock Issuances and Related Commitments (continued)

     (a) Private placements of common shares and warrants (continued)

         (iii) The Company offered, pursuant to a private placement, 1,000,000
               units at $4.00 per unit. Each unit consisted of one common share,
               and one series C warrant to purchase one additional common share
               at $5.00 per share expiring October 6, 2000. The private
               placement was completed on March 2, 2000. On completion, a total
               of 125,817 common shares were issued at $4.00 per share for total
               proceeds of $503,268. The Company entered into an Agreement
               relating to this private placement financing and investor
               relations services. The Agreement calls for a 10% finders fee to
               be paid pursuant to this private placement. A total of $43,500
               has been paid. In addition, 100,000 warrants were issued to
               acquire 100,000 common shares exercisable at $4.00 per share
               expiring December 1, 2002. The value of these warrants, totalling
               $270,820, was charged against share capital.

     (b) Shares and warrants issued for services

         During fiscal 2000, the Company issued 175,000 common shares, valued at
         $678,900, pursuant to a Marketing and Financial Consulting Agreement,
         all of which has been charged to operations. Pursuant to this Agreement
         the Company was committed to file a Registration Statement registering
         these securities by November 6, 1999. It has been agreed to pay
         interest of $23,226 per month until such time as the commitment is met.
         During the year a total of $147,478 of such interest was paid and
         charged to operations.

         The Company issued 2,500 common shares valued at $22,000 in connection
         with the Company's Internet portal telephony project. This amount was
         charged to operations in fiscal 2000.

         The Company issued 20,000 common shares valued at $72,614 to a European
         investor relations company. This amount has been charged to operations
         in fiscal 2000.

         The Company issued 130,000 common shares valued at $466,849 for
         financial consulting services. This amount has been charged to
         operations in fiscal 2000 .

         The Company paid $60,000 and issued 400,000 warrants to acquire up to
         400,000 common shares exercisable at $3.50 per share expiring November
         15, 2000 for a three month marketing and advertising program including
         banner ads, news group coverage and press release distribution. The
         value of the warrants was $147,800. Total compensation expense of
         $207,800 was charged to operations in fiscal 2000.

         The Company entered into an Agreement relating to this private
         placement financing. The Agreement calls for a 10% finders fee to be
         paid pursuant to this private placement. A total of $43,500 has been
         paid. In addition, 100,000 warrants were issued to acquire 100,000
         common shares exercisable at $4.00 per share expiring December 1, 2002.
         The value of these warrants, totalling $270,820, was charged against
         share capital.

     (c) Stock Option Plan

         Pursuant to a stock option plan amended and restated February 8, 2000
         and expiring May 31, 2007, the Company has reserved 3,000,000 common
         shares for future issuance.

         The options are granted for services provided to the Company. Statement
         of Financial Accounting Standards No. 123 ("SFAS 123") requires that an
         enterprise recognize, or at its option, disclose the impact of the fair
         value of stock options and other forms of stock based compensation in
         the determination of income. The Company has elected under SFAS 123 to
         continue to measure compensation cost on the intrinsic value basis set
         out in APB Opinion No. 25. As options are granted at exercise prices
         based on the market price of the Company's shares at the date of grant,
         no compensation cost is recognized. However, under SFAS 123, the impact
         on net income and income per share of the fair value of stock options
         must be measured and disclosed on a fair value based method on a pro
         forma basis.

         The fair value of the employee's purchase rights, pursuant to stock
         options, under SFAS 123 was estimated using the Black-Scholes model.

                                     F-11
<PAGE>

8.   Common Stock Issuances and Related Commitments (continued)

     (c) Stock Option Plan (continued)

         The weighted average number of shares under option and option price for
         the year ended May 31, 2000 is as follows:

<TABLE>
<CAPTION>
                                                                          May 31, 2000
                                                       -------------------------------------------------
                                                                                               Weighted
                                                                               Weighted        Average
                                                                               Average        Remaining
                                                            Shares              Option           Life
                                                         Under Option           Price         of Options
                                                              #                   $            (Months)

         <S>                                             <C>                    <C>           <C>
             Beginning of year                            1,237,666               2.25
             Granted                                      1,070,000               4.37
             Exercised                                     (518,266)             (1.26)
             Cancelled                                     (157,500)             (4.76)
             Lapsed                                         (30,000)             (6.00)
                                                        -----------
             End of year                                  1,601,900               3.69                48
                                                        ===========            =======              ====

         If compensation expense had been determined pursuant to SFAS 123, the Company's net loss and net loss per share for the
         years ended May 31, 2000 and 1999 would have been as follows:

<CAPTION>
                                                                                    2000                              1999
                                                                                      $                                 $
         Net loss
             As reported                                                         (4,134,545)                        (948,873)
             Pro forma                                                           (4,897,805)                        (988,993)
         Basic net loss per share
             As reported                                                               (.55)                            (.18)
             Pro forma                                                                 (.66)                            (.18)
</TABLE>

9.   Commitments and Contingent Liability

     (a) Commitments

         The Company is committed to making the following lease or contract
         payments for the next four fiscal years:

<TABLE>
<CAPTION>
                                                         For the years ended May 31,
                                            --------------------------------------------------
                                                  2001        2002       2003            2004

                                                  $           $           $               $
         <S>                                 <C>         <C>          <C>         <C>
         Management consulting                  17,500           -          -               -
         Investor relations - consulting        60,000           -          -               -
         Premises leases                        63,987      25,878      8,149           3,396
                                              -----------------------------------------------
                                               141,487      25,878      8,149           3,396
                                              ===============================================
</TABLE>

                                     F-12
<PAGE>

9.   Commitments and Contingent Liability (continued)

     (b) Contingent Liability - Lawsuit

         A Writ of Summons and Statement of Claim was filed against the Company
         in the Supreme Court of British Columbia in April 1999 by a former
         employee and spouse of the employee (the "Plaintiffs"). The employee
         was retained by the Company as a consultant on or about December 1996
         and was subsequently terminated for cause by the Company in December
         1997. The Plaintiffs are seeking monetary damages related to the
         alleged remuneration pursuant to the agreement and a stock option
         between the Company and the employee. The total damages claimed amounts
         to $597,000 including alleged unpaid remuneration and a stock option
         benefit. The plaintiff's are also claiming 5% of business revenue from
         the operating subsidiary in Vancouver, Canada. This subsidiary operated
         at a net loss from operations during the period from acquisition in
         December 1996 to date. Management believes that the Plaintiff's alleged
         claim is without legal or factual basis and therefore have not accrued
         any potential losses resulting from this claim except for legal fees
         paid in establishing the defence. The Company intends to vigorously
         defend this action.

10.  Segmented Information

     The Company has adopted SFAS No. 131 Disclosure About Segments of an
     Enterprise and related information.

     The business of the Company is carried on in one industry segment being the
     provision of access to the Internet and providing services, including on-
     line publishing, to individual and corporate subscribers.

     Up until May 31, 1999 the Company operated in one geographic segment, being
     Canada, located in Vancouver, BC and Toronto, Ontario. During fiscal 2000
     the Company began expansion of its ISP business into the United States by
     setting up Virtual ISP's. The Company has switched on 50 ports (minimum per
     agreement) in each of 7 cities which enables the Company to service up to
     500 customers in each city. The cost of these portals for the year ended
     May 31, 2000 was $210,334 and was charged to operations as a general and
     administrative expense. There was no revenue generated during the year.

     Included in cost of goods sold is a one time telephone fee of $220,000 with
     a service provider. The fees were originally in dispute which now has been
     settled by the Company.

     The Company's head office is in Richmond, BC, Canada. The head office does
     not conduct any business specifically related to the Internet . Its sole
     purpose is to provide administration, investor relations services and
     services relating to being a public company. Included in general and
     administrative expenses and net loss is $2,604,047 relating to such
     activities. The net loss relating to Internet activities in Canada amounted
     to $1,320,164 and the net loss relating to US portal costs was $210,334.

11.  Subsequent Event

     On June 30, 2000 the Company entered into an agreement to purchase a travel
     agency located in British Columbia, Canada. The terms of payment are:
     Cnd$5,000 as an initial deposit; Cnd$10,000 due on or before the subject
     removal date, being July 14, 2000; and Cnd$110,000 due on closing date. The
     closing date has been extended until such time as the travel agency
     receives approval of the purchase from the Registrar of Travel Services and
     the International Air Transport Association. As additional consideration
     the Company agrees to pay any prepaid expenses incurred in carrying on the
     business after the closing date.

                                     F-13
<PAGE>

                                   PART III

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

     The following table sets forth the name, age and position of each Executive
Officer and Director of the Company:

Name                 Age   Position
----                 ---   --------
John G. Robertson    59    President, Chief Executive Officer, Director
Jennifer Lorette     27    Executive Vice President, Secretary/Treasurer,
                           Principal Accounting Officer and Chief
                           financial Officer, Director
Donna M. Moroney     40    Vice-President, Legal and Administration, and
                           Director
James Vandeberg      56    Chief Operating Officer, Attorney with Ogden
                           Murphy Wallace, PLLC, Information Highway.com's
                           legal counsel, and a Director

Mr. Robertson and Ms. Lorette have served as directors of our business since the
June 1997 Annual Meeting. Mr. Vandeberg was elected a director in January 1999.
Ms. Moroney was elected a director of the Company in December, 1999. Each
director will serve until the next annual meeting of shareholders and their
respective successors are elected and qualified. All officers currently devote
part-time to the operation of the Company.

Executive Officers, Directors and Other Significant Employees of the Company:

John G. Robertson--President, Principal Executive Officer and a member of the
Board of Directors

     Mr. Robertson is a founder, President, Principal Executive Officer and a
member of the Board of Directors. Since October 1984, Mr. Robertson has been
President and a Director of Reg Technologies, Inc., a British Columbia
corporation trading on the Canadian Venture Exchange that, in cooperation with
certain controlled affiliates, is engaged in developing a rotary engine and
other devices utilizing Rand Cam Technology. Since February 1979, Mr. Robertson
has been President and a Director of LinuxWizardry Systems, Inc. (formerly Flame
Petro-Minerals Corp.), a British Columbia corporation trading on the OTC
Bulletin Board and engaged in the development and marketing of a Linux based,
low cost router through its wholly-owned subsidiary, LinuxWizardry, Inc., which
was acquired in January 2000. Mr. Robertson is President, a director and CEO of
IAS Communications, Inc., an Oregon corporation traded over the counter in the
United States that has developed a television antenna which is 14'' in diameter
and only 2 inches high that can replace existing outside log periodic antennas
and has the capability of receiving local television stations up to a 60-mile
radius.

Jennifer Lorette--Executive Vice President, Secretary/Treasurer, Principal
Financial Officer and Principal Accounting Officer, and a Member of the Board of
Directors

     Ms. Lorette is a founder, Secretary/Treasurer, Principal Financial Officer
and Principal Accounting Officer.  Since April 1994, Ms. Lorette has been Vice
President of Administration of Reg Technologies Inc. Since June 1994, Ms.
Lorette has been a Vice President of REGI U.S. and Chief Financial Officer and
Vice President of Linux Wizardry Systems Inc. From February 1994 to April 1994,
Ms. Lorette was an executive assistant at Reg Technologies, Inc. Ms. Lorette is
also Secretary/Treasurer of IAS Communications, Inc.

Donna M. Moroney--Vice-President, Legal and Administration, and a member of the
Board of Directors

     Ms. Moroney has been a consultant to public companies since 1992. She has
been an officer of Information Highway.com since January 1998. She has been a
director of Linux Wizardry Systems Inc., an OTCBB company, since 1998. She is an
officer of Teryl Resources Corp., a Canadian Venture Exchange Company, a
director and officer of Teryl, Inc. Ms. Moroney has also been an instructor of
corporate/securities law for legal assistants.

James L. Vandeberg--Chief Operating Officer and a member of the Board of
Directors

     Mr. Vandeberg is an attorney with the Seattle, Washington law firm of Ogden
Murphy Wallace, PLLC. He has served as counsel to Information Highway.com since
1996. Mr. Vandeberg graduated cum laude from the University of Washington with a
Bachelor of Arts degree in accounting in 1966, and from New York University
School of Law in 1969, where he was a Root-Tilden Scholar. He became a member of
the Washington Bar Association in 1969 and of the California Bar Association in
1973. Mr. Vandeberg's practice focuses on the corporate finance area, and he
specializes in securities and acquisitions. He is a member and former director
of the American Society of Corporate Secretaries. Mr. Vandeberg was previously
general counsel and secretary of two NYSE companies and is a director of IAS
Communications, Inc.

Ismael Cristian Rodriguez--Manager of Information Systems and Senior Network
System Administrator
<PAGE>

     Mr. Rodriguez is 28 years old. He is the Manager of Information Systems and
Senior Network System Administrator, a position he has held since joining us in
1996. Prior to that, Mr. Rodriguez was a private consultant assisting clients
with Internet services, networking and computer hardware. Mr. Rodriguez attended
Vancouver Film School and received a Certificate for 3D Animation.

Jack Wasserman--Vice-President Toronto Operating Unit

     Mr. Wasserman is 50 years old. He is Vice-President of the Toronto
operating unit and has held that position since joining us in 1995. Prior to
that, Mr. Wasserman was an accountant with World Tel (Toronto) Internet, Inc.
Mr. Wasserman received his accounting designation with Arthur Andersen and
Company, in 1976 in the Province of Ontario.

Carol Coleman--Controller

     Ms. Coleman is a Chartered Accountant with over 10 years of experience in
the accounting industry. Her accounting background is in a variety of areas
including manufacturing and high-tech. Ms. Coleman's duties as Controller of the
Company include management of the accounting, management reporting, banking,
insurance and payroll.

ITEM 10.  EXECUTIVE COMPENSATION

     The following table sets forth compensation awarded to, earned by or paid
to Mr. Robertson for the designated fiscal years. No executive officer had an
annual salary and bonus in excess of $100,000 during the past three fiscal
years. The information contained in the table relates to our predecessor (now
our subsidiary) prior to the February 1999 reorganization. Pursuant to paragraph
(a)(5) of Item 402 of Regulation S-B, the table omits columns that are not
applicable to Mr. Robertson's compensation.

                          SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
(a)                                                                         (b)           (e)              (g)
                                                                                                        Securities
                                                                                      Other Annual      Underlying
                                                                                      Compensation     Options/SARs
                   Name and Principal Position                              Year           ($)             (#)
                   ---------------------------                              ----      ------------     ------------
<S>                                                                      <C>          <C>              <C>
John G. Robertson ................................................          2000          148,000(1)      300,000
     President and Chief Executive Officer                                  1999          575,500(2)      300,000
                                                                            1998           48,000(3)      150,000
                                                                            1997           30,000(4)
</TABLE>

___________________
(1) We paid Access Information Services, Inc. a management fee of $2,500 per
month and an additional $1,500 per month for rent and secretarial services each
month. Access Information Services, Inc. is a corporation owned by a trust of
which Mr. Robertson is one of three voting trustees and of which Kelly
Robertson, Mr. Robertson's daughter, is the beneficiary. We have disclosed the
entire amount of these payments, $48,000, as other compensation paid to Mr.
Robertson, due to his shared control over the trust, even though he will not
receive this amount in cash. In addition, in December 1999, a bonus was declared
in the amount of $100,000. This amount has not yet been paid to Mr. Robertson.

(2) On February 23, 1999, Mr. Robertson exercised 150,000 stock options with an
exercise price of $0.50 per share. Based on the closing market price of our
stock of $3.75 on February 24, 1999, its first day of trading, according to
rules of the Securities and Exchange Commission the exercise resulted in
compensation to Mr. Robertson of $487,500. We paid Access Information Services,
Inc. a management fee of $2,500 per month and an additional $1,500 per month for
rent and secretarial services each month. Access Information Services, Inc. is a
corporation owned by a trust of which Mr. Robertson is one of three voting
trustees and of which Kelly Robertson, Mr. Robertson's daughter, is the
beneficiary. We have disclosed the entire amount of
<PAGE>

these payments, $48,000, as other compensation paid to Mr. Robertson, due to his
shared control over the trust, even though he will not receive this amount in
cash.

(3) We paid Access Information Services, Inc. a management fee of $2,500 per
month and an additional $1,500 per month for rent and secretarial services each
month. Access Information Services, Inc. is a corporation owned by a trust of
which Mr. Robertson is one of three voting trustees and of which Kelly
Robertson, Mr. Robertson's daughter, is the beneficiary. We have disclosed the
entire amount of these payments, $48,000, as other compensation paid to Mr.
Robertson, due to his shared control over the trust, even though he will not
receive this amount in cash.

(4) We paid Access Information Services, Inc. a management fee of $2,500 per
month and an additional $1,500 per month for rent and secretarial services each
month from inception (October 15, 1996). Access Information Services, Inc. is a
corporation owned by a trust of which Mr. Robertson is one of three voting
trustees and of which Kelly Robertson, Mr. Robertson's daughter, is the
beneficiary. We have disclosed the entire amount of these payments, $30,000, as
other compensation paid to Mr. Robertson, due to his shared control over the
trust, even though he will not receive this amount in cash. The following table
sets forth certain information concerning grants of stock options pursuant to
stock option plans to the named Executive Officer during the year ended May 31,
1999.

                     OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               Individual Grants
<TABLE>
<CAPTION>
              (a)                   (b)                (c)            (d)              (d)               (e)
                                                    % of Total
                            Number of Securities   Options/SARs                     Market Price of
                                Underlying          Granted to                        Underlying
                               Options/SARs        Employees in                      Security on
             Name                 Granted          Fiscal Year    Exercise Price      Grant Date     Expiration Date
             ----           ------------------     ------------   --------------   ---------------   ---------------
     <S>                    <C>                    <C>            <C>              <C>               <C>
     John G. Robertson           300,000               50.4%         $4.00             $4.50           May 21, 2004
</TABLE>

     The following table sets forth certain information concerning exercises of
stock options pursuant to stock option plans by the named Executive Officer
during the year ended May 31, 2000 and stock options held at year end.

              Aggregated Option/SAR Exercises in Last Fiscal Year
                          and FY-End Option/SAR Values
<TABLE>
<CAPTION>
            (a)                        (b)                    (c)                    (d)                      (e)
                                                                              Number of Securities      Value of Unexercised
                                                                             Underlying Unexercised        In-the-Money
                                                                               Options/SARs at FY-      Options/SARs at
                                                                                     End (#)                 FY-End ($)
                                                                             ----------------------     ------------------
                                 Shares Acquired         Value Realized            Exercisable/             Exercisable/
            Name                 on Exercise (#)              ($)                 Unexercisable           Unexercisable
            ----                 --------------      --------------------    ----------------------     ------------------
     <S>                         <C>                 <C>                     <C>                        <C>
     John G. Robertson .........        0                      0                   300,000/-0-               -0-(1)/-0-
</TABLE>

(1) Mr. Robertson's 300,000 options were not in-the-money based on the August
18, 2000 closing price of $1.25 for our common stock.
<PAGE>

     We do not have any Long Term Incentive Plans. Directors receive no
compensation for their service as such, although they do receive reimbursement
for reasonable expenses incurred in attending meetings of the Board of
Directors. Ms. Lorette and Mr. Vandeberg each were granted options to purchase
100,000 shares of our common stock, due in part to their service as directors.
These options, granted during fiscal year 2000, are fully vested, have an
exercise price of $4.00 per share and must be exercised by November 5, 2004. We
have no obligation or policy to grant stock options to directors.

     We may in the future create retirement, pension, profit sharing, insurance
and medical reimbursement plans covering our Officers and Directors. At the
present time, no such plans exist. No advances have been made or are
contemplated to any of our Officers or Directors.

We do not have any employment contracts, termination of employment and change of
control arrangements.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth, as of August 18, 2000 and assuming exchange
of all shares of Information Highway, Inc. for our shares as of February 23,
1999, the outstanding Common Stock owned of record or beneficially by each
Executive Officer and Director and by each person who owned of record, or was
known by us to own beneficially, more than 5% of Common Stock, and the
shareholdings of all Executive Officers and Directors as a group.

<TABLE>
<CAPTION>
                                                                                                               Percentage
                                                                                                               ----------
                                                                                               Shares          of Shares
                                                                                               ------          ---------
Name                                                                                           Owned           Owned
----                                                                                           -----           -----
<S>                                                                                          <C>               <C>
John G. Robertson(1)(2) ...................................................................  2,975,000         31.6%
   President and member of the Board of Directors

Jennifer Lorette(1)(3) ....................................................................    234,500          2.9%
   Executive Vice President, Secretary/Treasurer,
   Chief Financial Officer and a member of the Board of Directors

James L. Vandeberg(1)(3) ..................................................................    123,400          1.5%
   Chief Operating Officer and a member of the Board of Directors

Donna Moroney(4) ................... ......................................................     74,000           .9%
   Director, Vice-President, Legal and Administration, and a member
   of the Board of Directors

Robertson Family Trust(5)..................................................................  2,448,000         30.1%

Access Information Services Inc.(6)........................................................    398,000          4.9%
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                            <C>              <C>
All Executive Officers & Directors as a Group (Four Individuals)(7)                          3,406,900         41.8%
</TABLE>

     Except as noted below, all shares are held of record and each record
shareholder has sole voting and investment power.

(1) These individuals are the Executive Officers and Directors of  Information
Highway.com and may be deemed to be parents or founders of Information
Highway.com as that term is defined in the Rules and Regulations promulgated
under the 1933 Act.

(2) Includes 2,050,000 shares owned or controlled by the Robertson Family Trust,
70,000 shares owned of record by SMR Investments, Ltd, a corporation owned by
Susanne Robertson, wife of Mr. Robertson, 10,000 shares owned of record by Mrs.
Robertson, and 300,000 options that are currently exercisable. Mr. Robertson is
one of three trustees of the Robertson Family Trust, which acts by the majority
vote of the three trustees. Also includes 398,000 shares owned of record by
Access Information Services, a corporation owned by the trust. Mr. Robertson
disclaims beneficial ownership of the shares owned or controlled by the
Robertson Family Trust. Mr. Robertson's address is the same as the Company's.

(3) Includes 100,000 options that are currently exercisable. Ms. Lorette's
address is the same as the Company's. Mr. Vandeberg's address is Ogden Murphy
Wallace, 2100 Westlake Center Tower, 1601 Fifth Avenue, Seattle, Washington.

(4) Includes 50,000 options that are currently exercisable. Ms. Moroney's
address is the same as the Company's.

(5) Includes 398,000 shares owned of record by Access Information Services, a
corporation owned by the trust. The address of the Robertson Family Trust is
185--10751 Shellbridge Way, Richmond, British Columbia V6X 2W8, Canada. The
trust acts by majority vote of its three trustees: (i) Mr. Robertson; (ii)
Susanne Robertson, Mr. Robertson's wife, 4040 Amundsen Place, Richmond, BC V7C
4L8; and (iii) Eric Hanson, 4620 Britannia St., Richmond, B.C. The sole
beneficiary is Kelly Robertson, daughter of Mr. and Mrs. Robertson, #401 12633
No. 2 Road, Richmond, B.C. V7E 6N5.

(6) Access Information Services is a corporation owned by the Robertson Family
Trust. Its address is 185 - 10751 Shellbridge Way, Richmond, British Columbia
V6X 2W8, Canada.

(7) Includes 625,000 options that are currently exercisable. Also see Note (2)
above regarding share ownership attributed to Mr. Robertson.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     At May 31, 2000 and 1999, we owed the amounts set forth below to the
following affiliated companies (in the case of the bracketed amounts, we were
owed the following amounts by the affiliated companies):

                                    May 31,
         Affiliate              2000      1999         Nature of Affiliation
         -------------------------------------------------------------------
<PAGE>

<TABLE>
<S>                           <C>        <C>         <C>
Access Information Systems..  $ (7,000)  $50,554                (1)
JGR Petroleum Inc...........  $  9,365   $ 6,000     Controlled by John Robertson
Reg Technologies, Inc.......  $(20,727)  $12,895                (2)
SMR Investment Ltd..........  $(70,319)  $33,527                (3)
</TABLE>
_________________
(1) See Security Ownership of Certain Beneficial Owners and Management, the
table thereunder and the notes thereto.

(2) Reg Technologies Inc. is a British Columbia Corporation listed on the
Canadian Venture Exchange. Since October 1984, Mr. Robertson has been President
and a Director of Reg Technologies Inc. SMR Investment Ltd., a British Columbia
corporation, holds a controlling interest in Reg Technologies Inc. Form 1977
through 1999, Mr. Robertson was President and a member of the Board of Directors
of SMR Investment Ltd. Susanne M. Robertson, Mr. Robertson's wife, owns SMR
Investment Ltd.

(3) From 1977 through 2000, Mr. Robertson was President and a member of the
Board of Directors of SMR Investment Ltd. Susanne M. Robertson, Mr. Robertson's
wife, owns SMR Investment Ltd.

     The indebtedness is unsecured and non-interest bearing.

     From April, 1998 through February, 2000, Vandeberg Johnson & Gandara, a law
firm in which James L. Vandeberg, Information Highway.com's Chief Operating
Officer and a Director, was a partner, was paid $185,956.84 for legal services.
From March 1, 2000 through August 18, 2000, Ogden Murphy Wallace, PLLC, Mr.
Vandeberg's current firm, was paid $14,520.31 for legal services.

     Mr. Robertson and Ms. Lorette could be considered promoters of Information
Highway.com. Their interests, including the details of their stock options, are
disclosed above.

     No other compensation is paid to any of our Executive Officers or
Directors. We may in the future create retirement, pension, profit sharing,
insurance and medical reimbursement plans covering our Officers and Directors.
At the present time, no such plans exist. No advances have been made or are
contemplated to any of our Officers or Directors.

ITEM 13(a).  EXHIBITS

Number    Description
------    -----------
3.1(1)    Articles of Incorporation, restated as amended on February 23, 1999
          and November 1, 1989
3.2(1)    Bylaws
4.1(1)    Specimen Share Certificate for Common Stock
4.2(1)    Form of Warrants ($1.00)
4.3(1)    Stock Option Plan
4.4(1)    Form of Stock Option Agreement
4.5(2)    Form of Warrants ($4.00 and $6.00)
4.6(3)    Form of Warrants ($3.50)
4.7(4)    Savage Warrants
4.8(5)    Form of Debenture (Senasqua Investors LLC)
4.9(5)    Warrant (Senasqua Investors LLC)
4.10(5)   Registration Rights Agreement (Senasqua Investors LLC)
4.11(5)   Securities Purchase Agreement (Senasqua Investors LLC)
<PAGE>

10.1(6)   VPOP Service Agreement between MetroNetCommunications and YesIC
          Communications
10.2(6)   Level 3 Communications Terms and Conditions for Delivery of Service
10.3(6)   ADSL Service Agreement dated August 24, 1999, by and between Bell
          Atlantic Network Integration, Inc. and Information Hightway.com, Inc.
10.4(7)   IP Equity Marketing and Financial Consulting Agreement
10.5(4)   Savage Agreement
10.6      Eezinet License Agreement - Portal
10.7(8)   Form of Debenture (Senasqua Investors LLC)
10.8(8)   Warrant (Senasqua Investors LLC)
10.9(8)   Registration Rights Agreement (Senasqua Investors LLC)
10.10(8)  Securities Purchase Agreement (Senasqua Investors LLC)
27.1      Financial Data Schedule

________________

(1)  Incorporated by reference from our registration statement on Form 10-SB
filed with the Securities and Exchange Commission on April 14, 1999.

(2)  Incorporated by reference from Amendment No. 1 to our registration
statement on Form 10-SB filed with the Securities and Exchange Commission on
October 12, 1999.

(3)  Incorporated by reference from our quarterly report on Form 10-QSB for the
quarterly period ended November 30, 1999, filed with the Securities and Exchange
Commission on January 14, 2000.

(4)  Incorporated by reference from our quarterly report on Form 10-QSB for the
quarterly period ended February 29, 2000, filed with the Securities and Exchange
Commission on April 14, 2000.

(5)  Previously filed

(6)  Incorporated by reference from our annual report on Form 10-KSB for the
fiscal year ended May 31, 1999, filed with the Securities and Exchange
Commission on October 6, 1999.

(7)  Incorporated by reference from our quarterly report on Form 10-QSB for the
quarterly period ended August 31, 1999, filed with the Securities and
Exchange Commission on October 15, 1999.

(8)  Incorporated by reference from our Form SB-2 Registration Statement filed
with the Securities and Exchange Commission on May 12, 2000.

ITEM 13(b).  REPORTS ON FORM 8-K

None.
<PAGE>

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

                                         INFORMATION HIGHWAY.COM, INC.

                                         By: /s/ John G.Robertson
                                            ------------------------
                                            John G. Robertson
                                            Its President

Dated: August 28, 2000
       ---------------

     In accordance with the Securities Exchange Act of 1934, this report has
been signed by the following persons on behalf of the Registrant and in the
capacities indicated as of August 28, 2000.

<TABLE>
<CAPTION>
Signature                             Title                               Date
---------                             -----                               ----
<S>                                   <C>                                 <C>
/s/ John G. Robertson                 President, Principal Executive      August 28, 2000
--------------------------
    John G. Robertson                 Officer


/s/ Jennifer Lorette                  Executive Vice President,           August 28, 2000
--------------------------
    Jennifer Lorette                  Secretary/Treasurer, Principal
                                      Accounting Officer and Chief
                                      Financial Officer


/s/ John G. Robertson                 Director                            August 28, 2000
--------------------------
    John G. Robertson


/s/ Jennifer Lorette                  Director                            August 28, 2000
--------------------------
    Jennifer Lorette


/s/ James L. Vandeberg                Director                            August 28, 2000
--------------------------
    James L. Vandeberg
</TABLE>