<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
                  For the fiscal year ended December 31, 2000

                                      OR

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

                        Commission file number: 0-26381

                             WATTAGE MONITOR INC.
          (Name of Small Business Issuer as Specified in Its Charter)

                   Nevada                                  86-0882633
     (State or Other Jurisdiction of                    (I.R.S. Employer
     Incorporation or Organization)                    Identification No.)

                     1100 Kietzke Lane, Reno, Nevada 89502
                   (Address of Principal Executive Offices)

                                (775) 327-6000
               (Issuer's 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, Par Value $0.01 Per Share
                               (Title of Class)

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

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in any amendment to this Form 10-KSB. [_]

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

     The registrant had revenues of $33,830 for the year ended December 31,
2000.

     On March 7, 2001, the aggregate market value of the voting stock of Wattage
Monitor Inc. held by non-affiliates of the registrant was approximately
$3,090,000 based on the average of the high bid and low asked prices of such
stock as reported by OTC Electronic Bulletin Board on such date. An affiliate
for this purpose is defined as the company's directors and executive officers
and beneficial owners of more than 5% of the company's common stock.

     The registrant had 44,396,520 shares of common stock, $.01 par value per
share, outstanding at March 7, 2001.

                  Documents Incorporated by Reference: None.
<PAGE>

                             WATTAGE MONITOR INC.
                         ANNUAL REPORT ON FORM 10-KSB

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                           ----
<S>                                                                                                        <C>
PART I....................................................................................................    3

     ITEM 1 - DESCRIPTION OF BUSINESS.....................................................................    3
     ITEM 2 - DESCRIPTION OF PROPERTY.....................................................................   13
     ITEM 3 - LEGAL PROCEEDINGS...........................................................................   14
     ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.........................................   14

PART II...................................................................................................   15
     ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS....................................   15
     ITEM 6 - PLAN OF OPERATION...........................................................................   17
     ITEM 7 - FINANCIAL STATEMENTS........................................................................   20
     ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE........   35

PART III..................................................................................................   36

     ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
              16(A) OF THE EXCHANGE ACT...................................................................   36
     ITEM 10 - EXECUTIVE COMPENSATION.....................................................................   38
     ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.............................   41
     ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............................................   43
     ITEM 13 - EXHIBITS, LIST AND REPORTS ON FORM 8-K.....................................................   43

SIGNATURES................................................................................................   44

EXHIBIT INDEX.............................................................................................   45
</TABLE>

                                       2
<PAGE>

                                    PART I

ITEM 1 - Description of Business.

Business Development.

     WattMonitor LLC, the predecessor to Wattage Monitor, was formed under the
laws of the State of Delaware on July 1, 1997. In February 1999, in anticipation
of the acquisition of WattMonitor LLC, Knowledge Networks Inc., a publicly held
corporation, changed its name to "Wattage Monitor Inc." On February 26, 1999,
Wattage Monitor Inc., a Nevada corporation, acquired WattMonitor LLC, a Delaware
company. The business of Wattage Monitor is identical to that of WattMonitor
LLC. For financial statement purposes, the transaction has been treated as a
recapitalization of WattMonitor LLC. For tax purposes, the acquisition was a
tax-free exchange of equity securities. Subsequent to the acquisition, the sole
activities of Wattage Monitor have been, and will continue to be, those
previously conducted by WattMonitor LLC. The historical activities of the
acquiring company's predecessor, Knowledge Networks, were limited to certain
immaterial software consulting contracts, all of which were completed prior to
the acquisition. Accordingly, the following discussion of our business relates
to the business previously conducted by WattMonitor LLC.

Business of Wattage Monitor.

Our Business.
-------------

     Our goal is to be the preeminent electric rate and service information and
transaction source in the competitive electricity market. We derive our revenue
principally from electricity suppliers for presenting consumers with information
about those suppliers' services and allowing consumers to order electricity from
their chosen supplier. We also expect to receive commissions on electricity
sales to consumers who order through our system, to provide electric marketing
research, industry news and information, statistical indices reflecting industry
performance and a variety of related services.

     From inception, we thought and, with the benefit of hindsight, still
believe there were three requirements necessary to prove our business model:

   .      Creation of the Wattage Monitor information system;

   .      Demonstration that consumers use the Wattage Monitor service; and

   .      Electricity supplier participation.

     With the recent enrollment of suppliers, we believe that we have
successfully demonstrated our ability to achieve each of these requirements. Now
the challenge is to scale the business as competition spreads to additional
states to capitalize on our market leading position.

     There are over 100,000,000 households in the United States using nearly $90
billion of electricity annually. Commercial consumers consume another $70
billion of electricity per year. As deregulation permits these customers to
choose a competing supplier, they require an accurate, objective source of
information to properly choose a supplier and implement that choice. Serving
that need is our primary focus. (Note: Industrial customers comprise the third
category of electric consumers. While they consume about the same volume of
electricity as their residential and commercial counterparts, they pay
approximately half as much per unit consumed. Industrial customers are not
expected to be an important market for Wattage Monitor).

                                       3
<PAGE>

     Like other industries that have deregulated, the long-term consequences of
cost plus regulation results in inexplicable variations in the cost of the
product in question, in this case electricity, to consumers. The complexity of
"fixing the rate structure" and the economic consequences of not doing so
becomes sufficiently burdensome that a political decision is made to let
competitive market influences bring economic rationality to pricing. To see just
how dramatic these discontinuities have become, the following table shows the
highest average residential and the lowest average residential rate for each
state in which consumer choice exists today:

             RANGE (in cents) OF AVERAGE RESIDENTIAL RATES PER KWH
                  States with Choice as of December 31, 2000

               STATE                  HIGH       LOW     % VARIATION
               California            14.79      5.49         169%
               Connecticut           13.22      8.01          65%
               Delaware              10.14      7.70          32%
               Maine                 22.56      5.45         314%
               Massachusetts         13.59      7.08          92%
               New Jersey            12.00      4.90         145%
               New York              23.45      2.59         805%
               Pennsylvania          13.14      4.48         193%
               Rhode Island          26.94      9.50         184%
               Virginia              12.15      4.90         148%

     Further, as over 3,000 electricity suppliers currently sell power to US
consumers, each must operate differently in a competitive business environment
or disappear. We provide impartial information to electricity consumers
regarding their service options and choices, and offer a communication channel
by which electric suppliers may reach potential customers.

     We derive our revenues principally from suppliers seeking new customers.
Such revenues result from fixed fees, transaction fees and marketing fees
(commissions), or a combination thereof. The marketing fee is designed to be
less than the equivalent cost of the advertising, direct mail, or other programs
suppliers undertake to inform and solicit potential customers. The transaction
fee results from a consumer's decision to choose a particular supplier through
our system.

     The two market considerations that create the opportunity for us to build a
national organization by offering our service are:

     .    The electric utility industry is restructuring, so that consumers have
          the ability to choose their electricity supplier; and

     .    The competition that results motivates electricity suppliers to seek
          efficient, cost-effective means to reach residential and commercial
          consumers.

     With the option of choosing their electric supplier, electric consumers
need information about their electricity options. This information may be
available from traditional sources such as advertising, general media coverage,
political discussion, and word of mouth, but there are no established
information sources assisting consumers to make an informed electric supply
choice. We believe that our service fills this void.

                                       4
<PAGE>

     The electricity market structure is particularly well suited for the
Wattage Monitor service. Its highly fragmented nature means that no electricity
supplier exercises significant market influence (see "The Electric Industry -
Fragmentation"). This, in turn, ensures that the consumer has great market
influence, as is the case with other highly fragmented markets. By determining
the needs of consumers to make their electric supplier purchase decisions, and
by meeting those needs, we believe that Wattage Monitor is positioned to become
one of the important consumer service companies in a competitive electric power
marketplace.

     The Company is structured to discern consumer needs through numerous
channels and programs: surveys, focus groups, follow-up satisfaction surveys of
the users of our system, and our ElectricEye program among others. Additionally,
the Company incorporates the suggestions of its participants, comments from
suppliers, suggestions from various regulatory commissions, the active
participation by consumer advocates and trade associations, and periodic
comprehensive service reviews by consumer marketing professionals. In doing so
it maintains an up-to-date, consumer-driven service.

The Electric Industry.
----------------------

     Overview. Over three trillion kilowatt hours are used in the United States
     --------
annually, divided roughly equally between residential, commercial and industrial
consumers. Measured by revenue, the residential and commercial segments of the
industry represent revenue approaching $180 billion annually. (Note: the
difference between commercial and industrial consumers is that industrial
customers are large-scale manufacturing concerns, while commercial users are
primarily small businesses, commercial real estate and retail enterprises). The
commercial sector acts like the residential sector and has been subjected to
regulated pricing policies similar to those of residential customers. Industrial
customers are treated differently. We anticipate, therefore, that most of our
revenue will be derived from the residential and commercial sectors.

     There are several secondary considerations that stand out as important to
the future demand for our services.

  .  Fragmentation. The electric industry is fragmented. No one company enjoys
     name recognition by more than a small percentage of customers. Even when a
     name is recognized, that recognition is concentrated in a confined
     geographic area. No company accounts for more than about 5% of total
     industry revenue. There are approximately 300 investor-owned utilities,
     which account for about three-quarters of the industry's revenue. However,
     even the largest of these are generally geographically isolated and have
     less than 5% of the national market. Unlike telephones, in the emerging
     electricity industry there are few, if any, identifiable electricity
     providers. Therefore, electric suppliers will seek to gain access to a
     large number of new customers. Being able to provide or facilitate such
     access will likely be a valuable resource to electric suppliers.

  .  Information Vacuum. The electric consumer's working knowledge of
     electricity is limited. Once customers have a choice, some are likely to
     exercise it. In many cases they will want information about more than just
     their specific choices. We plan to serve this need as well.

  .  Predictable Electric Use. The deregulation of telecommunications,
     principally telephones, has had a significant influence on consumer views.
     This may affect electricity in two ways. First, consumers are suspicious of
     a profusion of pricing schemes which, given the large number of anticipated
     new entrants, is likely to occur. Second, consumers perceive electric
     service as a network in which they may conveniently and routinely switch
     suppliers. Yet, unlike telephone usage, electricity use is consistent and
     predictable. This makes quantifying a consumer's choice

                                       5
<PAGE>

     of electric suppliers straightforward, enhancing comparison shopping while
     eliminating complexity.

Wattage Monitor's Service.
--------------------------

     Overview. Our efforts are centered around:
     ---------

  .  A residential information and transaction service;

  .  A commercial service; and

  .  Market research and information.

     All information is organized by zip code or sub-zip code. Sub-zip codes
are used if more than one regulated utility serves the area to ensure that the
information is directly relevant to each consumer.

     Competition is new to the electric industry. Most consumers and most
investors are unfamiliar with the industry and the factors that influence
competition. Accordingly, a detailed description of the electric industry and
the most common questions that arise when considering the topic for the first
time are included in this business description.

     Historically the electric industry has classified its customer base as
comprising three broad categories of consumers: industrial, commercial, and
residential. Our service is designed to meet the needs of the latter two classes
of consumers - commercial and residential. It is structured to permit suppliers
to cost effectively reach these consumer classes with their offerings. In
general, industrial customers purchase enough electricity that they enter into
individually negotiated contracts. Our information and ordering system is not
designed to facilitate such negotiations. The characteristics of our system in
the residential and commercial market segments are tailored to serve what we
have learned about the specific needs of customers in these classes.

     Residential Consumers. The residential service we offer revolves around
     ----------------------
four principles. It is simple, straightforward, comparative and complete - all
the information in one place. The regulated electricity market in most states is
not particularly simple. It typically has several different electric service
options. In highly populated areas there may be five or more such options while
in less populated areas either one or two is common. The complexity of those
rate structures are not overwhelmingly complicated, so with a little work,
simple, understandable comparisons for consumers can be fashioned. To a
significant degree, this is one role we play.

     Our site is further structured to recognize that some consumers may want
additional information, to understand the fine print of supplier offering, or to
look at their alternatives in some detail. We allow consumers to choose as much
information as they want, but do not require them to consider more than the
basic comparisons. Most consumers prefer the summary approach of our basic
service.

     Commercial Consumers. Commercial electric consumers average 5-6 times the
     ---------------------
electricity consumption of the average residential consumer. They need more
information than is provided to residential consumers. Commercial rate
structures are sufficiently complicated that it is not realistically possible to
impose on the commercial sector the simplicity we achieve in our residential
service. Furthermore, residential consumers tend to be fairly homogenous in
their electricity consumption pattern, while commercial enterprises represent
great variances in needs. Commercial accounts may operate

                                       6
<PAGE>

twenty-four hours a day, seven days a week, or just Monday through Friday, from
9 to 5, representing significantly different user profiles and requirements.

     A second differentiating characteristic of commercial businesses is that
the electricity purchasing decision is often made by a purchasing professional.
Our research indicates that commercial consumers' greatest need is a relatively
straightforward basis to understand their competitive attractiveness (or lack
thereof) as an electricity consumer. Unlike virtually everything else they buy,
they have not developed an ability to calibrate their importance as an
electricity consumer. While our commercial system cannot deliver simplicity
because the market is not simple, it can deliver concise information to assist
the commercial decision-maker in quickly becoming an informed consumer. We can
also assist suppliers in approaching commercial consumers with the specific
consumption patterns and volumes they most desire.

     Additional Features. Our service is designed to include an expanding
     --------------------
variety of features to allow consumers additional flexibility in analyzing their
supplier options. One such feature, the "Wattage Monitor Analyzer", allows
consumers to determine the monthly cost and/or savings of an offer. That
information can be estimated superficially (by knowing about how much was paid
for electricity last month) or in greater detail by considering historical
consumption information that the consumer provides.

     Access. Our services are available both through a toll-free telephone
     -------
service (1-888-WATTAGE) and through the Internet at www.wattagemonitor.com. The
Wattage Monitor service is free to consumers.

     Research and Information. We have accumulated an information database which
     -------------------------
has several unique and valuable characteristics. The first is that our
information is relatively independent of today's high profile privacy concerns.
The information is primarily about facilities, homes, offices and buildings, not
about individuals. Second, our database is stable because it is based on
location. If the homeowner moves, a business relocates or a tenant changes
addresses, the value of our information is unaffected. Typically, such changes
lead to a loss in a database's value because it is about the person rather than
the location. Therefore, the nature of our service allows us to register a
particular location, provide our service to current and future occupants
thereof, amass location specific information and facilitate the choice of an
electric supplier by subsequent occupants.

     With such information we intend to become a leading provider of analytical
information. We provide research on a fee basis, publish industry indices, and
distribute a newsletter. The focus of this information is on competition,
pricing, competitive trends and consumer behavior. In conjunction with our
activities to insure we meet the needs of electric consumers (such as those
noted above) and through the use of our service by consumers to choose an
electricity supplier, we believe we know as much or more about consumer
participation in the competitive electric market than any other entity. As a
brand building exercise within the electric power industry, and as a service to
the public, the print media, industry policy makers and other interested
parties, we periodically publish summaries of this information. This is a core
activity for our Service and Research Practice. We believe that such activities,
along with our direct marketing and public relations efforts, have helped make
us the preeminent information source we are today.

     Web Site Partnerships. Wattage Monitor offers a data stream and transaction
capability to other web sites which want to provide electric pricing information
and purchasing capability to their visitors. Through a combination of
proprietary technology and industry-leading aggregation of commercial and
residential electric utility pricing information, other web sites, Internet
portals and information services can access fast, accurate, and complete
information regarding the electric energy market place. In essence, we give
other web properties the ability to compete with Wattage Monitor's core offering
under the heading of their own brand. These sites are therefore afforded the
ability to deliver another service to their visitors without having those
visitors leave their property. These services are expected to be

                                       7
<PAGE>

increasingly valuable as the competitive electric market expands nationally, as
consumers become increasingly aware that they may choose an electric supplier,
and as a growing number of portals and web community sites conclude that they
should make such information available to their best customers. By providing
this information and transaction capability through multiple portals, competing
electric suppliers can access the widest possible range of Internet purchasing
consumers through their relationship with us. In these transactions, Wattage
Monitor shares revenue with the "host" web site.

     In the evolution of these partnerships, certain categories of consumers
have been identified who are more likely to be interested in choosing a new
electric supplier than others. These categories of consumers tend to use
products and services associated with the home such as financial services
offered by banks and insurance companies, particularly mortgage related
products, realtors, moving services, house and home sites, etc. Partnerships
with these naturally complementary sites are the focus of our attention in
completing these partnerships.

     In addition, governmental or the not-for-profit consumer advocate web sites
have found that facilitating access to the Wattage Monitor information system
for their visitors is consistent with their objectives and service. Accordingly
the majority of them, in locations where consumers may choose their electric
supplier, have chosen to link their sites to Wattage Monitor. In one recent
example, The Ohio Consumer Counsel licensed access to our database and retained
us to create several specialty information screens for their users. If an Ohio
resident, accessing that site, concludes they would like to use an electric
supplier identified therein, they may execute that choice by a link to the
Wattage Monitor site.

     The Wattage Monitor System. Our information system is designed to integrate
     ---------------------------
a data management and electronic commerce search engine to create an efficient
electric choice information system. The system was designed to create
recognizable brands and convey objectivity, simplicity, increased levels of
sophistication when necessary, and consumer orientation. The data management
capability of our information system maintains numeric data, including zip codes
and prices.

     Wattage Monitor v3.0, the current version of the system released in January
2001, provides greater transaction flexibility and more efficient implementation
of web site partnering and data-exchange opportunities, and services all 50
states.

     Operational Experience. While not the first state to allow its citizens to
     -----------------------
choose an electric supplier, Pennsylvania was the first state to do so in a
manner which allowed consumers significant savings. Accordingly, the first
commercial release of our information system occurred in Pennsylvania on October
19, 1998. While there has been experience gained with our system elsewhere, much
of its use to date is by residents of Pennsylvania, as the state remains the
purest de-regulated market in the US.

     Upon the deregulation of the electric industry in Pennsylvania, about
375,000 households switched suppliers in the first several months that they were
given a choice. Based on traffic to our system, the total switching figure
implies that nearly 15% of those who switched used our system. We consider this
response to be positive. Active marketing by suppliers to consumers in
Pennsylvania did not develop until late in 1998. In our first week, 10,000
consumers used the service. Over 50,000 Pennsylvania electricity shoppers used
our information system in the first three months.

Implementation.
---------------

     Consumer Awareness. We have tested various methods to inform electric
     -------------------
consumers of our existence by using billboards, drive time radio, links to other
web sites and public relations. The most

                                       8
<PAGE>

cost-effective of these methods has been editorial placements gained through PR
efforts, mostly in print media, particularly newspapers. More than 50 major
print articles have been written about our service.

     We also intend to reach consumers through our partnerships with other web
sites. Because choosing an electric supplier is not an every day activity,
portals have been receptive to discussions about offering a co-branded or site-
branded (i.e. Electric Center) Wattage Monitor option for their visitors.

     Billboards and radio, while somewhat effective, have proven to be less
useful than newspapers in informing consumers of our service. Consumer awareness
and use of our system is also dependent upon the advertising programs of
suppliers. The more frequently suppliers approach consumers, the greater the
demand for the comparative information available from our system. Accordingly,
use of our system is dependent upon the active, independent marketing efforts of
suppliers.

     Finally, we actively solicit commercial customers to use our system.
Informing commercial customers of our service involves out-bound telephone calls
in addition to the awareness programs described above. No such calls are made to
residential consumers. We cannot be certain that making consumers aware of our
service will not be more costly or take longer than is currently anticipated.

     Consumer Acceptance. As noted, early consumer acceptance of our services in
     --------------------
Pennsylvania was quite good. Our follow-up surveys of customer response have
shown the following:

  .  High levels of satisfaction with our service;

  .  Great confusion about the process and consequences of switching suppliers;

  .  A lack of information about how electricity is supplied and how competition
     is possible;

  .  Reluctance to tackle the complexities of choosing a supplier, unfamiliar
     terms, unfamiliar suppliers, complicated rate structures and offers; and

  .  Overwhelming support for competition as a "good thing."

     The rate at which consumers become familiar and comfortable with
competition in the electric market will determine when they are willing to
choose a supplier. This may determine when consumers decide to use our system.
At this point, there can be no assurance as to the rate of acceptance of our
service by consumers.

     Our system has found supportive audiences among trade associations,
community-based organizations, church groups and similar associations. It is
anticipated that such groups will help create demand for our service and
influence suppliers to participate.

     Supplier Awareness. Supplier participation has been gained through direct
     -------------------
marketing efforts undertaken by the company. These efforts are the
responsibility of our direct sales force. We have found suppliers initially
reluctant to contract with us for our services.

     Before we could generate revenue, we had to overcome suppliers' reluctance
to participate in our information system. Initially, we expected that creating a
national electricity information brand would require us to:

  .  Create the Wattage Monitor information system;

  .  Demonstrate that consumers use the Wattage Monitor service; and

                                       9
<PAGE>

  .  Gain electricity supplier participation.

     We believe we demonstrated our ability to successfully achieve the first
two of these success criteria within the first 18 months following the
establishment of Wattage Monitor. However, it proved more difficult to convince
suppliers to participate. There are a number of factors we believe affect an
electric supplier's participation in our service. Four of the most important
are:

  .  Market Immaturity-- When states decide to create competition in their
     electricity industry it generally requires legislation to do so. After
     adopting that legislation, the specific structure of the market and the
     requirements for participating in it evolve through hearings and
     implementing regulations issued by the various state Public Utility
     Commissions. That process is not complete even today even in states that
     originally enacted legislation two or three years ago. Such a process makes
     it difficult for suppliers to compete for customers when the market is
     first open, as the exact rules of engagement are not yet established. The
     end result, using as an example Pennsylvania, which opened its markets in
     early 1999, was that nearly eighty companies obtained licenses but only
     about thirty have, as yet, sought customers. Many of these thirty who are
     competing are essentially test marketing a product or approach while they
     wait for the market to come further into focus. In such an environment, the
     need for our service only arises once the supplier decides to proceed full
     speed ahead.

  .  Consumer Behavior -- While a hundred million households and fifteen million
     businesses use electricity, virtually none have ever chosen their electric
     supplier. There is no confidence about how such customers will make those
     choices. Since we represent a novel distribution channel in the mind of a
     supplier, there is added risk to enrolling with us before we demonstrate
     our effectiveness. Most suppliers choose to begin their marketing efforts
     using traditional marketing channels only.

  .  Organizational Immaturity -- All competing suppliers, including those (more
     than half) that are subsidiaries of very large enterprises, are
     nevertheless newly created. This "start-up" nature of all companies in this
     market means virtually every one of them was conceived by its founders
     and/or its parent to succeed by taking a certain approach. An organization
     was created to implement this approach. Necessarily, we were not part of
     those plans because we did not exist. Most suppliers conclude they need to
     try their originally adopted approach before they either (a) change
     directions or (b) add a second approach, such as the service we offer.

  .  Our Credibility -- Until we launched in Pennsylvania we could demonstrate
     our system for suppliers but we had no track record and no live consumer
     experience. Given the above noted market conditions, suppliers were
     reluctant to use our service until we demonstrated our operational
     existence and effectiveness. Although this reluctance is disappearing, our
     marketing efforts to suppliers have proven to be more difficult than
     originally anticipated.

     In spite of this initial reluctance on the part of suppliers to participate
in the Wattage Monitor system, our strategy was to show that consumers found our
system useful and used it. Having demonstrated such, along with our continued
ability to offer our service, we believed that the fragmented nature of this
industry would eventually result in one or more of the suppliers deciding to
participate in the Wattage Monitor system. We further believe that once our
supplier had done so that it would receive a disproportionately greater number
of new customers. Seeing that occur would, in turn, encourage the remaining
suppliers to participate in the Wattage Monitor system.

                                       10
<PAGE>

         While the timing was not exactly that which we had originally
anticipated, the overall evolution of supplier participation in our system
occurred as and for the reasons we originally expected. In February 2000, the
first four suppliers agreed to transact orders through our system. Within a
month this had grown into ten, then quickly expanded to nearly thirty
participating suppliers which represents the status of supplier participation at
the end of 2000. The following table sets forth, for regulated utility
territories with four or more competitive offers, the participating suppliers as
of the date hereof, states in which they compete for customers and the share of
competitive market offers they represent (participating suppliers' offerings
compared to the total of all competing market offers, i.e. our market share):

                                WM Market Share

<TABLE>
<CAPTION>
Regulated Utility Territory                 State       Suppliers           WM %            Offers            WM %
------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>         <C>                 <C>             <C>               <C>
 Pacific Gas & Electric                      CA            11               45%              14               50%
 San Diego Gas & Electric                    CA            10               50%              13               54%
 Southern California Edison                  CA            11               45%              13               46%
------------------------------------------------------------------------------------------------------------------------
                                                  California Average:       47%                               50%
------------------------------------------------------------------------------------------------------------------------
 Conectiv                                    NJ             6               67%               9               78%
 GPU/Jersey Central                          NJ             4               75%               6               83%
 PSEG                                        NJ             6               83%               9               89%
------------------------------------------------------------------------------------------------------------------------
                                                  New Jersey Average:       75%                               83%
------------------------------------------------------------------------------------------------------------------------
 ConEd (NY)                                  NY             5               80%               5               80%
 ConEd (Westchester)                         NY             4               75%               4               75%
------------------------------------------------------------------------------------------------------------------------
                                                  New York Average:         77%                               79%
------------------------------------------------------------------------------------------------------------------------
 Allegheny                                   PA             2              100%               4              100%
 DQE                                         PA             6               67%               8               75%
 MetEd                                       PA             8               75%              10               80%
 PenElec                                     PA             8               75%              10               80%
 PECO                                        PA            18               67%              22               68%
 Penn Power                                  PA             7               71%               9               78%
 PP&L                                        PA             8               63%              10               70%
 UGI                                         PA             3               67%               5               80%
------------------------------------------------------------------------------------------------------------------------
                                                Pennsylvania Average:       73%                               79%
------------------------------------------------------------------------------------------------------------------------
</TABLE>

         While we believe adding additional suppliers could be accomplished with
relatively less effort than it took to achieve our current level of supplier
participation, our marketing and other resources are currently devoted to
developing the procedures, automating the processes, implementing electronic
switching, and otherwise developing and maturing the relationship with these
newly existing participating suppliers. Furthermore, the Company's current
efforts with consumers involve redirecting their use of our site from
essentially an information source to one where they execute their choice of a
new supplier. These efforts, particularly the automation of such processes,
including the electronic compliance with the variations in state mandated
procedures and information requirements, currently involve substantially all our
IT resources.

         The Company believes that over time, by providing this service and
being ever better and more efficient at staying abreast of and automating the
detailed switching rules, we can build up a competitive advantage as the
preferred service implementing switching. That service can be offered only to
suppliers

                                       11
<PAGE>

who subscribe to the WM system, or offered separately for a fee to all electric
suppliers.

                             State-by-State Status

         Overview. The following tables summarize the status of state efforts to
         --------
allow consumers a choice of electric suppliers.

<TABLE>
<CAPTION>
                                                                  Number     Residential    Commercial
                                                                    of        Electric       Electric
Current Status                                                    States      Consumers     Consumers
--------------------------------------------------------------------------------------------------------
                                                                             (millions)     (millions)
<S>                                                               <C>        <C>            <C>
Enacted Legislation.......................................          24           65             8
Pending Legislation.......................................           5            7             1
Policy Development........................................          14           24             3
No Substantial Activity...................................           7           11             1
                                                               -----------------------------------------
                                                                    50          107            13
</TABLE>

         Other Considerations. Many states are actively in the process of
         --------------------
adopting competition for their electric industry. However, the timing of
competition is not the only factor in determining how, and to what degree,
demand for our information system will evolve. Demand for our service stems as
much from how competition is introduced as when it is introduced. States are
enacting legislation well in advance of implementing competition. While such
legislation typically sets a timetable for competition, it may also establish
specific requirements of how competition is to be phased in. For instance,
Pennsylvania adopted regulations that meant consumers could realize immediate
savings. By contrast, California structured the phase-in of competition in a
manner that did not permit consumers such savings. By 2004, a California
consumer may see savings considerably greater than those available in
Pennsylvania. Accordingly, the demand for our service will be determined by the
timing of competition that individual states adopt as well as by how it is
phased in. There can be no assurance that the state-by-state phase-in plans will
be sufficiently timely or competitive to allow demand for our service to
develop.

Competitive Environment.
-----------------------

         Since our inception in 1997, numerous (20+) companies, most news
services and a wide range of governmental entities have provided a variety of
information about the deregulating electric industry to consumers. Some of that
information may include rate and service information. However, none of those
have exactly our approach to the market and/or offer the service we provide. For
instance, we believe we are the only company to directly sign up and switch
electric suppliers when consumers request us to do so. To the best of our
knowledge, all other companies who profess to offer this type of service refer,
usually via email, customers to an identified supplier rather than provide
direct switching functionality.

         In comparing our activities only to companies who are arguably similar
in approach to ours, only eight of them remain active of which only four provide
services that are national in scope and only one, Energyguide.com, is currently
actively competitive with us in several situations. However, as an internet
business, we are subject to the internet's rapidly changing business
environment, technology, and standards. Further, the internet, particularly for
information and shopping services such as the one we offer, is also subject to
rapid new product and service introductions.

                                       12
<PAGE>

Proprietary Intellectual Property.
---------------------------------

         We have applied to the United States Patent and Trademark Office for
registration of several trademarks, logos and icons including "WM", "Wattage
Monitor," "Kilowatt Monitor", "WattMonitor," and "ElectricEye." Others are
currently pending. We have received certificates of registration for "Wattage
Monitor", "ElectricEye" and the Wattage Monitor logos.

         We have also applied for a patent relating to our computer-based system
and methods for collecting and providing information regarding the electric
power industry and available electric supply options. No action has been taken,
nor comments received, on the patent application, which was filed on November
11, 1998. No assurances can be given when or if our patent application will be
approved.

Employees.
---------

     As of March 7, 2001, we employed 36 people. We believe that our relations
with our employees are good.

Insurance.
---------

     We maintain property and liability coverage with various insurers. We
believe that such coverage is adequate for our needs and customary for
information service companies of comparable size and maturity.

Reports to Security Holders.

         We will file reports, proxy statements and other information with the
Securities and Exchange Commission. Such reports (generally Forms 10-QSB, 10-KSB
and 8-K), proxy statements and other information can be inspected and copied, at
the Public Reference Room of the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at the Northeast Regional Office of
the Commission located at Seven World Trade Center, Suite 1300, New York, New
York 10048 and at the Midwest Regional Office of the Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Please call the Commission at 1-800-SEC-0330 for further information
on the public reference rooms. Our Commission filings will also be available to
the public from the Commission's web site at http://www.sec.gov.

ITEM 2 - Description of Property.

     We maintain offices in several locations, including:

     .   San Rafael, California (month-to-month rental, expires April 6, 2001)
         1348 Fourth Street, Suite 210
         San Rafael, CA 94901

     .   San Rafael, California (this lease begins on March 15, 2001 and expires
         on March 31, 2004)
         711 Grand Avenue, Suite 210
         San Rafael, CA 94902

     .   Reno, Nevada (this lease expires on April 14, 2001)
         1100 Kietzke Lane
         Reno, NV  89502

                                       13
<PAGE>

     .   Reno, Nevada (this lease begins on April 1, 2001 and expires on March
         31, 2004)
         1475 Terminal Way, #B
         Reno, NV 89502

     .   Washington, D.C. (month-to-month rental)
         1401 New York Avenue NW, Suite 600
         Washington, DC  20005

     .   Dallas, Texas (this lease expires on March 31, 2003)
         3131 McKinney Avenue, #L10
         Dallas, TX  75204

         Our offices cover an aggregate of approximately 11,700 square feet. As
of the date of this filing, required annual lease payments are: $215,400 for
2001, $259,700 for 2002, $210,000 for 2003 and $47,800 for 2004. In addition, we
have offices provided by our employees in Boston, Massachusetts; Helena,
Montana; and Las Vegas, Nevada. No additional lease expenses are required under
these arrangements with our employees.

ITEM 3 - Legal Proceedings.

         Not applicable.


ITEM 4 - Submission of Matters to a Vote of Security Holders.

         On December 27, 2000, the Company mailed proxy statements with ballots
to its stockholders of record on December 22, 2000.

         The stockholders approved an amendment to the Amended and Restated
Articles of Incorporation to increase the total number of shares of Common Stock
that the Company shall have the ability to issue by twenty-five million to
seventy-five million shares. The following consents were received as of December
31, 2000 when the Certificate of Amendment was filed with the Nevada Secretary
of State.

<TABLE>
<CAPTION>
               Approve          % Approve       Disapprove       % Disapprove        Abstain          % Abstain
               -------          ---------       ----------       ------------        -------          ---------
              <S>               <C>             <C>              <C>                 <C>              <C>
              9,022,166          56.23%              -                 -                -                 -
</TABLE>

         The stockholders also approved an amendment to the 1999 Incentive
Compensation Plan to increase the number of shares of Common Stock authorized
and available for issuance thereunder from 2,500,000 to 8,989,980. Set forth
below is the results of the vote to amend the 1999 Incentive Compensation Plan.

<TABLE>
<CAPTION>
               Approve          % Approve       Disapprove       % Disapprove        Abstain          % Abstain
               -------          ---------       ----------       ------------        -------          ---------
              <S>               <C>             <C>              <C>                 <C>              <C>
              9,022,166          56.23%              -                 -                -                 -
</TABLE>

                                       14
<PAGE>

                                    PART II

ITEM 5 - Market for Common Equity and Related Stockholder Matters.

         Our common stock is currently quoted on the OTC Electronic Bulletin
Board under the symbol "WMON." There was no active market for Wattage Monitor's
securities until February 26, 1999. Prior to the reverse acquisition of
WattMonitor LLC by Wattage Monitor, Wattage Monitor was listed on the OTC
Electronic Bulletin Board from February 18, 1999 through February 25, 1999.

         The following table sets forth for the periods indicated the high and
low bid price information for the common stock as quoted on the OTC Electronic
Bulletin Board. The quotations reflect inter-dealer prices, without retail
mark-ups, mark-downs or commissions, and may not represent actual transactions.

<TABLE>
<CAPTION>
                                                                              Common Stock
                                                              --------------------------------------------
                                                                   High Bid                   Low Bid
                                                              ------------------        ------------------
     <S>                                                      <C>                       <C>
     February 26, 1999 through March 31, 1999.............          $ 7.25                    $ 4.00
     April 1, 1999 through June 30, 1999..................          $16.00                    $ 5.50
     July 1, 1999 through September 30, 1999..............          $ 6.75                    $ 2.40
     October 1, 1999 through December 31, 1999............          $ 4.56                    $ 1.03
     January 1, 2000 through March 31, 2000...............          $ 4.00                    $ 1.38
     April 1, 2000 through June 30, 2000..................          $ 2.94                    $ 0.38
     July 1, 2000 through September 30, 2000..............          $ 2.44                    $ 0.91
     October 1, 2000 through December 31, 2000............          $ 1.75                    $ 0.52
</TABLE>

         On March 7, 2001, the closing bid price as quoted by the OTC Electronic
Bulletin Board for our common stock was $0.31. As of March 7, 2001, there were
70 holders of record of our common stock.

         There is no public trading market for any of our preferred stock,
warrants or options.

         We have never declared or paid cash dividends on our common stock. We
presently intend to retain any earnings for use in the business and do not
anticipate paying cash dividends in the foreseeable future. Any future cash
dividends will be at the discretion of the board of directors and will depend on
our earnings, financial condition, cash flows, capital requirements and other
considerations that the board of directors may consider relevant.

         On January 18, 1999, Wattage Monitor issued 980,000 shares of our
common stock. We raised $9,800 from that offering, which was made under Rule 506
of Regulation D, promulgated under the Securities Act of 1933, as a non-public
offering solely to accredited investors.

         On February 5, 1999, Wattage Monitor entered into a Stock Purchase
Agreement in connection with the purchase of 2,750,000 shares of our common
stock. We raised $1,000,000 under the agreement, which was made under Rule 504
of Regulation D, promulgated under the Securities Act of 1933, as a non-public
offering solely to accredited investors.

         On February 24, 1999, Wattage Monitor completed an offering of
1,000,000 units, consisting of one share of our Series A preferred stock and one
warrant to purchase our Series B preferred stock at a price of $1.00 per share.
We raised $3,000,000 from that offering, which was made pursuant to Rule 506 of
Regulation D, promulgated under the Securities Act of 1933, as a non-public
offering solely to accredited investors. In addition, we received $3,500,000
from the full exercise of the warrants between

                                       15
<PAGE>

September 23, 1999 and November 10, 1999 for a total of $6,500,000. In exchange
we issued Preferred Stock convertible into 3,500,000 shares of common stock for
a total of 4,500,000 shares issued. The weighted average price of the underlying
common stock issued is $1.44 ($6,500,000 divided by 4,500,000).

         On February 26, 1999, we completed a reverse acquisition of WattMonitor
LLC. In connection with the merger, we converted all of the outstanding
membership interests in WattMonitor LLC into an aggregate of 7,550,450 shares of
our common stock. On February 26, 1999, we issued an additional 50,000 shares of
our common stock to Jonathan Cohen, an accredited investor. We received $50,000
as a result of the issuance. In connection with these transactions, we relied on
the statutory exemption provided by Section 4(2) of the Securities Act of 1933,
because the issuances did not involve public offerings. In addition, each
member, other than the controlling members, was entitled to acquire such number
of shares of our common stock at $1.00 per share as necessary to maintain the
same ownership percentage in Wattage Monitor as such members held in WattMonitor
LLC. In connection with this right, between February 26, 1999 and March 31,
1999, 657,366 shares of our common stock were issued to our existing
shareholders. In connection with these transactions, we relied on the statutory
exemption provided by Section 4(2) of the Securities Act of 1933, because these
issuances did not involve public offerings.

         In connection with the reverse acquisition, all of our employees
exchanged their contingent membership interests for stock options, exercisable
at $1.00 per share, totaling 918,000 shares of our common stock. In connection
with these transactions, we relied on the statutory exemption provided by
Section 4(2) of the Securities Act of 1933, because these issuances did not
involve public offerings.

         On May 29, 1999, Anne Alderson, an employee, exercised 150 options
issued pursuant to our 1999 Incentive Compensation Plan at $1.00 per share. In
connection with this transaction, we relied upon the statutory exemption
provided by Section 4(2) of the Securities Act of 1933, because this issuance
did not involve a public offering.

         On July 12, 1999, we issued a warrant to Camhy Karlinsky & Stein LLP
exercisable through July 11, 2009, to purchase 7,000 shares of our common stock
at an exercise price of $6.00 per share. The warrant was exercisable
immediately. In connection with this transaction, we relied upon the statutory
exemption provided by Section 4(2) of the Securities Act of 1933, because this
issuance did not involve a public offering.

         On September 14, 1999, we issued 4,500 shares of our common stock to
Michael Benzian, one of our employees, as a result of the exercise of an option
to purchase such shares for an aggregate amount of $4,500. In connection with
this transaction we relied on the statutory exemption provided by Section 4(2)
of the Securities Act of 1933, because this issuance did not involve a public
offering.

         Between September 23, 1999 and November 10, 1999, Valiant Growth Fund,
Orion Projects Limited, Delta Realty Limited, Bennett Finance Limited, Westin
Machineries Pension S.A. and Liegemen, S.A. exercised their warrants to purchase
an aggregate of 3,500,000 shares of Series B preferred stock for an aggregate
purchase price of $3,500,000. In connection with these transactions, we relied
upon the statutory exemption provided by Section 4(2) of the Securities Act of
1933, because these issuances did not involve public offerings.

         Between September 23, 1999 and November 10, 1999, we issued 1,000,000
shares of our common stock upon the automatic conversion of 1,000,000 shares of
our Series A preferred stock, which occurred as a result of the exercise of our
warrants. In connection with this transaction, we relied upon

                                       16
<PAGE>

the statutory exemption provided by Section 4(2) of the Securities Act of 1933,
because these issuances did not involve public offerings.

         On October 1, 1999, we issued to ThorGroup Ventures an option to
purchase 40,000 shares of our common stock at an exercise price of $3.00 per
share. Of these options, 10,000 are exercisable immediately. In connection with
this transaction, we relied upon the statutory exemption provided by Section
4(2) of the Securities Act of 1933, because this issuance did not involve a
public offering.

         On October 15, 1999, we issued a warrant to BlueGarni & Company,
exercisable through October 14, 2009, to purchase 6,500 shares of our common
stock at an exercise price of $6.00 per share. The warrant is exercisable at any
time. BlueGarni & Company has assisted in the recruitment of our management
personnel. In connection with this transaction, we relied upon the statutory
exemption provided by Section 4(2) of the Securities Act of 1933, because this
issuance did not involve a public offering.

         Between October 20, 1999 and November 10, 1999, John D. Westfield, an
employee, exercised 9,000 options issued pursuant to our 1999 Incentive
Compensation Plan at $1.00 per share. In connection with this transaction, we
relied upon the statutory exemption provided by Section 4(2) of the Securities
Act of 1933, because this issuance did not involve a public offering.

         On January 6, 2000, Bennett Finance Limited, Westin Machineries Pension
S.A. and Liegemen, S.A. converted an aggregate of 875,000 shares of Series B
preferred stock to 875,000 shares of common stock. In connection with this
transaction, we relied upon the statutory exemption provided by Section 4(2) of
the Securities Act of 1933, because this issuance did not involve a public
offering.

         On November 22, 2000, Valiant Growth Fund, Orion Projects Limited and
Delta Realty Limited converted an aggregate of 2,625,000 shares of Series B
preferred stock to 2,625,000 shares of common stock. In connection with this
transaction, we relied upon the statutory exemption provided by Section 4(2) of
the Securities Act of 1933, because this issuance did not involve a public
offering.

         On December 22, 2000, Wattage Monitor entered into a Stock Purchase
Agreement in connection with the purchase of 2,750,000 shares of our common
stock. We received cash in the amount of $27,500 and executed promissory notes
in the aggregate amount of $720,500 under the agreement, which was made under
Rule 504 of Regulation D, promulgated under the Securities Act of 1933 as a
non-public offering solely to accredited investors.

         On November 28, 2000, Wattage Monitor entered into a Stock Purchase
Agreement in connection with the purchase of 25,600,000 shares of our common
stock. Under the terms of the Stock Purchase Agreement, Wattage Monitor was
required to deliver shares covered by an effective registration statement on the
closing date.  In accordance with the terms of such agreement, on December 28,
2000 we received capital in the amount of $6,963,200 and delivered shares
registered under the Securities Act of 1933, as amended.

ITEM 6 - Plan of Operation.

         As of March 7, 2001, we had approximately $4,511,400 of cash in our
accounts. At today's expenditure levels, that will carry us into 2002, assuming
nominal revenue. We do, however expect to materially increase our revenue in
2001.

         Our goal is to be the preeminent electricity information and switching
transaction service in the competitive electricity market. We derive our revenue
principally from electricity suppliers for presenting consumers with information
about electric rates and allowing consumers to order electricity

                                       17
<PAGE>

from their chosen supplier. We also make our industry leading electricity news
and information available to partner web sites via a data-feed, and expect to
share the sales commissions and any advertising revenue these partner sites
generate. Finally, we provide electric market research, a newsletter and
consumer surveys on a fee and subscription basis to electric utilities and
others interested in this industry. We began to generate revenue during the
first quarter of 2000, and although revenue grew in the second, third and fourth
quarters of 2000, the total revenue generated during the year ended December 31,
2000 was not significant.

         Our success enrolling suppliers in the first half of 2000 demonstrated
that we can achieve the three criteria we initially established as necessary to
prove our business model:

         1.  Creation of the Wattage Monitor information system;
         2.  Demonstration that consumers use the Wattage Monitor service; and
         3.  Electricity supplier participation.

         Our task now becomes to scale our business as competition spreads to
additional states to capitalize on our market leading position. The first step
in that process has been to secure and maintain a strong market share of
participating suppliers in each of the regulated utility territories in each of
the states with active competition. At the end of 2000, our market share -
defined as the percentage of competing suppliers in a territory that are
actively participating in our system - was greater than 46% in all cases, as
much as 100% in some cases, and averaged approximately 74%.

         While establishing and maintaining market share remains an on-going
focus, the natural next step in scaling our business is to generate switching
activity through our service, thereby growing our principal revenue stream.
Leveraging our relationships with competitive suppliers, we executed several
market-specific initiatives in the 2nd half of 2000. With the majority of our
activities implemented in the volatile San Diego, California market, we executed
1,246 revenue generating transactions (both orders and lead referrals) in the
last half of 2000.

Plan of Operation

         We expect monthly expenditures during the next year to begin at roughly
$400,000-$450,000 and to increase ratably with our increase in revenue over the
period. Any increase is expected to be primarily in the form of additional
staffing and marketing efforts. For the year ended December 31, 2000, monthly
expenditures averaged approximately $401,000. After adjusting to include
capitalized payroll-related development costs and exclude
depreciation/amortization and financing-related costs, our monthly expenditures
averaged approximately $365,000 for the year just ended. Current monthly
expenditures (as adjusted) are approximately $117,000 for system development,
$64,000 for marketing to suppliers, $82,000 for operations, and $138,000 for
general and administrative expenses. Of these amounts approximately $83,000,
$41,000, $34,000 and $23,000, respectively, are for salaries of our employees.

         We expect to operate for the next twelve months principally as follows:

         .  To maintain current information about electric rates and services in
            all states with active competition among suppliers.

         .  To offer Internet access and telephone service through our 1-888-
            WATTAGE toll free number for the entire year, the cost of which is
            included in the monthly expenditures discussed above.

                                       18
<PAGE>

         .  To implement market-specific initiatives (including local programs
            affecting a single city, locality or regulated utility service
            territory) and consumer-segment-specific initiatives to increase
            switching activity through our service.

         .  To realize increasing revenue from offering our service.

         .  To continue to actively market our service to suppliers through our
            direct sales force.

         .  To maintain our current co-branding "Powered by WM" relationships
            and to continue to actively pursue new "Powered by WM" opportunities
            to both increase the exposure of our service and increase revenue.

         .  To further expand and refine our information system, WM v3.0, to
            provide greater transaction flexibility and more efficient
            implementation of web site partnering and data-exchange
            opportunities.

         .  To redesign the commercial customer path of our information system
            to provide a more sophisticated infomediary service/tool to
            commercial customers and suppliers, thereby increasing higher
            revenue switching transactions.

         .  To further market our commercial service by leveraging our Preferred
            Supplier status with PurchasePro, a leading enabler of business-to-
            business e-commerce for companies of all sizes.

         .  In sum, we expect to scale our business to capitalize on our market
            leading position and establish a growing and increasingly
            predictable revenue stream.

                                       19
<PAGE>

ITEM 7 - Financial Statements.

Report of Independent Certified Public Accountants
--------------------------------------------------

Board of Directors
Wattage Monitor Inc.

We have audited the accompanying balance sheet of Wattage Monitor Inc. (a
development stage company) as of December 31, 2000, and the related statements
of operations, stockholders' equity (deficit), and cash flows for the period
from inception (July 1, 1997) through December 31, 2000 and for the years ended
December 31, 1999 and 2000. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wattage Monitor Inc. as of
December 31, 2000, and the results of its operations and its cash flows for the
period from inception (July 1, 1997) through December 31, 2000 and for the years
ended December 31, 1999 and 2000 in conformity with accounting principles
generally accepted in the United States of America.

Grant Thornton LLP

Reno, Nevada
February 1, 2001

                                       20
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                                 BALANCE SHEET

                               December 31, 2000

                                    ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                      $  5,849,057
    Accounts receivable                                                  21,502
    Prepaid expenses                                                     58,559
                                                                   ------------
             Total current assets                                     5,929,118
                                                                   ------------

PROPERTY AND EQUIPMENT, net                                           1,066,719
                                                                   ------------

OTHER ASSETS

    Software licenses                                                    11,250
    Patents and trademarks                                               40,482
    Deposits                                                             16,262
                                                                   ------------
             Total other assets                                          67,994
                                                                   ------------

                                                                   $  7,063,831
                                                                   ============

                    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                               $    765,315
    Accrued liabilities                                                  78,235
    Accrued interest                                                      8,124
                                                                   ------------
             Total current liabilities                                  851,674
                                                                   ------------

COMMITMENTS                                                                  --
                                                                   ------------

STOCKHOLDERS' EQUITY
    Preferred stock, Series B, convertible; $0.01 par value,
        5,000,000 shares authorized, no shares
        issued and outstanding                                               --
    Common stock, $0.01 par value, 75,000,000 shares
        authorized, 44,396,520 shares issued and
        outstanding                                                     443,966
    Additional paid-in capital                                       18,783,761
    Note receivable issued for common stock                            (720,500)
    Deficit accumulated during the development stage                (12,295,070)
                                                                   ------------
        Total stockholders' equity                                    6,212,157
                                                                   ------------

                                                                   $  7,063,831
                                                                   ============

        The accompanying notes are an integral part of this statement.

                                       21
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                           STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                                     Cumulative
                                                                                                   from Inception
                                                       Year Ended December 31,                    (July 1, 1997) to
                                                   1999                       2000                December 31, 2000
                                            ------------------         -----------------         ------------------
<S>                                         <C>                        <C>                       <C>
Revenue                                     $                -         $          33,830         $           33,830

Operating expenses

     Telecommunications                     $          781,430         $         794,640         $        1,925,316
     System development                                688,412                   927,004                  2,073,409
     Marketing                                         675,360                   864,379                  2,002,203
     General and administrative                      1,362,638                 1,820,641                  4,143,769
     Depreciation and amortization                     164,692                   341,257                    535,501
                                            ------------------         -----------------         ------------------

         Net loss from operations                   (3,672,532)               (4,714,091)               (10,646,368)
                                            ------------------         -----------------         ------------------


Other income (expense)
     Interest expense                               (1,303,908)                   (8,124)                (1,832,421)
     Interest and dividend income                      107,352                    80,886                    199,038
     Loss on disposal of assets                        (15,319)                        -                    (15,319)
                                            ------------------         -----------------         ------------------
                                                    (1,211,875)                   72,762                 (1,648,702)
                                            ------------------         -----------------         ------------------

         NET LOSS                           $       (4,884,407)        $      (4,641,329)     $         (12,295,070)
                                            ==================         =================         ==================

Loss per common share                       $            (0.45)         $          (0.34)         $           (1.22)
                                            ==================         =================         ==================

Weighted average number of
common shares outstanding                           10,919,332                13,836,659                 10,067,274
                                            ==================         =================         ==================
</TABLE>

       The accompanying notes are an integral part of these statements.

                                       22
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                             Class I             Class II                Series A                  Series B
                                         Membership Units     Membership Units        Preferred Stock           Preferred Stock
                                        -----------------     ----------------        ----------------          ---------------
                                        Units     Amount       Units    Amount        Shares    Amount         Shares     Amount
---------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>           <C>        <C>        <C>             <C>       <C>            <C>        <C>
Inception, July 1, 1997                    -    $       -         -   $       -            -    $    -              -     $    -

Issuance of membership units       5,000,000      450,000         -           -            -         -              -          -

Net loss                                   -            -         -           -            -         -              -          -

---------------------------------------------------------------------------------------------------------------------------------
Balances, December 31, 1997        5,000,000      450,000         -           -            -         -              -          -

Issuance of membership units,
    net offering cost                      -            -   666,667     949,710            -         -              -          -

Beneficial conversion feature on
    debt                                   -            -         -           -            -         -              -          -

Amortization of discount on debt           -            -         -           -            -         -              -          -

Net loss                                   -            -         -           -            -         -              -          -

Recapitalization                  (5,000,000)    (450,000) (666,667)   (949,710)           -         -              -          -

---------------------------------------------------------------------------------------------------------------------------------
Balances, December 31, 1998                -    $       -         -   $       -            -    $    -              -     $    -

=================================================================================================================================

<CAPTION>
                                                                                                           Deficit
                                                                                                         Accumulated
                                                                 Add'l    Note Receivable  Unamortized    During the
                                            Common Stock        Paid-In      Issued for      Discount     Development
                                            ------------
                                         Shares     Amount      Capital     Common Stock      on Debt        Stage       Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>         <C>          <C>             <C>          <C>             <C>
Inception, July 1, 1997                      -   $      -    $        -      $        -   $        -   $          -    $        -

Issuance of membership units                 -          -             -               -            -              -       450,000

Net loss                                     -          -             -               -            -       (177,935)     (177,935)
----------------------------------------------------------------------------------------------------------------------------------

Balances, December 31, 1997                  -          -             -               -            -       (177,935)      272,065

Issuance of membership units, net
    offering cost                            -          -             -               -            -              -       949,710

Beneficial conversion feature on
    debt                                     -          -       880,000               -     (880,000)             -             -

Amortization of discount on debt             -          -             -               -      495,000              -       495,000

Net loss                                     -          -             -               -            -     (2,591,399)   (2,591,399)

Recapitalization                     7,500,000     75,000     1,324,710               -            -              -             -

----------------------------------------------------------------------------------------------------------------------------------
Balances, December 31, 1998          7,500,000   $ 75,000    $2,204,710      $        -   $ (385,000)  $ (2,769,334)   $ (874,624)

==================================================================================================================================
</TABLE>

       The accompanying notes are an integral part of these statements.

                                       23
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                Class I                   Class II                 Series A                     Series B
                            Membership Units          Membership Units          Preferred Stock              Preferred Stock
                            ----------------          ----------------        --------------------         --------------------
                            Units     Amount          Units     Amount         Shares      Amount           Shares      Amount
-------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>       <C>             <C>       <C>           <C>         <C>              <C>         <C>
Sale of common stock            -     $    -              -     $    -                 -  $      -                  -  $      -
Exercise of stock options       -          -              -          -                 -         -                  -         -
Conversion of debt to
    common stock                -          -              -          -                 -         -                  -         -
Acquisition of
    Wattage Monitor Inc. -
    net of offering costs       -          -              -          -         1,000,000    10,000                  -         -
Beneficial conversion
    feature on debt             -          -              -          -                 -         -                  -         -
Amortization of
    discount on debt            -          -              -          -                 -         -                  -         -
Exercise of warrants            -          -              -          -                 -         -          3,500,000    35,000
Conversion of preferred
    stock to common stock       -          -              -          -        (1,000,000)  (10,000)                 -         -
Net loss                        -          -              -          -                 -         -                  -         -
-------------------------------------------------------------------------------------------------------------------------------
Balances, December 31, 1999     -     $    -              -     $    -                 -  $      -          3,500,000  $ 35,000
===============================================================================================================================

<CAPTION>
                                                                                           Deficit
                                                                                         Accumulated
                                                               Add'l    Note Receivable  Unamortized   During the
                                          Common Stock        Paid-In      Issued for      Discount    Development
                                      -------------------
                                         Shares    Amount     Capital     Common Stock     on Debt        Stage       Total
-------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>         <C>        <C>        <C>              <C>           <C>          <C>
Sale of common stock                    707,366 $   7,074 $    700,292    $        -      $        -  $          -  $   707,366
Exercise of stock options                14,100       141       13,959             -               -             -       14,100
Conversion of debt to
    common stock                      3,075,054    30,751    1,456,829             -               -             -    1,487,580
Acquisition of Wattage Monitor Inc.
    - net of offering costs             250,000     2,500    2,806,784             -               -             -    2,819,284
Beneficial conversion
    feature on debt                           -         -      880,000             -        (880,000)            -            -
Amortization of
    discount on debt                          -         -            -             -       1,265,000             -    1,265,000
Exercise of warrants                          -         -    3,465,000             -               -             -    3,500,000
Conversion of preferred
    stock to common stock             1,000,000    10,000            -             -               -             -            -
Net loss                                      -         -            -             -               -    (4,884,407)  (4,884,407)
-------------------------------------------------------------------------------------------------------------------------------
Balances, December 31, 1999          12,546,520 $ 125,466 $ 11,527,574    $        -      $        -  $ (7,653,741) $ 4,034,299
===============================================================================================================================
</TABLE>

       The accompanying notes are an integral part of these statements.

                                       24
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                    Class I             Class II                Series A                  Series B
                               Membership Units      Membership Units        Preferred Stock           Preferred Stock
                               ----------------      ----------------        ----------------         -----------------
                               Units     Amount       Units    Amount        Shares    Amount         Shares     Amount
-----------------------------------------------------------------------------------------------------------------------
<S>                            <C>       <C>         <C>       <C>           <C>       <C>        <C>         <C>
Sale of common stock               -     $    -           -    $    -             -    $    -              -  $       -

Conversion of preferred
    stock to common stock          -          -           -         -             -         -     (3,500,000)   (35,000)

Net loss                           -          -           -         -             -         -              -          -

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

Balances, December 31, 2000        -     $    -           -    $    -             -    $    -     (3,500,000) $ (35,000)

========================================================================================================================

<CAPTION>
                                                                                                 Deficit
                                                                                               Accumulated
                                                       Add'l   Note Receivable    Unamortized   During the
                                  Common Stock        Paid-In     Issued for        Discount   Development
                                  ------------
                                Shares    Amount      Capital    Common Stock        on Debt      Stage           Total
------------------------------------------------------------------------------------------------------------------------
<S>                         <C>        <C>        <C>               <C>           <C>         <C>           <C>
Sale of common stock        28,350,000 $ 283,500  $ 7,218,864       $ (720,500)   $         - $          -  $ 6,781,864

Conversion of preferred
    stock to common stock    3,500,000    35,000            -                -              -            -            -

Compensation expense
    on option grants                 -         -       37,323                -              -            -       37,323

Net loss                             -         -            -                -              -   (4,641,329)  (4,641,329)

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

Balances, December 31, 2000 44,396,520 $ 443,966  $18,783,761       $ (720,500)   $         - $(12,295,070) $ 6,212,157

========================================================================================================================
</TABLE>

       The accompanying notes are an integral part of these statements.

                                       25
<PAGE>

                              Wattage Monitor Inc.
                          (a development stage company)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                Cumulative
                                                                                              from Inception
                                                       Year ended December 31,               (July 1, 1997) to
                                                     1999                   2000             December 31, 2000
                                               -----------------      -----------------      -----------------
<S>                                            <C>                    <C>                    <C>
Cash flows from operating activities:
   Net loss                                    $     (4,884,407)      $     (4,641,329)      $    (12,295,070)
                                               -----------------      -----------------      -----------------
   Adjustments to reconcile net loss to
   net cash used in operating activities:
     Write off of software license                            -                      -                184,875
     Loss on disposal of assets                          15,319                      -                 15,319
     Amortization of discount on debt                 1,265,000                      -              1,760,000
     Depreciation and amortization                      164,692                341,257                535,501
     Changes in:
       Accounts receivable                                    -                (21,502)               (21,502)
       Prepaid expenses                                 (26,270)               (28,903)               (58,558)
       Other assets                                     (12,783)               (21,476)               (57,243)
       Accounts payable                                  75,442                335,491                523,992
       Accrued liabilities                               34,537                 31,199                 78,237
       Accrued interest                                  37,191                  8,124                 70,704
                                               -----------------      -----------------      -----------------
         Total adjustments                            1,553,128                644,190              3,031,325
                                               -----------------      -----------------      -----------------
         Net cash used in operating activities       (3,331,279)            (3,997,139)            (9,263,745)
                                               -----------------      -----------------      -----------------

Cash flows from investing activities:

   Acquisitions of property and equipment              (535,106)              (529,714)            (1,571,845)
                                               -----------------      -----------------      -----------------

Cash flows from financing activities:

   Deferred offering costs                               48,670                      -                      -
   Issuance of membership units                               -                      -              1,399,710
   Issuance of notes payable to related parties         500,000                757,000              2,486,000
   Payments on notes payable to related parties        (304,000)              (757,000)            (1,061,000)
   Acquisition of Wattage Monitor, Inc.               2,819,284                      -              2,819,284
   Common stock issued                                  707,366              6,819,187              7,526,553
   Series B preferred stock warrants exercised        3,500,000                      -              3,500,000
   Stock options exercised                               14,100                      -                 14,100
                                               -----------------      -----------------      -----------------
         Net cash provided by
         financing activities                         7,285,420              6,819,187             16,684,647
                                               -----------------      -----------------      -----------------

       NET INCREASE IN CASH AND
       CASH EQUIVALENTS                               3,419,035              2,292,334              5,849,057
Cash and cash equivalents beginning of period           137,688              3,556,723                      -
                                               -----------------      -----------------      -----------------
Cash and cash equivalents end of period        $      3,556,723       $      5,849,057       $      5,849,057
                                               =================      =================      =================

Supplemental disclosure of non-cash investing
and financing activities:
   Software license agreement and development
   costs included in accounts payable          $              -       $              -       $        373,129
                                               =================      =================      =================

   Notes payable converted to common stock     $      1,487,580       $              -       $      1,487,580
                                               ================       =================      =================
</TABLE>

   During the year ended December 31, 2000, notes receivable of $720,500 were
   received as partial payment for 2,750,000 shares of common stock.

       The accompanying notes are an integral part of these statements.

                                       26
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                         NOTES TO FINANCIAL STATEMENTS

NOTE A - Summary of Accounting Policies and Nature of Business

1.   Organization and Nature of Business
     -----------------------------------

         The Company was organized by its members on July 1, 1997 in Delaware.
The Company is a development stage enterprise and provides electrical rate
information to commercial and residential consumers nationwide. Revenue is
anticipated to come primarily from referral fees and commissions charged to
electricity suppliers who offer their products and service through the Company.
On February 26, 1999, Wattage Monitor Inc. (a Nevada corporation) acquired all
of the membership units of the Company. For accounting purposes, the acquisition
is treated as a recapitalization with the Company as the acquirer. Pro forma
information is not presented since the acquisition is not a business
combination. The financial statements give retroactive effect to the conversion
of members' equity into common stock to reflect the recapitalization.

2.   Cash Equivalents
     ----------------

         The Company considers all short-term investments with original
maturities of ninety days or less to be cash equivalents.

3.   Depreciation and Amortization
     -----------------------------

         Depreciation and amortization sufficient to relate the cost of
depreciable assets to operations over their estimated service lives is provided
using the straight-line method of depreciation.

4.   Software License and Development Costs
     --------------------------------------

         The Company has entered into several software license agreements to
enable customers to access information and order services provided via the
internet. Some of these agreements require the Company to pay an annual
maintenance fee. Additionally, the Company incurs software development costs to
tailor such software to its specific requirements. Such customization costs when
internally incurred or purchased from third parties are capitalized until the
project is substantially complete and ready for its intended use. License and
development costs are amortized straight-line over three years while maintenance
fees are charged to expense ratably over the contract period. Periodically,
management evaluates the estimated useful life of intangible assets based on
projected future undiscounted cash flows.

         The Company intends to provide its information services principally
over the internet through both licensed and custom software. No licensee fees
were paid 1999 or 2000. In addition, the Company capitalized third party
payments for software customization of $428,000 and $84,000 for the years ended
December 31, 1999 and 2000, respectively. The Company capitalized internally
incurred customization costs of $56,000 and $282,000 for the years ended
December 31, 1999 and 2000, respectively.

                                       27
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                  NOTES TO FINANCIAL STATEMENTS - (Continued)


NOTE A - Summary of Accounting Policies and Nature of Business - (Continued)

5.   Patents and Trademarks
     ----------------------

         The Company has filed for a patent relating to its computer-based
system and methods for collecting and providing information regarding the
electric power industry and available electric supply options. The Company has
also applied for trademarks to limit the use by others of WM, Wattage Monitor,
Kilowatt Monitor, WattMonitor and ElectricEye. In 2000, the Company received
certificates of registration from the U.S. Patent and Trademark Office for WM
and Wattage Monitor. Subsequent to December 31, 2000, the Company received a
certificate of registration from the U.S. Patent and Trademark Office for
ElectricEye. Patent and trademark expenses will be amortized on the
straight-line method over fifteen years.

6.   Advertising
     -----------

         The Company expenses advertising costs as incurred. Advertising expense
was $108,344 for 1999 and $32,355 for 2000.

7.   Use of Estimates
     ----------------

         In preparing these financial statements in conformity with accounting
principles generally accepted in the United States of America, management is
required to make estimates and assumptions. These affect the carrying value of
the Company's assets and liabilities, revenues and expenses during the reporting
period and disclosures relating to contingent assets and liabilities. Actual
results may differ from these estimates.

8.   Concentration of Credit Risk
     ----------------------------

         Financial instruments which potentially subject the Company to credit
risk consist primarily of cash and cash equivalents. The Company maintains its
cash in bank deposit accounts which, at times, may exceed federally insured
limits. The Company believes it is not exposed to any significant credit risk
related thereto.

9.   Income Taxes
     ------------

         Through February 26, 1999, the Company was not subject to income tax.
Income was taxed directly to its members. Accordingly, no provision has been
made for federal income tax. Further, because losses incurred have been reported
by the members, no operating losses are available to offset future income.

         After February 26, 1999, the Company provides for income taxes based
upon income reported for financial reporting purposes. Certain charges to
earnings will differ as to timing from those deducted for tax purposes. The tax
effect of those differences will be recorded as deferred income taxes. At
December 31, 2000, the Company has a deferred tax asset of $2,650,000 resulting
from a net operating loss for the period February 27, 1999 through December 31,
2000. The Company has provided for a valuation allowance of $2,650,000 at
December 31, 2000.

                                       28
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                  NOTES TO FINANCIAL STATEMENTS - (Continued)


NOTE A - Summary of Accounting Policies and Nature of Business - (Continued)


10.  Fair Value of Financial Instruments
     -----------------------------------

         Management believes the fair value of financial instruments
approximates their carrying amounts.

11.  Discount on Debt
     ----------------

         Costs incurred in connection with the issuance of debt are amortized
over the expected life of the debt. The beneficial conversion feature has been
accounted for as additional paid-in capital and associated unamortized discount
on debt recorded as a component of stockholders' equity.

12.  Loss Per Share
     --------------

         Loss per common share is computed based upon the weighted average
shares outstanding giving retroactive effect of common shares issued to members
of WattMonitor LLC upon completion of the recapitalization. Convertible equity
instruments are not considered in the calculation of net loss per share as their
inclusion would be for 1999 and 2000.

NOTE B - Related Party Transactions

         During 1999 and 2000, the Company purchased approximately $14,800 and
$4,900 of equipment from Kirshenbaum, Bond & Partners, the principals of which
have a financial interest in the Company; a former partner is also a director of
the Company. The Company also paid Kirshenbaum, Bond & Partners $104,000 for
advertising for the year ended December 31, 1999.

         During the last quarter of 2000, certain stockholders or related
entities loaned the Company $757,000 with interest payable at 12% per annum. The
notes were repaid prior to year-end. In connection with these notes, the Company
issued warrants to the stockholders to purchase 497,795 shares of common stock
at $0.272 per share, exercisable immediately.

                                       29
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                  NOTES TO FINANCIAL STATEMENTS - (Continued)


NOTE C - Property and Equipment

         Property and equipment consisted of the following at December 31, 2000:


                                                                       Lives
                                                                   ---------

                       Furniture and equipment     $  286,077      5-7 years
                                      Software      1,272,673        3 years
                                                   ----------
                                                    1,558,750

                 Less accumulated depreciation
                              and amortization       (492,031)
                                                   ----------
                                                   $1,066,719
                                                   ==========

NOTE D - Stockholders' Equity (Deficit)

         In January 1999, WattMonitor LLC sold 37,777 membership units.

         On February 26, 1999, Wattage Monitor Inc. (a Nevada corporation)
acquired all of the equity (membership units) of WattMonitor LLC. For accounting
purposes, the acquisition is treated as a recapitalization with the Company as
the acquirer. Pro forma information is not presented since the acquisition is
not a business combination. The members exchanged their membership units for
7,550,450 shares of common stock (approximately 72% of the outstanding common
stock) of Wattage Monitor Inc. In addition, each member, other than the
controlling members, was entitled to acquire such number of shares of common
stock at $1.00 per share as necessary to maintain the same ownership percentage
in Wattage Monitor Inc. as such member held in the Company. In connection with
this right, 657,366 shares were issued. Also, in connection with the
recapitalization, all employees exchanged their contingent membership interests
for stock options to purchase 918,000 shares of Wattage Monitor Inc. exercisable
at $1.00 per share.

         Certain stockholders of Wattage Monitor Inc. advanced approximately
$500,000 in January 1999, which, along with $500,000 advanced in 1998, was
converted into 2,750,000 shares of common stock in 1999. In October 1999, notes
payable and accrued interest of $487,580 were converted to 325,054 shares of
common stock.

                                       30
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                  NOTES TO FINANCIAL STATEMENTS - (Continued)


NOTE D - Stockholders' Equity (Deficit) - (Continued)

         In connection with its recapitalization, Wattage Monitor Inc. issued
1,000,000 shares of Series A 6% Convertible Preferred Stock for $3,000,000. The
Series A 6% Preferred Stock accrues dividends at 6% per annum, payable annually,
commencing on February 26, 2000. The dividend at the option of the Company may
be paid in common stock. Each share of Series A 6% Preferred Stock was
convertible into one share of common stock upon the occurrence of certain
events.

         In 1999, 1,000,000 Series B warrants were exercised to purchase
3,500,000 shares of Series B Convertible Preferred Stock at $1.00 per share.
Each share of Series B Preferred Stock was convertible into one share of common
stock. During 2000, 3,500,000 shares of the Series B Preferred were converted
into common stock. Upon exercise of the Series B warrants, the Series A
Convertible Preferred Stock was converted to 1,000,000 shares of common stock.

         In connection with the merger, a warrant was issued to the holder of
250,000 shares of preferred stock which represents the right to purchase 100,000
shares of common stock at $1.00 per share. Also, warrants to purchase 449,999
shares of common stock at $1.50 per share are outstanding. These warrants were
issued in connection with notes payable to related parties which were repaid
during the year ended December 31, 1999.

         In December 2000, 25,600,000 shares of our common stock were issued for
$6,963,200 under a Stock Purchase Agreement entered into on November 28, 2000.
Also, in December 2000, 2,750,000 shares of common stock were issued to certain
stockholders under a Stock Purchase Agreement entered into on December 22, 2000
for a combination of cash and notes receivable totaling $748,000.

NOTE E - Contingent Membership Interests/Stock Options

         Contingent membership interests in an LLC are similar to stock options
in a corporation. Pursuant to a formal plan, the Board granted various employees
and other individuals contributing to the success of the organization,
contingent membership interests. In conjunction with the recapitalization, all
such contingent membership interests were exchanged for stock options under
Wattage Monitor Inc.'s incentive stock option plan. The plan allows for
8,989,980 shares of common stock to be granted. In the three months prior to the
recapitalization, Wattage Monitor issued employee stock options totaling 370,000
exercisable at $1.00 per share. Compensation expense related thereto was
immaterial.

                                       31
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                  NOTES TO FINANCIAL STATEMENTS - (Continued)


NOTE E - Contingent Membership Interests/Stock Options - (Continued)

     The Company has adopted  the  disclosure-only  provisions  of SFAS No. 123,
Accounting for Stock-Based Compensation, but applies Accounting Principles Board
Opinion No. 25 and related interpretations in accounting for stock options.

     The fair value of the Company's stock options was estimated as of the grant
date using the Black-Scholes option pricing model with the following weighted
average assumptions for the years ended December 31, 1999 and 2000: dividend
yield of 0.0%, expected volatility of 150%, risk free interest rate of 6%, and
an expected holding period from three to four years.

     Based on these assumptions and taking into account the related compensation
expense, the Company's results would have been as follows:


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

          Net loss:
            As reported                       $ 4,641,329      $ 4,884,407
            Pro forma                           4,930,349                -

          Net loss per share:
            As reported                             $0.34            $0.45
            Pro forma                                0.36             0.45


     Presented below is a summary of the status of the stock options after
giving retroactive effect to the recapitalization.

                                                                 Weighted
                                                                  Average
                                                                 Exercise
                                                                  Price
                                                                ---------

             Balance at December 31, 1997         225,000        $ 1.00
                  Granted                         621,300          1.00
                  Forfeited/expired                  (450)         1.00
             Balance at December 31, 1998         845,850          1.00
                  Granted                         214,600          3.49
                  Forfeited/expired               (66,200)         1.10
                  Exercised                       (14,100)         1.00
             Balance at December 31, 1999         980,150          1.54
                  Granted                       2,142,050           .47
                  Forfeited/expired               (89,500)         1.76
                                               ----------        ------

             Balance at December 31, 2000       3,032,700        $  .60
                                              ===========        ======

                                       32
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                  NOTES TO FINANCIAL STATEMENTS - (Continued)


NOTE E - Contingent Membership Interests/Stock Options - (Continued)

<TABLE>
<CAPTION>
                                                                     Weighted
                          Range of                                   Average
                          Exercise            Options                Contractual        Options
                          Prices              Outstanding            Life               Exercisable
                          ----------------    ------------------     ---------------    -------------------
     <S>                  <C>                 <C>                    <C>                <C>
     December 31, 2000    Up to $1.00          2,680,600             9.24                  655,469
                          ===========         ==========             ====               ==========

                          $2.13-2.88             215,600             9.20                   44,748
                          ==========          ==========             ====               ==========

                          $3.13-3.78               40,000            8.75                   16,667
                          ==========          ===========            ====               ==========

                          $4.50                    62,500            8.74                   60,833
                          =====               ===========            ====               ==========

                          $6.13 - 7.87             34,000            8.23                   15,250
                          ============        ===========            ====               ==========
</TABLE>

NOTE F - Employee Benefit Plans

     The Company adopted a 401(k) retirement plan (the "plan") effective January
1, 1998, which provides for employee salary deferrals limited to 25% of a
participant's compensation and for discretionary Company contributions. The plan
year ends on December 31st. The plan covers employees who have completed one
month of service and have attained the minimum age requirement, as defined in
the plan. The Company made no contributions in 1999 or 2000.

NOTE G - Lease Commitments

     The Company leases its office space and certain computer equipment under
operating leases, which expire through 2003. The Company has options to extend
the leases for additional lease periods. The leases require monthly rental
payments totaling approximately $17,822. Total rent expense for the years ended
December 31, 1999 and 2000 was $91,893 and $128,772, respectively.

     The following is a schedule of the future minimum lease payments under the
operating leases, as of December 31, 2000:

                         2001                               $ 194,150
                         2002                                 125,402
                         2003                                  29,341
                                                            ---------

        Net minimum lease payments                          $ 348,893
                                                            =========

                                       33
<PAGE>

                             Wattage Monitor Inc.
                         (a development stage company)

                  NOTES TO FINANCIAL STATEMENTS - (Continued)


NOTE H - Development Stage

     The Company is a development stage company. As shown in the accompanying
financial statements, the Company incurred a net loss of $4,641,329 for the year
ended December 31, 2000 and did not have significant revenues. The future of the
Company is dependent upon its ability to generate sufficient cash flows from
revenue to cover operating costs.

NOTE I - Preferred Supplier Agreement

     During the year, the Company entered into a preferred supplier agreement
with PurchasePro.com, a stockholder of the Company, whereby the Company is
promoted on PurchasePro.com's global marketplace. The total contract cost of
$500,000 is for two years and requires quarterly payments of $62,500 through
January 2003.

NOTE J - Employment Contract

     The Company has an employment contract with its President. The agreement
continues until terminated by the individual or the Company, and provides for
severance payments under certain circumstances. As of December 31, 2000, if the
President were to be terminated by the Company, the Company's liability would be
approximately $300,000.

                                       34
<PAGE>

ITEM 8 - Changes In and Disagreements with Accountants on Accounting and
         Financial Disclosure.

     None.

                                       35
<PAGE>

                                   PART III

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

     The following table sets forth certain information with respect to our
directors and executive officers as of December 31, 2000:

     Name                     Age       Company Position and Offices Held
     --------------------     ---       ---------------------------------------

     Stephen D. Klein          41       Chairman of the Board of Directors
     Gerald R. Alderson        54       President, Chief Executive Officer and
                                        Director
     Alexander Ellis III       50       Vice President - Strategic Development
                                        and Director
     Willie E. Dennis          39       Secretary
     Vicki L. Center           42       Vice President - Marketing
     Robert E. Forrest         33       Vice President - Operations
     John D. Westfield         38       Vice President - Technology

     Stephen D. Klein, age 41, is the Chairman of the Board and a founder of
Wattage Monitor. He is not an employee. Since 1990, he has been a Managing
Partner and Director of Media and Interactive Services of Kirshenbaum Bond &
Partners, one of the country's most successful independent advertising agencies.
Mr. Klein is one of the advertising industry's pioneers in the integration of
Internet media into brand-building marketing efforts. Mr. Klein has a B.A. in
English from Columbia University.

     Gerald R. Alderson, age 54, is a founder and President of Wattage Monitor.
Between 1982 and the founding of Wattage Monitor in mid-1997, Mr. Alderson held
a variety of positions with Kenetech Corporation, including as its President and
Chief Executive Officer. He received his B.A. from Occidental College and his
M.B.A. from Harvard University Graduate School of Business Administration.

     Alexander Ellis III, age 50, has served as a Vice President for Wattage
Monitor since its founding. Since 1990, Mr. Ellis held a number of management
positions at Kenetech Corporation, including as its Vice President - Marketing.
Between 1989 and 1990, he was Vice President Corporate Accounts at Knoll
International, Inc. Mr Ellis is a member of RockPort Partners, LLC, a small
merchant banking firm and RockPort Capital Partners, LLC, a private equity fund
focused on energy and environmental technologies. He also is a member of Acadia
Bay Energy Co., LLC, a small development firm with interests in powerplant
development in the Midwest. Mr. Ellis received his B.A. from Colorado College
and his Masters in Public and Private Management from Yale School of
Organization & Management.

     Willie E. Dennis, age 39, is the Secretary of Wattage Monitor. Since 2000,
Mr. Dennis has been a partner in the corporate practice group of Akin, Gump,
Strauss, Hauer & Feld, L.L.P, in New York and is Co-Chair of the Firm's
Technology Practice in New York. From 1996 to 2000, Mr. Dennis was a member of
the New Media and E-Law Group of Camhy Karlinsky & Stein LLP. in New York. From
1991 to 1995 Mr. Dennis was associated with the law firm Mudge Rose Guthrie
Alexander & Ferdon in New York. He received his B.A. and his J.D. from Columbia
University.

     Vicki L. Center, age 42, has served as Vice President - Marketing for
Wattage Monitor since April of 2000, and prior to that served as Director of
Marketing since October of 1998. Ms. Center has 18 years of sales management and
consulting experience in major organizations. Between August 1995 and October
1998, Ms. Center was a Sales Manager directing large-scale marketing strategies
for Development Dimensions International and SHL, Inc. Her previous roles
include overseeing large corporate accounts, launching product and service
offerings in new industries, and managing business

                                       36
<PAGE>

development teams for EDS, Motorola, and American Airlines. Ms. Center is a
motivational speaker and a certified sales trainer. Ms. Center has Bachelors of
Business Administration with majors in both Marketing and Education from the
University of North Texas.

     Robert E. Forrest, age 33, has served as Vice President - Operations for
Wattage Monitor since March of 1998. Between May 1993 and his joining Wattage
Monitor, Mr. Forrest held a variety of finance positions, including cost control
and system development, principally in the food products industry. Since October
1995, in his most recent position, Mr. Forrest was the finance lead for all
United States trade agreement negotiations for Burns Philp, Inc., a global food
company. Mr. Forrest received his B.A. from the University of California at Los
Angeles (magna cum laude).

     John D. Westfield, age 38, has served as Vice President - Technology for
Wattage Monitor since April of 1998. Between December, 1996 and April, 1998, Mr.
Westfield was a Director of Special Programs for Computer Sciences Corporation.
Between April, 1989 and November, 1996, he held a variety of management and
information technology positions with American Airlines including responsibility
for the design of the SABRE reservation system's internet interface. Mr.
Westfield holds both a Bachelor's and Master's degree from The University of
Texas, at Austin.

     All directors hold office until the next annual meeting of shareholders and
until their successors are duly elected and qualified. All directors have held
office since the Company's merger with WattMonitor LLC on February 26, 1999.
Officers are elected on an annual basis by the Board of Directors and serve at
the discretion of the Board.

Involvement in Certain Legal Proceedings.

     During the last five years, none of the directors, executive officers or
control persons of Wattage Monitor have been:

     .    A party to a bankruptcy proceeding;

     .    Convicted in a criminal proceeding;

     .    Subject to any order, judgment or decree permanently or temporarily
          enjoining, barring, suspending or otherwise limiting his involvement
          in any type of business, securities or banking activities; or

     .    Found to have violated a federal or state securities or commodities
          law.

                                       37
<PAGE>

Compliance with Section 16(a) of the Securities Act.

         Section 16 of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers, and beneficial owners of more than 10%
of any class of the Company's registered equity securities to file with the
Securities and Exchange Commission initial reports of beneficial ownership (Form
3) and reports of changes in beneficial ownership (Forms 4 and 5) of the
Company's common stock and other equity securities of the Company. Officers,
directors and greater than 10% beneficial owners are required by Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) reports they file.

         To the Company's knowledge, all directors, officers and beneficial
owners of more than 10% of any class of the Company's registered equity
securities, filed all reports required of Section 16(a) of the Securities
Exchange Act of 1934 during the fiscal year ending December 31, 2000.

ITEM 10 - Executive Compensation.

Summary Compensation Table.

         The following table sets forth all compensation awarded to our Chief
Executive Officer and our other executive officers in fiscal years 2000, 1999
and 1998:

<TABLE>
<CAPTION>
                                                                    Annual                       Long Term
                                                                 Compensation               Compensation Awards
                                                                 ------------               -------------------
     Name and Principal Position                 Year               Salary             Securities Underlying Options
     --------------------------------------      ----               ------             -----------------------------
     <S>                                         <C>             <C>                   <C>
     Gerald R. Alderson....................      2000              $ 150,000                       10,000
         President, Chief Executive              1999              $ 150,000                       10,000
         Officer and Director                    1998              $ 137,500                          ---

     Vicki L. Center.......................      2000              $ 140,000                      375,000
         Vice President - Marketing              1999              $ 140,000                          ---
                                                 1998              $  46,667                      125,000

     Alexander Ellis, III..................      2000              $ 125,000                      210,000
         Vice President - Strategic              1999              $ 125,000                       10,000
         Development                             1998              $ 125,000                       75,000

     Robert E. Forrest.....................      2000              $ 100,000                      375,000
         Vice President - Operations             1999              $  90,000                          ---
                                                 1998              $  69,774                      125,000

     John D. Westfield.....................      2000              $ 195,000                      300,000
         Vice President - Technology             1999              $ 195,000                          ---
                                                 1998              $ 136,500                      125,000
</TABLE>

                                       38
<PAGE>

Option Grants in 2000.

         Set forth below is information on grants of stock options for our
executive officers for the fiscal year ended December 31, 2000.

<TABLE>
<CAPTION>
                                                                  Individual Grants
                                          ----------------------------------------------------------------
                                             Number of       % of Total
                                            Securities    Options Granted
                                            Underlying      to Employees        Exercise        Expiration
     Name                                 Options Granted      in 2000       Price per Share       Date
     -------------------------------      ---------------      -------       ---------------       ----
     <S>                                  <C>             <C>                <C>                <C>
     Gerald R. Alderson
         Granted May 2000 (1).......          10,000            0.5%            $  0.84          5/23/10

     Vicki L. Center (2)
         Granted Dec. 2000 (2)......         375,000           17.6%            $ 0.272         12/22/10

     Alexander Ellis, III
         Granted May 2000 (1).......          10,000            0.5%            $  0.84          5/23/10
         Granted Dec. 2000 (2)......         200,000            9.4%            $ 0.272         12/22/10

     Robert E. Forrest
         Granted Dec. 2000 (2)......         375,000           17.6%            $ 0.272         12/22/10

     John D. Westfield
         Granted Jan. 2000 (3)......         100,000            4.7%            $  1.70           1/1/10
         Granted Dec. 2000 (2)......         200,000            9.4%            $ 0.272         12/22/10
</TABLE>

(1) Options were granted on May 23, 2000 and were fully exercisable on May 24,
    2000.
(2) Options were granted on December 22, 2000 and are exercisable at a rate of
    25% per year over four years.
(3) Options were granted on January 19, 2000 and are exercisable at a rate of
    25% per year over four years.

                                       39
<PAGE>

Aggregated Option Exercises in 2000 and Year End Option Values.

         Set forth below is information with respect to the stock options held
by our executive officers at December 31, 2000.

<TABLE>
<CAPTION>
                                                                        Number of                        Value of
                                                                  Securities Underlying                 Unexercised
                                     Shares                        Unexercised Options             In-The-Money Options
                                    Acquired        Value         at December 31, 2000             at December 31, 2000
Name                              on Exercise     Realized      Exercisable/Unexercisable        Exercisable/Unexercisable
---------------------------       -----------     --------      -------------------------        -------------------------
<S>                               <C>             <C>           <C>                              <C>
Gerald R. Alderson.........            ---           ---                  20,000 / 0                  $       0 / $ 0

Vicki L. Center............            ---           ---            62,500 / 437,500                  $ 0 / $ 156,750


Alexander Ellis, III.......            ---           ---           263,750 / 256,250                  $  0 / $ 83,600

Robert E. Forrest..........            ---           ---            62,500 / 437,500                  $ 0 / $ 156,750

John D. Westfield..........            ---           ---            53,500 / 362,500                  $  0 / $ 83,600
</TABLE>

Director Compensation.

         Compensation of directors consists solely of reimbursement of their
expenses for attending meetings. Additionally, each director receives
immediately exercisable stock options to purchase 10,000 shares of our common
stock on the date of the annual meeting of our shareholders except that in 1999
the grant occurred on September 30, 1999.

Employment Contracts, Termination of Employment and Change-In-Control
Arrangements.

         On January 1, 1998, WattMonitor LLC, as our predecessor, entered into
an Employment Agreement with Mr. Alderson. On February 26, 1999, we assumed Mr.
Alderson's employment agreement. Mr. Alderson's initial employment term expired
on December 31, 2000, but automatically renewed for a one-year period expiring
on December 31, 2001. The Agreement will be automatically renewed for an
unlimited series of one-year periods unless either party notifies the other.

         Mr. Alderson currently receives a base salary of $150,000 per year,
which is subject to an annual adjustment at the discretion of our board of
directors. Under the terms of the agreement, Mr. Alderson is eligible to receive
a bonus for services rendered, subject to the discretion of our board of
directors. In the event we terminate Mr. Alderson's employment for any reason
other than "for cause", then Mr. Alderson will be entitled to receive a lump sum
termination payment equal to two years' base salary.

         In the event we experience a change in control and Mr. Alderson
resigns, or is terminated, within six months of the change in control Mr.
Alderson will be entitled to receive two years base salary, payable in one lump
sum. He will also be entitled to receive a payment equal to the greater of his
bonuses for the three years prior to the termination or eighteen months base
salary. In no event will this termination payment exceed 2.99 times Mr.
Alderson's average annual cash compensation during the five years prior to his
termination.

                                       40
<PAGE>

ITEM 11 - Security Ownership of Certain Beneficial Owners and Management.

         The following table sets forth certain information regarding beneficial
ownership of our common stock as of March 7, 2001 as follows:

         .   By each person who is known by Wattage Monitor to beneficially own
             more than 5% of Wattage Monitor's common stock, fully diluted;

         .   By each of Wattage Monitor's directors;

         .   By each officer named under "Directors, Executive Officers,
             Promoters and Control Persons"; and

         .   By all officers and directors as a group.

         Beneficial ownership is determined in accordance with the rules
promulgated by the SEC and the information is not necessarily indicative of
beneficial ownership for any other purpose. This table is based upon information
supplied to us by officers, directors and principal stockholders. Except as
otherwise indicated, we believe that the persons or entities named in the table
have sole voting power with respect to all shares of our common stock shown as
beneficially owned by them, subject to community property laws where applicable.

         The table should be read in conjunction with the information that
precedes it. The percentages set forth in the table assume 44,396,520 shares of
common stock outstanding as of March 7, 2001.

         Mr. Lessin's beneficial ownership column includes 564,706 shares of
common stock beneficially owned through RHL Ventures LLC, warrants (exercisable
at any time) to purchase an aggregate of 627,451 shares of common stock
beneficially owned through RHL Ventures LLC, and 2,541,963 shares of common
stock owned directly.

         Mr. Alderson's and Mr. Klein's beneficial ownership columns include
warrants (exercisable at any time) to purchase an aggregate of 276,225 shares of
common stock beneficially owned.

         The numbers in Mr. Ellis', Mr. Forrest's, Ms. Center's and Mr.
Westfield's beneficial ownership columns represent options to purchase an
aggregate of 578,500 shares of common stock, which are immediately exercisable.
The numbers do not include options to purchase an additional 1,337,500 shares of
common stock, which are not currently exercisable.

         The aggregate amounts for Mr. Alderson, Mr. Klein, and Mr. Ellis each
include 20,000 options and the amount for Mr. Dennis represents 10,000 options
to purchase an aggregate of 70,000 shares of our common stock, granted to them.
The options are exercisable immediately.

                                       41
<PAGE>

<TABLE>
<CAPTION>
                                                              Number of Shares of
                                                                 Common Stock              Percentage of
         Name and Address of Beneficial Owner                 Beneficially Owned       Beneficial Ownership
         ------------------------------------                 ------------------       --------------------
         <S>                                                  <C>                      <C>
         WPG Raytheon Software Fund, L.P.                          9,269,738                    20.9%
         c/o Weiss, Pecks & Greer, LLC
         565 Fifth Avenue, 14/th/ Floor
         New York, NY  10017

         WPG Institutional Software Fund, L.P.                     7,599,161                    17.1%
         c/o Weiss, Pecks & Greer, LLC
         565 Fifth Avenue, 14/th/ Floor
         New York, NY  10017

         WPG Software Fund, L.P.                                   5,316,730                    12.0%
         c/o Weiss, Pecks & Greer, LLC
         565 Fifth Avenue, 14/th/ Floor
         New York, NY  10017

         Gerald R. Alderson                                        4,231,331                     9.5%
         c/o Wattage Monitor
         1100 Kietzke Lane
         Reno, NV 89502

         Robert H. Lessin                                          3,734,120                     8.3%
         c/o Wit Capital
         826 Broadway, 6/th/ Floor
         New York, NY 10003

         PurchasePro.com, Inc.                                     3,676,471                     8.3%
         3291 N. Buffalo Drive
         Las Vegas, NV  89129

         Stephen D. Klein                                          1,375,391                     3.1%
         c/o iballs
         487 Greenwich Street, 5/th/ Floor
         New York, NY 10013

         Alexander Ellis, III                                        282,500                        *

         Vicki L. Center                                             225,000                        *

         Robert E. Forrest                                           225,000                        *

         John D. Westfield                                           116,000                        *

         Willie E. Dennis                                             10,000                        *

         All Officers and Directors (7 persons)                    6,465,223                    14.3%
</TABLE>

              *  Less than one percent (1.0%)

                                       42
<PAGE>

ITEM 12 - Certain Relationships and Related Transactions.

         Between October 26, 2000 and December 7, 2000, RHL Ventures loaned us
an aggregate amount of $332,000, with interest at 12% per annum. The note was
repaid in December of 2000. In connection with the note, on December 7, 2000, we
issued a warrant to RHL Ventures exercisable through November 30, 2003, to
purchase 244,118 shares of our common stock at an exercise price of $0.272 per
share. The warrant was exercisable immediately. Mr. Lessin, one of our
shareholders, is the President and Chief Executive Officer of RHL Ventures.

         Between October 26, 2000 and December 13, 2000, Gerald R. Alderson
loaned us an aggregate amount of $215,000, with interest at 12% per annum. The
note was repaid in December of 2000. In connection with the note, on December
13, 2000, we issued a warrant to Mr. Alderson exercisable through November 30,
2003, to purchase 158,088 shares of our common stock at an exercise price of
$0.272 per share. The warrant was exercisable immediately. Mr. Alderson is our
President and Chief Executive Officer, a director and a shareholder.

         Between October 26, 2000 and November 9, 2000, Stephen D. Klein loaned
us an aggregate amount of $30,000, with interest at 12% per annum. The note was
repaid in December of 2000. In connection with the note, on November 30, 2000,
we issued a warrant to Mr. Klein exercisable through November 30, 2003, to
purchase 22,059 shares of our common stock at an exercise price of $0.272 per
share. The warrant was exercisable immediately. Mr. Klein is the Chairman of our
Board of Directors and a shareholder.

         On November 15, 2000, SDK Investments LLC loaned us $40,000, with
interest at 12% per annum. The note was repaid in December of 2000. In
connection with the note, on November 30, 2000, we issued a warrant to SDK
Investments LLC exercisable through November 30, 2003, to purchase 29,412 shares
of our common stock at an exercise price of $0.272 per share. The warrant was
exercisable immediately. Mr. Klein, the Chairman of our Board of Directors and a
shareholder, is the managing member and the majority investor in SDK Investments
LLC.

         On October 26, 2000, Verus Group loaned us $60,000, with interest at
12% per annum. The note was repaid in December of 2000. In connection with the
note, on November 30, 2000, we issued a warrant to Verus Group exercisable
through November 30, 2003, to purchase 44,118 shares of our common stock at an
exercise price of $0.272 per share. The warrant was exercisable immediately.
Ajmal Khan is the President of Verus Group and is a former director of our
company.

         On November 20, 2000, we entered into a Preferred Supplier Agreement
with PurchasePro.com, whereby we are promoted on PurchasePro.com's global
marketplace. The total contract cost of $500,000 is for two years. We incurred
expense of $27,228 under this agreement for the period ended December 31, 2000.
PurchasePro.com is the beneficial owner of more than five percent of our common
stock.

ITEM 13 - Exhibits, List and Reports on Form 8-K.

  (a) 1.  Financial Statements - See Financial Statements included herein.

      2.  Financial Statement Schedules - Not Applicable.

      3.  Exhibits - Incorporated by reference to the Exhibit Index at the end
          of this Report.

  (b)     Reports on Form 8-K - None.

                                       43
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on March 23, 2001.

                           WATTAGE MONITOR INC.


                           By: /s/ Gerald R. Alderson
                               ----------------------
                               Gerald R. Alderson
                               President, Chief Executive Officer and
                                  Principal Financial Officer

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

                               /s/ Gerald R. Alderson           March 23, 2001
                               ----------------------------
                               Gerald R. Alderson, Director, President,
                                  Chief Executive Officer and
                                  Principal Financial Officer

                               /s/ Stephen D. Klein             March 22, 2001
                               ----------------------------
                               Stephen D. Klein, Director

                               /s/ Alexander Ellis III          March 23, 2001
                               ----------------------------
                              Alexander Ellis III, Director

                                       44
<PAGE>

                                  EXHIBIT INDEX

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

   2.1*       Agreement and Plan of Merger by and between WattMonitor LLC and
              Wattage Monitor, dated as of February 26, 1999 (filed without
              exhibits or schedules) (filed as Exhibit 2.1 to Amendment No. 4 to
              Form SB-2 Registration Statement, filed October 13, 1999).

   3.1*       Amended and Restated Articles of Incorporation of Wattage Monitor
              as filed with the Secretary of State of the State of Nevada on
              February 24, 1999 (filed as Exhibit 3.1 to Amendment No. 4 to Form
              SB-2 Registration Statement, filed October 13, 1999).

   3.2*       Amended and Restated By-Laws of Wattage Monitor, adopted as of
              February 19, 1999 (filed as Exhibit 3.2 to Amendment No. 4 to Form
              SB-2 Registration Statement, filed October 13, 1999).

   3.3*       Certificate of Amendment to Amended and Restated Articles of
              Incorporation of Wattage Monitor as filed with the Secretary of
              State of the State of Nevada on October 11, 2000 (filed as Exhibit
              3.3 to Form S-3, filed November 30, 2000).

   3.4**      Certificate of Amendment to Amended and Restated Articles of
              Incorporation of Wattage Monitor as filed with the Secretary of
              State of the State of Nevada on December 22, 2000.

   4.1*       Specimen Common Stock certificate (filed as Exhibit 4.1 to
              Amendment No. 4 to Form SB-2 Registration Statement, filed October
              13, 1999).

   4.2*       Certificate of Designation of Series A Preferred Stock, as filed
              with the Secretary of State of the State of Nevada on February 24,
              1999 (filed as Exhibit 4.2 to Amendment No. 4 to Form SB-2
              Registration Statement, filed October 13, 1999).

   4.3*       Certificate of Amendment of Certificate of Designation of Series A
              Preferred Stock, as filed with the Secretary of State of the State
              of Nevada on February 26, 1999 (filed as Exhibit 4.3 to Amendment
              No. 4 to Form SB-2 Registration Statement, filed October 13,
              1999).

   4.4*       Certificate of Designation of Series B Preferred Stock, as filed
              with the of State of the State of Nevada on September 9, 1999
              (filed as Exhibit 4.4. to Amendment No. 4 to Form SB-2
              Registration Statement, filed October 13, 1999).

  10.1*       Stock Purchase Agreement by and among Knowledge Networks
              Acquisitions, Inc., Intrepid International S.A. and Certain
              Purchasers, dated February 5, 1999 (filed as Exhibit 10.1 to
              Amendment No. 4 to Form SB-2 Registration Statement, filed October
              13, 1999).

  10.2*       Registration Rights Agreement by and among Wattage Monitor and
              Certain Shareholders, dated as of February 26, 1999 (filed as
              Exhibit 10.3 to Amendment No. 4 to Form SB-2 Registration
              Statement, filed October 13, 1999).

  10.3*       Employment Agreement by and between WattMonitor LLC and Gerald R.
              Alderson, dated January 1, 1998, as assumed by Wattage Monitor on
              February 26, 1999 (filed as Exhibit 10.4 to Amendment No. 4 to
              Form SB-2 Registration Statement, filed October 13, 1999).

                                       45
<PAGE>

   10.4*      Warrant to Stephen D. Klein to purchase 33,333 Class II Membership
              Units of WattMonitor LLC, dated December 29, 1998 (filed as
              Exhibit 10.5 to Amendment No. 4 to Form SB-2 Registration
              Statement, filed October 13, 1999).

   10.5*      Warrant to RHL Ventures LLC to purchase 100,000 Class II
              Membership Units of WattMonitor LLC, dated December 29, 1998
              (filed as Exhibit 10.6 to Amendment No. 4 to Form SB-2
              Registration Statement, filed October 13, 1999).

   10.6*      Warrant to Gerald R. Alderson to purchase 33,333 Class II
              Membership Units of WattMonitor LLC, dated December 29, 1998
              (filed as Exhibit 10.7 to Amendment No. 4 to Form SB-2
              Registration Statement, filed October 13, 1999).

   10.7*      Warrant to RHL Ventures LLC to purchase 283,333 Class II
              Membership Units of WattMonitor LLC, dated August 14, 1998 (filed
              as Exhibit 10.8 to Amendment No. 4 to Form SB-2 Registration
              Statement, filed October 13, 1999).

   10.8*      Wattage Monitor 1999 Incentive Compensation Plan (filed as Exhibit
              10.10 to Amendment No. 4 to Form SB-2 Registration Statement,
              filed October 13, 1999).

   10.9*      Stock Purchase Agreement by and among Wattage Monitor Inc., WPG
              Software Fund, L.P., WPG Raytheon Software Fund, L.P., WPG
              Institutional Software Fund, L.P. and PurchasePro.com, Inc., dated
              November 28, 2000 (filed as Exhibit 10.1 to Form S-3, filed
              November 30, 2000).

   10.10*     PurchasePro.com, Inc. Preferred Supplier Agreement by and between
              Wattage Monitor and PurchasePro.com, Inc., dated as of November
              20, 2000 (filed as Exhibit 10.2 to Form S-3, filed November 30,
              2000).

   10.11*     Stock Purchase Agreement by and among Wattage Monitor Inc., Gerald
              R. Alderson, Vicki L. Center and Robert E. Forrest, dated December
              22, 2000 (filed as Exhibit 10.2 to Form 8-K, filed January 5,
              2001).

   10.12*     Secured Promissory Note, dated December 22, 2000, between Vicki L.
              Center as "Maker" and Wattage Monitor Inc. as "Payee" (filed as
              Exhibit 10.3 to Form 8-K, filed January 5, 2001).

   10.13*     Secured Promissory Note, dated December 22, 2000, between Robert
              E. Forrest as "Maker" and Wattage  Monitor Inc. as "Payee" (filed
              as Exhibit 10.4 to Form 8-K, filed January 5, 2001).

   10.14*     Secured Promissory Note, dated December 22, 2000, between Gerald
              R. Alderson as "Maker" and Wattage Monitor Inc. as "Payee" (filed
              as Exhibit 10.5 to Form 8-K, filed January 5, 2001).

   10.15*     Form of Stock Pledge Agreement, dated December 22, 2000 (filed as
              Exhibit 10.6 to Form 8-K, filed January 5, 2001).

   10.16**    Warrant to RHL Ventures LLC to purchase  244,118 shares of common
              stock of Wattage Monitor Inc, dated December 7, 2000.

                                       46
<PAGE>

     10.17**   Warrant to Gerald Alderson to purchase 158,088 shares of common
               stock of Wattage Monitor Inc, dated December 13, 2000.

     10.18**   Warrant to Verus Group to purchase 44,118 shares of common stock
               of Wattage Monitor Inc, dated November 30, 2000.

     10.19**   Warrant to SDK Investments LLC to purchase 29,412 shares of
               common stock of Wattage Monitor Inc, dated November 30, 2000.

     10.20**   Warrant to Stephen Klein to purchase 22,059 shares of common
               stock of Wattage Monitor Inc, dated November 30, 2000.

     10.21**   Warrant to Marousa Dumaresq to purchase 14,706 shares of common
               stock of Wattage Monitor Inc, dated November 30, 2000.

     10.22**   Warrant to Stratosphere International Ltd. to purchase 7,353
               shares of common stock of Wattage Monitor Inc, dated November 30,
               2000.

     10.23**   Warrant to Jonathan Cohen to purchase 36,765 shares of common
               stock of Wattage Monitor Inc, dated December 8, 2000.

     10.24**   Lock-Up Agreement of Gerald R. Alderson executed by Gerald R.
               Alderson, effective as of November 28, 2000.

     10.25**   Lock-Up Agreement of Gerald R. Alderson IRA executed by Gerald R.
               Alderson, effective as of November 28, 2000.

     10.26**   Lock-Up Agreement of RHL Ventures LLC executed by Robert H.
               Lessin, effective as of November 28, 2000.

     10.27**   Lock-Up Agreement of Robert H. Lessin executed by Robert H.
               Lessin, effective as of November 28, 2000.

     10.28**   Lock-Up Agreement of Stephen D. Klein executed by Stephen D.
               Klein, effective as of November 28, 2000.

     10.29**   Loan Agreement by and among Wattage Monitor Inc. "Borrower" and
               RHL Ventures LLC, Gerald Alderson, Verus Group, SDK Investments
               LLC, Stephen Klein, Marousa Dumaresq, Stratosphere International
               Ltd. and Jonathan Cohen, collectively "Lenders" dated November
               30, 2000.

     10.30**   Security Agreement by and among Wattage Monitor Inc. "Debtor" and
               RHL Ventures LLC, Gerald Alderson, Verus Group, SDK Investments
               LLC, Stephen Klein, Marousa Dumaresq, Stratosphere International
               Ltd. and Jonathan Cohen, collectively "Secured Parties" dated
               November 30, 2000.

     10.31**   Warrant Agreement by and among Wattage Monitor Inc. "Company" and
               RHL Ventures LLC, Gerald Alderson, Verus Group, SDK Investments
               LLC, Stephen Klein, Marousa Dumaresq, Stratosphere International
               Ltd. and Jonathan Cohen, collectively "Lenders" dated November
               30, 2000.

                                       47
<PAGE>

     10.32**   Promissory Note between  Wattage Monitor Inc.  "Borrower" and RHL
               Ventures LLC, Gerald Alderson,  Verus Group, SDK Investments LLC,
               Stephen Klein, Marousa Dumaresq,  Stratosphere International Ltd.
               and Jonathan  Cohen,  collectively  "Lenders"  dated November 30,
               2000.

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

             * Exhibits designated with an asterisk (*) have previously been
               filed with the Commission and are incorporated herein by
               reference to the document referenced in parentheticals following
               the descriptions of such exhibits.

            ** Filed herewith.

                                       48