<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  Form 10-KSB


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

  [_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934
            For the transition period from __________________ to _____________
                       Commission file number ________________________________

                                PC-EPhone, Inc.
                       ---------------------------------
                         Name of Small Business Issuer

<TABLE>
                            Nevada                                                      98-0197707
----------------------------------------------------------------------  -------------------------------------------
<S>                                                                     <C>
(State or other jurisdiction of incorporation or organization)             (I.R.S. Employer Identification No.)
</TABLE>

<TABLE>
                Suite 515, 3440 Wilshire Blvd,
                   Los Angeles, California                                                   90010
----------------------------------------------------------------------  -------------------------------------------
<S>                                                                     <C>
           (Address of principal executive offices)                                       (Zip Code)
</TABLE>

Issuer's telephone number: (213) 487-8000
                           --------------

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

Securities registered under Section 12(g) of the Exchange Act:

                        Common Shares, $0.001 par value
                        -------------------------------
                               (Title of class)

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

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

  The issuer's revenues for the year ended December 31, 2000 were $872,000.

  The aggregate market value of the voting stock held by non-affiliates of the
  registrant as of February 28, 2001, based on the closing trading price of the
  day of $6.25 for the issuer's Common Shares, $0.001 par value (the "Common
  Shares") was $72,921,231.

  The number of shares outstanding of the issuer's common equity, as of February
  28, 2001, were 16,122,167.
<PAGE>

<TABLE>
<CAPTION>
DESCRIPTION                                                                          PAGE
<S>                                                                                  <C>

               PART I

Forward-Looking Statements                                                              3

Business                                                                                3

Properties                                                                             25

Legal Proceedings                                                                      25

Submission of Matters to a Vote of Securities Holders                                  25

               PART II

Market for Common Equity and Related Stockholder Matters                               27

Management's Discussion and Analysis of Financial Condition and Results of             28
Operations

Financial Statements                                                                 F-1

Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure                                                                             31

               PART III

Directors and Executive Officers of the Registrant; Compliance with Section 16(a)
of the Exchange Act                                                                    32

Executive Compensation                                                                 34

Security Ownership of Certain Beneficial Owners and Management                         34

Certain Relationships and Related Transactions                                         36

Exhibits and Reports on Form 8-K                                                       37
</TABLE>

                                      -2-
<PAGE>

                                    PART I
Forward-Looking Statements

This Annual Report on Form 10-KSB includes "forward-looking" statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").  Certain important factors may affect the Company's actual
results and could cause such results to differ materially from any forward-
looking statements that may be deemed to have been made in this Form 10-KSB
including, without limitation, statements under "Description of Business" and
"Management's Discussion and Analysis or Plan of Operation", or that are
otherwise made by or on behalf of the Company.  For this purpose, any statements
contained in this Form 10-KSB that are not statements of historical fact may be
deemed to be forward-looking statements.  Without limiting the generality of the
foregoing, words such as "may," "expect," "believe," "anticipate," "intend,"
"could," "estimate," or "continue," or the negative or other variations
therefor, or comparable terminology, are intended to identify forward-looking
statements. Readers are directed to the discussion under "Risk Factors" herein
for a presentation of various risks that could materially affect the Company's
business and which could alter the actual outcome of any and all such forward-
looking statements.

Description of Business

PC-EPhone, Inc. (the "Company") is a corporation organized under the laws of the
State of Nevada.  On June 17, 1998, the Company was incorporated under the name
"Newlands Oil & Gas Inc." The name of the Company was changed to "PC-EPhone,
Inc." on December 15, 2000.

The Company was originally organized to explore and develop oil and gas
properties in California. By agreement (the "Agreement") dated March 1, 1999
between the Company and Brothers Oil & Gas Inc. ("Brothers"), the Company had an
option to earn 70% of Brothers' 10% working interest in certain oil and gas
leases, options to lease and seismic options located on the Travis 3D Seismic
Project located in Solano County, California (the "Lands").  The Company paid
$73,000 to Brothers pursuant to the Agreement which amount is equal to Brothers'
total land and seismic acquisition costs associated with the Lands.  The
estimated land and seismic costs were $83,000 at the time the Agreement was
entered into.  However, cost savings were realized and the total land and
seismic costs were in fact, $73,000.  The Company subsequently paid Brothers
$83,506 to drill wells on the property.

Under the terms of the Agreement, the Company was required to pay 10% of the
cost of each test well drilled.  If the Company elected not to pay this amount
within 15 days of a cash call, then the Company would not have rights to any
test wells or development wells drilled on that prospect.  The Company could
only participate in development wells on a prospect by contributing 10% of the
costs of drilling an initial test well on that prospect.  The Company's option
was not assignable without the written permission of Brothers.

On August 18, 2000, the Company decided not to exercise its option on the Lands
and abandoned the oil and gas exploration business, at which time it began to
pursue the opportunities related to PC-EPhone.

                                      -3-
<PAGE>

By a distribution agreement (the "Distribution Agreement") dated November 6,
2000, the Company's wholly own Bermuda subsidiary, PC-EPhone Ltd. ("PC-EPhone
Ltd.")  was granted certain distribution rights by Cyberbank Corp.
("Cyberbank"), a corporation incorporated in the Republic of Korea.  Cyberbank
has developed a handheld device/terminal, named the "PC-EPhone" that can be used
to perform multiple functions on a Code Division Multiple Access ("CDMA") or
other wireless application protocol system.

The Company intends to market and sell PC-EPhone units throughout Canada and the
United States pursuant to the Distribution Agreement.  The Company intends to
negotiate additional distributions rights with Cyberbank in the foreseeable
future. The Company, through PC-EPhone Ltd., has signed a sub-distribution
agreement with FutureCom Global, Inc. ("FutureCom"), a private Nevada
corporation in the business of development, distribution and servicing of
telecommunications products and services with an emphasis on the wireless
market.  The Company, in conjunction with FutureCom, plans to actively promote
and market the PC-EPhone throughout the United States and Canada.

Product

The PC-EPhone is a wireless handheld device developed by Cyberbank that combines
the features of a hand-held computer, with wireless Internet access, a cellular
phone, and a personal digital assistant.

Cyberbank built the original prototype of the PC-EPhone in late 1999.  Cyberbank
has continuously developed and refined the PC-EPhone and completed development
of a functional version of the PC-EPhone during the year 2000.  Cyberbank's
research and development department has continually improved and enhanced the
PC-EPhone.  New features and innovative enhancements are expected to be
introduced regularly.

The PC-EPhone is the Company's only product at this time.  As a practical and
convenient device, the PC-EPhone offers all of the features of a hand-held
computer with the flexibility of voice communication.  The PC-EPhone's principal
features are as follows:

     1.  Hand-held personal computer;
     2.  Mobile telecommunication equipped for both voice and data;
     3.  Bluetooth technology for wireless communication;
     4.  Mobile Internet and E-commerce enabled;
     5.  Four inch (4") color TFT LCD with touch screen capability; and
     6.  Multimedia functions with Mpeg and MP3 (video and audio streaming).

The PC-EPhone is a "multi" product with a broad array of functions, including
the following:

--------------------------------------------------------------------------------
Personal Computer              .  Pocket Word
                               .  Address Book
                               .  Scheduler
                               .  Memo
                               .  Recorder
                               .  MS Pocket Office installable
--------------------------------------------------------------------------------

                                      -4-
<PAGE>

--------------------------------------------------------------------------------
Mobile Phone                   .  Built-in Microphone and Speaker
                               .  Head Set Communication
                               .  Data Communication Including SMS
                               .  Wireless Communication with a Stylus Handset
--------------------------------------------------------------------------------
Wireless Internet              .  Direct Web Surfing (IE 4.0 CE)
                               .  Internet Mail (SMTP/POP, IMAP)
                               .  Chat Line Capabilities
                               .  Tel Net Capabilities
--------------------------------------------------------------------------------
Multimedia & others            .  Gaming
                               .  MP3 Player
                               .  MPEG Video
                               .  Handwriting Recognition
                               .  Hand-held Navigation System (GPS)
                               .  Cyber Stock Trading and Banking
                               .  Compact Flash Memory
--------------------------------------------------------------------------------

New Products & Features

Cyberbank intends to continue to upgrade and refine the PC-EPhone.  Cyberbank
has advised the Company that the PC-EPhone is expected to have the following
additional features available in the near future:

--------------------------------------------------------------------------------
Other Plug-ins and Add-on      .  Wireless Payment System
Functions                      .  Video phone (video conferencing)
                               .  Web phone
                               .  Digital camera
                               .  Bar code scanner
                               .  Wireless printer
                               .  Hard disk
                               .  Plug & talk for GSM or CDMA module

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


Distribution

Under the Distribution Agreement, Cyberbank granted to the Company, through PC-
EPhone Ltd., an exclusive distribution license to market, sell and distribute
the PC-EPhone within the United States and Canada, as well as non-exclusive
distribution rights outside of the United States and Canada.  The term of the
Distribution Agreement will expire on December 31, 2007, subject to the Company
meeting certain performance requirements established thereunder.

The Company is required to purchase a minimum of 500,000 PC-EPhone units by the
later of December 31, 2001 and the date that is one year from the date that the
PC-EPhone is approved by the Federal Communications Commission ("FCC") for
retail sale in the United States. Thereafter, the Company will be required to
purchase an annual minimum of 500,000 units of the PC-EPhone product from
Cyberbank.  As of March 22, 2001, the FCC has not yet approved the PC-EPhone for
sale in the United States.

Pursuant to the Distribution Agreement, the Company made an initial purchase of
1,000 PC-EPhones in late 2000.  The Company was obligated pursuant to the
Distribution Agreement to purchase 35,000 PC-EPhone units within 7 days after
the receipt of the initial shipment of

                                      -5-
<PAGE>

1,000 PC-EPhones. The Distribution Agreement allows for termination by Cyberbank
should the Company fail to meet defined minimum purchase requirements. If
Cyberbank were to terminate the Distribution Agreement, the Company would have
no further rights to market, sell or distribute the PC-EPhone. However, in light
of the ongoing FCC approval process, the Company and Cyberbank executed a letter
agreement dated February 8, 2001, pursuant to which, Cyberbank waived and/or
deferred certain requirements imposed by the Distribution Agreement, described
in further detail below.

In consideration for the rights acquired, the Company, through PC-EPhone Ltd.,
issued 3,500,000 shares of its Common Shares, par value $ 0.001 (the "Common
Shares") to Cyberbank pursuant to the Distribution Agreement.  The Company also
agreed to use its best efforts to nominate two candidates put forth by Cyberbank
to its Board of Directors in the near future.  In the event that such conditions
are not met and maintained, Cyberbank may terminate the Distribution Agreement,
and in such case the Company would have no further rights with respect to the
PC-EPhone.

On March 29, 2001, the Board of Directors of the Company appointed two nominees
put forth by Cyberbank to sit on the Board.  If the shareholders fail to approve
such directors at the Company's annual meeting, Cyberbank could terminate the
Distribution Agreement.

Effective November 15, 2000, the Company, through PC-EPhone Ltd., entered into a
subdistributor agreement (the "Subdistributor Agreement") with FutureCom.
FutureCom is in the business of developing, distributing and servicing
telecommunications products with an emphasis on the wireless market.  The
Subdistributor Agreement authorizes FutureCom to market and distribute the PC-
EPhone and use the PC-EPhone trademark within the territory of Canada and the
United States in consideration for FutureCom's commitment to purchase certain
minimum quantities of PC-EPhones.

On February 8, 2001 the Company and Cyberbank executed a letter agreement
pursuant to which Cyberbank waived and/or deferred the certain of the Company's
obligations, including the Company's obligation to purchase 35,000 PC-EPhone
units within 7 days of receipt of the initial 1,000 PC-EPhone units (as
discussed above), until fifteen (15) business days subsequent to Cyberbank
having obtained final written approval from the FCC and the delivery of evidence
of such approval to the Company.

On February 9, 2001 the Company, Cyberbank and FutureCom entered into a tri-
party agreement (the "Tri-Party Agreement") that clarified some of the terms of
the contractual relationships among the three companies.  The Tri-Party
Agreement calls for a purchase order supported by a standby letter of credit to
be issued at least 3 months prior to the shipment dates of PC-EPhone units to be
ordered.

FutureCom is currently in negotiations to establish one or more letters of
credit in order to fulfill its obligations under the Subdistributor and Tri-
Party Agreements, however no such letters of credit have been established to
date.  There can be no assurances that such letters of credit can or will be
established.

                                      -6-
<PAGE>

Establishment of Distribution Networks

The Company and FutureCom expect to actively promote and market the PC-EPhone
throughout the United States and Canada.  The intention is to focus sales
efforts on the following types of customers in order to establish distribution
networks for the PC-EPhone:

     1.   Wireless Network Providers
     2.   Major Retail Distributors
     3.   Wholesale Distributors

Wireless Network Providers:  With respect to the PC-EPhones' wireless
communications capabilities, the Company expects to target companies such as
Verizon Wireless, Sprint, AT&T Wireless, MCI, Airtouch, Telus Mobility, Bell
Mobility, and others who offer retail wireless products in connection with
provision of wireless access services.

Major Retail Distributors:  Since the PC-EPhone is a multi-function wireless
convergence device, the Company will also focus on major retail distributors who
specialize in electronics products.  Target companies in this category include
Radio Shack, Best Buy, Future Shop, and London Drugs.

Wholesale Distributors:  The features of the PC-EPhone present an innovative
product for companies with a focus on retail electronics products.  There are
numerous independent retailers of computers and phones who source their products
from wholesalers.  The Company expects to target wholesalers who sell computers
and phones to these independent retailers.

In addition to the foregoing traditional distribution channels, the Company also
expects to pursue online marketing programs.  As a sales and marketing strategy,
the Company may offer various promotions for initial customers who purchase the
PC-EPhone.  The Company expects to actively participate in marketing and
promotion efforts regarding brand development and end-user interest in the PC-
EPhone.

Industry Overview

The Company believes that there are currently no other products or devices on
the market that combine all of the features and functionality of the PC-EPhone.
The PC-EPhone combines features of a handheld computer, mobile telephone,
wireless messaging device, and a personal digital assistant ("PDA"), with
wireless multimedia and Internet graphic Web browsing capability. The PC-EPhone
crosses established product and industry category lines that have traditionally
divided such products as computers, mobile phones and PDAs.  The Company
believes that the PC-EPhone can compete directly and indirectly with a
substantial number of products now on the market, such as mobile phones,
wireless Internet and other handheld computers and devices.

The Company believes that the prototypical end-user of the PC-EPhone will be the
same type of individual who has use for a high-end PDA with wireless Internet
capability: a busy professional who has become increasingly mobile.  The Company
further believes that these

                                      -7-
<PAGE>

individuals are seeking increasingly efficient ways to access, communicate and
manage, critical personal and professional information.

Many of these professionals used conventional paper-based organizers and, later,
stand-alone electronic pocket organizers or portable computers to accomplish
these tasks: early tools were met with mixed success, were often cumbersome and
offered limited functionality.

The introduction of the first PDAs ushered in a new market for handheld devices
that offered users a combination of simplicity and functionality.  Innovations
in design, synchronization technology, user interface, programmability, and
battery power management soon followed.  These devices have evolved into
convenient productivity tools significantly accelerating hand-held user demand.

The emergence of technologies enabling wireless access to the Internet and
enterprise data is again transforming the handheld device industry.  The
Internet has become an important way for consumers and professionals to access
personal and business information, communicate with peers and access services.
The Company believes that wireless access to Internet content and enterprise
data will make handheld computing devices increasingly valuable to users. This
value proposition is driving a variety of handheld information appliance
manufacturers to add Internet connectivity features to products such as mobile
phones.

With the PC-EPhone, the Company believes that it will introduce into the U.S.
and Canadian markets, a highly sophisticated and functional combination handheld
communications and productivity device. The Company is not aware of any other
product on the market today that provides the same combination of features as
the PC-EPhone.

The Company believes that continued technological innovations that address end-
user needs will be a critical component of industry-wide growth.  Technological
advances have led to significant reductions in size and weight of most analogous
products, not to mention improvements in battery life, reliability and storage
capacity.  Third-party developers, who create software applications and
complementary accessories, supplement manufacturers' innovations and allow end-
users to customize and enhance their respective devices. The Company expects to
benefit from such third-party developers creation and innovative software and
accessory products to complement the PC-EPhone which may attract new users and
encourage device upgrades.

Competition

The PC-EPhone will cross current competitive category product lines, combining
features of PDAs, mobile phones, wireless Internet access devices, and hand-held
computers.  The Company believes that it is reasonably well-positioned to
compete favorably with currently available products in each of these markets.
The market for such products is highly competitive.  Most of the Company's
competitors or potential competitors have significantly greater financial,
technical and marketing resources than does the Company.  In addition, in many
cases these competitors do not rely on outside organizations for product
development, and they may be able to respond more rapidly to new or emerging
technologies or changes in

                                      -8-
<PAGE>

customer requirements than is the Company. They may also devote greater
resources to the development, promotion and sale of their products than does the
Company.

The Company projects that the PC-EPhone will compete with a variety of handheld
devices, including pen and keyboard based devices, mobile phones, sub-notebook
computers, personal and hand-held computers, as well as PDAs and wireless
messaging systems.  The Company believes its principal competitors will include
Palm, Inc., Casio, Compaq, Kyocera, Hewlett-Packard, Nokia, Psion, Sharp,
Ericsson, Motorola, Samsung, Siemens and Visor Handspring.  In addition other
companies may develop products similar to the PC-EPhone in the near future.

The Company also believes that the principal competitive factors impacting the
market for the PC-EPhone will include functionality, features, operating system
performance, styling, availability, brand and price.  In addition, the Company
is dependent on suppliers such as Microsoft for the PC-EPhone operating system
and the development of third-party applications that will appeal to end-users.
Few if any of these factors fall within the Company's direct control given its
dependence on Cyberbank for ongoing product development.

The Company expects the PC-EPhone will compete with a variety of alternative
devices, technologies and services.  Mobile phone manufacturers and service
providers including Nokia, Motorola and Sprint have recently introduced mobile
phones that offer Internet connectivity.  The Company expects that the trend
toward integrating Internet connectivity into combination hand-held devices will
continue to accelerate as industry standards emerge.

The worldwide market for PDAs is anticipated to increase based on the following
factors:

     .    The number of domestic mobile internet users is anticipated to
increase due to the increased sales of mobile internet devices and the advent of
various mobile internet contents providers.

     .    23% of world mobile phone users have expressed their intention to
purchase a new mobile internet device for mobile data use within 5 years (ARC
Group Report).

     .    70% of mobile internet devices are forecasted to be subsidized in
whole or in part (Gartner Group, Itxpo2000 Report).

Certain products that are already available on the worldwide market have certain
features that could compete with the PC-EPhone.  However, a comparison of
recently reported comparables in the table below indicates that none of them
currently match the combination of features of the PC-EPhone:

                                      -9-
<PAGE>

                             Performance Comparison
                             ----------------------

<TABLE>
<CAPTION>
-------------- --------------------- ---------------------- --------------------- ---------------------
    Item        PC-EPHONE                  Palm VIIx             Compaq iPAQ         HP Jornada 540
-------------- --------------------- ---------------------- --------------------- ---------------------
<S>            <C>                    <C>                    <C>                    <C>
Product         PDA   +    CDMA   +   PDA + Wireless         PDA                   PDA
Concept         Bluetooth             Modem (Data only)
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Voice           Yes                   No                     No                    No
Communication
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Wireless                                                     Limited (possible     Limited (possible
Data            Yes                   Yes                    when connected        when connected
Communication                                                with cell phone)      with cell phone)
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Wireless                                                     Limited (possible     Limited (possible
Internet        Yes (Unlimited)       Yes (Limited to        when connected        when connected
Access                                text)                  with cell phone)      with cell phone)
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
CPU             206 MHz RISC chip                            206 MHz RISC chip
                (Intel `Strong        Low CPU speed          (Intel `Strong        133MHz Hitachi SH3
                Arm' 1110)                                   Arm' 1110)
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Memory          32MB Flash Memory     8MB storage capacity   16MB ROM              16MB ROM
                32MB RAM                                     32MB RAM              16MB RAM
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Display         640x480 resolution                           240x320 resolution
                4" 256 Color TFT                             2.26x3.02" color      240x320 resolution
                LCD Touch screen      Mono backlit display   TFT LCD               Color TFT LCD
                                                             Touch screen          Touch screen
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Interface       CDMA (MSM3000 chip)
                IrDA / Bluetooth      IrDA                   IrDA                  IrDA
                CompactFlash slot     Wireless Modem         CompactFlash slot     CompactFlash slot
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Operating       Windows CE 3.00       Palm OS 3.5            Windows Powered      MS Windows for
System                                                       Pocket PC S/W         Pocket PC
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Built-in        Serial port                                                        Serial port, USB
                (RS-232C)             Built-in connector     USB & Serial port     cradle
                Microphone, Speaker   to attach expansion    Microphone, Speaker   Microphone, Speaker
                Audio out jack        devices                Audio out jack        Audio out jack
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Power           Lithium ion
                rechargeable                                                       Lithium ion
                battery               2 AAA batteries       Lithium Polymer        rechargeable
                (PDA 4H, Phone 6H,    last 2 to 4 weeks                            battery
                Standby time 60H)                                                  8 hours
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Size            127H  x  102W x 22D
                (mm)
                                      133H x  82.5W  x 19D   129.7H  x  83.3W  x   130H  x  78W  x 16D
                Bluetooth Hand        (mm)                   15.7D (mm)            (mm)
                set:  120H  x 20W x
                13.4D
-------------- --------------------- ---------------------- --------------------- ---------------------
-------------- --------------------- ---------------------- --------------------- ---------------------
Weight          299 grams with        190 grams with         178 grams with        260 grams with
                battery               batteries              battery               battery
-------------- --------------------- ---------------------- --------------------- ---------------------
</TABLE>

                                     -10-
<PAGE>

The Company is aware of competitive forces and plans to compete with them
through an aggressive marketing and distribution program.  To date the Company
has not made any commercial sales of the PC-EPhone and may not do so until
approval is obtained from the FCC, and Industry Canada.  See "Regulation" below.
The Company expects to be able to compete effectively in the market after such
approval is granted, however, there can be no assurance in this regard.

Suppliers

Cyberbank is the Company's sole supplier of PC-EPhones.

Patent/Trademark Information

The Company is in the process of trademarking the "PC-EPhone" brand name.  An
application has been filed to trademark the "PC-EPhone" brand name in Canada,
and the Company is preparing to file a trademark application for the "PC-EPhone"
brand name in the United States.  There is no guarantee that the Company will be
granted a trademark.

The Company is reliant on Cyberbank for protection of any and all patent-related
intellectual property rights with respect to the PC-EPhone.

Regulation

Users of two-way radios are regulated by a variety of governmental and other
regulatory agencies throughout the world.  In the United States, users of two-
way radios are licensed by the Federal Communication Commission ("FCC"), which
has broad authority to make rules and regulations and prescribe restrictions and
conditions to carry out the provisions of the Communications Act of 1934.  The
FCC's authority includes, among other things, the power to classify radio
stations, prescribe the nature of the service to be rendered by each class of
station, assign frequencies to the various classes of stations and regulate the
kinds of equipment that may be used.  Industry Canada, which regulates the
communications industry in Canada, has similar authority.  The Company's
business and results will initially depend on the approval by the FCC and
Industry Canada of the PC-EPhone for sale in their respective jurisdictions.
However, the Company's business and results could also be affected by rules and
regulations adopted by the FCC and/or Industry Canada from time to time in the
future.  In addition, the overall growth and results of the two-way radio
communications industry may be affected by the regulations of the FCC and/or
Industry Canada relating to the allocation of frequencies for land mobile
communications users, especially in urban areas where such frequencies are
heavily used.

In late January 2001, Cyberbank filed an application with the FCC with respect
to the sale of PC-EPhones in the United States.  The Company expects that the
FCC will approve the PC-EPhone for sale in the United States in the near future,
however there can be no assurance that such approval will be obtained.

                                     -11-
<PAGE>

The PC-EPhone will likewise require approval by Industry Canada prior to its
sale in Canada.  The Company expects to file an application for approval of the
PC-EPhone with Industry Canada following approval by the FCC.  The Company
expects that Industry Canada will approve the PC-EPhone for sale in the Canada
in the near future, however there can be no assurance that such approval will be
obtained.

Research & Development

To date, the Company has not borne any of the costs associated with the research
and development of the PC-EPhone, as such costs have been paid by Cyberbank.
The Company does not expect to incur any direct costs with respect to PC-EPhone
research and development during the foreseeable future, however there can be no
assurance in this regard.

Employees

The Company currently has no full-time employees.  The Company has several
management consultants that render administrative, managerial, and marketing
services to the Company.

Risk Factors

Limited Operating History.  The Company was incorporated under the laws of
Nevada on June 17, 1998, and therefore has a limited operating history.  From
incorporation through August 18, 2000, it was an oil and gas exploration and
development company.  It has only been a telecommunications distribution company
since November 2000.  The Company's chances of financial and operational success
are subject to the risks, uncertainties, expenses, delays and difficulties
associated with starting a new business in a highly competitive field, many of
which may be beyond the Company's control.  The Company's future financial
results will depend primarily on its ability to distribute the PC-EPhone and
meet the requirements of the Distribution Agreement with Cyberbank.  There can
be no assurance that the Company will achieve or sustain profitability or
positive cash flows from operating activities in the future.  The revenue and
income potential of the Company's products and business are unproven.  The
Company cannot predict the viability of the PC-EPhone in the market.  Failure by
the Company to sell PC-EPhones in adequate numbers and/or failure to overcome
startup risks, uncertainties, expenses, delays and difficulties could materially
and adversely affect the business, financial condition and results of operations
of the Company.

The Company will be Wholly Dependent on Cyberbank to Supply it with PC-EPhones.
The Company depends on Cyberbank to supply it with PC-EPhone units in sufficient
quantities, on a timely basis and at satisfactory quality levels.  Cyberbank
intends to either manufacture the PC-EPhones units, or sub-contract such
manufacturing processes to sub-manufacturers.  If Cyberbank fails to supply the
Company with a reliable product or to produce such product in adequate numbers
on a timely basis, the Company's reputation would suffer which would adversely
affect sales and therefore materially and adversely affect the business,
financial condition and results of operations of the Company.

                                     -12-
<PAGE>

The Market for Handheld Wireless Computing and Communication Devices such as the
PC-EPhone is Characterized by Rapid Technological Change and Evolving Industry
Standards.  The Company will be Wholly Dependent on Cyberbank to Modify and
Improve the PC-EPhone.  The market in which the PC-EPhone is expected to compete
is characterized by rapidly changing technology, evolving industry standards,
changes in customer needs, heavy competition and frequent new product
introductions.  The Company will be wholly dependent on Cyberbank to modify
and/or improve the PC-EPhone in response to changes in technology or industry
standards.  In the absence of the successful and timely implementation of such
modifications and improvements, the PC-EPhone could rapidly become less
competitive or even obsolete.  The Company's future success will depend, in
part, on Cyberbank's ability to:

     .  use leading technologies effectively;

     .  continue to develop technical expertise;

     .  enhance the PC-EPhone;

     .  influence and respond to emerging industry standards and other
        technological changes.

        The Company will depend on Cyberbank's timely and cost effective
responses to changing technology and industry standards. Cyberbank may not be
successful in effectively using new technologies, developing new products or
enhancing the PC-EPhone on a timely and cost effective basis. Cyberbank's
pursuit of necessary technology may require substantial time and expense, and
may require the licensing of new technologies to respond to technological
change. Such licenses might not be available on acceptable terms for the Company
and/or Cyberbank. In addition Cyberbank may not succeed in adapting the PC-
EPhone to new technologies as they emerge.

The Company Currently Depends on Cyberbank to Develop New, Innovative and
Commercially Viable Products.  Failure by Cyberbank to Develop such Products,
could Decrease Demand for the PC-EPhone.  The Company expects that Cyberbank
will develop additional and complementary products in the future, in connection
with the PC-EPhone.  The Company currently has no plans to utilize other
suppliers for new products, and would enjoy no advantages in any efforts to seek
out and develop relationships with other suppliers.  Failure by Cyberbank to
provide the Company with an ongoing line of new, innovative, and commercially
viable products in the future could damage the Company's credibility and
decrease consumer interest in and sales of the PC-EPhone.

If Popular Applications are not Developed for the PC-EPhone, Demand for the PC-
EPhone could be Limited.  To differentiate the Company's products from those of
competitors in the future, and attract large numbers of consumer purchasers for
the PC-EPhone in the future, the Company believes that third parties will need
to develop compelling software applications for the PC-EPhone.  There can be no
assurances that the Company will be able to attract such third-party application
developers in the near future, because of the unproven nature of the PC-EPhone
within the industry or for technological or other reasons.

                                     -13-
<PAGE>

If such applications are not developed, demand for the PC-EPhone may materially
diminish, thus adversely affecting the business, financial condition and results
of operations of the Company.

The Price and the Unique, Complex and Comprehensive Design of the PC-EPhone may
not be Accepted by Consumers.  The perceived value of the PC-EPhone is based on
the Company's unproven expectation that the PC-EPhone's unique, complex and
comprehensive design, and relatively high target retail price point when
compared with other currently available handheld devices with similar features,
will prove popular with consumers.  There can be no assurances that consumers
will prefer the PC-EPhone to other competing products currently on the market,
or that may be introduced from time to time in the future, or that consumers
will purchase the PC-EPhone in sufficient quantities to sustain the Company's
business.  Failure to achieve adequate sales of the PC-EPhone, would materially
and adversely affect the business, financial condition and results of operations
of the Company,

Failure to Accurately Anticipate Demand for the PC-EPhone could result in the
Company's Inability to Secure Sufficient Quantities of the PC-EPhone or in
Excess Inventory.  Because the Company has no operating history in this business
sector, and has not begun selling the PC-EPhone, there is very little
information about demand for the PC-EPhone.  The Company believes demand of the
PC-EPhone will depend on many factors and that it will be difficult to forecast.
Significant unanticipated fluctuations in demand could cause problems in the
Company's and its suppliers operations.  If demand does not develop as expected,
the Company could find itself with significant excess inventory resulting from
its obligation under the Distribution Agreement.  If demand exceeds the
Company's expectations, Cyberbank and/or its sub-manufacturers will need to
rapidly increase production, and there can be no assurances that this will be
possible.  Cyberbank's suppliers will also need to provide additional volumes of
components, which may not be possible within required timeframes.  Even if
Cyberbank and/or its sub-manufacturers are able to obtain enough components,
they might not be able to produce adequate PC-EPhones to meet market demands.
The inability of Cyberbank, its sub-manufacturers and/or its suppliers to
increase production rapidly enough, could cause the Company to fail to meet
customer demand and damage the Company's reputation. In addition, rapid
increases in production levels to meet unanticipated demand could result in
higher costs for manufacturing and supply of components and other expenses.
These higher costs might ultimately be passed on to the Company and could
adversely affect its profit margins.

The Company Will Rely on Third Parties for Repair Services and Technical
Support. The Company's Reputation and Results of Operations could be Harmed by
its Inability to Control Such Third Party's Operations.  The Company expects to
rely on third parties to repair units and provide technical support.  If such
repair services or technical support services are interrupted or experience
quality problems, the Company's ability to meet customer demands would be
harmed, causing a loss of revenue and harm to the Company's reputation.
Although the Company will have the ability to add new service providers or
replace existing ones, transition difficulties and lead times involved in
developing additional or new third party relationships could cause interruptions
in services and harm the Company's business.

                                     -14-
<PAGE>

Fluctuation in Quarterly Revenues and Operating Results Might Lead to Reduced
Prices for the Company's Stock.  Given the Company's lack of operating history,
prospective investors in the Company's securities should not rely on quarter-to-
quarter comparisons of the Company's results of operations as an indication of
its future performance. In some future periods, results of operations could be
below the expectations of investors and public market analysts. In this event,
the price of the Company's Common Shares would likely decline.  Factors that are
likely to cause the Company's results to fluctuate include, without limitation,
the following:

     .  the announcement and timely introduction of new products by the Company
        and its competitors;

     .  the timing and the availability of software programs and applications
        that are compatible with the PC-EPhone;

     .  market acceptance of existing and future versions of the PC-EPhone and
        compatible application;

     .  the availability of components to manufacture the PC-EPhone;

     .  the potential seasonality of PC-EPhone sales;

     .  the Company's ability to avoid system failures on its Web site;

     .  the price of products that both the Company and its competitors offer;
        and

     .  the mix of complementary products that the Company and/or third parties
        may offer.


Lawsuits Against the Company, Cyberbank and/or FutureCom Could Harm the Company.
Suits against any of the Company, Cyberbank, and/or FutureCom could effectively
halt the sales and marketing program with respect to the PC-EPhone.  Any
interruption of the sales and marketing program with respect to the PC-EPhone
could materially and adversely affect the business, financial condition and
results of operations of the Company.

A Portion of the Company's Revenues May be Derived From Sales Related to Direct
Marketing through the Company's and/or FutureCom's Web Site.  System Failures or
Delays Could Harm the Company.  The Company and/or FutureCom may market the PC-
EPhone by advertising over the Internet through their web sites.  Such marketing
program might result in referral sales amounting to a significant portion of the
Company's possible future revenues.  Such revenues may depend on the Company's
and/or FutureCom's ability to maintain and expand its computer systems.  The
Company and FutureCom must also protect their computer systems against damage
from fire, water, power loss, telecommunications failures, computer viruses,
vandalism and other malicious acts and similar unexpected adverse events.
Potential system interruptions and slowdowns often occur during the design and

                                     -15-
<PAGE>

implementation of web sites.  Such system interruptions and slowdowns could
interrupt the advertising for the PC-EPhone conducted via the Internet and harm
the Company's reputation.

The Company Expects that its Subdistributors will Rely in part on Retailers to
Sell the PC-EPhone, and any Disruptions in Retail Distribution Channels Could
Result in the Purchase of Fewer PC-EPhones by the Company's Sub-Distributors.
The Company expects to sell the PC-EPhone to subdistributors for distribution of
the PC-EPhone to retailers.  The Company is indirectly exposed to many risks
relating to the retail distribution of the PC-EPhone, including, without
limitation, the following:

     .  retailers may not maintain inventory levels sufficient to meet customer
        demand;

     .  if the Company reduces the prices of the PC-EPhone to be paid by end
        users, retailers may have to be compensated for the difference between
        the higher price they paid to buy their inventory and the new lower
        retail price of the PC-EPhone;

     .  product returns could increase as a result of the Company's and its Sub-
        Distributors strategic interest in assisting retailers in balancing
        inventories;

     .  retailers may emphasize the Company's competitors' products or decline
        to carry the PC-EPhone; and

     .  the Company and its subdistributors may not be able to attract or retain
        a sufficient number of qualified retailers; and

Cyberbank's Production Could be Seriously Harmed in the Event of Component
Shortages.  The Company is dependent on Cyberbank to supply it with PC-EPhones.
PC-EPhones contain components, including, without limitation, liquid crystal
displays, touch panels, memory chips and microprocessors, that Cyberbank must
procure from a variety of suppliers and/or sub-manufacturers and that are in
great demand.  Cyberbank may or may not carry any inventory of such products or
product components.  Cyberbank relies on its suppliers and/or sub-manufacturers
to deliver necessary components to its contract manufacturers in a timely manner
based on forecasts that the Company will provide.  The Company believes that at
various times, some of the key components for handheld computers, including
display components and flash memory, have been in short supply in the market.
The Company's competitors have reported in some cases waiting up to 180 days
between order and delivery of such components and supplies.  High industry
demand has been a significant factor in such capacity constraints, and
relatively long lead times are required for relevant suppliers to expand factory
capacity, should they elect to do so.  Some of the Company's competitors have
been unable to meet demand for their products as a result of these component
shortages.  Such shortages of components could harm Cyberbank's ability to
deliver PC-EPhones on a timely basis.  The cost, quality and availability of
components are essential to Cyberbank's successful production, and sales of the
PC-EPhone will depend on Cyberbank's successful and timely production.  Some
components, such as power supply integrated circuits, microprocessors and
certain discrete components, come from sole or single source suppliers.
Alternative sources may at times not be available for these sole and single

                                     -16-
<PAGE>

source components.  If suppliers are unable to meet Cyberbank's demand for sole
source components and if Cyberbank is unable to obtain an alternative source, or
if the price for an alternative source is prohibitive, Cyberbank's ability to
maintain timely and cost-effective production of the PC-EPhone would be
seriously harmed.  In addition, while Cyberbank may at times have some forward
supply contracts with certain suppliers and/or sub-manufacturers, Cyberbank is
expected to rely upon purchase orders with suppliers.  The Company cannot
predict with certainty Cyberbank's ability to procure components on a regular
basis at reasonable prices in the longer term.  If Cyberbank, or its sub-
manufacturers cannot obtain components or can only receive smaller allocations
of components than is necessary to manufacture the PC-EPhone in quantities
sufficient to meet customer demand, customers could choose to purchase competing
products.

The Company Expects to Face Seasonality in its Sales, which Could Cause its
Quarterly Operating Results to Fluctuate.  Based on industry trends, the Company
expects to experience seasonality in the sales of the PC-EPhone particularly
with respect to expected increases during holiday periods and lower volume
during summer months.  These seasonal variations in sales may lead to
fluctuations in quarterly operating results, and as a result, in the price of
the Company's Common Shares.

Failure by the Company to Develop Brand Recognition Could Limit or Reduce
Consumer Demand for the PC-EPhones.  The Company believes that the development
of brand recognition will be critical to developing demand for, and achieving
sales of the PC-EPhone. Some of the Company's competitors and potential
competitors have already developed powerful brands with widespread name
recognition.  Promoting and positioning the PC-EPhone brand will depend largely
on the success of the Company's marketing efforts.  To promote the brand, the
Company expects to increase marketing expenditures and otherwise increase
financial commitment to creating and maintaining brand loyalty among users.
Brand promotion activities may not yield increased revenues or customer loyalty
and, even if they do, any increased revenues may not offset the expenses
incurred in building and maintaining the brand.

The Company Relies on Management Consultants for Management of its Operations.
This System and the Consultants Employed, Could Prove Inadequate to Handle the
Company's Potential Growth.  The Company expects to experience rapid growth and
expansion in the near future.  This growth has the potential to place
significant strain on such management consultants, information systems and
operational and financial resources.  To manage future growth, the Company's
management consultants must continue to improve its operational and financial
systems.  The management consultants may not be able to manage the Company's
growth effectively.  If the Company's systems, procedures and controls are
inadequate to support its operations, its expected expansion would be halted and
its opportunity to gain significant market share could be lost.  Inability to
manage growth effectively could materially and adversely affect the business,
financial condition and results of operations of the Company.

The PC-EPhone May Contain Errors or Defects, or Could be Subject to Viruses,
Which Could Result in the Rejection of the PC-EPhone and Damage to the
Reputation of the

                                     -17-
<PAGE>

Company, as well as Lost Revenues, Diverted Development Resources, and Increased
Service Costs and Warranty Claims. The PC-EPhone is technologically complex and
must meet stringent user requirements. The Company will depend on Cyberbank to
develop products quickly to keep pace with the rapidly changing handheld
computing and communications market. Products as sophisticated as the PC-EPhone
are likely to contain detected and undetected errors or defects, especially when
first introduced or when new models or versions are released. In the future, the
Company may experience delays by Cyberbank in releasing new products as problems
are corrected. There could be an undetected error or defect of a significant
nature in the PC-EPhone, or that is perceived to be significant. Any such error
could result in the rejection of the PC-EPhone by consumers and/or distributors,
damage to the Company's reputation, lost revenues, diverted development
resources and increased customer service and support costs and warranty claims.
In addition, some undetected errors or defects may only become apparent as new
functions are added to the PC-EPhone through the use of future applications. The
Company anticipates that it will provide consumers with a warranty regarding the
PC-EPhone, however the terms of such warranty have not yet been decided by the
Company. Delays, costs and damage to the Company's reputation due to product
defects could materially and adversely affect the business, financial condition
and results of operations of the Company. The PC-EPhone could be affected by
viruses in the future. Since the PC-EPhone uses the Windows CE operating system,
any virus capable of disrupting such operating system could potentially harm the
PC-EPhone. It is possible that such viruses may become more prevalent in the
future, and that other viruses which affect handheld computers in particular,
may become more common as well, as handheld computers are developed that
facilitate more sophisticated sharing of files and other information. To the
extent that antivirus software is unable to protect users of the PC-EPhone from
such viruses, the PC-EPhone could be rejected by consumers and distributors, and
result in increased service costs.

The Company is Dependent on Cyberbank for Substantially all Intellectual
Property and Brand Protection Regarding the PC-EPhone. The Company is acting
solely in the capacity of a distributor of the PC-EPhone and therefore has
limited rights to take measures to ensure intellectual property and brand
protection with respect to the PC-EPhone, including without limitation,
trademark, copyright, patent protection and/or trade secrets. There can be no
assurance that any measures taken with respect to intellectual property
protection by Cyberbank, and/or the Company to the extent possible, will be
effective. If any such intellectual property rights are defective or held to be
invalid, the distribution rights purchased by the Company would be far less
valuable. There can be no assurance that any intellectual property right
protections will be granted to Cyberbank or the Company, or upheld if granted.
Failure by Cyberbank, and/or the Company to the extent possible, to successfully
secure legal protection for intellectual property rights could materially and
adversely affect the business, financial condition and results of operations of
the Company. The Company has limited ability to ascertain whether Cyberbank
and/or the PC-EPhone may infringe on third-party intellectual property rights.
Any litigation with respect to actual or alleged third-party infringement could
materially and adversely harm the Company. In addition, the Company may be
required to spend significant resources to protect, monitor and police the
intellectual property rights. The Company may not be able to detect infringement
on any rights within the scope of protections granted to Cyberbank and/or the
Company which may result in a loss of

                                     -18-
<PAGE>

competitive position in the market. Competitors may design around Cyberbank's
technology or develop competing technologies. Intellectual property rights may
also be unavailable or limited in some foreign countries, which could make it
easier for competitors to infringe on Cyberbank and/or the Company's rights. Any
such infringement could have a material adverse affect on the Company.

The Company and/or Cyberbank could be Subject in the Future to Claims of
Infringement of Third Party Intellectual Property, Which could Result in
Significant Expense and Loss of Intellectual Property Rights.  The industry in
which the Company believes the PC-EPhone will compete, is characterized by
uncertain and conflicting intellectual property claims and frequent intellectual
property litigation, especially regarding patent rights.  From time to time,
third parties have in the past and may in the future assert patent, copyright,
trademark or other intellectual property rights to technologies that are
important to the business.  Any litigation to determine the validity of such
claims, including claims arising through the Company's contractual
indemnification of its business partners, regardless of their merit or
resolution, would likely be costly and time consuming and divert the efforts and
attention of the Company's management consulting team.  There can be no
assurances that the Company would prevail in any such potential litigation given
the complex technical issues and inherent uncertainties in intellectual property
litigation.  If such litigation resulted in an adverse ruling, the Company could
be required to pay substantial damages, cease the use or sale of infringing
products, discontinue the use of certain technology, or obtain a license under
the intellectual property rights of the third party claiming infringement, which
license may not be available on reasonable terms, or at all.

The Company's Future could be Harmed as a result of Economic, Political,
Regulatory, and other Risks Associated with International Sales and Operations,
Particularly with respect to its Strategic Relationship with Cyberbank - whose
operations are situated in South Korea.  The Company expects to focus its sales
efforts on the North American market, where political and economic risks and
uncertainties have historically been low.  However, the Company depends on
Cyberbank, a Korean corporation located in South Korea, to supply it with the
PC-EPhone, its sole product to date.  Political tensions are significant between
North Korea and South Korea, and there can be no assurances that this region
will remain politically stable.  If political turmoil were to occur in the
region, it could easily affect or halt production and/or distribution of PC-
EPhones by Cyberbank.  Under such circumstances, the Company would have no
products to sell, and would not be capable of generating revenues.  In addition,
a substantial number of Cyberbank's material suppliers are based outside of the
United States, and are subject to a wide variety of international risks.
Accordingly, the Company's future results, which will be predicated on the
timely delivery of PC-EPhones by Cyberbank, could be harmed by a variety of
factors, including:

     .  changes in foreign currency exchange rates as between Cyberbank and its
        respective suppliers;

     .  changes in a specific country's or region's political or economic
        conditions, particularly in emerging markets;

                                     -19-
<PAGE>

     .  trade protection measures and import or export licensing requirements;

     .  development risks and expenses associated with customizing the PC-EPhone
        products for local requirements;

     .  potentially negative consequences from changes in tax laws;

     .  impact of natural disasters with an inability of the local government to
        quickly provide recovery services;

     .  difficulty in managing widespread sales and manufacturing operations;
        and

     .  less effective protection of intellectual property.

        The Company expects to enter additional international markets over time.
To the extent that the Company's revenue from international operations
represents an increasing portion of its total revenue, it may become subject to
increased exposure to international risks.

The Company May Pursue Strategic Acquisitions that might prove Difficult or
Impossible to Successfully Integrate.  The Company expects to evaluate
acquisition opportunities that could provide it with additional product or
services offerings, technologies or additional industry expertise.  Any future
acquisition could result in difficulties assimilating acquired operations and
products, diversion of capital and attention away from other business issues and
opportunities and amortization of acquired intangible assets.  Integration of
acquired companies may result in problems related to integration of technology
and management teams.  The Company's management consulting team has had limited
experience in assimilating acquired organizations and products into the
Company's operations.  The Company could fail to integrate the operations,
personnel or products that may be acquired in the future.  Failure to
successfully integrate such acquisitions could materially and adversely affect
the business, financial condition and results of operations of the Company.

The Price of the Company's Common Shares has been and Likely will Continue to be
Volatile and Subject to Wide Fluctuations.  The market prices of the securities
of technology-related companies have been especially volatile.  If the Company's
revenues do not grow or grow more slowly than anticipated, or, if operating or
capital expenditures exceed expectations and cannot be adjusted accordingly, or
if some other event adversely affects the Company, the market price of the
Company's Common Shares could decline.  In addition, if the market for
technology-related stocks or the stock market in general experiences a loss in
investor confidence or otherwise fails, the market price of the Company's Common
Shares could fall for reasons unrelated to the business, results of operations
and financial condition of the Company. The market price of the Company's Common
Shares also might decline in reaction to events that affect other companies in
the industry, even if these events do not directly affect the Company.  In the
past, companies that have experienced volatility in the market price of their
stock have been the subject of securities class action litigation.  If the
Company were to become the subject of securities litigation, it could result in
substantial costs and a diversion of its attention and resources.

                                     -20-
<PAGE>

Future Sales of Common Shares by Existing Stockholders Could Affect the Price of
the Company's Common Shares.  As of February 28, 2001, the Company has 50
million Common Shares authorized for issuance and an aggregate of 16,122,167
Common Shares issued and outstanding.  Of such shares, 9,090,897 Common Shares
are free trading and 7,031,270 are restricted.  Of the restricted shares, an
aggregate of 954,770 Common Shares are held by directors and officers of the
Company as a group and 3,500,000 are held by Cyberbank.  Giving effect to the
holdings of officers and directors of the Company, an aggregate of 4,454,770
restricted Common Shares are held by affiliate shareholders.  The balance of
2,576,500 restricted shares are held by non-affiliates of the Company and
therefore may be sold from time to time on or after July 13, 2001 pursuant to
Rule 144, promulgated under the Securities Act of 1933.  As a result, the
Company's stock price may reflect greater dilution in the public float which may
affect both trading volume and price volatility of the Company's Common Shares
when such restricted shares become eligible for public resale.  The Company also
expects to issue additional securities in connection with financing programs and
corporate development activities that will dilute the equity interests of
current Common Shareholders.  The Company may be obliged to grant registration
rights in connection with such issuances providing for accelerated entry into
the marketplace of such Common Shares.  In addition, Cyberbank holds a warrant
exercisable for the purchase of 2,500,000 restricted Common Shares.  If
Cyberbank exercises such warrant, Cyberbank will own approximately 32% ownership
of the Company's outstanding Common Shares which could result in a substantial
degree of control over the Company's policies and corporate governance.

Minimum Purchase Requirements - Cyberbank.  Marketing, distribution and sales
rights for the PC-EPhone are subject to the Company purchasing minimum required
volumes of the PC-EPhone from Cyberbank.  The Company does not presently have
sufficient funds to purchase the required minimum of PC-EPhones.  If the Company
is unable to raise sufficient funds to meet the minimum purchase requirements,
Cyberbank could unilaterally elect to cancel the Distribution Agreement.
Cancellation of the Distribution Agreement would materially and adversely affect
the business, financial condition and results of operations of the Company.

Required Financing May be Unavailable. The Company will require significant
additional financing in connection with the development of the PC-EPhone
business. Significant revenues from operations will not be realized until
material sales of the PC-EPhone are made. The Company may raise interim
financing through private placements to finance operations and/or resort to debt
financing, however, there can be no assurance that any funds can be made
available to the Company in either case. The Company has no assurance that any
future equity and/or debt financing will be available on acceptable terms, if at
all. If such financing is not available on satisfactory terms, the Company may
be unable to develop or expand its operations. Any equity financing may result
in substantial dilution to existing stockholders. Failure to locate necessary
financing could materially and adversely affect the business, financial
condition and results of operations of the Company.

                                     -21-
<PAGE>

Subdistributor May fail to Purchase Product. The Company is relying on
FutureCom, its subdistributor, to purchase significant numbers of PC-EPhones in
connection with the Subdistributor Agreement. There can be no assurances that
FutureCom will be able to perform its obligations under the Subdistibutor
Agreement or that any other subdistributors may be retained. Failure by
FutureCom to purchase adequate numbers of PC-EPhones will adversely affect the
Company's business plan and viability, and could materially and adversely affect
the business, financial condition and results of operations of the Company.

Complex and Unpredictable Business Strategy.  The Company's business plan calls
for a complex and unpredictable business strategy including without limitations:
(i) development of distribution networks for the PC-EPhone; (ii) successful
marketing of the PC-EPhone; (iii) effective responses to competitive pressures;
and (iv) continued development of the PC-EPhone business once development of the
product is complete.  There is no guarantee that the Company can accomplish any
of these goals.  Even if the Company successfully accomplishes each of these
milestones, there can be no guarantee of the sustainable viability of the
Company's strategy.

Operating Expenses to Increase - Revenue Unpredictable.  The Company expects to
continue to incur losses for the foreseeable future.  The Company will incur
expenses associated with establishment of distribution networks, marketing and
advertising of the PC-EPhone and expansion of the business operations.  The
Company will be required to incur these expenditures prior to realizing any
revenues and the Company cannot reasonably ascertain when it will realize
revenues, if at all.  Even if the Company ultimately does achieve profitability,
the Company may not be able to sustain or increase profitability on a quarterly
or annual basis.  If revenue grows more slowly than anticipated, or if operating
expenses exceed expectations and cannot be adjusted accordingly, the Company's
business will be harmed.  Failure by the Company to realize revenues would
materially and adversely affect the business, financial condition and results of
operations of the Company.

Business Plan Depends on Third Parties.  Failure to develop distribution
relationships with wholesalers, retailers and wireless service providers could
adversely affect development of the PC-EPhone business and the Company's ability
to achieve revenues.  Failure by the Company to achieve revenues would
materially and adversely affect the business, financial condition and results of
operations of the Company.

Inability to Attract/Retain Management and Skilled Personnel.  Failure to
attract, hire and retain skilled personnel that are in high demand may result in
the Company's inability to implement its business strategy.  The loss of the
services of any of senior management consultants could harm the Company's
business.  Future performance will depend, in part, on the ability of management
consultants retained by the Company to work together effectively.  Management
consultants retained by the Company may not be successful in carrying out their
duties or running the Company.  Any dissent among executive officers and senior
management consultants could impair the Company's ability to make strategic
decisions quickly in a rapidly changing market.

Market Acceptance and Competition.  To the Company's knowledge, competing
products

                                     -22-
<PAGE>

with similar all-in-one features are not currently available.  However,
competition is intense and will likely increase significantly.  Increased
competition could result in: (i) the development of competing products that
achieve greater market acceptance, (ii) price reductions by competitors and
lower profit margins; (iii) the emergence of new competitors, (iv) the Company's
inability to generate sales of the PC-EPhones at all; and/or (v) the Company's
inability to establish relationships with wholesalers and retailers for the
distribution and sale of the PC-EPhones.  Any and all of the foregoing may
occur, and any one alone could materially and adversely affect the business,
financial condition and results of operations of the Company.  The Company
expects its competitors to continue to improve the performance of their current
products and to introduce new products, services and technologies.  Successful
new product introductions or enhancements by the Company's competitors could
reduce sales and the market acceptance of the PC-EPhone, cause intense price
competition or make the PC-EPhone obsolete.  To be competitive, the Company must
continue to invest significant resources in sales and marketing and customer
support.  The Company cannot be sure that it will have sufficient resources to
make these investments or that Cyberbank will be able to make the technological
advances necessary to be competitive.  Increased competition could result in
price reductions, fewer customer orders, reduced margins and loss of market
share. Failure by the Company to compete successfully against current or future
competitors could materially and adversely affect the business, financial
condition and results of operations of the Company.

Distribution Agreement - Cyberbank Nominees.   The Distribution Agreement with
Cyberbank requires that forty percent of the Company's Board of Directors be
nominated by Cyberbank and for this requirement to be maintained throughout the
term of the Distribution Agreement.  Failure by the Company's shareholders to
elect the Cyberbank nominees in accordance with the Distribution Agreement would
allow Cyberbank to terminate the Distribution Agreement.  Termination of the
Distribution Agreement would leave the Company with no right to market,
distribute and sell the PC-EPhone which would materially and adversely affect
the business, financial condition and results of operations of the Company.

If Wireless Handsets and Devices are shown to Pose Health and Safety Risks, the
PC-EPhone may be Subject to New Regulations, and Demand for the PC-EPhone may
Decrease.  Media reports have suggested that radio frequency emissions from
wireless handsets and devices may be linked to various health concerns,
including cancer, and may interfere with various electronic medical devices,
including hearing aids and pacemakers. Concerns over radio frequency emissions
may have the effect of discouraging the use of wireless handsets, which would
decrease demand for the PC-EPhone.  In recent years, the FCC and foreign
regulatory agencies have updated the guidelines and methods they use for
evaluating radio frequency emissions from radio equipment, including wireless
handsets.  In addition, interest groups have requested that the FCC investigate
claims that wireless technologies pose health concerns and cause interference
with airbags, hearing aids and medical devices. There also are some safety risks
associated with the use of wireless handsets while driving. Concerns over these
safety risks and the effect of any legislation that may be adopted in response
to these risks could reduce demand for the PC-EPhone.  Reduced demand

                                     -23-
<PAGE>

for the PC-EPhone could materially and adversely affect the business, financial
condition and results of operations of the Company.

The Company will Depend on Third Parties to Provide Wireless Service to its
Users.  In order to utilize the PC-EPhone's telecommunication and wireless
Internet capabilities, users will be required to purchase wireless services from
third party vendors.  There can be no guarantee that such services will be
available on terms attractive to consumers, or that such services will meet the
requirements of the product.  If wireless services for the PC-EPhone are not
available on attractive terms, or if such services, for any reason, do not
function well, or as intended, the Company could be materially and adversely
affected.

FCC and Industry Canada Approval.  The PC-EPhone has not been approved by the
FCC for sales in the United States to date nor has the PC-EPhone been approved
by Industry Canada, and there can be no assurances as to when, if at all, such
approvals will be forthcoming.  If either or both of the FCC and Industry Canada
fail to provide timely approvals for the PC-EPhone, the Company may not be able
to make sales of the PC-EPhone in the United States and/or Canada.  Failure to
make sales of the PC-EPhone in either the United States or Canada would likely
cause the Company to fail.

Multiple Jurisdictions.  The Company may be required to qualify to do business
in multiple jurisdictions.  Such qualifications may be expensive, time
consuming, distracting or even unobtainable.  Failure to qualify as a foreign
company in a jurisdiction where required to do so could subject the Company to
taxes and penalties that the Company does not currently anticipate and which
could materially and adversely affect the business, financial condition and
results of operations of the Company.

No Assurance of Dividends.  It is not anticipated that the Company will pay
dividends on its capital stock at any time during the foreseeable future.
Investors who anticipate the need for immediate income from their investment in
the Company's securities should refrain from the purchase of the Company's
securities.

Authorization of Preferred Stock.  The Company is authorized to issue up to
1,000,000 shares of Preferred Stock, $0.01 par value. As of the date of this
Form 10-KSB, no shares of Preferred Stock have been issued. The Company's
Preferred Stock may bear such rights and preferences, including dividend and
liquidation preferences, as the Board of Directors may fix and determine from
time to time. Any such preferences may operate to the detriment of the rights of
the holders of Common Shares.

Provisions in the Company's Charter Might Deter a Company from Acquiring the
Company.  The Company's stockholders are unable to remove any director or the
entire Board of Directors without a super majority vote or to fill any vacancy
on the Board of Directors. The Company's stockholders must also meet advance
notice requirements for stockholder proposals. The Board of Directors may also
issue preferred stock without any vote or further action by the stockholders.
These provisions and other provisions under Nevada law could make it more
difficult for a third party to acquire the Company, even if doing so would
benefit the Company's stockholders.

                                     -24-
<PAGE>

The Company may be Subject to Residual Environmental Liabilities and Regulatory
Risk Based on Its Past Activities in the Oil and Gas Business.  The Company has
been involved with the oil and gas business in the past.  The Company may have
maintained interests in properties that could prove in the future to be
associated with environmental pollution.  The Company could under such
circumstances be liable for environmental damage, including historical
contamination, caused it, or by other former operators of such properties.
Liabilities could arise from continuing violations or contamination not
discovered during the Company's assessment of the acquired properties.

Description of Property

The Company occupies an office of approximately 1700 square feet at Suite 515,
3440 Wilshire Boulevard, Los Angeles, California.  The Company also leases an
office at Suite 1388, 885 West Georgia Street, Vancouver, British Columbia,
Canada.  The Company believes that such offices will be satisfactory during the
near term for the conduct of business.

The Company was engaged in the business of oil and gas exploration from its
inception until August 18, 2000.  Pursuant to an agreement dated March 1, 1999,
the Company acquired an option to earn 70% of Brothers' 10% working interest in
certain oil and gas leases, options to lease and seismic options located on the
Travis 3D Seismic Project located in Solano County, California (the "Lands").
The Company paid $73,000 to Brothers pursuant to the Option Agreement which
amount is equal to Brothers' total land and seismic acquisition costs associated
with the Lands. The estimated land and seismic costs were $83,000 at the time
the Option Agreement was entered into. However, cost savings were realized and
the total land and seismic costs were in fact, $73,000. The Company subsequently
paid Brothers $83,506 for the drilling of  wells on the property.

On August 18, 2000, the Company announced that it would not be exercising its
option to proceed with the Travis oil and gas property.  Investors are referred
to the "Exploration Conveyance and Assignment Agreement" between Brothers Oil &
Gas Inc. and the Company, as previously reported in the Company's Form 10-SB
filed with the Securities and Exchange Commission.  The Company paid for its
share of drilling costs for the first well, which resulted in a dry hole and
elected not to exercise its option to participate in further drilling. The
option was non-transferable, therefore the Company did not sell its option but
instead allowed it to expire.  The Company will not be penalized for allowing
the option to expire. The Company owns no property in relation to its former oil
and gas business.


Legal Proceedings

The Company is not currently involved in any legal proceedings and is not aware
of any pending or threatened legal actions.

Submission of Matters to a Vote of Security Holders

The Company held an Annual Meeting on December 15, 2000.

                                     -25-
<PAGE>

Douglas Yee, Negar Towfigh, Alan Crawford and Greg Burnett were all re-elected
as directors of the Company at the Annual Meeting.  Terrence King was also
elected as a director.

Each of the above directors were expected to hold office until the next annual
general meeting of the holders of the Company's Common Shares or until such
director's resignation or removal from office in accordance with the Company's
by-laws.

There were two matters voted upon at the Annual Meeting of the Company held on
December 15, 2000. The first matter was the election of the following management
nominees to serve as directors: Douglas Yee, Terrence E. King, Alan Crawford,
Greg Burnett and Negar Towfigh.

Nominee                      Number of Votes Cast:
                             For     Against  Abstain     Broker Non Votes

Douglas Yee              6,252,701      0        0               0
Terrence E. King         6,252,701      0        0               0
Alan Crawford            6,252,701      0        0               0
Greg Burnett             6,252,701      0        0               0
Negar Towfigh            6,252,701      0        0               0

All of management's nominees were elected as directors at the Annual Meeting.

The second matter voted upon at the Annual Meeting was the approval of the
amendment of the Company's articles of incorporation changing the name of the
Company to "PC-EPhone, Inc." from "Newlands Oil & Gas Inc."  The name change was
in response to the Company's change in principal focus from oil and gas
exploration to marketing and distribution of telecommunications products.

                         Number of Votes Cast
                         For        Against    Abstain    Broker Non Votes

Name Change           6,252,701        0          0              0

The name of the Company was changed to "PC-EPhone, Inc." at the Annual Meeting.

                                     -26-
<PAGE>

                                    PART II

Market for Common Equity and Related Stockholder Matters

The Company's Common Shares have been listed on the OTC Bulletin Board since
February 24, 2000.  The Common Shares were originally listed under the trading
symbol "NWOG", however the trading symbol changed to "PCPH" on December 18,
2000, to correspond with the Company's name change from "Newlands Oil & Gas
Inc." to "PC-EPhone, Inc.".  Since November 21, 2000, the Company's Common
Shares have also been listed on the third segment of the Frankfurt Stock
Exchange under the trading symbol "NL1" and its WKN number is 589 864.

On April 4, 2000, the first trade of the Company's Common Shares occurred on the
OTC Bulletin Board. The high and low sales price (denominated in US$) of the
Common Shares on the OTC Bulletin Board since trading commenced, by quarter, are
as follows:

                              High          Low
                              ----          ---
2000    Fourth Quarter      7             5 31/64
2000    Third Quarter       5 1/16          3 1/2
2000    Second Quarter      10 1/8          23/32

These quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commission, and many not represent actual transactions.

The high and low sales price (denominated in Euros) of the Company's Common
Shares on the Frankfurt Stock Exchange since trading commenced during the forth
quarter of year 2000 are as follows:

                          High               Low
                          ----               ---
2000  Fourth Quarter      8.00               7.90

As of February 28, 2001, the Company had 21 stockholders of record.  The Company
has not declared or paid any cash dividends on its Common Shares since formation
and does not presently anticipate paying any cash dividends on its Common Shares
in the foreseeable future.

Unregistered Securities Issued and/or Sold

The Company has sold or issued the following securities that were not registered
under the Securities Act of 1933, as amended (the "Act").  Except as indicated
below, no underwriters were used in connection with these sales and issuances.

On July 12 and 13, 2000 the Company issued an aggregate of 2,500,000 shares of
restricted Common Shares to four accredited investors in connection with the
negotiated settlement and discharge of $250,000 of Company indebtedness due to
creditors of the Company.  The Company relied upon the exemption from
registration provided by Section 4(2) of the Act

                                     -27-
<PAGE>

with respect to such issuance. Neither the Company nor the investors paid any
fees or commissions to the creditors other than the principal amount of the
settlement.

On November 10, 2000 the Company received subscriptions for 75,000 shares of its
Common Shares to two accredited investors at a price of $3.00 per share for an
aggregate purchase price of $225,000.  These shares were subsequently issued on
February 17, 2001.  With respect to such issuances, the Company relied upon the
exemption from registration provided by Rule 506 under Regulation D promulgated
under the Act.

On November 21, 2000 the Company, on behalf of its wholly owned subsidiary, PC-
EPhone Ltd., issued 3,500,000 restricted, Common Shares to Cyberbank Corp., a
Korean company, pursuant to the Distribution Agreement.  In accordance with the
Distribution Agreement, Cyberbank granted to the Company, through PC-EPhone
Ltd., an exclusive distribution license to market, sell and distribute the PC-
EPhone within the United States and Canada, as well as non-exclusive
distribution rights outside of the United States and Canada.  The Company has
valued the 3,500,000 restricted shares of Common Shares at $2.70 per share for a
total valuation of $9,450,000.  The Company relied on the exemption from
registration provided by Regulation S of the Act with respect to such issuance
of these shares.

Effective February 27, 2001, the Company executed an option agreement with
Euromerica Capital Group Inc. ("Euromerica").  In consideration for Euromercia
providing consulting services to the Company, Euromerica was granted an option
to purchase a total of 25,000 shares of Common Shares of the Company at $3.00
per share on or before November 30, 2001.  The Company relied on Section 4(2) of
the Act with respect to this Option.

Effective February 27, 2001, the Company executed an option agreement with
Alexander Wurm.  In consideration for Mr. Wurm providing consulting services to
the Company, Mr. Wurm was granted an option to purchase a total of 100,000
shares of the Company at $3.00 per share on or before February 1, 2003.  The
Company relied on Section 4(2) of the Act with respect to this Option.

Effective February 27, 2001, the Company executed an option agreement with
Marketing Services, a German company.  In consideration for Marketing Services
providing consulting services to the Company, Marketing Services was granted an
option to purchase a total of 100,000 shares of the Company at $3.00 per share
on or before February 1, 2003.  The Company relied on Section 4(2) of the Act
with respect to this Option.


Management's Discussion and Analysis or Plan of Operation

Introduction

The Company began year 2000 drilling for oil and gas in California but after
some unsuccessful drilling efforts on the Travis Project, a decision was made to
change the Company's mission to focus on a technology related business.  On
August 18, 2000, the

                                     -28-
<PAGE>

Company abandoned the Travis Project and began seeking out new opportunities in
the technology industry.

In November 6, 2000, after several months of discussions and meetings, the
Company, through PC-EPhone Ltd., signed the Distribution Agreement with
Cyberbank.  Cyberbank's flagship product is the PC-EPhone, a wireless, handheld
device that combines the features of a hand-held computer with Internet access,
a cellular phone, and PDA.  This convergent product combines major features that
are desirable for users who need "anywhere, anytime" access to such tools.

Results of Operation

The Company took delivery of the first shipment of 1,000 PC-EPhone units in
December 2000 and recognized revenue of $872,000 with gross profit of $72,000 or
8.3% compared with no sales in fiscal year 1999.  The increase in sales reflects
the Company's change in business, as noted above, and the introduction of the
new PC-EPhone product.  General and administrative expenses have increased this
year by $507,322 or 285.8% over fiscal year 1999, which primarily reflects an
increase in:  (a) marketing and promotion expenses; (b) consulting and
management fees expenses; and (c) amortization expense associated with the
distribution rights obtained from Cyberbank.

The Company was represented at the Comdex trade show in Las Vegas in November
2000, a primary cause of the increase in marketing and promotion expenses as
well as the increase in travel expenses.  Consulting and management fees
expenses increased due to the additional efforts associated with identifying
technology opportunities, execution of the Distribution Agreement with
Cyberbank, attempts to raise financing, and efforts to develop the distribution
network for the PC-EPhone.  The amortization of the distribution rights is on a
straight-line basis over the term of the agreement.  For year 2000, two of 86
months were amortized.  Since the Company did not initiate its new business
until the latter part of year 2000, general and administrative expenses are
expected to increase in 2001 compared to year 2000, reflecting a full year of
operations.  In addition to a full year of management fees, expenses are
expected to increase in connection with increased advertising and increased
attendance by the Company at trade shows and events.  The Company also expects
to incur expenses related to the hiring of staff to meet needs for growth.

Expenses associated with the former oil and gas exploration business amounted to
$21,960 in year 2000 compared to $61,546 in prior year, representing an decrease
of 65%.  The Company expects to incur no further expenses related to the oil and
gas business.

The Company realized a net loss for 2000 of $688,640, or $0.06 per share,
compared to a net loss of $238,580, or $0.02, in prior year and to a net loss of
$29,916 or $0.03 per share in the fiscal period from June 17, 1998, the
Company's date of incorporation, to December 31, 1998.

                                     -29-
<PAGE>

Liquidity and Capital Resources

As of December 31, 2000, the Company had a working capital deficit of $160,795
compared to a deficit of $190,788 in prior year.  The Company has been unable to
secure any short-term bank financing to address the working capital deficiency
and does not expect to be able to secure such bank financing unless operations
increase.  Since signing the Distribution Agreement in November 2000, the
Company has been financing its operations primarily from related-party loans and
private placements of Common Shares.  At year-end, the Stockholders' equity was
$9,113,322 compared to a deficiency of $117,788 last year.  The change in equity
reflects the non-cash value of the 3,500,000 shares of Common Shares issued to
Cyberbank pursuant to the Distribution Agreement.  No cash was received by the
Company for the issuance of Common Shares to Cyberbank.  Significant additional
financing is required before the end of 2001 in order to meet the Company's cash
needs.

The Company is obligated by the Distribution Agreement and, thus, is targeting
to sell, a minimum of 500,000 PC-EPhones during each 12-month period after
regulatory approvals are obtained.  The Company plans to fulfill this commitment
and target through various sales and subdistribution agreements.  The Company,
through PC-EPhone Ltd., began this process by executing the Subdistributor
Agreement with FutureCom, a distributor of various telecommunications products
and services throughout the United States.

The Company does not currently have any material revenues.  The Company's
ability to commence significant distribution and sales in the United States and
Canada is dependent on obtaining approval for the PC-EPhone from the FCC and
Industry Canada, respectively.  If such approvals are not granted, the Company
will not be able to commence its sales program, thus precluding development of
any revenues.  The Company's ability to continue as a going concern is dependent
on its ability to raise capital from shareholders or other sources to sustain
operations.  These factors, particularly with respect to the Company's lack of
established source of revenue, raise substantial doubt that the Company will be
able to continue as a going concern.  The Company expects FCC approval to be
forthcoming very shortly, however there can be no assurance in this regard.

The Company is actively marketing and promoting the PC-EPhone through trade
shows, road shows and targeted campaigns in order to increase awareness and
create demand for the product while the PC-EPhone unit awaits approval by the
FCC and wireless network carriers.

In addition, the Company is working very closely with Cyberbank, the developer
of the PC-EPhone, to enhance the strategic alliance, to identify potential
partnerships to enhance the PC-EPhone's existing features and to plan for the
development of new models and products for the future.  The Distribution
Agreement provides the Company with rights to distribute all of Cyberbank's
future products.

The Company will need to increase its liquidity and capital resources to
purchase inventory to fulfill orders and, therefore, will need to obtain
additional financing for that

                                     -30-
<PAGE>

purpose. If the Company is able in the future to demonstrate its
creditworthiness, it is anticipated that some financing of inventory purchases
will occur through the use of letters of credit, but there is no guarantee that
such financing can be obtained.

The Company believes that the PC-EPhone is the world's first convergent product
that combines the features of a handheld PC with Internet access, a cellular
phone and a PDA.  Recent public announcements suggest that similar products are
forthcoming from competitors.  The Company is aware of these competitive forces
but believes it can obtain a competitive advantage by being the first such
product available in North America, however, there can be no assurance in this
regard.

The Company believes that it is not materially exposed to foreign currency and
interest rate changes as it deals primarily in U.S. dollars and has very few
loans outstanding.  However, Cyberbank may be subject to foreign currency risks
and interest rate changes in connection with its dealings with its suppliers who
may be based in foreign countries.

The Company plans to use its best efforts to seek to develop markets for the PC-
EPhone beyond the United States and Canada and to identify new opportunities to
increase shareholder value.  The Company's success in developing new markets for
the PC-EPhone in other parts of the world will depend on the product development
efforts of Cyberbank.  Current versions of the PC-EPhone use CDMA and PCS
wireless protocols that are functional for the United States, Canada and certain
other countries around the world.  However, future success of the PC-EPhone in
most of Europe and Asia will require units that function using the GSM wireless
protocol.  Other opportunities to increase shareholder value may involve the
identification of new products for distribution and/or the development of value-
added relationships that will support revenue growth for the Company.

Recently Issued Accounting Pronouncements

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101"), Revenue Recognition in Financial Statements.  SAB
101 provides guidance for revenue recognition under certain circumstances. SAB
101 is effective beginning in the fourth quarter of fiscal 2001.  Implementation
of SAB 101 is not expected to require the Company to change existing revenue
recognition policies and therefore is not expected to have a material effect on
the Company's financial position or results of operations.

Financial Statements

The Company's financial statements are contained in the financial pages that
follow and are incorporated herein by reference thereto.

Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure

Not Applicable.

                                     -31-
<PAGE>

Financial Statements.
                                PC-EPHONE, INC.

                       (formerly Newlands Oil & Gas Inc.)

                  REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2000, 1999 and 1998



                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Stockholders,
PC-EPhone, Inc.
(formerly Newlands Oil & Gas Inc.)

We have audited the accompanying consolidated balance sheets of PC-EPhone, Inc.
(formerly Newlands Oil & Gas Inc.) as at December 31, 2000, 1999 and 1998 and
the consolidated statements of operations, stockholders' equity and cash flows
for the years ended December 31, 2000 and 1999 and for the period from  June 17,
1998 (Date of Incorporation) to December 31, 1998.  These consolidated financial
statements are the responsibility of the company's management.  Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of PC-EPhone, Inc. as at December 31,
2000, 1999 and 1998 and the results of its operations and its cash flows for the
years ended December 31, 2000 and 1999 and for the period from June 17, 1998
(Date of Incorporation) to December 31, 1998, in accordance with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements referred to above have been
prepared assuming that the company will continue as a going concern.  As
discussed in Note 1 to the financial statements, the company's ability to
continue as a going concern is dependent on its ability to raise capital from
shareholders or other sources to sustain operations.  These factors, along with
the company's lack of an established source of revenue and other matters as set
forth in Note 1, raise substantial doubt that the company will be able to
continue as a going concern.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


Vancouver, Canada                                          /s/ Amisano Hanson
February 9, 2001, except as to Note 9(b), which is as      Chartered Accountants
of February 17, 2001 and as to Note 16, which is as
of February 27, 2001

                                      F-2
<PAGE>

                                PC-EPHONE, INC.
                       (formerly Newlands Oil & Gas Inc.)
                          CONSOLIDATED BALANCE SHEETS
                        December 31, 2000, 1999 and 1998


<TABLE>
<CAPTION>
                                                ASSETS
                                                ------
                                                                  2000                 1999                 1998
                                                               -----------           ----------            ---------
<S>                                                            <C>                  <C>                    <C>
Current
 Cash                                                          $    81,780           $    4,409            $  29,472
 Accounts receivable - Note 10                                           -                3,734                    -
 Prepaid expenses and deposits - Note 3                             35,016                    -               45,000
                                                               -----------           ----------            ---------
                                                                   116,796                8,143               74,472

Loan receivable - Note 4                                            20,000                    -                    -
Capital assets - Note 5                                             23,884                    -                    -
Oil and gas property - Note 6                                            -               73,000               50,000
Distribution rights - Notes 2(d), 7 and 11                       9,230,233                    -                    -
                                                               -----------           ----------            ---------
                                                               $ 9,390,913           $   81,143            $ 124,472
                                                               ===========           ==========            =========

                                              LIABILITIES
                                              -----------
Current
 Accounts payable - Note 10                                    $   157,591           $  120,431            $   3,680
 Loans payable - Notes 8 and 10                                    120,000               78,500                    -
                                                               -----------           ----------            ---------
                                                                   277,591              198,931                3,680
                                                               -----------           ----------            ---------

                                    STOCKHOLDERS' EQUITY (DEFICIENCY)
                                    ---------------------------------
Capital stock - Note 9                                              16,122               10,047               10,047
Additional paid-in capital - Note 11                            10,054,336              140,661              140,661
Deficit                                                           (957,136)            (268,496)             (29,916)
                                                               -----------           ----------            ---------
                                                                 9,113,322             (117,788)             120,792
                                                               -----------           ----------            ---------
                                                               $ 9,390,913           $   81,143            $ 124,472
                                                               ===========           ==========            =========
</TABLE>

Nature and Continuance of Operations - Note 1
Commitments - Notes 7 and 9
Subsequent Events - Notes 7, 9 and 16

APPROVED BY THE DIRECTORS:



/s/ Douglas Yee,  Director                    /s/ Terrence King, Director
----------------                              ------------------

                            SEE ACCOMPANYING NOTES

                                      F-3
<PAGE>

                                PC-EPHONE, INC.
                      (formerly Newlands Oil & Gas Inc.)
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                for the years ended December 31, 2000 and 1999
 and for the period June 17, 1998 (Date of Incorporation) to December 31, 1998


<TABLE>
<CAPTION>
                                                                                                           June 17, 1998
                                                                                                              (Date of
                                                                                                         Incorporation) to
                                                                                                            December 31,
                                                                         2000                1999               1998
                                                                         ----                ----               ----
<S>                                                                   <C>                 <C>                 <C>
Sales                                                                 $   872,000         $         -          $         -
Cost of sales - Note 10                                                   800,000                   -                    -
                                                                      -----------         -----------          -----------
Gross profit                                                               72,000                   -                    -
                                                                      -----------         -----------          -----------

Expenses
  General and Administrative Expenses - Note 10                           461,637             177,522               25,385
  Amortization of capital assets                                            3,440                   -                    -
  Amortization of distribution rights                                     219,767                   -                    -
                                                                      -----------         -----------          -----------
                                                                         (684,844)           (177,522)             (25,385)
                                                                      -----------         -----------          -----------
Loss from operations                                                     (612,844)           (177,522)             (25,385)
                                                                      -----------         -----------          -----------
Other income (loss)
  Exploration and development - Note 10                                   (21,960)            (61,546)              (4,531)
  Gain on settlement of debts - Note 10                                    18,008                   -                    -
  Write-off of oil and gas property - Note 10                             (73,000)                  -                    -
  Interest income                                                           1,156                 488                    -
                                                                      -----------         -----------          -----------
                                                                          (75,796)            (61,058)              (4,531)
                                                                      -----------         -----------          -----------
Net loss for the period                                               $  (688,640)        $  (238,580)         $   (29,916)
                                                                      ===========         ===========          ===========
Basic loss per share                                                  $     (0.06)        $     (0.02)         $     (0.03)
                                                                      ===========         ===========          ===========
Weighted average number of shares outstanding                          11,386,749          10,047,167            1,020,017
                                                                      ===========         ===========          ===========
</TABLE>

                            SEE ACCOMPANYING NOTES

                                      F-4
<PAGE>

                                PC-EPHONE, INC.
                      (formerly Newlands Oil & Gas Inc.)
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                for the years ended December 31, 2000 and 1999
 and for the period June 17, 1998 (Date of Incorporation) to December 31, 1998


<TABLE>
<CAPTION>
                                                                                                             June 17, 1998
                                                                                                                (Date of
                                                                                                          IIncorporation) to
                                                                                                              December 31,
                                                                           2000                1999               1998
                                                                           ----                ----               ----
<S>                                                                     <C>                 <C>                 <C>
Cash flows used in Operating Activities
 Net loss for the period                                                 (688,640)           (238,580)            (29,916)
 Add (deduct) items not affecting cash:
  Amortization of capital assets                                            3,440                   -                   -
  Amortization of distribution rights                                     219,767                   -                   -
  Write-off of oil and gas property                                        73,000                   -                   -
  Gain on settlement of debts                                             (18,008)                  -                   -
 Changes in non-cash working capital balances related to
 operations
  Accounts receivable                                                       3,734              (3,734)                  -
  Loan receivable                                                         (20,000)
  Prepaid expenses and deposits                                           (35,016)             45,000             (45,000)
  Accounts payable                                                        219,168             116,751               3,680
  Loans payable                                                           127,500              78,500                   -
                                                                       ----------          ----------           ---------
                                                                         (115,055)             (2,063)            (71,236)
                                                                       ----------          ----------           ---------
Cash flows from Financing Activity
 Issuance of common shares                                                219,750                   -             150,708
                                                                       ----------          ----------           ---------
Cash flows used in Investing Activities
 Oil and gas property                                                           -             (23,000)            (50,000)
 Acquisition of capital assets                                            (27,324)                  -                   -
                                                                       ----------          ----------           ---------
                                                                          (27,324)            (23,000)            (50,000)
                                                                       ----------          ----------           ---------
Net increase (decrease) in cash during the period                          77,371             (25,063)             29,472

Cash, beginning of the period                                               4,409              29,472                   -
                                                                       ----------          ----------           ---------
Cash, end of the period                                                $   81,780          $    4,409           $  29,472
                                                                       ==========          ==========           =========
Non-cash Transactions - Note 11
</TABLE>

                            SEE ACCOMPANYING NOTES

                                      F-5
<PAGE>

                                PC-EPHONE, INC.
                      (formerly Newlands Oil & Gas Inc.)
          CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                for the years ended December 31, 2000 and 1999
 and for the period June 17, 1998 (Date of Incorporation) to December 31, 1998


<TABLE>
<CAPTION>

                                                                       Common Shares       Additional
                                                                       -------------         Paid-in
                                                                       #       Par Value     Capital        Deficit        Total
                                                                   ----------  ---------     -------                       -----
<S>                                                                <C>         <C>        <C>            <C>            <C>
Issued for cash pursuant to offering memorandum - $0.015           10,047,167    $10,047   $   140,661   $          -   $   150,708

Net loss for the period                                                     -          -             -        (29,916)      (29,916)
                                                                   ----------     ------    ----------    -----------    ----------
Balance, December 31, 1998                                         10,047,167     10,047       140,661        (29,916)      120,792

Net loss for the year                                                       -          -             -       (238,580)     (238,580)
                                                                   ----------     ------    ----------    -----------    ----------
Balance, December 31, 1999                                         10,047,167     10,047       140,661       (268,496)     (117,788)
Issued pursuant to debt settlement agreements - $0.10 - Note 11     2,500,000      2,500       247,500              -       250,000
Issued pursuant to acquisition of distribution rights - $2.70 -
 Note 11                                                            3,500,000      3,500     9,446,500              -     9,450,000
Issued for cash pursuant to subscription agreements - $3.00            75,000         75       224,925              -       225,000
- commission                                                                -          -        (5,250)             -        (5,250)
Net loss for the year                                                       -          -             -       (688,640)     (688,640)
                                                                   ----------     ------    ----------    -----------    ----------
Balance, December 31, 2000                                         16,122,167    $16,122   $10,054,336   $   (957,136)  $ 9,113,322
                                                                   ==========     ======    ==========    ===========    ==========
</TABLE>

Non-cash Transactions - Note 11

                            SEE ACCOMPANYING NOTES

                                      F-6
<PAGE>

                                PC-EPHONE, INC.
                       (formerly Newlands Oil & Gas Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2000, 1999 and 1998



Note 1    Nature and Continuance of Operations
          ------------------------------------

          The company was incorporated in Nevada on June 17, 1998 as Newlands
          Oil & Gas Inc. and changed its name to PC-EPhone, Inc. on December 15,
          2000. The company's common shares trade on the NASD Over-the-Counter
          Bulletin Board in the United States.

          The company holds the exclusive distribution rights in the United
          States and Canada for a wireless handheld device that can be used to
          perform internet, personal computer, cellular phone and organizer
          functions (the "PC-EPhone") (Note 7).

          Since incorporation, June 17, 1998 and prior to the acquisition of the
          distribution rights, the company was in the exploration stage and held
          an interest in an oil and gas property located in California (Note 6).
          At December 31, 2000, the company is considered an operating company.

          These consolidated financial statements have been prepared on a going
          concern basis. The company has a working capital deficiency of
          $160,795 as at December 31, 2000 and has accumulated a deficit of
          $957,136 since incorporation. Its ability to continue as a going
          concern is dependent upon its ability to generate profitable
          operations in the future and/or to obtain the necessary financing to
          meet its obligations and repay its liabilities arising from normal
          business operations when they come due. The outcome of these matters
          cannot be predicted, with any certainty, at this time. The company has
          historically satisfied its capital needs primarily by issuing equity
          securities. Management plans to continue to provide for its capital
          needs during the year ended December 31, 2001 by the continued
          development of its sales of the PC-EPhone. In addition, the company's
          capital requirements during the year ended December 31, 2001 is
          expected to be supplemented by issuing equity securities. These
          consolidated financial statements do not include any adjustments to
          the amounts and classification of assets and liabilities that may be
          necessary should the company be unable to continue as a going concern.

Note 2    Summary of Significant Accounting Policies
          ------------------------------------------

          These consolidated financial statements have been prepared in
          accordance with accounting principles generally accepted in the United
          States of America. Because a precise determination of many assets and
          liabilities is dependent upon future events, the preparation of
          financial statements for a period necessarily involves the use of
          estimates which have been made using careful judgement. Actual results
          may differ from these estimates.

          The consolidated financial statements have, in management's opinion,
          been properly prepared within reasonable limits of materiality and
          within the framework of the significant accounting policies summarized
          below:

          (a)  Principles of Consolidation
               ---------------------------

               These consolidated financial statements include the accounts of
               the company and its wholly owned Bermuda subsidiary, PC-EPhone
               Ltd. During the year ended December 31, 2000, the company
               acquired all the issued and outstanding shares of PC-EPhone Ltd.
               for a nominal cash amount. At the time of acquisition, PC-EPhone
               Ltd. was non-active and had no net assets. The company accounts
               for this acquisition by the purchase method All intercompany
               transactions and balances have been eliminated on consolidation.

                                      F-7
<PAGE>

Note 2    Summary of Significant Accounting Policies - (cont'd)
          ------------------------------------------

          (b)  Oil and Gas Project Costs
               -------------------------

               The company follows the successful efforts method of accounting
               for its oil and gas properties. Under this method, the initial
               acquisition costs and the costs of drilling and equipping
               development wells, are capitalized. The costs of drilling
               exploratory wells are initially capitalized and, if subsequently
               determined to be unsuccessful, are charged to operations as dry
               hole expenses. Costs and reserves of properties are aggregated by
               country. All other exploration expenditures, including geological
               and geophysical costs and annual rentals on exploration acreage,
               are charged to operations as incurred. Lease acquisition costs,
               subsequently determined to be impaired in value, are charged to
               operations. Any capitalized balances are written-off upon the
               company's decision to abandon the property.


          (c)  Capital Assets and Amortization
               -------------------------------

               Capital assets are recorded at cost. The company provides for
               amortization using the straight-line method at the following
               annual rates:


                    Office furniture and equipment                5 years
                    Computer equipment                            4 years

               Website development costs are expensed as incurred.

           (d) Distribution Rights and Amortization
               ------------------------------------

               Distribution rights are recorded at the fair value of the non -
               cash consideration paid for these rights (Notes 7 and 11). The
               company provides for amortization on a straight-line basis over
               the term of the distribution agreement (86 months). In accordance
               with Statement of Financial Accounting Standards No. 121,
               "Accounting for the Impairment of Long-lived Assets and for Long-
               lived Assets to be Disposed Of", the distribution rights will be
               reviewed on a continuous basis throughout the following fiscal
               periods for impairment whenever assets or changes in
               circumstances indicate the carrying value of the asset may not be
               recoverable. An impairment loss would be recognized in the period
               it is determined.


          (e)  Foreign Currency Translation
               ----------------------------

               Foreign currency transactions are translated into U.S. dollars,
               the functional and reporting currency, by the use of the exchange
               rate in effect at the date of the transaction, in accordance with
               Statement of Financial Accounting Standards No. 52, "Foreign
               Currency Translation". At each balance sheet date, recorded
               balances that are denominated in a currency other than US dollars
               are adjusted to reflect the current exchange rate.


          (f)  Basic Loss per Share
               --------------------

               The company reports basic loss per share in accordance with
               Statement of Financial Accounting Standards No. 128, "Earnings
               Per Share". Basic loss per share is computed using the weighted
               average number of shares outstanding during the periods. Diluted
               loss per share has not been provided as it would be antidilutive.

                                      F-8
<PAGE>

Note 2    Summary of Significant Accounting Policies - (cont'd)
          ------------------------------------------

          (g)  Impairment of Long-lived Assets
               -------------------------------

               The company reports the impairment of long-lived assets and
               certain identifiable intangibles in accordance with Statement of
               Financial Accounting Standards No. 121, "Accounting for the
               Impairment of Long-lived Assets and for Long-lived Assets to be
               Disposed Of". Certain long-lived assets and identifiable
               intangibles held by the company are reviewed for impairment
               whenever assets or changes in circumstances indicate the carrying
               amount of an asset may not be recoverable. Accordingly, an
               impairment loss is recognized in the period it is determined.


          (h)  Income Taxes
               ------------

               The company uses the liability method of accounting for income
               taxes pursuant to Statement of Financial Accounting Standards,
               No. 109 "Accounting for Income Taxes".


          (i)  Fair Value of Financial Instruments
               -----------------------------------

               The carrying values of cash, accounts receivable, loan
               receivable, accounts payable and loans payable approximate fair
               value because of the short maturity of those instruments.


          (j)  Revenue Recognition
               -------------------

               Revenue from product sales is recognized when it is earned, the
               product has been shipped and collection is reasonably assured.
               During the year ended December 31, 2000, the company's revenue
               was derived from one subdistributor (Note 6 (b)).


Note 3    Prepaid Expenses and Deposits
          -----------------------------

          By an agreement dated July 1, 1998, the company engaged a consultant
          for the purpose of facilitating a private placement of the company's
          securities at a cost of $45,000, paid in advance of such services.
          During the year ended December 31, 1999, the consultant provided
          general consulting services to the company and consequently this
          amount was charged to consulting fees.

Note 4    Loan Receivable
          ---------------

          The loan receivable is unsecured, non-interest bearing and due on
          demand.

Note 5    Capital Assets
          --------------

<TABLE>
<CAPTION>
                                                         Accumulated                    Net Carrying Amount
                                           Cost          Amortization          2000          1999           1998
                                           ----          ------------          ----          ----           ----
<S>                                 <C>               <C>              <C>           <C>              <C>
Office furniture
 and equipment                        $      13,168      $     1,317     $     11,851   $          -     $         -
Computer equipment                           14,156            2,123           12,033              -               -
                                      -------------      -----------     ------------   ------------    ------------
                                      $      27,324      $     3,440     $     23,884   $          -    $          -
                                      =============      ===========     ============   ============    ============
</TABLE>

                                      F-9
<PAGE>

Note 6    Oil and Gas Property
          --------------------

          Pursuant to an exploration conveyance and assignment agreement with a
          related company (related by virtue of common directors), the company
          earned a 7% working interest in the Travis Oil and Gas project for
          total consideration of $73,000. The company is required to pay 10% of
          the costs for each test well drilled.

          During the year ended December 31, 2000, the company abandoned its
          interest in the Travis Oil and Gas Project and wrote-off the
          acquisition costs of $73,000.

Note 7    Distribution Rights - Notes 2(g) and 11
          ---------------------------------------

<TABLE>
<CAPTION>
                                                     Accumulated                  Net Carrying Amount
                                        Cost         Amortization          2000            1999            1998
                                        ----         ------------          ----            ----            ----
             <S>                   <C>             <C>              <C>              <C>              <C>
               Distribution rights   $  9,450,000    $    219,767     $   9,230,233    $          -     $          -
                                     ============    ============      ============    ============     ============
</TABLE>

          (a)  (i)  By a distribution agreement dated November 6, 2000 and
                    amended February 8, 2001 with Cyberbank Corp. ("Cyberbank"),
                    a Korean Corporation, PC-EPhone Ltd. was granted the
                    exclusive right to market, distribute and sell, within the
                    United States and Canada, a wireless handheld device which
                    performs internet, personal computer, cellular phone and
                    organizer functions (the "PC-EPhone"). In addition, PC-
                    EPhone Ltd. was granted the worldwide right on a non-
                    exclusive basis.

                    In consideration for these rights, the company, on behalf of
                    PC-EPhone Ltd., issued 3,500,000 common shares to Cyberbank,
                    valued at $2.70 per share for total non-cash consideration
                    of $9,450,000 (Notes 2 (g) and 11). As a condition of
                    maintaining the rights, PC-EPhone Ltd. must purchase from
                    Cyberbank a minimum of 500,000 units annually upon Cyberbank
                    receiving written approval for the product by the US Federal
                    Communications Commission.

                    The company granted Cyberbank share purchase warrants
                    entitling Cyberbank the right to acquire 2,500,000 common
                    shares at $3.20 per share. These warrants are exercisable
                    during the period November 1, 2001 to December 31, 2001.

                    PC-EPhone Ltd. has agreed to issue two binding purchase
                    orders to Cyberbank for a total of $25,300,000 to be paid
                    with cash of $2,000,000 and letters of credit totalling
                    $23,300,000.

                    The term of this agreement ends December 31, 2007 and will
                    automatically renew from year to year.

               (ii) By a warrant agreement dated November 6, 2000, Cyberbank
                    granted the company warrants to purchase the number of
                    common shares as determined below at a price of $223.54 per
                    share. The warrants are exercisable during the period from
                    November 1, 2001 to December 31, 2001.

                                      F-10
<PAGE>

Note 7    Distribution Rights - (cont'd)
          -------------------

          (a)  (ii) - (cont'd)

                    The ultimate number of Cyberbank warrants to be issued to
                    the company is to be determined based on the following:

                         If the Average Trading Price of the company's common
                         shares is greater than or equal to $6.00 per share,
                         35,789 Cyberbank warrants will be issued;

                         If the Average Trading Price of the company's common
                         shares is less than $6.00 per share, then the number of
                         Cyberbank warrants shall be determined as follows:

                         Number of Warrants = 35,789 Warrants X (Average Trading
                         Price/$6.00)

                    The "Average Trading Price" of the company's common shares
                    means the average trading price of the common stock of the
                    company for the twenty trading days prior to November 1,
                    2001 determined based on the closing price on each trading
                    day.

                    These warrants are subject to approval by the directors of
                    Cyberbank, such approval to be obtained no later than March
                    31, 2001.

          (b) By a subdistributor agreement dated November 15, 2000 with
              FutureCom Global, Inc. ("FutureCom"), PC-EPhone Ltd. granted
              FutureCom the exclusive right to market, distribute and sell,
              within the United States and Canada, the PC-EPhone product.

               As a condition of maintaining these rights, FutureCom must
               purchase from PC-EPhone Ltd. a minimum of 250,000 units
               quarterly, once Cyberbank has received written approval for the
               product by the US Federal Communications Commission.

               FutureCom has also agreed to issue two binding purchase orders to
               PC-EPhone Ltd. for a total of $25,300,000 to be paid with cash of
               $2,000,000 and letters of credit totalling $23,300,000.

               The term of this agreement ends December 31, 2007 and will
               automatically renew from year to year.

                                      F-11
<PAGE>

Note 8    Loans Payable
          -------------

<TABLE>
<S>                                                              <C>              <C>              <C>
                                                                       2000             1999              1998
                                                                       ----             ----              ----
         <S>                                                     <C>             <C>                <C>
          (a)  Loan payable, interest only payable monthly at
               12% per annum, unsecured, due June 30, 2001.       $    100,000     $            -     $            -

          (b)  Loan payable, non-interest bearing, unsecured,
               due on demand.                                           20,000                  -                  -

          (c)  Loans payable, non-interest bearing, unsecured,
               no specific terms for repayment                               -             78,500                  -
                                                                  ------------     --------------     --------------
                                                                  $    120,000     $       78,500     $            -
                                                                  ============     ==============     ==============
</TABLE>

Note 9    Capital Stock
          -------------

          (a)  Authorized:
               50,000,000 common shares , $0.001 par value
               1,000,000 preferred shares, $0.01 par value

          (b)  Share Subscriptions:

               At December 31, 2000, share subscriptions totalling $225,000 had
               been received with respect to subscription agreements for 75,000
               common shares at $3.00 per share. A commission of $5,250 was paid
               with respect to these subscriptions. On February 17, 2001, the
               company issued the 75,000 common shares.

          (c)  Warrants:

               At December 31, 2000, there were share purchase warrants
               outstanding entitling the holder thereof the right to purchase
               2,500,000 common shares of the company at $3.20 per share. These
               warrants are exercisable during the period November 1, 2001 to
               December 31, 2001.

                                      F-12
<PAGE>

Note 10   Related Party Transactions
          --------------------------

          (a)  The company has incurred charges by directors, companies with
               directors or officers in common or shareholders owning greater
               than 10% of the company as follows:

<TABLE>
<CAPTION>
                                                                                                        June 17, 1998
                                                                                                       (Date of Incor-
                                                                                                        poration) to
                                                                                                        December 31,
                                                                            2000             1999           1998
                                                                            ----             ----           ----
               <S>                                                       <C>               <C>          <C>
               Cost of sales                                             $   800,000      $       -     $         -
               General and Administrative Expenses
                 Consulting                                                  167,500         70,000               -
                 Office and telephone                                              -          4,000               -
                 Rent                                                          2,739          4,157               -
               Exploration and development                                    21,960              -               -
               Gain on settlement of debts                                 (  17,538)             -               -
               Write-off of oil and gas property - Note 6                     73,000              -               -
                                                                         -----------      ---------     -----------
                                                                         $ 1,047,661      $  78,157     $         -
                                                                         ===========      =========     ===========
</TABLE>

          (b)  At December 31, 2000, 1999 and 1998, the company owed directors,
               companies with directors or officers in common or shareholders
               owning greater than 10% of the company the following amounts:

<TABLE>
<CAPTION>
                                                                            2000             1999           1998
                                                                            ----             ----           ----
               <S>                                                       <C>              <C>           <C>
               Accounts payable                                          $    71,360      $  74,157     $         -
               Loans payable                                                       -         25,500               -
               Accounts receivable                                                 -       (  3,734)              -
                                                                         -----------      ---------     -----------
                                                                         $    71,360      $  95,923     $         -
                                                                         ===========      =========     ===========
</TABLE>

                                     F-13
<PAGE>

Note 11   Non-cash Transactions
          ---------------------

          Investing and financing activities that do not have a direct impact on
          current cash flows are excluded from the statement of cash flows.
          During the year ended December 31, 2000 the following transactions
          were excluded from the statement of cash flows:

          a)   the company issued 2,500,000 common shares at $0.10 per share as
               settlement of loans payable totalling $86,000 and accounts
               payable totalling $164,000;

          b)   the company issued 3,500,000 common shares at $2.70 per share (a
               total value of $9,450,000) as consideration for the acquisition
               of distribution rights (Notes 2 (d) and 7).

Note 12   Deferred Tax Assets
          -------------------

          The Financial Accounting Standards Board issued Statement Number 109
          in Accounting for Income Taxes ("FAS 109") which is effective for
          fiscal years beginning after December 15, 1992. FAS 109 requires the
          use of the asset and liability method of accounting of income taxes.
          Under the assets and liability method of FAS 109, deferred tax assets
          and liabilities are recognized for the future tax consequences
          attributable to temporary differences between the financial statements
          carrying amounts of existing assets and liabilities and their
          respective tax bases. Deferred tax assets and liabilities are measured
          using enacted tax rates expected to apply to taxable income in the
          years in which those temporary differences are expected to be
          recovered or settled.

          The following table summarizes the significant components of the
          company's deferred tax assets:

                                                                      Total
                                                                      -----
          Deferred Tax Assets
            Non-capital loss carryforwards                        $    957,136
                                                                  ============
          Gross deferred tax assets                               $    382,854
          Valuation allowance for deferred tax asset                (  382,854)
                                                                  ------------
                                                                  $          -
                                                                  ============

          The amount taken into income as deferred tax assets must reflect that
          portion of the income tax loss carryforwards which is likely to be
          realized from future operations. The company has chosen to provide an
          allowance of 100% against all available income tax loss carryforwards,
          regardless of their time of expiry.

                                     F-14
<PAGE>

Note 13   Income Taxes
          ------------

          No provision for income taxes has been provided in these consolidated
          financial statements due to the net loss. At December 31, 2000, the
          company has operating loss carryforwards, which expire commencing in
          2018 totalling approximately $957,136, the potential tax benefit of
          which has not been recorded in the consolidated financial statements.

Note 14   New Accounting Standards
          ------------------------

          In April 1998, the Accounting Standards Executive committee issued SOP
          98-5, "Reporting on the cost of start-up activities". This statement
          is effective for fiscal years beginning after December 15, 1998.
          Adopting this standard did not have a material impact on the company's
          financial position, results of operations or cash flows.

          In December 1999, the Securities and Exchange Commission issued Staff
          Accounting Bulletin No. 101, "Revenue Recognition in Financial
          Statements". Adopting this Bulletin did not have a material impact on
          the company's financial position, results of operations or cash flows.

Note 15   Comparative Figures
          -------------------

          Certain comparative figures have been reclassified to conform with the
          presentation used in the current year.

Note 16   Subsequent Events - Notes 7 and 9
          -----------------

          On February 27, 2001, the company granted stock purchase options
          entitling the holders thereof the right to acquire 225,000 common
          shares of the company at $3.00 per share. These options expire on
          November 30, 2001, as to 25,000 options, and February 1, 2003, as to
          200,000 options.


Changes In and Disagreements With Accountants on Accounting and Financial
Disclosure.

Not Applicable.

                                     F-15
<PAGE>

                                   PART III

Directors, Executive Officers, Promoters and Control Persons; Compliance With
Section 16(a) of the Exchange Act

The following table sets forth as of March 29, 2001, the name, age, position of
the executive officers and directors of the Company, along with their date of
appointment.  The directors serve until the Company's next annual general
meeting, or until a successor is elected and qualifies to be a director of the
Company, or until such director's resignation or removal from office in
accordance with the Company's By-Laws.

<TABLE>
<CAPTION>
Name                    Age     Position/Office held                    Served in Office Since

<S>                     <C>     <C>                                     <C>
Douglas Yee              32     Director, President, Treasurer          September 12, 2000
Terrence King            45     Director                                December 15, 2000
Negar Towfigh            28     Director                                February 16, 1999
                                Secretary                               July 22, 1999
Don-gil Park             42     Director                                March 29, 2001
Jaekil Song              36     Director                                March 29, 2001
Jin Lee                  41     Chief Technology Officer                January 31, 2001
</TABLE>

DOUGLAS YEE (Age 32), President, Treasurer, and a Director of the Company.   Mr.
--------------------------------------------------------------------------
Yee has been a director of the Company since September 12, 2000.  Mr. Yee was
the Director of Finance of Conor Pacific Environmental Technologies Inc. from
1997 to June 2000.  From 1996 to 1997, Mr. Yee was Treasurer and Corporate
Controller of Triton Mining Corporation.  At Royal Oak Mines Inc., between 1992
and 1996, Douglas Yee worked in various positions: Controller, Manager of
Taxation, Assistant Treasurer and Corporate Accountant.  All these companies are
or were listed on the Toronto Stock Exchange ("TSE").  Mr. Yee has been involved
in the analysis and acquisition of several companies.  He has participated in
contract negotiations, reviewed joint venture agreements and prospectuses, and
prepared numerous financial schedules.  Mr. Yee is a Chartered Accountant and
graduated with honors from the University of British Columbia in 1990 with a
Bachelor of Commerce in Accounting.  Mr. Yee has taught several courses at the
School of Chartered Accountancy and the Institute of Chartered Accountants of
British Columbia.

TERRENCE E. KING (Age 45), a Director of the Company.  Mr. King is a lawyer and
-----------------------------------------------------
is a principal at Holmes & King, an Association of Lawyers and Law Corporations.
Mr. King was admitted to the British Columbia Bar in 1982 and is a member of the
British Columbia Law Society and Canadian Bar Association. Mr. King graduated
from the University of British Columbia with a Bachelor of Arts (Political
Science) and, subsequently, a Bachelor of Law in 1982. Mr. King was a partner
with the law firm of Ferguson Gifford from 1987 to 1991. Mr. King established
Terrence E. King Law Corporation in 1991 and is presently practicing law in
association with Holmes & King, an association of lawyers and law corporations.
Mr. King's principal area of law practice is Securities and Corporate Finance,
Corporate and Commercial. Mr. King is presently a secretary of Prospector
International Resources Inc., a publicly traded company whose shares are traded
on the Canadian Venture Exchange. From 1996 to 1998,

                                     -32-
<PAGE>

Mr. King was a director of South Duval Gold Corp., a company whose shares were
previously listed on the Canadian Venture Exchange.

NEGAR TOWFIGH (Age 28), Director and Secretary of the Company.  Ms. Towfigh has
--------------------------------------------------------------
been a director of the Company since February 16, 1999. Ms. Towfigh is Corporate
Secretary of First Goldwater Resources Inc., as well as Vice President and
Secretary of Habanero Resources Inc. Ms. Towfigh runs her own consulting firm
where she specializes in structuring companies from incorporation to a listing
on the CDNX or OTCBB; she assists companies with initial public offerings; and
handles all regulatory filings. She has previously been employed in the
investment industry with several brokerage houses including Canaccord Capital
Corporation, Nesbitt Burns Inc., RBC Dominion and Pacific International
Securities Inc. She graduated with a Bachelor of Commerce in Finance from the
University of British Columbia in 1995.

DON-GIL PARK (Age 42) a Director of the Company.  Mr. Park is a Senior Executive
------------------------------------------------
Director with Cyberbank Corp., a private Korean company. He has overseen
overseas marketing development for Cyberbank since June 2000 for Cyberbank. From
September 1994 to June 2000, Mr. Park was in the marketing field with SK
Telecom, a telecom carrier. Mr. Park is not currently a director or officer of
any other publicly traded corporation. Mr. Park graduated from the Korea
University in Seoul, Korea with a Bachelor of Economics.

JAEKIL SONG (Age 36) a Director of the Company.  Mr. Song is a general manager
-----------------------------------------------
of Cyberbank Corp. since March 29, 2000. Mr. Song oversaw overseas investments
for Hyundai International's Merchant Banking division from January 3, 1990 until
September 13, 1999. Subsequently, Mr. Song was an investment banker with
Choheung Bank from September 13, 1999 to March 18, 2000. Mr. Song is not
currently a director or officer of any other publicly traded corporation. Mr.
Song graduated with a Bachelor of Business Administration from the Korea
University in Seoul, Korea. He went on to the University of Pennsylvania, where
he earned his Masters of Business Administration in Finance.

JIN LEE (Age 41) Chief Technology Officer.  Mr. Lee  has been the President of
------------------------------------------
Internet Interworld Inc., an Internet service provider, since November 1996.
From 1995 to 1996 Mr. Lee worked as a visiting professor in the Department of
Electrical Engineering at the University of British Columbia.  Mr. Lee graduated
from California State University with a Masters in Computer Science in 1989.
Mr. Lee is not currently a director or officer of any other publicly traded
corporation.

There are no family relationships between any of the directors and officers of
the Company.

Section 16 Compliance

     Douglas Yee was required to file a Form 3 with the SEC on or before
September 22, 2000.  The Form 3 was filed late with the SEC on November 22,
2000.

     Negar Towfigh was required to file a Form 4 with the SEC on or before
August 10, 2000.  She filed a Form 5 with the SEC February 15, 2001.

     Graeme Sewell, a former director of the Company, was required to file a
Form 4 with the SEC on or before August 10, 2000.  He filed a Form 5 with the
SEC on February 15, 2001.

                                     -33-
<PAGE>

     Allen Sewell, a former director of the Company, was required to file one
Form 4 with the SEC on or before August 10, 2000 and another Form 4 with the SEC
on or before December 8, 2000.  He filed a Form 5 with the SEC on February 15,
2001.

     Cyberbank Corp. was required to file a Form 3 with the SEC on or before
December 8, 2000.  The Form 3 was filed late with the SEC on December 19, 2000.
Cyberbank Corp. filed a Form 5 with the SEC on March 1, 2001.  By rule, the Form
5 was required to be filed with the SEC on or before February 14, 2001.

Executive Compensation.

The following table summarizes the total compensation of the three individuals
who served as CEO or in a similar capacity at various times throughout the last
two fiscal years.  No executive officers of the Company earned in excess of
$100,000 during either of the fiscal years ended December 31, 1999 or December
31, 2000.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
                        SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------
                           Annual Compensation
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Name and Principle             Year                   Salary ($)
 Position
-------------------------------------------------------------------------
<S>                      <C>                <C>
Douglas Yee                    2000                    22,500
President &
Director (1)
-------------------------------------------------------------------------
Graeme Sewell                  2000                    24,000
Former President &
Director (2)                   1999                    30,000
-------------------------------------------------------------------------
Allen Sewell
Former President &             2000                    32,000
Director (3)
                               1999                    40,000

-------------------------------------------------------------------------
</TABLE>

(1) Douglas Yee has served as President from September 12, 2000 to present. Mr.
    Yee's management services company received $7,500 per month for providing
    management services to the Company.
(2) Graeme Sewell served as President from August 18, 2000 to September 12,
    2000.
(3) Allen Sewell served as President from June 17, 1998 to August 18, 2000.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of March 28, 2001, based on
information obtained from the persons named below, with respect to the
beneficial ownership of the

                                     -34-
<PAGE>

Common Shares by (i) each person known by the Company to own beneficially 5% or
more of the Common Shares, (ii) each director and officer and (iii) all
directors and officers as a group:

<TABLE>
<CAPTION>
Title of Class                    Name & Address                     Amount & Nature              Percent of
                                  of Beneficial Owner              of Beneficial Owner (1)          Class

<S>                               <C>                              <C>                            <C>
Common Shares                     Douglas Yee                             500,000                   3.1%
                                  President, Director and Treasurer
                                  2505 East 5/th/ Avenue
                                  Vancouver, BC
                                  Canada  V5M 1M8

Common Shares                     Don-gil Park                                  0                     0%
                                  Director
                                  102 - 1601 Sindonga Apt.
                                  Yongdu-dong
                                  Dongdaemun-gu
                                  Seoul, Korea

Common Shares                     Jaekil Song                                   0                     0%
                                  Director
                                  109 - 406 Jugong Apt.
                                  Kwachon City
                                  Kyonggi-do, Korea

Common Shares                     Terrence King                                 0                     0%
                                  Director
                                  Suite 1300
                                  1111 West Georgia Street
                                  Vancouver, BC
                                  Canada  V6E 4M3

Common Shares                     Jin Lee                                 406,770                   2.5%
                                  Chief Technology Officer
                                  #1890-401 W. Georgia Street
                                  Vancouver, BC
                                  Canada V6B 5A1
 </TABLE>

                                    -35-
<PAGE>

<TABLE>
<CAPTION>
<S>                        <C>                                                         <C>               <C>
Common Shares              Negar Towfigh                                                   48,000         0.3%
                           Director and Secretary
                           1403 Chippendale Road
                           West Vancouver, BC
                           Canada  V7S 2N7

Common Shares              Cyberbank Corp. (2)                                          3,500,000        21.7%
                           18/th/ Floor, Mirae Bldg., 1306-6
                           Seocho-dong, Seocho-gu
                           Seoul, Korea  137-070

Common Shares              Directors & Officers as a                                      954,770         6.0%
                           Group (six persons)
</TABLE>

    (1)  Unless otherwise indicated, this column reflects amounts as to which
         the beneficial owner has sole voting power and sole investment power.

    (2)  Excludes a warrant exercisable for the purchase of 2,500,000 shares of
         Common Stock at a purchase price of $3.20 per share, which warrant is
         exercisable from November 1, 2001 through December 31, 2001.

Certain Relationships and Related Transactions

On March 19, 1999, the Company entered into the Agreement with Brothers, a
company owned and controlled by several members of the Sewell family, and whose
president is Allen Sewell. Graeme Sewell is Allen Sewell's son and Graeme
Sewell's two children owned shares in Brothers, at the time of the transaction.
The directors of Brothers are Allen Sewell and Michael Sewell, Graeme Sewell's
father and brother, respectively.

Brothers granted to the Company an option to earn 70% of Brothers' 10% working
interest in certain oil and gas leases, options to lease and seismic options
located on the Lands in Solano County, California. As discussed, the Company has
paid $73,000 to Brothers pursuant to the Agreement which amount is equal to
Brothers total land and seismic acquisition costs associated with the Lands. The
estimated land and seismic costs were $83,000 at the time the Agreement was
entered into. However, cost savings were realized and the total land and seismic
costs are in fact, $73,000. The Company subsequently paid Brothers $83,506 to
drill wells on the property.

On August 18, 2000, the Company announced that it would not be exercising its
option to proceed with the Travis oil and gas property. Investors are referred
to the "Exploration Conveyance and Assignment Agreement" between Brothers Oil &
Gas Inc. and the Company, as previously reported in the Company's Form 10-SB
filed with the Securities and Exchange Commission. The Company paid for its
share of drilling costs for the first well, which resulted in a dry hole and
elected not to exercise its option to participate in further drilling. The
option was non-transferable, therefore the Company did not sell its option but
instead allowed it to expire. The Company will not be penalized for allowing the
option to expire. The Company owns no property in relation to its former oil and
gas business.

                                     -36-
<PAGE>

Pursuant to the Distribution Agreement, the Company, through PC-EPhone Ltd.,
granted 3,500,000 shares of its Common Shares to Cyberbank in exchange for the
distribution rights thereunder. In addition, pursuant to the Warrants Agreement,
the Company granted to Cyberbank 2,500,000 warrants to purchase shares of the
Company's Common Shares. Upon receipt of the shares issued by the Company
pursuant to the Distribution Agreement, Cyberbank owns in excess of 5% of the
total equity interest in the Company.

Exhibits and Reports on Form 8-K

No reports on Form 8-K were filed during the fourth quarter of the year ending
December 31, 2000.


Index of Exhibits

2.1    Letter Agreement dated November 7, 2000 between Newlands Oil & Gas Inc.
       and Peace for the New Millennium Ltd., pursuant to which Newlands Oil &
       Gas Inc. acquired Peace for the New Millennium Ltd.

3      (i)   Articles of Incorporation including all Amendments thereto.

3      (ii)  ByLaws - incorporated by reference under the Company's Form 10-SB
             filed with the Securities & Exchange Commission on June 11, 1999 as
             Exhibit 3 (ii).

10.1   Indemnification Agreement with Douglas Yee.

10.2   Indemnification Agreement with Negar Towfigh.

10.3   Indemnification Agreement with Terrence King.

10.4   Indemnification Agreement with Alan Crawford.

10.5   Indemnification Agreement with Greg Burnett.

10.6   Indemnification Agreement with Jin Lee.

10.7   Indemnification Agreement with Don-gil Park.

10.8   Indemnification Agreement with Jaekil Song.

10.9   Debt Settlement Agreement dated July 12, 2000 between the Company and
       Next Millennium Management Ltd.

10.10  Debt Settlement Agreement dated July 12, 2000 between the Company and
       Shareholders.

10.11  Debt Settlement Agreement dated July 12, 2000 between the Company and
       Allen Sewell.

10.12  Debt Settlement Agreement dated July 12, 2000 between the Company and
       Amisano Hanson CA's.

                                     -37-
<PAGE>

10.13     Debt Settlement Agreement dated July 12, 2000 between the Company and
          Brothers Oil & Gas Inc.

10.14     Debt Settlement Agreement dated July 12, 2000 between the Company and
          First Place Capital Inc.

10.15     Debt Settlement Agreement dated July 12, 2000 between the Company and
          463563 BC Ltd.

10.16     Debt Settlement Agreement dated July 12, 2000 between the Company and
          Morton & Co.

10.17(1)  Distribution Agreement dated November 6, 2000 between the Company and
          Cyberbank Corp.

10.18     Warrants Agreement dated November 6, 2000 between the Company and
          Cyberbank Corp.

10.19(1)  Subdistributor Agreement dated as of November 15, 2000 between the
          Company and FutureCom Global, Inc.

10.20(1)  Letter Agreement dated February 8, 2001 between the Company and
          Cyberbank Corp.

10.21(1)  Tri-Party Agreement dated February 9, 2001 among the Company,
          Cyberbank Corp. and FutureCom Global, Inc.

10.22     Management Services Contract dated as of October 1, 2000 between the
          Company and All Seasons Consulting Inc.

10.23     Exploration Conveyance & Assignment Agreement dated March 1, 1999
          between the Company and Brothers Oil & Gas Inc. - incorporated by
          reference under the Company's Form 10-SB filed with the Securities &
          Exchange Commission on June 11, 1999 as Exhibit 10.1.

(1) Confidential Treatment Requested

                                     -38-
<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.

                                       PC-EPHONE, INC.

                                       By: __/s/ Douglas Yee___________________
                                             Douglas Yee
                                             President, Treasurer and
                                             Director

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 indicated on March 28, 2001.


      Signature                        Title                 Date
      ---------                        -----                 ----

/s/ Douglas Yee                  President, Treasurer
------------------------------   and Director            March 28, 2001
      Douglas Yee


/s/ Terrence King                Director
------------------------------                           March 28, 2001
      Terrence King


/s/ Negar Towfigh                Secretary and           March 28, 2001
------------------------------   Director
      Negar Towfigh

                                     -39-
<PAGE>

                               Index of Exhibits

2.1     Letter Agreement dated November 7, 2000 between Newlands Oil & Gas Inc.
        and Peace for the New Millennium Ltd., pursuant to which Newlands Oil &
        Gas Inc. acquired Peace for the New Millennium Ltd.

3       (i)   Articles of Incorporation including all Amendments thereto.
3       (ii)  ByLaws - incorporated by reference under the Company's Form 10-SB
              filed with the Securities & Exchange Commission on June 11, 1999
              as Exhibit 3 (ii).

10.1    Indemnification Agreement with Douglas Yee.
10.2    Indemnification Agreement with Negar Towfigh.
10.3    Indemnification Agreement with Terrence King.
10.4    Indemnification Agreement with Alan Crawford.
10.5    Indemnification Agreement with Greg Burnett.
10.6    Indemnification Agreement with Jin Lee.
10.7    Indemnification Agreement with Don-gil Park.
10.8    Indemnification Agreement with Jaekil Song.
10.9    Debt Settlement Agreement dated July 12, 2000 between the Company and
        Next Millennium Management Ltd.
10.10   Debt Settlement Agreement dated July 12, 2000 between the Company and
        Shareholders.
10.11   Debt Settlement Agreement dated July 12, 2000 between the Company and
        Allen Sewell.
10.12   Debt Settlement Agreement dated July 12, 2000 between the Company and
        Amisano Hanson CA's.
<PAGE>

10.13     Debt Settlement Agreement dated July 12, 2000 between the Company and
          Brothers Oil & Gas Inc.
10.14     Debt Settlement Agreement dated July 12, 2000 between the Company and
          First Place Capital Inc.
10.15     Debt Settlement Agreement dated July 12, 2000 between the Company and
          463563 BC Ltd.
10.16     Debt Settlement Agreement dated July 12, 2000 between the Company and
          Morton & Co.
10.17(1)  Distribution Agreement dated November 6, 2000 between the Company and
          Cyberbank Corp.
10.18     Warrants Agreement dated November 6, 2000 between the Company and
          Cyberbank Corp.
10.19(1)  Subdistributor Agreement dated as of November 15, 2000 between the
          Company and FutureCom Global, Inc.
10.20(1)  Letter Agreement dated February 8, 2001 between the Company and
          Cyberbank Corp.
10.21(1)  Tri-Party Agreement dated February 9, 2001 among the Company,
          Cyberbank Corp. and FutureCom Global, Inc.
10.22     Management Services Contract dated as of October 1, 2000 between the
          Company and All Seasons Consulting Inc.
10.23     Exploration Conveyance & Assignment Agreement dated March 1, 1999
          between the Company and Brothers Oil & Gas Inc. - incorporated by
          reference under the Company's Form 10-SB filed with the Securities &
          Exchange Commission on June 11, 1999 as Exhibit 10.1.

(1) Confidential Treatment Requested