<PAGE>   1

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   -----------
                                   FORM 10-KSB
(Mark One)

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     |X|      SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                   For the fiscal year ended December 31, 1999
                                       OR

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

                    For the transition period from ______ to

                         Commission file number 0-25435
                                   -----------
                              SYMPOSIUM CORPORATION
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                Delaware                               13-4042921
    (State or Other Jurisdiction of       (I.R.S. Employer Identification No.)
    Incorporation or Organization)

              410 Park Avenue, Suite 830, New York, New York 10022
                    (Address of Principal Executive Offices)

                                 (212) 754-9901
                (Issuer's Telephone Number, Including Area Code)

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

         Securities Registered under Section 12(g) of the Exchange Act:
                          Common Stock, $.001 par value
                                   -----------
            Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes: |X|
No: |_|

            Issuer's revenues for fiscal year ended December 31, 1999 were $0

            The aggregate market value of the voting stock (common stock) held
by non-affiliates of the Registrant on April 7, 2000 was approximately
$19,100,000.

            Number of shares outstanding of each of the issuer's classes of
common equity as of April 7, 2000: 23,014,345 shares of common stock.

      Transitional Small Business Disclosure Format Yes: |_| No: |X|
<PAGE>   2

                              Symposium Corporation
                                   Form 10KSB
                      For the Year Ended December 31, 1999

      The statements contained in this Annual Report on Form 10-KSB that are not
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including statements regarding the
expectations, beliefs, intentions or strategies regarding the future. The
Company intends that all forward-looking statements be subject to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements reflect the Company's views as of the date they are
made with respect to future events and financial performance, but are subject to
many risks and uncertainties, which could cause the actual results of the
Company to differ materially from any future results expressed or implied by
such forward-looking statements. Examples of such risks and uncertainties
include, but are not limited to: obtaining sufficient financing to maintain the
Company's planned operations, including acquisitions of other companies; the
Company's ability to form an online discount buying club; the changing of market
conditions and the other risks detailed in "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Certain Trends and
Uncertainties" in this Annual Report on Form 10-KSB and elsewhere herein. The
Company does not undertake to update any forward-looking statements.

                                     PART I

ITEM 1. Description of Business

General

      The Company was incorporated in Delaware in May 1997 as "Brack Industries,
Inc." and changed its name to "Symposium Telecom Corporation" in June 1998 and
to "Symposium Corporation" in May 1999. The Company commenced business
operations in the quarter ended December 31, 1998. From December 1998 through
June 30, 1999, the Company, through its wholly-owned subsidiary Publishers
Advantage Corporation ("PAC"), had minimal operations and was engaged
principally in telemarketing magazine and periodical subscription renewals to
persons whose subscriptions had recently expired. The Company discontinued the
operations of PAC as of June 30, 1999.

      The Company's principal business strategy is to acquire well established
direct marketing companies and then leverage the existing marketing
infrastructure and management techniques of those companies to attain
significant market presence in the new web-based economy. Targeted acquisitions
will have one or more of the following characteristics:

      -     a history of profitability

      -     an on-going base of current customers

      -     reach millions of consumers annually

      -     direct marketing expertise in such areas as outbound/inbound
            telemarketing, mass market print and broadcast advertising and mass
            market direct mail campaigns

      -     the opportunity for significant growth within each company's present
            business.

      Symposium's strategy is to "piggyback" on the direct marketing skills of
an acquired company and its consumer contacts to recruit members to a web-based
discount buying club being developed by Symposium, to provide E-mail addresses
to third party web sites and/or to sell a variety of targeted web services. By
following this strategy, Symposium believes that it can obtain new web customers
for either Symposium's own use or for third party web retailers at or below the
cost of other recruiting techniques. There can be no assurance, however, that
the Company will be able to identify and acquire companies that meet these
criteria.


                                      -2-
<PAGE>   3

      As the first step in the implementation of this strategy, in January 2000,
Symposium completed its acquisition of Direct Sales International LP ("DSI")
(see "DSI Acquisition" below).

DSI Acquisition

      On January 28, 2000 Symposium, through its wholly-owned subsidiary Media
Outsourcing, Inc. ("MOS"), acquired substantially all the assets and assumed
certain liabilities of DSI, a magazine subscription agency based in Atlanta,
Georgia which works on behalf of US magazine publishers to generate new magazine
subscriptions.

      The purchase price paid by Symposium to acquire the net assets of DSI was
approximately $27.6 million including: (i) $25.0 million in cash paid to the
Seller, (ii) an agreement to loan $1.5 million to AmeriNet, Inc. ("AmeriNet") a
company in which Richard Prochnow, DSI's principal owner, holds a majority
interest and (iii) approximately $1.1 million in closing costs and fees incurred
in connection with the acquisition. See "MD&A--Financial Condition and
Liquidity" for a description of certain financial arrangements between
Symposium, Mr. Prochnow and AmeriNet. A dispute between the parties with regard
to the terms of the asset purchase agreement and whether the purchase was
concluded within the time set forth in the Option Agreement caused the purchase
price to increase from that provided under the Option Agreement described in the
Company's Form 10-QSB dated August 16, 1999. Symposium financed the cash portion
of the purchase price by borrowing $16.0 million under a credit facility
provided by Coast Business Credit, resulting in net proceeds of $15.8 million
net of fees, and by using proceeds totaling approximately $9.2 million from the
issuance of common stock, warrants for the purchase of common stock, convertible
preferred stock and convertible debentures. (See "MD&A--Financial Condition and
Liquidity" for a further description of such financing).

      MOS Business

      The business acquired by Symposium from DSI has been operated through MOS
since the closing of the DSI Acquisition.

      MOS is a clearinghouse which has been granted the "Direct Authority" to
act on behalf of magazine publishers, accepting magazine subscription orders
from independent sales organizations and placing those orders with fulfillment
houses designated by the publishers. MOS has relationships with approximately 35
independently owned and operated telemarketing agencies. Each agency employs
telemarketing representatives ("TSRs") who place outbound telephone calls to
potential customers. The TSR sources the calls from lists purchased by the
telemarketing agency or is provided with lists purchased by MOS. On average, the
TSRs employed by the 35 telemarketing agencies call between 3 million and 4
million potential customers and reach approximately 1 million potential
customers per month, resulting in approximately 15,000 new orders each month
during 1999. The TSR's offer a bundle of four to five magazines having an
average selling price of approximately $600 per bundle for an average
subscription period of between three and four years. The TSR takes the order,
confirms the customer's credit card information, and submits the order to MOS
via modem. Within 24 hours of receiving an order, MOS underwrites the order by
calling the customer to verify all of the information regarding the order,
including the magazine subscription order details and the customer's credit card
information. MOS obtains permission to record each conversation as part of the
underwriting process. Upon completion of the underwriting process, MOS purchases
the acceptable orders from the telemarketing agency and finances the cost of the
magazines to the subscriber over a twelve month period with each monthly payment
automatically debited to the customer's credit card. MOS forwards the order to
the appropriate magazine publisher's fulfillment center for processing and pays
the magazine publisher an agreed upon remittance. In the three years preceding
the DSI acquisition, DSI financed more than $250 million of magazine
subscriptions to over 650,000 magazine buyers.

      MOS generates additional revenues through the receipt of commissions for
participation in special promotions by magazine publishers to spur the sale of
subscriptions. Publishers will request that MOS provide names of potential
customers for such special promotions. MOS receives a commission based upon the
additional subscriptions sold to the customer base provided by MOS.


                                        3
<PAGE>   4

      Additionally, MOS earns a commission from a third party discount buying
club ("Memberworks") each time an MOS recommended customer enrolls in or renews
a membership in Memberworks. In 1999 approximately 20% of all new MOS customers
enrolled in Memberworks, resulting in fees to DSI totaling approximately $2.1
million.

      Competition

      While there are no limitations on who may sell magazines to the public,
the companies and individuals that sell magazines must forward the subscriptions
to the publisher through a clearinghouse which has been granted authority to do
so by the publisher and must pay a fee to the clearinghouse to clear the order.
Thus, in order for a clearinghouse to serve as a distribution channel for a
magazine, it must have secured authority to do so from the publisher of that
magazine. Publishers determine the clearinghouses to which they will grant such
authority. Establishing such a relationship is difficult due to magazine
publishers' reluctance to grant this authority to new companies. MOS has been
granted authority to clear orders for approximately 250 major U.S. magazine
publications.

      Magazines are sold by clearinghouses through their own in-house marketing
and sales organizations or through independent agencies, which then clear the
orders they generate through clearinghouses. The industry leaders in sales of
magazine subscriptions are Publishers Clearinghouse and New Sub Services, Inc.

      Regulation

      Telemarketing operations are subject to various state and federal
regulations. The Federal Telephone Consumer Protection Act of 1991 limits the
hours during which tele-marketers may call consumers to between 8:00 AM and 9:00
PM, and prohibits the use of automated telephone dialing equipment to call
certain telephone numbers. The Federal Telemarketing and Consumer Fraud and
Abuse Prevention Act of 1994, and the Federal Trade Commission ("FTC)
regulations promulgated thereunder, prohibit deceptive, unfair or abusive
practices in telemarketing sales. Both the FTC and state attorney generals have
authority to prevent telemarketing activities that constitute "unfair or
deceptive acts or practices." Additionally, some states have enacted laws and
others are considering enacting laws targeted directly at telemarketing
practices, and there can be no assurance that any such laws, if enacted, will
not adversely affect MOS's current or future operations by adversely affecting
the operations and practices of the telemarketing agencies with which MOS has
relationships. Compliance with regulations promulgated by these agencies is
generally the responsibility of the telemarketing agency and as such the
telemarketing agencies with which MOS has relationships could be subject to a
variety of enforcement actions for any failure to comply with such regulations.

      Business Strategy

      Symposium intends to focus its efforts on the consumers who have been
contacted by MOS's telemarketing representatives but have not purchased a $600
bundle of magazine subscriptions. Symposium intends to:

      o     Encourage each consumer who has on-line access to visit Symposium's
            planned internet-based Discount Retail Buying Club. Symposium
            intends to induce consumers to visit its planned on-line club by
            offering special promotions, sweepstakes participation and contests.

      o     Ask permission to market additional products and services to each
            consumer who agrees to give Symposium his or her E-mail address.

       Symposium plans to form an Internet-based discount buying club as a joint
venture with a large, existing on-line discount buying club. As envisioned,
Symposium club members would enjoy the benefit of the numerous products and
services available from a third party with whom the Company is currently in
negotiations, as well as the customer service and fulfillment centers operated
by the third party. Symposium would locate potential club members through its
marketing efforts and refer them to the joint venture. Symposium would receive a
percentage of the fees and sales revenues received by the joint venture from
these new members. In addition, Symposium would compile customer profile
information on interests and buying patterns of members and would thus have the
ability to market additional goods and services to those members.


                                        4
<PAGE>   5

      Symposium's strategy is to leverage the existing customer base and
marketing platform of MOS and other direct marketing businesses that Symposium
may acquire in the future.

Purchase Options Terminated

      In February 2000, the Company announced its decision not to exercise its
options to purchase 50.1% of the outstanding common stock of AmeriNet, a company
offering direct debit services to electronic retailers, and all of the
outstanding common stock of Hamilton Telecommunications, Ltd. ("Hamilton"), an
international audiotext service operator. As a result, the Company recorded a
$621,716 charge during the fourth quarter of 1999 representing the write-off of
deferred acquisition costs. The charge, which is presented as the cost of
acquisitions not consummated, principally consists of legal and professional
fees, including $38,000 for the fair value of common stock purchase warrants and
$432,000 for the fair value of 50,000 shares of Common Stock that were issued to
various consultants.

      During 1999 the Company made a $500,000 loan to AmeriNet, which bears
interest at 8% per annum. As of December 31, 1999, the entire amount of this
loan was reserved due to its uncertainty of collection. As a prerequisite to
consummating the DSI Acquisition in January 2000, the Company agreed to provide
an additional $1.5 million loan facility to AmeriNet (See "Management's
Discussion and Analysis and Plan of Operation"). The Company has treated its
commitment to provide the additional funding to AmeriNet as an increase in the
purchase price of DSI due to the uncertainty of AmeriNet's ability to repay any
of the loans. Mr. Prochnow, the seller of DSI, owns 50% of the common stock of
AmeriNet and currently has a consulting agreement with Symposium.

Employees

      As of December 31, 1999, Symposium had four full-time employees. As of
March 31, 2000, Symposium and MOS had an aggregate of 158 full-time employees
and 35 part-time employees.

ITEM 2. Description of Property

      The Company's principal office is in the office of its Chief Executive
Officer, Ronald Altbach, located at 410 Park Avenue, New York, New York. The
Company is engaged in discussions to sublet approximately 3,300 square feet of
space from a current tenant at 410 Park Avenue for a five-year term at an
estimated annual cost of approximately $185,000 per annum. There can be no
assurance that the Company will be successful in these negotiations. MOS'
principal office is located 2550 Heritage Court, Atlanta, Georgia. These
premises are leased from an entity that is partially owned by the seller of DSI.
The lease for this office provides for approximately 16,800 square feet of
space, expires in 2004 and the annual rent is approximately $245,000.

ITEM 3. Legal Proceedings

      Symposium is not currently a party to any pending legal proceedings.

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

      None.


                                        5
<PAGE>   6

                                     PART II

ITEM 5. Market For Common Equity and related Stockholder Matters.

<TABLE>
<CAPTION>
      -----------------------------------------------------------------
      Fiscal 1999                High                         Low
      -----------                ----                         ---
      -----------------------------------------------------------------
<S>                             <C>                         <C>
      Second Quarter              $8                          $7
      -----------------------------------------------------------------
      Third Quarter               $8                        $5 9/16
      -----------------------------------------------------------------
      Fourth Quarter            $5 7/8                      $1 1/16
      -----------------------------------------------------------------
</TABLE>

      Symposium's Common Stock has been traded on the OTC Bulletin Board
("OTCBB") since June 28, 1999 under the symbol SYPM. The preceding table sets
forth the high and low bid prices for the Common Stock since the second quarter
of 1999, the initial listing period. Prior to the Company's initial listing on
the OTCBB there was no public market for the Common Stock. The quotations above
reflect prices as quoted on the OTCBB, without retail markup, markdown or
commission, and may not necessarily represent actual transactions. The trading
volume of the Company's Common Stock fluctuates and may be limited during
certain periods. As a result, the liquidity of an investment in the Company's
Common Stock may be adversely affected.

      On April 10, 2000 the closing bid price of the Common Stock as quoted on
the OTCBB was $1.75 per share. As of March 31, 2000, Symposium had approximately
346 stockholders of record.

Dividends

      The Company has never paid or declared any dividends on its Common Stock
and does not contemplate or anticipate paying any such dividends in the
foreseeable future. The Company currently intends to reinvest earnings, if any,
in the development and expansion of its business. The declaration of dividends
in the future will be at the discretion of the Board of Directors and will
depend upon the earnings, capital requirements and financial position of the
Company, general economic conditions, and other pertinent factors.

Recent Sales of Unregistered Securities.

      On October 26, 1999, Symposium issued to Airport Consulting, LTD
("Airport") 150,000 shares of Common Stock for financial public relations and
investor relations services rendered to the Company. These securities were
issued and sold in reliance on Section 4(2) of the Securities Act as a
transaction not involving any public offering, based on: (i) the fact that
Airport represented that it was an accredited investor and was acquiring the
securities for investment purposes; and (ii) the Company did not engage in any
general advertisement or general solicitation in connection with the issuance of
the securities.

      On December 23, 1999, Symposium sold to Kreditbank SA Luxembourgeoise
("Kreditbank") 255,000 shares of Common Stock at a price of $2.00 per share.
These securities were issued and sold in reliance on Section 4(2) of the
Securities Act as a transaction not involving any public offering, based on: (i)
the fact that Kreditbank represented that it was an accredited investor and was
acquiring the securities for investment purposes; and (ii) the Company did not
engage in any general advertisement or general solicitation in connection with
the issuance of the securities.

      On December 23, 1999, Symposium sold to Banque Diamantaire Anversoise
(Suisse) SA ("Diamantaire") 89,250 shares of Common Stock at a price of $2.00
per share. These securities were issued and sold in reliance on Section 4(2) of
the Securities Act as a transaction not involving any public offering, based on:
(i) the fact that Diamantaire represented that it was an accredited investor and
was acquiring the securities for investment purposes; and (ii) the Company did
not engage in any general advertisement or general solicitation in connection
with the issuance of the securities.


                                        6
<PAGE>   7

      On December 23, 1999, Symposium issued to Northern Management ("Northern")
75,000 shares of Common Stock related to the termination of the option to
purchase Hamilton. These securities were issued and sold in reliance on Section
4(2) of the Securities Act as a transaction not involving any public offering,
based on: (i) the fact that Northern represented that it was an accredited
investor and was acquiring the securities for investment purposes; and (ii) the
Company did not engage in any general advertisement or general solicitation in
connection with the issuance of the securities.

      On December 23, 1999, Symposium issued to Panton Management ("Panton")
75,000 shares of Common Stock related to the termination of the option to
purchase Hamilton. These securities were issued and sold in reliance on Section
4(2) of the Securities Act as a transaction not involving any public offering,
based on: (i) the fact that Panton represented that it was an accredited
investor and was acquiring the securities for investment purposes; and (ii) the
Company did not engage in any general advertisement or general solicitation in
connection with the issuance of the securities.

      On December 23, 1999, Symposium issued to Establishment Pour La Placement,
Inc. ("Establishment") 200,000 shares of Common Stock for financial public
relations and investor relations services rendered to the Company. These
securities were issued and sold in reliance on Section 4(2) of the Securities
Act as a transaction not involving any public offering, based on: (i) the fact
that Establishment represented that it was an accredited investor and was
acquiring the securities for investment purposes; and (ii) the Company did not
engage in any general advertisement or general solicitation in connection with
the issuance of the securities.

      On December 23, 1999, Symposium issued to Tyman Holdings Inc. ("Tyman")
200,000 shares of Common Stock for financial public relations and investor
relations services rendered to the Company. These securities were issued and
sold in reliance on Section 4(2) of the Securities Act as a transaction not
involving any public offering, based on: (i) the fact that Tyman represented
that it was an accredited investor and was acquiring the securities for
investment purposes; and (ii) the Company did not engage in any general
advertisement or general solicitation in connection with the issuance of the
securities.

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

      The following discussion and analysis should be read together with the
consolidated financial statements of Symposium and the accompanying "Notes to
the Consolidated Financial Statements" included elsewhere in this Form 10-KSB.

      This discussion summarizes the significant factors affecting the
consolidated operating results, financial condition and liquidity and cash flows
of Symposium for the years ended December 31, 1999 and 1998, respectively.
Except for historical information, matters discussed in this "Management's
Discussion and Analysis" are forward-looking statements that involve risks and
uncertainties and are based upon judgments concerning various factors that are
beyond the Company's control. Actual results could differ materially from those
projected in the forward-looking statements.

Introduction

      From December 1998 through June 30, 1999, the Company had minimal
operations and was engaged principally in telemarketing magazine and periodical
subscriptions through PAC. The Company discontinued the operations of PAC as of
June 30, 1999.

      On January 28, 2000 Symposium, through its wholly-owned subsidiary Media
Outsourcing, Inc. ("MOS"), acquired substantially all the assets and assumed
certain liabilities of DSI, a magazine subscription agency based in Atlanta,
Georgia which works on behalf of US magazine publishers to generate new magazine
subscriptions. The purchase price paid by Symposium to acquire the DSI assets
was approximately $27.6 million including: (i) $25.0 million in cash paid to the
seller (ii) an agreement to loan $1.5 million to AmeriNet, a company in which
Richard Prochnow, DSI's principal owner, holds a majority interest and (iii)
approximately $1.1 million in closing costs and fees incurred in connection with
the acquisition. The purchase price was arrived at through an arms-length
negotiations


                                       7
<PAGE>   8

among Symposium, DSI and Mr. Prochnow. A dispute between the parties with regard
to the terms of the Asset Purchase Agreement and whether the purchase was
concluded within the time set forth in the Option Agreement caused the purchase
price to increase from that provided under the Option Agreement described in
Symposium's Form 10-QSB, dated August 16, 1999. Symposium financed the cash
portion of the purchase price by borrowing $16.0 million, resulting in proceeds
of $15.8 million net of fees, through a credit facility provided by Coast
Business Credit and by using proceeds totaling approximately $9.2 million from
the issuance of common stock, warrants for the purchase of Common Stock,
convertible preferred stock and convertible debentures. (See "Financial
Condition and Liquidity" below). The Company will use "Purchase Accounting" in
accordance with Accounting Principles Board Opinion No. 16 "Business
Combinations" to record the DSI Acquisition.

Results of Operations

      Salaries and Benefits

      The Company incurred costs totaling $594,118 for the year ended December
31, 1999, consisting of personnel costs primarily related to the management of
the Company. There were no such costs incurred in 1998 due to the fact that the
Company had no operations and no employees. As a result of MOS' acquisition of
DSI in January 2000, we expect to record significantly greater salary and
benefits costs in 2000. MOS had approximately 154 full-time and 35 part-time
employees as of March 31, 2000.

      Consulting Expenses

      Consulting expenses increased $6.4 million, or 4,405.4%, to $6.6 million
in 1999 from $145,838 in 1998. Included in the 1999 consulting expenses are $3.3
million of non-cash charges reflecting the estimated fair value of five-year
warrants to purchase 850,000 shares of Common Stock for $2.00 per share and
three-year warrants to purchase 10,000 shares of Common Stock for $1.00 per
share. The fair value of such warrants was estimated using the Black-Scholes
Option Pricing Formula. Consulting expenses for 1999 also includes $2.7 million
of non-cash charges reflecting the fair value of 870,000 shares of the Company's
Common Stock issued for professional services rendered during the year ended
December 31, 1999. The Company expects to continue to incur significant
consulting expenses during 2000 through the issuance of warrants to purchase
Common Stock and payment in cash for marketing advisory and professional
services.

      Bad Debt Expense

      In June 1999, the Company extended a $500,000 loan to AmeriNet, which
bears interest at 8% per annum. The bad debt expense of $500,000 reflects the
Company's reserve on the AmeriNet loan due to the uncertainty of collection.

      Other Operating Expenses

      Other operating expenses increased $1.1 million, or 616.1%, to $1.2
million in 1999 from $173,666 in 1998. Other operating expenses in 1999 consist
primarily of accounting and legal expenses of approximately $462,000, travel and
entertainment expenses of approximately $211,000 and office expenses of
approximately $195,000 (including the expenses associated with the Company's
offices in New York and London). In January 2000, the Company closed its London
office in conjunction with the resignation of its UK based directors. Also
included in other operating expenses is the net loss of $178,511 incurred on the
Company's PAC operation that was closed in June 1999.

      Costs of Acquisitions Not Consummated

      In February 2000, the Company announced its decision not to exercise its
options to purchase 50.1% of the outstanding common stock of AmeriNet and all of
the outstanding common stock of Hamilton Telecommunications, Ltd ("Hamilton").
As a result, the Company recorded a $621,716 charge during the fourth quarter of
1999 representing the write-off of deferred acquisition costs. This charge,
which is presented as the cost of acquisitions not consummated, consists
principally of professional and consulting fees (including $38,000 representing
the fair value of Common


                                       8
<PAGE>   9

Stock purchase warrants and $432,000 representing the fair value of 225,000
shares of Common Stock that were issued to various consultants).

      Other Income

      During the year ended December 31, 1999, the Company recorded other income
totaling $29,910, representing interest income received from the investment of
the Company's funds held in interest bearing accounts.

      Income Taxes

      No provision was recorded for federal or state income taxes in 1999 or
1998, as the Company has incurred net operating losses since inception. In
accordance with Statement of Accounting Standards No. 109 "Accounting for Income
Taxes," the Company has provided a full valuation allowance on its deferred tax
assets because of the uncertainty regarding their realization.

      Net Loss and Net Loss per Share

      The net loss for the year ended December 31, 1999 was $9.5 million, or
$0.80 per share, compared to a net loss of $319,504, or $0.18 per share, for
1998. The net loss in 1999 is the result of the Company incurring costs relating
to (i) building its management team, (ii) fees for professional advisory
services and (iii) the identification, negotiation and termination of
acquisitions not consummated.

Liquidity and Financial Condition

      At December 31, 1999, the Company had cash on hand of $316,994. The
Company experienced a loss from operations of approximately $9.5 million for the
year ended December 31, 1999 and has a limited amount of working capital
available to meet the short-term needs of the business. In addition, substantial
funding is still required in order for the Company to pursue its strategy of
acquiring and consolidating direct marketing businesses.

      The Company had minimal operations before acquiring Direct Sales
International, LP and management believes that its 1999 loss and shortage of
working capital reflect the fact that the Company was principally focused on
consummating its first acquisition. Management believes the Company's revolving
credit facility provides sufficient financing, and, in addition, the acquisition
of Direct Sales International, LP will enable the Company to generate sufficient
cash flow from operations to meet the working capital needs of the business over
the next year.

      Although management is seeking additional sources of financing, there can
be no assurance that the Company will be successful in its efforts to raise
additional capital nor can there be any assurance that the acquisition of Direct
Sales International will improve the Company's operating results.

      Agreements with Richard Prochnow

      In June 1999, in connection with the DSI acquisition, Symposium issued
2,500,000 shares of its Common Stock to Richard Prochnow at a price of $1.00 per
share. The purchase price of the shares was paid by the issuance of a $2,500,000
principal amount note which bore interest at a rate of 7.75% (the "Prochnow
Note"). The Prochnow Note matured on the earlier of December 31, 2000 or the
closing date of the DSI acquisition. In connection with the closing of the DSI
acquisition, the Prochnow Note was amended: (i) to extend the maturity date to
January 14, 2003 (subject to the requirement that one-third of the proceeds of
any sale by Mr. Prochnow of Symposium Common Stock be used to prepay the Note);
(ii) to forgive all accrued and unpaid interest through January 28, 2000; and
(iii) to provide for the accrual of interest on the unpaid balance of the
Prochnow Note at a rate of 10% per annum, commencing on the date of any payment
default under the Note.

      As a result of these amendments of the Prochnow Note, the Company incurred
a charge of $115,243 relating to the forgiveness of accrued interest.


                                       9
<PAGE>   10

      On January 28, 2000, Symposium entered into a Registration Rights
Agreement with Mr. Prochnow, which provides that Mr. Prochnow may sell up to
600,000 shares of Symposium Common Stock to Symposium at $3.00 per share between
January 15, 2001 and March 15, 2001, and also requires the Company to register
1,000,000 of the 2,500,000 shares within 120 days following January 28, 2000.

      On January 28, 2000, MOS entered into a three year Consulting Agreement
with Mr. Prochnow pursuant to which Mr. Prochnow is entitled to receive $50,000
per month plus benefits in consideration for consulting services. Such amount
has been guaranteed by Symposium. Additionally, Mr. Prochnow has entered into a
5 year non-compete agreement with MOS expiring in January 2005.

      AmeriNet Commitment

      In February, 2000, the Company decided not to exercise its option (the
"Option") to acquire 50.1% of the outstanding stock of AmeriNet, Inc.
("AmeriNet"), but as a prerequisite to consummating the DSI acquisition agreed
to provide a $1.5 million credit facility to AmeriNet in addition to the
$500,000 of loans already advanced during 1999. Mr. Prochnow owns 50% of the
common stock of AmeriNet. The Company is treating its commitment to provide
additional funding to AmeriNet as an increase in the purchase price of DSI due
to the uncertainty of AmeriNet's ability to repay any of the loans.

      The credit facility requires that the Company fund AmeriNet $100,000 per
month for the ten months beginning in March, 2000 through December 2000
inclusive, plus a payment of $500,000 by July 28, 2000.

      Coast Business Credit- Financing Facility

      In connection with the DSI acquisition, MOS and the Company entered into
an agreement with Coast Business Credit ("Coast") to provide a credit facility
(the "Coast Facility") used to fund the DSI Acquisition and working capital
needs of MOS. The Coast Facility is for a term of three years, and provides a
maximum credit line of $20 million subject to certain availability limitations.
As a result of these availability limitations, the amount available for
borrowing under the Coast Facility at the time of the DSI acquisition was $16.0
million, which MOS drew down in its entirety to finance the DSI acquisition.
Interest on outstanding advances under the Coast Facility accrues at an annual
rate equal to the higher of (i) the prime rate plus 200 basis points, calculated
on the basis of the actual number of days elapsed in a 360 day year, and (ii)
9.0%. The Coast Facility requires Symposium and MOS to comply with specified
financial covenants. In connection with the execution and delivery of the Coast
Facility, the Company granted Coast 300,000 five-year options to purchase the
Company's Common Stock at an exercise price of $3.53 per share (110% of the
closing price of the Common Stock on the closing date). Coast extended the
facility to the Company with the condition that the Company raise additional
equity capital of not less than $3 million by February 28, 2000 which was
subsequently extended to March 31, 2000. On March 30, 2000 the Company and Coast
amended the Coast Facility as follows: (i) the covenant requiring the Company to
raise additional cash equity of $3.0 million was eliminated; (ii) the parties
reduced the consolidated net worth (defined as stockholder equity and
subordinated debt) covenant to $9.0 million from $12.0 million at March 31,
2000; and (iii) a new covenant was added requiring that the Company maintain
excess borrowing availability of (a) $750,000 through April 30, 2000, (b) $1.0
million from May 1, 2000 through June 30, (c) $2.0 million thereafter. If the
Company raises additional equity of $3.0 million, this availability requirement
is reduced to $750,000.

      Series A Mandatorily Redeemable Convertible Preferred Stock ("Series A
Preferred")

      On January 28, 2000, the Company issued 21,500 shares of Series A
Preferred resulting in net proceeds to the Company totaling $2.0 million. The
outstanding shares of Series A Preferred ("Series A Shares") were initially
redeemable at an aggregate redemption price of $2,150,000 (plus accrued
dividends at a rate of 16% per annum). As a result of the Company's failure to
redeem the Series A Preferred on February 27, 2000, the Company was required to
issue to the holders of the outstanding Series A Preferred (the "Series A
Holders") an aggregate of 16,125 shares of Common Stock per day for each day
that the Series A Shares remained outstanding from February 28 through March 28,
2000; and 26,875 shares of Common Stock per day for each day that such Series A
Shares remained outstanding after March 28, 2000.


                                       10
<PAGE>   11

      If the Series A Shares were not redeemed by April 12, 2000, the Company
would have been required to issue to the Series A Holders, monthly in advance,
five-year warrants to purchase 215,000 shares of Common Stock per Series A Share
at an exercise price of $.10 per share, for each 30-day period the Series A
Shares remained outstanding from and after April 13, 2000. In addition, on April
13, 2000, the conversion price at which the Series A Shares were convertible
into shares of Common Stock would have decreased from $2.00 to $0.10.

      On March 27, 2000, the Series A Holders (i) converted their total holdings
of Series A Shares including accrued and unpaid dividends into an aggregate of
4,414,666 shares of Common Stock (representing a conversion price of $.50 per
share); (ii) the Company agreed to issue to the Series A Holders: (A) warrants
to purchase 1,103,500 shares of Common Stock at an exercise price of $.0.50 per
share and (B) warrants to purchase 1,103,500 shares of Common Stock at an
exercise price of $1.00 per share; and (iii) the Company paid to Capital
Research, Ltd. (the placement agent for the Series A Shares and one of the
Series A Holders) a fee of 220,000 shares of Common Stock.

      Series B Mandatorily Redeemable Convertible Preferred Stock ("Series B
Preferred")

      On January 28, 2000, the Company issued 15,350 shares of Series B
Preferred resulting in net proceeds to the Company totaling $1.5 million. The
Series B Preferred is initially convertible into 767,500 shares of Common Stock
at a conversion price of $2.00 per share and is entitled to a 10% cumulative
dividend, payable quarterly. In connection with the issuance and sale of the
Series B Preferred, the Company issued to the holders of the Series B Preferred
warrants to purchase 387,750 shares of Common Stock with an exercise price of
$1.50 per share. The Series B Preferred is mandatorily redeemable on July 26,
2000 for an aggregate redemption price of $1,535,000, together with accrued
dividends ($26,495 as of March 31, 2000 and accruing thereafter at a rate of 10%
per annum). The Company is also required to redeem the Series B Preferred out of
the proceeds of any subsequent financing greater than $10 million. If the Series
B Preferred is not redeemed in full on or prior to July 26, 2000, the conversion
price automatically decreases from $2.00 per share to $.50 per share.

      Series C Mandatorily Redeemable Convertible Preferred Stock ("Series C
Preferred")

      On January 28, 2000, the Company issued 52,892 shares of Series C
Preferred resulting in net proceeds to the Company totaling approximately $5.0
million. The Series C Preferred is initially convertible into shares of Common
Stock at $2.00 per share and is entitled to a 10% cumulative dividend, payable
quarterly. In connection with the issuance and sale of the Series C Preferred,
the Company issued to the holders of the Series C Preferred 1,763,067 shares of
Common Stock. Additionally, the Company reduced the exercise price on 2,000,000
warrants previously issued to a holder of Series C Preferred from $3.50 per
share to $1.00 per share. The Series C Preferred is mandatorily redeemable on
July 26, 2000 at an aggregate redemption price of $5,289,200, together with
accrued dividends ($91,923 as of March 31, 2000). The Company is also required
to redeem the Series C Preferred out of the proceeds of any subsequent financing
greater than $10 million. If the Series C Preferred is not redeemed in full on
or prior to July 26, 2000, the conversion price automatically decreases from
$2.00 per share to $.25 per share and the Company will be required to issue to
the holders of the Series C Preferred, monthly in advance until the Series C
Preferred is redeemed in full, five-year warrants to purchase 370,244 shares of
Common Stock at a exercise price of $.25 per share.

      Preferred Stock Accounting

      The proceeds received from the issuances of preferred stock with common
stock and/or common stock purchase warrants will be allocated to each component
based on their relative fair values on January 28, 2000 (the date of issuance).
The fair value of the preferred stock is considered to be equal to the aggregate
market value of the equivalent number of common shares into which the preferred
stock is convertible. The fair value of the common stock is based on the closing
market value which was $3.20 on the date of issuance and the fair value of the
common stock purchase warrants was determined using the Black"Scholes option
pricing model.

      The difference between carrying value of the preferred stock and its
mandatory redemption price (of $100 per share) will be amortized from the date
of issuance to the mandatory redemption date by increasing the carrying value of
the preferred stock and decreasing retained earnings for the accrual of
preferred dividends. In addition, cumulative


                                       11
<PAGE>   12

dividends payable to the preferred shareholders on the mandatory dates of
redemption will also be accounted for by periodically increasing the carrying
value of the preferred stock and decreasing retained earnings.

      All of the preferred shares were issued with a beneficial conversion
feature that has an intrinsic value of $1.20 per share, representing the
difference between the market value of the Company's common stock of $3.20 per
share on the date of issuance and the initial conversion price of $2.00 per
share on such date. Since all of the preferred stock is immediately convertible
into common stock, the intrinsic value of the beneficial conversion feature will
be characterized as a dividend and accounted for by increasing additional
paid-in-capital and decreasing retained earnings on the date of issuance.

      Reductions in the conversion price of the preferred stock into common
stock (that will take effect if the Company fails to redeem the preferred stock
on the mandatory date of redemption) are considered contingencies that are not
recognized for accounting purposes on the date of issuance. The difference
between the intrinsic value that would result from a reduction of the conversion
price in the event of a default and the intrinsic value recorded as a dividend
on the date of issuance would be characterized as additional dividend that would
further decrease retained earnings.

      As noted above, the Series A shareholders were issued 275,000 shares of
common stock in exchange for extending the mandatory redemption date of the
Series A preferred stock then subsequently agreed to convert their preferred
shares and accumulated dividends into 4,414,666 shares of common stock. The
market value of the Company's common stock on the date of conversion was $2.63.
Accordingly, the Company recorded a contractual dividend of $57,533 payable to
the Series A holders on the date of conversion and additional dividends of
approximately $13.3 million including (i) the fair of the additional common
shares and common stock purchase warrants, (ii) accretion of the difference
between the carrying value and the redemption amount and (iii) the difference in
the amount of intrinsic value of the beneficial conversion feature on the date
of redemption and the date of original issuance.

      The following table summarizes (i) the allocation of the proceeds from the
issuances of the preferred stock with common stock and common stock purchase
warrants, (ii) the reduction in retained earnings resulting from the beneficial
conversion feature and (iii) the incremental reduction in retained earnings that
would result from a contractual changes in conversion prices in the event of a
default.

<TABLE>
<CAPTION>
                                      Series A      Series B       Series C
                                     ----------    ----------     ----------

<S>                                  <C>           <C>            <C>
Mandatory redemption amount          $2,150,000    $1,535,000     $5,289,200
                                     ----------    ----------     ----------
Allocation of proceeds to:
  Preferred stock                    $1,428,571    $1,173,715     $2,401,352
  Common stock                              430                        1,763
  Additional paid-in-capital          1,860,999     1,282,285      4,948,237
  Retained Earnings                  (1,290,000)     (921,000)    (2,401,352)
                                     ----------    ----------     ----------
  Gross proceeds                     $2,000,000    $1,535,000     $4,950,000
                                     ----------    ----------     ----------
Additional dividends resulting
from extension and conversion of
Series A preferred stock            $13,270,882
                                     ----------

Contingent dividends if default
occurs on Series B and C                           $7,368,000     $60,011,208
                                                   ----------     -----------
</TABLE>

      Acquisition Bridge Financing

      Commtel Services Ltd. Note. On January 20, 2000, the Company entered into
a note agreement (the "Commtel Note") with Commtel Services Ltd. ("Commtel") for
a 30-day bridge loan in the principal amount of $300,000. The proceeds of this
loan were used in connection with the financing of the DSI acquisition. The
Commtel


                                       12
<PAGE>   13

Note accrued interest of a rate of 10% per annum, with principal and interest
due and payable on February 20, 2000 . In consideration of the loan, the Company
issued 75,000 shares of its Common Stock to Commtel. The Company failed to pay
the Commtel Note at maturity, as a result of which: (i) the annual interest rate
on the Commtel Note increased to 18% on all outstanding principal and accrued
interest, and (ii) the Company was required to issue to Commtel an additional
50,000 shares of Common Stock as of February 21, 2000 and an additional 2,500
shares of Common Stock for each subsequent day until the Commtel Note was paid
or converted (aggregating 77,500 shares on March 21, 2000). On March 21, 2000,
Commtel converted the Commtel Note into approximately 614,048 shares of Common
Stock in satisfaction of all principal and interest due. The proceeds received
from the issuances of the Commtel Note with Common Stock are being allocated to
each component based on their relative fair values on January 20, 2000 (the date
of issuance). The fair value of the Common Stock on January 20, 2000 was $2.31
per share and resulted in discounted carrying value to the Commtel Note of
$200,000 and an increase to stockholders' equity of $100,000.

      The difference between carrying value of the Commtel Note and its face
value of $300,000 is being amortized from the date of issuance to its due date
of February 20, 2000 and will be recorded as component of interest expense.

      As a result of the conversion of the Commtel Note, during the first
quarter of 2000, the Company will record additional interest expense of
approximately $1.2 million including interest of 10% on the Commtel Note, the
fair market value of additional common shares issued under the penalty provision
of the Commtel Note, and the intrinsic value of the beneficial conversion of the
Commtel Note into 614,048 shares of common stock.

      Fontenelle Note. On January 25, 2000, the Company borrowed $500,000 from
Fontenelle LLC, which borrowing was evidenced by a $500,000 principal amount
Convertible Subordinated Note due March 25, 2000 (the "Fontenelle Note").

      The proceeds of this loan were used primarily in connection with the
financing of the DSI acquisition. Interest accrued on the Fontenelle Note at an
annual rate of 10% and was due and payable along with the outstanding principal
at maturity. The Fontenelle Note was convertible into shares of Common Stock at
a conversion price of $2.00 per share. The Company paid the Fontenelle Note in
full on March 24, 2000.

      D2 Loan. On January 25, 2000, the Company borrowed $300,000 from D2 Co.
LLC, which borrowing is payable on July 26, 2000 (the "D2 Loan"). The proceeds
of the D2 Loan were used primarily in connection with the financing of the DSI
acquisition. Interest accrues on the D2 Loan at an annual rate of 10% and is due
and payable along with the outstanding principal at maturity. The outstanding
principal amount of the D2 Loan is initially convertible into 150,000 shares of
the Company's Common Stock at a conversion price of $2.00 per share. If the
Company does not pay the D2 Loan by July 26, 2000, the conversion price is
reduced to $0.50 per share (representing 600,000 shares of the Company's Common
Stock).

      The beneficial conversion feature of the D2 note has an aggregate
intrinsic value of $46,500. The aggregate intrinsic value of the beneficial
conversion feature represents the difference between the market value of the
Company's Common Stock of $2.31 per share on the date of issuance and the
initial conversion price of $2.00 per share on such date. Since the note is
immediately convertible into Common Stock, the intrinsic value of the beneficial
conversion feature will be recorded as additional interest expense on the date
of issuance.

      The reduction in the conversion price to $.50 per share that will take
effect if the Company fails to repay the D2 note on its due date is considered a
contingency that is not recognized for accounting purposes on the date of
issuance. The reduction of the conversion price to $.50 per share, if it occurs,
will result in additional interest expense of approximately $1 million based
upon the difference between the intrinsic value of the conversion feature
pursuant to the default provisions of the D2 note and the intrinsic value on the
date of issuance.


                                       13
<PAGE>   14

Certain Trends and Uncertainties

      General Economic Conditions

      The Company's business may be adversely affected by periods of economic
slowdown or recession which may be accompanied by a decrease in the availability
of consumer credit. Any material decline in the availability of consumer credit
may result in a decrease in consumer demand to utilize credit cards to purchase
magazine subscriptions, which could adversely affect the demand for the
Company's products and services.

      Interest Rates

      The Company's profitability may be directly affected by interest rates,
specifically the Prime Rate, which affects the interest paid by MOS under the
Coast Facility. The annual rate of interest payable under the Coast Facility is
calculated at the higher of (i) the Prime Rate plus 200 basis points and (ii)
9.0%. An increase in the Prime Rate would increase the interest paid by MOS
under the Coast Facility, adversely impacting earnings.

      Need to Increase Authorized Shares of Common Stock

      There are 25,000,000 shares of Common Stock authorized for issuance under
the Company's Amended and Restated Certificate of Incorporation. The Company
currently does not have sufficient authorized but unissued shares of Common
Stock to enable it to issue shares of Common Stock issuable upon exercise or
conversion of all of the Company's outstanding options, warrants or convertible
securities, or to use its Common Stock as a currency to pursue acquisition or
other business opportunities that the Company may consider attractive. The Board
of Directors has approved an amendment to the Amended and Restated Certificate
of Incorporation (the "Amendment"), and is currently in the process of seeking
stockholder approval of such Amendment (by written consent pursuant to Section
228 of the Delaware General Corporation Law), to increase the authorized shares
of Common Stock from 25,000,000 to 75,000,000. While stockholders owning more
than fifty percent of the issued and outstanding shares of Common Stock (the
percentage necessary to approve the Amendment) have indicated their intention to
consent to the Amendment, the requisite consents have not yet been obtained and,
accordingly, there can be no assurance that the Amendment will be approved.

      Need for Additional Financing

      The Company will require additional debt or equity financing in order to
meet its obligations to redeem shares of mandatorily redeemable preferred stock
and to pay the outstanding principal balances of and accrued interest on a short
term bridge financing which matures during the next several months. The Company
will also require additional financing to pursue its strategy of expanding its
business operations through the development or acquisition of niche direct
marketing businesses. The failure timely to obtain such financing could prevent
the Company from continuing its business strategy or responding to changing
business or economic conditions, could cause the Company to experience
difficulty in withstanding any adverse operating results or competing
effectively and could, therefore, materially adversely affect the Company. The
Company financed its January 2000 acquisition of DSI with the proceeds of
borrowings under the Coast Facility, the proceeds of certain bridge financing
(described in the next sentence) and the proceeds from the issuance and sale of
shares of the Company's Series A, B and C Preferred Stock. The bridge financing
consisted of the Commtel Note; the Fontenelle Note; and the D2 Loan. Commtel
converted the Commtel Note into Common Stock on March 21, 2000 and the Company
paid the Fontenelle Note on March 24, 2000. The D2 Loan matures on July 26, 2000
and remains unpaid.

      The holders of the Series A Preferred have converted the outstanding
Series A Preferred at a conversion price of $0.50 per share. See "Financial
Condition and Liquidity - Series A Mandatorily Redeemable Convertible Preferred
Stock" above. The outstanding shares of Series B Preferred Stock (the "Series B
Shares") are mandatorily redeemable on or prior to July 26, 2000 at an aggregate
redemption price of $1,535,000, together with accrued dividends ($26,495 as of
March 31, 2000 and accruing thereafter at a rate of 10% per annum). The
outstanding shares of Series C Preferred (the "Series C Shares") are mandatorily
redeemable on or prior to July 26, 2000 at an aggregate redemption price of
$5,289,200, together with accrued dividends ($91,293 as of March 31, 2000 and
accruing thereafter at a rate of 10% per annum).


                                       14
<PAGE>   15

      As described above under "Financial Condition and Liquidity - Series B
Mandatorily Redeemable Convertible Preferred Stock and Series C Mandatorily
Redeemable Convertible Preferred Stock," the Company's failure timely to redeem
the B and C Preferred Stock will trigger certain requirements under their
respective Certificates of Designation and the Company's agreements with the
holders thereof, that the Company issue shares of Common Stock or warrants to
purchase Common Stock to the holders of Preferred Stock, and will result in a
significant reduction of the applicable prices at which such Preferred Stock is
convertible into Common Stock. Such issuances and reductions could result in
significant dilution to the existing holders of Common Stock.

      Limited Operating History

      The Company's business, as currently conducted, has a limited operating
history, and it is difficult to predict whether the Company's business will be
successful.

      Acquisitions

      A key component of the Company's strategy is to acquire, on acceptable
terms, companies that complement or enhance the Company's business. The
Company's acquisition strategy may result in increased expenses, difficulties in
integrating acquired companies and diversion of management's attention. There
cannot be any assurance that the Company will be able to identify or
successfully compete for attractive acquisition candidates or to complete
acquisitions at reasonable purchase prices, in a timely manner or at all. In
addition, certain of the Company's competitors have greater financial resources
than the Company and may be able to more effectively complete acquisitions,
which could result in increased prices for acquisition targets and a diminished
number of companies available for acquisition.

      Other risks associated with the Company's acquisition growth strategy
include: (i) expenses and difficulties in identifying potential targets and
costs associated with uncompleted acquisitions; (ii) expenses, delays and
difficulties of integrating acquired companies in the Company's existing
organization; (iii) expenses of amortizing acquired companies' intangible
assets; and (iv) issuance of equity securities to pay for acquisitions may be
dilutive to existing stockholders. These risks could have a material adverse
effect on the Company's financial condition, operating results and business.

      Managing Growth

      The Company's recent growth as a result of the DSI acquisition has
required, and anticipated future growth will require, a substantial amount of
the Company's managerial and operational resources. To manage future growth,
management must continue to improve its operational and financial systems and
expand, train, retain and manage its employee base. There can be no assurance
that the Company will be able to effectively manage its growth. If the Company's
(or its present or any future subsidiaries') systems, procedures or controls are
inadequate to support their operations, the Company's expansion would be
impaired. The Company's inability to manage growth effectively could have a
material adverse effect on its financial condition, operating results and
business.

      Volatility of Stock Price

      The market price of the Company's Common Stock has been, and is likely to
continue to be, volatile, experiencing wide fluctuations. Some of these
fluctuations appear to be unrelated or disproportionate to the operating
performance of the company. Future market movements may materially and adversely
affect the market price of the Company's Common Stock.

      Ownership of Company is Concentrated

      The five largest stockholders of the Company beneficially owned
approximately 52% of the Company's issued and outstanding Common Stock as of
March 31, 2000. As a result, these stockholders possess significant influence
over the Company on business matters, including the election of directors or the
approval of any other action requiring the approval of stockholders. This
concentration of share ownership may: (i) delay or prevent a change of control
of the Company; (ii) impede a merger, consolidation, takeover or other business
combination


                                       15
<PAGE>   16

involving the Company; or (iii) discourage a potential acquiror from making a
tender offer or otherwise attempting to obtain control of the Company.

      Shares Eligible for Future Sale Could Cause the Company's Stock Price to
Decline

      The market price of the Common Stock could decline as a result of future
sales of substantial amounts of the Company's Common Stock, or the perception
that such sales could occur. Furthermore, certain of the Company's existing
stockholders have the right to require the Company to register their shares, or
shares of Common Stock into which their convertible securities, options,
warrants or convertible debt are convertible, which may facilitate the sale of
these shares in the public market.

      On January 28, 2000, Symposium entered into a Registration Rights
Agreement with Richard Prochnow, which also requires the Company to register
1,000,000 of the shares owned by Mr. Prochnow within 120 days following January
28, 2000.

      On March 21, 2000 Symposium entered into a Settlement Agreement regarding
the Commtel Note which provides that Symposium issue 816,548 shares of Symposium
Common Stock to Commtel as full performance of Symposium's obligations under the
Commtel Note. The Settlement Agreement grants Commtel piggyback registration
rights with respect to these shares should Symposium effect the registration of
any shares of Common Stock.

      In March 1999, the Company issued an aggregate of 100 Units, each Unit
consisting of (i) 25,000 shares of its Common Stock and (ii) 25,000 warrants
(the "Warrants"), each warrant representing the right to purchase one share of
Common Stock at an exercise price of $3.50 per share expiring on December 31,
2001 (the "Units Offering"). In connection with this offering, the Company
agreed to register, as promptly as practicable following June 16, 1999 (the date
the Company's Common Stock was registered under Section 12 of the Securities
Exchange Act of 1934, as amended) the Common Stock included the Units and all
Common Stock issuable upon exercise of the Warrant component of the Units.

      In connection with the issuance of the Series A, B and C Mandatory
Returnable Convertible Preferred Stock of the Company, the Company has agreed to
register, upon demand, (i) the Common Stock issued, or issuable, upon conversion
of the Series A, B and C Convertible Preferred Stock (collectively, the
"Preferred Stock") (ii) the Common Stock issued, or issuable, upon exercise of
warrants of the Company issued to the holders of Series B Convertible Preferred
Stock and (iii) any other securities issued or issuable as a result of, or in
connection with, any stock dividend, stock split or reverse stock split,
combination, recapitalization, reclassification, merger or consolidation,
exchange or distribution in respect of the Common Stock referred to above. The
Company has also agreed to unlimited "piggy back rights" with respect to such
shares.

      Credit Facility Covenants

      In connection with the financing of the DSI acquisition, MOS and the
Company entered into the Coast Facility. The Company has guaranteed MOS'
obligations under the Coast Facility. Under the terms of the agreement with
Coast, the Company is required, among other things, to maintain a consolidated
net worth of not less than $9.0 million (defined as stockholders' equity and
subordinated debt) and excess borrowing availability of (a) $750,000 through
April 30, 2000, (b) $1.0 million from May 1 through June 30, 2000 and (c) $2.0
million thereafter. If the Company raises additional equity of $3.0 million, the
excess availability requirement is reduced to $750,000. If the Company cannot
satisfy these covenants, or other covenants under the Coast Facility, it will be
required to seek a waiver or amendment from Coast. Although Coast has agreed to
waivers and amendments in the past, there can be no assurance that Coast will do
so in the future. If MOS and the Company are in default of their obligations to
Coast, Coast would be entitled to accelerate the maturity of outstanding
indebtedness under the Coast Facility ($15,257,095 is outstanding as of March
30, 2000) and to enforce its security interest in the Company's assets.


                                       16
<PAGE>   17

      Preferred Stock; Possible Anti-Takeover Effect

      The Company's Certificate of Incorporation, as amended, authorizes the
board of directors (the "Board of Directors") to issue up to 10,000,000 shares
of preferred stock, par value $.001 per share. The preferred stock may be issued
in one or more series, the terms of which may be determined at the time of
issuance by the Board of Directors, without further action by stockholders, and
may include, among other things, voting rights (including the right to vote as a
series on particular matters), preferences as to dividends and liquidation,
conversion and redemption rights, and sinking fund provisions. After giving
effect to the conversion of the series A preferred into common stock, there are
two series of preferred stock currently outstanding which have a liquidation
preference. In addition, specific rights granted to future holders of preferred
stock could be used to restrict the Company's ability to merge with, or sell its
assets to a third party. The ability of the Board of Directors to issue
preferred stock could discourage, delay, or prevent a takeover of the Company,
hereby preserving control of the Company by the current stockholders.

      Dependence on Key Personnel

      The Company's and MOS' success depends to a significant extent upon a
number of key employees and management. The loss of the services of key
employees could adversely affect our business, operating results or financial
condition.

      Year 2000

      The Year 2000 issue is one where computer systems recognize the
designation "00" as 1900 instead of 2000, potentially resulting in system
failure or miscalculations. In recognition of this Year 2000 issue, commencing
in the second quarter of 1999, MOS initiated a review of its information
technology systems, on which we are dependent for the conduct of our business
operations, as well as the computer hardware and software products, components
and other equipment supplied to us by third parties in order to determine the
adequacy of those systems in light of our future business requirements. We
completed our review in the fourth quarter of 1999.

      As a result of our review, we determined that our internal financial
software systems are adequate for our future business needs, including Year 2000
compliance, and do not need to be replaced. The cost of our Year 2000 efforts
was immaterial. To date, we have not experienced any material Year 2000
compliance problems relating to our internal financial software systems or our
other information technology systems, computer hardware, software products and
components or other equipment.

      We have not assessed the Year 2000 readiness of any third parties with
whom we have relationships. Due to our uncertainty of the Year 2000 readiness of
these third parties, we cannot determine whether the failure by one or more of
these parties to be Year 2000 compliant will materially impact our business,
financial condition or results of operations. Through March 31, 2000, we have
not experienced any material Year 2000 compliance failures by any third parties.

      If we or the third parties with which we have relationships were to fail
to meet Year 2000 requirements, we would likely encounter disruptions to our
business that could have a material adverse effect on our business, financial
position or results of operations. We could be materially and adversely impacted
by widespread economic or financial market disruption or by Year 2000 computer
system failures of third parties with which we have relationships.



                                       17
<PAGE>   18
ITEM 7. Financial Statements

                          INDEX TO FINANCIAL STATEMENTS

                                                                       Page
                                                                       ----

Report of Independent Certified Public Accountants                      19

Financial Statements

      Consolidated Balance Sheets                                       20

      Consolidated Statements of Operations                             21

      Consolidated Statement of Stockholders' Equity                    22

      Consolidated Statements of Cash Flows                             23

      Notes to Consolidated Financial Statements                       24-41


                                       18
<PAGE>   19

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
   Symposium Corporation and Subsidiary

We have audited the accompanying consolidated balance sheets of Symposium
Corporation and Subsidiary as of December 31, 1998 and 1999, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Symposium
Corporation and Subsidiary as of December 31, 1998 and 1999 and the consolidated
results of their operations and their consolidated cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States.

/s/ GRANT THORNTON LLP

New York, New York
March 31, 2000


                                      19
<PAGE>   20

                      Symposium Corporation and Subsidiary

                           CONSOLIDATED BALANCE SHEETS

                                  December 31,

<TABLE>
<CAPTION>
                                                                                                                      1999 Unaudited
                                                                                                                       Consolidated
                                                                                                                        Pro Forma
                              ASSETS                                                       1998            1999          (Note C)
                                                                                       ------------    ------------    ------------

<S>                                                                                    <C>             <C>             <C>
Current assets
    Cash and cash equivalents                                                          $    276,243    $    337,615    $    337,615
    Trade accounts receivable, net of collection and
      cancellation reserve of $18,493,203                                                                                28,401,999
    Prepaid insurance                                                                                        19,916         555,920
    Deferred expenses                                                                                                     1,472,040
                                                                                       ------------    ------------    ------------
          Total current assets                                                              276,243         357,531      30,767,574
                                                                                       ------------    ------------    ------------
Equipment (at cost, less accumulated depreciation)                                            3,583          34,208         287,918
Organizational costs                                                                         25,110
Deferred acquisition costs                                                                                  514,317
Deferred financing costs                                                                                    150,000       1,106,000
Goodwill and other intangible assets                                                                                      5,775,824
Other assets                                                                                 39,315
                                                                                       ------------    ------------    ------------
                                                                                       $    344,251    $  1,056,056    $ 37,937,316
                                                                                       ============    ============    ============

               Liabilities and Stockholders' Equity

Current liabilities
    Cash overdraft                                                                                                     $  2,235,950
    Revolving credit facility                                                                                            16,000,000
    Acquisition bridge notes and loan                                                                                       300,000
    Trade accounts payable                                                             $     69,233    $     69,093       4,021,318
    Accrued closing costs                                                                                                 2,000,000
    Accrued professional fees                                                                               454,280         494,280
    Other current liabilities                                                                                               238,921
    Deferred revenue                                                                                                      3,004,164
                                                                                       ------------    ------------    ------------
          Total current liabilities                                                          69,233         523,373      28,294,633
                                                                                       ------------    ------------    ------------
Commitments and contingencies
Mandatorily redeemable preferred stock, par value $.001 per share; authorized,
    10,000,000 shares; no shares issued and outstanding in 1998 and 1999; 89,742
    outstanding on a pro forma basis                                                                                      3,548,305

Stockholders' equity
    Common stock, par value $.001 per share; authorized, 25,000,000 shares;
      7,370,464 shares and 14,043,214 shares issued and outstanding at December
      31, 1999 and 1998, respectively; 21,962,495 outstanding on a pro forma basis            7,370          14,043          21,962
    Additional paid-in capital                                                              587,152      12,848,277      37,530,105
    Note receivable  - common stock                                                                      (2,500,000)     (2,500,000)
    Accumulated deficit                                                                    (319,504)     (9,829,637)    (28,957,689)
                                                                                       ------------    ------------    ------------
                                                                                            275,018         532,683       6,094,378
                                                                                       ------------    ------------    ------------
                                                                                       $    344,251    $  1,056,056    $ 37,937,316
                                                                                       ============    ============    ============
</TABLE>

The accompanying notes are an integral part of these statements.


                                      20
<PAGE>   21

                      Symposium Corporation and Subsidiary

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                             Year ended December 31,

<TABLE>
<CAPTION>
                                                                                                                      1999 Unaudited
                                                                                                                       Consolidated
                                                                                                                        Pro Forma
                                                                                 1998                 1999               (Note C)
                                                                             ------------         ------------         ------------

<S>                                                                          <C>                  <C>                  <C>
Revenues, net                                                                                                          $ 85,356,097
Direct costs and expenses                                                                                                73,980,868
                                                                                                                       ------------

        Gross profit                                                                                                     11,375,229
                                                                                                                       ------------

Expenses
    Salaries and benefits                                                                         $    594,118            2,348,459
    Consulting expenses                                                      $    145,838            6,577,827            6,977,827
    Bad debt expense                                                                                   500,000              500,000
    Other operating expenses                                                      173,666            1,246,382            3,276,445
    Amortization of goodwill and other intangible assets                                                                    577,582
    Costs of acquisitions not consummated                                                              621,716              621,716
                                                                             ------------         ------------         ------------

        Total expenses                                                            319,504            9,540,043           14,302,029
                                                                             ------------         ------------         ------------

    Loss from operations                                                         (319,504)          (9,540,043)          (2,926,800)

Other income (expense)
    Interest expense                                                                                                     (2,082,357)
    Other income                                                                       --               29,910              468,478
                                                                             ------------         ------------         ------------

    NET LOSS                                                                     (319,504)          (9,510,133)          (4,540,679)

Preferred stock dividends                                                              --                                (3,612,431)
                                                                             ------------         ------------         ------------

Net loss to common stockholders                                              $   (319,504)        $ (9,510,133)        $ (8,153,110)
                                                                             ============         ============         ============

Basic and diluted loss per share                                             $      (0.18)        $       (.80)        $      (0.41)
                                                                             ============         ============         ============

Weighted-average shares of common stock outstanding -
    basic and diluted                                                           1,729,428           11,852,273           19,771,554
                                                                             ============         ============         ============
</TABLE>

The accompanying notes are an integral part of these statements.


                                      21
<PAGE>   22

                      Symposium Corporation and Subsidiary

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                     Years ended December 31, 1998 and 1999

<TABLE>
<CAPTION>
                                                     Common stock
                                              -------------------------
                                                Number                    Additional
                                                  of                        paid-in         Note        Accumulated
                                                shares         Amount       capital      receivable       deficit          Total
                                              -----------   -----------   -----------   ------------    ------------    -----------
<S>                                            <C>          <C>           <C>           <C>             <C>             <C>
Balance at January 1, 1998
Sales of common stock                           7,361,264   $     7,361   $   430,977                                   $   438,338
Common stock issued for consulting
   services                                         9,200             9           175                                           184
Stock options and warrants issued
   for services                                                                73,000                                        73,000
Contributed service - officers                                                 83,000                                        83,000
Net loss for the year ended
   December 31, 1998                                                                                    $   (319,504)      (319,504)
                                              -----------   -----------   -----------                   ------------    -----------

Balance at December 31, 1998                    7,370,464         7,370       587,152                       (319,504)       275,018
Sales of common stock                           5,429,250         5,429     5,475,589   $ (2,500,000)                     2,981,018
Issuances of common stock from
   exercise of previously issued
   warrants                                        28,500            29        28,451                                        28,480
Stock warrants issued for consulting
   services                                                                 3,525,550                                     3,525,550
Common stock issued for consulting
   services                                     1,215,000         1,215     3,231,535                                     3,232,750
Net loss for the year ended
   December 31, 1999                                                                                      (9,510,133)    (9,510,133)
                                              -----------   -----------   -----------   ------------    ------------    -----------
Balance at December 31, 1999                   14,043,214   $    14,043   $12,848,277   $ (2,500,000)   $ (9,829,637)   $   532,683
                                              ===========   ===========   ===========   ============    ============    ===========
</TABLE>

The accompanying notes are an integral part of this statement.


                                      22
<PAGE>   23

                      Symposium Corporation and Subsidiary

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             Year ended December 31,

<TABLE>
<CAPTION>
                                                                                                   1998                    1999
                                                                                               -----------              -----------

<S>                                                                                            <C>                      <C>
Cash flows from operating activities
    Net loss                                                                                   $  (319,504)             $(9,510,133)
    Adjustments to reconcile results of operations to
      net cash effect of operating activities
    Value of common stock and common stock purchase
      warrants issued for services                                                                  73,000                6,486,300
    Contributed services - officers                                                                 83,000
    Depreciation                                                                                       124                    5,124
    Bad debt expense                                                                                                        500,000
    Write-off of organization costs                                                                                          25,110
    Changes in assets and liabilities
        Prepaid insurance                                                                                                   (19,916)
        Other assets                                                                               (39,315)                  39,315
        Accounts payable and other accrued expenses                                                 69,233                  454,140
                                                                                               -----------              -----------
        Net cash used in operating activities                                                     (133,462)              (2,020,060)
                                                                                               -----------              -----------
Cash flows from investing activities
    Purchase of equipment                                                                           (3,707)                 (35,749)
    Organization costs                                                                             (24,926)
    Loans made to AmeriNet                                                                                                 (500,000)
    Deferred acquisition costs                                                                                             (242,317)
                                                                                               -----------              -----------
        Net cash used in investing activities                                                      (28,633)                (778,066)
                                                                                               -----------              -----------
Cash flows from financing activities
    Sales of common stock                                                                                                 3,009,498
    Deferred financing costs                                                                       438,338                 (150,000)
                                                                                               -----------              -----------
        Net cash provided by financing activities                                                  438,338                2,859,498
                                                                                               -----------              -----------
        Net increase in cash and cash equivalents                                                  276,243                   61,372
Cash and cash equivalents at beginning of year                                                          --                  276,243
                                                                                               -----------              -----------
Cash and cash equivalents at end of year                                                       $   276,243              $   337,615
                                                                                               ===========              ===========
</TABLE>

Supplemental disclosures of noncash activities:
    During the year ended December 31, 1999, 2,500,000 shares of common stock
    were issued at $1.00 per share in exchange for a note receivable.

    The Company issued common stock purchase warrants with a fair value of
    $152,000 in exchange for services rendered in connection with acquiring
    Direct Sales International in January 2000.

The accompanying notes are an integral part of these statements.


                                      23
<PAGE>   24

                      Symposium Corporation and Subsidiary

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 1998 and 1999

NOTE A - Organization

      Symposium Corporation ("Symposium" or the "Company") was incorporated in
      Delaware on May 9, 1997 under the name of Brack Industries Inc. and, after
      amending its certificate of incorporation, changed its name to Symposium
      Corporation in December 1998. The Company was inactive until December
      1998. The Company's principal business strategy is to identify, acquire,
      and consolidate direct marketing businesses. In November 1999, the Company
      formed Media Outsourcing, Inc. ("MOS") formerly known as Direct Sales
      International, Inc., a wholly-owned subsidiary, for the purpose of
      acquiring the assets of Direct Sales International, LP. The Company
      completed this acquisition in January 2000 (see Note C). From December
      1998 through June 1999, the Company, through its wholly-owned subsidiary
      Publishers Advantage Corporation ("PAC"), had minimal operations and was
      principally engaged in telemarketing in the United States for magazine and
      periodical subscription renewals to persons whose subscriptions had
      recently expired. The Company discontinued the operations of PAC as of
      June 30, 1999 (see Note O).

NOTE B - Liquidity and Financial Results

      The Company experienced a loss from operations of approximately $9.5
      million for the year ended December 31, 1999 and has a limited amount of
      working capital available to meet the short-term needs of the business. In
      addition, substantial funding is still required in order for the Company
      to pursue its strategy of acquiring and consolidating direct marketing
      businesses.

      The Company had minimal operations before acquiring Direct Sales
      International, LP and management believes that its 1999 loss and shortage
      of working capital reflect the fact that the Company was principally
      focused on consummating its first acquisition. Management believes the
      Company's revolving credit facility, as described in Note C, provides
      sufficient financing, and, in addition, the acquisition of Direct Sales
      International, LP (see Note C) will enable the Company to generate
      sufficient cash flow from operations to meet the working capital needs of
      the business over the next year.

      Although management is seeking additional sources of financing, there can
      be no assurance that the Company will be successful in its efforts to
      raise additional capital nor can there be any assurance that the
      acquisition of Direct Sales International, LP will improve the Company's
      operating results.


                                      24
<PAGE>   25

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE C - Subsequent Events

      Acquisition of Direct Sales International, LP ("DSI Acquisition")

      On January 28, 2000, the Company, through its wholly-owned subsidiary MOS,
      acquired substantially all of the assets and assumed certain liabilities
      of Direct Sales International, LP ("DSI"), a Georgia limited partnership,
      for approximately $27.6 million, including closing costs of approximately
      $1.1 million and an agreement to provide approximately $1.5 million of
      funding to AmeriNet, Inc. ("AmeriNet"). The transaction will be accounted
      for as a purchase business combination.

      AmeriNet is 50% owned by the seller of DSI (the "Seller") and the
      agreement to provide $1.5 million of funding to AmeriNet arose in
      connection with Symposium choosing not to exercise an option to purchase
      50.1% of AmeriNet's outstanding common stock as more fully described in
      Note E.

      The acquisition was financed by borrowing $16 million ($15.8 million of
      proceeds, net of fees) under a revolving credit facility entered into
      contemporaneous with consummating the acquisition and the remainder was
      funded with proceeds received from sales of common stock and common stock
      purchase warrants, Series A, B and C mandatorily redeemable convertible
      preferred stock and the acquisition bridge loans described below.

      Concurrent with the acquisition, the Company also entered into a
      three-year consulting agreement with the seller of DSI for $600,000 per
      annum plus benefits and a five-year non-compete agreement expiring in
      January 2005.


                                      25
<PAGE>   26

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE C (continued)

      Unaudited Consolidated Pro Forma Financial Information

      The unaudited consolidated pro forma balance sheet gives effect, as of
      December 31, 1999, to (i) the acquisition of the assets and business of
      DSI, (ii) the revolving credit facility, (iii) the issuances of the Series
      A, B and C mandatorily redeemable convertible preferred stock, (iv) the
      acquisition bridge financings and (v) the conversion of the Series A
      preferred and Commtel acquisition bridge note into common stock. The
      unaudited consolidated pro forma statement of operations gives effect to
      the recurring impact on each of the events described plus the additional
      compensation expense that the Company would incur pursuant to the
      consulting agreement entered into with the seller of DSI as if each had
      occurred on January 1, 1999.

      The unaudited consolidated pro forma statement of operations does not
      include the following non-recurring charges resulting from the events
      described above: (i) additional interest expense associated with the
      beneficial conversion feature of the D-2 loan; (ii) any interest expense
      associated with the Commtel acquisition note, since it is deemed to have
      been converted into common stock on January 1, 1999; (iii) net loss to
      common shareholders, which are immediately convertible into Series B and
      C, does not include any dividends associated with the issuance or
      conversion of the Series A preferred stock, since those shares are deemed
      to have been converted into common stock on January 1, 1999, nor does it
      include additional dividends associated with the beneficial conversion
      features of the preferred stock. The weighted-average number of shares
      used to determine pro forma loss per share gives effect to common stock
      issued in connection with the Commtel note and sale of Series A preferred
      stock and the conversion of those instruments into Symposium common stock
      as if those shares were issued on January 1, 1999, but does not give
      effect to common stock equivalents associated with acquisition bridge
      financings and preferred stock since their effect would be antidilutive.

      The unaudited consolidated pro forma financial statements do not purport
      to represent what the Company's financial position or results of
      operations would actually have been had any of the events described above
      on such dates occurred nor do they purport to project the Company's
      financial position or results of operations for any future date. The
      actual financial information and results of operations may differ
      significantly from that presented in the accompanying pro forma financial
      information.


                                      26
<PAGE>   27

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE C (continued)

      The following table provides an analysis of the purchase price of the DSI
      acquisition. The excess of the purchase price over the book value of the
      net assets acquired has been allocated to goodwill and other intangible
      assets based upon a preliminary analysis of the net assets acquired and
      certain assumptions that the Company believes are reasonable. The actual
      allocation of purchase price may differ significantly from the pro form
      amounts included herein.

<TABLE>
<CAPTION>
<S>                                                                  <C>
         Cash consideration paid to the seller                       $25,000,000
         Commitment to fund Amerinet, Inc.                             1,500,000
         Estimated transaction expenses                                1,014,317
                                                                     -----------

         Total purchase cost                                          27,514,317

         Estimated fair value                                         21,738,493
                                                                      ----------

         Purchase price in excess of estimated fair value
             of net assets acquired                                  $ 5,775,824
                                                                     ===========

         Allocation of purchase price in excess of book value
             of net assets acquired to goodwill and other
             intangible assets                                       $ 5,775,824
                                                                     ===========
</TABLE>

      Note Receivable for Common Stock

      In June 1999, the Company issued 2.5 million shares of its common stock to
      the seller of DSI for $1.00 per share in exchange for a note receivable
      with interest at 7.75% per annum. In January 2000, the note was amended,
      at which time the seller paid $2,500 of the principal and the due date for
      the remaining balance was extended to January 2003 (except that if the
      holder sells any portion of the stock, a portion of the proceeds from such
      sale must be applied toward repaying the note). In addition, the
      requirement to pay interest was rescinded. The stock note receivable is
      presented in the stockholders' equity section of the balance sheet. The
      seller has pledged 1.9 million shares as collateral for the note.

      The Company entered into a Registration Rights Agreement with the seller
      that requires the Company to register 1.0 million of the 2.5 million
      shares by May 27, 2000 and provides the seller with the right to sell up
      to 600,000 shares back to the Company for $3.00 per share from January
      2001 through March 2001.


                                      27
<PAGE>   28

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE C (continued)

      Revolving Credit Facility

      On January 28, 2000, the Company and its newly acquired subsidiary entered
      into a three-year revolving credit facility, as amended, with a bank
      providing for borrowings of up to $20 million subject to certain
      availability limitations stipulated in the agreement. All borrowings under
      this facility are repayable with interest at the prime rate plus 2% per
      annum but not less than 9%. The Company is also required to maintain
      certain minimum earnings ratios and levels of net worth as defined in the
      agreement and MOS is restricted from making distributions to Symposium in
      excess of $1.8 million annually plus any amounts necessary for tax
      obligations attributable to its operations. All of the Company's assets
      are pledged as collateral for this obligation.

      The Company incurred fees and expenses in connection with this facility of
      approximately $1.1 million (see Note H), which will be amortized over
      three years.

      Mandatorily Redeemable Preferred Stock

            Series A Mandatorily Redeemable Convertible Preferred Stock ("Series
            A Preferred")

            On January 28, 2000, in a private placement, the Company sold 21,500
            units, each unit consisting of one share of Series A mandatorily
            redeemable convertible preferred with a face value of $100 each and
            20 shares of the Company's common stock for gross proceeds of $2.0
            million. The Series A Preferred is initially convertible into
            1,075,000 shares of common stock at a conversion ratio of $2.00 per
            share and carries a 16% per annum cumulative dividend.

            The Series A Preferred was originally issued with a mandatory
            redemption date of March 28, 2000 and the right for the holders to
            receive 50% of the first $500,000 of any new financings until
            redeemed in full and 16,125 shares of common stock per day for each
            day the Series A Preferred shares are outstanding from day 31 to day
            60 from the issuance date. At day 61, the number of shares issued
            daily would have increased to 26,875 per day until the Series A
            Preferred is fully redeemed.


                                      28
<PAGE>   29

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE C (continued)

            On March 21, 2000, the holders of the Series A preferred extended
            the due date for the redemption of their shares to April 12, 2000 in
            exchange for 275,000 shares for the Company's common stock; then, on
            March 27, 2000, they agreed to convert their shares into 4,414,666
            shares of common stock at a conversion ratio of $.50 per share based
            on the Series A aggregate redemption price of $2,207,333, including
            $2,150,000 representing the face value of the shares and accrued
            dividends of $57,333. In addition, Series A holders were also issued
            2,207,000 five-year common stock purchase warrants, including
            1,103,500 with an exercise price of $.50 per share and 1,103,500
            with an exercise price of $1.00 per share plus a fee of 220,000
            shares of common stock.

            As a result of the extension and conversion, the former Series A
            holders now own 5,339,666 shares of the Company's common stock, plus
            warrants to purchase 2,207,000 additional shares of the Company's
            common stock as of March 27, 2000.

            Series B Mandatorily Redeemable Convertible Preferred Stock ("Series
            B Preferred")

            On January 28, 2000, in a private placement, the Company sold 15,350
            units, each unit consisting of one share of Series B mandatorily
            redeemable convertible preferred stock with a face value of $100
            each and warrants to purchase 25 shares of the Company's common
            stock for gross proceeds of $1.5 million. The Series B Preferred is
            initially convertible into 767,500 shares of common stock at a
            conversion ratio of $2.00 per share and carries a 10% cumulative
            dividend, payable quarterly. The common stock purchase warrants are
            exercisable for three years from their date of issuance at an
            exercise price of $1.50 per share.

            The Series B Preferred is mandatorily redeemable on the earlier of
            July 26, 2000 or upon the consummation of an additional financing
            transaction resulting in gross proceeds of at least $10 million. If
            the Company does not redeem the shares by July 26, 2000, the
            conversion ratio is reduced to $.50 per share (representing
            3,070,000 shares of the Company's common stock).

            Series C Mandatorily Redeemable Convertible Preferred Stock ("Series
            C Preferred")

            On January 28, 2000, in a private placement, the Company sold 52,892
            units, each unit consisting of one share of Series C mandatorily
            redeemable convertible preferred stock with a face value of $100
            each and 33.33 shares of the Company's common stock for
            approximately $5 million. Additionally, the Company reduced the
            exercise price on 2 million warrants previously issued to a Series C
            holder from $3.50 per share to $1.00 per share. The Series B
            Preferred is initially convertible into 2,644,600 shares of common
            stock at a conversion ratio of $2.00 per share and carries a 10%
            cumulative dividend, payable quarterly.


                                      29
<PAGE>   30

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE C (continued)

            The Series C Preferred is also mandatorily redeemable on the earlier
            of July 26, 2000 or upon the consummation of a financing transaction
            resulting in gross proceeds of at least $10.0 million. If the
            Company does not redeem the shares by July 26, 2000, the conversion
            ratio is reduced to $.25 per share (representing 21,156,800 shares
            of the Company's common stock) and the Company must issue 370,244
            five-year common stock purchase warrants with an exercise price of
            $.25 per share each month until the shares are fully redeemed.

            Preferred Stock Accounting

            The proceeds received from the issuances of preferred stock with
            common stock and/or common stock purchase warrants will be allocated
            to each component based on their relative fair values on January 28,
            2000 (the date of issuance). The fair value of the preferred stock
            is considered to be equal to the aggregate market value of the
            equivalent number of common shares into which the preferred is
            convertible. The fair value of the common stock is based on the
            closing market value, which was $3.20 on the date of issuance and
            the fair value of the common stock purchase warrants was determined
            using the Black-Scholes option pricing model.

            The difference between the carrying value of the preferred stock and
            its mandatory redemption price (of $100 per share) will be amortized
            from the date of issuance to the mandatory redemption date by
            increasing the carrying value of the preferred stock and decreasing
            retained earnings for the accrual of preferred dividends. In
            addition, cumulative dividends payable to the preferred shareholders
            on the mandatory dates of redemption will also be accounted for by
            periodically increasing the carrying value of the preferred stock
            and decreasing retained earnings.

            All of the preferred shares were issued with a beneficial conversion
            feature that has an intrinsic value of $1.20 per share, representing
            the difference between the market value of the Company's common
            stock of $3.20 per share and the initial conversion price of $2.00
            per share on the date of issuance. Since all of the preferred shares
            are immediately convertible into common stock, the intrinsic value
            of the beneficial conversion feature will be characterized as a
            preferred dividend and accounted for by increasing additional
            paid-in capital and decreasing retained earnings on the date of
            issuance.

            Reductions in the conversion price of the preferred stock into
            common stock (that would take effect if the Company fails to redeem
            the preferred stock on the mandatory date of redemption) are
            considered contingencies that are not recognized for accounting
            purposes on the date of issuance. The difference between the
            intrinsic value that would result from a reduction of the conversion
            price in the event of a default and the intrinsic value recorded as
            a dividend on the date of issuance would be characterized as
            additional dividends that would further decrease retained earnings.


                                      30
<PAGE>   31

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE C (continued)

      As noted above, the Series A shareholders were issued 275,000 shares of
      common stock in exchange for extending the due date of the Series A
      preferred then subsequently agreed to convert their preferred shares and
      accumulated dividends into 4,414,666 shares of common stock. The market
      value of the Company's common stock on the date of conversion was $2.63.
      Accordingly, the Company recorded, upon conversion, a contractual dividend
      of $57,533 payable to the Series A holders on the date of conversion and
      additional dividends of approximately $13.3 million including (i) the fair
      value of the additional common shares and common stock purchase warrants,
      (ii) accretion of the difference between the carrying value and the
      redemption amount, and (iii) the difference in the amount of intrinsic
      value of the beneficial conversion feature on the date of redemption and
      the date of original issuance.

      The following table summarizes (i) the allocation of the proceeds from the
      issuances of the preferred stock with common stock and common stock
      purchase warrants, (ii) the preferred stock dividends and reduction in
      retained earnings resulting from the beneficial conversion feature and
      (iii) the incremental preferred stock dividends and reduction in retained
      earnings that would result from contractual changes in conversion prices
      in the event of a default:

<TABLE>
<CAPTION>
                                                                     Series A          Series B           Series C
                                                                    -----------       ----------        ------------

<S>                                                                 <C>               <C>               <C>
         Mandatory redemption amount                                $ 2,150,000       $1,535,000        $  5,289,200
                                                                    ===========       ==========        ============

         Allocation of proceeds to:
           Preferred stock                                          $ 1,428,571       $1,173,715        $  2,401,352
           Common stock                                                     430                                1,763
           Additional paid-in capital                                 1,860,999        1,282,285           4,948,237
           Retained earnings                                         (1,290,000)        (921,000)         (2,401,352)
                                                                    -----------       ----------        ------------

           Gross proceeds                                           $ 2,000,000       $1,535,000        $  4,950,000
                                                                    ===========       ==========        ============

         Additional dividends resulting from extension and
            conversion of Series A preferred stock                  $13,270,882
                                                                    ===========

         Contingent dividends if default occurs on Series B
            and C                                                                     $7,368,000         $60,011,208
                                                                                      ==========        ============
</TABLE>


                                      31
<PAGE>   32

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE C (continued)

      Acquisition Bridge Loans

            Commtel Services LTD Note

            On January 20, 2000, the Company entered into a note agreement with
            Commtel Services, Ltd. (the "Commtel Note") for a 30-day bridge loan
            in the principal amount of $300,000 that was due, with interest at
            10% per annum, on February 20, 2000. The proceeds of the loan were
            used to acquire DSI. The Company issued 75,000 shares of its common
            stock to Commtel as consideration for the loan.

            The proceeds received from the issuances of the note with common
            stock are being allocated to each component based on their relative
            fair values on January 20, 2000 (the date of issuance). The fair
            value of the common stock on January 20, 2000 was $2.31 and resulted
            in discounted carrying value to the note of $200,000 and an increase
            to stockholders' equity of $100,000.

            The difference between the carrying value of the note and its face
            value of $300,000 is being amortized from the date of issuance to
            its due date of February 20, 2000 and will be recorded as a
            component of interest expense.

            The Company defaulted on its obligation to repay the note on its due
            date and, as a result, the interest rate increased to 18% per annum
            and the Company was required to immediately issue 50,000 additional
            shares of its common stock to Commtel.

            On March 21, 2000, Commtel agreed to convert the note into 614,048
            shares of common stock (representing a $.50 per share conversion
            ratio) in settlement of the $300,000 principal balance plus accrued
            interest of approximately $7,000. In addition, the Company was also
            required to issue an additional 77,500 shares of its common stock to
            Commtel pursuant to the default provisions of the note under which
            Commtel is entitled to 2,500 additional shares of the Company's
            common for each day the note remained in default. As a result of the
            above, Commtel now owns an aggregate of 816,548 shares of the
            Company's common stock.

            As a result of the conversion, the Company recorded additional
            interest expense of approximately $1.2 million, including (i)
            contractual interest of 10%; (ii) the fair market value of
            additional common shares issued in exchange for the holders
            agreement to convert; (iii) the additional shares issued under the
            penalty provision; (iv) and the intrinsic value of the beneficial
            conversion of the note into 614,048 shares of common stock.


                                      32
<PAGE>   33

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE C (continued)

            Fontenelle Subordinated Bridge Note

            On January 25, 2000, the Company entered into a Subordinated Bridge
            Note agreement with Fontenelle LLC (the "Fontenelle Note") in the
            principal amount of $500,000, due with accrued interest at 10% per
            annum on March 25, 2000. The proceeds of the loan were used to
            acquire DSI. The loan was repaid with interest of approximately
            $8,000 on March 24, 2000.

            D2 Loan

            January 25, 2000, the Company entered into a Convertible
            Subordinated Bridge Loan in the amount of $300,000 with D2 Partners
            (the "D2 Loan"). The proceeds of this loan were used to acquire DSI.
            The D2 Loan is repayable with interest at 10% per annum on July 26,
            2000. The D2 Loan is initially convertible into 150,000 shares of
            the Company's common stock at a conversion ratio of $2.00 per share.
            If the Company does not redeem the note by July 26, 2000, the
            conversion ratio is reduced to $0.50 per share (representing 600,000
            shares of the Company's common stock).

            The beneficial conversion feature of the note has an aggregate
            intrinsic value of $46,500. The aggregate intrinsic value of the
            beneficial conversion represents the difference between the market
            value of the Company's common stock of $2.31 per share and the
            initial conversion price of $2.00 per share on the date of issuance.
            Since the note is immediately convertible into common stock, the
            intrinsic value of the beneficial conversion feature will be
            recorded as additional interest expense on the date of issuance.

            The reduction in the conversion price to $.50 per share (that would
            take effect if the Company fails to repay the note on its due date)
            is considered a contingency that is not recognized for accounting
            purposes on the date of issuance. The reduction of the conversion
            price to $.50 per share would result in additional interest expense
            $1 million based upon the difference between the intrinsic value of
            the conversion feature pursuant to the default provisions of the
            note and the intrinsic value on the date of issuance.

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Principles of Consolidation

      The consolidated financial statements include the accounts of the Company
      and its wholly-owned subsidiaries.


                                      33
<PAGE>   34

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE D (continued)

      Reclassifications

      Certain amounts in the statements have been reclassified to conform to the
      1999 presentation.

      Use of Estimates in the Preparation of Financial Statements

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      the disclosure of contingent assets and liabilities at the date of the
      financial statements as well as the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from
      those estimates.

      Cash and Cash Equivalents

      The Company considers all highly liquid investments with maturities of
      three months or less to be considered cash equivalents.

      Property and Equipment

      Property and equipment are recorded at cost, less accumulated
      depreciation. Depreciation expense is computed using the straight-line
      method over the estimated useful lives of the assets which are five years.

      Deferred Financing Costs

      The deferred financing costs are amortized on a straight-line basis over
      the term of the related credit facility (see Note C), which is three
      years.

      Accounting for Stock-Based Compensation

      The Company has elected to follow Accounting Principles Board Opinion No.
      25 ("APB No. 25"), "Accounting for Stock Issued to Employees." Under APB
      No. 25, when the exercise price of the Company's employee stock option is
      equal to or greater than the market price of the underlying stock on the
      date of grant, no compensation expense is recognized.


                                      34
<PAGE>   35

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE D (continued)

      Net Loss Per Share

      Net loss per share is presented under Statement of Financial Accounting
      Standards No. 128 ("SFAS No. 128"), "Earnings Per Share." In accordance
      with SFAS No. 128, basic and diluted net loss per share has been computed
      using the weighted-average number of shares of common stock outstanding
      during the period. Potentially dilutive securities have been excluded from
      the computation, as their effect is antidilutive. If the Company had
      reported net income, diluted earnings per share would have included the
      shares used in the computation of net loss per share plus common
      equivalent shares related to 600,000 and 2,803,000 outstanding options and
      warrants for the years ended December 31, 1999 and 1998, respectively.

NOTE E - Costs of Acquisitions not Consummated

      In February 2000, the Company announced its decision not to exercise its
      options to purchase 50.1% of the outstanding common stock of AmeriNet and
      all of the outstanding common stock of Hamilton Telecommunications, Ltd.
      ("Hamilton"). As a result, the Company recorded a $621,716 charge during
      the fourth quarter of 1999 representing the write-off of previously
      deferred acquisition costs. The charge, which is presented as the cost of
      acquisitions not consummated, principally consists of legal and
      professional fees, including $38,000 for the fair value of common stock
      purchase warrants and $432,000 for 225,000 shares of common stock that
      were issued to various consultants. In connection with the AmeriNet
      agreement, the Company made a $500,000 loan to AmeriNet, which bears
      interest at 8%. At December 31, 1999, the entire amount of the note is
      reserved due to its uncertainty of collection.

NOTE F - Deferred Acquisition Costs

      Deferred acquisition costs of $514,317 principally represent legal and
      consulting fees incurred in connection with the Company's acquisition of
      the assets and business of DSI and include $272,000 for the fair value of
      warrants issued to consultants in exchange for services. These costs will
      be added to the acquisition purchase price in determining the total cost
      to be allocated to the net assets acquired.


                                      35
<PAGE>   36

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE G - Income Taxes

      Significant components of the Company's deferred tax assets are as
follows:

<TABLE>
<CAPTION>
                                                               1998          1999
                                                           -----------    -----------

<S>                                                        <C>            <C>
      Net operating losses                                 $    45,000    $ 2,365,000
      Organization and start-up costs                           82,000         72,000
      Common stock purchase warrants issued for services                    1,356,000
      Bad debt reserve                                           1,000        200,000
      Other                                                                     7,000
                                                           -----------    -----------

                                                               128,000      4,000,000
      Valuation allowance                                     (128,000)    (4,000,000)
                                                           -----------    -----------

      Net deferred tax asset                               $        --    $        --
                                                           ===========    ===========
</TABLE>

      At December 31, 1999, the Company had Federal and State net operating loss
      carryforwards of approximately $5.9 million that will be available to
      offset future taxable income, if any, through December 2019. The
      utilization of the net operating losses may be subject to a substantial
      limitation due to the "change of ownership" provisions under Section 382
      of the Internal Revenue Code and similar State provisions. Such limitation
      may result in the expiration of the net operating losses before their
      utilization. A 100% valuation allowance has been established to reserve
      for the deferred tax assets arising from the net operating losses and
      other temporary differences since there is no assurance that their benefit
      will be realized in the future.

      At December 31, 1999, the Company had Federal and State net operating loss
      carryforwards of approximately $5.9 million that will be available to
      offset future taxable income, if any, through December 2019. The
      utilization of the net operating losses may be subject to a substantial
      limitation due to the "change of ownership" provisions under Section 382
      of the Internal Revenue Code and similar State provisions. Such limitation
      may result in the expiration of the net operating losses before their
      utilization. A 100% valuation allowance has been established to reserve
      for the deferred tax assets arising from the net operating losses and
      other temporary differences since there is no assurance that their benefit
      will be realized in the future.


                                      36
<PAGE>   37

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE H - Related Party Transactions

      The Company paid $266,000 to a consulting firm owned by one of its
      Directors for services rendered in connection with obtaining the revolving
      credit facility described in Note C, including $85,000 in cash through
      December 31, 1999, a $125,000 success fee and 30,000 common stock purchase
      warrants with a fair value of approximately $56,000 upon closing the
      agreement in January 2000.

NOTE I - Commitments and Contingencies

      Employment Agreements

      The Company has employment agreements with its three executive officers
      providing for aggregate annual compensation amounting to approximately
      $750,000 per annum plus bonuses (as defined in the agreements) and
      severance pay of up to $1 million for termination under certain
      circumstances.

NOTE J - Stock Options

      In December 1998, the Board of Directors approved the adoption of a stock
      plan (the "Plan"). The Plan provides for the grant of options to purchase
      up to 1,000,000 shares of the Company's common stock. In September 1999,
      the plan was amended to increase the number of shares of common stock
      available for issuance under the plan from 1,000,000 to 2,500,000 shares.
      These options may be granted to selected eligible directors, officers,
      employees and consultants of the Company. Options granted under the Plan
      may either be "incentive stock options" within the meaning of Section 422
      of the Internal Revenue Code of 1986, as amended (the "Code"), or options
      which do not qualify as "incentive stock options." The exercise price of
      an incentive stock option may not be less than the fair market value of a
      share of common stock at the date of grant. There is no limitation on the
      exercise price of options that are not incentive stock options. No
      participant may receive options representing more than 50% of the
      aggregate number of shares of common stock that may be issued pursuant to
      all options under the Plan. Statement of Financial Accounting Standards
      No. 123 ("SFAS No. 123"), "Accounting for Stock-Based Compensation"
      establishes financial accounting and reporting standards for stock-based
      employee compensation plans. The financial accounting standards of SFAS
      No. 123 permit companies to either continue accounting for stock-based
      compensation under previous rules or adopt SFAS No. 123 and reflect fair
      value of stock options and other forms of stock-based compensation in the
      results of operations and additional expense. The disclosure requirements
      of SFAS No. 123 require companies which elect not to record the fair value
      in the statement of operations to provide pro forma disclosures of net
      income and earnings per share in the notes to the financial statements as
      if the fair value of the stock-based compensation had been recorded.


                                      37
<PAGE>   38

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE J (continued)

      The Company follows Accounting Principles Board Opinion No. 25 and its
      related interpretations in accounting for its stock-based compensation
      plans. Accordingly, no compensation cost has been recognized in the
      statement of operations for employee stock options; however, the Company
      did recognize approximately $73,000 and $3.3 million of consulting expense
      for options which were granted in 1998 and 1999, to directors and
      consultants.

      The following table summarizes the stock option activity for the years
      ended December 31, 1998 and 1999:

<TABLE>
<CAPTION>
                                                  December 31, 1998        December 31, 1999
                                                ---------------------    ---------------------
                                                            Weighted-                Weighted-
                                                             average                  average
                                                            exercise                 exercise
                                                Options       price       Options      price
                                                -------     ---------    --------    ---------

      <S>                                       <C>           <C>         <C>           <C>
      Outstanding - beginning of the year                                 150,000      $1.00
      Granted                                   150,000       $1.00       450,000       3.01
      Canceled                                                           (118,000)      1.00
                                                -------                  --------

      Outstanding - end of the year             150,000       $1.00       482,000       2.87
                                                =======                  ========

      Options exercisable                                                 200,000       2.35
                                                =======                  ========
</TABLE>

      The following table summarizes additional information about outstanding
      and exercisable stock options at December 31, 1999.

<TABLE>
<CAPTION>
                                                 Weighted-
                                                  average           Weighted-                             Weighted-
         Range of                                remaining          average                               average
         exercise              Number           contractual         exercise        Number                exercise
          prices            outstanding            life               price       exercisable              price
      --------------        -----------       --------------        --------      -----------             -------

<S>                           <C>                <C>                  <C>            <C>                    <C>
           $1.00              307,000            2.5 years            $1.00          150,000                $1.00
            5.88               75,000            2.0 years             5.88                -
            6.38              100,000            3.1 years             6.38           50,000                 6.38
</TABLE>


                                      38
<PAGE>   39

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                December 31, 1999

NOTE J (continued)

      The Company applies APB No. 25 in accounting for options issued to
      employees under the plan and, accordingly, recognizes compensation expense
      for the difference, if any, between the fair value of the underlying
      common stock and the exercise price of the option at the grant date. All
      options issued to date under the plan have exercise prices equal to the
      fair market value of the stock at the date of grant. Had compensation cost
      for the options issued under the plan been determined based upon the fair
      value at the grant date, consistent with the method described by SFAS No.
      123, pro forma net loss and net loss per share for the years ended
      December 31, 1998 and 1999 would have been as follows:

<TABLE>
<CAPTION>
                                                      December 31,
                                           ----------------------------------
                                              1998                    1999
                                           -----------            -----------
<S>                                         <C>                   <C>
      Earnings
        As reported                         $(319,504)            $(9,510,133)
        Pro forma                            (323,071)             (9,697,124)

      Net loss per share
        As reported                          $(0.18)                  $(.80)
        Pro forma                              (.19)                   (.82)
</TABLE>

      The weighted-average fair market value of the options issued during 1998
      and 1999 was $.31 and $.75, respectively. These values were calculated
      using the Black-Scholes option-pricing model based on the following
      assumptions in 1998 and 1999: an expected life of four years, a risk-free
      interest rate of 6% and a volatility factor of approximately 35%.

NOTE K - Equipment

      Equipment at cost less accumulated depreciation is summarized as follows:

<TABLE>
<CAPTION>
                                                          December 31,
                                                  ----------------------------
                                                   1998                 1999
                                                  ------               -------

<S>                                               <C>                  <C>
      Equipment                                   $3,707               $39,457
      Accumulated depreciation                      (124)               (5,249)
                                                  ------               -------

                                                  $3,583               $34,208
                                                  ======               =======
</TABLE>


                                      39
<PAGE>   40

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE L - Fair Value of Financial Instruments

      Because of the short-term nature of these instruments, the carrying
      amounts of cash and trade payables are considered to approximate fair
      market value. The fair value of the stock note receivable approximates
      fair value based upon the fact that there has not been any significant
      change in interest rates since the note was issued.

NOTE M - Concentrations

      The Company maintains its cash balances at one financial institution.
      Deposits are insured by the Federal Deposit Insurance Corporation on
      aggregate balances up to $100,000. The uninsured balance approximated
      $334,000 representing the Company's funds invested in money market
      accounts at December 31, 1999. The Company has not experienced any losses
      in such accounts and believes it is not exposed to any significant credit
      risk.

NOTE N - Stockholders' Equity

      Common Stock

      At December 31, 1999, the Company is authorized to issue 25,000,000 shares
      of common stock, $.001 par value and 10,000,000 shares of preferred stock,
      $.001 par value. A summary of the Company's common stock issuances for the
      years ended December 31, 1998 and 1999 is as follows:

<TABLE>
<CAPTION>
                                                      December 31, 1998               December 31, 1999
                                                 --------------------------      --------------------------
                                                   Shares          Amount          Shares          Amount
                                                 ----------      ----------      ----------      ----------

<S>                                               <C>            <C>              <C>            <C>
      Issues for:
           Cash                                   7,361,264      $  438,338       2,957,750      $3,009,498
           Note receivable                                                        2,500,000       2,500,000
           Non-cash (principally consulting
              services)                               9,200             184       1,215,000       3,232,750
                                                 ----------      ----------      ----------      ----------

                                                  7,370,464      $  438,522       6,672,750      $8,742,248
                                                 ==========      ==========      ==========      ==========
</TABLE>

      The 1999 shares sold for cash include 28,500 shares issued pursuant to the
      exercise of common stock purchase warrants.


                                      40
<PAGE>   41

                      Symposium Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1998 and 1999

NOTE N (continued)

      In 2000, the Company issued 8,971,131 additional shares of its common
      stock including 8,402,531 shares issued in connection with the acquisition
      bridge and preferred stock financings and conversion of notes and
      preferred stock into common stock as described in Note C. Accordingly,
      23,014,345 shares of common stock are outstanding after giving effect to
      the events described in Note C. In addition, the Company has reserved
      2,500,000 shares of common stock for issuance under the stock option plan
      described in Note K. Accordingly, the Company is in the process of
      effecting an amendment to its Certificate of Incorporation to increase the
      number of authorized common shares to 75,000,000.

NOTE O - Other matters

      Publishers Advantage Corporation

      In June 1999, the Company discontinued the operations of its minimally
      active subsidiary, Publishers Advantage Corporation, whose results of
      operations were insignificant to the 1999 financial statements.

      Co-Employment Arrangement

      The Company has entered into a co-employment arrangement with a
      Professional Employment Organization ("PEO") principally providing for the
      outsourcing of certain human resources functions and the administration of
      payroll and employee benefit programs. Under this arrangement, the Company
      and the PEO jointly employ the Company's personnel; however, the Company
      still controls, among other things, the employees' duties and establishes
      its own policies with respect to hiring, terminations, and promotion and
      compensation.


                                      41

<PAGE>   42
ITEM 8. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure

      None.














                                      42
<PAGE>   43

                                    Part III

      The information, and accompanying exhibits called for by Item 9 "Directors
and Executive Officers of the Registrant," Item 10 "Executive Compensation,"
Item 11 "Security Ownership of Certain Beneficial Owners and Management," and
Item 12 "Certain Relationships and Related Transactions" is incorporated herein
by reference to the Company's definitive proxy statement for its 2000 Annual
Meeting of Shareholders which definitive proxy statement is expected to be filed
with the Commission no later than 120 days after the end of the fiscal year to
which this Report relates.

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

(a) Exhibits

Exhibit No.       Description

2.1               Asset Purchase Agreement made and entered into as of January
                  28, 2000, by and among Direct Sales International, Inc.,
                  Symposium Corporation and Richard Prochnow, incorporated by
                  reference to Registrant's Current Report on from Form 8-K,
                  filed with the Securities & Exchange Commission, February 14,
                  2000.

2.2               Option Agreement dated June 9, 1999 by and among Symposium
                  Corporation, Direct Sales International L.P. and Richard
                  Prochnow, incorporated herein by reference to Exhibit 2.2 to
                  the Registrant's Quarterly Report on Form 10-QSB for the
                  period ended June 30, 1999.

3.1               Amended and Restated Certificate of Incorporation of the
                  Registrant, incorporated by reference to the Registrant's Form
                  10-12G, filed with the Securities and Exchange Commission on
                  February 24, 1999.

3.2               Certificate of Designation of Series A Convertible Preferred
                  Stock, par value $.001, filed with the Secretary of State of
                  Delaware on January 28, 2000.*

3.3               Certificate of Designation of Series B Convertible Preferred
                  Stock, par value $.001 filed with the Secretary of State of
                  Delaware on January 28, 2000.*

3.4               Certificate of Designation of Series C Convertible Preferred
                  Stock, par value $.001 filed with the Secretary of State of
                  Delaware on January 28, 2000.*

3.5               By-Laws of the Registrant, incorporated by reference to the
                  Registrant's Form 10-12G, filed with the Securities &
                  Exchange Commission on February 24, 1999.

10.1              Coast Credit Loan and Security Agreement, between Coast
                  Business Credit, a division of Southern Pacific Bank
                  ("Coast") and Direct Sales International, Inc., dated as of
                  January 28, 2000.*

10.2              Amendment to Coast Credit Loan and Security Agreement,
                  between Coast Business Credit, a division of Southern Pacific
                  Bank ("Coast") and Direct Sales International, Inc., dated as
                  of January 28, 2000.*

10.3(a)           Amendment to Loan Documents between Court Business Credit, a
                  division of Southern Pacific Bank and Media Outsourcing,
                  Inc., dated as of March __, 2000.*

                                       43
<PAGE>   44

10.3(b)           Second Amendment to Coast Credit Loan and Security Agreement,
                  between Coast Business Credit, a division of Southern Pacific
                  Bank ("Coast") and Direct Sales International, Inc., dated as
                  of March 6, 2000.*

10.4              Amendment to Coast Credit Loan and Security Agreement,
                  between Coast Business Credit, a division of Southern Pacific
                  Bank ("Coast") and Direct Sales International, Inc., dated as
                  of March 30, 2000.*

10.5              Continuing Guaranty executed by Symposium Corporation as
                  Guarantor, in favor of Coast Business Credit, with respect to
                  the indebtedness of Direct Sales International, Inc., dated
                  as of January 28, 2000.*

21                List of subsidiaries of Symposium*

27.1              Financial Data Schedule*

99.1              Registration Rights Agreement made and entered into as of
                  January 28, 2000 by and between Symposium Corporation and
                  Richard Prochnow, incorporated by reference to Registrant's
                  Current Report on Form 8-K, filed with the Securities &
                  Exchange Commission February 14, 2000.

99.2              Amended Non-Negotiable Secured Promissory Note made by
                  Richard Prochnow payable to the order of Symposium
                  Corporation, dated January 28, 2000, incorporated by
                  reference to Registrant's Current Report on Form 8-K, filed
                  with the Securities & Exchange Commission on February 14,
                  2000.

99.3              Consulting Agreement between Symposium Corporation, Direct
                  Sales International, Inc. and Richard Prochnow, incorporated
                  by reference to Registrant's Current Report on Form 8-K,
                  filed with the Securities & Exchange Commission on February
                  14, 2000.0.

99.4              Loan Agreement made and entered into as of January 28, 2000,
                  between Symposium Corporation and AmeriNet, incorporated by
                  reference to Registrant's Current Report on Form 8-K, filed
                  with the Securities & Exchange Commission, on February 14,
                  2000.

99.5              Share Purchase and Sale Agreement, by and between Symposium
                  Telecom Corporation and Hamilton Telecommunications Limited,
                  dated December 14, 1998, as amended, incorporated by reference
                  to registrant's Form 10-12G, dated June 1, 1999.

99.6              Option Agreement by and between Symposium Telecom Corporation,
                  Robert Green, Marilyn Shein, Fabrice Thomas, Shropshire Fine
                  Investment Limited and Automated Communications Limited, dated
                  December 14, 1998, as amended, incorporated by reference to
                  Registrant's Form 10-12G, filed with the Securities Exchange
                  Commission on February 24, 1999

-----------------
* Filed herewith.


                                       44
<PAGE>   45

(b) Reports on Form 8-K

On February 14, 2000 the Registrant filed a Current Report on Form 8-K reporting
the DSI acquisition.


                                       45
<PAGE>   46

                                   SIGNATURES

            In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Date: April 11, 2000           By:


                                  /s/ Ronald Altbach
                                  ------------------
                                  Ronald Altbach
                                  Chairman, Director and Chief Executive Officer


                                  /s/ Tim S. Ledwick
                                  ------------------
                                  Tim S. Ledwick
                                  Chief Financial Officer


                                  /s/ Richard Cohen
                                  -----------------
                                  Richard Cohen
                                  Director


                                  /s/ Richard Kaufman
                                  -------------------
                                  Richard Kaufman
                                  Director


                                       46