SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549


                             FORM 10-KSB/A1


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

         For the transition period from __________ to __________

                       Commission File No. 0-29025

                    NETVOICE TECHNOLOGIES CORPORATION
                    ---------------------------------
         (Exact Name of Registrant as Specified in its Charter)

          Nevada                                  91-1986538
-------------------------------   ---------------------------------------
(State or Other Jurisdiction of   (I.R.S. Employer Identification Number)
Incorporation or Organization)



                     3201 WEST ROYAL LANE, SUITE 160
                            IRVING, TX  75063

           --------------------------------------------------
      (Address of Principal Executive Offices, Including Zip Code)

Registrants Telephone Number, Including Area Code:   (972) 788-2988

Securities Registered Pursuant to Section 12(b) of the Act:   NONE.

Securities Registered Pursuant to Section 12(g) of the Act:   COMMON STOCK,
$.001 PAR VALUE

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

As of April 4, 2000, 13,416,600 shares of Common Stock were outstanding,
and the aggregate market value of the Common Stock of NetVoice Technology
Corporation held by nonaffiliates was $111,718,800.

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

State the issuer's revenues for its most recent fiscal year. $1,212,363.
                                                             ----------
Documents incorporated by reference:
          DEFINITIVE PROXY STATEMENT FOR ANNUAL SHAREHOLDER MEETING 2000
          EXHIBITS TO FORM 10SB (SEC FILE NO. 0-29025)

This Form 10-KSB consists of 69 pages.  The Exhibit Index begins on page
48.
<PAGE>
                            TABLE OF CONTENTS

PART I

Item 1.   Description of Business

Item 2.   Description of Property

Item 3.   Legal Proceedings

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


PART II

Item 5.   Market Price of the Registrant's Common Stock and Related
          Security Holder Matters

Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

Item 7.   Financial Statements

Item 8.   Change in and Disagreements with Accountants on Accounting and
          Financial Disclosure


PART III

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

Item 10.  Executive Compensation

Item 11.  Security Ownership of Certain Beneficial Owners and Management

Item 12.  Certain Relationships and Related Transactions

Item 13.  Exhibits, Financial Statements and Reports on Form 8-K



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            SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     Some of the statements under "Business," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and elsewhere in this Form 10-KSB constitute forward-looking statements.
These statements involve known and unknown risks, significant uncertainties
and other factors what may cause our actual results, levels of activity,
performance or achievements to be materially different from any future
results, ability to repay debt to noteholders, levels of activity,
performance or achievements expressed or implied by such forward-looking
statements.  Such factors include, among other things, those listed under
"Risk Factors" including, but not limited to, "Our limited operating
history," "Our operating losses, current liabilities of $5.6 million and
anticipate losses will continue and increase in the foreseeable future,"
"We intend to pursue multiple streams of revenue," "We may experience
difficulties managing our expanding operations," "We may fail to establish
and maintain strategic relationships" and "We are dependent on sales agents
to market and distribute our products and services."

                                 PART I

     IN THIS ANNUAL REPORT ON FORM 10-KSB THE TERMS "NETVOICE," "COMPANY,"
"WE," "US" AND "OUR" REFER TO NETVOICE TECHNOLOGIES CORPORATION AND OUR
WHOLLY OWNED SUBSIDIARIES, NETVOICE TECHNOLOGIES, INC. AND NETLD.COM, INC.
WE REFER TO NETVOICE TECHNOLOGIES, INC. AS NVT, INC.; WE REFER TO
NETLD.COM, INC. AS NLD; AND WE REFER TO OUR $.001 PAR VALUE COMMON STOCK AS
COMMON STOCK.  ALL REFERENCE TO THE NUMBER OF SHARES OUTSTANDING AND OTHER
RELATED CALCULATIONS AND DATA ARE ADJUSTED THROUGHOUT THIS REPORT TO
REFLECT THE 2 FOR 1 STOCK SPLIT WHICH OCCURRED IN MARCH 2000 UNLESS THE
CONTEXT REQUIRES OTHERWISE.


     THIS AMENDMENT UPDATES VARIOUS SECTIONS OF THE FORM 10-KSB FILED ON
APRIL 13, 2000 TO REFLECT A RESTATEMENT OF THE COMPANY'S CONSOLIDATED
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999 AND RELATED DISCLOSURES.


ITEM 1.  DESCRIPTION OF BUSINESS.

HISTORY


     Our Company is a Nevada corporation.  We and our wholly-owned
operating subsidiaries, NetVoice Technologies, Inc. and NetLD.com, Inc.,
both Nevada corporations, have executive and operating offices at 3201 West
Royal Lane, Suite 160, Irving, Texas 75063.  Our telephone number is (972)
788-2988.  Our Website address is www.netvoice.net and www.netvoice.com.


     The Company is the successor company to NetVoice Technologies, LLC, a
Texas limited liability company that began operations on January 7, 1998.
NetVoice Technologies, LLC was formed for the purpose of developing,
acquiring and operating telephone communication facilities and networks
that were intended to transmit voice over the Internet utilizing
conventional and Internet technologies.  NetVoice Technologies, LLC was
reincorporated in Nevada on June 30, 1998, as NetVoice Technologies, Inc.

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<PAGE>

     On August 13, 1998, NVT, Inc. concluded a reverse acquisition of Blue
Pines, Inc. in which Blue Pines, Inc. issued 6,000,000 shares of common
stock in exchange for all of the outstanding shares of common stock of NVT,
Inc., the surviving accounting acquirer.  As a result of the reverse
acquisition, NVT, Inc. became a wholly-owned subsidiary of Blue Pines,
Inc., and the six former shareholders of NVT, Inc. became the holders of
approximately 75% of the outstanding shares of common stock of the Company.
The remaining 25% of the shares were owned by the original non-affiliated
shareholders of Blue Pines, Inc.  On August 11, 1998, Blue Pines, Inc.
changed its name to NetVoice Technologies Corporation.  The value of assets
that NVT, Inc. acquired as a result of the reverse acquisition was
negligible because Blue Pines, Inc. was an inactive shell at the time of
the reverse acquisition.  There was no prior affiliation between the
parties.  Shares outstanding prior to the reverse acquisition have been
restated to reflect the exchange ratio with Blue Pines, Inc.  See
"Principal Shareholders" and "Certain Transactions."


     NetLD.com, Inc. was incorporated in the State of Nevada as a wholly-
owned subsidiary of the Company on October 14, 1999.  This corporation was
initially formed for the purpose of conducting the traditional long
distance telephone services of the Company. Currently, we have had no
activity in this subsidiary and it is not anticipated traditional long
distance will be pursued as part of our business model.  We may disband
this entity or use it for other corporate purposes as yet to be determined.

OVERVIEW

     We are a provider of voice transmission over the Internet, which
allows our customers to make high-quality, low-cost telephone calls on
their personal computers or traditional telephones with a technology known
as Voice over Internet Protocol ("VoIP").  The technology has advanced so
that we now communicate from:

     *    one personal computer to another

     *    personal computer to a conventional telephone

     *    conventional phone to conventional phone

     We commenced offering our long distance Internet services during the
past year as part of our current business plan.  We have aggressively been
deploying VoIP gateways in 25 markets located throughout the United States
with leading manufacturers such as Cisco Systems, Inc. and leading Internet
backbone suppliers.  Currently, Cisco Systems supplies us with much of the
equipment involved in establishing our VoIP gateways and building our
network.  Furthermore, we participate in the "Jump Start" program with
Cisco, where we receive marketing dollars from them in exchange for our
purchase of Cisco equipment and use of their name in conjunction with our
marketing efforts.  To date, we have only received approximately $25,000
from Cisco through this program.  For a more detailed discussion of our
relationship with Cisco and other suppliers, see "Contractual
Relationships" below.

     The Company's IP telephony network is built to handle and transport IP
telephony minutes. This is accomplished through leased lines that allow us
to connect and expand our network between various cities.  Currently each
of our markets has sufficient capacity to provide

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50 million minutes of communication time per year, and this represents our
break-even point.  However, this number will increase as we continue to
expand our network.  Thus, the communication time we provide on our network
is limited by the size of the network.

     Our goal is to expand our gateway network after an assessment of
locations which provide high potential traffic and investigate new VoIP
applications and develop new installation sites.

     Our operations currently do not require the use of any raw materials.
Our major customers in 1999, included IXC Communications, Inc., Caprock
Communications Corporation, World Access, Inc., Landmark Community News and
Z-Tel, Inc.  These customers purchase minutes at either a flat rate or on
a per minute basis.  We do not believe that the loss of these customers
would have a significant impact on our revenues in the year 2000 due to our
current marketing efforts to other large customers.

     We have filed a patent application for a communications enabled
browser and have filed a trademark application for the mark "CAB" as
applied to the browser software.  Both of these applications are currently
pending.

     Since inception, we have spent approximately $25,000 on research and
development involving our network, however none of these costs were borne
directly by our customers.

     The Company is not currently subject to any environmental laws.

INDUSTRY BACKGROUND


     Management believes the Internet is experiencing unprecedented growth
as a medium for communications and commerce and companies are increasingly
using the Internet as a communication medium.  A recent study by E-Marketer,
a market research firm, estimated that 9.4 billion e-mail messages are
delivered daily.  Instant text communication through online "chat" rooms is
also gaining widespread acceptance.

     We also believe online commerce is also becoming widely accepted as a
means of doing business, however, projections for Internet commerce growth
involve a multitude of variables, many of which cannot be readily
predicted.  International Data Corporation projects that commerce over the
Internet will grow to approximately $1.3 trillion in 2003.  Projections for
Internet commerce growth involve a multitude of variables, none of which
can be reliably predicted.


     The use of the Internet to make long distance calls will enable
consumers the ability to talk directly to online sellers and facilitate the
online purchasing experience at lower prices.  We believe Internet long
distance will become an important component of online purchasing and
communicating with customers.

EMERGENCE OF INTERNET TELEPHONY


     Internet telephony has emerged as a low cost alternative to
traditional long distance calls. The revenue of an IP telephony service
provider depends on the volume of minutes that it

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originates, it terminates, or that transits its network, or a combination
of the three.  Thus, the minutes of use is the critical metric for
assessing an IP telephony service providers opportunity.  According to
International Data Corporation, VoIP Telephony will be 135 billion minutes
by 2004, up from 2.7 billion today.  IDC also estimates the IP telephony
services annual revenue will reach $19 billion by 2004, however, only $2.75
billion will be attributed to the domestic market which is our current
focus.  However, it is estimated that as IP technology improves, domestic
use will increase substantially.


     Internet telephone calls are currently less expensive than traditional
long distance calls primarily because the technology by which Internet
phone calls are made is more cost-effective than the technology by which
traditional long distance calls are made.  First, no modifications are
necessary to existing home telephones.  Second, transport is more efficient
than traditional long distance technology that uses circuit-switching
technology.  Third, calls carried over the Internet or our network bypass
a significant portion of long distance tariffs and taxes because Internet
telephony is currently an unregulated industry.  Finally, our network
provides a more cost effective solution because it allows for the
transmission of Internet, data, voice and video over the same network.  See
"Regulation of the Internet" for a more detailed description.  Management
estimates that Internet telephony is on average approximately 35% cheaper
than traditional long distance rates.

     We use a technology called "packet-switching" to break voice and fax
calls into discrete data packets, route them over the Internet or our
network and reassemble them into their original form for delivery to the
recipient.  Traditional long distance calls, in contrast, are made using a
technology called "circuit switching" which carries these calls over voice
telephone networks.  These networks are typically owned by governments or
carriers who charge a tariff for their use.  Circuit switching requires a
dedicated connection between the caller and the recipient that must remain
open for the duration of the call.  As a result, circuit-switching
technology does not allow multiple conversations to be carried over the
same line.  The greater efficiency involved in packet-switching technology
creates network cost savings that can be passed on to the consumer in the
form of lower long distance rates.

     Currently, there exists certain barriers to entry into the telephony
market which consist of the time to order the necessary hardware and
circuits; develop internal expertise to build and monitor the network and
the capital investment required.  We feel our ability to raise capital over
the next twelve (12) months is our major barrier to continue to expand and
grow our network and hire and retain key technical personnel.

INTEGRATION OF VOICE INTO THE INTERNET

     We believe that Internet telephony offers significant benefits to
consumers and businesses beyond long distance cost savings.  The
technologies that enable Internet telephony can be applied to integrate
live voice capabilities into the Web.  We believe that this integration can
enhance the potential for the Internet to become the preferred medium for
both communications and commerce.  For example, the integration of voice
into the Web could supplement existing text-based modes of Internet
communication such as e-mail and online chat by adding a live, secure,
low-cost or free voice alternative.  We believe that this will be attractive
both to consumers and businesses and allow us to combine our long distance
network, Internet access and voice telephony into a single business model.

                                    6
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     In addition, voice-enabling the Web should give Internet shoppers the
ability to speak directly with customer service representatives of online
retailers in order to ask questions and alleviate concerns about online
security.  This may increase the probability that a sale is made and may
give online retailers a key competitive advantage by providing them with
opportunities to sell higher margin and additional products to these
customers.  Voice-enabling a commercial Web site may also give online
retailers the ability to provide more responsive customer support and service.

     Integrating live voice capabilities into the Web would also enable
Internet companies to offer enhanced communications services, such as
providing Internet users with a central source for retrieving voicemail,
e-mail, faxes and pages.  We believe this would allow these companies to
attract more users to their sites and to increase the amount of time these
users spend on their sites.  This increased usage will allow these Internet
companies to attract advertisers and secure higher advertising rates,
thereby increasing revenue.

LIMITATIONS OF EXISTING INTERNET TELEPHONY SOLUTIONS

     The growth of Internet telephony has been limited to date due to poor
sound quality attributable to technological issues such as delays in packet
transmission and network capacity limitations.  However, recent
improvements in packet-switching technology, new software algorithms and
improved hardware have substantially reduced delays in packet
transmissions.  In addition, the use of private networks such as our lease
facilities to transmit calls as an alternative to the public Internet is
helping to alleviate network capacity constraints.  These networks are
profitable due to the efficiencies obtained with the use of IP as a method
of transport.

     Several large long distance carriers, including AT&T and Sprint, have
announced Internet telephony service offerings.  However, to date certain
of these announced service offerings have not been deployed on a large
scale.  Many also require users to purchase other telecommunications
services such as voice messaging and Internet access.  Smaller Internet
telephony service providers also offer low-cost Internet telephony services
from personal computers to telephones and from telephones to telephones.
These services, however, are available only in limited geographic areas.
We also believe that existing Internet telephony service providers rely
upon technologies and systems that lack large-scale billing, network
management and monitoring systems, and customer service capabilities
required for the integration of voice communication into the Web.

     In addition, many companies currently provide Internet telephony
software and services that allow Internet telephone calls to be made
between personal computers.  However, most of these companies require both
the initiator and the recipient of the call to have the same software
installed on their personal computers and to be online at the same time.

     We view the competition from the large long distance carriers which
can offer Internet telephony at a lower costs as our major limitation to
becoming profitable.  This competition will be in the form of lower prices,
greater technological resources and larger amounts of capital to upgrade
and expand their existing long distance networks.

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OUR SOLUTION

     We will deliver high-quality Internet and telephony services to
consumers and businesses. Our solution provides the following benefits to
our customers:

     *    NATIONAL NETWORK.  Currently we offer VoIP services to 25 markets
          and are expanding to a nationwide network.  Through our network
          that includes 25 points of presence (POP's), we are able to offer
          dial up Internet service in 13 major markets and full service
          domestic long distance nationwide. As we expand our network our
          costs will continue to significantly decrease while we continue
          to offer coast to coast access.

     *    LOW COST.  Our services allow our customers to make telephone
          calls, often at a fraction of the cost of traditional long
          distance service.  Because the technology that enables long
          distance calls to be routed over the Internet is more cost-
          effective than the technology by which traditional long distance
          calls are made, we are able to charge lower rates than
          traditional long distance carriers.

     *    HIGH VOICE QUALITY.  We offer high voice and data transmission
          quality through our packet-switching network, which reduce packet
          loss and delay, route packets efficiently and perform quality-
          enhancing functions, such as echo cancellation. We intend to
          continue to enhance the voice quality of our services as our
          customer base and business grow.

     *    EASE OF USE AND ACCESS.  Our services are designed to be
          convenient and easy to access.  Access to our network for
          organizational and reseller customers is 100% seamless after
          network initiated implementation.

     *    RELIABLE SERVICE.  Our network is reliable because its design is
          technologically advanced.  Fault tolerant design allows us to
          expand our network and add capacity by adding switches and
          gateways to the existing network. Our system also provides
          seamless service and high-quality voice transmission through our
          ability to dynamically reroute packets if problems arise. We
          believe that our ability to provide reliable service is essential
          to the success of the company.

OUR STRATEGY

     While a large number of VoIP companies have been formed in recent
years, most VoIP companies focus on the build out and development of
international VoIP networks, in the effort to capture an ever shrinking
high margin revenue base.  Little attention has been given to domestic VoIP
with bundled service offerings.  We believe that, in this very competitive
landscape that offering many voice and data transmission options, leasing
time (or purchasing minutes) on VoIP networks will quickly become a
commodity business, as the various competitors whittle margins to gain
growth and market share.  We feel it is imperative to not only offer a
quality, nationwide network but to also be an aggressive marketing
organization seeking to provide value added products and services.  The
following points summarize our overall strategy:

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NETWORK STRATEGY

     *    Build out POP's (points of presence) across the United States in
          major cities and grow into markets dominated by the largest long
          distance carriers;

     *    Attract large carrier customers as a means to push telephony
          usage minutes through our network; and

     *    Focus on the domestic market through strategic relationships.

MARKETING STRATEGY

     *    Search for additional value added products and services in
          telephony and forms of communications for our product portfolio;

     *    Focus on purchasing or licensing products from outside
          development organizations; and

     *    Promote significant effort towards building brand name awareness.

WEBSITE STRATEGY

     Currently we have two operational Websites:

     *    Netvoice.net or netvoice.com is a site devoted to marketing the
          Company to the general community of potential customers, and
          their employees.  This site also includes limited e-commerce
          capabilities for residential customers to purchase pre-paid long
          distance services.  We have not yet begun marketing the ability
          to purchase low cost, long distance on-line.

     *    CorporateLD.com, is a marketing site emphasizing NetVoice
          corporate solutions. The site will eventually allow corporate
          customers to access call history and use and make payments
          towards accounts on-line.  This site will include:

               1)   Agents corner - information for existing agents and
               recruiting information; and

               2)   Account Information - full, real time access to account
               information, provisioning and deactivation.

     The Company expects to launch two more sites by the end of the second
quarter 2000.  These sites are:

     *    CollegiateLD.com., a fully functional e-commerce and provisioning
          web site focusing on selling Internet and telephony related
          products into the college market;

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     *    ResidentialLD.com., a fully functional e-commerce and
          provisioning site focusing on selling Internet and telephony
          related products into the residential market.

     We are focusing on the finalization of all programming related to
billing and provisioning accounts in order to launch the sites.  We have
spent approximately $50,000 to build our 4 sites and $30,000 to build an
on-line billing package.  We expect to spend $500,000 to market our sites
in the first year.  Currently, we have not developed any securities
measures with respect to our sales on our sites.  The Company currently has
no strategic relationships associated with our websites other than the
contractual relationships described elsewhere herein.

     We have acquired licenses with Call Vision.com, Inc. and Portal
Software, Inc. in order to bill and provision services on-line.  Our
agreement with Call Vision.com, Inc. is for an initial one-year term and
includes a $30,000 license fee and minimal monthly fees based on the number
of customers who eventually use this service.  Our agreement with Portal
Software, Inc. is for an indefinite term and includes an initial licensing
fee of $90,000.

WEBSITE TRAFFIC AND SALES

     *    www.netvoice.net (netvoice.com) is currently receiving
          approximately 14,000 individual visitors per month.

     *    CorporateLD.com has only been up and running since March 6, 2000,
          and accordingly we do not yet have any statistics regarding
          traffic levels on this site.

     At this time, revenue generated via these two sites is insignificant
as the Company has yet to implement an all-out marketing campaign to
generate traffic for these sites.

WEBSITE AGENTS

     Agents will be used in the promotion and sales of our services.  We
intend to recruit agents via our websites, where they can apply online for
our agent program, and through our direct sales force.  We do not intend to
use a multi-level marketing strategy, but intend to work directly with our
agents and compensate them on a commission basis based on revenue generated.

OUR NETWORK

     Voice transmission over the Internet is of very recent origin and was
initially limited to communication from one personal computer to another.
The technology enabling such communication is known as Voice over Internet
Protocol or "VoIP". This technology has become so advanced as to enable
voice communication over the Internet.

     *    from one personal computer to another

     *    from a personal computer to a conventional telephone

     *    from a conventional telephone instrument to another such instrument

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CURRENT NETWORK

     We have provided long distance services over the Internet for the past
year.  We have been working on an aggressive schedule to increase the size
of our network, establish alliances with other long distance carriers with
existing networks, exploit our current installations, and generally attempt
to capture a larger portion of the long distance market.  Our VoIP gateway
network is expanding in multiple geographic locations.  We currently have
operational gateways in 25 markets:

    Albuquerque      Fort Worth              New Jersey       San Antonio
    Atlanta          Houston                 New Orleans      Tampa
    Austin           Jacksonville            New York         Tulsa
    Chicago          Kansas City             Oklahoma City    Waco
    Dallas           Little Rock             Omaha
    Denver           Los Angeles             Phoenix
    El Paso          Miami/Ft. Lauderdale    Portland

     Our largest markets are in Dallas, Houston, Miami/Ft. Lauderdale,
Atlanta, Chicago, Los Angeles, Tampa and New York.  These markets each have
the capacity of 7.0 to 10.0 million minutes per month.  Our second tier
consists of San Antonio, Portland, Denver, Kansas City, Jacksonville and
Phoenix.  These markets have the capacity of 1.0 million minutes per month.
The remaining markets have the capacity of 500,000 per month.  Currently,
we are only utilizing approximately 4.0 million minutes per month for all
locations which is below our breakeven-point.

     In each of the foregoing operating cities we utilize our VoIP
gateways, acquired from leading manufacturers such as Cisco Systems
("Cisco").  Our Internet telephony services are provided by a combination
of our own leased fiber, leased PSTN facilities and leased Internet
services from leading Internet backbone suppliers.

NETWORK EXPANSION

     Our current expansion plans are as follows:

     *    Expand existing long distance traffic utilizing the Internet

     *    Establish new installation sites

     *    Evaluate sites for needed upgrades

     *    Maintain existing hardware and software

     *    Investigate additional applications for VoIP

     We are planning to have our VoIP gateways installed in 50 cities by
the end of 2000.  The bulk of the equipment costs will be financed through
Cisco's financing program for small businesses and additional private and
public equity and/or debt offering.  Currently our revenues do not exceed
network costs and we experience short falls each month requiring additional
infusions of capital, which may or may not be available in the future.

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NETWORK ADVANTAGES

     The principal advantages of our use of the Internet and the VoIP
network:

     *    Utilization of packet-switching technology that converts natural
          voice into data packets that are transmitted over our network to
          our destination gateways where the packets are returned to
          natural voice.

     *    Cost savings that we can pass on to our customers in the form of
          lower long distance charges.

     *    Ability to transmit faxes routed over our VoIP network without
          purchasing additional hardware or software.

     *    Delivery of high voice quality and faxes transmitted without
          delay with immediate delivery confirmation.

CONTRACTUAL RELATIONSHIPS

     We have entered into certain contractual relationships to provide our
customers communication products and establish a high quality VoIP network.
Each relationship is important to our continuing operations.  The
agreements include:

     *    CISCO SYSTEMS, INC.  We utilize a Cisco Systems Powered Network
          that uses a technology called "packet-switching" to break voice
          and fax calls into discrete data packets, route them over the
          Internet or our network and reassemble them into their original
          form for delivery to the recipient. This greater efficiency
          creates network cost savings that can be passed on to the
          consumer in the form of lower long distance rates.  Our
          relationship with Cisco allows us to benefit from their newly-
          developed products and services as they become available.
          Equipment was originally leased from Cisco on a 2-year basis, for
          a monthly lease payment of approximately $2,400.  However,
          because of the expansion of our network, we have entered into
          several amendments to our original lease with Cisco.  Through the
          amendments, we have incorporated additional Cisco equipment into
          our network and have extended the term of our lease.  Due to our
          utilization of more Cisco equipment, our monthly payments have
          increased to approximately $40,000 per month and will continue to
          increase as we build and expand our network.

     *    VIRTUALPLUS, INC.  Virtualplus, Inc. ("Virtualplus") is a leading
          supplier of outsourced, value-added, enhanced telecommunications
          service to the Internet and telecommunications industries.  The
          company was formed in 1995, when it designed a voicemail and fax
          distribution system. This system was later migrated onto the
          Internet and within this process the Internet's first unified
          messaging system was created.  The Virtualplus services include
          Messagepoint, Messagejet and JustPhone and are available
          worldwide in over 100 area codes.  Pursuant to our agreement and
          in return for the Company's payment of an initial set-up fee of
          $10,000, NetVoice is able to distribute the Virtualplus unified
          messaging products

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          privately labeled under the NetVoice name.  The agreement is for
          an indefinite period of time and may be terminated by either
          party on 30 days notice.

     *    SIGNUPSERVER.  SignUpServer(TM) provides back end technical
          capabilities for ISPs. Providing all server space, tunneling,
          filtering, NOC facilities and technical service to end customers,
          SignUpServer(TM) allows ISPs to simply manage their front end -
          web development, marketing and content. The Company and
          SignUpServer(TM) will jointly market Internet service with
          private branding capabilities through our combined network of
          agents.  The agreement is for an indefinite term and includes an
          initial set-up fee of $35,000 and monthly fees based on number of
          users.
     *    LEVEL 3 COMMUNICATIONS, INC.  Our contractual relationship for
          co-location with Level 3 Communications. allows NetVoice to offer
          high quality voice communications at a lower cost over a managed
          VoIP network.  In utilizing Level 3's co-location facilities and
          IP CrossRoads products, we will have access to sufficient
          bandwidth on demand that will allow us the ability to meet
          increased demand for rapid growth and flexibility in managing the
          cost of our network.  We have several contracts with Level 3,
          representing our co-location in various cities. Each agreement is
          for a one year term and ranges in amount from approximately $700
          to $3,000 per month depending on the products utilized at each
          facility.  Our latest monthly billing with Level 3 was
          approximately $40,000.

PRODUCTS AND SERVICES

VoIP

     Currently, substantially all of our revenues come from sales of high
volume minutes to large long distance carriers transmitted over our VoIP
network and pre-paid calling companies.  Revenues derived from sales over
our VoIP network constituted $967,000 in 1999 and comprised 80% of our
total revenues.  The remaining 20% of our revenue was from our abandoned
traditional long distance traffic.  Currently, our revenues do not exceed
our costs and we have been financing the shortfalls with outside, private
financing.

     Based on available funding, it is our intention to enter into the
corporate market beginning in the second quarter 2000 to deliver voice,
internet, data and video conferencing to small- and medium-size businesses.
Our existing network is capable of handling this varied traffic at its
present size.  We will market these services through a to be developed,
in-house sales staff and independent agents.

INTERNET SERVICE

     We offer dial up Internet access in our gateway cities and dedicated
Internet service to our corporate customers.  We will also host all
Internet service back office functions to offer virtual ISP capabilities to
our customers including radius servers, filtering, e-mail, technical
support and billing. Internet service can be provided under the NetVoice
name or can be private labeled for our customers.

                                   13
<PAGE>
     As previously noted, we have entered into an agreement with
Virtualplus, Inc., the world's largest provider of unified messaging with
over 500,000 virtual mailboxes under their management.  We will distribute
this service on a private label basis under our Company's name and logo.
Unified messaging allows the user to pick up voicemail, e-mail and fax from
a single unified box.

PRE-PAID LONG DISTANCE CALLING CARDS

     Currently we are focusing on selling prepaid long distance calling
cards to the college student market.  To date, this market has only been
tested on a small scale.  Our initial, informal investigation has indicated
this market to be viable for the following reasons:

     *    The cost of acquiring these customers is relatively low due to
          geographical concentration.

     *    Campus newspapers and other media expenses are relatively low.

     *    Our sales personnel have easy access to students.

     *    The students are characteristically well acquainted with the
          Internet, and, therefore, receptive to our offering of long
          distance calling on the Internet.

     *    These college and university students (and their parents) are
          also receptive to the convenience of purchasing minutes by
          accessing our website and/or calling our 800 telephone number.

THE NETVOICE COMMUNICATION APPLICATION BROWSER

     We currently have under development the NetVoice CAB, an Internet
browser that allows the user to have access to a suite of communication
functions such as long distance and fax while browsing the world wide web.
Access to all functionality features of the browser will be available in
the borders of the screen while the Internet runs in the center of the
screen.  Functionality features include:

     *    Free PC to PC calls provided both parties have our browser
          downloaded onto their PC's;

     *    Address book with ability to import address book from Microsoft
          Outlook(TM);

     *    Unified messaging capabilities;

     *    Search engine access; and

     *    Access to "favorites" much like traditional Internet bookmarking
          functionality.

     Our browser will be distributed free of charge and downloaded via our
Company website or through marketing agreements.  Our browser is currently
under beta review and we expect to launch by May 1, 2000.  There will be
several revenue opportunities within the browser:

                                   14
<PAGE>
     *    commission earned on merchandise purchased from affiliate sites
          that are programmed into the browser;

     *    revenue earned from banner advertisement;

     *    revenue earned from the preprogrammed favorites within the
          browser; and

     *    revenue earned on PC to phone calling, when available.


Our successful distribution of the browser is key to achieve these revenue
streams.


SALES, MARKETING AND DISTRIBUTION

     Our strategy for building a viable position in the Internet telephony
market includes the following key elements:

     *    Marketing our services through multiple channels;

     *    Pursuing multiple sources of revenue;

     *    Enhancing brand recognition;

     *    Expanding and enhancing our products and services; and

     *    Pursuing acquisitions of other telecommunications companies to
          expand our revenues and technological base.

INTERNET SERVICE PROVIDERS MARKETS

     We expect to offer virtual ISP services and will distribute VoIP
products to ISP's to distribute to their consumer and business customers.
These products will offer revenue-generating opportunities for the ISP's as
well as their e-commerce customers.  We will become the wholesale provider
to the ISP for these services.  We will attempt to seek out products that
allow us to co-brand with our NetVoice logo.

CORPORATIONS

     Corporations are focused on cost cutting opportunities and
communication improvements that allow information systems to be both
simplified and enhanced as a means to stay competitive. Accordingly, we
believe this segment will readily embrace the cost savings and enhanced
services that VoIP can offer over existing LAN's/WAN's.

RESIDENTIAL

     While the residential VoIP market may be difficult to penetrate due to
high customer acquisition costs vs. number of minutes purchased per
customer, we believe there are niche residential areas, such as colleges
and universities, which we can enter with relatively low

                                   15
<PAGE>
competition and marketing costs, while allowing us to build a brand name
recognizable by the typical consumer.  As NetVoice Technologies grows we
can use these niche segments as a launching pad from which to enter the
general residential market.  The initial residential niches may include the
college market, which affords access to opinion leaders and early adapters
to new technology.

WHOLESALE MARKET

     The wholesale market consists of agents, carriers and pre-pay service
providers. All entities requiring large volume of minutes at low costs are
our potential customers, including the more traditional long distance PSTN
carriers who can resell our minutes with a higher margin than PSTN minutes.
We feel that we are uniquely poised to capture clients in this segment,
because of our ability to offer lower cost minutes, due to the current lack
of regulation in our technology and consequent absence of tariffs, which
many of our potential customers in this segment cannot avoid on their own
networks.

DISTRIBUTION CHANNELS

     IN-HOUSE SALES

     We currently have two, full time individuals whose responsibilities
are sales and marketing.  It is our intention, as funds become available,
to hire more sales personnel who will be based in our Dallas office.

     AGENTS

     We intend to expand our use of existing long distance and telephony
agent networks as a means to sell our low cost, high quality VoIP products
to carriers, pre-pay providers, institutional organizations and corporations.

     WORLD WIDE WEB

     Virtual agents will be sought, as a means to distribute VoIP minutes
via ISP's, and in turn individual e-commerce web sites.  E-commerce web
sites operated by virtual agents can sell our products as revenue
generating opportunities for their site and NetVoice's.

     Through targeted advertising, we intend to direct customers to
purchase low cost long distance services via our website.  We plan to
initially drive our website sales to universities and colleges.  This very
price sensitive market segment is an ideal potential revenue stream due to
their need for low cost long distance and the relatively inexpensive access
to a university population.  Low cost college newspaper and radio
advertising as well as on-site visits allow us to quickly and inexpensively
reach this segment with our message.  Also, across the board access and
acceptance of Internet usage for the typical college student will drive
on-line registration and purchase of products through our website.  We believe
this segment will find our program attractive due to our ability to offer
low prices.

                                   16
<PAGE>
TECHNOLOGY

     As discussed above, we are currently developing a communications
applications browser that allows the user to have access to a suite of
online communications devices and other functionality while browsing or
searching the world wide web.  Our browser will be distributed to the end
user for free via our websites.  This browser will be designed to allow the
NetVoice logo to appear on users desktops which will build brand awareness
while the applet will allow NetVoice to have access to these users as we
market Internet and Telephony related products and services.

CUSTOMERS


     During the fiscal year ended December 31, 1998, IXC Communications,
Inc. (formerly Coastal Telephone, Inc.) ("IXC") accounted for approximately
61% of our total revenues and for the year ended December 31, 1999, IXC
accounted for 23% of our revenues.  Caprock Communications Corporation and
World Access, Inc. accounted for 11% and 30% of our revenues, respectively,
during the fiscal year ended December 31, 1999.  Recently, we signed two
new wholesale agreements with Landmark Community News, Inc. ("Landmark")
and Z-Tel, Inc. ("Z-Tel").


     *    Landmark is a publisher of 48 local newspapers in 12 states.  Our
          agreement with Landmark is to provide VoIP related products and
          services, including Internet service, Internet telephony and
          unified messaging for resale to Landmark customers.  The
          agreement is for an indefinite period of time and may be
          terminated by either party with notice.  NetVoice will be
          compensated by Landmark customers who utilize the various
          services that NetVoice may provide, and NetVoice will pay
          Landmark a commission per customer.

     *    Our agreement with Z-Tel will allow us to provide Internet access
          to their local customers for a period of two years.  Z-Tel will
          pay the Company a fee on graduated basis according to the number
          of customers we are providing Internet access for.


     We believe that the impact the loss of these customers on our revenues
in the year 2000 will be offset by our current and future marketing efforts
to other large customers.


PATENTS AND TRADEMARKS

     We are the owner of a pending provisional patent application for a
communications enabled browse.  Follow-up, non-provisional applications are
being prepared to cover the communications tools embedded in the browser,
the ability to display thumbnail sketches (graphic links) on the browser,
and the placement of permanent icons on the browser border that can be
addressed to key retailers.

     We are the owner of a pending trademark application for the mark
("CAB") as applied to browser software.

                                   17
<PAGE>
COMPETITION

     The long distance telephony market and the Internet telephony market
are highly competitive.  There are several large and numerous small
competitors, and we expect to face continuing competition based on price
and service offerings from existing competitors and new market entrants in
the future.  The principal competitive factors include price, quality of
service, breadth of geographic presence, customer service, reliability,
network capacity and the availability of enhanced communications services.
Our competitors include AT&T, MCI WorldCom and Sprint, as well as a number
of smaller companies.

     Many of our competitors have substantially greater financial,
technical and marketing resources, larger customer bases, longer operating
histories, greater name recognition and more established relationships in
the industry than we have.  As a result, certain of these competitors may
be able to adopt more aggressive pricing policies, which could hinder our
ability to market our Internet telephony services.  We believe that our key
competitive advantages are our ability to deliver reliable, high quality
voice service over the Internet in a cost-effective manner and the size and
rapid growth of our network.  We cannot assure you, however, that this
advantage will enable us to succeed against comparable service offerings
from our competitors.

REGULATION

REGULATION OF INTERNET TELEPHONY

     The use of the Internet to provide telephone service is a recent
market development.  Currently, the Federal Communications Commission is
considering whether to impose surcharges or additional regulations upon
certain providers of Internet telephony.  On April 10, 1998, the FCC issued
its report to Congress concerning the implementation of the universal
service provisions of the Telecommunications Act.  In the report, the FCC
indicated that it would examine the question of whether certain forms of
phone-to-phone Internet telephony are properly classified as information
services or as telecommunications services.  The FCC noted that it did not
have, as of the date of the report, an adequate record on which to make a
definitive pronouncement, but that the record suggested that certain forms
of phone-to-phone Internet telephony appear to have the same functionality
as non-Internet telecommunications services and lack the characteristics
that would render them information services.  If the FCC were to determine
that certain services are subject to FCC regulation as telecommunications
services, the FCC may require providers of Internet telephony services to
make universal service contributions, pay access charges or be subject to
traditional common carrier regulation.  Such a determination would have a
material adverse effect on the price structure for the Company's VoIP
services.  It is also possible that some services may be regulated by the
FCC differently.  In addition, the FCC sets the access charges on
traditional telephony traffic, and if it reduces these access charges, the
cost of traditional long distance telephone calls will probably be lowered,
thereby decreasing some of our competitive pricing advantage.

     In September 1998, two regional Bell operating companies, US WEST and
BellSouth, advised Internet telephony providers that the regional companies
would impose access charges on Internet telephony traffic.  In addition, US
WEST has petitioned the FCC for a declaratory ruling that providers of
interstate Internet telephony must pay federal access charges, and has
petitioned the public utilities commissions of Nebraska and Colorado for
similar rulings concerning payment of access charges for intrastate
Internet telephone calls.   At this time, it is not known whether these
companies, US WEST and BellSouth, will actually impose access

                                   18
<PAGE>
charges or when such changes will become effective.  If these companies
succeed in imposing access charges, such changes are expected to reduce the
cost savings afforded by Internet telephony as compared to traditional
telephone service.  Access charges would materially adversely affect the
development of our Internet telephony business.  In February 1999, the FCC
adopted an order concerning payment of reciprocal compensation, which
provides legislative support for a possible future finding by the FCC that
providers of Internet telephony must pay access charges for at least some
subset of Internet telephony services.  If the FCC were to make such a
finding, the payment of access charges could materially adversely effect
our business, results of operations and financial condition.  Many of our
competitors are lobbying the FCC for the imposition of access charges on
Internet telephony traffic.

     To our knowledge, there are currently no domestic and few foreign laws
or regulations that prohibit voice communications over the Internet.  State
public utility commissions may retain jurisdiction to regulate the
provision of intrastate Internet telephony services.  A number of countries
that currently prohibit competition in the provision of voice telephony
have also prohibited Internet telephony.  Many countries permit but
regulate Internet telephony.   If Congress, the FCC, state regulatory
agencies or foreign governments begin to regulate Internet telephony, such
regulation may materially adversely affect our business, financial
condition or results of operations.


     The Federal Communications Commission (the "FCC") has recently issued
a Notice of Inquiry ("NOI"), soliciting comments on whether Section 255 of
the Telecommunications Act of 1996 should apply to IP telephony.  The rules
and policies released by the FCC will require manufacturers of
telecommunications equipment and providers of telecommunication services to
ensure that such equipment and services are accessible to and useable by
persons with disabilities.  Management currently does not believe that
these FCC rules and policies, if applied to IP telephony, will have a
significant impact on our operations.


REGULATION OF THE INTERNET

     Congress has recently adopted legislation which regulates certain
aspects of the Internet, including online content, user privacy, taxation,
access charges, liability for third-party activities and jurisdiction.  The
European Union has also enacted several directives relating to the
Internet, one of which addresses online commerce.  In addition, federal,
state, local and foreign governmental organizations currently are
considering other legislative and regulatory proposals which would regulate
the Internet.  Increased regulation of the Internet may decrease its growth
and eliminate or reduce its competitive advantage, which may increase the
cost of doing business via the Internet or otherwise materially adversely
affect our business, results of operations and financial condition.

     The Federal Trade Commission has proposed regulations regarding the
collection and use of personal identifying information obtained from
individuals when accessing Web sites, with particular emphasis on access by
minors.  These regulations may include requirements that companies
establish certain expensive procedures to disclose and notify users of
privacy and security policies, obtain consent from users for certain
collection and use of information and to provide users with the ability to
access, correct and delete personal information stored by the company.
These regulations may also include enforcement and redress provisions.
There can be no assurance that we will adopt policies that conform with any
regulations adopted by the FTC, or that our cost will remain competitive
after adopting compliance procedures.  Moreover, even in the absence of
those regulations, the FTC has begun investigations into the privacy practices

                                   19
<PAGE>
of companies that collect information on the Internet.  One investigation
resulted in a consent decree pursuant to which an Internet company agreed
to establish programs to implement the principles noted above.  We may
become subject to a similar investigation or the FTC's regulatory and
enforcement efforts may adversely affect the ability to collect demographic
and personal information from users which could have an adverse effect on
our ability to provide highly targeted opportunities for advertisers and
electronic commerce marketers.  We may increase our regulatory risk by
targeting university populations, despite the attractiveness of this market
segment.  Any of the foregoing adverse regulatory developments could
adversely affect our business, results of operation and financial condition.

     Recently, the European Union adopted a directive that imposes
restrictions on the collection and use of personal data.  Under the
directive, citizens of the European Union are guaranteed rights to access
their data, rights to know where the data originated, rights to have
inaccurate data rectified, rights to recourse in the event of unlawful
processing and rights to withhold permission to use their data for direct
marketing. The directive could, among other things, affect United State
companies that collect information over the Internet from individuals
located in European Union member countries, and may impose restrictions
that are more stringent than current Internet privacy standards in the
United States.  In particular, companies with offices located in European
Union countries will not be allowed to send personal information to
countries that do not maintain adequate standards of privacy.  The
directive does not, however, define what standards of privacy are adequate.
As a result, the directive may adversely affect the activities of entities
such as us that may engage in data collection from users in European Union
member countries.

EMPLOYEES

     As of March 20, 2000, we had twenty two (22) full time employees,
including eight (8) technical personnel, seven (7) in sales and marketing
and seven (7) in management and finance.  As noted elsewhere in this
Report, a top priority of our marketing strategy is to hire additional
sales personnel in an attempt to create additional traffic for the network.

RISK FACTORS


     The risks described below are not the only ones that we face.
Additional risks that are not yet known to us or that we currently think
are immaterial could also impair our business, operating results or
financial condition.  Other information set forth in this Report, including
our consolidated financial statements and the related notes detail other
risks affecting our business.  If any of the following risks actually
occur, our business, financial condition or results of operations could be
materially adversely affected.


RISKS RELATED TO OUR BUSINESS

                                   20
<PAGE>
WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO EVALUATE OUR POTENTIAL FOR
FUTURE SUCCESS

     We only began operations in January of 1998 when we acquired NVT.
Therefore, we have only a limited operating history. As an early stage
company in the new and rapidly evolving Internet telephony market, we face
numerous risks and uncertainties.  Since commencement of operations, we
have primarily been investing our capital into the expansion of our
network.  We will be unable to continue the expansion of our network
without the proceeds from future private and/or public financing.  Our
limited operating history does not provide meaningful historical financial
or operational information upon which to make plans or forecasts.  We
cannot assure you that our business strategy will be successful or that we
will successfully address these risks.

WE HAVE A HISTORY OF OPERATING LOSSES, CURRENT LIABILITIES OF $5.4 MILLION
AND ANTICIPATE LOSSES FOR THE FORESEEABLE FUTURE


     We have incurred net losses of $1,723,367 for the year ended December 31,
1998 and $5,014,853 for the year ended December 31, 1999.  As of
December 31, 1999, we had an accumulated deficit of $6,738,220 and current
liabilities of $5,389,141 million which includes notes due to noteholders
in year 2000.  The Company has never had any profits.  We expect to
continue to incur operating losses for at least the next eighteen months.
We expect that operating and marketing expenses will increase significantly
during the next several years.  In order to achieve and maintain
profitability, we will need to generate significant revenue and we cannot
assure you that we will generate sufficient revenue for profitability.
Even if we do achieve profitability, we cannot assure you that we will be
able to sustain or increase profitability. If revenue grows more slowly
than we anticipate or if operating and marketing expenses exceed our
expectations or cannot be managed in proportion to revenues, our business,
results of operations and financial condition will be materially adversely
affected.


WE INTEND TO PURSUE NEW MARKETS AND PRODUCTS, MANY OF WHICH ARE UNPROVEN

     To date, we have generated revenue from routing minutes of use of our
services over the Internet and to a limited degree from the sale of
traditional one-plus long distance.  In the future, we intend to pursue new
revenue streams by leveraging our Internet telephony network to integrate
real-time voice communication capabilities into the Web.  For example, we
intend to pursue new Web-based revenue opportunities from personal computer
to phone applications, as well as offering integrated voice and data
service to corporations.  We intend to market our various products as
single packages to various groups of end-users.  We have no experience in
the specific markets we intend to enter and have never generated revenues
from this type of business.  We intend to devote significant capital and
resources to create these new revenue streams and we cannot ensure that our
investments will be profitable. To be successful, we must, among other
things, develop and market products and services that achieve broad market
acceptance by individuals, businesses, online retailers and advertisers.
We cannot assure you that the market for our new products and services will
develop or that demand for our new products and services will emerge, grow
or generate sufficient revenue to become profitable.

                                   21
<PAGE>
WE MAY HAVE DIFFICULTIES MANAGING OUR EXPANDING OPERATIONS, AND WE MAY HAVE
A NEED TO DEVELOP AND IMPLEMENT SYSTEMS AND CONTROLS

     Our expected growth will place a significant strain on our managerial,
operating, financial and other resources. We expect this rapid growth to
continue and expect these strains to continue over time. Our future
performance will depend, in part, on our ability to manage this growth
effectively.  To that end, we will have to undertake the following tasks,
among others:

     *    develop our operating, administrative and financial and
          accounting systems and controls;

     *    improve coordination among our engineering, accounting, finance,
          marketing and operations personnel;

     *    enhance our management information systems capabilities; and

     *    hire and train additional qualified personnel, including
          personnel with technical skills and experience which we do not
          now have.

     We cannot assure you that we will be able to accomplish these tasks,
and if we are unable to accomplish any of them, our business would be
materially adversely affected.

A FAILURE TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS COULD LIMIT OUR
ABILITY TO INCREASE OUR SALES

     We believe that our success depends, in part, on our ability to
develop and maintain strategic relationships with leading Internet
companies and computer hardware and software companies, as well as with key
marketing distribution partners.  If any of our strategic relationships are
discontinued, sales of our products and services and our ability to
maintain or increase our customer base may be substantially diminished.  We
will depend on these relationships to:

     *    distribute our products to potential customers;

     *    increase usage of our services;

     *    build brand awareness; and

     *    cooperatively market our products and services.

WE WILL NEED TO HIRE ADDITIONAL AGENTS TO MARKET AND DISTRIBUTE OUR
PRODUCTS AND SERVICES; TO PROVIDE LOCAL CUSTOMER SUPPORT; AND THE LOSS OF
KEY AGENTS COULD ADVERSELY AFFECT OUR BUSINESS

     We must forge new relationships with agents in markets where our
products and services are not adequately marketed and maintain and deepen
relationships in those markets where we seek greater penetration.  Agents
also typically provide local customers with front-line support.  If we hire
an agent who fails to market our products and services effectively, or
fails to provide

                                   22
<PAGE>
adequate front-line customer support, we could lose market share.
Additionally, if an agent provides poor customer service, we could lose
brand equity.  Therefore, we must maintain and hire additional agents that
are capable of providing high-quality sales and service efforts.  The loss
of an agent in a key market, or the failure of a current or future seller
to adequately provide customer support could materially adversely affect
our business, results of operations and financial condition.

COMPETITION COULD REDUCE OUR MARKET SHARE AND DECREASE OUR REVENUE

     The market for our services has been extremely competitive, and is
expected to remain extremely competitive for the foreseeable future. Many
companies offer Internet telephony products and services, and many of these
companies already have a substantial presence in this market in which we
are only a recent entrant.

     In addition, a number of large telecommunications providers, such as
ICG Commun-ications, IPVoice.com, ITXC, RSL Communications (through its
Delta Three subsidiary) and ibasis, Inc., route Internet telephony traffic
to destinations on a worldwide basis, while our operations are focused on
the United States only.  In addition, major long distance providers, such
as AT&T, Deutsche Telekom, Frontier, MCI WorldCom, Qwest Communications and
Net2Phone, as well as other major companies such as Motorola and Intel,
have all entered or plan to enter the Internet telephony market. Many of
our competitors are larger than us and have substantially greater
financial, distribution and marketing resources than we have.  We cannot be
certain that we will be able to compete successfully in the developing
Internet telephony market.

WE FACE PRICING PRESSURES, WHICH MAY LESSEN OUR COMPETITIVE PRICING ADVANTAGE

     Any success of our product and service offerings must be based on our
ability to provide discounted voice communications by taking advantage of
cost savings achieved through Internet telephony.  In recent years, the
price of traditional domestic and international long distance calls has
been declining.  In response to these declines, we have lowered the price
of our service offerings.  Should prices of traditional long distance calls
decline to a point where we no longer have a price advantage over our
competitors, we would lose our anticipated significant competitive
advantage and would have to rely on factors other than price to
differentiate our product and service offerings.  If we fail to do so, our
business could be materially adversely affected.

OUR PERFORMANCE IS DEPENDENT ON THE CONTINUED EMPLOYMENT OF OUR EXECUTIVE
OFFICERS AND WE NEED TO HIRE AND RETAIN HIGHLY-SKILLED TECHNICAL AND
MANAGEMENT PERSONNEL TO SUSTAIN OUR BUSINESS

     Our performance is highly dependent on the continued services of our
executive officers and other key personnel, the loss of any of whom could
materially adversely affect our business, results of operations and
financial condition.


     We need to attract and retain other highly skilled technical and
managerial personnel, for whom there is intense competition.  Certain of
such individuals must have skills and experience, which we do not have.  We
cannot assure you that we will be able to attract and retain the personnel
necessary for the development of our business.  The inability to attract
and retain

                                   23
<PAGE>
qualified technical and managerial personnel would materially adversely
affect our business, results of operations and financial condition.
Currently, we do not have any employment contracts with any of our key
personnel, with the exception of our President, Jeff Rothell, and our Chief
Financial Officer, Garth Cook.  In addition, we do not maintain any key man
insurance on any of these individuals.


WE NEED TO DEVELOP BRAND RECOGNITION AND NEED TO ESTABLISH AND MAINTAIN
HIGH QUALITY PRODUCTS AND SERVICES

     We believe we must establish and maintain a brand and name recognition
in order to attract and expand our targeted client base.  We believe the
importance of reputation and name recognition will increase as competition
increases in the Internet telephony market.  Promotion and enhancement of
our name will depend on the effectiveness of our marketing and advertising
efforts.  Success in establishing brand and name recognition will also
depend upon our success in continuing to provide high-quality products and
services.  We cannot assure you that our advertising, marketing or quality
control efforts will be successful.  If our customers do not perceive our
service to be effective or of high quality, our brand and name recognition
would be materially adversely affected.

WE DEPEND ON LOCAL EXCHANGE TELECOMMUNICATIONS CARRIERS TO LEASE
TRANSMISSION FACILITIES AND WE ARE SUBJECT TO PRICE AND COMPETITIVE
UNCERTAINTIES FROM LOCAL CARRIERS

     We do not own any local exchange transmission.  All of the telephone
calls made by our customers are connected at least in part through leased
transmission facilities.  In addition, national telephone companies may not
be required by law to allow us to lease necessary transmission lines and
may be unwilling to enter into such agreements on a cost-effective basis,
considering terms and price.  Further, even if applicable law requires
national telephone companies to lease transmission lines to us, we expect
to encounter delays of unknown duration in negotiating leases and
interconnection agreements, and commencing operations. Additionally,
disputes may arise, relating to pricing, terms and billing, after
commencing operations.

     In the United States, the providers of local exchange transmission
facilities are generally the incumbent local exchange carriers, including
the regional Bell operating companies.  The permitted pricing of local
exchange facilities that we lease in the United States is subject to
uncertainties.  The Federal Communications Commission issued an order
requiring local exchange carriers to establish a pricing standard for those
facilities that may be charged to competitors and the United States Supreme
Court recently upheld the FCC's jurisdiction in this regard.  However, the
incumbent local exchange carriers can be expected to bring further legal
challenges to the FCC's decision.  If they succeed, the result may be to
increase our cost to obtain incumbent local exchange carrier facilities.

     Local exchange carriers from which we intend to lease facilities are
also our competitors, such as the regional Bell operating companies.  We
generally lease lines on a fixed-cost basis.  These include leases of
transmission capacity for point-to-point circuits on a monthly or longer-
term fixed-cost basis.  There is every reason to expect that our local
telephone operating company competitors will have advantages, including a
lower internal price and greater transmission capacity than that expected
to be available to us.

                                   24
<PAGE>
OUR SYSTEMS MAY NOT ACCOMMODATE SIGNIFICANT GROWTH IN THE NUMBER OF USERS

     Our success depends on our ability to handle a large number of
simultaneous calls.  We expect that the volume of simultaneous calls will
increase significantly as we expand our operations.  If this occurs,
additional stress will be placed upon the network hardware and software
that manages our traffic.  We cannot assure you of our ability to
efficiently manage a large number of simultaneous calls.  If we are not
able to maintain an appropriate level of operating performance, or if our
service is disrupted, then we may develop a negative reputation and our
business, results of operations and financial condition would be materially
adversely affected.

BECAUSE WE ARE UNABLE TO PREDICT THE VOLUME OF USAGE AND OUR CAPACITY
NEEDS, WE MAY ENTER INTO DISADVANTAGEOUS CONTRACTS

     Our business plan projects that the number of calls that we handle
over our network will continue to grow in the future.  If our plans are
realized, we may be required to enter into additional long-term agreements
for leased capacity.  To the extent that we over-estimate the anticipated
volume of calls, we may become obligated to pay for more transmission
capacity than we actually use, resulting in our incurring costs without
achieving corresponding revenue.  Conversely, if we underestimate our
capacity needs, we may be required to obtain additional transmission
capacity through more expensive means because the capacity is added prior
to our expected delivery time.  We cannot assume that such capacity will be
available either on a planned or emergency basis.  The occurrence of either
over-estimation or under-estimation of capacity needs could significantly
reduce our operating margins.

WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL FUNDS NECESSARY TO TAKE ADVANTAGE
OF NEW OPPORTUNITIES AND MEET OUR OBLIGATIONS


     Due to our limited operating history, current liabilities of $5.4
million including notes due to our existing noteholders and the rapid
evolution of the Internet telephony market, our future capital needs are
difficult to predict.  We currently have approximately $3.65 million due on
the Notes in the calendar year 2000.  All of the Notes will be due and
payable through September, 2000, unless extended for nine (9) months at the
option of the noteholder.  At this time, we have the ability to repay all
the notes as such obligations come due.  Repayment of the Notes will be
used at the expense of our efforts to become profitable due to our need for
additional funds.  We will require additional capital in order to take
advantage of increasing the size of our network, unanticipated
opportunities, including strategic alliances and potential acquisitions, or
to respond to changing business conditions and unanticipated competitive
pressures.  Additionally, funds from operations may be less than
anticipated.   Should these circumstances arise, we will need to raise
additional funds, either by borrowing money or issuing additional equity.
We cannot assure you that we will be able to raise such funds on favorable
terms or at all.  If we are unable to obtain additional funds as needed,
then we may be unable to take advantage of new opportunities or take other
actions that otherwise might be important to our business, results of
operations and financial condition.


                                   25
<PAGE>
WE ARE SUBJECT TO RISKS ASSOCIATED WITH SYSTEM FAILURES, DELAYS AND
INADEQUACIES

     Our success depends on our ability to provide efficient and
uninterrupted, high-quality Internet telephony services.  Any damage to or
failure of our systems or operations could result in reductions in, or
terminations of, our services.   In addition, in the case of frequent or
persistent system failures, our brand and reputation could be materially
adversely affected.  Our systems and operations are vulnerable to damage or
interruption from natural disasters, power loss, telecommunication system
failures, physical or electronic break-ins, sabotage, intentional acts of
vandalism and similar events that are expected to be generally beyond our
control. The occurrence of any or all of these events could materially
adversely affect our business, results of operations and financial condition.


AT THIS POINT WE HAVE NOT OBTAINED DIRECTORS AND OFFICERS INSURANCE


     We have investigated the cost of insurance against liabilities arising
out of the negligence of Officers and Director(s).  The Company has not
obtained such insurance, because the availability thereof is extremely
limited and, where available, the cost is excessive.  The Company is
required to indemnify certain costs and liabilities for negligence of its
officers and directors.  Therefore, the Company will have to satisfy any
such liabilities out of its assets. Any such liabilities which might arise
could be substantial and may exceed the assets of the Company.

WE HAVE A LIMITED NUMBER OF SHAREHOLDERS AND A LIMITED NUMBER OF SHARES
AVAILABLE FOR TRADING

     To our knowledge, there are 1,100 record holders of our Common Stock
although we believe the actual number of shareholders who hold our stock in
their brokerage accounts or "street name" accounts to be higher.  The
public float or shares available for sale at any given time is extremely
limited which can cause significant price swings when large blocks of our
Common Stock are bought or sold in the market.  Also, our daily trading
volume is limited with a small number of brokerage firms making a market in
our stock.  Accordingly, the price you pay or receive when you buy and sell
your shares may not be reflective of an active, arms-length trading market.

THE MARKET PRICE OF OUR SHARES MAY EXPERIENCE EXTREME PRICE AND VOLUME
FLUCTUATIONS FOR REASONS OVER WHICH WE HAVE LITTLE CONTROL

     The stock market has, from time to time, experienced extreme price and
volume fluctuations.  Prices of securities of Internet-related companies
have been especially volatile and have often fluctuated for reasons that
are unrelated to the operating performance of the affected companies.  The
market price of shares of our Common Stock could fluctuate greatly due to
a variety of factors.  In the past, companies that have experienced
volatility in the market price of their stock have been the objects of
securities class action litigation.  If we were the object of securities
class action litigation, it could result in substantial costs and a
diversion of our management's attention and resources.

                                   26
<PAGE>
OUR EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS OWN A MAJORITY
OF OUR VOTING STOCK AND WILL BE ABLE TO EXERT SIGNIFICANT INFLUENCE OVER
DECISIONS REQUIRING A STOCKHOLDER VOTE

     Our Executive Officers, Directors, employees and principal
stockholders and their affiliates own in the aggregate, beneficially
approximately 61% of our outstanding Common Stock.  This does not include
2,582,000 outstanding options with exercise prices that range from $1 to
$18 exercisable over the next five years.  As a result, our Executive
Officers, Directors and principal stockholders are able to exercise
significant control over all matters requiring approval by our
stockholders, including the election of directors and approval of mergers
and other significant corporate transactions.  This concentration of
ownership may also have the effect of delaying or preventing a change in
control that might otherwise benefit our stockholders.

STOCKHOLDERS MAY SELL SHARES OF OUR COMMON STOCK IN A MANNER THAT
NEGATIVELY AFFECTS THE PRICE OF COMMON STOCK

     If any of our principal stockholders sell a substantial number of
their shares of Common Stock, those sales could adversely affect the market
price of our Common Stock and could impair our future ability to raise
capital through the sale of equity securities.  We currently have
13,416,600 shares of Common Stock outstanding.  In addition, as of March
20, 2000, we had reserved for issuance 2,582,000 shares of Common Stock
issuable upon exercise of stock options.  All of our outstanding shares of
Common Stock are freely transferable without restriction under the
Securities Act, unless they are held by our "affiliates" or sold in an
offering of restricted common stock.

RISKS RELATED TO OUR INDUSTRY

OUR FUTURE GROWTH DEPENDS UPON AN INCREASE IN THE USE OF THE INTERNET AS A
MEDIUM FOR VOICE COMMUNICATIONS

     The Internet telephony market is new and rapidly evolving, and the
technology is still in the early stages of development.  Historically, the
audible sound quality of Internet telephony calls was poor.  As the
industry has grown, substantial improvements to sound quality have been
made but technological hurdles still need to be resolved.  Additionally,
the capacity constraints of the public Internet network may, if not
resolved, impede further development of Internet telephony to the extent
that callers experience delays, errors in transmissions or other
difficulties. As is typical in the case of a new and rapidly evolving
industry, demand and market acceptance for our services are subject to a
high level of uncertainty and risk. In particular, the Internet must be
accepted by business and residential users as a viable alternative to
traditional telephone service.  Customers who have already invested
substantial resources in integrating traditional telephony service with
their operations may be particularly reluctant or slow to adopt a new
technology which makes their existing infrastructure obsolete. Because the
Internet telephony market is new and evolving, it is difficult to predict
the size of this market or its growth rate. If the Internet telephony
market fails to develop, develops more slowly than we expect or becomes
saturated with competitors, then our business, results of operations and
financial condition will be materially adversely affected.

                                   27
<PAGE>
OUR FUTURE SUCCESS DEPENDS UPON THE INCREASED USE OF THE INTERNET

     The use of the Internet as a commercial marketplace is at an early
stage of development.  Demand and market acceptance for recently introduced
products and services over the Internet are still uncertain. We cannot
predict whether customers will be willing to shift their traditional
activities online. For example, we do not know if people will increase
their usage of online directories or make online purchases.  The Internet
may not grow as a viable commercial marketplace for a number of reasons,
including:

     *    concerns about security;

     *    Internet network congestion;

     *    inconsistent quality of service; and

     *    lack of cost-effective, high-speed access.

If the use of the Internet as a commercial marketplace does not continue to
grow, then our business, results of operations and financial condition will
be materially adversely affected.

OUR SUCCESS DEPENDS, IN PART, ON OUR ABILITY TO KEEP PACE WITH RAPID
TECHNOLOGICAL CHANGE

     Our continued success depends, in part, on our ability to keep pace
with rapid technological change, new product development and evolving
industry standards and practices.  Technological advancements have allowed
the use of packet-switching technology for the transmission of calls.  The
development of voice applications for the Internet is part of a larger
trend of convergence of standard voice and data networks.  We believe that
the providers of packet-switching technology will be able to offer quality
communications services at rates that are significantly less than the rates
currently charged for long distance calls.  However, our failure to respond
quickly and cost-effectively to these developments would materially
adversely affect our business, results of operations and financial condition.

GOVERNMENTAL REGULATIONS REGARDING THE INTERNET MAY BE ENACTED, WHICH COULD
IMPEDE OUR BUSINESS

     To date, governmental regulations have not materially restricted use
of the Internet in our markets.  Nevertheless, the FCC has engaged in
substantial regulation of the traditional telephony markets.  Accordingly,
the legal and regulatory environment that pertains to the Internet in which
our business would operate is uncertain and may change. Uncertainty
regarding the regulatory environment and new regulations could increase our
costs of doing business and may even prevent us from delivering our
products and services over the Internet.  The growth of the Internet may
also be significantly slowed by industry specific or more general
regulation of the Internet.  Such regulation could delay growth in demand
for our products and services and limit the growth of our revenue.

     In addition to new regulations being adopted, existing laws may be
applied to the Internet.  New and existing laws may cover issues which include:

                                   28
<PAGE>
     *    sales and other taxes;

     *    access charges;

     *    user privacy;

     *    pricing controls;

     *    characteristics and quality of products and services;

     *    consumer protection;

     *    cross-border commerce;

     *    copyright, trademark and patent infringement; and

     *    other claims based on the nature and content of Internet materials.

WE MAY BE THE VICTIM OF FRAUD OR THEFT OF SERVICE.

     From time to time, callers have obtained our services without
rendering payment by unlawfully using our access numbers and personal
identification numbers.  At this time, due to our limited operating
history, such instances of theft have been insignificant.  Theft of service
is a widespread issue for the telephony market.  As Internet telephony
services are more heavily used, theft of service is expected to be a
problem in the Internet telephony market, which will require industry
action to protect consumers.  We attempt to manage these theft and fraud
risks through our internal controls and our monitoring and blocking
systems.  To date, we have not experienced material losses from the
unauthorized use of access numbers and personal identification numbers.
However, we can provide no assurance that our risk management practices
will be sufficient to protect us in the future from unauthorized
transactions or thefts of services that could materially adversely affect
our business.


ITEM 2.  DESCRIPTION OF PROPERTY.


     Our address is 3201 West Royal Lane, Suite 160, Dallas, Texas 75063.
The Company's telephone number is (972) 788-2988.  The Company leases
approximately 13,314 square feet at $12,205 per month for a period of five
(5) years which will expire March 31, 2005.  The Company believes this
space is adequate for its current needs.


     At each of our points of presence we co-located with other competitive
local exchange carriers or other telecommunications providers for rack
space for our Cisco gateways.  We typically enter into one (1) year lease
agreements which range from $450 to $700 per month per rack.

                                   29
<PAGE>
ITEM 3.   LEGAL PROCEEDINGS

     We are not currently a party to any legal proceedings, nor are we
aware of pending or threatened litigation.

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

     We intend to hold an Annual Meeting of Shareholders in May 2000.

                                 PART II

ITEM 5.   MARKET FOR NETVOICE'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

MARKET INFORMATION

     Our Common Stock began trading on the Over the Counter Bulletin Board
beginning in February 1999 and the National Quotation Bureau "Pink Sheets"
as of February 2000.  Accordingly, there is insufficient market history to
establish or identify any trend in the market for the Common Stock.

     The following table sets forth the high and low bid prices for our
Common Stock for the past year.  The quotations reflect inter-dealer
prices, with retail mark-up, mark-down or commissions, and may not
represent actual transactions.  The information presented was obtained from
the OTCBB.com, a website maintained by OTC Bulletin Board(R) (OTCBB) and
the National Quotation Bureau "Pink Sheets" as of March 2000.

     In February, 2000, the Company declared a 2-for-1 stock split of all
outstanding shares for all record holders as of that date March 1, 2000.
THE BELOW MARKET PRICES REFLECT THAT STOCK SPLIT AS IF IT HAD OCCURRED AS
OF THE DATES IDENTIFIED.

                                             High           Low
                                             Bid            Bid
                                             ---            ---
          1999 Fiscal Year
          ----------------
          First Quarter. . . . . . . . . . .$2.75          $0.50
          Second Quarter . . . . . . . . . .$2.25          $1.25
          Third Quarter. . . . . . . . . . .$1.38          $1.25
          Fourth Quarter . . . . . . . . . .$4.44          $1.63

On April 3, 2000, the last reported bid and asked prices for the Common
Stock were $16.00 and $20.00, respectively.

     As referenced above, our shares are currently traded on the "Pink
Sheets" of the National Quotation Bureau.  Our shares were de-listed from
the OTCBB in February 2000 as our shares were not then registered under
Section 12(g) of the Securities Exchange Act of 1934.  On January 17, 2000,
we filed with the Securities Exchange Commission ("SEC") a Form 10SB to
register our shares with the Securities and Exchange Commission and as
required by the OTCBB

                                   30
<PAGE>
for further listing.  We intend to re-apply to OTCBB or the Nasdaq National
Markets at such time as we have received and responded to all comments of
the staff of the SEC with respect to the Form 10SB.

HOLDERS

     As of March 22, 2000, the Company believes it had approximately 1,100
beneficial owners of record of the Company's Common Stock based on reports
of the Depository Trust Corporation.  Although there is a trading market
for our stock, it is lightly traded, there is no substantial public float
at the present time.

RECENT SALES OF UNREGISTERED SECURITIES

     During the past three years, the Registrant and its subsidiary NVT,
Inc. have issued their securities to the following persons for the cash or
other consideration indicated in transactions that were not registered
under the Securities Act of 1933 (the "1933 Act").  As of March 14, 2000,
we have 13,416,600 shares outstanding of which 9,440,000 shares is
restricted stock subject to Rule 144.  Of the restricted shares, 1,475,000
are shares reserved to be issued to officers and employees over a vesting
period.

                                   I.

     In August 1998, the Registrant entered into a Merger and Plan of
Reorganization where it acquired all of the issued and outstanding shares
of NVT, Inc. and issued a total of 6,000,000 shares of Common Stock to six
(6) individuals, three (3) of which are current Officers and Directors.
The share exchange was made pursuant to the exemption provided by Section
4(2) of the 1933 Act and Rule 506 of Regulation D promulgated thereunder.

                                   II.

     In August 1998, the Company issued 400,000 shares of its "restricted"
Common Stock to Mezzanine Capital Limited ("Mezzanine") for 40,000 of their
shares and certain financial advisory services valued at $240,000 which
included locating the public "shell" into which NVT, Inc. was ultimately
merged and structuring the transaction.  The shares received have recently
been written off as worthless.  Further, in August 1998, Mezzanine was
issued an additional 600,000 shares of Common Stock for continuing
investment banking and advisory services valued at $.125 per share.  This
issuance was pursuant to the exemption from registration provided by
Section 4(2) of the 1933 Act.  Mezzanine represented that it purchased the
securities for investment, and all certificates issued were impressed with
a restrictive legend advising that the shares represented by the
certificates may not be sold, transferred, pledged or hypothecated without
having first been registered or the availability of an exemption from
registration established.  No commissions were paid and no broker/dealer
was involved in this transaction.

                                  III.


     In January 1999, the Company issued 740,000 shares of stock to
directors and certain employees.  At the time the shares were issued there
was no market in the Company's stock.  The Company valued the shares at
$.195 per share and compensation expense of $145,000 was

                                   31
<PAGE>
recorded in during the year ended December 31, 1999.  The stock vested
immediately and these shares reflect the split on March 14, 2000.  The
Company offered these employees their shares pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act of 1933.  All
employees took their shares for investment purposes without a view to
distribution and had access to information concerning the Company.  All
certificates bear "restricted" legends prohibiting their transfer.


                                   IV.

     In February of 1999, one of the original shareholders returned 145,000
shares to the Company.  The shares were forfeited because of the lack of
effort the individual could devote to Company matters.  The Company
cancelled the shares upon receipt.

                                   V.


     In March and April 1999, the Registrant issued 986,500 shares of
Common Stock at $1.00 to forty-one (41) individuals primarily through
certain Officers and Directors at the time without the payment of
commissions.  The purchasers consisted primarily of friends and associates
of these individuals.  The Registrant claims the exemption from
registration provided by Section 3(b) and 4(2) of the Securities Act of
1933, as amended (the "1933 Act") and Rule 504 pursuant to Regulation D
adopted thereunder. A cash finders fee of 3% or approximately $30,000 in
total was paid in connection with the sale of the shares to three finders.
They were Diana Costain, Andres Montgomery and InterMountain Marketing
Associates; all non-affiliates of the Company.


                                   VI.


     From January 1998 to December 1999, the Registrant's subsidiary NVT,
Inc. has issued from time to time, a series of promissory notes to certain
"accredited investors" and non-accredited investors.  The issuance of NVT,
Inc.'s notes to the 64 noteholders was made in reliance upon the exemption
from registration provided by Section 4(2) of the 1933 Act and/or
Regulation D and Rule 506 adopted thereunder.  A total of 16 noteholders
are non-accredited and forty-eight are accredited as defined pursuant to
Rule 501 of regulation D.  A finders fee of 10% was paid in connection with
the sale of the notes to the same three finders as described above. All
purchasers represented by way of Subscription Agreements, that they had
access to information regarding the Company and purchased the securities
for investment and not with a view to distribution.  All notes issued to
the purchasers were impressed with a restrictive legend advising that the
shares represented by the certificates were "restricted" securities and may
not be sold, transferred, pledged or hypothecated without having first been
registered or the availability of an exemption from registration
established.  These purchasers who have renewed their notes have received
updated information from the Company and executed amended subscription
agreements.


                                  VII.

     From August to November of 1999, the Company issued 315,000 shares of
stock to directors and certain employees.  The Company valued the shares at
a range of $.73 to $1.62 per share and compensation expense of $257,150 was
recorded during the year ending December 31,

                                   32
<PAGE>

1999.  The stock vested immediately.  These numbers reflect the split on
March 14, 2000.  The Company offered these employees their shares pursuant
to the exemption from registration provided by Section 4(2) of the
Securities Act of 1933.  All employees took their shares for investment
purposes without a view to distribution and had access to information
concerning the Company.  All certificates bear "restricted" legends
prohibiting their transfer.

                                  VIII.


     From August to November 1999, the Company reserved to be issued
1,475,000 shares of stock to officers and certain employees.  The Company
valued the shares between $.73 and $1.73 per share depending on the date of
grant.  The stock vests based upon continued employment over a period of
approximately 18 months.  These numbers reflect the split on March 14,
2000.  The Company recorded $1,201,200 as unearned compensation on the date
of the grants of which $834,386 was amortized as compensation expense
during the year ended December 31, 1999.  The remaining $366,814 will be
amortized as compensation expense on a straight-line basis over the vesting
period.  The Company offered these employees their shares pursuant to the
exemption from registration provided by Section 4(2) of the Securities Act
of 1933.  All employees took their shares for investment purposes without
a view to distribution and had access to information concerning the
Company.  All certificates bear "restricted" legends prohibiting their transfer.


                                   IX.


     In February 2000, the Company sold 1,200,000 shares of its Common
Stock at $4.25 to seventy-nine (79) investors for a total of $5,100,000.
No commissions or fees were paid to any individual or entity in connection
with the sales.  The shares of Common Stock issued by the Company in
connection with this offering are deemed "restricted securities" within the
meaning of that term as defined in Rule 144 of the Securities Act of 1933,
as amended ("Act") and were issued pursuant to certain "private placement"
exemptions under Section 4(2) and rule 506 of Regulation D of the Act, as
promulgated by the Securities and Exchange Commission.  The sales of the
Common Stock were to "accredited" investors, as that term is defined in
rule 501 of Regulation D of the Act, and were transactions by the Company
not involving any public offering.  Although not required, all such
accredited investors had access to information on the Company necessary to
make an informed investment decision. All of the aforesaid purchasers were
fully informed and advised concerning the Company, its business, financial
and other matters by way of a Private Placement Memorandum.  All of the
aforesaid securities have been appropriately marked with a restricted
legend and are "restricted securities," as defined in Rule 144 of the rules
and regulations of the Securities and Exchange Commission. The Company's
transfer agent has been instructed to mark "stop transfer" on its ledgers
to assure that these securities will not be transferred absent registration
or until the availability of an exemption therefrom is determined.


                                   33
<PAGE>
ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

     In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "could," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "intends," "potential"
or "continue" or the negative of such terms or other comparable
terminology.  These statements are only predictions.  In evaluating these
statements, you should specifically consider various factors, including the
risks outlined within.  These factors may cause our actual results to
differ materially from any forward-looking statement.


     Although we believe that the expectations reflected in the forward-
looking statements are reasonable, we cannot guarantee future results, our
ability to repay noteholders and other debt, levels of activity,
performance or achievements.  Moreover, neither we nor any other person
assume responsibility for the accuracy and completeness of such statements.
We are under no duty to update any of the forward-looking statements after
the date of this report.


OVERVIEW

     We currently provide long distance services via our Internet Protocol
network in 25 markets throughout the United States, wholesale dedicated and
dial-up internet services in 13 markets and in the past to a very limited
degree, provided traditional long distance.  Our current VoIP business
consists primarily of wholesale services marketed to other long distance
carriers and prepaid calling card companies.  In 1999, approximately 80% of
our revenue came from our VoIP network and currently all of our revenues
are derived from our IP network .  We currently market our services
directly and through agents.

     During 1998 we began operations in our present form.  NVT was a Texas
limited liability company that was formed in December 1997, which was
reincorporated as a Nevada corporation (NVT, Inc.) and then reorganized as
a wholly-owned subsidiary of the Company, which prior to the merger was an
inactive public company.  In September of 1998 our first VoIP gateway was
installed in Dallas, Texas.  The initial focus was to build out our Texas
network and move into other areas of the United States.  Accordingly,
during 1999, we continued to expand our domestic network with the greatest
amount of traffic terminating or originating in Jacksonville, Tampa,
Portland and Dallas.  We currently have our VoIP network operational in 6
cities in Texas and a total of 25 markets throughout the U.S.

     The Company is the successor company to NetVoice Technologies, LLC, a
Texas limited liability company that began operations on January 7, 1998.
NetVoice Technologies, LLC was formed for the purpose of developing,
acquiring and operating telephone communication facilities and networks
that were intended to transmit voice over the Internet utilizing
conventional and Internet technologies.  NetVoice Technologies, LLC was
reincorporated in Nevada on June 30, 1998, as NetVoice Technologies, Inc.


     On August 13, 1998, NVT, Inc. concluded a reverse acquisition of Blue
Pines, Inc. in which Blue Pines, Inc. issued 6,000,000 shares of common
stock in exchange for all of the outstanding shares of common stock of NVT,
Inc., the surviving accounting acquirer.  As a result

                                   34
<PAGE>
of the reverse acquisition, NVT, Inc. became a wholly-owned subsidiary of
Blue Pines, Inc., and the six former shareholders of NVT, Inc. became the
holders of approximately seventy five percent (75%) of the outstanding
shares of common stock of the Company.  The remaining 25% of the shares
were owned by the original non-affiliated shareholders of Blue Pines, Inc.
On August 11, 1998, Blue Pines, Inc. changed its name to Netvoice
Technologies Corporation.  The value of assets that NVT, Inc. acquired as
a result of the reverse acquisition was negligible because Blue Pines, Inc.
was an inactive shell at the time of the reverse acquisition.  There was no
prior affiliation between the parties.  Shares outstanding prior to the
reverse acquisition have been restated to reflect the exchange ratio with
Blue Pines, Inc. See "Principal Shareholders" and "Certain Transactions."


     NetLD.com, Inc. was incorporated in the State of Nevada as a wholly-
owned subsidiary of the Company on October 14, 1999.  This corporation was
initially formed for the purpose of conducting the traditional long
distance telephone services of the Company.  Currently, we have had no
activity in this subsidiary and it is not anticipated traditional long
distance will be pursued as part of our business model.  We may disband
this entity or use it for other corporate purposes as yet to be determined,
and in December 1999, we closed an Agreement to dispose of our long
distance bases for $175,000.  We currently have had no activity in this
subsidiary.  See "Management's Discussion and Analysis - Financing Sources"
and "Certain Relationships and Related Transactions" for a more detailed
description of the transaction.

FINANCING SOURCES


     In February 2000, we entered into a letter of intent with Cisco
Systems Capital Corporation ("Cisco") that provides $28 million in funding.
This is only a letter of intent and not a definitive Agreement.  At this
time the funding is contingent and if obtained will be used primarily to
fund equipment purchases in order to expand our network.  The funding, in
the form of a loan, is to be used for equipment purchases from Cisco, soft
costs to install that equipment and for working capital.  The Company will
receive the funding from Cisco over a period of 5 years and will be
required to repay the principal plus interest at an adjustable rate.

     In February 2000, we sold to all accredited investors 1,200,000 shares
of our Common Stock through a Private Placement Memorandum for $5.1
million.  The average bid price of our common stock during the February
2000 private placement was $6.78 to $9.18.  The costs of the offering were
$20,000 for printing costs and related fees.  The net proceeds will
primarily be used for marketing, network expansion and working capital.

     From March 1999 through April 1999, we privately placed 986,500 shares
of our Common Stock at $1.00 per share for a total of $986,500.  Net
proceeds of the offering after expenses was approximately $960,000.
Expenses of the offering included the payment of fees to broker-dealers
($25,000) and costs of the offering including legal, accounting, printing,
marketing-related expenses, due diligence expenses, travel related
expenses, and preparation and distribution of sales literature.  The net
proceeds were primarily used by our subsidiary, NVT, Inc., to repay short-
term loans and for working capital ($310,000), provide marketing funds
($150,000), and to begin the building of our Internet VoIP telephony
network ($500,000).

     Since January of 1998 NVT, Inc. has privately issued a series of
promissory notes. These funds were used primarily to continue the build-out
of our VoIP network, which includes

                                   35
<PAGE>
equipment purchases, and for working capital. The terms of these notes are
nine-months with an interest rate of 13.35%.  The notes are secured by
revenues from contracts, equipment and a 10% cash reserve.  At December 31,
1999, the Company was not in compliance with the 10% cash reserve.  The
Company received a waiver from the paymaster of the Trustee, and as of
February 23, 2000 the Company has now complied with the reserve requirement.

     At January 31, 2000, we had approximately $4.0 million outstanding in
such notes.  During 1999, we repaid $2.5 million together with all accrued
interest due.  Approximately $4.0 million falls due throughout the calendar
year 2000.  All of the Notes will be due and payable in or before
September, 2000, unless extended for nine (9) months at the option of the
noteholder.  At this time, we intend to offer conversion of these notes or
to repay them in accordance with the terms of the notes with proceeds from
existing funds or future public or private offerings.  Currently, there are
no conversion rights on behalf of the note holders.

     In October 1998 we purchased a customer list from Quantum Network
Services, Inc. ("Quantum") a company owned by Mr. William Yotty, one of our
former Directors, for $110,000 in cash.  Quantum's historical costs basis
in the customer list was $110,000.  In June 1999, we purchased an
additional customer list for $60,000 in cash from Quantum.  Quantum had no
historical cost basis in this customer list.  New management, brought on in
August, determined that these customer bases did not fit well with our
current VoIP network.  In December of 1999 the Company sold these bases to
a related party for $175,000 in the form of the partial forgiveness of a
note to Jim Chambas, a then Director.  The customer bases were sold because
the bases were dispersed in areas not serviced by our network and it was
determined that expanding our network to service these customer bases would
not be in the Company's best interest.  The majority of the customer bases
were located throughout California and to service them would have required
an extensive build out of our then existing network.  As of February 2000,
the Company still owes the former Director approximately $139,000.  The
note is non-interest bearing and the original cash proceeds were used to
fund working capital needs of the Company.  The Company did not obtain a
fairness opinion with respect to any of the above transactions or look for
non-affiliated purchasers.

     Subsequent to the issuances of the Company's consolidated financial
statements as of and for the year ended December 31, 1999, the Company's
management determined that the cost for the purchase of a customer list
from a company owned by a shareholder in June 1999 should have been
accounted for as a capital distribution, and the proceeds from the sale of
such customer list and the excess of the proceeds from the sale of another
customer list over its amortized carrying cost, both having been sold to
another shareholder in December 1999, should have been accounted for as
capital contribution.  These transactions are more fully discussed in Note
8.  Previously, the purchase was accounted for as an asset acquisition with
amortization of the cost charge to expense, and the sale was accounted for
as an asset disposition with a gain recognized.  Additionally, subsequent
to the issuance of the Company's consolidated financial statements as of
and for the period ended December 31, 1998, the Company's management
determined that certain leases entered into in December 1998 should have
been accounted for as operating leases.  Previously, such leases had been
accounted for as capital leases.  As a result, the 1999 and 1998 financial
statements have been restated from amounts previously reported to
appropriately account for these transactions.  The effects of the
restatement are summarized in Note 12 to the consolidated financial
statements.


                                   36
<PAGE>
     As of December 31, 1999, the Company currently has an accumulated
deficit of $6.7 million.

RESIGNATION OF DIRECTORS

     On March 13, 2000, the Company was notified that the state of
Pennsylvania had entered a Cease and Desist Order on December 7, 1999
against William D. Yotty and indirectly against James Chambas as a Director
of Paystar Communications, Inc.  The Cease and Desist Order alleged that
these individuals and other were selling unregistered securities in the
state of Pennsylvania and elsewhere.  Although Messrs. Yotty and Chambas
intend to vigorously defend this action, they deemed it to be in the best
interests of the Company to resign as Directors of the Company and
discontinue any direct relationship with the Company except as shareholders
as of March 20, 2000.

REVENUE FROM OPERATIONS

     Currently, all of our revenues are derived from long distance services
sold over our IP network.  One of the Company's initial strategies is to
continue to acquire existing customer bases concentrated in specific
geographical areas which complement our current markets and convert them to
our VoIP network.  We also anticipate deriving revenues through direct
sales by our existing employees, independent agents and selling through
ISPs to their existing customer base.  In the future, in order to
diversify, we plan to introduce a variety of value added services utilizing
our VoIP network including:

     *    dial-up Internet access;

     *    unified messaging;

     *    revenue through our browser;

     *    prepaid calling;

     *    wholesale internet services; and

     *    video services.

     Revenues from operations for the year ended December 31, 1999 derived
80% from sales to wholesale customers and 20% from sales to our retail
customers.  Almost the entire retail base was sold in December 1999 to a
related party as described under "Management Discussions and Analysis of
Operations - Financing Sources".  Margins from both wholesale and retail
sales are not currently sufficient to cover our network costs which include
leased bandwidth, connection to the Internet, and local lines within a
local calling area.  Expansion of our network and the addition of services
will have to be financed by an increase in traffic and additional
financings.  We expect this trend to continue for a period of time as we
continue to concentrate on the expansion of our VoIP network and customer
traffic. In the second quarter of 2000, we plan to offer Internet services
and voice over the same facilities to corporate customers.

                                   37
<PAGE>
     The Company will continue to expand its network to handle projected
volume.  The Company's cost drops by approximately 30% by converting the
network from a DS-1 level to DS-3 level.  This coupled with converging
various products (voice, video, data, Internet) over the same network are
the key ingredients to approach profitability.  The Company, as it
continues to grow and build network, is not expected to be profitable in
the foreseeable future.

     There are little or no seasonal changes in the revenue stream of the
business.

COST STRUCTURE

     Our costs and expenses include:

     *    network costs;

     *    selling and marketing;

     *    general and administrative; and

     *    interest and depreciation.

     Network costs primarily consist of costs associated with the routing
and termination of our customers' traffic.  The costs include:

     *    leased bandwidth and connection to the Internet;

     *    leased network equipment;

     *    local lines used to carry calls to and from our network
          locations; and

     *    our network facilities.

     We expect these costs to increase into the future as we further expand
our network in the United States and throughout the world.  The majority of
these costs are fixed.  The Company will continue to add fixed cost network
in order to continue to grow revenue.  The network will have to be expanded
to handle additional volume in excess of 50,000,000 minutes per month.

     Sales and marketing expenses include the expenses anticipated to be
associated with acquiring customers, establishing brand recognition,
commissions paid to our sales personnel, advertising costs and customer
referral fees. We expect sales and marketing expenses to increase over time
as we aggressively market our products and services.

     During 1998 and 1999, sales and marketing expenses were relatively
fixed costs.  Sales and marketing expenses are expected to increase both in
terms of absolute dollars and as a percentage of revenue as our revenue
grows. We expect to spend significant capital to build brand recognition to
the extent possible due to our relatively small size.  Much of our sales
and marketing expenses are anticipated to be expanded to obtain strategic
relationships with a variety of agents, portals, content providers, and
other key customer destinations on the Web.

                                   38
<PAGE>
     General and administrative expenses consist of the salaries of our
employees and associated benefits, and the cost of travel, business
entertainment, rent and utilities. A large portion of our general and
administrative expenses is allocated to operations and customer support.
Customer support expenses include the costs associated with customer
service and technical support, and consist primarily of the salaries and
employment costs of the employees responsible for those efforts. We expect
operations and customer support expenses to increase over time to support
new and existing customers. We expect general and administrative costs to
increase to support our growth, particularly as we establish a larger
organization to implement our business plan. Historically, we have included
our development and start-up costs, comprised primarily of payroll expenses
for our technical team of engineers and developers, in general and
administrative expenses.  We plan to incur additional costs for research
and development, though they are not expected to increase as a percentage
of revenue.  Over time, we expect these relatively fixed general and
administrative expenses to decrease as a percentage of revenue, primarily
as a consequence of increased revenues.

     Interest consists of the cost incurred including commission
(recognized over the life of the notes) on the issuance of the short-term
notes and interest on the notes.  The notes have a term of nine-months with
an interest rate of 13.35%.  During the fiscal years 1998 and 1999, we had
net interest expense in the aggregate amount of $369,000 and $675,000,
respectively.  Interest payable on the Notes in 2000 will be approximately
$445,000, assuming the Notes are repaid in full on their respective due
dates, and not extended by the option of the several payees for nine (9)
months.


     Depreciation primarily relates to our hardware infrastructure.  We
depreciate our infrastructure over its estimated five-year useful life
using the straight-line method.  In addition, we will be adding more
originating and terminating VoIP Gateways as traffic volumes justify.  We
expect depreciation to increase in absolute terms as we grow our networks
to support new and acquired customers, but to decrease as a percentage of
total revenue.  In February of 2000, we have entered into a letter of
intent with Cisco for $28 million in funding with the majority to be used
for equipment purchases over the next two years.  See "Management's
Discussion and Analysis or Plan of Operation - Financing Sources" for a
more detailed discussion of the letter of intent.


RESULTS OF OPERATIONS -



                                   39
<PAGE>
===========================================================================
                                                             Period from
                                               Year        January 7, 1998
                                              Ending     (date of inception)
                                            December 31,   to December 31,

                                       1999, as restated  1998, as restated

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

Revenues                                    $ 1,212,363       $   120,737
                                            -----------       -----------

Expenses:
Direct Costs                                  2,043,399           252,194

General and Admin. Expenses                   3,477,104           983,549

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


Total Expenses                                5,520,503         1,235,743
                                            -----------       -----------


Operating Loss                               (4,308,140)       (1,115,006)

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

Other Income (Expenses):

Net Interest                                   (675,195)         (368,561)
Gain (Loss) on Investment                       (31,518)         (239,800)
                                            -----------       -----------

Total Other Expenses                           (706,713)         (608,361)
                                            -----------       -----------


Net Loss                                    $(5,014,853)      $(1,723,367)

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

COMPARISON OF YEAR ENDED DECEMBER 31, 1999 TO THE PERIOD FROM JANUARY 7,
1998 (DATE OF INCEPTION) TO DECEMBER 31, 1998


     Revenue increased from $120,737 for the period ended December 31, 1998
to $1,212,363 for the year ended December 31, 1999.  The increase is a
result of our business moving from the start-up phase into an operational
entity.  Of revenue generated in 1999, revenue from wholesale sales over
our VoIP network accounted for 80%.  Additionally, as we expanded our
network, we had more locations to offer existing customers.  We expect our
wholesale revenue to continue to grow, as we continue to expand our network
into additional locations.  Currently, we are expanding our "points of
presence" in major markets to handle DS-3 traffic and above.  The focus on
the wholesale revenue is expected to give us the ability to grow our
network and eventually begin to offer more on net locations when we enter
the retail sector.  This retail sector will primarily consist of corporate
customers and various target and niche markets.


     To date all of our revenue has been earned in our voice telephony
business.  However, in November of 1999, we entered into several
contractual agreements to provide Internet services over our network.  See
"Overview" and "Product and Services" section for a more detailed
explanation of these services.  We expect to continue to offer other
value-added services utilizing our network in the future.


     Total direct costs increased from $252,194 for the period ended
December 31, 1998 to $2,043,399 for the year ended December 31, 1999.  The
increase of costs in the year ended

                                   40
<PAGE>
December 31, 1999 over the period ending December 31, 1998 is a result of
our business moving from the start-up phase into an operational entity.  As
we expand our network to DS-3 level service in each of our major markets,
we expect network cost to increase by $50,000 per month.  We have continued
to purchase additional equipment to expand our VoIP network and direct
costs have increased as a result.  As we implement several of the new
wholesale contracts, in the first quarter of fiscal year 2000, direct costs
as a percentage of revenue are expected to decrease with J.D. Services,
Inc., IDS Long Distance, Inc., Caprock Communication and General
Communication Corporation.

     General and Administrative expenses increased from $983,549 for the
period ended December 31, 1998 to $3,477,104 for the year ended December 31,
1999.  As we continue to grow our network, expand our product offering
and execute our business plan, we expect these expenses to continue to
grow.  The primary reason for this increase is the expense for marketing
and costs of additional personnel.  Also, the Company has hired several key
individuals since August 1999 and incurred stock compensation expense in
the amount of approximately $1,237,000 as a result.  General and
administrative expenses will increase as a percentage of revenue for a
period, until all necessary personnel and systems are in place to handle
future revenue and support future products.  Thereafter, we anticipate that
general and administrative costs will decrease as a proportion of revenues.

     Depreciation and Amortization costs increased from $36,627 for the
period ended December 31, 1998 to $151,787 for the year ended December 31,
1999.  It is anticipated depreciation for currently owned equipment in 2000
will be $200,000.  Depreciation consists primarily of the depreciation of
our VoIP gateways.  We depreciate this network equipment over five years on
a straight-line basis.  It can be expected that depreciation will continue
to increase as we continue to expand our network.  Amortization consists of
the amortization of the cost of two customer bases.  In December of 1999,
we sold these two bases to an affiliated company for forgiveness of a note
and cash.  We intend to acquire customer bases in the future that have
synergies with our network and business plan.  These synergies include
profitability, location and type of customer.

     Net Interest expense increased from $368,561 for the period ended
December 31, 1998 to $675,195 for the year ended December 31, 1999.  This
increase is the result of the increase in the issuance of short-term notes,
the commissions paid to broker-dealers for the sale of these notes and the
cost of our financing for capital equipment.

     Loss on Investment changed from $(239,800) for the period ended
December 31, 1998 to $(31,518) for the year ended December 31, 1999. In
1998 we incurred a loss of $239,800 of a write-down of an investment in
Mezzanine Capital to $200.  In 1999, these costs represent a loss of
$31,518 incurred with a potential acquisition.  We expect these gains
(losses) to vary based on changes in the Company's business.

     Our Net Loss increased from $(1,723,367) for the period ended December 31,
1998 to $(5,014,853) for the year ended December 31, 1999.  This
increase is due primarily to the continued expansion of our network and an
increase in personnel and overhead.  We expect continued and increasing
losses as we continue to pursue our growth strategy.


                                   41
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

     Since our inception in January of 1998, we have financed our
operations through a series of private placements of our Common Stock for
$960,000 in net proceeds, and from the sale of $5.4 million, nine-month
notes beginning in January 1998 through December 1999.  As of December 31,
1999, we have a total of $3.7 million outstanding in these notes.  In
February of 2000 we completed a private placement from the sale of
1,200,000 shares of our restricted common stock for $5.1 million.  Most of
our equipment has been leased with our equipment vendors primarily through
Cisco Systems, Inc.


     As of December 31, 1999 we had approximately $20,000 in cash and cash
equivalents.  Our operating activities used cash of approximately
$2,840,000 for the year ended December 31, 1999, compared to approximately
$1,146,000, for the period ended December 31, 1998.  Cash used in investing
activities was approximately $330,000 and $691,000 for the year ended
December 31, 1999 and the period ended December 31, 1998, respectively.
Our cash used in investing activities was principally for the purchase of
telecommunications and Internet equipment.  Our financing activities
provided cash of approximately $3,182,000 and $1,844,000 for the year ended
December 31, 1999 and the period ended December 31, 1998, respectively.
The principal sources of the cash provided were additional funding from the
sale of notes and a common stock offering in 1999.


     Our future capital requirements will depend on numerous factors, including:

     *    market acceptance of our services;

     *    brand promotions;

     *    the amount of resources we devote to the development of our
          current and future products; and

     *    the expansion of our in-house sales force and marketing our services.


     We may experience a substantial increase in our capital expenditures
and lease arrangements consistent with the growth in our operations and
adding additional Personnel.  Our current cash flow from operations is not
sufficient to meet our working capital and capital expenditure needs for at
least the next 12 months and accordingly, we have obtained and will
continue to seek additional financing.  Accordingly, there can be no
assurance that we will have sufficient capital to finance potential
acquisitions or other growth oriented activities, and may issue additional
equity securities, incur debt or obtain other financing.


     In 1998 and 1999, we entered into various contracts for the purchase
of network facilities.  Our currently outstanding network costs will
require us to expend approximately $220,000 per month in 2000, but we
expect to increase network costs as we continue to expand.

     Additional commitments for the year 2000 are as follows:

     *    repayment of indebtedness on the nine-month notes in the
          aggregated amount of $3.7 million;

                                   42
<PAGE>
     *    leases on existing corporate offices, equipment and network
          facilities in the aggregate amount of $105,000;

     *    leases on new corporate offices in the aggregate amount of $72,000;

     *    operating leases on existing equipment in the aggregate amount of
          $436,000;

     *    operating leases on new equipment purchased in January 2000 of
          $372,000; and

     *    network expenditures in the aggregate amount of $2,600,000.


     The Company expects to fund these year 2000 commitments from the funds
raised in future private and public offerings.  As of December 31, 1999,
our working capital deficit is $5.1 million.


     In February 2000, the Company sold 1,200,000 shares of its Common
Stock at $4.25 to 79 investors for a total of $5,100,000.  The shares of
Common Stock issued by the Company in connection with this offering are
deemed "restricted securities" within the meaning of that term as defined
in Rule 144 of the Securities Act of 1933, as amended ("Act") and were
issued pursuant to certain "private placement" exemptions under Section
4(2) and Rule 506 of Regulation D of the act, as promulgated by the
Securities and Exchange Commission.


     In March of 2000 the Company entered into a letter of intent with
Cisco Systems, Inc. for $28 million of financing.  This is only a letter of
intent and not a definitive Agreement.  The funding would be used for the
purchase of equipment and working capital and would be repaid over 5 years.


     The Company has no material capital commitments.

COMMITMENTS AND CONTINGENCIES

     We have entered into various Agreements with Service Providers, on an
order by order basis, to lease bandwidth, purchase dedicated Internet
access, lease local lines, and to rent space to locate our network
equipment.  These service orders range in term from month to month to five
year agreements.  Below is a schedule that details the significant terms of
these commitments:



                                   43
<PAGE>
             MONTHLY
             PAYMENTS   TERM    CANCELLATION PENALTY        INITIAL ORDER
             --------   ----    --------------------        -------------

Sprint(TM)   $45,000    3 yr.   100% of year 1; 50% of      October 1998
 Commercial                     Year 2; 50% of year 3

Global       $35,000    2 yr.   $25,000 per month           August 1999
 Crossing                       commitment

E.Spire      $35,000    1-3 yr. Commitment for the total    August 1998
                                period for value of orders

Cox          $9,000     5 yr.   Commitment for full         January 1999
                                amount for entire period

Electric     $21,000    1 yr.   Commitment for full         July 1999
 Lightwave                      amount for the entire period

MCI          $11,000    1 yr.   Commitment for 50% of       Sept 1999
 WorldCom                       the remaining due

Level 3      $40,000    1 yr.   Commitment for total        August 1999
 Communications, Inc.           amount for the full term

Caprock      $5,000     1 yr.   Take or Pay Commitment      July 1999
 Communications


     In December of 1999, we terminated services with Sprint.  Management
believes that the Company will be able to cancel the existing contracts
without material adverse effect on the Company's consolidated financial
statements.  We are currently trying to negotiate a final settlement.  We
are in good standing with respect to all of our other commitments.



ITEM 7.   FINANCIAL STATEMENTS


     The Financial Statements set forth on pages F-1 to F-19 to this Report
are incorporated herein by reference.



ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURES


     In December 1999, we engaged Deloitte & Touche, LLP as our auditors
for the fiscal year ending December 1999.  Previously, Schvanevedt &
Company were the Company's auditors until their dismissal in December 1999.
Schvanevedt & Company's report on the financial statements for the period
ended December 31, 1998 did not contain an adverse opinion or disclaimer of
opinion, nor were they modified as to uncertainty, audit scope, or
accounting principles except that their report included an explanatory
paragraph concerning our ability to

                                   44
<PAGE>
continue as a going concern.  The decision to change auditors was
unanimously approved by the Company's Board of Directors in December 1999.
There were no disagreements with Schvanevedt & Company on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which if not resolved to Schvanevedt &
Company's satisfaction, would have caused it to make reference to the
subject matter of the disagreement in connection with their reports.


                                PART III

     The information required by Part III of Form 10-KSB (Items 9-12) is
incorporated herein by reference to NetVoice's definitive Proxy Statement
to be filed no later than April 17, 2000, in connection with the Annual
Meeting of Shareholders to be held on May 19, 2000.









                                   45
<PAGE>
                                GLOSSARY

APPLET - A small application that performs a specific task within an
operating system such as the calculator or calendar in a Microsoft Windows
97(TM) program.

BRAND EQUITY - The long-term value of a marketers brand in the marketplace
(which usually occurs when customers see the brand as more than the sum of
elements in the package).

CIRCUIT SWITCHING - The process of setting up and keeping a circuit open
between two or more users, such that the users have exclusive and full use
of the circuit until the connection is released.

COMMUNICATIONS APPLICATIONS BROWSER ("CAB") - A software application,
loaded onto a computer that allows users to locate and retrieve data over
the Internet and to make phone calls and send and retrieve voice, text and
fax messages while browsing the World Wide Web.

DATA PACKETS - The method which information is transferred through
electronic media.  Information is transformed into data packets, traversed
across the electronic medium and at the destination is reassembled into the
original information.

DS-3 - Digital Service, level 3 is a high-speed equivalent of 28 T-1
channels and operating at 44.736 Mbps.  Also called T-3.

FILTERING - The ability to limit the type of information available via the
World Wide Web.  A filtering device is typically used to filter
objectionable information, profanity or pornography.

INTEGRATED VOICE AND DATA is the combination of voice and data signals
transmitted via a single channel.

INTERNET - Several large computer networks containing information on a
variety of subjects joined together over high speed data links allowing the
free flow of information across the data links.

ISP - Internet Service Provider is an entity which provides Internet access
to its customers typically for a fee.

LAN/WAN - Local Area Network/Wide Area Network. is a short distance data
communications network used to link together computers and peripheral
devices under some form of standard control.  A Wide Area Network uses
common-carrier provided lines that cover an extended geographical area.  In
contrast with LAN, this network uses links provided by local telephone
companies and usually connects disparate sites.

LATAS AND INTERLATA SERVICES - Local Access and Transport Area is one of
161 local geographical areas in the US within which a local telephone
company may offer telecommunications services - local or long distance.
Inter LATA - Telecommunications services that originate in one and
terminate in another Local Area Transport Area.

                                   46
<PAGE>
LEMs - Law Enforcement Management Systems are proprietary software
application developed and maintained by Security Telcom used to manage
systems and information for jails and correctional facilities.

NOC - Networks Operation Centers are organization and systems responsible
for the day-to-day care and management of a network.

NTVT - The Company's bulletin board trading symbol.

POINTS OF PRESENCE ("POPs") - are physical places within a LATA where a
long distance carrier, ISP or other provider interfaces with the network of
the local exchange carrier.

PSTN - Public Switched Telephone Network is a name which refers to a public
phone company.

RBOCs - The Regional Bell Operating companies are seven RBOCs which split
out of the old AT&T/Bell System by the FCC upon divestiture of the Bell
Operating Companies.

REAL-TIME is a term used to describe no perceived delay in transmission of
information between the actual event and the transmission of the event or
information related to the event.

ROUTING is the process of selecting the correct circuit path for a message
throughout a network to specific geographical locations.

SWITCHED CARRIERS are the traditional long distance carriers using the PSTN
like AT&T, MCI, etc.

TELEPHONY is the science of transmitting voice, data, video or image
signals over a distance via a network of a communication conduit, typically
copper or fiber and hardware used to route signals.

TUNNELING is to temporarily change the destination of a packet in order to
traverse one or more routers that are incapable of routing to the real
destination.

UNIFIED MESSAGING is a telecommunications application that allows the user
to retrieve a variety of messaging mediums, i.e. Voicemail, e-mail and fax
from one unified box.  Messages can be retrieved via phone or e-mail.

VoIP NETWORK is the Voice over Internet Protocol Network.  It is a
communications network utilizing Internet Protocol technology in the
delivery of voice and data transmissions.  Internet Protocol technology
uses packet switching to deliver voice and rata rather than the traditional
method of circuit switching.

www.netvoice.net is the NetVoice Technologies Corporation URL.

                                   47
<PAGE>
ITEM 13.  EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K

     (a)(1)(2)      The following documents are filed as a part of this
                    Form 10-KSB

                    Exhibits required to be filed are listed below and,
                    except where incorporated by reference, immediately
                    follow the Financial Statements.

     (a) (3)        Exhibits:

Exhibit
Number         Description
------         -----------------

3.1            Articles of Incorporation of Eastco, Inc. dated June 16, 1977(1)

3.2            Certificate of Amendment of Articles of Incorporation of
               Eastco, Inc. dated December 8, 1997(1)

3.3            Certificate of Amendment of Articles of Incorporation of
               Blue Pines, Inc. dated August 11, 1998(1)

3.4            Bylaws of NetVoice Technologies Corporation(1)

3.5            Amendments to Bylaws of NetVoice Technologies Corporation(1)

3.6            Certificate of Correction(1)

3.7            Second Amended and Restated Articles of Incorporation of
               NetVoice Technologies Corporation(1)

10.1           Agreement and Plan of Reorganization(1)

10.2           Memorandum of Understanding between NetVoice Technologies,
               Inc. and MultiCom Services(1)

10.3           Memorandum of Understanding between NetVoice Technologies,
               Inc. and Diversified Data Distributors(1)

10.4           Agreement between NetVoice Technologies, Inc. and Interwest
               Transfer Co., Inc.(1)

10.5           Broker Agreement between NetVoice Technologies, Inc. and
               Unlimited Tech, Inc.(1)

10.6           Carrier Service Agreement between NetVoice Technologies,
               Inc. and IDT Corporation(1)

10.7           Carrier Service Agreement between NetVoice Technologies,
               Inc. and IDS Long Distance, Inc.(1)

10.8           Carrier Service Agreement between NetVoice Technologies,
               Inc. and Intercomm Americas, Inc.(1)

10.9           Internet Telephony Service Agreement between NetVoice
               Technologies, Inc. and Intercomm Americas, Inc.(1)

10.10          Carrier Service Agreement between NetVoice Technologies,
               Inc. and JD Services, Incorporated(1)

                                   48
<PAGE>
10.11          Carrier Service Agreement between NetVoice Technologies,
               Inc. and SuperNet(1)

10.12          Carrier Service Agreement between NetVoice Technologies,
               Inc. and ValuLine, Inc.(1)

10.13          Telecommunications Service Agreement between NetVoice
               Technologies, Inc. and Brooks Fiber Communications(1)

10.14          Carrier Service Agreement between NetVoice Technologies,
               Inc. and CapRock Communications(1)

10.15          Letter of Agreement between NetVoice Technologies
               Corporation and Duncan & Hill, LLC(1)

10.16          Agreement between NetVoice Technologies, Inc. and Frontier
               Communications(1)

10.17          Agreement between NetVoice Technologies, Inc. and Electric
               Lightwave, Inc.(1)

10.18          Agreement between NetVoice Technologies, Inc. and GTE
               Internetworking(1)

10.19          Software License and Support Agreement between NetVoice
               Technologies, Inc. and Portal Software, Inc.(1)

10.20          Master Lease Agreement between NetVoice Technologies, Inc.
               and Sunrise Leasing Corporation (Cisco Systems)(1)

10.21          Addendum to Master Lease Agreement (AA) between NetVoice
               Technologies, Inc. and Sunrise Leasing Corporation (Cisco
               Systems)(1)

10.22          Addendum to Master Lease Agreement (AB) between NetVoice
               Technologies, Inc. and Cisco Systems Capital Corporation(1)

10.23          Addendum to Master Lease Agreement (AC) between NetVoice
               Technologies, Inc. and Sunrise Leasing Corporation (Cisco
               Systems)(1)

10.24          Addendum to Master Lease Agreement (AD) between NetVoice
               Technologies, Inc. and Sunrise Leasing Corporation (Cisco
               Systems)(1)

10.25          Addendum to Master Lease Assignment (AE) between NetVoice
               Technologies, Inc. and Sunrise Leasing Corporation (Cisco
               Systems)(1)

10.26          Addendum to Master Lease Agreement (AF) between NetVoice
               Technologies, Inc. and Sunrise Leasing Corporation (Cisco
               Systems)(1)

10.27          Lease Agreement between NetVoice Technologies, LLC and
               Inter-Tel Leasing, Inc.(1)

10.28          Network Agreement between NetVoice Technologies, Inc. and
               Inter-Tel.net, Inc.(1)

10.29          Master Services Agreement with Signup Server, Inc.(1)

10.30          Office Lease and First Amendment thereto(1)

10.31          Employment Agreement with Jeff Rothell(1)

                                   49
<PAGE>
10.32          Employment Agreement with Garth Cook(1)


21             Subsidiaries of the Company*

27             Financial Data Schedule*

27.1           Financial Data Schedule
_____________
* previously filed

(1)  Incorporated by reference to Registration Statement on Form 10SB dated
     January 17, 2000 (Commission File No. 0-29025).

     (b)  During the quarter ended December 31, 1999, no Current Reports on
          Form 8-K were filed by the Company.









                                   50
<PAGE>
                    NETVOICE TECHNOLOGIES CORPORATION


                            TABLE OF CONTENTS

                                                                 Page
                                                                 ----
Independent Auditor's Report . . . . . . . . . . . . . . . . . . . F-2

Predecessor Auditor's Report . . . . . . . . . . . . . . . . . . . F-3


Consolidated Balance Sheets for December 31, 1999 (Restated)
 and 1998 (Restated) . . . . . . . . . . . . . . . . . . . . . . . F-4

Consolidated Statement of Operations for the year ended
 December 31, 1999 (Restated) and the period from January 7, 1998
 (date of inception) to December 31, 1998. . . . . . . . . . . . . F-5

Consolidated Statements of Stockholders' Deficit for the
 year ended December 31, 1999 (Restated) and the period from
 January 7,  1998 (date of inception) to December 31, 1998 . . . . F-6

Consolidated Statements of Cash Flow for the year ended
 December 31, 1999 (Restated) and the period from January 7, 1998
 (date of inception) to December 31, 1998 (Restated) . . . . . . . F-7

Notes to Consolidated Financial Statements . . . . . . . . . . F-8 - F-19










                                   F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
   NetVoice Technologies Corporation:


We have audited the accompanying consolidated balance sheet of NetVoice
Technologies Corporation and subsidiary (the "Company") as of December 31,
1999, and the related consolidated statements of operations, stockholders'
deficit and cash flows for the year then ended.  These consolidated
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audit.


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


In our opinion, the consolidated financial statements present fairly, in
all material respects, the financial position of the Company at December 31,
1999, and the results of its operations and its cash flows for the year
then ended, in conformity with accounting principles generally accepted
in the United States of America.

As described in Note 12, the accompanying consolidated financial statements
have been restated.



/s/ DELOITTE & TOUCHE LLP

Dallas, Texas

March 14, 2000, except for Note 12, as to which the date is
August 2, 2000




                                   F-2
<PAGE>
INDEPENDENT AUDITOR'S REPORT

Board of Directors
NetVoice Technologies Corporation
(A Development Stage Company)

I have audited the accompanying consolidated balance sheets of NetVoice
Technologies Corporation, (a development stage company), as of December 31,
1998, and the related statements of operations, stockholders' equity, and
cash flows for the period January 7, 1998 (Inception) to December 31, 1998.
These consolidated financial statements are the responsibility of the
Company's management.  My responsibility is to express an opinion on these
financial statements based on my audit.   As described in Note #12, to the
financial statements, subsequent to the issuance of the report the
financial statements of the Company for the period January 7, 1998 (date of
inception) to December 31, 1998, were restated.

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

In my opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the financial position of NetVoice
Technologies Corporation, (a development stage company), as of December 31,
1998, and the results of its operations and its cash flows for the period
January 7, 1998 (Inception) to December 31, 1998, in conformity with
generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared
assuming NetVoice Technologies Corporation, (a development stage company),
will continue as a going concern.  As discussed in Note #10 to the
consolidated financial statements, the Company has an accumulated deficit
and a negative net worth at December 31, 1998.  These factors raise
substantial doubt about the Company's ability to continue as a going
concern.  Management's plans in regard to these matters are also discussed
in Note #10.  The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


/s/ SCHVANEVELDT & COMPANY
Salt Lake City, Utah
December 15, 1999
Except Note #12 to which the date is March 14, 2000


                                  F-3
<PAGE>


<TABLE>
NETVOICE TECHNOLOGIES CORPORATION

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
-------------------------------------------------------------------------------------------------
<CAPTION>

                                                                        1999            1998
                                                                    (AS RESTATED,   (AS RESTATED,
ASSETS                                                                 NOTE 12)        NOTE 12)

<S>                                                                 <C>              <C>
CURRENT ASSETS:
   Cash and cash equivalents                                        $    20,085      $     7,990
   Restricted cash and cash equivalents                                                  167,100
   Accounts receivable - trade                                          190,733           75,068
   Prepaid expenses                                                      86,505            6,063
                                                                    -----------      -----------

         Total current assets                                           297,323          256,221

PROPERTY AND EQUIPMENT, NET                                             860,534          495,376

OTHER ASSETS                                                            300,787          174,074
                                                                    -----------      -----------

TOTAL                                                               $ 1,458,644      $   925,671
                                                                    ===========      ===========



LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
   Accounts payable                                                 $ 1,519,154      $   426,161
   Accrued expenses                                                     180,082           63,568
   Current portion of notes payable and capital lease obligations     3,659,905        1,834,309
   Unearned revenue                                                      30,000
                                                                    -----------      -----------

         Total current liabilities                                    5,389,141        2,324,038

LONG-TERM DEBT, LESS CURRENT PORTION                                    223,056
                                                                    -----------      -----------

         Total liabilities                                            5,612,197        2,324,038

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' DEFICIT:
   Preferred stock; 50,000,000 shares authorized at $0.001 par value,
      none issued

   Common stock, 100,000,000 shares authorized at $0.001 par value;
      10,741,600 and 8,990,100 shares issued and outstanding,
      respectively                                                       10,742            8,940
   Paid-in capital                                                    2,940,739          316,010
   Unearned compensation                                               (366,814)
   Accumulated deficit                                               (6,738,220)      (1,723,367)
                                                                    -----------      -----------

         Total stockholders' deficit                                 (4,153,553)      (1,398,367)
                                                                    -----------      -----------

TOTAL                                                               $ 1,458,644      $   925,671
                                                                    ===========      ===========
</TABLE>

See notes to consolidated financial statements.

                                   F-4
<PAGE>
<TABLE>
NETVOICE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999, AND
PERIOD FROM JANUARY 7, 1998 (DATE OF INCEPTION) TO
DECEMBER 31, 1998
-------------------------------------------------------------------------------------------------
<CAPTION>

                                                                        1999            1998
                                                                    (AS RESTATED,
                                                                       NOTE 12)

<S>                                                                 <C>              <C>
REVENUES                                                            $ 1,212,363      $   120,737

EXPENSES:
   Direct expenses                                                    2,043,399          252,194
   General and administrative expenses                                3,477,104          983,549
                                                                    -----------      -----------

         Total expenses                                               5,520,503        1,235,743
                                                                    -----------      -----------

OPERATING LOSS                                                       (4,308,140)      (1,115,006)

OTHER INCOME (EXPENSE):
   Interest income                                                        4,316            3,540
   Interest expense                                                    (679,511)        (372,101)
   Loss on investments                                                  (31,518)        (239,800)
                                                                    -----------      -----------

         Total other expense                                           (706,713)        (608,361)
                                                                    -----------      -----------


NET LOSS                                                            $(5,014,853)     $(1,723,367)
                                                                    ===========      ===========


BASIC AND DILUTED LOSS PER SHARE                                    $     (0.48)     $     (0.24)
                                                                    ===========      ===========

WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING                10,404,446        7,246,064
                                                                    ===========      ===========
</TABLE>


See notes to consolidated financial statements.

                                   F-5
<PAGE>
<TABLE>
NETVOICE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
YEAR ENDED DECEMBER 31, 1999 (RESTATED), AND
PERIOD FROM JANUARY 7, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 1998
--------------------------------------------------------------------------------------------------------------------
<CAPTION>


                                               COMMON STOCK
                                          --------------------
                                                                PAID-IN      UNEARNED     ACCUMULATED
                                           SHARES      AMOUNT   CAPITAL    COMPENSATION     DEFICIT       TOTAL

<S>                                       <C>         <C>      <C>          <C>           <C>           <C>
BALANCE, JANUARY 7, 1998  (DATE OF
  INCEPTION)                                     -    $   -    $      -     $      -      $       -     $       -

  Shares issued to incorporators           6,000,000    6,000       4,000                                    10,000

  Shares issued for "reverse acquisition"
    of Blue Pine, Inc.                     1,990,100    1,990      (1,990)                                      -

  Shares issued for investment in Mezzanine
    Capital, Ltd. at $.60 per share          400,000      400     239,600                                   240,000

  Shares issued for services                 600,000      600      74,400                                    75,000

  Net loss                                                                                 (1,723,367)   (1,723,367)
                                          ----------   ------  ----------   ----------    -----------   -----------

BALANCE, DECEMBER 31, 1998                 8,990,100    8,990     316,010          -       (1,723,367)   (1,398,367)

  Restricted shares issued (1,055,000
    shares) and granted (1,475,000 shares)
    to officers, directors and employees   1,055,000    1,055   1,602,295   (1,603,350)                         -

  Shares sold as part of private placement
    memorandum at $1.00 per share, net of
    issuance costs                           986,500      987     957,513                                   958,500

  Purchase of customer list from stockholder                      (60,000)                                  (60,000)

  Sale of customer list to stockholder in
    exchange for the forgiveness of debt                          124,631                                   124,631

  Canceled stock                            (290,000)    (290)        290                                       -

  Amortization of unearned compensation                                      1,236,536                    1,236,536

  Net loss                                                                                 (5,014,853)   (5,014,853)
                                          ----------  -------  ----------   ----------    -----------   -----------

BALANCE, DECEMBER 31, 1999                10,741,600  $10,742  $2,940,739   $ (366,814)   $(6,738,220)  $(4,153,553)
                                          ==========  =======  ==========   ==========    ===========   ===========
</TABLE>



See notes to consolidated financial statements.

                                   F-6
<PAGE>
<TABLE>
NETVOICE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999, AND
PERIOD FROM JANUARY 7, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 1998
-------------------------------------------------------------------------------------------------
<CAPTION>

                                                                        1999            1998
                                                                    (AS RESTATED,   (AS RESTATED,
                                                                       NOTE 12)        NOTE 12)

<S>                                                                 <C>              <C>
OPERATING ACTIVITIES:
  Net loss                                                          $(5,014,853)     $(1,723,367)
   Adjustments to reconcile net loss to net cash used in operating
   activities:
    Loss on investments                                                  31,518          239,800
    Depreciation and amortization                                       151,787           36,627
    Expenses paid by stock in lieu of cash                                                75,000
    Stock issued to employees, officers and directors                 1,236,536
    Changes in operating assets and liabilities:
      Accounts receivable                                              (115,665)         (75,068)
      Prepaid expenses                                                  (80,442)          (6,063)
      Accounts payable                                                1,092,993          426,161
      Accrued expenses                                                  116,514           63,568
      Unearned revenue                                                   30,000
      Other assets                                                     (288,380)        (182,208)
                                                                    -----------      -----------

       Net cash used in operating activities                         (2,839,992)      (1,145,550)
                                                                    -----------      -----------

INVESTING ACTIVITIES:
  Purchase of property and equipment                                   (462,129)        (523,669)
  Decrease (increase) in restricted cash and cash equivalents           167,100         (167,100)
  Purchase of investments                                               (35,036)
                                                                    -----------      -----------

       Net cash used in investing activities                           (330,065)        (690,769)
                                                                    -----------      -----------

FINANCING ACTIVITIES:
  Proceeds from the sale of common stock                                958,500           10,000
  Proceeds from long-term debt                                        3,892,989        2,039,309
  Payments on long-term debt                                         (1,669,337)        (205,000)
                                                                    -----------      -----------

       Net cash provided by financial activities                      3,182,152        1,844,309
                                                                    -----------      -----------

INCREASE IN CASH AND CASH EQUIVALENTS                                    12,095            7,990

CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD                         7,990
                                                                    -----------      -----------

CASH AND CASH EQUIVALENTS, AT END OF PERIOD                         $    20,085      $     7,990
                                                                    ===========      ===========

SUPPLEMENTAL DISCLOSURES - Interest paid                            $   368,774      $   372,101
                                                                    ===========      ===========

NONCASH TRANSACTIONS:
  Issued 400,000 shares of common stock to acquire 40,000 shares
  of Mezzanine Capital, Ltd.                                        $       -        $   240,000
                                                                    ===========      ===========

  Issued 600,000 shares of common stock for services                $       -        $    75,000
                                                                    ===========      ===========

  Issued 1,055,000 compensatory shares to officers, directors
  and employees                                                     $ 1,602,822      $       -
                                                                    ===========      ===========

  Assets acquired through capital leases                            $    31,631      $       -
                                                                    ===========      ===========

  Forgiveness of debt in exchange for customer lists                $   175,000      $       -
                                                                    ===========      ===========
</TABLE>



See notes to consolidated financial statements.

                                   F-7
<PAGE>
NETVOICE TECHNOLOGIES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1999 (RESTATED), AND

PERIOD FROM JANUARY 7, 1998 (DATE OF INCEPTION) TO
DECEMBER 31, 1998 (RESTATED)
-------------------------------------------------------------------------


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION - NetVoice Technologies Corporation (the "Company") is the
successor company to NetVoice Technologies, LLC ("NVT, LLC"), a Texas
limited liability company that began operations on January 7, 1998.  NVT,
LLC was formed for the purpose of developing, acquiring and operating
telephone communication facilities and networks that were intended to
transmit voice over the Internet utilizing conventional and Internet
technologies.  NVT, LLC was reincorporated in Nevada on June 30, 1998, as
NetVoice Technologies, Inc. ("NVT, Inc.").


On August 13, 1998, NVT, Inc. concluded a reverse acquisition of Blue
Pines, Inc. in which Blue Pines, Inc. issued 6,000,000 shares of common
stock in exchange for all of the outstanding shares of common stock of
NVT, Inc., the surviving accounting acquirer.  As a result of the reverse
acquisition, NVT, Inc. became a wholly owned subsidiary of Blue Pines,
Inc., and the six former stockholders of NVT, Inc. became the holders of
approximately 75% of the outstanding shares of common stock of the
Company.  The remaining 25% of the shares were owned by the original
non-affiliated stockholders of Blue Pines, Inc.  On August 11, 1998, Blue
Pines, Inc. changed its name to NetVoice Technologies Corporation.  The
value of assets that NVT, Inc. acquired as a result of the reverse
acquisition was negligible because Blue Pines, Inc. was an inactive shell
at the time of the reverse acquisition.  There was no prior affiliation
between the parties.  Shares outstanding prior to the reverse acquisition
have been restated to reflect the exchange ratio with Blue Pines, Inc.


NetLD.com, Inc. was incorporated in the State of Nevada as a wholly owned
subsidiary of the Company on October 14, 1999.  This corporation was
initially formed for the purpose of conducting the traditional long
distance telephone services of the Company.  Currently, there has been no
activity in this subsidiary, and it is not anticipated that traditional
long distance will be pursued as part of the business model.  The Company
may disband this entity or use it for other corporate purposes.


RISKS AND UNCERTAINTIES - The Company has experienced cumulative
operating losses, and its operations are subject to certain risks and
uncertainties, including, among others, risks associated with technology
and regulatory trends, evolving industry standards, growth and
acquisitions, actual and prospective competition by entities with greater
financial and other resources, the development of the Internet market and
the need for additional capital.

The Company has incurred net losses of $5,014,853 and $1,723,367 in 1999
and 1998, respectively.  The Company has also had negative cash flows
from operating activities of $2,839,992 and $1,145,550 in 1999 and 1998,
respectively.  The Company must obtain additional debt or equity capital
to continue its current operations and to meet debt service requirements.
As described in Note 11, the Company has entered into a letter of intent
for $28.0 million credit facility with Cisco Systems.  Management has
also completed a private placement of 1,200,000 shares of its common
stock for $5.1 million.  The Company believes that this additional
financing and private placement will be sufficient to support the
Company's liquidity requirements through December 31, 2000.


                                   F-8

Management also believes there can be no assurances that additional
financing can be obtained from conventional sources.  Therefore,
management is exploring alternative sources of financing support that
include seeking strategic investors and/or technology partners.  There
can be no assurance that the Company will be successful in obtaining any
of the necessary financing on reasonable terms or at all.

REVENUES FROM TRADITIONAL LONG DISTANCE SERVICES RECOGNITION POLICY -
Traditional long distance services provided to consumers and long
distance services sold in bulk to other carriers are recognized in the
period the minutes are used.  Any amounts prepaid are deferred until the
period service are provided.

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries.
All intercompany transactions and balances between the Company and its
subsidiaries have been eliminated in consolidation.


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


CASH AND CASH EQUIVALENTS - The Company considers all short-term, highly
liquid investments purchased with an initial maturity of three months or
less to be cash equivalents.


PROPERTY AND EQUIPMENT - The cost of property and equipment is
depreciated over the estimated useful lives of the related assets.
Depreciation and amortization are computed on the straight-line method.
The following is a summary of useful lives of the major categories of
property and equipment:

     Furniture and equipment                           3 to 10 years
     Computer and telephone equipment                  3 to 10 years


ACCOUNTS RECEIVABLE - The Company does not have an allowance for doubtful
accounts at December 31, 1999 and 1998.  It is management's belief that
all accounts receivable balances at December 31, 1999 are probable of
collection.

INCOME TAXES - The Company and its subsidiaries file a consolidated tax
return.  Deferred income taxes are recognized for the tax consequences of
temporary differences by applying enacted statutory tax rates applicable
to future years to differences between the financial statement carrying
amounts and the tax basis of existing assets and liabilities.  The effect
on deferred taxes of a change in tax rates is recognized in income in the
period that includes the enactment date.  The Company annually evaluates
the recoverability of the deferred tax asset and adjusts the valuation
allowance for the portion of such asset  not considered more likely than
not to be realized.

EARNINGS PER SHARE - Basic earnings per share are computed by dividing
income (loss) available to common stockholders by the weighted average
number of common shares outstanding during the period.  Diluted earnings
per share are computed by including contingently issuable shares with the
weighted average shares outstanding during the period.  Contingently
issuable shares would have an antidilutive effect upon earnings per
share.  At December 31, 1999 and 1998, the Company had 3,347,500 and
1,872,500, respectively, of contingently issuable shares of common stock
that were not included in the Company's earnings per share calculation.

COMPREHENSIVE INCOME - The Company has no elements of other comprehensive
income.


                                   F-9
<PAGE>
SEGMENTS - The Company is in a single-market segment.

LONG-LIVED ASSETS - Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," requires that they be stated at the
lower of the expected net realizable value or cost.  The carrying value
of long-lived assets is periodically reviewed to determine whether
impairment exists.  The review is based on comparing the carrying amount
of the assets to the undiscounted estimated cash flows over the remaining
useful lives.  No impairment is indicated as of December 31, 1999.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS - SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," was issued in June 1998
and establishes standards for accounting and reporting for derivative
instruments.  It requires entities to record all derivative instruments
on the balance sheet at fair value.  Changes in the fair value of
derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated as
part of a hedge transaction and on the type of hedge transaction.  The
portion of all hedges not effective in achieving offsetting changes in
fair value is recognized in earnings.  SFAS No. 133, as amended, is
effective for all fiscal quarters of all fiscal years beginning after
June 15, 2000.  Management has not completed an evaluation of the impact
of the provisions of this statement on the Company's financial statements.

RECLASSIFICATIONS - Certain reclassifications have been made in the prior
year's financial statements in order to conform to the classifications
used in the current year.

2.   PROPERTY AND EQUIPMENT

Property and equipment at December 31 consisted of the following:
<TABLE>
<CAPTION>

                                                                     1999            1998
       <S>                                                      <C>             <C>
       Furniture and equipment                                  $    10,033     $     8,160
       Computer and telephone equipment                             975,765         515,509
                                                                -----------     -----------

             Total cost                                             985,798         523,669

       Less accumulated depreciation                               (125,264)        (28,293)
                                                                -----------     -----------

                                                                $   806,534     $   495,376
                                                                ===========     ===========
</TABLE>



                                  F-10
<PAGE>
3.   OTHER ASSETS

Other assets at December 31 consisted of the following:
<TABLE>
<CAPTION>

                                                                     1999            1998
       <S>                                                      <C>             <C>
       Vendor security deposits                                 $   300,587     $    72,208
       Investments                                                      200             200
       Customer lists, net                                                          101,666
                                                                -----------     -----------

                                                                $   300,787     $   174,074
                                                                ===========     ===========
</TABLE>

The customer list was amortized on a straight-line basis over two years.
For the year ended December 31, 1999, and the period from January 7, 1998
(date of inception) to December 31, 1998, amortization expense was
$70,696 and $8,529, respectively (see Note 8).

Investments consist of 40,000 shares of common stock of Mezzanine
Capital, Ltd. ("Mezzanine"), a Bermuda corporation.  The stock of
Mezzanine is traded on the Bermuda exchange.  The Company considered its
investment in Mezzanine strategic in nature to facilitate its consulting
services.  At the time the transaction was entered into, the market value
of Mezzanine stock was approximately $6.00 per share.  At December 31,
1998, the Company wrote the investment down because there had been no
trading activity in the stock and its market value is believed to be
permanently impaired.

4.   NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

Notes payable and capital lease obligations at December 31 consisted of
the following:
<TABLE>
<CAPTION>

                                                                     1999            1998
       <S>                                                      <C>             <C>
       Notes payable                                            $ 3,651,932     $ 1,669,337

       Loans from stockholders, no interest rate, maturing from
       October 2004 to December 2004                                206,672

       Loans from stockholders, no interest rate, due on demand                     164,972

       Capital lease obligations, with interest rates of 15%
       to 15.3%, maturing August 2003                                24,357
                                                                -----------     -----------

                                                                  3,882,961       1,834,309

       Less current portion of long-term debt                    (3,659,905)     (1,834,309)
                                                                -----------     -----------

                                                                $   223,056     $       -
                                                                ===========     ===========
</TABLE>

                                  F-11
<PAGE>
     Future minimum lease payments for capital lease obligations at
     December 31, 1999, are as follows:
<TABLE>
<CAPTION>

       <S>                                                                      <C>
       Year ended December 31:
         2000                                                                   $11,127
         2001                                                                    11,127
         2002                                                                     5,615
         2003                                                                     2,256
                                                                                -------

       Total                                                                     30,125

       Less interest of capital lease obligations                                (5,768)
                                                                                -------

       Present value of net minimum capital lease payments                      $24,357
                                                                                =======
</TABLE>


     The aggregate future maturities of long-term debt, excluding capital
     lease obligations, are as follows:
<TABLE>
<CAPTION>

       <S>                                                                      <C>
       Year ended December 31:
         2000                                                                   $3,651,932
         2001
         2002
         2003
         2004                                                                      206,672
                                                                                ----------

                                                                                $3,858,604
                                                                                ==========
</TABLE>

Notes payable are secured by a security interest in revenues from
contracts, equipment and a cash reserve equal to 10% of total notes
payable.  The notes bear a fixed rate of interest at a rate of 13.35% per
annum, payable on the first day of each quarter during the term.  All
principal and unpaid accrued interest is due and payable nine months from
issuance.  The notes are due from January 2000 to September 2000.  The
note holder has the right to extend the terms of the notes for an
additional nine months at the same terms.


The aggregated principal amount of the notes that may be delivered under
the Indenture Agreement is limited to $5,000,000, of which $3,651,932 has
been issued through December 31, 1999.  At December 31, 1999, the Company
was not in compliance with its debt covenant, that requires the Company
to maintain approximately 10% of its outstanding debt on deposit with an
escrow agent, however, subsequently, the Company received a waiver for
its noncompliance.


5.   INCOME TAXES

From January 7, 1998 (date of inception) to June 30, 1998, the Company
operated as an LLC.  On June 30, 1998, the Company filed Articles of
Incorporation in the State of Nevada and continued its business
activities as a corporation.  For income tax purposes, the Company has
filed a partnership return for the period when it operated as an LLC and
a corporate tax return will be filed thereafter.

                                  F-12
<PAGE>
The Company has net operating losses to carry forward for future tax
purposes, as follows:

           YEAR                      AMOUNT            EXPIRATION
          OF LOSS                   OF LOSS              DATE

           1998                    $1,156,628            2018
           1999                     4,022,882            2019


Net deferred taxes in the accompanying consolidated balance sheets
include the following components as of December 31:
<TABLE>
<CAPTION>

                                                                     1999            1998
       <S>                                                      <C>             <C>
       Deferred tax asset:
         Net operating loss carryforward                        $ 1,968,213     $   439,519
         Miscellaneous tax asset items                               91,124          93,668
                                                                -----------     -----------

         Total deferred tax asset                                 2,059,337         533,187

         Valuation allowance                                     (2,059,337)       (533,187)
                                                                -----------     -----------

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


The Company annually evaluates the recoverability of the deferred tax
asset and adjusts the valuation allowance for the portion of such asset
not considered more likely than not to be realized.


A reconciliation of income taxes computed at the U.S. federal statutory
tax rate to the provision for income tax is as follows as of December 31:
<TABLE>
<CAPTION>

                                                            1999                    1998
                                                 ------------------------- ----------------------
       <S>                                        <C>            <C>        <C>          <C>
       Income tax benefit at U.S. federal
         statutory rates                          $(1,559,846)   (34.00)%   $(585,945)   (34.00)%
       State tax benefit                             (183,511)    (4.00)      (68,935)     0.04
       Other, primarily permanent differences         217,206      4.70       121,692      7.06
       Valuation allowance                          1,526,151     33.30       533,187     26.98
                                                  -----------    ------     ---------    ------

                                                  $       -        0.00 %   $     -        0.00 %
                                                  ===========    ======     =========    ======
</TABLE>

6.   STOCKHOLDERS' EQUITY

PREFERRED STOCK - The Company is authorized to issue 50,000,000 shares of
preferred stock with a par value of $0.001 per share in one or more
series as may be determined by the Board of Directors.  The Board of
Directors may fix the designation, power, preference and relative rights
of the shares of each series and any qualifications, limitations or
restrictions thereof, and increase or decrease the number of shares of
any series without stockholders' approval or action by the stockholders.
The Board of Directors may authorize, without stockholders' approval, the
issuance of preferred stock with voting rights and conversion rights that
could adversely affect the voting power and other rights of the common stock.


COMMON STOCK - The total authorized stock of the Company is 100,000,000
shares of common stock, with a par value of $.001.  All stocks when
issued shall be deemed fully paid and nonassessable.  No

                                  F-13
<PAGE>
cumulative voting on any matter to which stockholders shall be entitled
to vote shall be allowed for any purpose.  Stockholders have no
preemptive rights to acquire unissued shares of stock of the Company.


During 1998, the Company issued 400,000 shares of common stock to acquire
40,000 shares of Mezzanine, a Bermuda corporation (see Note 3).

During 1998, the Company issued 600,000 shares of common stock to two
providers of promotional services.  The value of the services provided
was $75,000, which was expensed.

STOCK SPLIT - In February 2000, the Company declared a 2-for-1 stock
split of all outstanding shares for all stockholders of record as of
March 14, 2000.  Retroactive effect has been given to the stock split in
stockholders' equity accounts as of December 31, 1999 and 1998, and in
all share and per-share data in the accompanying financial statements.

CANCELED STOCK - In February 1999, one of the original stockholders of
the Company returned 290,000 shares to the Company.  The shares were
forfeited because of the lack of effort the individual could devote to
Company matters.  The Company canceled the shares upon receipt.

PRIVATE PLACEMENT - In March and April 1999, the Company issued 986,500
shares of common stock at $1.00 in a private placement.

7.   STOCK-BASED COMPENSATION

STOCK-GRANTS - In January 1999, the Company issued 740,000 shares of
stock to directors and certain employees.  At the time the shares were
issued, there was no market in the Company's stock.  The Company valued
the shares at $.195 per share, and compensation expense of $145,000 was
recorded in the Company's financial statements.  The stock vested
immediately.  All certificates bear "restricted" legends prohibiting
their transfer.

From August to November 1999, the Company issued 315,500 shares of stock
to officers and certain employees.  The Company valued the shares between
$.73 and $1.62 per share, and compensation expense of $257,150 was
recorded in the Company's financial statements.  The stock vested
immediately.  All certificates bear "restricted" legends prohibiting
their transfer.

From August to November 1999, the Company granted and reserved to be
issued 1,475,000 shares of stock to officers and certain employees.  The
Company valued the shares between $.73 and $1.73 per share, depending on
the date of grant.  The stock vests based upon continued employment over
a period of approximately 18 months.  The Company recorded $1,201,200 as
unearned compensation on date of grant, of which $834,386 was amortized
as compensation expense in the year ended December 31, 1999, and the
remainder is to be recognized on a straight-line basis over the vesting
period.  All certificates bear "restricted" legends prohibiting their
transfer.

The following is the vesting schedule for the granted shares:

     882,500 shares to vest in the first calendar quarter of 2000
     177,500 shares to vest in the second calendar quarter of 2000
     177,500 shares to vest in the third calendar quarter of 2000
     42,500 shares to vest in the fourth calendar quarter of 2000
     195,000 shares to vest in the first calendar quarter of 2001

The grant of options with no exercise price is accounted for as a grant
of restricted shares.

                                  F-14
<PAGE>
Effective January 25, 1999, the Board approved the adoption of a stock
option plan to be administered by a committee.  Each option is
exercisable in accordance with certain price restrictions and were vested
on the date of grant.  During 1999, 1,872,500 options were granted at an
exercise price of $.50 per share, the estimated fair value of the
underlying stock at the date of grant was $.20 per share.  As of December
1999, all 1,872,500 options were vested and exercisable.

The Company applies the provisions of APB No. 25 and related
Interpretations in accounting for its stock option plan.  Accordingly, no
compensation cost has been recognized for its stock option plan, since
the exercise price of the Company's stock option grants was greater than
the estimated fair market value of the underlying stock on the date of
the grant.  Had compensation costs for the stock option plan been
determined based on the fair value at the grant date consistent with SFAS
No. 123, "Accounting for Stock-Based Compensation," the Company's net
loss for 1999 would have been the same.  In determining the calculation
for SFAS No. 123, the Company used a weighted average remaining life of
these options of four years, a risk free interest rate of 6.35%, no
dividend rate and volatility of 1%.

8.   RELATED PARTY TRANSACTIONS


In October 1998, the Company purchased a customer list from Quantum
Network Services, Inc. ("Quantum") for $110,000 in cash.  Quantum's
historical cost basis in the customer list was $110,000.  The list was
used by the Company in its long distance and other marketing efforts, and
the Company estimated its useful life as two years.  The Company
recognized $8,334 as amortization expense in 1998 and $51,297 in 1999.
In June 1999, the Company purchased an additional customer list for
$60,000 in cash from Quantum.  Quantum had no historical cost basis in
this customer list.  The President of Quantum was at the time as member
of the Board of Directors of the Company and is a shareholder of 23.9% of
the Company's common stock.  The $60,000 that was paid to Quantum was
accounted for a distribution to the shareholder by the Company.  In
December 1999, the Company sold the customer lists to Nationwide
Hospitality, a company also owned by a then member of the Board of
Directors of the Company and shareholder of 8.2% the Company's common
stock, for $175,000 in the form of a partial settlement of a note
payable.  The $124,631 that was in excess of the Company's basis was
accounted for as a contribution of capital.


As of December 31, 1999 and 1998, the Company had loans payable to
stockholders in the amounts of $206,672 and $164,972, respectively.
These notes include no interest rate and have maturity dates from October
through December 2004.

9.   COMMITMENTS AND CONTINGENCIES

LEGAL - The Company is not currently subject to any legal proceedings
that management believes will have a material impact on the Company's
financial position or results of operations.


The legal acquirer was involved in the gold mining industry; the extent
of its mining activity was to acquire a mineral lease, which was
subsequently abandoned due to lack of lease payments and exploration
activity.  The applicable statute of limitations has not expired, and no
claims have been made against Blue Pines, Inc.  The Company believes it
is unlikely that any claims will be made against the Company relating to
this matter.


AGREEMENTS AND COMMITMENTS - The Company has entered into various
agreements with service providers, on an order-by-order basis, to lease
bandwidth, purchase dedicated Internet access, lease local lines and rent
space to locate its network equipment.  These service orders range in
term from month-to-month to five-year agreements.  Below is a schedule
that details the significant terms of these commitments:

                                  F-15
<PAGE>
<TABLE>
<CAPTION>
                        MONTHLY                 CANCELLATION              INITIAL
                        PAYMENTS    TERM           PENALTY                 ORDER

<S>                     <C>        <C>       <C>                         <C>
Sprint(TM) Commercial   $45,000    3 years   100% of year 1; 50% of      October 1998
 ("Sprint")                                  Year 2; 50% of year 3

Global Crossing          35,000    2 years   $25,000-per-month of the    August 1999
                                             remaining commitment

E.Spire                  35,000    1-3 years Commitment for the total    August 1998
                                             period for value of orders

Cox                       9,000     5 years  Commitment for full         January 1999
                                             amount for entire period

Electric Lightwave       21,000     1 year   Commitment for full           July 1999
                                             amount for the entire period

MCI WorldCom             11,000     1 year   Commitment for 50% of       September 1999
                                             the remaining amount due

Level 3 Communications   40,000     1 year   Commitment for total        August 1999
 Inc.                                        amount for the full term

Caprock Communications    5,000     1 year   Take-or-pay Commitment        July 1999
</TABLE>


In December 1999, the Company terminated services with Sprint.
Management believes that the Company will be able to cancel the existing
contracts without material adverse effect on the Company's consolidated
financial statements.  The Company is currently trying to negotiate a
final settlement.  The Company is in good standing with respect to all of
its other commitments.


OPERATING LEASES - The Company conducts its operations in leased
facilities and has entered into leases for office space and equipment.
The future minimum lease payments under these operating leases as of
December 31, 1999, are as follows:
<TABLE>
<CAPTION>

       <S>                                                                      <C>
       Years ending December 31:
         2000                                                                   $536,590
         2001                                                                    204,314
         2002                                                                     40,281
                                                                                --------

       Total                                                                    $781,185
                                                                                ========
</TABLE>


The Company recorded operating lease expense of $44,035 and $27,372 in
1999 and 1998, respectively.

10.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments."  The estimated
fair value amounts have been determined by the Company using available
market information and appropriate valuation methodologies.  However,
considerable judgment is required in interpreting market data to develop
the estimates of fair value.  Accordingly, the estimates presented herein
are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.  The

                                  F-16
<PAGE>
use of different market assumptions and/or estimation methodologies may
have a material effect on the estimated fair value amounts.
<TABLE>
<CAPTION>

                                                    DECEMBER 31, 1999       DECEMBER 31, 1998
                                                 ----------------------- -----------------------
                                                   CARRYING   ESTIMATED   CARRYING    ESTIMATED
                                                    AMOUNT    FAIR VALUE   AMOUNT     FAIR VALUE
       <S>                                        <C>         <C>        <C>          <C>
       Assets:
         Cash and cash equivalents                $   20,085  $   20,085  $    7,990  $    7,990
         Accounts receivable - trade                 190,733     190,733      75,068      75,068
       Liabilities:
         Accounts payable                          1,519,154   1,519,154     426,161     426,161
         Long-term debt                            3,858,604   3,382,233   1,834,309   1,607,851
</TABLE>


CASH AND CASH EQUIVALENTS, ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE - The
carrying amounts of these items are a reasonable estimate of their fair value.

LONG-TERM DEBT - The fair values of long-term debt are estimated based on
interest rates that are currently available to the Company for the
issuance of debt with similar terms and remaining maturities.

The fair value estimates are based on pertinent information available to
management as of December 31, 1999.  Although management is not aware of
any factors that would significantly affect the estimated fair value
amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since that date, and current estimates of
fair value may differ significantly from the amounts presented.

11.  SUBSEQUENT EVENTS

PRIVATE PLACEMENT MEMORANDUM - In February 2000, the Company effected a
private placement of 1,200,000 shares of its common stock for $5,100,000.
Subscribers may not sell, transfer or otherwise dispose of the shares
unless it is in compliance with Rule 144 of the Securities Act of 1933.


FACILITY WITH CISCO SYSTEMS CAPITAL CORPORATION - In February 2000, the
Company entered into a letter of intent for a $28 million credit facility
with Cisco Systems, divided into three tranches.  Tranche A provides $20
million for the purchase of Cisco Systems networking hardware; Tranche B
provides $5 million for the soft costs associated with the network; and
Tranche C provides $3 million to be used for working capital purposes
exclusive of acquisitions.  The applicable interest rate is London
Interbank Offered Rate ("LIBOR") plus 5.50% per annum, calculated on a
360-day year for actual days elapsed, and accrued from the date of
initial funding.  After two consecutive quarters of positive earnings
before income taxes, depreciation and amortization ("EBITDA"), the
interest rate will be based on a sliding scale over LIBOR with a margin
range from 4.00% to 5.25%.  The final maturity date for all debt is five
years from the closing date of the facility agreement, or February 25,
2005.  The agreement also gives Cisco Systems warrants to purchase 2.5%
of the Company's common stock for $11.25 per share.  The warrants will be
exercisable for five years from the date of issuance.


12.  RESTATEMENT


Subsequent to the issuance of the Company's consolidated financial
statements as of and for the year ended December 31, 1999, the Company's
management determined that the cost for the purchase of a customer list
from a company owned by a shareholder in June 1999 should have been
accounted for as a capital

                                  F-17
<PAGE>
distribution, and the proceeds from the sale of such customer list and
the excess of the proceeds from the sale of another customer list over
its amortized carrying cost, both having been sold to another minority
shareholder in December 1999, should have been accounted for as capital
contribution.  These transactions are more fully discussed in Note 8.
Previously, the purchase was accounted for as an asset acquisition with
amortization of the cost charged to expense, and the sale was accounted
for as an asset disposition with a gain recognized.  Additionally,
subsequent to the issuance of the Company's consolidated financial
statements as of and for the period ended December 31, 1998, the
Company's management determined that certain leases entered into in
December 1998 should have been accounted for as operating leases.
Previously, such leases had been accounted for as capital leases.  As a
result, the 1999 and 1998 financial statements have been restated from
amounts previously reported to appropriately account for these
transactions.  The effects of the restatement are summarized as follows:

A summary of the significant effects of the restatement on the 1999
financial statements is as follows:

<TABLE>
<CAPTION>
                                                               AS PREVIOUSLY        AS
                                                                 REPORTED        RESTATED
       <S>                                                     <C>             <C>
       Balance sheet
         Paid-in Capital                                       $ 2,881,479     $ 2,940,739
         Accumulated Deficit                                    (6,673,589)     (6,738,220)

       Statement of operations
         General and Administrative Expenses                     3,412,473       3,477,104
         Total Expenses                                          5,455,872       5,520,503
         Operating Loss                                         (4,243,509)     (4,308,140)
         Net Loss                                               (4,950,222)     (5,014,853)
</TABLE>


A summary of the significant effects of the restatement on the 1998
financial statements is as follows:

<TABLE>
<CAPTION>
                                                               AS PREVIOUSLY        AS
                                                                 REPORTED        RESTATED
       <S>                                                      <C>             <C>
       Property and equipment, net                              $  681,856      $  495,376
       Total assets                                              1,112,151         925,671
       Notes payable and current portion of capital lease
        obligations                                              1,951,390       1,834,309
       Total current liabilities                                 2,441,119       2,324,038
       Long-term debt                                               69,399
       Total liabilities and stockholders' deficit               1,112,151         925,671
</TABLE>



                                  F-18
<PAGE>
13.  REVISED CISCO AGREEMENT (unaudited)


On May 25, 2000, the letter of intent with Cisco System, as disclosed in
Note 11, was revised to reflect a $25.0 million credit facility.  The
revision to the credit facility excludes Tranche C.  Therefore, no
warrants will be issued in connection with the proposed financing.



                                 ******









                                  F-19
<PAGE>
                               SIGNATURES

In accordance with Section 13 of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   NETVOICE TECHNOLOGIES CORPORATION



Date: September 22, 2000           By: /s/ JEFFREY ROTHELL

                                      -------------------------------
                                      Jeffrey Rothell, President, Chief
                                      Executive Officer


Date: September 22, 2000           By: /s/ GARTH COOK

                                      -------------------------------
                                      Garth Cook, Treasurer, Chief
                                      Financial Officer and Chief
                                      Accounting Officer

                            POWER OF ATTORNEY

     KNOW ALL PERSONS BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Jeffrey Rothell and Garth Cook,
and each of them, as true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him or her and in his
or her name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this report, and
to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all which said attorneys-in-fact and agents or
any of them, or their or his or her substitute or substitutes, may
lawfully do, or cause to be done by virtue hereof.

     In accordance with the Exchange Act, this report was signed below by
the following persons on behalf of the registrant and in the capacities
and on the dates stated.

Signatures                   Title                          Date
----------                   -----                          ----


/s/ JEFFREY ROTHELL   President, Chief Executive Officer   September 22, 2000
--------------------- (Principal Executive Officer)
Jeffrey Rothell


/s/ GARTH COOK        Chief Financial Officer              September 22, 2000
--------------------- (Principal Financial and
Garth Cook            Accounting Officer)

/s/ WILLIAM BEDRI     Director and Secretary               September 22, 2000
---------------------
William Bedri


                                   51