U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               FORM 10-KSB/A No. 2

         (Mark One)

     [X]  ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR 15(D)  OF THE  SECURITIES
          EXCHANGE  ACT OF 1934 FOR THE FISCAL YEAR ENDED  DECEMBER  31, 2000 or


     [    ] TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE  ACT OF 1934  FOR  THE  TRANSITION  PERIOD  OF  _________  TO
          _________.

         Commission File Number:  000-27263


                             Cyberfast Systems, Inc.
                 (Name of small business issuer in its charter)

           Florida                                     13-398600
------------------------------                    -------------------
State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization                     Identification No.)


              777 Yamato Road, Suite 105, Boca Raton, Florida 33431
             ------------------------------------------------------
                    (Address of principal executive offices)

         Issuer's telephone number: (561) 995-6255
         Securities registered under Section 12(b) of the Act:   None


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

                      Class A Common Stock, $0.01 Par Value
                                (Title of Class)

Check  whether the Issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  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 [ ]

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

State Issuer's revenues for its most recent fiscal year: $192,815

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates, computed by reference to the last sales price reported on the
Pink Sheets of such common equity as of July 5, 2001: $511,680.

As of July 5, 2001,  3,239,276  shares of Registrant's  Class A Common Stock and
4,447,600 shares of Registrant's Class B Common Stock were outstanding.

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


                                     PART I

ITEM 1. DESCRIPTION OF THE BUSINESS

     Cyberfast Systems,  Inc. ("Cyberfast" or the "Company") is an international
provider of digital data communications services. The Company operates primarily
between the United States and selected destination  countries.  Depending on the
quality of available  circuitry,  the Company's network can offer  international
telecommunications  services via Voice over the  Internet  ("VON") or Voice over
Internet Protocol  ("VoIP").  In order to insure the highest quality of service,
most of the Company's services are handled through VoIP routing.  In addition to
delivering  voice  services,  Cyberfast  plans to  offer  fax,  data  and  video
capability,  together  known as Internet  Protocol  Telephony  ("IP  Telephony")
services.  Cyberfast is building a network of Points of Presence  ("POP") around
the world.  This worldwide  footprint can be used for transport of voice,  data,
video,  Internet access and multimedia by a variety of users.  Cyberfast is able
to  leverage  Internet  protocol  technology  to reduce  the costs of  providing
telecommunications  services in traditionally high priced markets.  By utilizing
the latest voice compression  technology,  Cyberfast can digitalize and compress
eight calls into a traditional  phone line. This allows  Cyberfast to send eight
times the amount of calls through the same  facility  that a  traditional  phone
carrier  utilizes to place only one call. This ability,  along with the inherent
flexibility of IP, lets Cyberfast  provide voice services in a market previously
controlled by the large telephone companies.

     The Company's  principal  office is located at 777 Yamato Road,  Suite 105,
Boca  Raton,  Florida  33431 and its  telephone  number is (561)  995-6255.  The
Company's internet site can be accessed at www.cyberfast.net.

History

Reorganization with Smartfit.

     Budget-Calls  Corporation  ("BCC") was founded on August 10, 1995 by Edward
J. and  Itir  Stackpole,  the  Company's  current  majority  shareholders,  as a
predecessor to the Company.  BCC operations were  subsequently  transferred into
Cyberfast Network Systems Corporation ("CNSC"),  and incorporated August 7, 1996
as a Florida  corporation.  Pursuant to an Agreement and Plan of  Reorganization
dated November 10, 1998 (the  "Reorganization"),  Smartfit Foundations,  Inc., a
non-operating  public shell  corporation,  acquired  100% of the common stock of
CNSC  and BCC in  exchange  for  97.8% of its  stock,  and  changed  its name to
Cyberfast Systems, Inc.

     CNSC entered into the Reorganization with Smartfit for several reasons, the
most important of which include:

          1. CNSC was  experiencing  successes  with its basic business plan and
     needed to acquire additional resources.  It was thought at the time that if
     CNSC were public and had a marketable  common  stock,  the  acquisition  of
     target  expansion  companies  using  common  stock would help free up vital
     capital resources for additional equipment.

          2.  Existing and future  management  team members would see benefit in
     having stock options in a publicly traded company.

          3. Having  publicly  traded stock would  provide an exit  strategy for
     original and early investors.

     Once   management   decided  that  a  merger  into  a  public  company  was
appropriate,  a nationwide  search was  conducted.  Several  opportunities  were
evaluated,  and after several months,  the Smartfit  Reorganization  came to the
attention of CNSC through Mr. Robert Jarkow,  then the accounting  consultant to
Cyberfast.  SmartFit was an old established  company that had withdrawn from its
traditional markets and was interested in selling/merging with another company.

     To the  knowledge  of any of the  original  owners of CNSC and the existing
management  team,  no  relationship  existed  between any CNSC  principals,  its
management or consultants prior to, or at the time of, the Reorganization.

     The  purchase  price was reached by  negotiation  between the  parties.  No
outside party fairness  evaluation  was  commissioned.  Because  SmartFit had no
business  operations  at the  time  the  transaction  was  completed,  CNSC  was
acquiring only assets  associated with the Smartfit  public company  status.  No
liabilities  were assumed,  except for those  described in the agreement and for
which a reserve had been established.

Other Transactions.

     On May 20, 1999, the Company formed Boca Data Services, Inc. ("BDSI") under
the laws of Florida,  as a wholly owned subsidiary,  to partner with the Company
on certain  overseas  ventures where the  acquisition  of circuits  required two
entities.   BCC,  CNSC,  and  BDSI  currently  are  non-operating  wholly  owned
subsidiaries of the Company.

     In November, 1999, the Company acquired a Nevada corporation, Global Telcom
and Internet Ventures, Inc. ("Global") based in Denver, Colorado in exchange for
180,000 restricted shares of Class A Common Stock of Cyberfast.  A fee of 20,000
restricted  shares of Class A Common Stock was issued to a  broker-dealer  which
acted as finder in the transaction.  Global is currently a non-operating  wholly
owned subsidiary of Cyberfast.

     On May 5, 2000, the Company entered into a Memorandum of Understanding (the
"MOU") in  connection  with the sale of common  stock of the Company to The FATA
Group Sp.A.,  an Italian  corporation  ("FATA").  The MOU was replaced  when the
Company completed the first closing of an investment agreement (the "Agreement")
with FATA. Pursuant to the Agreement,  on August 1, 2000, FATA subscribed to and
purchased from the Company a total of 1,466,276  shares of the Company's Class A
Common Stock for a total  purchase  price of $1,500,000  (the "First  Closing"),
consisting of a $300,000 loan from FATA plus accrued interest that was converted
to equity, and cash from the internal funds of FATA. Previously, on May 5, 2000,
FATA made a $300,000  loan to the Company,  which had an interest rate of 6% per
annum.  Accordingly,  on August 1, 2000,  the Company  received  net proceeds of
$1,199,964 from FATA.

     Prior to the First Closing of the  Agreement,  Edward J. Stackpole and Itir
Stackpole (the  "Controlling  Shareholders")  beneficially  owned  approximately
30.2% of the Company's  outstanding Class A Common Stock and approximately 77.3%
of the Company's Class B Common Stock.  The Class B Common Stock is identical to
the Class A Common  Stock in all  respects  except  that  each  share of Class B
Common  Stock has 10 votes in  respect  to each  share of Class B Common  Stock.
Because  of the  number of shares and  voting  power  attributed  to the Class B
Common Stock, the Controlling Shareholders controlled approximately 75.5% of the
total voting power of the company prior to the First  Closing of the  Agreement.
Immediately  after the First  Closing,  FATA  owned  approximately  46.1% of the
outstanding shares of the Company's Class A common stock.

     Upon  satisfaction  of all the conditions  stated in the Agreement,  but no
later than November 30, 2000, FATA had the option to purchase from the Company a
combination  of  shares of Class A Common  Stock,  Class B Common  Stock  and/or
Preferred Stock for a total purchase price of $3,500,000 (the "Second Closing").
FATA did not proceed with the Second Closing. Pursuant to the Agreement, if FATA
did not proceed  with the Second  Closing,  FATA had an option,  exercisable  in
FATA's sole  discretion  until  November  30,  2000,  to sell to the Company the
number of Company shares acquired by FATA at the First Closing for a fixed price
of $1,500,000 plus any additional sums or  consideration  as of such time loaned
to or  contributed  to the Company,  plus an interest  rate of 6% per year.  The
Company is currently  disputing  whether FATA properly  exercised this option by
the November 30, 2000 deadline.

Industry Overview

     In addition  to  traditional  voice  communication  transported  via Public
Switched  Telephone  Networks  ("PSTN"),  the  past  few  years  have  seen  the
development  of  communications  technologies  using the Internet.  Pre-Internet
telephony operated using analog and digital signals via a two-way point-to-point
communication  network  connecting  copper  lines,  fiber  optics and  satellite
transmissions  on a global  basis.  The Internet is a worldwide  public  network
enabling   transfer   and   sharing  of  data   information   through  a  common
communications protocol called Transmission Control  Protocol/Internet  Protocol
("TCP/IP"). Data is transported over the Internet in the form of data packets on
a global computer network.

     VON refers to communications  services (voice,  fax and/or  voice-messaging
applications)  that are  transported  via the  Internet,  rather than the public
switched telephone networks ("PSTN"). The basic steps involved in originating an
Internet  telephone  call are  conversion  of the analog voice signal to digital
format and  compression/translation  of the signal into Internet  ("IP") packets
for the transmission  over the public  Internet.  The process is reversed at the
receiving end.

     VoIP is  technically  similar to VON,  but differs in that IP refers to the
use of Internet  protocols to transmit voice over an Internet  protocol based on
network.  These IP  networks  do not need to be the public  Internet  and can be
private  networks like those of a large  corporation  already  running  Internet
protocols for its own data communications  throughout the corporate  enterprise.
This use of Internet  protocols for voice network  traffic is growing rapidly in
the communication  space, as Internet and non-Internet  communications  networks
converge.

     In 1995 a computer telephone was commercially introduced that allows a user
to  connect to the  Internet  and speak to another  similarly  equipped  user as
though it were a traditional telephone call. Regardless of the users' locations,
the connect  cost for this "phone  call" was minimal  (ignoring  the cost of the
necessary  equipment).  This  was  the  beginning  of a  new  industry.  Further
refinements  have enabled  systems to be developed  that  integrate the Internet
routing into long distance telephone service without the necessity of having the
end user purchase any additional computer equipment. In fact, all that is needed
is their traditional  telephone equipment.  Referred to as IP Telephony,  it has
not  become an  industry  in itself,  but rather a new method of  communications
transport  paralleling  the world shift toward single,  open network systems for
all types of communications.

     Management  believes  that IP  Telephony  represents  a  break-through  for
worldwide  communications.  It offers  significant  advantages over conventional
telecommunications   systems,   including  reduced  equipment  costs,   improved
bandwidth  efficiency,  direct  routing  of  calls,  lower  transmission  costs,
improved ease of network  administration,  and delivery of multi-media  services
over a single network infrastructure.  IP Telephony combines the low cost global
reach of the  Internet  and the high  quality  and  security of private IP based
networks with the public telephone system's ease of access.

     The  dominant  driver  of IP  Telephony  today is the  opportunity  to make
inexpensive calls to domestic long distance and international destinations. This
is done through the routing of communications  (voice, data, and video) over the
public  Internet  or  privately   managed  networks  rather  than  PSTNs.   This
competitive  advantage is based on the two major  factors:  (1) higher fees that
the  traditional  long-distance  service  providers  are  required  to charge to
maintain their elaborate systems, and (2) government  regulation.  For every ten
cents that a traditional  long-distance  carrier  collects,  about four cents is
paid to a regional bell operating  company at the origination and termination of
the connection.  For international  calls, that amount may be more, depending on
the policies of the non-US carriers. In addition,  calls on the PSTN are subject
to a variety of taxes and surcharges.  For example, some of those surcharges are
used to support the Universal  Service Fund that subsidizes  telephone  services
for rural and low-income users. IP networks,  on the other hand, are statutorily
defined as  "information  services"  and are not  presently  subject to the same
regulations as the traditional "telecommunications services" providers.

Business

     Cyberfast  utilizes  recent  developments  in IP technology to provide toll
quality voice and data services.  IP technology  allows for effective sharing of
available  bandwidth  between many users.  This is achieved by digitizing  voice
signals  (essentially,  converting it to data),  segmenting the data stream into
data units  (packets),  compression of voice data, and dynamic  multiplexing  of
channels over a single physical  medium.  These methods yield more effective and
flexible  telecommunications  models than current land based or wireless models,
particularly  in  less-developed  or  underserved  environments  where the local
population cannot support the communications infrastructure.

     The Company has  developed a VoIP  leased-line  configuration  as a primary
building  block for its  telecommunications  infrastructure,  and depending upon
system  quality,  may also use VoN as a  delivery  system.  In most  cases,  the
Company  will lease  dedicated  lines and place  equipment  at a POP in order to
provide  quality  service  at  peak  load  levels.   Cyberfast  is  building  an
international    telecommunications    network   that   seamlessly    integrates
circuit-switched   and   packet-switched   networks  on  a  wholesale  level  to
international  long  distance  carriers and retail  distribution  of low cost IP
services directly to a consumer.

     Once a target market has been  identified,  there are four  functions to be
completed prior to a system being in a position to produce revenue. Many aspects
of each  function  can be  accomplished  simultaneously,  but each  area must be
complete prior to system activation. They are as follows:

     Phase  1  -  Locating  and  signing  a  suitable  local   contractor-  Upon
     identifying  an  attractive  target  market,  Cyberfast  will  search for a
     suitable   contractor  to  oversee  the  Company's  equipment  and  service
     connections at the point of integration with the target country's telephone
     system.  This process is one of the Company's most important efforts.  Even
     highly  qualified  contractors  will  sometimes  have  problems  with local
     licensing and system interface issues.  Among other  responsibilities,  the
     local  contractor will provide all necessary  local  licenses,  connections
     with the local telephone service provider,  provide facilities to house and
     protect the equipment, and provide appropriate utilities.

     Through  its  reputation  and via  mutual  friends,  many  times  potential
     contractors will contact Cyberfast unsolicited.  Other times the search for
     suitable contractor  candidates will take extensive  research.  The time to
     complete  this  function  can vary  greatly from just a few days to several
     months.

     Phase 2 - Partner preparation- This function, and the function of Cyberfast
     preparation  (Phase 3) can be done  simultaneously.  Usually  the effort to
     secure utilities and a suitable facility is relatively simple. However, the
     licensing and local telephony inter-connections are more complex. Depending
     on the target market, the process can take from a few weeks up to 18 months
     to complete.

     Phase 3 - Cyberfast preparation- Cyberfast is responsible for designing the
     telecommunications system and procuring the appropriate hardware,  software
     and international  inter-connect to create the VoIP network.  The Company's
     experience in this area makes this process a fairly straightforward effort.
     Depending on the target market,  the installation can include a combination
     of  satellite  and fiber  optic  inter-connects  which add  complexity  and
     additional  lead-time  to  the  preparation   process.   Depending  on  the
     availability  of equipment  and the  complexity of the  installation,  this
     process can take from 30 days to 120 days to complete.

     Phase 4 - Installation  and  Testing-Upon  completion of the contractor and
     Cyberfast preparation phases, the equipment is installed.  To expedite this
     process  Cyberfast will have installed and tested the appropriate  software
     prior to sending the equipment to the contractor.  Under normal conditions,
     the installation and testing process can be done in about 10 days. However,
     it is common to have unforeseen interface problems with the local telephone
     company that can significantly extend the installation and testing process.
     In addition,  if a satellite link is required other  considerations such as
     weather and shipping problems can affect the process.

     To market the  minutes  available  from the  installed  systems,  Cyberfast
provides  wholesale minutes to international  long distance carriers in the U.S.
As  mentioned  above,  the  Company  targets  destination  countries  with state
monopolized  telecommunications companies ("Telcos"), low personal income rates,
and high population transfers to the United States. The Company supplies minutes
to these destination  countries over a proprietary  network of gateways using IP
Telephony rather than  traditional,  analog based PSTNs. As a result,  Cyberfast
will be able  to  sell  wholesale  minutes  at a  dramatically  reduced  cost to
secondary suppliers and still generate suitable margins for itself.

     Although the Company has signed  numerous  agreements in various  countries
around the world,  most have not even advanced to Phase 1. Presently the network
consists of the following systems in the phase indicated:

     India Currently in Phase 2.

     North Africa Currently in Phase 1.

     Peru  Completed  Phase 4, but  waiting  on toll  free  phone  number  to be
activated  and  operations  to  commence.  In Peru,  Cyberfast  has  developed a
business relationship with Biper, Express, SAC. Through Biper, Cyberfast has use
of a license to originate and terminate VoIP traffic in and out of Peru. As part
of the program,  Cyberfast  will offer a pre-paid  international  long  distance
calling card in Peru. In addition to other distribution  alternatives,  the card
will be sold via local  retail  outlets.  A retail  distribution  chain has been
identified and test sales are scheduled to begin in the next few months.

     East Africa (Kenya)  Through Phase 3, but the Company and the local partner
were  dissatisfied  with the  testing  results  in Phase 4.  They are  currently
working on enlarging the capacity and, at the same time, increasing the quality,
at which time the system will be  re-tested.  This site will likely be producing
revenue in the second half of 2001.

     Ukraine  Completed  Phase 4, but  actual  operation  of the site is on hold
because  of  pricing  issues.  The  Company  is  uncertain  if this site will be
profitable.

     Haiti  Completed Phase 4, but operations at this site are on hold until the
Company locates a new local partner.

     Egypt Had completed Phase 4 and began  operating,  but equipment was seized
by the  telecommunications  authority  because the local  partner (a  registered
communications  company in Egypt) did not have the proper license it represented
to have.  Approximately $50,000 worth of equipment was confiscated.  This amount
is in  addition  to all the time and effort  expended  by the Company in getting
through  Phase 4. The Company is  continuing  to work with the local  partner to
retrieve the equipment  (if the equipment can be retrieved at all).  The Company
believes  that  if  and  when  the  equipment  is  finally  obtained,  it may be
technologically obsolete and not worth anything in resale value.

     In order to reduce  the  political  risk and  accelerate  potential  market
penetration,  Cyberfast  has  entered  into an  agreement  with  the  Federation
Mondiale  des Zones  Franches.  The  organization  is  headquartered  in Geneva,
Switzerland  and represents  over 2,400 free zones in over 70 countries.  Simply
stated,  a free zone is a designated  area in a given  country  where a business
receives economic  considerations  to locate its facilities there.  Depending on
its location and length of existence, a free zone can range from a few companies
to over  1,000+  enterprises.  Under the  agreement,  Cyberfast  is  allowed  to
identify  high  potential  free zones and develop a contract  with the free zone
manager to provide its services.  Cyberfast has an exclusive  agreement with the
Federation  to have this access.  The Company has  identified  a high  potential
market  located in Ecuador  and has signed a contract  with the zone  manager to
install VoIP systems, as described above.

     As previously  mentioned,  Cyberfast  locates its servers with  independent
contractors in selected destination countries around the world, all of whom sign
an exclusive service agreement with the Company.  Typically,  these partners are
paid 35-50% of the net revenue (total revenue less appropriate circuit lease and
interconnect  costs) derived from  terminating  calls on a dedicated  server for
their  particular  destination  country.  Cyberfast  pays  the  entire  cost  of
installing the gateways,  routers,  switches,  and international  connections at
these remote  sites.  Cyberfast is  responsible  for the leasing of  appropriate
transmission  lines and overseeing the engineering,  installation and testing of
the system.  The local partner is responsible for providing local  licensing,  a
secure facility to house the equipment, establishing local trunk connections and
providing 24 hour per day maintenance  coverage.  Cyberfast is also  responsible
for bringing customer traffic to the system, billing the customer and collecting
appropriate revenues.  Ultimately,  Cyberfast intends to negotiate directly with
Telcos in various  destination  countries to create a termination  point for the
whole  country to sell  originated  minutes  from that  country  to the U.S.  In
foreign  countries with Telcos the arbitrage  between IP and PSTN is even higher
for originated minutes from that country to the U.S.

     On the retail level,  the Company's  primary  mission is the development of
retail markets for  international IP  telecommunications.  An agreement has been
signed   with  the   Republic  of  Georgia  to  build  and  operate  a  wireless
telecommunications  system,  complete with wireless payphones.  The Company will
develop  programs  that  incorporate  a  wireless  system's  international  long
distance  business into Cyberfast's  proprietary VoIP network as well as provide
enhanced retail services.

Cyberfast System Operations

     Cyberfast is an international provider of communications services operating
primarily  between the United  States and selected  destination  countries.  The
Company leases capacity on private fiber optic and satellite-based circuits from
tier one  telecommunications  carriers  that  originate in the United States and
terminate in less developed,  underserved countries where Cyberfast provides its
services.  The Company then sells  wholesale voice and data services to carriers
seeking to route calls to the underserved locations on a per-minute basis.

     Cyberfast's  customers  sell VoIP and other IP Telephony  services to other
carriers,  network  operators,  and corporate end users.  The Company's  network
allows its customers to complete their calls in areas where it provides services
at lower cost than the traditional  long-distance  telephone providers.  This is
partially  due to the very  long-term  contracts the  traditional  long-distance
telephone  providers have entered into with countries  around the world at fixed
settlement rates.

     Cyberfast's facilities consist of telecommunications  switching and routing
equipment that enables reliable  delivery of high quality voice and data signals
over IP based circuits.  The Company's  domestic  facilities are located in Boca
Raton, Florida where it has developed proprietary billing software. This billing
system will allow the Company to invoice its customers weekly and  semi-monthly,
as the case may be. Payment will be required to be made in U.S. dollars via wire
transfer within ten business days of invoice.

     Cyberfast   researches  and  identifies  selected   destination   countries
currently  underserved by IP based network  providers.  Voice  communications to
these underserved countries are generally completed using one of the traditional
long-distance   networks,  such  as  AT&T,   MCI-WorldCom,   and  Sprint.  These
traditional voice networks have long-term,  higher-priced  settlement  contracts
with the primary  telephone company in each of the destination  countries.  They
are regulated, and as a result, charge higher termination fees.

     Destination countries are selected for several reasons:

     o    Traditional  telephone   communications  costs  from  the  US  to  the
          destination country are significantly  higher than a minimum threshold
          level.

     o    Company  management has had prior  relationships  with entities in the
          destination  country  that  have  strong  business/political  contacts
          and/or  are  involved  in  the  telecommunications  industry  in  that
          country.

     o    The  destination  country has adopted  and is  implementing  a plan of
          deregulation of its telecommunications industry.

     o    A Cyberfast  review of current  services  and prices  offered by other
          data service providers to the destination  country indicates long term
          growth potential.

     After the  Company has  determined  eligibility  of a specific  destination
country, a relationship with a local partner is established through an exclusive
service  agreement.   Cyberfast  requires  its  partner  provide  the  following
services:

     o    Obtain all required  permits and/or  licenses and otherwise  complying
          with local law.

     o    Staff a regional office twenty-four hours a day, seven days a week.

     o    Maintain  facilities  in the  destination  country  that will  provide
          proper security and safely house Cyberfast equipment.

     o    Provide  necessary  services  to  maintain  all  equipment  and assure
          uninterrupted service.

     o    Negotiate with all local  authorities at the agreed upon  destinations
          to assure and maintain the continued transmission of communications on
          the circuits.

     The Cyberfast corporate objective is to have between two and four customers
for each  country it serves.  The  Company  will  initially  limit the number of
customers  accessing the network to optimize system quality.  It is not uncommon
for other networks to frequently  oversubscribe  their  networks  resulting in a
degradation of service.

Business Risks

     Cyberfast's business is subject to a number of significant risks. Investors
should  carefully  consider the risks described  below and any additional  risks
contained in subsequent filings with the Securities and Exchange  Commission and
in the Company's press  releases.  If any of the following risks actually occur,
the Company's  business,  financial  condition or results of operations could be
materially adversely affected. In that event, the trading price of the Company's
shares could decline and investors could lose part or all of their investment.

     1) Working Capital Deficiency.

     Because Cyberfast has not had significant  revenues since November 1998 the
Company has a working capital deficit.  The principal  stockholders and The FATA
Group,  Sp.A. have provided loans since June 30, 1999 totaling over  $3,000,000.
In addition, FATA believes it has exercised its put option for redemption of its
$1,500,000  investment  (although  the Company  disputes  whether the option was
properly  exercised).  Therefore,  in addition  to working  capital  needs,  the
Company may be required to repay this investment. Until the Company's operations
provide positive cash flow, it will require additional  working capital,  either
from additional  stockholder or bank loans or access to equity capital  markets,
the availability of which has no certainty.

     2) Uncertainty of Revenue Streams

     The Company has not been  successful  in  sustaining a  continuous  revenue
stream, which is primarily due to the Company's complete reliance on its foreign
partners'  ability to obtain  connectivity  and necessary  licenses and permits.
Additionally,  the Company must rely on its vendors to supply the bandwidth that
is necessary for the Company's  business.  The Company has had  difficulty  with
vendors  being  unable  to supply it with  contracted-for  bandwidth.  While the
Company has been able to locate  customers and equipment for certain  locations,
without the necessary licenses,  permits and bandwidth that can be supplied only
by third parties,  the Company has experienced wide  fluctuations in its revenue
stream  and may  continue  to do so.  (See  Risk  Factor 6:  "Reliance  on Third
Parties" below).

     3) Doing Business in Foreign Countries.

     The Company operates in many foreign locations including  underdeveloped or
developing countries where the customs and business practices are different than
those in the United  States.  The laws and  regulations  in these  countries may
either be inadequately enforced or may be changed without notice resulting in an
interruption   of  the  Company's   service.   These  actions  can  include  the
confiscation   of   Cyberfast's   and/or  its  Local   Contractor's   equipment.
Furthermore,  the  judicial  system  in  these  countries  may not  provide  the
preventive or remedial protections necessary to adequately protect the Company's
interests.

     4) Reliance on Equipment.

     The  Company's  success  depends on its  ability to provide  efficient  and
uninterrupted,  high-quality  services.  The systems and operations necessary to
provide  this  service are  vulnerable  to damage or  interruption  from natural
disasters,  power  loss,  telecommunication  failures,  physical  or  electronic
break-ins,  sabotage,  intentional acts of vandalism and similar events that may
or may not be beyond the control of Cyberfast.  The  occurrence of any or all of
these events could have a material adverse effect on the Company's business.

     5) Reliance on Third Parties.

     In each of the foreign  countries where  Cyberfast  provides  service,  the
Company  establishes a contractual  relationship with a Local  Contractor.  This
local entity is responsible  for complying with the  appropriate  local laws and
regulations.  In addition, the Contractor is required to obtain and keep current
the required  licenses and permits,  as well as maintain and keep the  equipment
and  circuits  operational.  To the extent  that the Local  Contractor  does not
fulfill his contractual  obligations,  our business may be materially  adversely
affected.

     The Company leases circuits from primary  telecommunications  carriers from
time to time on an as-needed  basis.  If these carriers are unable to provide or
expand their current levels of service to the Company,  our operations  could be
materially adversely affected.  Although leased lines are usually available from
several alternative suppliers,  there can be no assurance that the Company could
obtain  substitute  services  from other  providers at  reasonable or comparable
prices  or in a timely  fashion.  Cyberfast  is  subject  to risks  relating  to
potential disruptions of such  telecommunications  services. No assurance can be
given that  significant  interruptions  of  telecommunications  services  to the
Company  will not occur in the  future.  Changes  in  tariffs,  regulations,  or
polices  by any of the  Company's  telecommunications  providers  may  adversely
affect  its  ability  to  offer  its  services  on  commercially  reasonable  or
profitable terms.

     6) Reliance on a Small Number of Customers.

     The Company  sells its  services  to a limited  number of  customers.  Each
customer  generates  more than ten percent of the revenues of the  Company.  For
example,  in 1998 Star Telecom  accounted for more than fifty percent of all the
Company's  revenues.  Cyberfast  operated  under an  agreement  with its largest
customer,  IDT, Inc. that accounted for all of the Company's 1999 revenues. IDT,
Inc.  is  located in  Newark,  New  Jersey and is a licensed  telecommunications
carrier in the United Kingdom, Netherlands,  Germany and France. In 2000, all of
the  Company's  revenues were  generated  from  customers in four sites:  India,
Turkey, Egypt and Kenya. At present,  operations in India are limited to testing
activities and operations in Kenya are being moved to a new site due to the lack
of PSTN lines at the first  location.  During 2000, the Company's  operations in
Turkey  became  economically  unfeasible  when the last mile cost to terminate a
call became  greater  than the  revenue per mile that the Company  could hope to
recognize from operations there. The Company no longer has operations in Turkey.
Although  Company  management  believes  that there are a number of customers to
whom the Company can provide its  services,  changing  business  conditions  may
adversely affect Cyberfast if it loses a major customer.

     7) Possible Regulation of IP Telephony.

     Cyberfast  customers  use the  Internet  and  private IP  networks  for the
transmission of IP Telephony  services.  These services  consist mainly of VoIP.
The FCC does not  presently  regulate  service  providers as common  carriers or
telecommunications  service  providers.  Any regulations that change the current
unregulated  environment in which the Company operates would  negatively  affect
the profitability and/or competitive  advantage of Cyberfast's  customers in the
marketplace  and may  result  in a  material  adverse  effect  on the  Company's
business model and financial results.

     8) Competition.

     Cyberfast's  success  depends  on the  Company's  ability  to  provide  its
customers a  high-quality,  lower cost method of completing  international  long
distance services. In recent years, the price of traditional long distance calls
has fallen.  This trend could continue to a point where the Company's  customers
no longer have a price  advantage over the traditional  long distance  services.
Cyberfast's  customers  would then have to rely on  factors  other than price to
differentiate  their  service,  which they may not be able to do. Any  resulting
loss of business or reduction  in margins for the  Company's  customers  may, in
turn, lead to downward  pressure on the price that can be competitively  charged
for Cyberfast's  services and may have a material adverse effect on its business
and financial results.

     Some major long distance  providers,  such as AT&T,  Deutsche Telecom,  MCI
WorldCom,  and Qwest  Communications,  Inc.  have  entered  or plan to enter the
market for carrying  VoIP.  These  companies are larger than  Cyberfast and have
substantially  greater  resources  than the  Company.  Furthermore,  these  long
distance  providers  may in the  future  plan  to  offer  VoIP  services  to the
countries where  Cyberfast  provides  services.  The Company is not aware of any
traditional  long  distance  provider's  plans to  offer  VoIP  services  to the
countries where it is currently  providing (or is planning to provide) services.
If these  traditional  long  distance  providers  were to offer VoIP services to
these countries, the Company may not be able to compete successfully.

     9) Need to Manage Growth.

     The  Company  plans  to  continue  to  aggressively   seek  to  expand  its
operations.  This  planned  growth,  if it  occurs,  will  place a strain on the
Company's  administrative,  operational and financial  resources.  The Company's
success depends, in part, on its ability to manage its growth and to enhance its
operational  and  financial  controls.  If the Company  continues to grow in the
future, for which no assurances can be given, it will need to be able to attract
and retain highly experienced  executives and employees capable of providing the
necessary support.

     10) Dependence on Management.

     The Company's  success to date has depended in large part on the skills and
efforts of Edward Stackpole, the Company's chairman and chief executive officer.
The Company has relied upon Mr.  Stackpole to establish  relationships  with its
customers,  service providers,  and various parties in the underserved countries
where the Company provides service.  If Mr. Stackpole were to become unavailable
or unwilling to serve in his present position, the business of the Company could
be materially and adversely affected.

     11) Limited Capitalization and Operating History.

     Since 1999, the Company's  liquidity needs have been  principally  financed
with personal  loans from Ed and Itir  Stackpole.  In order to fund its business
plan the  Company  needs  substantial  additional  capital.  In  addition to its
limited operating history, the Company has limited capitalization.  In the event
the  Company  is  unable  to  raise  additional  funds  through  private  equity
financing,  it may not be able to fully  implement its business plan.  Companies
with limited  operating history and limited  capitalization  make predicting its
future operating results difficult.

     12) Possible Fluctuations in Operating Results.

     The  Company  has  a  limited  operating  history.  Although  revenues  and
operating income  increased  rapidly in 1998, that growth rate is not indicative
of  future  growth  rates.  To  the  extent  that  the  Company  may  experience
interruptions  in its ability to  transmit  communications  for any reason,  the
results of operations for that period will be materially and adversely affected.

     From  September  1, 1998  through  the first  quarter of 1999,  and for the
fourth  quarter  of 1999,  Cyberfast  had no  operational  circuits  and did not
generate  any  revenues  from  operations.  The  Company  generated  $826,000 in
revenues from the sale of its  participation in its Karachi,  Pakistan  circuit.
Revenues  from the Company's  circuits in Haiti and India were  generated in the
second and third quarters in 1999 and sales were made to IDT during this period.
In 2000, the Company generated  revenues in the first three quarters from India,
Egypt and Turkey,  with sales to IDT and Arbinet, an entity which buys and sells
wholesale  minutes,  but none in the fourth quarter.  For these reasons,  and in
view of the  Company's  limited  operating  history,  the Company  believes that
period-to-period  comparisons  of its past or future  operating  results are not
meaningful.

     Future  results  of  operations  may  fluctuate  significantly  based  upon
numerous  factors,  including any foreign or domestic  regulation or FCC ruling,
pricing  pressures  which could lessen the  competitive  pricing  advantage  and
reduce the traffic usage of its network,  the Company's ability to penetrate new
markets,  and an increase in  competition.  There can be no assurances  that the
Company will be profitable on a period-to-period basis or at all.

     13) Control by Management.

     As of July 5, 2001, Edward J. Stackpole,  the Company's  chairman and chief
executive  officer,  and his wife,  Itir Stackpole,  the Company's  co-chairman,
beneficially  own  approximately  34.20% of the  Company's  outstanding  Class A
Common  Stock and  78.33% of the  Company's  Class B Common  Stock.  The Class B
Common Stock is  identical  to the Class A Common  Stock in all respects  except
that each  share of Class B Common  Stock has ten votes in respect to each share
of Class A Common  Stock.  Because  of the  number of shares  and  voting  power
attributed to the Class B Common Stock,  the  Stackpoles  control  73.62% of the
total  voting  power  and are able to  control  the  election  of the  Company's
directors and thereby control the policies and operations of the Company.

     14) Contractual Obligations to Management / No Dividends.

     Pursuant  to  employment  agreements  with  the  Company's  key  management
personnel,  the  Company  is  obligated  to pay an  aggregate  of  13.3%  of its
quarterly  net pre-tax  income to these  persons as bonuses in addition to their
base salaries and stock options.  There is no adjustment  provision in the event
the  Company  has  a  unprofitable   quarter  following  a  profitable  quarter.
Therefore,  it is unlikely that the Company will be able to pay any dividends in
light of its obligation to pay bonuses to management. Investors requiring income
from dividends should not invest in the Company. In addition, the obligations to
pay bonuses to management  may have a material  adverse  effect on the Company's
future results of operations.

     Research and Development

     The  Company's   research  and  development   activities  are  designed  to
complement  existing  products  and  services  and  not  to  innovate  radically
different technologies.

     The Company did not spend any amount for R&D in fiscal 2000, 1999 or 1998.

Regulatory Matters

     United States

     The use of the  Internet to provide  telephone  service is a recent  market
development.  Currently,  the FCC is considering surcharges or other regulations
upon providers of Internet telephony services. On April 10, 1998, the FCC issued
a 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 information services or 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.  It further stated 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 determines  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.  This could affect the
viability of Cyberfast's  business and may have a material adverse effect on the
Company's  ability to produce revenue from this business.  In addition,  the FCC
sets the access charges on traditional telephone traffic and if it reduces these
access  charges,  the cost of  traditional  long distance  telephone  calls will
probably be lowered, thereby decreasing the Company's pricing advantage in their
respective markets.

     In February 1999, the FCC adopted an order concerning payment of reciprocal
compensation.  This move could provide support for a possible finding by the FCC
that  providers of Internet  telephony must pay access charges for at least some
Internet telephony services. If the FCC were to make such a finding, the payment
of  access  charges  could  have a  material  adverse  effect  on the  Company's
business.

     To the  Company's  knowledge,  there are  currently  no  domestic  (and few
foreign) laws and/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  communications
have also prohibited Internet telephony.

     To Cyberfast's knowledge,  there are no laws prohibiting Internet telephony
in the countries where it provides service. Other countries permit, but regulate
Internet telephony.  If Congress, the FCC, state regulatory agencies, or foreign
governments   begin  to  regulate  or  increase  their  regulation  of  Internet
telephony, such regulation may have a material and adverse effect on Cyberfast's
business.

     Foreign Corrupt Practices Act

         Upon effectiveness of its registration statement on file with the SEC,
Cyberfast is subject to the Foreign Corrupt Practices Act (the "Act"). The Act
requires that all companies that file reports with the SEC:

     o    Keep reasonably detailed books and records reflecting transactions and
          dispositions of assets;

     o    Maintain a system of internal  controls  that include  preparation  of
          financial  statements in conformity with generally accepted accounting
          principles and maintaining accountability for assets; and

     o    Cannot make any kind of payment, whether considered bribery or not, to
          foreign government officials for the purpose of obtaining or retaining
          business or securing any improper advantage.

     The  Act   applies   to   companies   directly   and   indirectly   through
intermediaries.  The Act does contain a "knowledge"  requirement for payments to
or by an intermediary. However, the Act permits facilitating payments to foreign
officials for the purpose of expediting or securing routine  governmental action
by a foreign official.  Cyberfast's  management  believes that the Company fully
complies with the Act.

     As a result of conducting  business in foreign  countries where the customs
and business practices are different from the U.S., the Company runs the risk of
business  interruption for substantial  periods of time, or even the termination
of the  ability to  conduct  business.  Many of the  countries  where  Cyberfast
conducts  business do not have judicial systems that provide the protection from
or expeditious  resolution to certain unlawful actions that may be taken against
the  Company  or its  local  partner  and,  as a  result,  the  business  may be
materially and adversely affected.  For example, at the end of the third quarter
of 1998 the Company  experienced an interruption in its primary circuit to India
and  its  equipment  was  confiscated.  During  1998,  substantially  all of the
Company's  business  operations  were  conducted  in  India.  As a result of the
extraordinary  nature  of this  governmental  intervention,  Company  management
believes the financial  information contained herein and the analysis thereof is
not indicative of either future operating results or future financial condition.
The  Company  believes  that it was acting  within the legal  guidelines  of the
country and the confiscation was not justified.  When the equipment in India was
confiscated,  all revenue  sources ceased to exist and the Company began seeking
out new markets for its products and  services.  As a result of the action,  the
Company  experienced  substantial  and materially  adverse  fluctuations  in its
revenues  for the period in question  and  subsequent  periods.  The Company has
decided not to pursue seeking the return of the confiscated  equipment in India,
as management believes that the cost of doing so would likely outweigh the value
of the equipment.

Reports to Security Holders

     The Company is subject to the reporting  requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934.

     The public may read and copy any  materials  filed by the Company  with the
SEC at the SEC's Public Reference Room at 450 5th Street, N.W., Washington, D.C.
20549.  The  public  may  obtain  information  on the  operation  of the  Public
Reference  Room  by  calling  the  SEC  at  1-800-SEC-0330.  The  Company  is an
electronic  filer, and the SEC maintains an Internet site that contains reports,
proxy and information  statements,  and other information regarding issuers that
file   electronically   with   the  SEC.   This   site   can  be   accessed   at
(http://www.sec.gov).   The   Company's   Internet   site  can  be  accessed  at
(http://www.cyberfast.net).

ITEM 2. DESCRIPTION OF PROPERTY

Circuit Leases

     The Company leases or will lease, on an as-needed basis, fiber optic and/or
satellite-based circuits at fixed rates from telecommunications  carriers. These
circuits terminate in the destination countries where service is to be provided.
Cyberfast,  in turn,  sells access to these circuits to carriers on a per-minute
basis.

     During 2000, the Company executed various circuit leases, none of which are
currently in effect because each of the leases were conditioned upon the carrier
under the lease being able to supply  service in the areas under the lease.  For
example, in 2000 the Company executed a circuit lease with KPN and made payments
to KPN under the lease for approximately  four months,  but because only partial
service  could be supplied by KPN, the Company did not continue to make payments
thereunder and the lease terminated.

Equipment Leases

     Cyberfast leases  state-of-the-art  carrier-class equipment manufactured by
Cisco (and others) for use in its facilities.  This equipment consists of highly
scalable gateway servers,  routers and switches capable of reliably transmitting
voice, data and video signals over an IP based network. Equipment leases are for
a three year term which  automatically  renew on a yearly basis unless Cyberfast
provides  ninety days notice of the Company's  decision not to renew.  The lease
provides the Company with the option of  purchasing  the  equipment for the fair
market  value  of  used,  well  maintained  equipment  at  the  time  the  lease
terminates.  The  Company is  required  to  maintain  the  equipment  at its own
expense.  Because it has in-house  maintenance  capability,  the Company has not
entered into any service contracts for maintenance.  Cyberfast bears the risk of
loss  during the term of the lease and is  required  to  maintain  an  insurance
policy for the full replacement value of the equipment.

Office Leases

     The  Company is a party to a five year lease for its  corporate  offices in
Boca Raton,  Florida.  The Company will also house and maintain its transmission
facilities at this location. The lease expires on June 14, 2004. The total lease
payment  for year  2000 was  approximately  $25,000  and for year  2001  will be
approximately $100,000.

     The  Company is  currently  not a party to any other  long-term  leases for
office space either domestic or foreign.

ITEM 3. LEGAL PROCEEDINGS

     In January, 2000 the Company was served with a grand jury subpoena,  issued
by the U.S.  Attorney for the Southern  District of New York,  to deliver to the
District   Court  copies  of  numerous   corporate   documents,   contracts  and
correspondence.  Neither  the Company nor any officer or director of the Company
was required to personally  appear in  connection  with the subpoena and related
grand jury investigation. The Company was informed orally that the investigation
relates to an investigation of manipulation of certain  securities traded in the
NASDAQ Over the Counter Bulletin Board, including trading in the Company's Class
A Common  Stock that has  occurred in the past two years.  Although  the Company
believes it is not the target of the  investigation  and that the targets of the
investigation  are certain persons and entities not affiliated with the Company,
there can be no assurance that the investigation will not require the Company to
expend  the  Company's  resources  on legal  fees in  responding  to  additional
requests for information and documents, including any future subpoenas which may
require  that the  Company's  officers  and  directors  be  deposed  by the U.S.
Attorney.  Expending  funds on legal fees for  responding  to  requests  and, if
necessary,  in defending  any action  would usurp funds that could  otherwise be
applied towards the Company's business.

     The Company was involved in an  arbitration  with a former  employee,  Alan
Goldstein, who alleged termination of his employment agreement without cause. In
December 2000, the Company  approved a Settlement  Agreement  reached before the
American  Arbitration  Association  pursuant to which the Company is required to
pay $37,500 to Mr.  Goldstein  within  sixty days and to grant Mr.  Goldstein an
option for 40,000  shares of the  Company's  common  stock at a strike  price of
$1.00 per share. To date, the Company has granted Mr.  Goldstein  40,000 options
at a strike price of $1.00 per share and has paid Mr.  Goldstein  $20,000  under
the  Settlement  Agreement.  On July 13, 2001, Mr.  Goldstein  filed a breach of
contract  claim  against the Company  for an  additional  $30,000 in the Circuit
Court of the 15th Judicial Circuit in and for Palm Beach County, Florida.

     In January  2001,  William  Wollrab,  a former Vice  President  of Business
Development and Director of the Company,  filed a complaint  against the Company
in the Circuit Court of the 15th Judicial  Circuit in and for Palm Beach County,
Florida alleging a breach of contract claim relating to Mr. Wollrab's employment
contract  with the Company.  Mr.  Wollrab is seeking  $30,000 in unpaid wages as
well as 1.5% of the gross revenues from on-going contracts for which Mr. Wollrab
was responsible.  The Company is currently  attempting to negotiate a settlement
with Mr. Wollrab.

     In  January  2001,  FATA  Group  Sp.A.   filed  a  complaint  for  Specific
Performance and other Equitable Relief in the Circuit Court of the 15th Judicial
Circuit and for Palm Beach County, Florida, seeking to impose a mortgage against
property owned by Ed and Itir Stackpole.  This complaint arises from the dispute
over the Company's Investment Agreement with FATA. In February 2001, Ed and Itir
Stackpole filed a Motion to Dismiss FATA's complaint, alleging that FATA's claim
is barred by the Statute of Frauds and by the terms of the Investment  Agreement
between the Company and FATA.

     No other legal proceedings are known to be pending,  or in effect,  against
the Company at this time.

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

     None.

     Subsequent Events

     On June 12, 2001, the Company held an annual meeting of  shareholders  (the
"Meeting")  at the offices of the  Company.  The only  matter  voted upon at the
annual meeting was the election of directors.  The following  three persons were
elected  as  directors  to  hold  office  until  the  next  annual   meeting  of
shareholders and until their successors have been elected and qualified:

                  Edward Stackpole
                  Itir Stackpole
                  Bert Perez

     The tabulation with respect to each nominee was as follows:
<TABLE>
<CAPTION>

                                                                  % of                                   % of
                                                                 Shares             Withhold            Shares
                                           For                 Represented          Authority         Represented
                                           ---                 -----------          ---------         -----------

<S>                                   <C>                       <C>                <C>                   <C>
Edward Stackpole                      5,198,440                 67.51%             82,614                1.07%
Itir Stackpole                        5,198,410                 67.49%             82,614                1.07%
N. Bruce Walko                          961,279                 12.48%             82,614                1.07%
M. Dowell Stackpole                     887,410                 11.52%             82,614                1.07%
Bert Perez                            5,197,410                 67.49%             82,614                1.07%
Gerard Werner                           961,279                 12.48%             82,614                1.07%
</TABLE>


                                     PART II

ITEM 5. MARKET PRICE OF AND  DIVIDENDS  ON THE  REGISTRANT'S  COMMON  EQUITY AND
RELATED STOCKHOLDER MATTERS.

Market Prices Of Securities

     The Class A Common  Stock of the  Company is  currently  listed in the Pink
Sheets,  and prior to  December,  1999 was listed on the OTCBB  under the symbol
"CYSI."  From October  through  December  1998,  the Class A Common Stock traded
under the symbol  "SXFT."  The  following  table sets forth the high and low bid
prices of the Company's Class A Common Stock during the periods indicated.

<TABLE>
<CAPTION>

                       Calendar                                   High Bid Price*                 Low Bid Price*
                       --------                                   ---------------                 --------------

<S>                     <C>                                             <C>                            <C>
2000                   October 1 - December 31                          2.50                           0.06
                       July 1 - September 30                            4.00                           0.70
                       April 1 - June 30                                4.75                           2.00
                       January 1 - March 31                             7.00                           3.15

1999                   October 1 - December 31                          7.00                           1.50
                       July 1 - October 31                             12.00                          7.375
                       April 1 - June 30                               19.44                           2.38
                       January 1 - March 31                             5.25                           2.13
<FN>

*  Bid prices were provided by "www.bloomberg.com" via the internet. This web
   site is hosted by the Bloomberg Corporation. Quotations reflect inter-dealer
   prices, without mark-up, mark-down or commission, and may not represent
   actual transactions.
</FN>
</TABLE>

     The closing bid price of the Class A Common Stock on July 5, 2001 was $0.17
per share.

Holders

     As of July 5, 2001, there were  approximately 158 beneficial holders of the
Company's common stock.

Dividends

     The Company did not pay  dividends  on its common  stock in 1998,  1999 and
2000 and it does not anticipate  paying any dividends thereon in the foreseeable
future. The Company's  subsidiaries did make subchapter S distributions to their
former shareholders.

Recent Sales of Unregistered Securities

     In May 2000,  the Company  issued to JW Genesis a warrant to acquire 62,500
shares  of  Class A  Common  Stock  at $3.00  per  share  as a  finder's  fee in
connection with the FATA Investment Agreement. The warrant vests if the FATA put
option  expires  unexercised.  The Company is currently  disputing  whether FATA
properly  exercised this option by the November 30, 2000 deadline.  The issuance
of the warrants was conducted in reliance on Section 4(2) of the Act.

     On May 5, 2000, the Company entered into a Memorandum of Understanding (the
"MOU") in  connection  with the sale of common  stock of the Company to The FATA
Group Sp.A.,  an Italian  corporation  ("FATA").  The MOU was replaced  when the
Company completed the first closing of an investment  agreement (the "Agreement"
or "Investment  Agreement") with FATA.  Pursuant to the Agreement,  on August 1,
2000,  FATA  subscribed to and  purchased  from the Company a total of 1,466,276
shares  of the  Company's  Class A Common  Stock for a total  purchase  price of
$1,500,000 (the "First  Closing"),  consisting of a $300,000 loan from FATA plus
accrued interest that was converted to equity,  and cash from the internal funds
of FATA. The transactions  contemplated by the Investment  Agreement between the
Company and FATA, an accredited investor (as that term is defined in Rule 501 of
Regulation  D  promulgated  under  the  Act),  were  transactions   exempt  from
registration  pursuant to Section 4(2) of the Act.  Previously,  on May 5, 2000,
FATA made a $300,000  loan to the Company,  which had an interest rate of 6% per
annum.  Accordingly,  on August 1, 2000,  the Company  received  net proceeds of
$1,199,964 from FATA.

     Prior to the First Closing of the  Agreement,  Edward J. Stackpole and Itir
Stackpole (the  "Controlling  Shareholders")  beneficially  owned  approximately
30.2% of the Company's  outstanding Class A Common Stock and approximately 77.3%
of the Company's Class B Common Stock.  The Class B Common Stock is identical to
the Class A Common  Stock in all  respects  except  that  each  share of Class B
Common  Stock has 10 votes in  respect  to each  share of Class B Common  Stock.
Because  of the  number of shares and  voting  power  attributed  to the Class B
Common Stock, the Controlling Shareholders controlled approximately 75.5% of the
total voting power of the company prior to the First  Closing of the  Agreement.
Immediately  after the First  Closing,  FATA  owned  approximately  46.1% of the
outstanding shares of the Company's Class A common stock.

     Upon  satisfaction  of all the conditions  stated in the Agreement,  but no
later than November 30, 2000, FATA had the option to purchase from the Company a
combination  of  shares of Class A Common  Stock,  Class B Common  Stock  and/or
Preferred Stock for a total purchase price of $3,500,000 (the "Second Closing").
FATA did not proceed with the Second Closing. Pursuant to the Agreement, if FATA
did not proceed  with the Second  Closing,  FATA had an option,  exercisable  in
FATA's sole  discretion  until  November  30,  2000,  to sell to the Company the
number of Company shares acquired by FATA at the First Closing for a fixed price
of $1,500,000 plus any additional sums or  consideration  as of such time loaned
to or  contributed  to the Company,  plus an interest  rate of 6% per year.  The
Company is currently  disputing  whether FATA properly  exercised this option by
the November 30, 2000 deadline.

         Agreements with Management

     On June 30, 2001,  the Company  granted to each of Edward  Stackpole,  Itir
Stackpole,  Bert Perez, M. Dowell Stackpole,  N. Bruce Walko,  Gerard Werner and
Gianni Ciamaroni  options to acquire 50,000 shares of common stock for $0.17 per
share, exercisable for five years, in consideration for serving on the Company's
Board of  Directors  during 2000.  The issuance of the options was  conducted in
reliance on Section 4(2) of the Act.

     On August 2, 2000,  Gianni Ciamaroni,  then a director of the Company,  was
granted a warrant to acquire 112,500 shares of Class A Common Stock at $3.00 per
share as a finder's fee in  connection  with the FATA  transaction.  The warrant
vests if the FATA put option  expires  unexercised.  The  Company  is  currently
disputing  whether FATA properly  exercised this option by the November 30, 2000
deadline. The issuance of the warrants was conducted in reliance on Section 4(2)
of the Act.

     On June 8, 2000,  the  Company  granted to each of Edward  Stackpole,  Itir
Stackpole,  Bert Perez,  William  Wollrab,  Bruce Walko, M. Dowell Stackpole and
Gerard  Werner  options to acquire  50,000  shares of common stock for $3.50 per
share, exercisable for five years, in consideration for serving on the Company's
Board of  Directors.  The  issuance of the options was  conducted in reliance on
Section 4(2) of the Act.

     On May 1, 2000,  the Company  granted to each of Edward  Stackpole and Itir
Stackpole  options to acquire 25,000 shares of common stock at a strike price of
$3.00 per share,  exercisable  for five years in  consideration  for executing a
personal  guarantee of the Company's  obligations  in  connection  with the FATA
Investment  Agreement.  The issuance of the options was conducted in reliance on
Section 4(2) of the Act.

     Pursuant  to the terms of a letter to the  Company  from Bruce  Walko dated
October 29, 1999 which set forth the terms of his employment, the Company agreed
to grant Mr.  Walko  options to acquire  50,000  shares on  November 1, 1999 and
100,000  options per year for 2000, 2001 and 2002 with 25,000 shares vesting per
quarter in consideration for Mr. Walko serving as an officer of the Company. The
issuance of the options was conducted in reliance on Section 4(2) of the Act.

     Effective  on June 1,  1999,  Mr.  Bert  Perez  entered  into a  three-year
employment  agreement  pursuant to which he  received a signing  bonus of 10,000
shares of the Company's Class A Common Stock, of which 5,000 vested  immediately
and 5,000  shares  vested on December  1, 1999.  Mr.  Perez was granted  300,000
non-qualified  options exercisable at $3.50 per share over a 10-year period that
vest in increments of 25,000 options quarterly, provided that Mr. Perez is still
employed on the last day of each  quarter.  The  issuance  of the signing  bonus
shares and the options were conducted in reliance on Section 4(2) of the Act.

     On January 1, 1999,  Mr.  Edward J.  Stackpole  entered  into a  three-year
employment  agreement with the Company  pursuant to which he was granted 600,000
non-qualified stock options exercisable at $3.50 per share over a 10-year period
that will vest in  increments  of 50,000  options  quarterly,  provided that Mr.
Stackpole is still employed on the last day of each quarter. The issuance of the
options was conducted in reliance on Section 4(2) of the Act.

     On January 1, 1999 Mrs. Itir Stackpole entered into a three-year employment
agreement  with  the  Company   pursuant  to  which  she  was  granted   600,000
non-qualified  options exercisable at $3.50 per share over a 10-year period that
vest in increments of 50,000 options quarterly,  provided that Mrs. Stackpole is
still employed on the last day of each quarter.  The issuance of the options was
conducted in reliance on Section 4(2) of the Act.

     The Company granted Mr. M. Dowell Stackpole 58,000 shares of Class A Common
Stock on in January 1999 as compensation for joining the board of directors. The
issuance of the shares was conducted in reliance on Section 4(2) of the Act.

         Other issuances

     In  addition,  during the past  three  years,  the  following  persons  and
entities  acquired shares of stock and other  securities from the Company as set
forth in the table below.
<TABLE>
<CAPTION>
                                 Class of Securities                                 Amount of            Securities
Shareholder                            Received            Date Sold               Consideration              Sold
-----------                            --------            ---------               -------------              ----

<S>                              <C>                      <C>              <C>                             <C>
M. Dowell Stackpole              Class A Common Stock     01/01/1999       Inducement to join board of     58,000(1)
                                                                           directors

Douglas Blackwell                Class A Common Stock     01/06/1999       $50,000 in investor            7,500(1)(2)
                                                                           relations/public relations
                                                                           services rendered

Advantage Marketing and          Class A Common Stock     04/05/1999       Promissory Note                 50,000(1)
Capital, Inc.

European Network Group           Class A Common Stock      04/07/199       Fee                             20,000(1)
Society

Alan T. Goldstein                Class A Common Stock     06/01/1999       Signing bonus pursuant to an    10,000(1)
                                                                           employment agreement with
                                                                           the Company

Bert Perez                       Class A Common Stock     06/01/1999       Signing bonus pursuant to an    10,000(1)
                                                                           agreement with the Company

Boru Enterprises, Inc.           Class A Common Stock     08/13/1999       $500,000 in services            75,000(1)
                                                                           rendered in identifying and
                                                                           advising the Company about
                                                                           stock shorts
<FN>

(1)  The sale of shares of Class A Common Stock was exempt under Section 4(2) of
     the  Securities  Act. The  acquiring  person or entity  represented  to the
     Company that the shares were acquired for  investment  and that such person
     or entity had access to information  concerning the Company.  Further,  the
     acquiring  person   represented  to  the  Company  that  they  were  either
     financially sophisticated or that they were an accredited investor.

(2)  The table does not include 10,000 shares issuable to Mr. Blackwell as a fee
     as of June 30, 1999. The shares have not been issued.
</FN>
</TABLE>

     The following Class A shares were issued in connection with the acquisition
of Global in November  1999.  The shares were issued in reliance on Section 4(2)
of the  Securities  Act. In  addition,  20,000  Class A shares were issued to JW
Genesis Capital  Markets,  Inc. as a finder's fee in reliance on Section 4(2) of
the Securities Act. Exchanging shareholders  represented to the Company that the
shares were acquired for investment and that such person or entity had access to
information  regarding  the  Company.   Further,  the  exchanging   shareholders
represented to the Company that they were either  financially  sophisticated  or
that they were an accredited investor.

<TABLE>
<CAPTION>

                        Name                            Global Shares       Cyberfast Class A Shares
                        ----                            -------------       ------------------------

<S>                                                      <C>                        <C>
William Wollrab                                          1,766,102                  25,988

Ken Greenberg a/c/f Stephanie Greenberg                    200,000                   2,943

Chatfield Capital Corp.                                    100,000                   1,471

Green Capital, LLC                                       4,950,000                  72,839

Ken Greenberg a/c/f Annette Greenberg                       70,000                   1,030

Sissel Greenberg                                            70,000                   1,030

Dylan Linglebach                                            10,000                     147

Chris and Ira Snare                                        100,000                   1,471

Keith Galanti                                            2,500,000                  36,788

Arnold Greenberg                                           434,640                   6,396

Fiserv Correspondent Services, Inc. Cust. f/b/o            500,000                   7,358
Bernard O'Donnell IRA

Michael L. Rose                                            400,000                   5,886

Zenith Holdings, Ltd.                                      250,000                   3,679

Gerard Werner                                              100,000                   1,471

N. Bruce Walko                                             500,000                   7,358

Lee McKnight                                                46,936                     691

Patrick Kelly                                               93,872                   1,381

Stan Borin                                                  46,936                     691

William Lehr                                                46,936                     691

Jahangir Boroumand                                          46,936                     691
                                                        ----------              ----------

Total Shares                                            12,232,358                 180,000
                                                        ==========              ==========
</TABLE>


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS

     The  following  discussion  of  the  financial  condition  and  results  of
operation for the Company should be read together with the financial  statements
and related notes included in another part of this registration  statement.  The
financial statements for the years ended December 31, 1999 and 2000 are audited.

Results Of Operations

Years Ended December 31, 1999 and 2000

     For the year ended December 31, 2000, revenues were $0.193 million compared
to $0.436 million in the comparable  prior period ended December 31, 1999.  This
decrease in revenue of $0.243  million  represented  a 55.73%  decline  from the
comparable  prior period ended December 31, 1999. The percentage  change between
the periods was solely attributed to lack of capacity on the circuits  available
to the Company.  This decline in revenues occurred because the Company had fewer
circuits up and operating and for this reason,  the Company did not have circuit
capacity to sell. Accordingly,  the Company did not generate revenues during the
fourth quarter of 2000.

     The Company's  cost of goods sold  decreased  59.4% from $0.483 million for
the year ended  December 31, 1999 to $0.196  million for the year ended December
31, 2000. As a percentage of revenues,  cost of goods sold decreased from 110.8%
for the year ended  December 31, 1999 to 101.6% for the year ended  December 31,
2000  resulting in an increase in gross margin of 91.5% from a deficit of $0.047
million for the year ended  December 31, 1999 to a deficit of $0.034 million for
the year  ended  December  31,  2000.  The  decrease  in cost of goods sold as a
percentage  of  revenues in fiscal year 2000 as compared to the fiscal year 1999
occurred as a result of the lack of circuit capacity to sell.

     General and  administrative  expenses  increased  45.8% from $1.554 million
during the period ended  December 31, 1999 to $2.265  million in the  comparable
subsequent  period ended December 31, 2000.  This increase was the result of the
Company's actions in hiring outside  consultants  ($0.155 million) in connection
with the  investment  agreement  with FATA (see Note 7) and moving  into  larger
facilities  ($0.026  million).  The  Company  incurred  the moving  expenses  in
anticipation of an expansion of its operations. Such expansion did not occur.

     The  increase  in  general  and  administrative  expenses  was  offset by a
substantial  decrease in expenses  related to the  issuance of common  stock and
options to various vendors and employees of the Company.  This expense decreased
$1.388 million, or 62.8%, from $2.210 million for the fiscal year ended December
31, 1999 to $0.822 for the comparable subsequent period ended December 31, 2000.
The use of stock and  options  in  settlement  of  services  provided  and as an
inducement to retain professional employment services from senior executives was
made possible by the Company's reverse merger into a public shell and subsequent
Reorganization  in  November  1998.  Until  such time as the  Company is able to
provide more  standard  compensation  and benefit  packages for the retention of
professionally  qualified  and  competent  employees,  the  Company  expects  to
continue  the use of stock  and  option  grants  for  recruitment  into the near
future.  However,   reliance  on  this  method  for  financing  working  capital
requirements  should diminish  substantially  during  subsequent  periods as the
Company  begins  generating  revenues.  (For a  discussion  of the  Stock  based
compensation please see Note 9 to the accompanying  audited financial statements
and PART I, Item 6 - Executive Compensation.)

     As a consequence of the above factors,  the Company  experienced  loss from
operations of $3.811  million for the period ended December 31, 1999 compared to
a loss from  operations of $3.090 million for the comparable  subsequent  period
ended December 31, 2000, or a decrease of 18.92%.

     As a result of the Company circuits in India and Pakistan and the Company's
inability  to activate any new POPs,  the  controlling  shareholders  extended a
series of loans to the  Company at various  times  during the fiscal  year ended
December  31,  2000.  The loans are in the form of a demand  note with  interest
accruing at 9% per annum and payable  quarterly.  Because of continuing  working
capital deficiencies, interest on these loans has remained unpaid. Approximately
$0.116  million has been  accrued as interest  on the Company  accounts  for the
fiscal year ended December 31, 2000. Further interest accruals on this loan will
occur during subsequent  periods.  Except for $0.300 million paid in August 2000
as part  principal and interest  payment,  no principal  payments have been made
against them.

     The  Company  was  delinquent  in the filing of various  federal  and state
income tax  returns  and the payment of 1998  federal  and state  income  taxes.
Accordingly,  estimated  penalties  and  interest  of $0.151  million  have been
recorded  on the  Company's  audited  financial  statements.  (See Note 6 to the
accompanying  audited  financial  statements.)  With  respect to the  payment of
income taxes for the period ended December 31, 1998,  the Company  expects those
taxes to be offset by net  operating  losses for the period  ended  December 31,
2000.  Notwithstanding  the offset  provided by the NOLs, the Company intends to
negotiate with the various taxing authorities to reduce the penalty  assessments
associated with non-payment of the taxes for the period ended December 31, 1998,
although no  assurances  can be given that such  negotiations  will  produce any
reduction of these  penalties.  Once the results of that  negotiation  have been
determined, the Company will promptly discharge these penalties.

     As  more  fully  described  in  Note  10  of  the  consolidated   financial
statements,  the Company recorded a cumulative  effect of a change in accounting
principle  adjustment in 2000 relating to accounting for stock options issued to
independent directors in 1999. The result of the reduction of expense in 2000 of
$0.317 million was relating to expenses recorded in 1999.

     As a result of the above  reasons,  the Company  experienced  a loss before
taxes of $4.004  million for the year ended December 31, 1999 compared to a loss
before  taxes of  $3.298  million  in the  comparable  subsequent  period  ended
December  31,  2000. A tax benefit  accruing as a result of net  operating  loss
carry backs  decreased  the net loss for the period  ended  December 31, 1999 to
$3.781 million.  The Company did not realize a similar tax benefit in the period
ended  December  31,  2000.  The  Company's  results  per share of common  stock
increased  from net loss per share of $0.61 for the period  ended  December  31,
1999 to a loss per share of $0.43 for the period ended December 31, 2000.

Liquidity And Capital Resources

Years Ended December 31, 1999 and 2000

     Net cash used in operating  activities  for the fiscal year ended  December
31, 2000 was $1.323 million compared to $0.946 million used in operations in the
comparable  prior period ended  December 31, 1999,  representing  an increase of
$0.377 million or 39.9%.  This deficit in net cash was primarily the result of a
greater amount of general and  administrative  expenses requiring the payment of
cash, instead of stock-based compensation for the fiscal year ended December 31,
2000.

     Net cash used in  investing  activities  was $0.041  million for the fiscal
year ended  December 31, 2000 compared to net cash of $0.362 for the  comparable
prior period in 1999. The major component in investing activities for the period
ended  December  31,  1999  was  the  acquisition  of  equipment,  while  in the
comparable period ended December 31, 2000 the Company leased equipment  pursuant
to operating leases rather than purchasing equipment.

     For the fiscal year ended December 31, 2000, net cash provided by financing
activities was $1.368 million,  compared to $1.298 million provided by financing
activities  during the  comparable  prior  period ended  December 31, 1999.  The
primary components of the financing activity consisted of proceeds from the FATA
stock purchase and stockholder  loans,  offset by a $0.300 million  repayment of
such  stockholder  loans,  during the fiscal  year ended  December  31, 2000 and
stockholder  loans of $1.276 million during the comparable period ended December
31, 1999.

     As of December  31,  2000,  the Company  had a working  capital  deficit of
$4.756  million  and a cash  balance  of $0.003  million  compared  to a working
capital  deficit of $2.296 million and a cash overdraft of $0.023 million in the
comparable prior period ended December 31, 1999. The working capital deficit was
largely due to substantial  increases in shareholder loans, accounts payable and
accrued  expenses  between the periods.  For the fiscal year ended  December 31,
1999,  shareholder  loans and accounts payable totaled $1.346 million and $0.791
million respectively  compared to $1.237 million and $1.891 million respectively
for the comparable  prior period ended December 31, 2000. The shareholder  loans
were required as a result of continuing  unprofitable operations of the Company,
as explained in the Results of Operations  discussed above, and are evidenced by
promissory notes due on demand which bear 9% per annum interest.

     Company  management expects the working capital deficit will continue until
sufficient  revenues are generated from operations  and/or  additional equity or
debt investment  from third party financing can be obtained.  Because the Second
Closing with FATA did not occur,  the Company will remain  largely  dependent on
the extension of shareholder  loans to finance its working  capital  deficits or
the recruitment of additional equity capital.

     The Company  has  outstanding  tax  liability  from  fiscal year 1998.  The
Company  expects  to elect to carry  back its loss from 2000 to  eliminate  such
liability. However, accrued penalties and interest exist that the Company may be
required to pay.

     As  described in Item 5 of Part I above,  the Company is disputing  whether
FATA properly  exercised its option to sell to the Company the number of Company
shares  acquired by FATA at the First  Closing  for a fixed price of  $1,500,000
plus  any  additional  sums  or  consideration  as of  such  time  loaned  to or
contributed  to the  Company,  plus an  interest  rate of 6% per  year.  If this
dispute  results in litigation  and the Company were required to purchase  these
shares back from FATA,  the Company  would not have adequate cash reserves to do
so.

Plan of Operations

     During the succeeding twelve month period,  Company  management  expects to
continue  reliance on shareholder loans to finance it's working capital deficit,
but in addition, new equity subscriptions and the start-up of new POPs currently
under  contract  will  provide  sources  of  working  capital  which  should  be
sufficient to restore working  capital  surpluses.  In that regard,  shareholder
loans have  decreased  from a total of $1.346  million on  December  31, 1999 to
$1.236 million on December 31, 2000.

     During  calendar  year 2000 the Company  made  several  adjustments  to its
business plan. Four major items include:

o    The use of local  contractors in those countries where it is very important
     to have an  established  business  relationship  with the  local  telephone
     companies and/or the local licensing authorities.

o    The  expansion  of the  number of  targeted  operating  Points of  Presence
     (POP's) to minimize the effects on revenue if service to a single system is
     interrupted for any reason.

o    The inclusion of a retail strategy that enables Cyberfast to move away from
     a complete  reliance  on  wholesale  sales and  provide  additional  profit
     sources.   This  long-term  strategy  is  especially  important  as  market
     competition puts pressure on operating margins.

o    The  long-term  development  of network  "hubs" that will connect the POP's
     served by the Company. By interconnecting the POP's Cyberfast will have the
     ability to re-file international telecommunications traffic. Simply stated,
     instead of carrying traffic just between the United States and the POP, the
     Company  can take  advantage  of its network  and  deliver/receive  traffic
     between areas that traditionally provide very high margins.

         The Cyberfast management team is very aware of its need for additional
operating capital to finance it expansion. The Company hopes to acquire the
needed capital from three sources:

o    From operations.  The Company began  generating  revenues during the second
     quarter of 2001 from India.  The Company expects to generate  revenues from
     Kenya  and  Peru  in the  third  quarter.  Cyberfast  management  team  has
     purposely  kept  expenses  at a  minimum  so as to get the  Company  into a
     position where it can sustain itself from operating revenue.

o    From  outside  sources.  Over the last  year the  Company  has had  several
     meaningful negotiations with outside potential investors.

o    From the Stackpole  family.  Edward and Itir  Stackpole  have  continued to
     accrue salaries and provide interim funding as necessary.

     Company management is mindful of the consequences of government action with
respect  to  operations  in foreign  jurisdictions,  as was the case in India in
1998. In an effort to mitigate  interruption of the Company's  business in these
foreign jurisdictions,  Company management has implemented a program whereby the
Company  is  shielded  from any  direct  governmental  actions,  other  than the
potential seizing of equipment provided by the Company, through engagements with
local  partners.  Each local  partner will have the ultimate  responsibility  of
governmental  and  regulatory  relations in each  destination  country,  thereby
protecting  Company assets from predatory seizures by hostile  governments.  The
process of identifying,  recruiting,  and engaging local implementation partners
is governed by the following principles:

o    Traditional  telephone  communications costs from the US to the destination
     country are significantly higher than a minimum threshold level.

o    Company  management  has  had  prior  relationships  with  entities  in the
     destination country that have strong business/political contacts and/or are
     involved in the telecommunications industry in that country.

o    The  destination  country  has  adopted  and  is  implementing  a  plan  of
     deregulation of its telecommunications industry.

o    A Cyberfast  review of current  services  and prices  offered by other data
     service  providers to the  destination  country  indicates long term growth
     potential.

     Company  management  expects that the implementation of these policies will
safeguard both Company assets and important revenue streams, as well as, further
insulate  the Company  from the vagaries of  international  political  intrigues
beyond the control of Company management.

     The Company's outlook for the remainder of 2001 is optimistic.  The Company
has already invested in all the necessary equipment to start generating revenues
in  India,  Turkey,  Kenya  and Peru.  The  Company  is  currently  waiting  for
installation of the circuit at the new site in Kenya. The equipment and internet
line is  installed  in the  Company's  new  office in India but needs some final
improvements before revenues can be generated.  In Peru, all necessary equipment
has been installed and all necessary phone lines have been provided by the local
PTT to the Company.  The Company is currently  preparing marketing documents for
distribution to Peruvian customers. In Turkey, most equipment has been installed
by the  Company's  local  partner and has been tested.  The Company is currently
waiting for the remainder of the  installations to be completed and expects they
will be completed in the next month.

Forward Looking Statements

     CERTAIN  STATEMENTS  MADE IN THIS  REPORT  ARE  FORWARD-LOOKING  STATEMENTS
WITHIN THE  MEANING OF THE  PRIVATE  SECURITIES  LITIGATION  REFORM ACT OF 1995.
THESE  FORWARD-LOOKING  STATEMENTS INCLUDE,  AMONG OTHERS, OUR ANTICIPATION THAT
OUR  PRINCIPAL  STOCKHOLDERS  WILL  SUPPLY  WORKING  CAPITAL  LOANS AND THAT THE
COMPANY WILL LOCATE FINANCING FROM THIRD PARTIES.  THESE STATEMENTS ARE BASED ON
MANAGEMENT'S  BELIEFS AND ASSUMPTIONS AND ON INFORMATION  CURRENTLY AVAILABLE TO
MANAGEMENT.  THESE STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES  THAT COULD
CAUSE  ACTUAL  RESULTS  TO DIFFER  MATERIALLY  FROM THOSE  CONTEMPLATED  IN SUCH
FORWARD-LOOKING  STATEMENTS.  OUR PRINCIPAL  STOCKHOLDERS MAY DISCONTINUE MAKING
LOANS AND THE COMPANY MAY NOT BE ABLE TO ATTRACT THIRD PARTY FUNDING.

ITEM 7.           CONSOLIDATED FINANCIAL STATEMENTS

     The Company's audited consolidated  financial statements as of December 31,
2000, the consolidated statements of operations and statements of cash flows for
the two years then ended, are attached immediately  preceding the signature page
of this Form 10-KSB.

ITEM 8.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

     On October 5, 1999 the Company  engaged the firm of Rachlin  Cohen & Holtz,
LLP to audit Company  financial  statements  for the fiscal years ended December
31, 1998, 1999 and 2000. Mr. Robert Jarkow, CPA previously audited the Company's
financial  statements.  The Company learned that Mr. Jarkow was not independent,
could not act as  Company  auditor,  and could not  render  any  opinion  on the
financial statements of the Company.

     There were no  disagreements  with Mr.  Jarkow on any matter of  accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedure while the Company engaged him.


                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Directors and Executive Officers

     Executive officers of the Company are elected by the Board of Directors and
serve for a term of one year and until their  successors  have been  elected and
qualified  or  until  their  earlier  resignation  or  removal  by the  Board of
Directors, except as otherwise provided in the employment agreements with Edward
J. Stackpole, Itir Stackpole and Bert Perez.

     The following table sets forth names and ages of all executive officers and
directors of the Company:

<TABLE>
<CAPTION>

Name                                 Age      Position                                              Director Since
----                                 ---      --------                                              --------------

<S>                                  <C>      <C>                                                       <C>
Edward J. Stackpole                  56       Co-Chair of the Board of Directors, Chief                 11/98
                                              Executive Officer

Itir Stackpole                       45       Co-Chair of the Board of Directors, Vice                  11/98
                                              President

N. Bruce Walko                       60       President, Director                                      11/99(1)

M. Dowell Stackpole                  45       Director                                                 11/98(3)

Bert Perez                           36       Chief Technical Officer, Director                         12/99

William Wollrab                      43       Vice President, Business Development, Director           11/99(2)
Gerard Werner                        28       Secretary, Director                                      11/99(3)

Gianni Ciamaroni                     56       Director                                                 08/00(3)
<FN>
(1)  Mr. Walko resigned as President on April 12, 2001.

(2)  Mr. Wollrab resigned in August 2000.

(3)  Mr. Ciamaroni was not nominated for re-election as a director,  and Messrs.
     Stackpole  and Werner were not  re-elected  as directors  at the  Company's
     annual shareholders' meeting held June 12, 2001.
</FN>
</TABLE>

     Edward J. Stackpole  founded the operations of the Company  through the BCC
and CNSC subsidiaries.  Since August 1995, Mr. Stackpole has served as president
the BCC and  CNSC  subsidiaries,  and  since  the  Company's  Reorganization  in
November  1998, has been Chief  Executive  Officer and Chairman of the Company's
Board of  Directors.  For six years prior to that date,  Mr.  Stackpole  was the
general  partner of EJS  Associates,  a privately  held  company  that owned the
distribution   rights   for  AT&T   equipment   in   Turkey,   and   distributed
telecommunications  product in Turkey. Edward and Itir Stackpole are husband and
wife.

     Itir Stackpole co-founded the operations of the Company through the BCC and
CNSC  subsidiaries.  Since  August  1995,  Mrs.  Stackpole  has  served  as vice
president  of  the  BCC  and  CNSC   subsidiaries,   and,  since  the  Company's
Reorganization  in  November  1998,  has held the office of vice  president  and
co-chairman of the Board of Directors.  Mrs.  Stackpole was also general partner
of EJS Associates in Turkey from 1989 through August 1995.

     Mr. Bruce Walko was  President of the Company  from  November  1999 through
April 12, 2001. Mr. Walko has been a Director of the Company since November 1999
as a consequence of acquisition of Global by the Company.  Mr. Walko also serves
as a Director of Appiant Technologies,  formerly Nhancement Technologies,  Inc.,
and a NASDAQ small cap company located in Fremont, California that is a software
applications and services  company  specializing in unified  communications  and
information  solutions.  From June 1999 until  November 1999 Mr. Walko served as
President of Global Telcom until its acquisition by the Company. From April 1998
to May 1999 Mr. Walko was served as an individual  consultant to LCC Corporation
in Washington,  D.C., SITEL Corporation in Omaha,  Nebraska, and IES Corporation
in Salt Lake City,  Utah.  From September 1997 to March 1998 he served as acting
Vice  President of  Marketing  for MTC  Netsource,  Petaluma,  California.  From
September 1994 to August 1997 he served as Vice  President and Regional  General
Manager of NextWave Cellular in San Diego,  California.  He has a B.S. degree in
Computer Science from Purdue University and an MBA in Finance and Marketing from
the University of Southern California.

     Mr. Bert Perez has been the Chief Technical Officer and Director since June
1999. Sprint Communications, Inc. employed Mr. Perez. in south Florida from 1992
through 1999 as Data Support Manager and prior to that as an MIS manager for ABC
television. In his prior positions, Mr. Perez was responsible for the design and
implementation of network solutions and technical support.

     Mr.  Bill  Wollrab  was a  Director  of the  Company  as a  consequence  of
acquisition of Global by the Company and provided  consulting services to locate
potential partners in developing countries for the Company. He has been involved
in business  consulting  since March,  1998. From 1986 to 1993 Mr. Wollrab was a
commercial  real estate broker with Marcus & Millichap,  Denver,  Colorado.  Mr.
Wollrab  received his BA in German  Literature in 1979 from Lake Forest College,
Lake Forest,  Illinois.  Effective August 2, 2000, Mr. Wollrab resigned from the
Company's  Board of Directors to make a seat available for a nominee of FATA. As
consideration  for this  resignation,  the  Company  accelerated  the vesting of
certain  options due to Mr.  Wollrab during the  forthcoming  fiscal year ending
December 31, 2001.

     Mr.  Gerard  Werner  became a Director  and  Secretary  of the Company as a
consequence of  acquisition of Global by the Company.  Mr. Werner is a member of
the District of Columbia Bar  Association and received his A.B. in May 1994 from
Georgetown  University,  J.D. in May 1997 from Georgetown University Law Center.
Mr. Werner is no longer a director effective June 12, 2001.

     Mr. M. Dowell  Stackpole  became a director in December 1998. Mr. Stackpole
has been employed as an analyst for an investment firm operated by Bass Brothers
of Fort Worth,  Texas since  January 1994.  Mr.  Stackpole is the brother of Mr.
Edward J. Stackpole,  Cyberfast's Chief Executive  Officer.  Mr. Stackpole is no
longer a director effective June 12, 2001.

     Mr.  Gianni  Ciamaroni  became a director of the Company as a result of the
Company's  Investment  Agreement with FATA and was FATA's  representative on the
Board of  Directors.  Mr.  Ciamaroni  is no  longer a  director  of the  Company
effective June 12, 2001.

Board of Advisors

     In addition to the Company's  Board of  Directors,  it has added a Board of
Advisors  as the result of the Global  acquisition.  The members on the Board of
Advisors include:

     Lee W. McKnight

     Dr.  McKnight  is an advisor to the  Company's  Board of  Directors  and is
intended to be a  consultant  of the Company in the future,  although he has not
done any consulting work for the Company to date. Dr. McKnight has been with the
Company since October of 1999 as a consequence  of  acquisition of Global by the
Company. Dr. McKnight is Associate Professor of International  Communication and
Director  of the  Edward  R.  Murrow  Center at the  Fletcher  School of Law and
Diplomacy,   Tufts  University;   Research  Affiliate  at  the  MIT  Center  for
Technology, Policy and Industrial Development; founder of the Internet Telephony
Consortium; and President of Marengo Research, a consultancy. Professor McKnight
received his PhD from MIT in 1989, MA from Johns Hopkins University in 1981, and
BA from Tufts University in 1978.

     William H. Lehr

     Mr. Lehr is a consultant of the Company and has been with the Company since
October of 1999 as a consequence of  acquisition of Global by the Company.  From
1997 to  present,  Mr.  Lehr has been an  Assistant  Professor  of  Finance  and
Economics at the Graduate School of Business,  Columbia University New York, NY.
From January of 1997 to the present,  Mr. Lehr has been an affiliate of Internet
Telephony and  Interoperability  Consortium,  Center for Technology,  Policy and
Industrial  Development  at  Massachusetts  Institute  of  Technology.  Mr. Lehr
received his Ph.D. in Economics  from Stanford  University in 1992, his MBA from
The Wharton School, University of Pennsylvania in 1984.

Disclosure of Delinquent Forms 3, 4 or 5 Filers

     During the fiscal year ended December 31, 2000,  Edward J. Stackpole,  Itir
Stackpole,  M. Dowell Stackpole,  N. Bruce Walko, William Wollrab, Gerard Werner
and Bert Perez all failed to timely  file  Forms 5 for the  fiscal  years  ended
December 31, 1999 and 2000. In addition,  Gianni Ciamaroni failed to timely file
Form 3 upon his appointment as a director and failed to timely file a Form 5 for
the fiscal year ended 2000.

ITEM 10.          EXECUTIVE COMPENSATION

Compensation and other Benefits of Executive Officers

     The following table sets out the compensation received for the fiscal years
ended December 31, 1998, 1999 and 2000 in respect to each of the individuals who
were the Company's  chief  executive  officer at any time during the last fiscal
year and the Company's  four most highly  compensated  executive  officers whose
total salary and bonus exceeded $100,000 (the "Named Executive Officers").

<TABLE>
<CAPTION>

                                                    SUMMARY COMPENSATION TABLE

                  FISCAL YEAR COMPENSATION                                                 LONG TERM COMPENSATION

                                                                                Awards                                 Payouts
                                                                                ------                                 -------

                                                                                             Restricted
                                                                                               Shares
                                                                Other        Securities          or                    All other
                                                                Annual          under        Restricted     LTIP        Compen-
         Name and                       Salary       Bonus      Compen-      Option/SARs       Share       Payouts      sation
    Principal Position        Year        ($)         ($)       sation         Granted         Units         ($)          ($)
    ------------------        ----        ---         ---                      -------         -----         ---          ---

<S>                           <C>       <C>            <C>     <C>             <C>               <C>          <C>          <C>
Edward J. Stackpole/          2000      300,000        0       28,800(1)       275,000           0            0            0
Co-Chair and CEO              1999      300,000        0       28,800(1)       250,000           0            0            0
                              1998      262,882        0       2,400(1)           0              0            0      1,370,459(2)

Itir Stackpole/               2000      250,000        0           0           275,000           0            0            0
Co-and Vice President         1999      250,000        0           0           250,000           0            0            0
                              1998      262,882        0           0              0              0            0      1,370,459(2)

Bert Perez                    2000      100,000        0       14,400(1)       150,000           0            0            0
Chief Technical Officer       1999      58,333         0       8,400(1)        100,000         10,000         0            0
                              1998        N/A         N/A         N/A            N/A            N/A          N/A          N/A

Bruce Walko                   2000      105,638        0           0           150,000           0            0            0
President(4)                  1999        N/A         N/A         N/A            N/A            N/A          N/A          N/A
                              1998        NA          N/A         N/A            N/A            N/A          N/A          N/A
<FN>

(1)  Represents car allowance.
(2)  In 1998 CNSI was taxed under Subchapter S of the Internal Revenue Code.
     Edward and Itir Stackpole, as holders of 100% of the stock of CNSI,
     received distributions under Subchapter S of the Internal Revenue Code.
     One-half is imputed to each as other compensation.
(3)  Represents commissions.
(4)  Mr. Walko resigned as President on April 12, 2001.
</FN>
</TABLE>


Agreements with Management

     On June 30, 2001,  the Company  granted to each of Edward  Stackpole,  Itir
Stackpole, Bert Perez, M. Dowell Stackpole, N. Bruce Walko, Gianni Ciamaroni and
Gerard  Werner  options to acquire  50,000  shares of common stock for $0.17 per
share, exercisable for five years, in consideration for serving on the Company's
Board of  Directors  during 2000.  The issuance of the options was  conducted in
reliance on Section 4(2) of the Act.

     On May 1, 2000,  the Company  granted to each of Edward  Stackpole and Itir
Stackpole  options to acquire 25,000 shares of common stock at a strike price of
$3.00 per share,  exercisable  for five years in  consideration  for executing a
personal  guarantee of the Company's  obligations  in  connection  with the FATA
Investment Agreement.

     On June 8, 2000,  the  Company  granted to each of Edward  Stackpole,  Itir
Stackpole,  Bert Perez,  William  Wollrab,  Bruce Walko, M. Dowell Stackpole and
Gerard  Werner  options to acquire  50,000  shares of common stock for $3.50 per
share, exercisable for five years, in consideration for serving on the Company's
Board of Directors.

     On August 2, 2000, Mr.  Ciamaroni was granted a warrant to acquire  112,500
shares of common stock for $3.00 per share, as a finder's fee in connection with
the FATA transaction.

     Pursuant  to the terms of a letter to the  Company  from Bruce  Walko dated
October  29,  1999,  the  Company  agreed to pay Mr.  Walko a monthly  salary of
$10,000 per month for six months, and $15,000 per month thereafter and agreed to
pay Mr. Walko a bonus of up to 40% of base salary  starting in 2000. The Company
agreed to grant Mr. Walko  options to acquire  50,000 shares on November 1, 1999
and 100,000  options per year for 2000, 2001 and 2002 with 25,000 shares vesting
per quarter.

     On January 1, 1999,  Mr.  Edward J.  Stackpole  entered  into a  three-year
employment  agreement  with the Company at an annual salary of $300,000 per year
and a quarterly bonus equal to 5% of the Company's net pre-tax quarterly income.
Mr. Stackpole was also granted 600,000  non-qualified  stock options exercisable
at $3.50 per share over a 10-year  period that will vest in increments of 50,000
options quarterly, provided that Mr. Stackpole is still employed on the last day
of each quarter.

     On January 1, 1999 Mrs. Itir Stackpole entered into a three-year employment
agreement  with the  Company  at an  annual  salary of  $250,000  per year and a
quarterly bonus equal to 5% of the Company's net pre-tax quarterly income.  Mrs.
Stackpole was also granted 600,000 non-qualified options at $3.50 per share over
a 10-year period that vest in increments of 50,000 options  quarterly,  provided
that Mrs. Stackpole is still employed on the last day of each quarter.

     Effective  on June 1,  1999,  Mr.  Bert  Perez  entered  into a  three-year
employment  agreement with the Company at an annual salary of $100,000 per year.
Mr. Perez also  receives a quarterly  bonus equal to 3.3% of the  Company's  net
pre-tax  quarterly  income.  He received a signing bonus of 10,000 shares of the
Company's  Class A Common  Stock,  of which 5,000 vested  immediately  and 5,000
shares vested on December 1, 1999. Mr. Perez was granted  300,000  non-qualified
options  exercisable  at $3.50 per  share  over a  10-year  period  that vest in
increments  of  25,000  options  quarterly,  provided  that  Mr.  Perez is still
employed on the last day of each quarter.

     The Company granted Mr. M. Dowell Stackpole 58,000 shares of Class A Common
Stock on in January 1999 as compensation for joining the board of directors.

Option/Stock  Appreciation  Rights  ("SAR")  Grants  during  the  most  recently
completed Fiscal Year

     The  following  table sets out the stock  options  granted  by the  Company
during the previous fiscal year to the Named Executive Officers of the Company.

<TABLE>
<CAPTION>

                            OPTION/SAR GRANTS IN 2000
                                INDIVIDUAL GAINS

                              Number of         % of Total
                             Securities        Options/SARs
                             Underlying         Granted to
                            Options/SARs       Employees in     Exercise or Base    Market Price on
Name                         Granted (#)       Fiscal Year        Price ($/Sh)       Date of Grant      Expiration Date
----                         -----------       -----------        ------------       -------------      ---------------

<S>                            <C>                <C>                    <C>            <C>                   <C>
Edward J. Stackpole            200,000            23.81%                 $3.50          $3.50              01/01/09
                                50,000            5.95%                  $3.50          $3.00              06/07/05
                             25,000(1)            2.98%                  $3.00          $3.00              05/31/05

Itir Stackpole                 200,000            23.81%                 $3.50          $3.50              01/01/09
                                50,000            5.95%                  $3.50          $3.00              06/07/05
                             25,000(1)            2.98%                  $3.00          $3.00              05/31/05

Bert Perez                     100,000            11.90%                 $3.50          $9.00              05/31/09
                                50,000            5.95%                  $3.50          $3.00              06/07/05

N. Bruce Walko                 100,000            11.90%                 $3.00          $3.00              10/28/09
                                50,000            5.95%                  $3.50          $3.00              06/07/05
<FN>

(1)  Granted in consideration  for Ed & Itir Stackpole's  personal  guarantee of
     obligations  of the Company  made in  connection  with the FATA  Investment
     Agreement.
</FN>
</TABLE>


Aggregated  Option/SAR  Exercised  in Last  Financial  Year and Fiscal  Year-End
Option/SAR Values

     The  following  table  sets  out  all  Option/SAR  exercised  by the  Named
Executive  Officers  during  the most  recently  completed  fiscal  year and the
Option/SAR values for such persons as of the end of the most recently  completed
fiscal year.

Aggregated Option/SAR Exercised in Last Fiscal Year and FY-End Option/SAR Values
<TABLE>
<CAPTION>

                                                                             Number of
                                                                             Securities
                                                                            Underlying                Value of
                                                                            Unexercised             Unexercised
                                                                          Options/SARs at         Options/SARs at
                                                                             FY -End (#)             FY-End ($)

                           Shares Acquired
                                on                                          Exercisable/           Exercisable/
Name                         Exercise (#)        Value Realized ($)        Unexercisable           Unexercisable
----                         ------------        ------------------        -------------           -------------

<S>                                 <C>                   <C>                 <C>                        <C>
Edward J. Stackpole                -0-                   -0-                  525,000                   -0-

Itir Stackpole                     -0-                   -0-                  525,000                   -0-

Bert Perez                         -0-                   -0-                  250,000                   -0-

N. Bruce Walko                     -0-                   -0-                  250,000                   -0-
</TABLE>


Compensation of Directors

     No salaries are paid to directors.  However, each director receives options
to acquire  50,000  shares of Class A Common Stock for each year of service as a
director.

     No pension or  retirement  benefit plan has been  instituted by the Company
and none is proposed at this time and there is no arrangement  for  compensation
with respect to  termination  of the directors in the event of change of control
of the Company.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table provides certain information (consisting of Class A and
Class B Common Stock) as of July 5, 2001 concerning the beneficial  ownership of
the Company's  voting stock held by each director and named  executive  officer;
each person known by us to be the  beneficial  owner of at least five percent of
the Company's voting stock; and all named executive  officers and directors as a
group.  The  information is provided on a combined basis for Class A and Class B
Common  Stock to  reflect  share  ownership  and voting  power for the  combined
classes.
<TABLE>
<CAPTION>
                                                                                    Total of        Percent of Voting
Name and                 Number of     Percent of    Number of      Percent of     Class A and            Power
Address of               Class A        Class A       Class B        Class B         Class B            Combined
Beneficial Owner          Shares         Shares        Shares         Shares          Shares             Classes
----------------          ------         ------        ------         ------          ------             -------

<S>                     <C>             <C>          <C>            <C>             <C>                 <C>   <C>
Edward J. and Itir      1,569,394(1)      34.20%       3,507,400       78.33%      5,076,794(1)         73.62%(1)
Stackpole

N. Bruce Walko            357,358(2)       9.96%          -0-            -0-         357,358(2)          0.74%(2)

M. Dowell Stackpole       208,000(3)       6.14%          -0-            -0-         208,000(3)          0.43%(3)

Gerard Werner             151,471(4)       4.47%          -0-            -0-         151,471(4)          0.31%(4)

Bert Perez                360,000(5)      10.03%          -0-            -0-         360,000(5)          0.74%(5)

William Wollrab           300,988(6)       8.56%          -0-            -0-         300,988%(6)         0.62%(6)

Gianni Ciamaroni          162,500(7)       4.78%          -0-            -0-         162,500(7)          0.34%(7)

All officers and        3,109,711(8)      51.60%       3,507,400        78.33%      6,617,111(8)        75.16%(8)
directors as a group
(7 persons)

Oguz Stackpole            121,100          3.73%         965,200        21.56%      1,086,300          20.35%

The FATA Group Sp.A.    1,466,276         45.27%          -0-            -0-        1,466,276           3.05%
(9)
<FN>

(1)  Includes  options to acquire  675,000  shares held by Edward  Stackpole  of
     which 500,000 are exercisable at $3.50 per share until  12/31/09;  of which
     50,000 are exercisable at $3.50 per share until  11/23/04;  of which 25,000
     are  exercisable  at $3.00 per share  until  5/31/05;  of which  50,000 are
     exercisable  at $3.50 per share  until  6/07/05;  and of which  50,000  are
     exercisable  at $0.17 per share until  6/29/06.  Also  includes  options to
     acquire  675,000  shares  held by Itir  Stackpole,  of  which  500,000  are
     exercisable  at  $3.50  per  share  until  12/31/09;  of which  50,000  are
     exercisable  at  $3.50  per  share  until  11/23/04;  of which  25,000  are
     exercisable  at  $3.00  per  share  until  5/31/05;  of  which  50,000  are
     exercisable  at $3.50 per share  until  6/07/05;  and of which  50,000  are
     exercisable at $0.17 per share until 6/29/06.

(2)  Includes   options  to  acquire  350,000  shares,   of  which  200,000  are
     exercisable  at  $3.00  per  share  until  10/28/09;  of which  50,000  are
     exercisable  at  $3.50  per  share  until  11/23/04;  of which  50,000  are
     exercisable  at $3.50 per share  until  6/07/05;  and of which  50,000  are
     exercisable at $0.17 per share until 6/29/06.

(3)  Includes options to acquire 150,000 shares, of which 50,000 are exercisable
     at $3.50 per share until 11/23/09; of which 50,000 are exercisable at $3.50
     per share until 6/07/05;  and of which 50,000 are  exercisable at $0.17 per
     share  until  6/29/06.  Also  includes  8,000  shares  held  by  M.  Dowell
     Stackpole's  wife and six children.  Mr.  Stackpole is no longer a director
     effective 6/12/01.

(4)  Includes options to acquire 150,000 shares, of which 50,000 are exercisable
     at $3.50 per share until 11/23/09; of which 50,000 are exercisable at $3.50
     per share until 6/07/05;  and of which 50,000 are  exercisable at $0.17 per
     share until 6/29/06. Mr. Werner is no longer a director effective 6/12/01.

(5)  Includes   options  to  acquire  350,000  shares,   of  which  175,000  are
     exercisable  at  $3.50  per  shares  until  5/31/09;  of which  25,000  are
     exercisable  at  $3.50  per  share  until  9/30/04;  of  which  50,000  are
     exercisable  at  $3.50  per  share  until  11/23/04;  of which  50,000  are
     exercisable  at $3.50 per share  until  6/07/05;  and of which  50,000  are
     exercisable at $0.17 per share until 6/29/06.

(6)  Includes options to acquire 275,000 shares; of which 50,000 are exercisable
     at $3.50 per share until  11/23/04;  of which  125,000 are  exercisable  at
     $3.50 until 2004; of which 50,000 are  exercisable at $3.50 per share until
     6/07/05;  and of which  50,000  are  exercisable  at $3.00 per share  until
     8/20/05. Mr. Wollrab resigned as director effective August 2000.

(7)  Includes a warrant  to acquire  112,500  shares,  exercisable  at $3.00 per
     share which vests if the FATA put option expires  unexercised.  The Company
     is currently  disputing whether FATA properly  exercised this option by the
     November 30, 2000 deadline.  Also includes options to acquire 50,000 shares
     at $0.17 per share until 6/29/06.  Mr. Ciamaroni is no longer a director of
     the Company effective June 12, 2001.

(8)  Includes footnotes 1 through 7.

(9)  As discussed in its Schedule  13D,  FATA is  controlled by Gaetano Di Rosa,
     Ignazio  Moncada,   Andrea  Lombardi,   Marcello  Agnoli,  Angelo  Airaghi,
     Giancarlo Battista, Giuseppe Bono, Alberto De Benedictis, Paolo Micheletta,
     Arcangiolo Lovari,  Alessandro  Bertolini,  Loris Boggio,  Enrico Borgogna,
     Sergio  Camani,  Piero  Alberto  Canuto,  Stefano  Carlin,  Diego  Cavalli,
     Vincenzo  Chieppa,  Davide Cucino,  Silvio De Poli,  Giorgio  Donini,  Lino
     Franco,  Angelo  Furinghetti,  Marco Gallino,  Piero-Carlo  Gallo,  Stefano
     Giovine, Giovanni Granella, Massimo Lessona, Flavio Mussano, Sergio Pagani,
     Giancarlo  Prato,  Marzio  Raveggi,  Calogero  Rifici,  Bruno  Taraglio and
     Bartolomeo Tosco, all residents of Italy.
</FN>
</TABLE>


ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Edward and Itir  Stackpole  are husband and wife.  M. Dowell  Stackpole and
Edward Stackpole are brothers.

     As of December 31, 2000, the Company owed Edward and Itir Stackpole  $0.962
million for accrued  salaries.  Since that date,  the salaries have continued to
accrue.

     The  Company  currently  has  outstanding  loans to Mr. and Mrs.  Stackpole
totaling approximately  $1,431,000,  including accrued interest. In August 2000,
the  Company  made a  partial  payment  to the  Stackpoles  of  $300,000  on the
outstanding  principal  and  interest.  The  outstanding  debt is evidenced by a
demand note which accrues interest at 9%, compounded quarterly.  During 2000 and
1999, the Company  incurred,  but did not pay, interest expense of approximately
$116,000 and $78,000, respectively, in connection with these loans.

     During 1999,  the Company  issued 58,000 shares of Class A common stock and
options to purchase  an  additional  50,000  shares at $3.50 per share (the fair
value of the underlying  shares on the date of grant) to M. Dowell Stackpole who
is related by birth to Ed Stackpole,  a majority stockholder.  The common shares
and options  were issued to M. Dowell  Stackpole  in  connection  with  services
provided  during  1999 as a member  of the  Board of  Directors.  Subsequent  to
December 31, 1999, M. Dowell Stackpole  received an additional 50,000 options to
purchase  common stock,  again in  connection  with services to be rendered as a
Board member.

     In May 2000, the Company  issued to Gianni  Ciamaroni a warrant to purchase
112,500  shares of Class A Common  Stock at $3.00 per share as a finder's fee in
connection with the FATA Investment Agreement. The warrant vests if the FATA put
option  expires  unexercised.  The Company is currently  disputing  whether FATA
properly exercised this option by the November 30, 2000 deadline.

     In May 2000, the Company issued to JW Genesis a warrant to purchase  62,500
shares  of  Class A  Common  Stock  at $3.00  per  share  as a  finder's  fee in
connection with the FATA Investment Agreement. The warrant vests if the FATA put
option  expires  unexercised.  The Company is currently  disputing  whether FATA
properly exercised this option by the November 30, 2000 deadline.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits:

Exhibit No.:
<TABLE>
<CAPTION>

<S>                                           <C>
2.0                  Plan of Reorganization.  (1)
3.0                  Articles of Incorporation.  (1)
3.1                  Articles of Amendment to the Articles of Incorporation of Smartfit
                     Foundations, Inc.  (1)
3.2                  Amendment to the Articles of Incorporation of Cyberfast Systems, Inc.  (1)
3.3                  Bylaws.  (1)
10.1                 Cisco Equipment Lease.  (1)
10.2                 Cyberfast/FATA Investment Agreement.  (1)
10.3                 Employment Agreement between the Company and Edward Stackpole.  (2)
10.4                 Employment Agreement between the Company and Itir Stackpole.  (2)
10.5                 Employment Agreement between the Company and Bert Perez.  (2)
10.6                 Employment Agreement between the Company and Bruce Walko. (2)
10.7.1               Office Lease. (2)
10.7.2               Amendment to Lease Agreement, dated May 24, 2000. (2)
10.8                 Agreement with KPN/Qwest, dated April 5, 2000. (2)
16.0                 Form of letter to Mr. Robert Jarkow sent pursuant to Item 304(a)(3) of
                     Regulation SB.  (1)
21.0                 List of Subsidiaries. (3)
<FN>

(1)  Incorporated by reference from the Company's filing on Form 10-SB.

(2)  Incorporated by reference from the Company's Form 10-KSB/A. No. 1, for
     the fiscal year ended 12/31/99 as filed on April 2, 2001.

(3)  Incorporated by reference from the Company's Form 10-KSB, for the fiscal
     year ended 12/31/00 as filed on April 17, 2001.
</FN>
</TABLE>


         (b)      Reports on Form 8-K:

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


                                    SIGNATURE


     In accordance  with Section 12 of the Securities  Exchange Act of 1934, the
registrant  caused  this Form  10-KSB/A  No. 1 to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                CYBERFAST SYSTEMS, INC.



Dated:  August 13, 2001         By: /s/ Edward J. Stackpole
                                   ------------------------
                                   Edward J. Stackpole, Chief Executive Officer
                                   and Co-Chair of the Board


Dated:  August 13, 2001        By: /s/ Itir Stackpole
                                   ------------------
                                   Itir Stackpole, Chief Financial Officer, Vice
                                   President and Co-Chair of the Board


Dated:  August 13, 2001        By: /s/ Bert Perez
                                   --------------
                                   Bert Perez, Chief Technical Officer, Director



                                  EXHIBIT INDEX
<TABLE>
<CAPTION>



<S>                  <C>
2.0                  Plan of Reorganization.  (1)
3.0                  Articles of Incorporation.  (1)
3.1                  Articles of Amendment to the Articles of Incorporation of Smartfit
                     Foundations, Inc.  (1)
3.2                  Amendment to the Articles of Incorporation of Cyberfast Systems, Inc.  (1)
3.3                  Bylaws.  (1)
10.1                 Cisco Equipment Lease.  (1)
10.2                 Cyberfast/FATA Investment Agreement.  (1)
10.3                 Employment Agreement between the Company and Edward Stackpole.  (2)
10.4                 Employment Agreement between the Company and Itir Stackpole.  (2)
10.5                 Employment Agreement between the Company and Bert Perez.  (2)
10.6                 Employment Agreement between the Company and Bruce Walko. (2)
10.7.1               Office Lease. (2)
10.7.2               Amendment to Lease Agreement, dated May 24, 2000. (2)
10.8                 Agreement with KPN/Qwest, dated April 5, 2000. (2)
16.0                 Form of letter to Mr. Robert Jarkow sent pursuant to Item 304(a)(3) of
                     Regulation SB.  (1)
21.0                 List of Subsidiaries. (3)
<FN>

(1)  Incorporated by reference from the Company's filing on Form 10-SB.

(2)  Incorporated by reference from the Company's Form 10-KSB/A.  No. 1, for the
     fiscal year ended 12/31/99 as filed on April 2, 2001.

(3)  Incorporated  by reference from the Company's  Form 10-KSB,  for the fiscal
     year ended 12/31/00 as filed on April 17, 2001.
</FN>

</TABLE>


                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS


                                                             PAGE
                                                             ----



REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS            F-1


CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheet                                              F-2

   Statements of Operations                                   F-3

   Statements of Stockholders' Deficiency                     F-4

   Statements of Cash Flows                                   F-5

   Notes to Consolidated Financial Statements              F-6-F-18


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Stockholders
Cyberfast Systems, Inc. and Subsidiaries
Boca Raton, Florida


We have  audited  the  accompanying  consolidated  balance  sheet  of  Cyberfast
Systems,  Inc.  and  Subsidiaries  as of  December  31,  2000,  and the  related
consolidated statements of operations,  stockholders'  deficiency and cash flows
for each of the two years 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
audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Cyberfast Systems, Inc. and Subsidiaries as of December 31, 2000 and the results
of their operations and their cash flows for each of the two years then ended in
conformity with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As described in Note 2 to the
consolidated  financial  statements,  the  Company is  subject to certain  going
concern  considerations,  which  conditions  raise  substantial  doubt about the
Company's ability to continue as a going concern. Management's plans with regard
to these  matters are also  described  in Note 2 to the  consolidated  financial
statements. The consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.




Fort Lauderdale, Florida
February 9, 2001


CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 2000


<TABLE>
<CAPTION>


                                     ASSETS
Current Assets:
<S>                                                                   <C>
 Cash                                                                 $     3,522
 Advances to officers/directors and others                                 10,000
 Prepaid expenses and other current assets                                  8,521
                                                                      -----------
  Total current assets                                                     22,043

Property and Equipment, Net of Accumulated Depreciation
 of $154,690                                                              341,581
                                                                      -----------
                                                                      $   363,624
                                                                      ===========

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
 Obligation arising from common stock subject to put option           $ 1,500,000
 Note payable, major stockholder                                        1,236,622
 Accounts payable and accrued expenses:
  Stockholder compensation                                              1,030,766
  Accounts payable                                                        530,783
  Accrued interest, major stockholder                                     194,774
  Other accrued expenses                                                  134,293
 Income taxes payable                                                     151,000
                                                                      -----------
  Total current
  liabilities                                                           4,778,238
                                                                      -----------

Commitments, Contingencies, and Other Matters                                --

Stockholders' Deficiency:
 Preferred stock, $100 par value; 5,000,000
  shares authorized; none issued                                             --
 Common stock
  Class A, $.01 par value; 40,250,000 shares authorized;
      3,239,176 shares issued and outstanding                              32,392
  Class B, $.01 par value; 4,750,000 shares authorized;
      4,477,600 shares issued and outstanding                              44,776
 Additional paid-in capital                                             2,909,944
 Deficit                                                               (7,401,726)
                                                                      -----------
                                                                       (4,414,614)
                                                                      -----------
                                                                      $   363,624
                                                                      ===========
</TABLE>
See notes to consolidated financial statements.



                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>


                                                                                   2000           1999
                                                                                   ----           ----

<S>                                                                            <C>            <C>
Data Communications Service Revenues                                           $   192,815    $   435,739
                                                                               -----------    -----------

Costs and Expenses:
                Direct costs                                                       196,257        482,678
                General and administrative                                       2,264,734      1,554,008
                Common stock and options issued for services                       822,000      2,210,410
                                                                               -----------    -----------
                                                                                 3,282,991      4,247,096
                                                                               -----------    -----------

Loss from Operations                                                            (3,090,176)    (3,811,357)
                                                                               -----------    -----------

Other Income (Expense):
                Interest expense, stockholder                                     (119,786)       (78,540)
                Interest expense, other                                            (39,000)          --
                Loss on confiscation of assets                                     (50,000)          --
                Penalties and interest                                                --         (115,000)
                                                                               -----------    -----------
                                                                                  (208,786)      (193,540)
                                                                               -----------    -----------

Loss Before Income Taxes and Cumulative Effect of a Change
                in Accounting Principle                                         (3,298,962)    (4,004,897)

Income Tax Benefit                                                                    --          224,000
                                                                               -----------    -----------

Loss Before Cumulative Effect of a Change in Accounting Principle               (3,298,962)    (3,780,897)

Cumulative Effect on Prior Years (to December 31, 1999) of Accounting Change       317,000           --
                                                                               -----------    -----------

Net Loss                                                                       $(2,981,962)   $(3,780,897)
                                                                               ===========    ===========

Basic and Diluted Net Loss Per Common Share:
                Before cumulative effect of a change in accounting principle   $     (0.48)   $     (0.61)
                Cumulative effect of accounting change                                0.05           --
                                                                               -----------    -----------
                Net loss                                                       $     (0.43)   $     (0.61)
                                                                               ===========    ===========

Weighted Average Number of Common Shares Outstanding                             6,865,133      6,148,984
                                                                               ===========    ===========

Pro Forma Amounts Assuming Retroactive Application of Accounting Change:
                Net loss                                                       $(3,298,962)   $(3,463,897)
                                                                               ===========    ===========
                Net loss per common share - basic and diluted                  $     (0.48)   $     (0.56)
                                                                               ===========    ===========
</TABLE>
See notes to consolidated financial statements.



                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY

                     YEARS ENDED DECEMBER 31, 2000 AND 1999



<TABLE>
<CAPTION>

                                                                         Common Stock
                                                                         ------------
                                                               Shares                       Amount
                                                               ------                       ------
                                                       Class A        Class B        Class A      Class B
                                                       -------        -------        -------      -------

<S>               <C> <C>                              <C>           <C>          <C>           <C>
Balance, December 31, 1998                             1,459,950     4,540,050    $    14,600   $    45,400

Year ended December 31, 1999:
     Issuance of common stock for services               250,500          --            2,505     1,397,995
     Options granted for services                           --            --             --            --
     Net loss                                               --            --             --            --
                                                     -----------   -----------    -----------   -----------

Balance, December 31, 1999                             1,710,450     4,540,050         17,105        45,400

Year ended December 31, 2000:
     Options granted for services                           --            --             --            --
     Issuance of common stock in connection
              ith obligation subject to put option          --
             w                                         1,466,276          --           14,663          --
     Effect of accounting change relating to
             options granted to directors                   --            --             --            --
      xchange of shares                                     --
     E                                                    62,450       (62,450)           624          (624)
     Net loss                                               --            --             --            --
                                                     -----------   -----------    -----------   -----------

Balance, December 31, 2000                             3,239,176     4,477,600    $    32,392   $    44,776
                                                     ===========   ===========    ===========   ===========


                                                       Additional
                                                         Paid-In
                                                         Capital        Deficit          Total
                                                         -------        -------          -----
<CAPTION>
<S>                                                  <C>            <C>            <C>

Balance, December 31, 1998                           $   211,702    $  (638,867)   $  (367,165)

Year ended December 31, 1999:
     Issuance of common stock for services                  --        1,400,500
     Options granted for services                        809,910           --          809,910
     Net loss                                               --       (3,780,897)    (3,780,897)
                                                     -----------    -----------    -----------

Balance, December 31, 1999                             2,419,607     (4,419,764)    (1,937,652)

Year ended December 31, 2000:
     Options granted for services                        822,000           --          822,000
     Issuance of common stock in connection
              ith obligation subject to put option
             w                                           (14,663)          --
     Effect of accounting change relating to
             options granted to directors               (317,000)          --         (317,000)
      xchange of shares
     E                                                      --             --
     Net loss                                               --       (2,981,962)    (2,981,962)
                                                     -----------    -----------    -----------

Balance, December 31, 2000                           $ 2,909,944    $(7,401,726)   $(4,414,614)
                                                     ===========    ===========    ===========

</TABLE>
See notes to consolidated financial statements.



                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>

                                                                    2000            1999
                                                                    ----            ----

Cash Flows from Operating Activities:
<S>                                                            <C>            <C>
 Net loss                                                      $(2,981,962)   $(3,780,897)
 Adjustments to reconcile net loss to net cash
   used in operating activities:
     Cumulative effect of change in accounting principle          (317,000)          --
     Depreciation                                                   62,597         90,094
     Stock-based compensation                                      822,000      2,210,410
     Interest accrued on notes payable                             158,786         78,540
     (Increase) decrease in other assets                            (8,521)         3,027
     Changes in operating assets and liabilities:
     Increase (decrease) in:
       Accounts payable and accrued expenses:
         Stockholder compensation                                  501,940        528,846
         Other                                                     438,789         32,804
       Income taxes payable                                           --         (109,000)
                                                               -----------    -----------
          Net cash used in operating activities                 (1,323,371)      (946,176)
                                                               -----------    -----------

Cash Flows from Investing Activities:
 Purchase of property and equipment                                (45,802)      (347,233)
 (Advances to) repayments from officers/directors and others         5,000        (15,000)
                                                               -----------    -----------
          Net cash used in investing activities                    (40,802)      (362,233)
                                                               -----------    -----------

Cash Flows from Financing Activities:
 Proceeds from notes payable                                     1,500,000           --
 Loans from stockholders                                           190,261      1,275,861
 Repayment of loans from stockholders                             (300,000)          --
 Bank overdraft                                                    (22,566)        22,566
                                                               -----------    -----------
          Net cash provided by financing activities              1,367,695      1,298,427
                                                               -----------    -----------

Net Increase (Decrease) in Cash                                      3,522         (9,982)

Cash, Beginning                                                       --            9,982
                                                               -----------    -----------

Cash, Ending                                                   $     3,522    $      --
                                                               ===========    ===========
</TABLE>

See notes to consolidated financial statements.


                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Business

     Cyberfast  Systems,  Inc. (the "Company") is an  international  provider of
     data communications  services. The Company operates long distance and voice
     communication   services   primarily   between   the   United   States  and
     under-served,  under-developed or developing  countries.  All transmissions
     originate in the United States.

     Organization and Capitalization

     The Company was originally  incorporated as SmartFit Brassiere Co., Inc., a
     New  York  corporation,   and  was  in  the  business  of  selling  women's
     undergarments.  The Company changed its name to SmartFit Foundations,  Inc.
     on September 8, 1995.

     In October 1998, pursuant to an Agreement and Plan of Reorganization, Smart
     Fit Foundation,  Inc. (a non-operating public shell),  acquired 100% of the
     common stock of Cyberfast  Network  Systems Corp., in exchange for 97.8% of
     Smart Fit Foundation,  Inc.'s common stock. On October 19, 1998,  Smart Fit
     Foundation, Inc. changed its name to Cyberfast Systems, Inc.

     The  Company's  certificate  of  incorporation  authorized  the issuance of
     50,000,000  shares of  capital  stock  consisting  of  5,000,000  shares of
     preferred stock with a $100 par value per share, 40,250,000 shares of Class
     A common  stock  with a $.01 par value per share and one vote per share and
     4,750,000  shares of Class B common  stock  with a $.01 par value per share
     and ten votes per share.

     On November 1, 1999, the Company  acquired 100% of the outstanding  capital
     stock of Global Telecom and Internet Ventures,  Inc. (Global), an unrelated
     entity, in exchange for 180,000 shares of Company Class A common stock. The
     acquisition was accounted for as a pooling of interests,  and, as a result,
     the  consolidated  financial  statements  give  retroactive  effect  to the
     transaction. Global had minimal assets, liabilities or operations as of the
     date of the acquisition and for the periods included in these  consolidated
     financial statements.

     Principles of Consolidation

     The accompanying  consolidated financial statements include the accounts of
     the Company and its wholly-owned  subsidiaries.  All material  intercompany
     accounts and transactions have been eliminated.

     Revenue Recognition

     Revenue  is   recognized   when  earned  and   recorded  net  of  estimated
     chargebacks.

     Property and Equipment

     Property and  equipment are recorded at cost and  depreciation  is provided
     using the  straight-line  method  over the  estimated  useful  lives of the
     assets.  Gain or loss on  disposition  of  assets,  if any,  is  recognized
     currently. Repairs and maintenance of property and equipment are charged to
     expense as incurred. Major replacements and betterments are capitalized and
     depreciated over the remaining useful lives of the assets.

     Income Taxes

     The Company  accounts  for its income  taxes using  Statement  of Financial
     Accounting  Standards (SFAS) No. 109,  "Accounting for Income Taxes," which
     requires  recognition of deferred tax  liabilities  and assets for expected
     future tax  consequences of events that have been included in the financial
     statements or tax returns. Under this method,  deferred tax liabilities and
     assets  are  determined  based  on the  difference  between  the  financial
     statement and tax bases of assets and  liabilities  using enacted tax rates
     in effect for the year in which the differences are expected to reverse.

     Concentrations of Credit Risk

     Financial   instruments   that   potentially   subject   the   Company   to
     concentrations of credit risk consist principally of cash.

     At certain times during the year, the Company may have had cash balances in
     excess of federally insured limits. The Company maintains its cash balances
     with high quality  financial  institutions that the Company believes limits
     these risks.

     Cash Equivalents

     For purposes of the  statement  of cash flows,  the Company  considers  all
     highly liquid investments with an original maturity of three months or less
     to be cash equivalents.

     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 those
     estimates.

     Stock-Based Compensation

     The Company accounts for stock-based compensation issued to employees using
     the  intrinsic  value method  prescribed  in  Accounting  Principles  Board
     Opinion No. 25,  "Accounting  for Stock Issued to Employees".  Compensation
     cost for stock options,  if any, is measured as the excess of the estimated
     market  price of the  Company's  stock at the date of grant or agreement in
     principle to grant the option,  if earlier,  over the amount the  recipient
     must pay to acquire the stock.

     Statement of Financial  Accounting  Standards ("SFAS") No. 123, "Accounting
     for  Stock-Based   Compensation,"  established  accounting  and  disclosure
     requirements using a fair-value-based  method of accounting for stock-based
     employee  compensation plans. The Company has elected to retain its current
     method of accounting  as described  above,  and has adopted the  disclosure
     requirements  of  SFAS  No.  123.  The  Company  follows  SFAS  No.  123 in
     accounting for stock options issued to non-employees.

     Advertising

     Advertising  costs are charged to expense as  incurred.  Advertising  costs
     incurred for the years ended December 31, 2000 and 1999 were not material.

     Recent Accounting Pronouncements

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
     Accounting  Bulletin  ("SAB") No. 101,  "Revenue  Recognition  in Financial
     Statements."  SAB 101  provides  guidance  for  revenue  recognition  under
     certain circumstances, and is effective for the fourth quarter of 2000. SAB
     101 did not have a material effect on the Company's consolidated results of
     operations, financial position and cash flows.

     In March 2000, the Financial  Accounting  Standards  Board ("FASB")  issued
     FASB Interpretation No. 44, "Accounting for Certain Transactions  Involving
     Stock  Compensation - an  Interpretation of APB Opinion No. 25" ("FIN 44").
     FIN 44  clarifies  the  application  of APB  Opinion No. 25 and among other
     issues clarifies the following:  the definition of an employee for purposes
     of applying APB Opinion No. 25; the criteria for determining whether a plan
     qualifies  as a  non-compensatory  plan;  the  accounting  consequences  of
     various  modifications  to the terms of  previously  fixed stock options or
     awards; and the accounting for an exchange of stock compensation  awards in
     a business  combination.  FIN 44 was  effective  July 1, 2000,  but certain
     conclusions  in FIN 44 cover  specific  events that  occurred  after either
     December 15, 1998 or January 12, 2000. The Company  adopted FIN 44 in 2000.
     See Note 10 regarding a change in accounting  principle  resulting from the
     adoption of FIN 44 in 2000.

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
     "Accounting for Derivative  Instruments and Hedging  Activities."  SFAS No.
     133 requires  companies to recognize  all  derivatives  contracts as either
     assets or  liabilities  in the  balance  sheet and to measure  them at fair
     value.  If certain  conditions  are met, a derivative  may be  specifically
     designated  as a hedge,  the  objective  of which is to match the timing of
     gain or loss recognition on the hedging  derivative with the recognition of
     (i) the changes in the fair value of the hedged asset or liability that are
     attributable  to the hedged risk or (ii) the earnings  effect of the hedged
     forecasted  transaction.  For a  derivative  not  designated  as a  hedging
     instrument,  the gain or loss is  recognized  in  income  in the  period of
     change.  On June 30, 1999,  the FASB issued SFAS No. 137,  "Accounting  for
     Derivative  Instruments and Hedging  Activities - Deferral of the Effective
     Date of FASB Statement No. 133." SFAS No. 133 as amended by SFAS No. 137 is
     effective for all fiscal  quarters of fiscal years beginning after June 15,
     2000.

     In June  2000,  the FASB  issued  SFAS No.  138,  "Accounting  for  Certain
     Derivative  Instruments  and Certain Hedging  Activities."  SFAS No. 133 as
     amended by SFAS No. 137 and 138 is  effective  for all fiscal  quarters  of
     fiscal years beginning after June 15, 2000.

     Historically,  the Company has not entered  into  derivatives  contracts to
     hedge existing risks or for speculative purposes.  Accordingly, the Company
     does not expect  adoption of the new  standard on January 1, 2001 to affect
     its consolidated financial statements.

     Reclassification

     Certain  amounts  in  1999  have  been  reclassified  to  conform  to  2000
     presentation.


NOTE 2.  GOING CONCERN CONSIDERATIONS

     The accompanying  consolidated  financial statements have been presented in
     accordance with generally accepted accounting principles,  which assume the
     continuity  of  the  Company  as a  going  concern.  As  reflected  in  the
     consolidated  financial  statements,  the  Company  incurred  net losses of
     approximately $2,982,000 in 2000 and $3,781,000 in 1999 and, as of December
     31, 2000, the  consolidated  financial  position  reflects  minimal current
     assets and a  stockholders'  deficiency of  approximately  $4,415,000.  The
     Company  has had  minimal  operating  activity  and has  devoted  the major
     portion of its efforts in 1999, 2000 and continuing into 2001, establishing
     its business  operations.  In addition,  the Company is required to satisfy
     the obligation arising from the exercise of the put option in the amount of
     $1,500,000, plus accrued interest (see Note 3).

     Management's plans with regard to these matters include the following:

     During 2000 the Company was building a network of Points of Presence (POPs)
     around the world.  This  worldwide  footprint will be used for transport of
     voice,  data, video,  Internet access and multimedia by a variety of users.
     The Company owns a switch center in Florida where it receives and transmits
     all  of  the  traffic  between  the  U.S.  and  all  international  gateway
     locations.  The Company plans to leverage IP technology to reduce the costs
     of  providing  telecommunications  services  in  traditionally  high priced
     markets.

     The Company currently has contractors in the following countries which they
     plan to generate business in during 2001: India,  Kenya,  Ukraine,  Morocco
     and Peru (see Note 7 - Service  Agreements).  The Company has  equipment in
     each of these countries  which is monitored by the contractor.  Most of the
     equipment is leased by the Company under operating leases.

     The eventual  success of management's  plans cannot be ascertained with any
     degree of certainty.

     The conditions described above regarding going concern considerations raise
     substantial  doubt as to the  ability of the Company to continue as a going
     concern. The accompanying  consolidated financial statements do not include
     any adjustments that might result from the outcome of these uncertainties.


NOTE 3.  OBLIGATION ARISING FROM COMMON STOCK SUBJECT TO PUT OPTION

     On May 5, 2000,  the Company  entered  into a Memorandum  of  Understanding
     ("MOU") in connection with the sale of common stock. The MOU provided for a
     bridge loan of  $300,000,  repayable  from the first  capital  funding with
     interest at 6%, but in no case later than August 1, 2000. This bridge loan,
     which was  guaranteed  by the  majority  stockholders,  was received by the
     Company in May 2000.

     The purchaser, upon successful conclusion of preliminary due diligence, had
     the right to contract to purchase 45% of the total outstanding common stock
     and 51% of the voting rights of the Company for  $5,000,000  payable in two
     tranches. Within seven days of the execution of the contract, the purchaser
     must have purchased  $1,500,000 of Class A common stock. The purchaser then
     had 150 days to complete any and all due  diligence.  At that time,  if the
     purchaser decided to complete the transaction, the remaining $3,500,000 was
     to be funded.

     In addition to the 45% of  outstanding  common stock,  the purchaser  would
     have  received  a warrant  to  purchase  at least an  additional  6% of the
     outstanding  common  stock of the Company at $3.00 per share (based on fair
     value at the date of the MOU).

     In the event that the purchaser  decided,  pursuant to final due diligence,
     not to  purchase  the second  tranche,  the  purchaser  had a put option in
     connection  with the first tranche.  The put option required the Company to
     buy back the shares  acquired  in the first  tranche for  $1,500,000,  plus
     interest  at 6% per annum for the time the shares  were held.  The  Company
     must  repurchase  the shares within four months from the time the purchaser
     makes  the  request.  The  transaction,  in its  entirety,  was  personally
     guaranteed by the current majority stockholders.

     On July 26, 2000, the Company  entered into an investment  agreement  which
     contractually  obligated  the purchaser and the Company to the terms of the
     MOU as outlined above. On August 1, 2000, the Company  received  payment in
     full for the first tranche in exchange for the issuance of 1,466,276  Class
     A common stock. After repayment of the bridge loan, including interest, the
     Company received net proceeds of $1,199,964.

     On or about  November  30,  2000,  the  purchaser  did not proceed with the
     second  tranche and  notified  the Company that it intended to exercise the
     put option. This would require the Company to buy back the 1,466,276 shares
     issued  for  $1,500,000,  with  interest,  by March  31,  2001.  Due to the
     existence  of the put option as an  integral  element of this  transaction,
     this  obligation  is  presented  as a liability  for  financial  accounting
     purposes in the accompanying  consolidated balance sheet as of December 31,
     2000 under the caption,  "Obligation  Arising From Common Stock  Subject to
     Put Option."

     The Company is currently disputing whether the purchaser properly exercised
     this option by the November 30, 2000 deadline.

     In addition,  the Company  granted  options to purchase  175,000  shares of
     common stock to consultants,  which were exercisable upon expiration of the
     put  option  unexercised.  These  options  were to have  expired  when  the
     purchaser notified the Company of its intention to exercise the put option.
     Accordingly,  these options have not been given  accounting  recognition in
     these  consolidated  financial  statements,  however,  if it is  ultimately
     determined,  based  upon the  resolution  of the FATA  dispute,  that these
     options  are  exercisable,  accounting  recognition  will be given to these
     options at such time.


NOTE 4.  CONFISCATED ASSETS

     In 2000,  Egypt,  a country in which the  Company was  conducting  business
     operations,  seized  all the  assets of a  contractor  in Egypt,  including
     assets  leased by the  Company  (see Note 7). The assets  confiscated  were
     comprised  of  property  and  equipment  which were  leased by the  Company
     pursuant to an operating lease.  Estimated losses of approximately  $50,000
     in  connection  with these  confiscated  assets  have been  recorded in the
     accompanying consolidated financial statements.


NOTE 5.  NOTE PAYABLE, MAJOR STOCKHOLDER

     At various times during 1999,  the major  stockholder  loaned the Company a
     total of  $1,346,361.  A demand note was  executed  January 1, 2000,  which
     provided for interest at 9%,  payable  quarterly.  During 2000, the Company
     repaid  $300,000  on this note and the  stockholder  loaned the  Company an
     additional  $190,000.  During 2000 and 1999, the Company incurred,  but did
     not  pay,   interest  expense  of   approximately   $116,000  and  $78,000,
     respectively, in connection with this obligation.


NOTE 6.  INCOME TAXES

     The Company  accounts for income taxes under the provisions of Statement of
     Financial  Accounting  Standards  (SFAS) No.  109,  "Accounting  for Income
     Taxes."  SFAS No.  109 is an asset and  liability  approach  for  computing
     deferred income taxes.

     A  reconciliation  of income tax computed at the statutory  federal rate to
income tax expense (benefit) is as follows:
<TABLE>
<CAPTION>

                                                                                        Year Ended December 31,
                                                                                         2000             1999
                                                                                         ----             ----
<S>                                                                                  <C>               <C>
          Tax provision at the statutory rate of 34%                                 $(1,014,000)      $(1,296,000)
          State income taxes, net of federal income tax                                  (89,000)         (114,000)
          Benefit of net operating loss carryback                                              -          (224,000)
          Stock based compensation                                                       187,000           370,000
          Change in valuation allowance                                                  822,000           991,000
          Other                                                                           94,000            49,000
                                                                                    ------------     -------------
                                                                                   $          --     $   (224,000)
                                                                                    ============     =============
</TABLE>

     The net tax effects of temporary differences between the carrying amount of
     assets and  liabilities  for financial  reporting  purposes and the amounts
     used for income tax  purposes  are  reflected  in  deferred  income  taxes.
     Significant  components of the Company's deferred tax assets as of December
     31, 2000 are as follows:

          Benefit of net operating loss carry forward     $1,134,000
          Accruals for compensation and other losses         161,000
          Stock and options issued for compensation          518,000
          Less valuation allowance                        (1,813,000)
                                                           ---------
             Net deferred tax asset                       $       --
                                                          ==========

     As of December  31,  2000,  sufficient  uncertainty  exists  regarding  the
     realizability  of  these  deferred  tax  assets  and,  accordingly,  a 100%
     valuation allowance has been established.

     The Company is delinquent in the filing of various federal and state income
     tax returns, and is also delinquent in paying 1998 federal and state income
     taxes. Estimated penalties and interest, as applicable,  have been recorded
     in the  accompanying  consolidated  financial  statements  in the amount of
     $151,000.   The  Company  may  also  be  subject  to  possible  review  and
     examination  of such tax  returns by the  appropriate  taxing  authorities.
     Additional  income  taxes,   including  penalties  for  non-compliance  and
     interest,  if any, that may be assessed will be charged to operations  when
     determined.

     In  accordance  with  certain  provisions  of the Tax Reform Act of 1986, a
     change in  ownership of greater  that 50% of a  corporation  within a three
     year period will place an annual limitation on the corporation's ability to
     utilize its existing tax benefit carryforwards.  Such a change in ownership
     may have  occurred  as a result of the sale of common  stock  (see Note 3).
     Under such  circumstances,  the potential  benefits from utilization of the
     tax loss  carryforwards  as of that date may be  substantially  limited  or
     reduced on an annual  basis.  To the extent that net  operating  loss carry
     forwards, when realized,  relate to stock option deductions,  the resulting
     benefits will be credited to stockholders' equity.


NOTE 7.  COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

     Litigation

     The Company is involved in certain  lawsuits arising in the ordinary course
     of business.  In the opinion of management,  any liabilities resulting from
     such  litigation  would  not be  material  in  relation  to  the  Company's
     consolidated financial position.

     Employment Agreements

     The Company has  entered  into  employment  agreements  with its  executive
     officers,  effective  January  1999,  the terms of which  expire at various
     times through December 2002. Such agreements,  which have been revised from
     time to time,  provide for minimum salary levels,  as well as for incentive
     bonuses,  payable  quarterly.  The agreements also provide for the grant of
     1,500,000 stock options at $3.50 per share, 350,000 stock options at market
     value and 300,000  stock  options at $5.00 per share  pursuant to a vesting
     schedule.  The stock options vest  quarterly  over  three-year  periods and
     expire after ten years.  The aggregate  commitment  for future  salaries at
     December 31, 2000,  excluding  bonuses and stock options,  is approximately
     $1,660,000.   During  1999  and  2000  and   continuing   into  2001,   two
     officer/director/employees  agreed to defer  payment of a large  portion of
     their compensation.  Included in accrued expenses is approximately $962,000
     of  compensation  due to these  officer/director/employees  at December 31,
     2000.

     One  agreement was  terminated  during 1999 with only 50,000 of the 300,000
     options  granted  vested;  the  remainder of the options was  canceled.  An
     arbitration  claim was filed by the former employee against the Company.  A
     settlement was reached with the former  employee,  whereby the Company will
     pay $37,500 in cash,  which is  included  in  accounts  payable and accrued
     expenses,  and exchange the 50,000  options for 40,000 options which have a
     $1.00 option price and a five-year life.

     Service Agreements

     The Company has service  agreements with several  contractors  that provide
     service for circuits  originating  in the United States and  terminating in
     foreign  countries.  The agreements,  which provide for compensation  based
     primarily  on a percentage  of income  generated,  expire at various  dates
     through December 2004. The contractors  provide the equipment,  facilities,
     and related  services  required for terminating  data and voice calls,  and
     otherwise receiving and/or transmitting communications.

     Satellite Service Agreement

     The Company  had two service  agreements  with a  satellite  provider.  The
     agreements,  which provided for monthly payments totaling $28,800,  expired
     in August 2000. The balance of $230,000 incurred,  but unpaid,  under these
     agreements  as of December  31,  2000 is  included in accounts  payable and
     accrued expenses.

     Operating Leases

     The  Company  leases   certain  of  its  facilities  and  equipment   under
     non-cancelable  operating  leases,  which  expire  through  June  2004.  In
     addition, the Company is responsible for all taxes, insurance,  maintenance
     and utilities.

     Minimum future lease payments on these leases are as follows:

              Year ending December 31:
                 2001                      $462,000
                 2002                       281,000
                 2003                       119,000
                 2004                        55,000
                                           --------
                    Total                  $917,000
                                            =======

     Rent expense  under all  operating  leases was  approximately  $375,000 and
     $148,000 for 2000 and 1999, respectively.

     Foreign Operations

     The Company  conducts  business  operations in foreign  countries where the
     customs, laws and business practices are different from those in the United
     States.  The laws and  regulations  in these  countries may change  without
     notice or may not be appropriately enforced,  resulting in the interruption
     of service or other  consequences to the Company.  These consequences could
     have a material adverse effect on the Company.

     Significant Customers and Suppliers

     The Company sells its data  communications  services to a limited number of
     customers.  Two customers accounted for 50% of the revenues each during the
     year ended  December  31,  2000.  One  customer  accounted  for 100% of the
     revenue during the year ended December 31, 1999.

     The Company leases long-distance  networks,  which the Company is dependent
     on to connect and route  calls.  One supplier  accounted  for 100% of these
     services during the years ended December 31, 2000 and 1999.

     Placement Agent Agreement

     During  September 1999, the Company entered into an agreement in connection
     with placement  services for proposed private  placements of equity or debt
     securities at any time within twelve months from September 23, 1999. If one
     or more sales were consummated, the Company would pay a placement fee equal
     to 10% of the purchase price and issue placement agent warrants to purchase
     2% of the  fully  diluted  shares  of common  stock of the  Company  at the
     closing bid price on the date of the closing of the sale.  The Company also
     agreed to pay reasonable out-of-pocket expenses not to exceed $25,000.

     In  connection  with  the  investment  agreement  discussed  in Note 3, the
     Company   paid   $155,000   in   commissions   (included   in  general  and
     administrative  expenses) to J W Genesis and granted 175,000 options to the
     placement  agent.  These  options were to have  expired when the  purchaser
     notified the Company of its intention to exercise the put option.

     Due to the fact  that the  options  were  issued  in  conjunction  with the
     placement of equity  securities,  the accounting  treatment was to increase
     and decrease  additional  paid-in capital for the fair value of the options
     at the date of grant, $103,000.

     Related Party Transactions

     During 1999,  the Company  issued 58,000 shares of Class A common stock and
     options to purchase  an  additional  50,000  shares at $3.50 per share (the
     fair  value of the  underlying  shares on the date of grant) to a member of
     the  Company's  Board of Directors  who is related by birth to the majority
     stockholder.  The common shares and options were issued in connection  with
     services provided during 1999 as a member of the Board of Directors. During
     2000, this Board member  received an additional  50,000 options to purchase
     common stock at $3.50,  again in connection with services to be rendered as
     a Board member.


NOTE 8.  NET LOSS PER SHARE

     The Company follows Statement of Financial  Accounting Standards (SFAS) No.
     128, "Earnings Per Share" which requires the presentation of both basic and
     diluted net income (loss) per share.

     Basic net loss per common share has been  computed  based upon the weighted
     average number of shares of common stock outstanding during the period. The
     number of shares used in the  computation  was  6,865,133 and 6,148,984 for
     2000 and 1999,  respectively.  Diluted  loss per common  share has not been
     presented,   since  the  effect  of  common  share   equivalents  would  be
     anti-dilutive.

     The  shares  of  common  stock  issued in  connection  with the  investment
     agreement described in Note 3 have been issued and, accordingly,  have been
     considered  outstanding for the computation of weighted average shares.  If
     these  shares  has been  canceled  as a result of the  exercise  of the put
     option,  the weighted average number of shares  outstanding would have been
     6,250,500  for 2000 and the net loss per  common  share for 2000 would have
     been $(0.53).


NOTE 9.  STOCK-BASED COMPENSATION

     Stock Issued for Services

     During 1999,  the Company  issued 250,500 shares of Class A common stock to
     certain  employees  and  consultants  in exchange for  services,  including
     50,000  shares  issued to a related  party (see Note 7).  These shares have
     been accounted for as compensation/consulting expense at the estimated fair
     value of the  shares  issued,  unless  the value of the  services  was more
     reliably  determinable,  with a corresponding  credit to additional paid-in
     capital.  The total  expense  recorded in  connection  with the issuance of
     these common shares was $1,400,500.

     Stock Options

     In 1995,  the  Financial  Accounting  Standards  Board issued  Statement of
     Financial   Accounting  Standards  No.  123,  "Accounting  for  Stock-Based
     Compensation"  ("SFAS  123").  As  permitted  by SFAS No. 123,  the Company
     continues to apply the recognition and measurement provisions of Accounting
     Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
     ("APB 25").

     Pursuant  to SFAS No.  123,  the  Company  has  elected to account  for its
     employee stock options under APB Opinion No. 25. Compensation cost has been
     recognized for any options for which the market value exceeded the exercise
     price on the date of the  grant or  agreement  in  principle  to grant  the
     option,  if earlier.  The Company granted 2,611,000 options to employees of
     which 1,971,000 was vested as of December 31, 2000. Compensation expense of
     $550,000 and $340,750 has been recognized in the accompanying  consolidated
     financial  statements  for 2000 and 1999,  respectively,  relating to these
     vested options.  Had compensation  cost for the plan been determined on the
     fair value at the grant date  consistent  with SFAS No. 123, the  Company's
     net loss would have been as follows:

                                                  2000            1999
                                                  ----            ----
           Net Loss:
              As reported                     $(2,981,962)    $(3,780,897)
              Pro forma                        (6,206,207)     (7,337,397)

           Basic Net Loss Per Share:
              As reported                          $(0.43)         $(0.61)
              Pro forma                             (0.90)          (1.19)

     The Company accounts for stock-based  compensation  grants to non-employees
     pursuant to the guidance of SFAS No. 123 using the fair-value-based method.
     The Company  granted  48,000  options to  non-employees  as of December 31,
     2000,  all of which are vested.  Compensation  expense of $272,000 has been
     recorded in the accompanying consolidated financial statements for 2000.

     The Company  granted 148,000  options to  non-employees  as of December 31,
     1999,  all of which are vested.  Compensation  expense of $469,160 has been
     recorded in the accompanying consolidated financial statements for 1999.

     During 2000, the Company adopted FIN 44, which requires  options granted to
     non-employee  board members be accounted for as employees under APB Opinion
     No.  25.  Accordingly,  a  cumulative  effect  adjustment  for a change  in
     accounting  principle of $317,000,  representing  the fair value of 100,000
     options granted to independent  Directors during 1999, has been recorded in
     the  accompanying  consolidated  financial  statements  for 2000 for  those
     options  previously  recorded  at fair value  pursuant to SFAS No. 123 (see
     Notes 1 and 10).

     The Company estimates the fair value of each stock option at the grant date
     by  using  the  Black-Scholes   option-pricing  model  with  the  following
     weighted-average  assumptions  used  for  grants:  no  dividend  yield;  an
     expected life of ten years; 143% expected  volatility,  and 6.00% risk free
     interest rate.

     The option  valuation  model was developed  for use in estimating  the fair
     value of traded  options  that have no vesting  restrictions  and are fully
     transferable.  In addition,  valuation  models  require the input of highly
     subjective  assumptions including the expected price volatility.  Since the
     Company's stock options have characteristics  significantly  different from
     those of traded  options,  and since  variations  in the  subjective  input
     assumptions  can  materially  affect  the fair value  estimate,  the actual
     results can vary significantly from estimated results.

     A summary  of the status of options as of  December  31,  2000 and  changes
     during the period ended on that date are presented below:
<TABLE>
<CAPTION>

                                                                                     Weighted
                                                                       Number        Average         Expiration
                                                                     of Shares        Price             Date
                                                                     ---------        -----             ----

<S>                                                                <C>              <C>             <C>
             Balance, December 31, 1998                                     -       $     -               -
             Year Ended December 31, 1999:
                Granted                                             2,723,000          3.63         November 2004
                Exercised                                                   -                     to December 2009
                Expired                                              (250,000)         5.00
                                                                   ----------
             Balance, December 31, 1999                             2,473,000          3.63         November 2004
                                                                                                  to December 2009

             Year Ended December 31, 2000:
                Granted                                               713,000*         3.27
                Exercised                                                   -
                Expired                                              (225,000)*        3.62
                                                                   ----------
             Balance, December 31, 2000                             2,961,000          3.44         November 2004
                                                                    =========
                                                                                                  to December 2009

     * Includes  175,000  options  issued in connection  with the FATA agreement
     (see Note 3).
</TABLE>


     The following table summarizes  information  about  outstanding  options at
     December 31, 2000:
<TABLE>
<CAPTION>

                             Options Outstanding                                  Options Exercisable
              ------------------ ---------------- --------------    --------------- --------------- ----------------
                                      Number         Weighted                            Number         Weighted
                                    Outstanding       Average            Range        Exercisable        Average
                   Range of             at           Remaining             of              at           Remaining
                   Exercise        December 31,     Contractual         Exercise      December 31,     Contractual
                    Prices             2000            Life              Price            2000            Life
                    ------             ----            ----              -----            ----            ----

<S>              <C>     <C>         <C>              <C>            <C>     <C>        <C>             <C>
                 $1.00 - $7.00       2,961,000        8 years        $1.00 - $7.00      2,296,000       8 years
                  ============       =========        =======         ============      =========       =======
</TABLE>

     Subsequent to December 31, 2000,  150,000  options were vested  pursuant to
     employment and consulting agreements.


NOTE 10. CHANGE IN ACCOUNTING PRINCIPLE

     As more fully discussed in Note 1, Recent  Accounting  Pronouncements,  the
     Company  adopted  FIN 44 in 2000.  Prior  to the  adoption  of FIN 44,  the
     Company  recorded  compensation  associated  with stock  options  issued to
     independent  Board of Director members at fair value. FIN 44 specifies that
     stock  options  issued to  independent  Directors  be recorded at intrinsic
     value  pursuant to APB Opinion 25. Under the fair value  method  previously
     applied,  the  Company had  recognized  $317,000  of  compensation  expense
     related to options  granted to certain  independent  Directors in 1999. The
     effect  of  the  change  in  accounting  principle  was to  eliminate  this
     compensation  expense,  thereby  decreasing  net loss for 2000 by  $317,000
     ($.05  per  share).  Due to the fact that the fair  value of stock  options
     granted does not create a timing  difference  for  deferred  tax  purposes,
     there was no tax effect  associated with the change.  The cumulative effect
     of the  accounting  change is a one-time  credit to  operations.  Pro forma
     amounts are presented on the statement of operations  showing the effect of
     applying the new method retroactively.