<PAGE>

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

                              FORM 10-KSB/A No. 1

      (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, 1999 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:

                         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 [_]  No [X]

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: $435,739

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates, computed by reference to the closing bid price reported by
the OTC Bulletin Board of such common equity as of March 5, 2001: $281,442.

As of March 5, 2001, 3,239,276 shares of Registrant's Class A Common Stock and
4,477,600 shares of Registrant's Class B Common Stock were outstanding.

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

                                    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, FL 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 it 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
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          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

                                       3
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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 as 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

                                       4
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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-

                                       5
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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.

                                       6
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     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 first 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.

                                       7
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     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.

     In April 2000, the Company entered into an agreement with KPN/Qwest that
provides Cyberfast with high bandwidth access to Western Europe. Through this
agreement, the Company also gained access to KPN/Qwest's state-of-the-art
satellite communications system with coverage throughout Europe. This access
will enable the Company to deploy its toll quality services quickly and
efficiently in any geographic location within the KPN/Qwest service area without
having to depend on expensive land-based systems.

     The term of the KPN/Qwest agreement is for one year, renewable at the end
of each year. All services to be provided by KPN/Qwest under the agreement, not
including maintenance, are

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charged at a flat rate and the total monthly recurring services charge for all
service areas under the agreement is 15,400 Euro; and the total non-recurring
services charge for all service areas is 23,750.

     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 through the KPN/Qwest Euro-network as they come online.

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 were 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:

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

                                       9
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  .  Company management has had prior relationships with entities in the country
     that have strong business/political contacts and/or are involved in the
     telecommunications industry in that country.

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

  .  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:

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

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

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

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

  .  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 $2,000,000.
In addition FATA believes it has exercised its put option for redemption of its
$1,500,000 investment (although the Company

                                       10
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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)   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.

     3)   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.

     4)   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 such
as AT&T, MCI WorldCom, and Sprint. 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 a commercially reasonable or
profitable terms.

                                       11
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     5)  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.
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.

     6)  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.

     7)  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.

     8)  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

                                       12
<PAGE>

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.

     9)  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.

     10)  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.

   11)  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 late December, 1999 Cyberfast had no
operational circuits and did not generate any revenues from operations. For this
reason, 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
<PAGE>

     12)  Control by Management.
          ----------------------

     Edward J. Stackpole, the Company's chairman and chief executive officer,
and his wife, Itir Stackpole, the Company's co-chairman, beneficially own
approximately 26.15% 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 73.97% 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.

     13)  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 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.

                                       14
<PAGE>

     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 this Registration Statement, Cyberfast is subject to
the Foreign Corrupt Practices Act (the "Act"). The Act requires that all
companies that file reports with the SEC:

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

     .  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

     .  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

                                       15
<PAGE>

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. 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 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.

     The Company currently has four circuit leases in service with Qwest. On two
of the

                                       16
<PAGE>

leases the monthly cost to the Company is $7,000 per lease, and the other two
leases are at a monthly cost of $4,000 per lease. The Company has one circuit
lease in service with KPN at a monthly cost of $10,000, one circuit lease in
service with MCI at a monthly cost of $23,000 and one circuit lease in service
with AT&T at a monthly cost of $28,000.

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. The Cisco equipment is
installed at the Company's Boca Raton, Florida facilities where it is available
to transmit voice and data traffic for customers on a 24 hours a day, 7 days a
week basis.

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 1999 was approximately $25,000 and for year 2000 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

                                       17
<PAGE>

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 paid Mr. Goldstein $20,000 under the
Settlement Agreement and expects to pay the remaining balance by the end of
March 2001.

     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. ("FATA") 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 as previously described in
this Form 10-KSB. 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.

                                       18
<PAGE>

                                    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.

OTC Market

<TABLE>
<CAPTION>
                   Calendar                          High Bid Price*          Low Bid Price*
                   --------                          --------------           -------------
<S>                <C>                                <C>                     <C>
2000               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

1998               October 1 - December 31                5.38                      2.25
</TABLE>

_______________
* 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.

     The closing bid price of the Class A Common Stock on March 5, 2001 was
$0.40 per share.

Holders
-------

     As of March 5, 2001, there were approximately 155 beneficial holders of the
Company's common stock.

Dividends
---------

     The Company did not pay dividends on its common stock in 1998 or 1999 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.

                                       19
<PAGE>

Recent Sales of Unregistered Securities
---------------------------------------

     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.

     During the period covered by this report, the following persons and
entities acquired shares of stock and other securities from us as set forth in
the table below.

                                       20
<PAGE>

<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         04/07/1999      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 rendered           75,000(1)
                                                                          in identifying and advising
                                                                          the Company about stock shorts
</TABLE>

(1) The sale of shares of Class A Common Stock was exempt under Section 4(2) of
    the Securities Act.  Each person acquired the shares for investment and had
    access to information concerning Cyberfast.
(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 as of the date of this
    registration statement.

          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.

                                       21
<PAGE>

<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>

                                       22
<PAGE>

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, 1998 and 1999 are audited.

Results Of Operations
---------------------

Years Ended December 31, 1998 And 1999

Table 1 - Percentage Analysis of Yearly Results of Operations
<TABLE>
<CAPTION>
=======================================================================================================
                                                                                PERCENTAGE CHANGE
                                                                                -----------------
------------------------------------------------------------------------
                                            1999              1998           Between Periods (Decrease)
                                            ----              ----           --------------------------
-------------------------------------------------------------------------------------------------------
<S>                                         <C>               <C>            <C>
Revenues                                       100.0%         100.0%                            (94.2%)
-------------------------------------------------------------------------------------------------------
Expenses
-------------------------------------------------------------------------------------------------------
 COGS                                          110.8%          29.7%                            (78.3%)
-------------------------------------------------------------------------------------------------------
 Gross Margin                                  (10.8%)         70.3%                            (81.1%)
-------------------------------------------------------------------------------------------------------
 General & Administrative                      356.6%          45.8%                            (54.6%)
-------------------------------------------------------------------------------------------------------
 Common Stock                                  507.3%           0.6%                          4,475.8%
-------------------------------------------------------------------------------------------------------
Total Op. Expenses                             974.7%          46.5%                            (25.4%)
-------------------------------------------------------------------------------------------------------
Income (Loss) from operations                 (874.7%)         23.8%                           (314.2%)
-------------------------------------------------------------------------------------------------------
Other Income                                       -              -                                 -
-------------------------------------------------------------------------------------------------------
 Interest Expense, stockholder                  18.0%             -                                 -
-------------------------------------------------------------------------------------------------------
 Interest Income                                   -            0.2%                                -
-------------------------------------------------------------------------------------------------------
 Penalties and Interest                         26.4%             -                                 -
-------------------------------------------------------------------------------------------------------
 Proceeds/Contact Settlement                       -           11.2%                                -
-------------------------------------------------------------------------------------------------------
Income (Loss) before tax                      (919.1%)         31.6%                           (252.3%)
-------------------------------------------------------------------------------------------------------
Income Tax (Expense) Benefit                    51.4%          (3.1%)                           186.2%
-------------------------------------------------------------------------------------------------------
Net Income (Loss)                             (867.7%)         28.5%                           (259.6%)
-------------------------------------------------------------------------------------------------------
Net Income (Loss)/share                       ($0.61)        $ 0.39                            (256.4%)
======================================================================================================
</TABLE>


     Table 1 above represents:  (a) the relationship of income and expenses
relative to net revenues; and (b) the change between the comparable prior period
and current period.  This table should be read in the context of the Company's
audited financial statements incorporated as part of this filing, elsewhere
herein.

     For the year ended December 31, 1999, revenues were $0.436 million compared
to $7.475 million in the comparable prior period ended December 31, 1998.  This
decrease in revenue of $7.911 million represented a 94.2% decline from the
comparable prior period ended December 31, 1998.  The percentage change between
the periods was solely attributed to a governmental confiscation of the
Company's revenue producing assets in India during

                                       23
<PAGE>

September, 1998. During 1998, substantially all of the Company's business
operations were conducted in India. During 1999, all revenue was generated from
business operations in Haiti. As a result of the governmental intervention in
India, the Company has initiated policies to minimize exposure to politically
motivated and retaliatory actions by foreign governments on U.S. based
businesses operating in the lesser developed countries of the world. (Please see
Item 1 - Description of Business, "Cyberfast Business Operations" above and Note
3 to the accompanying Financial Statements below for further discussion.) 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's cost of goods sold decreased 78.3% from $2.221 million for
the year ended December 31, 1998 to $0.483 million for the year ended December
31, 1999.  As a percentage of revenues, cost of goods sold increased from 29.7%
for the year ended December 31, 1998 to 110.8% for the year ended December 31,
1999 resulting in a decrease in gross margin of 103.8% from $5.254 million for
the year ended December 31, 1998 to a deficit of $0.047 million for the year
ended December 31, 1999.  The increase in cost of goods sold as a percentage of
revenues in fiscal year 1999 as compared to the fiscal year 1998 occurred as a
result of the Company's precipitous loss of revenues due to the governmental
action in India referenced above.

     General and administrative expenses declined 54.6% from $3.426 million
during the period ended December 31, 1998 to $1.554 million in the comparable
subsequent period ended December 31, 1999.  Notwithstanding a one time
commission fee of $1.620 for the period ended December 31, 1998, general and
administrative expenses would have decreased only 14.0% between the fiscal year
periods.  This decrease was the result of the Company's actions to decrease
costs in response to the loss of revenues as discussed above.  The cost cutting
measures adopted by the Company include the termination of employees; reduction
of travel and related entertainment expenses; and decrease in general overhead
expenses.  Costs for developing new POPs during the fiscal year ended December
31, 1999 in other areas of the world were classified as general and
administrative expenses.

     The decline in general and administrative expenses was offset by a
substantial increase in expenses related to the issuance of common stock and
options to various vendors and employees of the Company.  This expense increased
$2.162 million, or 4,475.8%, from $0.048 million for the fiscal year ended
December 31, 1998 to $2.210 for the comparable subsequent period ended December
31, 1999.  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 8 to the accompanying audited financial statements
and PART I, Item 6 - Executive Compensation.)

                                       24
<PAGE>

     As a consequence of the above factors, the Company experienced income from
operations of $1.780 million for the period ended December 31, 1998 compared to
a loss from operations of $3.811 million for the comparable subsequent period
ended December 31, 1999, or a decline of 314.2%.

     As a result of the Company circuits in India, Haiti 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, 1999.  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 $0.079 million has been accrued as interest on the Company
accounts for the fiscal year ended December 31, 1999.  Further interest accruals
on this loan will occur during subsequent periods.  Except for $0.300 paid in
August 2000 as part principal and interest payment, no principal payments have
been made against them.

     Conversely, the Company earned interest of approximately $0.013 million
during the fiscal year ended December 31, 1998 on its outstanding bank balances
and cash equivalents. Similar interest earnings for the comparable subsequent
period ended December 31, 1999 did not occur for the above stated reasons.

     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 $0.115 million have been
recorded on the Company's audited financial statements for the fiscal year ended
December 31, 1999.  (See Note 5 to the accompanying audited financial
statements.)  Employee payroll taxes associated with the delinquent filings were
completely discharged immediately after the receipt of FATA's first tranche of
equity investment.  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, 1999. 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.

     In December 1998, the Company generated $0.836 million in Other Income as a
result of the disposition of the Company's rights to a potential income stream
in Pakistan.  This receipt was recorded as Other Income since the disposition of
this resource was not done in the ordinary course of business.

     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 an
income before taxes of $2.629 million in the comparable prior period ended
December 31, 1998.  A tax assessment of $0.260 million for the period ended
December 31, 1998 reduced the Company's net income for the period to $2.369
million, and a tax benefit accruing as a result of net operating loss carry
forwards decreased the net loss for the comparable subsequent period ended
December 31, 1999

                                       25
<PAGE>

to $3.781 million. Accordingly, the Company's results per share of common stock
declined from an income per share of $0.39 for the period ended December 31,
1998 to a loss per share of $0.61 for the period ended December 31, 1999. It
should be noted, however, that the Company's income tax liabilities for the
fiscal year ended December 31, 1998 were assessed under subchapter S of the
Internal Revenue Code through September 30, 1998. Had the Company been taxed as
a conventional corporation under the Internal Revenue Code, the Company's tax
liability would have been $0.989 million for that same period, reducing the
Company's net income to $1.640 million from $2.369 million and it's per share
earnings to $0.27 from $0.39. This proforma presentation more accurately
characterizes the Company's financial performance and tax liability during the
period ended December 31, 1998.

Liquidity And Capital Resources
-------------------------------

Years Ended December 31, 1998 And 1999

     Net cash used in operating activities for the fiscal year ended December
31, 1999 was $0.946 million compared to $2.445 million provided by operations in
the comparable prior period ended December 31, 1998, representing a decline of
$3.391 million or 138.7%.  This deficit in net cash was primarily the result of
a $3.781 million net loss for the fiscal year ended December 31, 1999 as
compared to net income of $2.369 for the comparable prior period.  The net cash
deficit was partially offset by an increase in stock based contributions of
$2.210 million and accounts payable of $0.640 million from the fiscal year ended
December 31, 1998 to the comparable period ended December 31, 1999.

     Net cash used in investing activities was $0.362 million for the fiscal
year ended December 31, 1999 compared to net cash provided of $0.057 for the
comparable prior period in 1998.  The major component in investing activities
for the period ended December 31, 1999 was the acquisition of equipment, while
in the comparable prior period ended December 31, 1998, the purchase of
equipment was largely offset by the repayment of loans to shareholders.

     For the fiscal year ended December 31, 1999, net cash provided by financing
activities was $1.298 million, compared to $2.670 used in financing activities
during the comparable prior period ended December 31, 1998.  The primary
components of the financing activity consisted of shareholder loans of $1.276
million during the fiscal year ended December 31, 1999 and distributions under
Subchapter S of the Internal Revenue Code of $2.741 million in the comparable
prior period ended December 31, 1998.

     As of December 31, 1999, the Company had a working capital deficit of
$2.296 million and a cash overdraft of $0.023 million compared to a working
capital deficit of $0.367 million and a cash balance of $0.010 million in the
comparable prior period ended December 31, 1998. The working capital deficit was
largely due to substantial increases in shareholder loans and accounts payable
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 $0.071 million and $0.151 million respectively for the
comparable prior period ended December 31, 1998.  The shareholder loans were
required as a result of continuing unprofitable operations of the Company, as
explained in the Results of Operations discussed

                                       26
<PAGE>

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.

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 sufficient to restore
working capital surpluses.  In that regard, shareholder loans have increased
from a total of $1.346 million on December 31, 1999 to $1.488 million on May 31,
2000.

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

     .    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.

     .    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.

     .    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.

     .    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 are
          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 acquiring the
needed capital from three sources:

     .    From operations. The Company believes it will begin generating
          revenues during the first six months of 2001. 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.

                                       27
<PAGE>

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

     .    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 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:

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

     .    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.

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

     .    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.

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

                                       28
<PAGE>

MAKING LOANS AND THE COMPANY MAY NOT BE ABLE TO ATTRACT THIRD PARTY FUNDING.

ITEM 7.   FINANCIAL STATEMENTS

     The Company's audited financial statements for fiscal years ended December
31, 1998 and 1999, the statements of operations and statements of cash flows for
the 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 and 1999. The Company's financial statements were previously audited by
Mr. Robert Jarkow, CPA. 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 he was engaged by the Company.


                                   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,          11/98
                                   Chief Executive Officer

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

                                       29
<PAGE>

<TABLE>
<CAPTION>
Name                       Age     Position                                           Director Since
----                       ---     --------                                           --------------
<S>                        <C>     <C>                                                <C>
N. Bruce Walko             60      President, Director                                    11/99

M. Dowell Stackpole        45      Director                                               11/98

Bert Perez                 36      Chief Technical Officer, Director                      12/99

William Wollrab            43      Vice President, Business Development, Director         11/99*

Gerard Werner              27      Secretary, Director                                    11/99
</TABLE>

_______________
* Mr. Wollrab resigned in August 2000.

     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 has been President and 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., 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 a Directors since
June 1999. Mr. Perez was employed by Sprint Communications, Inc. in south
Florida from 1992 through 1999 as

                                       30
<PAGE>

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 is 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. 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.

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, though 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.

                                       31
<PAGE>

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, 1999, Edward J. Stackpole, Itir
Stackpole, M. Dowell Stackpole, N. Bruce Walko, William Wollrab, Gerard Werner
and Bert Perez all failed to timely file Forms 3.

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, 1997, 1998, and 1999 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").

                                       32
<PAGE>

<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/      1999     300,000          0       28,800/(1)/      250,000          0           0            0
Co-Chair and CEO          1998     262,882          0        2,400/(1)/                       0           0       1,370,459/(2)/
                          1997       N/A            0           0              N/A            0           0           N/A

Itir Stackpole/           1999     250,000          0           0            250,000          0           0            0
Co-and Vice President     1998     262,882          0           0               0             0           0       1,370,459/(2)/
                          1997       N/A            0           0              N/A            0           0           N/A

Ridvan Ali Gurkan/        1999         0            0           0               0             0           0            0
Vice President,           1998     310,000/(3)/     0           0               0             0           0            0
International Operations  1997         0            0           0               0             0           0            0

Alan T. Goldstein         1999      50,000          0           0             50,000       10,000         0            0
                          1998       N/A           N/A         N/A             N/A           N/A         N/A          N/A
                          1997       N/A           N/A         N/A             N/A           N/A         N/A          N/A

Bert Perez                1999      58,333          0        8,400/(1)/      100,000       10,000         0            0
Chief Technical Officer   1998       N/A           N/A         N/A             N/A           N/A         N/A          N/A
                          1997       N/A           N/A         N/A             N/A           N/A         N/A          N/A
</TABLE>

____________________
(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.

Agreements with Management
--------------------------

     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.

                                       33
<PAGE>

     On June 1, 1999, Mr. Alan T. Goldstein entered into a three-year employment
agreement with the Company at an annual salary of $100,000 per year. Mr.
Goldstein's employment with the Company was terminated February 4, 2000. 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 vested on December 1, 1999.
Furthermore, Mr. Goldstein was granted 300,000 non-qualified options exercisable
at $5.00 per share over a 10-year period, vesting in increments of 25,000
options quarterly. Mr. Goldstein and the Company are currently involved in an
arbitration proceeding regarding the termination of his employment and the
vesting of options relating thereto. (See PART II, Item 2 - Legal Proceedings,
below for a discussion.)

     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.

     From approximately the end of the third quarter of 1998 through the end of
the second quarter of 1999, Mr. Edward J. and Itir Stackpole, our chief
executive officer and vice-president respectively, held as nominees for
Cyberfast, approximately $538,097 in personal accounts. These funds are
reflected in the audited financial statements for the year ended December 31,
1999 as cash equivalents of Cyberfast. The funds including interest were used
subsequent to December 31, 1999 as Cyberfast's working capital.

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.
The following amounts include options that were granted prior to the previous
fiscal year but were repriced during that year.

                                       34
<PAGE>

                      OPTION/SAR GRANTS IN PREVIOUS YEAR
                               INDIVIDUAL GAINS

<TABLE>
<CAPTION>
                         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               30.77%                $3.50                  $5.25              01/01/09
                           50,000                7.69%                $3.50                  $7.00              12/31/09

Itir Stackpole            200,000               30.77%                $3.50                  $5.25              01/01/09
                           50,000                7.69%                $3.50                  $7.00              12/31/09

Alan Goldstein             50,000                7.69%                $3.50                  $7.00              12/31/09

Bert Perez                 50,000                7.69%                $3.50                  $9.19              05/31/09
                           50,000                7.69%                $3.50                  $7.00              12/31/09
</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-                     250,000                $1,750,000

Itir Stackpole                   -0-                     -0-                     250,000                $1,750,000

Alan T. Goldstein                -0-                     -0-                      50,000                $  350,000

Bert Perez                       -0-                     -0-                     100,000                $  700,000
</TABLE>

                                       35
<PAGE>

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 March 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       Percentage 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>
Edward J. and Itir
Stackpole               1,069,394/(1)/       26.15%        3,507,400           78.33%          4,576,744/(1)/        73.97%/(1)/

N. Bruce Walko            207,358/(2)/        6.03%               -0-             -0-            207,358/(2)/         0.43%/(2)/

M. Dowell Stackpole       158,000/(3)/        4.73%               -0-             -0-            158,000/(3)/         0.33%/(3)/

Gerard Werner             101,471/(4)/        3.04%               -0-             -0-            101,471/(4)/         0.21%/(4)/

Bert Perez                210,000/(5)/        6.11%               -0-             -0-            210,000/(5)/         0.44%/(5)/

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

All officers and
directors as a
group (7 persons)       2,022,161/(7)/       40.94%        3,507,400           78.33%          5,529,561/(7)/        74.62%/(7)/

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

The FATA Group
Sp.A. /(8)/             1,466,276             45.3%               -0-             -0-          1,466,276              3.05%
</TABLE>

__________________
(1) Includes options to acquire 425,000 shares held by Edward Stackpole of which
    400,000 are exercisable at $3.50 per share for ten years from date of grant
    and of which 25,000 are exercisable at $3.00 per share for ten years from
    date of grant. Also includes options to purchase 425,000 shares held by Itir
    Stackpole, of which 400,000

                                       36
<PAGE>

    are exercisable at $3.50 per share from date of grant and of which 25,000
    are exercisable at $3.00 per share for ten years from date of grant.
(2) Includes options to acquire 200,000 shares exercisable at $3.00 per share
    for ten years from date of grant.
(3) Includes options to acquire 100,000 shares exercisable at $3.50 per share
    for ten years from date of grant. Also includes 8,000 shares held by M.
    Dowell Stackpole's wife and six children.
(4) Includes options to acquire 100,000 shares exercisable at $3.50 per share
    for ten years from date of grant.
(5) Includes options to acquire 200,000 shares exercisable at $3.50 per share
    for ten years from date of grant.
(6) Includes options to acquire 150,000 shares exercisable at $3.50 per share
    for ten years from date of grant and options to acquire 125,000 shares
    exercisable at $4.20 per share for ten years from date of grant.
(7) Includes footnotes 1 through 6.
(8) 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.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

    The following table describes the shares that the Company issued to
management and persons who were beneficial owners of more than five percent of
the Company's common stock as part of the November 1998 Reorganization:

Shareholder Name                      Number and Class of Shares Issued
----------------                      ---------------------------------

Edward J. and Itir Stackpole          251,044 shares of Class A Common Stock
                                      3,507,400 shares of Class B Common Stock

Oguz Stackpole/(1)/                   198,800 shares of Class A Common Stock
                                      965,200 shares of Class B Common Stock

Ali Gurkan/(2)/                       49,806 shares of Class A Common Stock
                                      67,450 shares of Class B Common Stock

Kenneth Greenberg/(3)(4)/             70,350 shares of Class A Common Stock
                                      209,950 shares of Class B Common Stock

(1)  Son of Mr. and Mrs. Stackpole.
(2)  Mr. Gurkan was a director at the time of the Reorganization.  Mr. Gurkan is
     the brother of Itir Stackpole.
(3)  Mr. Greenberg was an officer at the time of the Reorganization.  Includes
     50,350 shares of Class A Common Stock issued to Greengold International
     Corp., of which Mr. Greenberg was an affiliate.
(4)  Issued to Greengold International Corp. a corporation of which Mr.
     Greenberg is an affiliate.

                                       37
<PAGE>

     As of December 31, 1999, the Company owed Edward and Itir Stackpole $0.529
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 $1,700,000, 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 1998, approximately $310,000 in salary and commissions was paid to
Ali Gurkan, Itir Stackpole's brother and to Mr. Gurkan's wife, for consulting
services rendered to the Company. Mr. Gurkan resigned his consulting position in
the second quarter of 1999. In November 1998, the Company issued 209,950 shares
of Class B Common Stock to Mr. Gurkan, in exchange for 71 shares of Cyberfast
Network Systems, Inc. and in reliance on Section 4(2) of the Act.

     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 November 1998, the Company sold 209,950 shares of Class B Common Stock
to Greengold International Corporation ("Greengold"), a promoter, in exchange
for 221 shares of Cyberfast Network Systems, Inc. in reliance on Section 4(2) of
the Act. Greenbold subsequently converted its Class B shares to Class A shares.
Kenneth Greenberg and Peter Goldstein, both affiliated with Greengold, were each
issued 20,000 shares of Class A Common Stock, in reliance on Section 4(2) of the
Act, for services rendered to the Company.

     In November 1998, the Company issued 127,900 shares of Class A Common Stock
to Bridgestone Capital Group, LLC, a promoter of the Company, in exchange for
services rendered to the Company and in reliance on Section 4(2) of the Act. In
November 1998, the Company also issued 115,735 shares of Class A Common Stock to
Olympic Capital Group, Inc. and its designees, promoters of the Company, in
exchange for service rendered and in reliance of Section 4(2) of the Act.

                                       38
<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

Exhibit No.:

 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. Filed
           herewith
10.4       Employment Agreement between the Company and Itir Stackpole. Filed
           herewith.
10.5       Employment Agreement between the Company and Bert Perez. Filed
           herewith.
10.6       Employment Agreement between the Company and Bruce Walko. Filed
           herewith.
10.7.1     Office Lease. Filed herewith.
10.7.2     Amendment to Lease Agreement, dated May 24, 2000. Filed herewith.
10.8       Agreement with KPN/Qwest, dated April 5, 2000. Filed herewith.
16.0       Form of letter to Mr. Robert Jarkow sent pursuant to Item 304(a)(3)
           of Regulation SB. (1)
21.0       Subsidiaries.  (1)
27.1       Financial Data Schedule. (1)

___________
(1) Incorporated by reference from the Company's filing on Form 10-SB.
(2) To be filed by amendment to the Company's Form 10-SB.


     (b)  Reports on Form 8-K:

     On November 16, 1999 the Company filed a report on Form 8-K, reporting an
event on September 30, 1999 regarding a change in the Company's auditor. The
Company filed Form 8-K/A No. 1 on August 22, 2000 amending the September 30,
1999 Form 8-K.

                                       39
<PAGE>

                                   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: April 3, 2001           By: /s/ Edward J. Stackpole
                                   ---------------------------------------------
                                   Edward J. Stackpole, Chief Executive Officer
                                   and Co-Chair of the Board


Dated: April 3, 2001           By: /s/ Itir Stackpole
                                   ---------------------------------------------
                                   Itir Stackpole, Chief Financial Officer,
                                   Vice President and Co-Chair of the Board


Dated: April 3, 2001           By: /s/ N. Bruce Walko
                                   ---------------------------------------------
                                    N. Bruce Walko, President, Director


Dated: April 3, 2001           By: /s/ Bert Perez
                                   ---------------------------------------------
                                   Bert Perez, Chief Technical Officer, Director


Dated: April 3, 2001           By: /s/ Gerard Werner
                                   ---------------------------------------------
                                   Gerard Werner, Secretary, Director

                                       40
<PAGE>

                                 EXHIBIT INDEX


 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.
               File herewith.
10.4           Employment Agreement between the Company and Itir Stackpole. File
               herewith.
10.5           Employment Agreement between the Company and Bert Perez. (1)
10.6           Employment Agreement between the Company and Bruce Walto. Filed
               herewith.
10.7.1         Office Lease. Filed herewith.
10.7.2         Amendment to Lease Agreement, dated May 24, 2000. Filed herewith.
10.8           Agreement with KPN/Qwest, dated April 5, 2000. Filed herewith.
16.0           Form of letter to Mr. Robert Jarkow sent pursuant to Item
               304(a)(3) of Regulation SB. (1)
21.0           Subsidiaries. (1)
27.1           Financial Data Schedule. (1)

____________
(1) Incorporated by reference from the Company's filing on Form 10-SB.
(2) To be filed by amendment to the Company's Form 10-SB.
<PAGE>

                    Cyberfast Systems, Inc. and Subsidiaries



                         INDEX TO FINANCIAL STATEMENTS
                         -----------------------------


<TABLE>
<CAPTION>
                                                                     PAGE
                                                                     ----
<S>                                                                <C>
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
</TABLE>
<PAGE>

              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, 1999, 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
audit.

We conducted our audit 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 audit provides 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, 1999, 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
significant risks and uncertainties, 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 significant risks and
uncertainties.


                            RACHLIN COHEN & HOLTZ LLP


Fort Lauderdale, Florida
May 11, 2000, except for Note 9 as to
  which the date is March 26, 2001
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                          CONSOLIDATED BALANCE SHEETS

                               DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                                              1999
                                                                              ----
<S>                                                                        <C>
                                        ASSETS
                                        ------

Current Assets:
    Cash                                                                   $         -
    Advances to officers/directors and others                                   15,000
                                                                           -----------
      Total current assets                                                      15,000

Property and Equipment, Net of Accumulated Depreciation
    of $92,094 and $2,000                                                      358,376

Deposits                                                                             -
                                                                           -----------

                                                                           $   373,376
                                                                           ===========

                       LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                       ----------------------------------------

Current Liabilities:
    Accounts payable and accrued expenses:
      Stockholder compensation                                             $   528,826
      Other                                                                    262,275
    Majority stockholder/officer/director/loan                               1,346,361
    Income taxes payable                                                       151,000
    Bank overdraft                                                              22,566
                                                                           -----------
      Total current liabilities                                              2,311,028
                                                                           -----------

Commitments, Contingencies, Other Matters and Subsequent Event                       -

Stockholders' Deficiency:
    Preferred stock, $100.par value; 5,000,000
      shares authorized; 0 shares issued                                             -
    Common stock
      Class A, $.01 par value; 40,250,000 shares authorized;
          1,710,450 and 1,459,950 shares issued and outstanding                 17,105
      Class B, $.01 par value; 4,750,000 shares authorized;
          4,540,050 shares issued and outstanding                               45,400
    Additional paid-in capital                                               2,419,607
    Deficit                                                                 (4,419,764)
                                                                           -----------
                                                                            (1,937,652)
                                                                           -----------
                                                                           $   373,376
                                                                           ===========
</TABLE>

               See notes to consolidated financial statements.

                                      F-2
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                    YEARS ENDED DECEMBER 31, 1999 and 1998


<TABLE>
<CAPTION>
                                                                                                    1999             1998
                                                                                                    ----             ----
<S>                                                                                             <C>            <C>
Revenues:
    Data communications services                                                                $   435,739    $  7,474,685

Cost of Sales                                                                                       482,678       2,220,941
                                                                                                -----------    ------------
Gross Margin                                                                                        (46,939)      5,253,744
                                                                                                -----------    ------------
Other Operating Expenses:
    General and administrative                                                                    1,554,008       3,425,795
    Common stock and options issued for services                                                  2,210,410          48,306
                                                                                                -----------    ------------
         Total expenses                                                                           3,764,418       3,474,101
                                                                                                -----------    ------------
Income (Loss) from Operations                                                                    (3,811,357)      1,779,643
                                                                                                -----------    ------------
Other Income (Expense):
    Interest expense, stockholder                                                                   (78,540)              -
    Interest income                                                                                       -          13,287
    Penalties and interest                                                                         (115,000)              -
    Proceeds from contract settlement                                                                     -         836,000
                                                                                                -----------    ------------
                                                                                                   (193,540)        849,287
                                                                                                -----------    ------------
Income (Loss) before Income Taxes                                                                (4,004,897)      2,628,930
Income Tax (Expense) Benefit                                                                        224,000        (260,000)
                                                                                                -----------    ------------
Net Income (Loss)                                                                               $(3,780,897)   $  2,368,930
                                                                                                ===========    ============
Net Income (Loss) Per Common Share -
    Basic and Diluted                                                                           $     (0.61)   $       0.39
                                                                                                ===========    ============
Weighted Average Number of Common
    Shares Outstanding                                                                            6,148,984       6,000,000
                                                                                                ===========    ============
1998 Proforma Tax:

During 1998, through September 30, 1998 the Companies were taxed as subchapter S
Corporations.

The proforma tax is computed as if Cyberfast Systems, Inc. and Subsidiaries were
taxed for the entire calender year 1998 as a conventional corporation under the
Internal Revenue Code.

        Income from operations before income tax                                                               $  2,628,930

        Provisions for income tax                                                                                   989,000
                                                                                                               ------------
        Net income                                                                                             $  1,639,930
                                                                                                               ============
        Net income per share                                                                                   $       0.27
                                                                                                               ============
        Weighted average outstanding shares                                                                       6,000,000
                                                                                                               ============
</TABLE>

                See notes to consolidated financial statements.

                                      F-3
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY

                    YEARS ENDED DECEMBER 31, 1999 and 1998


<TABLE>
<CAPTION>
                                                                                          Additional    Retained
                                                           Common Stock                    Paid-In      Earnings
                                                   Shares                 Amount           Capital      (Deficit)      Total
                                                   ------                 ------           -------      ---------      -----
                                             Class A    Class B     Class A     Class B
                                             -------    -------     -------     -------
<S>                                         <C>        <C>         <C>         <C>       <C>          <C>           <C>
Balance, December 31, 1997                  1,459,950  4,540,050   $ 14,600    $ 45,400  $   211,702  $  (266,880)  $     4,822

Year ended December 31, 1998:

   Net income                                       -          -          -           -            -    2,368,930     2,368,930

   Distributions to stockholders                    -          -          -           -            -   (2,740,917)   (2,740,917)
                                            --------- ----------   --------    --------  -----------  -----------   -----------

Balance, December 31, 1998                  1,459,950  4,540,050     14,600      45,400      211,702     (638,867)     (367,165)

Year ended December 31, 1999:

   Issuance of common stock for services      250,500          -      2,505                1,397,995            -     1,400,500

   Options granted for services                     -          -          -           -      809,910            -       809,910

   Net loss                                         -          -          -           -            -   (3,780,897)   (3,780,897)
                                            --------- ----------   --------    --------  -----------  -----------   -----------

Balance, December 31, 1999                  1,710,450  4,540,050   $ 17,105    $ 45,400  $ 2,419,607  $(4,419,764)  $(1,937,652)
                                            ========= ==========   ========    ========  ===========  ===========   ===========
</TABLE>

                See notes to consolidated financial statements.

                                      F-4
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                    YEARS ENDED DECEMBER 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                         1999            1998
                                                                                         ----            ----
<S>                                                                                   <C>             <C>
Cash Flows from Operating Activities:
    Net income (loss)                                                                 $(3,780,897)    $ 2,368,930
    Adjustments to reconcile net income (loss) to net cash and
      cash equivalents provided by (used in) operating activities:
         Depreciation                                                                      90,094           2,000
         Stock-based compensation                                                       2,210,410          48,306
         Loss on confiscated assets                                                             -         108,892
         Changes in operating assets and liabilities:
         (Increase) decrease in :
           Customer deposits                                                                    -        (309,000)
           Other                                                                            3,027          20,000
         Increase (decrease) in:
           Accounts payable                                                               640,190         (54,023)
           Income taxes payable                                                          (109,000)        260,000
                                                                                      -----------     -----------
                Net cash provided by (used in) operating activities                      (946,176)      2,445,105
                                                                                      -----------     -----------
Cash Flows from Investing Activities:
    Purchase of property and equipment                                                   (347,233)        (93,237)
    Repayment of stockholder loan receivable                                                    -         150,000
    (Advances to) repayments from officers/directors and others                           (15,000)              -
                                                                                      -----------     -----------
                Net cash provided by (used in) investing activities                      (362,233)         56,763
                                                                                      -----------     -----------
Cash Flows from Financing Activities:
    Bank overdraft                                                                         22,566               -
    Loans from stockholders                                                             1,275,861          70,500
    Distributions to stockholders                                                               -      (2,740,917)
                                                                                      -----------     -----------
                Net cash provided by (used in) financing activities                     1,298,427      (2,670,417)
                                                                                      -----------     -----------
Net Decrease in Cash and Cash Equivalents                                                  (9,982)       (168,549)

Cash and Cash Equivalents, Beginning                                                        9,982         178,531
                                                                                      -----------     -----------
Cash and Cash Equivalents, Ending                                                     $         -     $     9,982
                                                                                      ===========     ===========
Supplemental Disclosure of Cash Flow Information:
    Cash paid for interest                                                            $         -     $         -
                                                                                      ===========     ===========
</TABLE>

                See notes to consolidated financial statements.

                                      F-5
<PAGE>

                    Cyberfast Systems, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1999 AND 1998


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 Brassiera Co.,
          Inc., a New York corporation, and was in the business of selling
          women's undergarments. The Company changed its name to Smart Fit
          Foundation, 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 $100.00 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.

          In October 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
          interest, 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.

                                      F-6
<PAGE>

                    Cyberfast Systems, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)



NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     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

          Cyberfast Network Systems Corp. was taxed under the provisions of
          Subchapter S of the Internal Revenue Code up to the Plan of
          Reorganization. Under the Subchapter S provisions, the Company
          generally does not pay federal corporate tax, but rather, the
          stockholders' share of income or loss is included in their individual
          tax returns. The Company terminated the S Corporation election
          effective September 30, 1998.

          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.

                                      F-7
<PAGE>

                    Cyberfast Systems, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     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, 1999 and 1998 were not
          material.

                                      F-8
<PAGE>

                    Cyberfast Systems, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Recent Accounting Pronouncements

          In June 1997, the Financial Accounting Standards Board issued SFAS No.
          130, "Reporting Comprehensive Income" and No. 131, "Disclosures about
          Segments of an Enterprise and Related Information." SFAS No. 130
          establishes standards for reporting and displaying comprehensive
          income, its components, and accumulated balances. SFAS No. 131
          establishes standards for the way that public companies report
          information about operating segments in annual financial statements
          and requires reporting of selected information about operating
          segments in interim financial statements issued to the public. Both
          SFAS No. 130 and SFAS no. 131 are effective for periods beginning
          after December 15, 1997. The Company adopted these new accounting
          standards in 1998, and their adoption had no effect on the Company's
          financial statements and disclosures.

          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.

          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.


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 a net
          loss of approximately $3,890,000 in 1999 and as of December 31, 1999
          the consolidated financial position reflect a bank overdraft, minimal
          current assets, and a stockholders' deficiency of approximately
          $1,787,000. During 1998, the Company was operating almost exclusively
          in India. In September 1998, India, alleging inappropriate use of the
          telephone lines and non-payment of various taxes and tariffs,
          confiscated all the Company's operating assets, including cash
          accounts, in India (see Note 3). As a result, the Company had no
          active operations and has spent 1999, continuing into 2000,
          reestablishing its business operations.

                                      F-9
<PAGE>

                    Cyberfast Systems, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 2.  GOING CONCERN CONSIDERATIONS (Continued)

     Management's plans with regard to these matters include:

     During 2000 the Company is 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
     via a fiber optic link to a satellite dish in Amsterdam, Holland. The
     Company plans to leverage IP technology to reduce the costs of providing
     telecommunications services in traditionally high priced markets.

     The Company has gained access to a state of the art satellite
     infrastructure through a lease with Royal Dutch Telecom (KPN) that has a
     footprint in Europe, Asia, and Africa. This unique position enables the
     Company to deploy its toll quality services quickly and efficiently in any
     geographical location (in Europe, Asia and Africa) without having to have
     access to expensive land-based infrastructure. To enable the Company to
     build a presence in selected countries, management has entered into a
     strategic alliance with KPN, which will provide the Company with high
     bandwidth access to Western Europe.

     To fund the Company's international development, management entered into a
     Memorandum of Understanding (MOU) with FATA Group SpA, which calls for a
     series of capital investments. (See note 9) 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 significant
     risks and uncertainties.


NOTE 3.  CONFISCATED ASSETS

     In September 1998, India, the country in which the Company was conducting
     substantially all of its business operations, issued an injunction stopping
     the Company from operating and seized all Company assets located in India.
     The primary assets confiscated were property and equipment, which had a net
     book value of approximately $109,000 at the time it was confiscated. In
     addition, the Company had three bank accounts with minimal balances, which
     were also confiscated. All confiscated assets have been expensed in the
     accompanying consolidated financial statements.

                                     F-10
<PAGE>

                    Cyberfast Systems, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 4.  STOCKHOLDER LOANS

     At various times during 1999, the majority stockholders loaned a total of
     $1,346,361 to the Company. A demand note was executed January 1, 2000,
     which provides for quarterly interest payments at 9%. Subsequent to year-
     end, the stockholders loaned an additional approximately $185,000 to the
     Company. During 1999, the Company incurred, but did not pay, interest
     expense of approximately $78,000 in connection with these loans.


NOTE 5.  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:

                                                            Years Ended
                                                            December 31,
                                                          1999         1998
                                                          ----         ----

     Tax provision at the statutory rate of 34%       $(1,296,000)  $ 894,000
     State income taxes, net of federal income tax       (114,000)     95,000
     Benefit of net operating loss carryback             (224,000)          -
     Stock based compensation                             370,000           -
     Tax relating to subchapter S status                        -    (729,000)
     Change in valuation allowance                        991,000           -
     Other                                                 49,000           -
                                                      -----------   ---------
                                                      $  (224,000)  $ 260,000
                                                      ===========   =========

     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 are as follows:

                                                                   December 31,
                                                                       1999
                                                                       ----

     Benefit of net operating loss carry forward                    $ 621,000
     Stock and options issued for compensation                        370,000
     Less valuation allowance                                        (991,000)
                                                                    ---------
        Net deferred tax asset                                      $       -
                                                                    =========

     As of December 31, 1999, sufficient uncertainty exists regarding the
     reliability of these deferred tax assets and, accordingly, a 100% valuation
     allowance has been established.

                                     F-11
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 5.   INCOME TAXES (Continued)

          The Company is delinquent in the filing of various federal and state
          income tax returns. The Company is also delinquent in paying 1998
          federal and state income taxes. Estimated penalties and interest
          through December 31, 1999 have been recorded in these 1999
          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 is contemplated in the proposed sale of common
          stock (see Note 9). 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 6.   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 June 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 1,800,000 stock options
               at $3.50 per share, 300,000 stock options at $5.00 per share and
               300,000 stock options at market value 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, 1999, excluding bonuses and stock
               options, is approximately $1,350,000. During 1999 two
               officer/director/employees agreed to defer payment of a large
               portion of their compensation. Included in accrued expenses is
               approximately $529,000 of compensation due to these
               officer/director/employees at December 31, 1999.

                                      F-12
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 6.   COMMITMENTS, CONTINGENCIES, AND OTHER MATTERS (Continued)

          Employment Agreements (Continued)

               One agreement was terminated during 1999 with only 50,000 of the
               300,000 options granted vested; the remainder were canceled. An
               arbitration claim has been filed by the former employee against
               the Company. The maximum exposure is the balance of wages due for
               the remaining term of the agreement, approximately $300,000, and
               the vesting of all stock options. The Company believes that the
               contract was terminated for cause, that the Company has no
               financial obligations to the previously employee, and is
               vigorously defending this action.

          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 has two service agreements with a satellite provider.
               The agreements, which provide for monthly payments totaling
               $28,800, expire through August 2000. As of December 31, 1999,
               approximately $106,000 was incurred, but unpaid, under these
               agreements and is included in accounts payable. The remaining
               payments due in 2000 under these agreements total approximately
               $113,000.

          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:
                         2000                               $293,000
                         2001                                300,000
                         2002                                154,000
                         2003                                103,000
                         2004                                 52,000
                                                            --------
                           Total                            $902,000
                                                            ========

               Rent expense for the facility was $46,585 and $128,698 for 1999
               and 1998, respectively.

                                      F-13
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 6.   COMMITMENTS, CONTINGENCIES, AND OTHER MATTERS (Continued)

          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 effect on the Company.

          Significant Customers and Suppliers

               The Company sells its data communications services to a limited
               number of customers. One customer accounted for 100% of the
               revenue during the year ended December 31, 1999. Two customers
               accounted for 50% of the revenues each during the year ended
               December 31, 1998.

               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,
               1999 and 1998.

          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 are
               consummated , the Company will 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 has also agreed to pay reasonable out-of-
               pocket expenses not to exceed $25,000.

           Related Party Transactions

               During 1998, approximately $310,000 of commissions were paid to
               two consultants who are related by birth to a majority
               stockholder. These agents resigned from providing services in the
               second quarter of 1999. During the first half of 1999, there were
               no revenues and, as a result, no commissions earned.

               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 a majority stockholder. The common
               shares and options were issued in connection with services
               provided during 1999 as a member of the Board of Directors.
               Subsequent to December 31, 1999, this Board member received an
               additional 50,000 options to purchase common stock, again in
               connection with services to be rendered as a Board member.

                                      F-14
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 7.   NET INCOME (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 income (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
          6,148,984 and 6,000,000 for 1999 and 1998, respectively. Diluted
          income (loss) per common share has not been presented, since the
          effect of common share equivalents is not material in 1998 and would
          be anti-dilutive in 1999.

NOTE 8.   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 6). 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 determined, 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 2,575,000 options to employees of which 900,000
               was vested as of December 31, 1999. Compensation expense of
               $340,750 has been recognized in these consolidated financial
               statements for 1999 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
               earnings would have been as follows:

                                      F-15
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 8.   STOCK-BASED COMPENSATION (Continued)

          Stock Options (Continued)

               Net Loss:
                  As Reported               $(3,889,897)
                  Pro Forma                 $(7,446,397)

               Basic Net Loss Per Share:
                  As Reported               $     (0.63)
                  Pro Forma                 $     (1.21)


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

               The Company estimates the fair value of each stock option at the
               grant date by using the Black-Sholes 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, 1999 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
                                                       ---------
               Balance, December 31, 1999              2,473,000           3.63      November 2004
                                                       =========                     to December 2009
</TABLE>

                                      F-16
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 8.   STOCK-BASED COMPENSATION (Continued)

          Stock Options (Continued)

               The following table summarizes information about outstanding
               options at December 31, 1999:

<TABLE>
<CAPTION>
                          Options Outstanding                             Options Exercisable
               -------------------------------------------    ---------------------------------------
                                  Number       Weighted                      Number
                                Outstanding    Average          Range      Exercisable     Weighted
                   Range of         at        Remaining          of            at          Average
                   Exercise      December    Contractual      Exercise      December       Exercise
                                    31,                                        31,
                   Prices          1999         Life           Price          1999          Price
                   ------          ----         ----           -----          ----          -----
<S>            <C>              <C>
               $3.50 - $7.00     2,473,000     9 years      $3.50 - $7.00  1,048,000        $3.63
               =============     =========     =======      =============  =========        =====
</TABLE>

               Subsequent to year end, 250,000 options were granted to employee
               board members and 150,000 options vested pursuant to employment
               agreements, and 148,000 options were granted to certain board and
               advisory board members.

NOTE 9.   SUBSEQUENT EVENT

          On May 5, 2000, the Company entered into a Memorandum of Understanding
          ("MOU") in connection with the sale of common stock. The MOU provides
          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 is guaranteed by the majority stockholders,
          was received by the Company in May, 2000.

          The purchaser, upon successful conclusion of preliminary due
          diligence, has the right to contract to purchase 45% of the total
          outstanding capital 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 purchase $1,500,000 of
          Class A common stock. The purchaser then has 150 days to complete any
          and all due diligence. At that time, if the purchaser has decided to
          complete the transaction, the remaining $3,500,000 is to be funded.

          In addition to the 45% of outstanding capital stock, the purchaser
          will receive a warrant to purchase at least an additional 6% of the
          outstanding capital 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 decides, pursuant to final due
          diligence, not to purchase the second tranche, the purchaser will have
          a put option in connection with the first tranche. The put option will
          require 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, is personally guaranteed by the current majority
          stockholders.

                                      F-17
<PAGE>

                   Cyberfast Systems, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 9.   SUBSEQUENT EVENT (Continued)

          On July 26, 2000, the Company entered into an investment agreement
          which contractually obligates 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 November 30, 2000, the purchaser notified the Company that it did
          not intend to move forward with the second tranche and requested that
          the Company repurchase the $1,500,000 of common shares issued to the
          purchaser. The Company is currently disputing whether the purchaser
          properly exercised this option by the November 30, 2000 deadline.

                                      F-18