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

                                   FORM 10-KSB

         (Mark One)

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


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

Commission File Number:  000-27263
                         ---------

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


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


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

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

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

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

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

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

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

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates, computed by reference to the last sales price reported on the
Pink Sheets of such common equity as of March 5, 2001: $621,442.

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

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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

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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

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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-

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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.

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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.

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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 Euro.

         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 where it has developed proprietary billing software. This
billing system will allow the Company to invoice its customers weekly and
semi-monthly, as the case may be. Payment will be required to be made in U.S.
dollars via wire transfer within ten business days of invoice.

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

         Destination countries are selected for several reasons:

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

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

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

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

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

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

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

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

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

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

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

Business Risks

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

         1)       Working Capital Deficiency.

         Because Cyberfast has not had significant revenues since November 1998
the Company has a working capital deficit. The principal stockholders and The
FATA Group, Sp.A. have provided loans since June 30, 1999 totaling over
$2,700,000. In addition FATA believes it has exercised its put option for
redemption of its $1,500,000 investment (although the Company

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

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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. In
2000, all of the Company's revenues were generated from customers in three
sites: India, Turkey and Egypt. 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.

                                       12
<PAGE>

         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 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 the first quarter of 1999, and for the
fourth quarter of 1999, Cyberfast had no operational circuits and did not
generate any revenues from operations. In 2000, the Company generated revenues
in the first three quarters, but none in the fourth quarter. For these reasons,
and in view of the Company's limited operating history, the Company believes
that period-to-period comparisons of its past or future operating results are
not meaningful.

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

                                       13
<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 29.59% 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 74.07% 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 2000, 1999 or
1998.

Regulatory Matters

         United States

         The use of the Internet to provide telephone service is a recent market
development. Currently, the FCC is considering surcharges or other regulations
upon providers of Internet telephony services. On April 10, 1998, the FCC issued
a report to Congress concerning the implementation of the universal service
provisions of the Telecommunications Act. In the report, the FCC indicated that
it would examine the question of whether certain forms of phone-to-phone
Internet telephony are information services or telecommunications services. The
FCC noted that it did not have, as of the date of the report, an adequate record
on which to make a definitive pronouncement. It further stated that the record
suggested that certain forms of phone-to-phone Internet telephony appear to have
the same functionality as non-Internet telecommunications services and lack the
characteristics that would render them information services.

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

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

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

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

         The Act applies to companies directly and indirectly through
intermediaries. The Act does contain a "knowledge" requirement for payments to
or by an intermediary. However, the

                                      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.
Cyberfast's management believes that the Company fully complies with the Act.

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

Reports to Security Holders

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

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

ITEM 2.  DESCRIPTION OF PROPERTY

Circuit Leases

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

                                       16
<PAGE>

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

Equipment Leases

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

Office Leases

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

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

                                       17
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

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

         The Company was involved in an arbitration with a former employee, Alan
Goldstein, who alleged termination of his employment agreement without cause. In
December 2000, the Company approved a Settlement Agreement reached before the
American Arbitration Association pursuant to which the Company is required to
pay $37,500 to Mr. Goldstein within sixty days and to grant Mr. Goldstein an
option for 40,000 shares of the Company's common stock at a strike price of
$1.00 per share. To date, the Company has granted Mr. Goldstein 40,000 options
at a strike price of $1.00 per share and has paid Mr. Goldstein $20,000 under
the Settlement Agreement.

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

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

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

                                       18
<PAGE>

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

         None.


                                     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.

         Calendar                       High Bid Price*     Low Bid Price*
         --------                       ---------------     --------------
2000     October 1 - December 31           $ 2.50             $ 0.06
         July 1 - September 30               4.00               0.70
         April 1 - June 30                   4.75               2.00
         January 1 - March 31                7.00               3.15

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

---------------
*  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.

                                       19
<PAGE>

Dividends

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

Recent Sales of Unregistered Securities

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

                                       20
<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, 1999 and 2000 are audited.

Results Of Operations

Years Ended December 31, 1999 and 2000

         For the year ended December 31, 2000, revenues were $0.193 million
compared to $0.436 million in the comparable prior period ended December 31,
1999. This decrease in revenue of $0.243 million represented a 55.73% decline
from the comparable prior period ended December 31, 1999. The percentage change
between the periods was solely attributed to lack of capacity on the circuits
available to the Company.

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

         General and administrative expenses increased 45.8% from $1.554 million
during the period ended December 31, 1999 to $2.265 million in the comparable
subsequent period ended December 31, 2000. This increase was the result of the
Company's actions in hiring outside consultants and moving into larger
facilities.

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

                                       21
<PAGE>

please see Note 9 to the accompanying audited financial statements and PART I,
Item 6 - Executive Compensation.)

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

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

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

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

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

                                       22
<PAGE>

Liquidity And Capital Resources

Years Ended December 31, 1999 and 2000

         Net cash used in operating activities for the fiscal year ended
December 31, 2000 was $1.323 million compared to $0.946 million used in
operations in the comparable prior period ended December 31, 1999, representing
an increase of $0.377 million or 39.9%. This deficit in net cash was primarily
the result of a greater amount of general and administrative expenses requiring
the payment of cash instead of stock-based compensation for the fiscal year
ended December 31, 2000. The net cash deficit in fiscal year ended 2000 was not
offset by an increase in stock based contributions as it was during fiscal year
ended 1999.

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

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

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

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

                                       23
<PAGE>

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

Plan of Operations

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

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

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

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

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

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

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

o        From operations. The Company believes it will begin generating revenues
         during the second quarter 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.

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

                                       24
<PAGE>

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

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

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

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

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

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

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

Forward Looking Statements

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

                                       25
<PAGE>

ITEM 7.  CONSOLIDATED FINANCIAL STATEMENTS

         The Company's audited consolidated financial statements as of December
31, 1999 and 2000, 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, 1999 and 2000. 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>
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>

                                       26
<PAGE>

<TABLE>
<S>                                  <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

Gianni Ciamaroni                     56       Director                                                  08/00
</TABLE>
----------------
* Mr. Walko resigned as President on April 12, 2001.
** 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 was President of the Company from November 1999 through
April 12, 2001. Mr. Walko has been a Director of the Company since November,
1999 as a consequence of acquisition of Global by the Company. Mr. Walko also
serves as a Director of Appiant Technologies, formerly Nhancement Technologies,
Inc., 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.

                                       27
<PAGE>

         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 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.

         Mr. Gianni Ciamaroni became a director of the Company as a result of
the Company's Investment Agreement with FATA and is FATA's representative on the
Board of Directors. Mr. Ciamaroni refuses to provide the Company with any
additional information.

Board of Advisors

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


Lee W. McKnight

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

                                       28
<PAGE>

MIT in 1989, MA from Johns Hopkins University in 1981, and BA from Tufts
University in 1978.


William H. Lehr

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

Disclosure of Delinquent Forms 3, 4 or 5 Filers

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

ITEM 10.  EXECUTIVE COMPENSATION

Compensation and other Benefits of Executive Officers

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

                                       29
<PAGE>

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                  FISCAL YEAR COMPENSATION                                                 LONG TERM COMPENSATION

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

                                                                                             Restricted
                                                                                               Shares
                                                               Other          Securities        or                   All other
                                                               Annual          under         Restricted      LTIP     Compen-
        Name and                         Salary      Bonus     Compen-        Option/SARs      Share       Payouts    sation
    Principal Position        Year        ($)         ($)      sation          Granted         Units         ($)        ($)
    ------------------        ----      -------      -----     ---------      -----------    ----------    -------   ---------
<S>                           <C>       <C>           <C>      <C>             <C>             <C>          <C>      <C>
Edward J. Stackpole/          2000      300,000        0       28,800(1)       275,000           0            0            0
Co-Chair and CEO              1999      300,000        0       28,800(1)       250,000           0            0            0
                              1998      262,882        0        2,400(1)          0              0            0      1,370,459(2)

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

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

Bruce Walko                   2000      105,638        0           0           150,000           0            0            0
President(4)                  1999        N/A         N/A         N/A            N/A            N/A          N/A          N/A
                              1998        NA          N/A         N/A            N/A            N/A          N/A          N/A
</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.
(4)  Mr. Walko resigned as President on April 12, 2001.

Agreements with Management

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

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

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

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

         On January 1, 1999, Mr. Edward J. Stackpole entered into a three-year
employment agreement with the Company at an annual salary of $300,000 per year
and a quarterly bonus

                                       30
<PAGE>

equal to 5% of the Company's net pre-tax quarterly income. Mr. Stackpole was
also granted 600,000 non-qualified stock options exercisable at $3.50 per share
over a 10-year period that will vest in increments of 50,000 options quarterly,
provided that Mr. Stackpole is still employed on the last day of each quarter.

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

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

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

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

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

                                       31
<PAGE>

                           OPTION/SAR GRANTS IN 2000
                               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           23.81%                $3.50               $3.50          01/01/09
                                50,000            5.95%                $3.50               $3.00          06/07/05
                             25,000(1)            2.98%                $3.00               $3.00          05/31/05

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

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

N. Bruce Walko                 100,000           11.90%                $3.00               $3.00          10/28/09
                                50,000            5.95%                $3.50               $3.00          06/07/05
</TABLE>
-----------
(1) Granted in consideration for Ed & Itir Stackpole's personal guarantee of
obligations of the Company made in connection with the FATA Investment
Agreement.

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.

                                       32
<PAGE>

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

<TABLE>
<CAPTION>

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

                            Shares Acquired
                                 on                                        Exercisable/            Exercisable/
Name                         Exercise (#)        Value Realized ($)        Unexercisable           Unexercisable
----                         ------------        ------------------        -------------           -------------
<S>                           <C>                   <C>                    <C>                     <C>
Edward J. Stackpole                -0-                   -0-                  525,000                  -0-

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

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

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

Compensation of Directors

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

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table provides certain information (consisting of Class A
and Class B Common Stock) as of 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.

                                       33
<PAGE>

<TABLE>
<CAPTION>
                                                                                      Total of      Percent of Voting
Name and Address of       Number of     Percent of     Number of      Percent of     Class A and     Power (Combined
Beneficial Owner        Class A Shares Class A Shares Class B Shares Class B Shares Class B Shares       Classes)
-------------------     -------------- -------------- -------------- -------------- --------------  -----------------
<S>                     <C>            <C>            <C>            <C>            <C>             <C>
Edward J. and Itir       1,269,394(1)      29.59%       3,507,400       78.33%      4,776,794(1)        74.07%(1)
Stackpole

N. Bruce Walko             257,358(2)       7.38%          -0-            -0-         257,358(2)         0.53%(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                 260,000(5)       7.45%          -0-            -0-         260,000(5)         0.54%(5)

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

                           112,500(7)       3.36%          -0-            -0-         112,500(7)         0.23%(7)
Gianni Ciamaroni

All officers and         2,459,711(8)      48.21%       3,507,400       78.33%      5,967,111(8)        75.27%(8)
directors as a group
(7 persons)

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

The FATA Group
Sp.A. (9)                1,466,276         45.27%          -0-            -0-       1,466,276            3.05%
</TABLE>
(1)  Includes options to acquire 525,000 shares held by Edward Stackpole of
     which 400,000 are exercisable at $3.50 per share until 12/31/09; of which
     50,000 are exercisable at $3.50 per share until 11/23/04; of which 25,000
     are exercisable at $3.00 per share until 5/31/05; and of which 50,000 are
     exercisable at $3.50 per share until 6/7/05. Also includes options to
     acquire 525,000 shares held by Itir Stackpole, of which 400,000 are
     exercisable at $3.50 per share until 12/31/09; of which 50,000 are
     exercisable at $3.50 per share until 11/23/04; of which 25,000 are
     exercisable at $3.00 per share until 5/31/05; and of which 50,000 are
     exercisable at $3.50 per share until 6/7/05.
(2)  Includes options to acquire 250,000 shares, of which 150,000 are
     exercisable at $3.00 per share until 10/28/09; of which 50,000 are
     exercisable at $3.50 per share until 11/23/04; and of which 50,000 are
     exercisable at $3.50 per share until 6/7/05.
(3)  Includes options to acquire 100,000 shares, of which 50,000 are exercisable
     at $3.50 per share until 11/23/09 and of which 50,000 are exercisable at
     $3.50 per share until 6/7/05. Also includes 8,000 shares held by M. Dowell
     Stackpole's wife and six children.
(4)  Includes options to acquire 100,000 shares, of which 50,000 are exercisable
     at $3.50 per share until 11/23/09 and of which 50,000 are exercisable at
     $3.50 per share until 6/7/05.
(5)  Includes options to acquire 250,000 shares, of which 125,000 are
     exercisable at $3.50 per shares until 5/31/09; of which 25,000 are
     exercisable at $3.50 per share until 9/30/04; of which 50,000 are
     exercisable at $3.50 per share until 11/23/04; and of which 50,000 are
     exercisable at $3.50 per share until 6/7/05.
(6)  Includes options to acquire 275,000 shares; of which 50,000 are exercisable
     at $3.50 per share until 11/23/04; of which 125,000 are exercisable at
     $3.50 until 2004; of which 50,000 are exercisable at $3.50 per share until
     6/7/05; and of which 50,000 are exercisable at $3.00 per share until
     8/20/05.
(7)  Includes a warrant to acquire 112,500 shares, exercisable at $3.00 per
     share which vests if the FATA put option expires unexercised. The Company
     is currently disputing whether FATA properly exercised this option by the
     November 2000 deadline.
(8)  Includes footnotes 1 through 7.

                                       34

<PAGE>

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

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

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

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

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

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


                                       35
<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.  (2)
10.4     Employment Agreement between the Company and Itir Stackpole.  (2)
10.5     Employment Agreement between the Company and Bert Perez.  (2)
10.6     Employment Agreement between the Company and Bruce Walko. (2)
10.7.1   Office Lease. (2)
10.7.2   Amendment to Lease Agreement, dated May 24, 2000. (2)
10.8     Agreement with KPN/Qwest, dated April 5, 2000. (2)
16.0     Form of letter to Mr. Robert Jarkow sent pursuant to Item 304(a)(3) of
         Regulation SB.  (1)
21.0     List of Subsidiaries.  Filed herewith
-------------
(1)  Incorporated by reference from the Company's filing on Form 10-SB.
(2)  Incorporated by reference from the Company's Form 10-KSB/A. No. 1, for the
     fiscal year ended 12/31/99 as filed on April 2, 2001.


         (b)      Reports on Form 8-K:

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

                                       36
<PAGE>

                                    SIGNATURE

         In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this Form 10-KSB to be signed on its behalf by the
undersigned, thereunto duly authorized.

                               CYBERFAST SYSTEMS, INC.

Dated:  April 16, 2001         By: /s/ Edward J. Stackpole
                                   --------------------------------------------
                                   Edward J. Stackpole, Chief Executive Officer
                                   and Co-Chair of the Board

Dated: April 16, 2001          By: /s/ Itir Stackpole
                                   --------------------------------------------
                                   Itir Stackpole, Chief Financial Officer, Vice
                                   President and Co-Chair of the Board

Dated: April 16, 2001          By: /s/ N. Bruce Walko
                                   --------------------------------------------
                                   N. Bruce Walko, President, Director

Dated: April 16 2001           By: /s/ Bert Perez
                                   --------------------------------------------
                                   Bert Perez, Chief Technical Officer, Director
<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.  (2)
10.4     Employment Agreement between the Company and Itir Stackpole.  (2)
10.5     Employment Agreement between the Company and Bert Perez.  (2)
10.6     Employment Agreement between the Company and Bruce Walko. (2)
10.7.1   Office Lease. (2)
10.7.2   Amendment to Lease Agreement, dated May 24, 2000.  Filed herewith.
10.8     Agreement with KPN/Qwest, dated April 5, 2000. (2)
16.0     Form of letter to Mr. Robert Jarkow sent pursuant to Item 304(a)(3) of
         Regulation SB.  (1)
21.0     List of Subsidiaries.  Filed herewith.
-------------
(1)  Incorporated by reference from the Company's filing on Form 10-SB.
(2)  Incorporated by reference from the Company's Form 10-KSB/A. No. 1, for the
     fiscal year ended 12/31/99 as filed on April 2, 2001.
<PAGE>

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





                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999





================================================================================
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS
                                -----------------

                                                                         PAGE
                                                                         ----

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                        F-1


CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheet                                                          F-2

   Statements of Operations                                               F-3

   Statements of Stockholders' Deficiency                                 F-4

   Statements of Cash Flows                                               F-5

   Notes to Consolidated Financial Statements                          F-6-F-18
<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, 2000, and the related
consolidated statements of operations, stockholders' deficiency and cash flows
for each of the two years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

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

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

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

                            RACHLIN COHEN & HOLTZ LLP

Fort Lauderdale, Florida
February 9, 2001

                                      F-1
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                             DECEMBER 31, 2000


                                     ASSETS
                                     ------

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

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

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

Commitments, Contingencies, and Other Matters                                --

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

                   See notes to consolidated financial statements.

                                      F-2
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                                   2000           1999
                                                                               -----------    -----------
<S>                                                                            <C>            <C>
Data Communications Service Revenues                                           $   192,815    $   435,739
                                                                               -----------    -----------

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

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

Other Income (Expense):
    Interest expense, stockholder                                                 (119,786)       (78,540)
    Interest expense, other                                                        (39,000)            --
    Loss on confiscation of assets                                                 (50,000)            --
    Penalties and interest                                                              --       (115,000)
                                                                               -----------    -----------
                                                                                  (208,786)      (193,540)
                                                                               -----------    -----------
Loss Before Income Taxes and Cumulative Effect of a Change in
  Accounting Principle                                                          (3,298,962)    (4,004,897)

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

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

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

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

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

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

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

                   See notes to consolidated financial statements.

                                      F-3
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                            Common Stock
                                              -----------------------------------------
                                                     Shares               Amount          Additional
                                              --------------------  -------------------    Paid-In
                                               Class A    Class B    Class A    Class B    Capital        Deficit         Total
                                              ---------  ---------  ---------  --------  -----------    -----------    -----------
<S>                                           <C>        <C>        <C>        <C>       <C>            <C>            <C>
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)

Year ended December 31, 2000:
    Options granted for services                     --         --         --        --      822,000             --        822,000
    Issuance of common stock in connection
      with obligation subject to put option   1,466,276         --     14,663        --      (14,663)            --             --
    Effect of accounting change relating to
      options granted to directors                   --         --         --        --     (317,000)            --       (317,000)
    Exchange of shares                           62,450    (62,450)       624      (624)          --             --             --
    Net loss                                         --         --         --        --           --     (2,981,962)    (2,981,962)
                                              ---------  ---------  ---------  --------  -----------    -----------    -----------

Balance, December 31, 2000                    3,239,176  4,477,600  $  32,392  $ 44,776  $ 2,909,944    $(7,401,726)   $(4,414,614)
                                              =========  =========  =========  ========  ===========    ===========    ===========
</TABLE>

                   See notes to consolidated financial statements.

                                      F-4
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                      2000           1999
                                                                  -----------    -----------
<S>                                                               <C>            <C>
Cash Flows from Operating Activities:
    Net loss                                                      $(2,981,962)   $(3,780,897)
    Adjustments to reconcile net loss to net cash
       used in operating activities:
         Cumulative effect of change in accounting principle         (317,000)            --
         Depreciation                                                  62,597         90,094
         Stock-based compensation                                     822,000      2,210,410
         Interest accrued on notes payable                            158,786         78,540
         (Increase) decrease in other assets                           (8,521)         3,027
         Changes in operating assets and liabilities:
         Increase (decrease) in:
            Accounts payable and accrued expenses:
              Stockholder compensation                                501,940        528,846
              Other                                                   438,789         32,804
            Income taxes payable                                           --       (109,000)
                                                                  -----------    -----------
                 Net cash used in operating activities             (1,323,371)      (946,176)
                                                                  -----------    -----------

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

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

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

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

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

                   See notes to consolidated financial statements.

                                      F-5
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Business

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

     Organization and Capitalization

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

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

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

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

     Principles of Consolidation

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

     Revenue Recognition

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

                                      F-6
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Property and Equipment

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

     Income Taxes

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

     Concentrations of Credit Risk

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

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

     Cash Equivalents

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

     Use of Estimates

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

                                      F-7
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Stock-Based Compensation

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

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

     Advertising

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

     Recent Accounting Pronouncements

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

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

                                      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 (Continued)

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

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

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

     Reclassification

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

NOTE 2. GOING CONCERN CONSIDERATIONS

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

                                      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 the following:

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

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

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

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

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

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

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

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

                                      F-10
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


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

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

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

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

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

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

NOTE 4. CONFISCATED ASSETS

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

                                      F-11
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 5. NOTE PAYABLE, MAJOR STOCKHOLDER

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

NOTE 6. INCOME TAXES

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

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

                                                       Year Ended December 31,
                                                     --------------------------
                                                        2000            1999
                                                     -----------    -----------

      Tax provision at the statutory rate of 34%     $(1,014,000)   $(1,296,000)
      State income taxes, net of federal income tax      (89,000)      (114,000)
      Benefit of net operating loss carryback                 --       (224,000)
      Stock based compensation                           187,000        370,000
      Change in valuation allowance                      822,000        991,000
      Other                                               94,000         49,000
                                                     -----------    -----------
                                                     $        --    $  (224,000)
                                                     ===========    ===========

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

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

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

                                      F-12
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 6. INCOME TAXES (Continued)

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

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

NOTE 7. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

     Litigation

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

     Employment Agreements

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

                                      F-13
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 7. 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 of the options was
          canceled. An arbitration claim was filed by the former employee
          against the Company. A settlement was reached with the former
          employee, whereby the Company will pay $37,500 in cash, which is
          included in accounts payable and accrued expenses, and exchange the
          50,000 options for 40,000 options which have a $1.00 option price and
          a five-year life.

     Service Agreements

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

     Satellite Service Agreement

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

     Operating Leases

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

          Minimum future lease payments on these leases are as follows:

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

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

                                      F-14
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 7. 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 adverse effect on the
          Company.

     Significant Customers and Suppliers

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

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

     Placement Agent Agreement

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

          In connection with the investment agreement discussed in Note 3, the
          Company paid $155,000 in commissions and granted 175,000 options to
          the placement agent. These options were to have expired when the
          purchaser notified the Company of its intention to exercise the put
          option. Accordingly, these options have not been given accounting
          recognition in these consolidated financial statements; however, if it
          is ultimately determined, based upon the resolution of the FATA
          dispute, that these options are exercisable, accounting recognition
          will be given to these options at such time.

     Related Party Transactions

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

                                      F-15
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 8. NET LOSS PER SHARE

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

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

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

NOTE 9. STOCK-BASED COMPENSATION

     Stock Issued for Services

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

     Stock Options

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

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

                                      F-16
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 9. STOCK-BASED COMPENSATION (Continued)

     Stock Options (Continued)

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

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

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

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

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

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

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

                                      F-17
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 9. STOCK-BASED COMPENSATION (Continued)

     Stock Options (Continued)

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

<TABLE>
<CAPTION>
                                                                 Weighted
                                                   Number         Average         Expiration
                                                  of Shares        Price             Date
                                                  ---------      --------        -------------
             <S>                                  <C>            <C>           <C>
             Balance, December 31, 1998                  --      $    --              --
             Year Ended December 31, 1999:
                Granted                           2,723,000         3.63         November 2004
                Exercised                                --                    to December 2009
                Expired                            (250,000)        5.00
                                                 ----------
             Balance, December 31, 1999           2,473,000         3.63         November 2004
                                                                               to December 2009

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

          The following table summarizes information about outstanding options
          at December 31, 2000:

<TABLE>
<CAPTION>
                             Options Outstanding                                  Options Exercisable
              ------------------ ---------------- --------------    --------------- --------------- ----------------
                                      Number         Weighted                            Number         Weighted
                                    Outstanding       Average            Range        Exercisable        Average
                   Range of             at           Remaining             of              at           Remaining
                   Exercise        December 31,     Contractual         Exercise      December 31,     Contractual
                    Prices             2000            Life              Price            2000            Life
                    ------             ----            ----              -----            ----            ----
<S>              <C>                 <C>              <C>            <C>                <C>             <C>
                 $1.00 - $7.00       2,961,000        8 years        $1.00 - $7.00      2,296,000       8 years
                  ============       =========        =======         ============      =========       =======
</TABLE>

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

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

                                      F-18
<PAGE>

                    CYBERFAST SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 10. CHANGE IN ACCOUNTING PRINCIPLE

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

                                      F-19