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, 1999

[X]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

For the transition period from _______________ to ________________

Commission file no.     0-27917

                                IPVoice.com, Inc.
                  --------------------------------------------
                 (Name of small business issuer in its charter)


           Nevada                                               65-0729900
 -------------------------------                           -------------------
 (State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                           Identification No.)


 5050 No. 19th Avenue, Suite 416/417, Phoenix, Arizona            85015
 -------------------------------------                          ----------
 (Address of principal executive offices)                       (Zip Code)


                                                  Name of each exchange on
       Title of each class                             which registered


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




 Copies of Communications Sent to:
                              Mercedes Travis, Esq.
                              Mintmire & Associates
                              265 Sunrise Avenue, Suite 204
                              Palm Beach, FL 33480
                              Tel: (561) 832-5696:
                              Fax: (561) 659-5371


<PAGE>



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

        Yes   X           No
           -----             -----

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B 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. [X]

State issuer's revenues for its most recent fiscal year. $321,279.

Of  the  16,422,758  shares  of  voting  stock  of  the  registrant  issued  and
outstanding   as  of  December   31,   1999,   7,066,235   shares  are  held  by
non-affiliates.  The  Company is quoted on the OTC under the symbol  "IPVC".  On
March 30, the closing price was $2.531. Accordingly,  the aggregate market value
based on the non-affiliate  shares and based upon this closing price as of March
30, 2000 was $17,884,641.




<PAGE>



                                TABLE OF CONTENTS



PART I                                                                  PAGE NO.

Item 1.     Description of Business                                           1

Item 2.     Description of Property                                          38

Item 3.     Legal Proceedings                                                39

Item 4.     Submission of Matters to a Vote of Security Holders              40

PART II

Item 5.     Market for Common Equity and Related Shareholder Matters         40

Item 6.     Plan of Operation                                                41

Item 7.     Financial Statements - Commencing on                             47

Item 8.     Changes and Disagreements with Accountants on Accounting         48
            And Financial Disclosure

PART III

Item 9.     Directors, Executive Officers, Promoters and Control Persons;    48
            Compliance with Section 16(a) of the Exchange Act

Item 10.    Executive Compensation                                           51

Item 11.    Security Ownership of Certain Beneficial Owners and              55
                      Management

Item 12.    Certain Relationships and Related Transactions                   58

Item 13.    Exhibits and Reports on Form 8K                                  65





<PAGE>



                                     PART I

Item 1. Description of Business.

           (a)       Business Development

           IPVoice.com,  Inc. (the "Company" or "IPVC") is  incorporated  in the
State of Nevada.  The Company was originally  incorporated as Nova  Enterprises,
Inc. on February 19, 1997 ("Nova"). In March 1998, Nova acquired 100% of IPVoice
Communications, Inc., a Delaware corporation formed in December 1997 ("IPVCDE").
The Company  subsequently  changed its name to IPVC in May 1999.  The Company is
quoted on the OTC Bulletin Board under the symbol "IPVC".  Its executive offices
are presently  located at 5050 No. 19th Avenue Suite 416/417,  Phoenix,  Arizona
85015.  Its telephone number is (602) 335-1231 and its facsimile number is (602)
335-1577.

           The  Company  is filing  this  Form  10-KSB  in  compliance  with the
effectiveness  of its  filing on Form  10-SB.  The  Company  will file  periodic
reports in the event its obligation to file such reports is suspended  under the
Securities and Exchange Act of 1934 (the "Exchange Act".)

           Since  inception  the  Company  has been  engaged in the  business of
developing its MultiCom  Business  Management  Software  ("MultiCom") for use in
Internet telephony applications (telephone, fax, data, images and video over the
Internet).  MultiCom is the  business  management  system  behind the  Company's
TrueConnect Gateway product ("Gateway"), for which trademark protection is being
sought.  Gateway  provides a mechanism for bridging the public  telephone system
with the Internet.  IPVC was founded on the premise that  traditional  telephone
systems  wasted  precious  resources  by  assigning  each call a  "nailed  down"
circuit.  IPVC's Gateway allows a packet of information (voice,  video,  e-mail,
data,  images,  etc.)  to  cross  multiple  networks  on its  way  to its  final
destination.  Thus,  instead of having one  dedicated  circuit  for a call,  the
entire network is shared.  The Company continues to research the availability of
additional  innovative products in the Internet telephony and related industries
for development,  distribution or acquisition.  See Part I, Item 1. "Description
of the Business - (b) Business of Issuer - Patents, Copyrights and Trademarks."

           It is the  Company's  intention to (i) continue to market its network
and Gateway  product;  (ii) to conduct  research to further  develop its Gateway
product and (iii) to develop  further  "add- ons" which will  enhance and expand
the Gateway  product.  See Part I, Item 1.  "Description  of the  Business - (b)
Business of Issuer."

           In February 1997,  prior to its  acquisition  of IPVCDE,  the Company
sold  1,400,000  shares of its  unrestricted  Common  Stock to  sixty-nine  (69)
individuals for $14,000. For such offering, the Company relied upon Section 3(b)
of the Securities  Act of 1933, as amended (the "Act") and Rule 504  promulgated
under  Regulation  D of the Act  ("Rule  504") and  Section  517.061(11)  of the
Florida Code,  Section 4[5/4](G) of the Illinois Code, Section 90.530(11) of the
Nevada  Code,   Section  78  A-17(9)  of  the  North  Carolina   Code,   Section
48-2-103(b)(4) of the Tennessee Code

                                        1

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and Section 5[581-5]I(c) of the Texas Code. No state exemption was necessary for
the sales made to Bahamian, Canadian or French investors. See Part III, Item 12.
"Certain Relationships and Related Transactions".

           In November 1997,  prior to its  acquisition  by the Company,  IPVCDE
entered  into a consulting  agreement  with Condor  Worldwide,  Ltd., a Bahamian
corporation  ("Condor"),   whereby  Condor  agreed  to  provide  certain  sales,
marketing  and public  relations  services  in exchange  for  600,000  shares of
IPVCDE's  unrestricted  Common Stock to be issued upon listing of IPVCDE's stock
on the OTC Bulletin  Board.  Such shares were never issued and the agreement was
amended in July 1998  deleting  the  issuance  of such  shares.  The  consulting
agreement  was modified in July 1998 to revoke all  interest in the shares.  The
term of the  Agreement was for a period of six (6) years and is still in effect.
James K. Howson,  the Company's Chairman and CEO, serves as the Chairman and CEO
of Condor and he is the beneficial  owner of Condor.  Effective  September 1999,
Condor  agreed to reduce its  consulting  fees to $90,000 per year.  This agreed
reduction  will shall  continue until the Company is profitable and there are no
accruals of any unpaid amounts under the Condor contract.  Further,  none Condor
has no  expectations  regarding the amount foregone at any future date. See Part
I, Item 1.  "Description  of Business - (b)  Business of Issuer - Employees  and
Consultants"; Part III, Item 11 "Security Ownership of Certain Beneficial Owners
and  Management";  and Part III,  Item 12.  "Certain  Relationships  and Related
Transactions".

           In March 1998, the Company's predecessor,  Nova, entered into a share
exchange  agreement  with  IPVCDE  and  its  shareholders  whereby  Nova  issued
9,000,000  shares of its  restricted  Common  Stock valued at $9,000 to IPVCDE's
shareholders  for all of the  outstanding  capital  stock of IPVCDE,  which then
became a wholly-owned subsidiary of Nova. In connection with the agreement,  the
Company  entered  into  employment  agreements  with Barbara  Will,  its current
Director, Chief Operating Officer and President and with Anthony Welch, designer
of the  Company's  proprietary  software,  who  currently  serves as the  Senior
Vice-President of Research and Development.  As part of the exchange,  Ms. Will,
Mr. Welch and Condor each received 3,000,000 shares of the Company's  restricted
common stock. Mr. Howson, the Company's Chairman and Chief Executive Officer, is
the  beneficial  owner of Condor.  For such  offering,  the Company  relied upon
Section 4(2) of the Act, Rule 506, Section 11-51-308(1)(j) of the Colorado Code,
Section  7309(b)(9)  of the Delaware  Code and Section  90.530(17) of the Nevada
code. The Company relied on no state exemption for the issuance to Condor, which
is a Bahamian  corporation.  See Part I, Item 1.  "Description of Business - (b)
Business of Issuer - Employees and  Consultants";  Part III, Item 10. "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

           In April 1998,  the Company sold 154,000  shares of its  unrestricted
Common Stock to five (5) investors for $154,000.  For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504 and Section  517.061(11) of the
Florida Code and Section  359(f)(2)(d)  of the New York Code. No state exemption
was necessary for the shares sold to a United Kingdom corporation. See Part III,
Item 12. "Certain Relationships and Related Transactions".

                                        2

<PAGE>



           In July 1998,  the  Company  sold 53,333  shares of its  unrestricted
Common Stock to one (1) investor for $40,000.75.  For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504 and Section  517.061(11) of the
Florida  Code.  See  Part  III,  Item 12.  "Certain  Relationships  and  Related
Transactions".

           In July 1998,  the Company  entered into a consulting  agreement with
Calpe,  Ltd., a Bahamian  corporation  ("Calpe"),  to provide  public  relations
consulting  services  valued at $85,000 to the Company in  exchange  for 850,000
shares of the Company's  unrestricted Common Stock, of which 200,000 shares were
given to The Investor  Communications Group, Inc., a Georgia corporation ("ICG")
pursuant to its consulting  contract (as more fully described herein) and 23,000
shares were given to Neil Rand d/b/a  Corporate  Imaging ("CI")  pursuant to its
consulting  contract (as more fully described  herein).  In consideration of its
627,000 shares,  Calpe agreed to forego  commissions  equal to $62,700 from IPVC
product sales. The term of the Agreement was for a period of three (3) years and
is still in effect.  For such offering,  the Company relied upon Section 3(b) of
the Act and Rule 504. No state exemption was necessary for the Calpe shares,  as
Calpe is a Bahamian  corporation.  However,  the  Company  relied  upon  Section
10-5-9(13)  of the Georgia  Code for the ICG shares and Section  14-4-140 of the
Arizona Code for the CI shares.  See Part I, Item 1.  "Description of Business -
(b)  Business  of Issuer - Employees  and  Consultants";  and Part III,  Item12.
"Certain Relationships and Related Transactions".

           In July,  1998, the Company entered into a consulting  agreement with
ICG to provide  financial public relations and direct marketing  advertising and
consulting services to the Company. For such services, the Company agreed to pay
ICG $75,000 over the term of the Agreement  and to issue  200,000  shares of the
unrestricted  Common  Stock of the  Company,  and to grant  warrants to purchase
100,000 shares of the restricted  Common Stock of the Company  exercisable for a
period of two (2) years at an exercise  price of $2.00 per share.  Such warrants
have  piggy-back  registration  rights.  Such  issuance of shares were valued at
$20,000, while the warrants were valued at $0. IPVC has a right of first refusal
to buy back any shares  proposed  to be sold by ICG to any third  party.  Of the
850,000 shares of its unrestricted Common Stock issued to Calpe,  200,000 shares
were given to ICG pursuant to its  contract.  The contract term was for a period
of six (6) months  and has since  terminated.  For such  offering,  the  Company
relied  upon  Section  3(b) of the Act and Rule 504.  The  Company  relied  upon
Section  10-5-9(13) of the Georgia Code for the issuance of ICG shares. See Part
I, Item 1.  "Description  of Business - (b)  Business of Issuer - Employees  and
Consultants";  and  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

           In July 1998, the Company entered into a consulting agreement with CI
to provide public and investor relations  consulting  services to the Company in
exchange for 23,000  shares of the  Company's  unrestricted  Common  Stock.  The
Agreement  was for a term of three (3) months and  terminated  automatically  in
November 1998. Of the 850,000 shares of its unrestricted  Common Stock issued to
Calpe,  23,000  shares were given to CI pursuant  to its  contract.  The Company
relied  upon  Section  3(b) of the Act and Rule 504.  The  Company  relied  upon
Section 14-4-140 of the Arizona Code for the issuance of CI shares.  See Part I,
Item 1.  "Description  of  Business - (b)  Business  of Issuer -  Employees  and
Consultants"; and Part III, Item 12. "Certain Relationships

                                        3

<PAGE>



and Related Transactions".

           In July  1998,  the  Company  entered  into  an  agreement  with  The
Armstrong  International Group, Inc.  ("Armstrong")  wherein the Company granted
Armstrong the  non-exclusive  right to market,  advertise and sell the Company's
domestic and international calling services. As payment for these services, IPVC
issued  Armstrong  warrants to purchase  50,000 shares of the  Company's  Common
Stock exercisable at a price of $0.75 per share or, at the option of IPVC, for a
total  sum of  $37,500  as well as  commissions  on all  sales of the  Company's
products and  services.  The term of the  agreement is for a period of three (3)
years.  For such offering,  the Company relied upon Section 4(2) of Act and Rule
506  and  Section  517.061(11)  of  the  Florida  Code.  See  Part  I,  Item  1.
"Description  of Business - Business of Issuer - Internet  Telephony";  and Part
III, Item 12. "Certain Relationships and Related Transactions".

           In September  1998, the Company  entered into a consulting  agreement
for a  term  of six  (6)  months  with  First  Capital  Partners,  Inc.  ("First
Capital"), to provide financial consulting services to the Company. In the event
that First Capital was  successful in securing debt or equity  financing for the
Company,  First Capital would be granted  warrants to purchase 125,000 shares of
the restricted Common Stock of the Company exercisable for a period of three (3)
years  at an  exercise  price of $1.00  per  share.  Such  warrants  would  have
piggy-back  registration  rights. See Part I, Item 1. "Description of Business -
(b)  Business of Issuer - Employees  and  Consultants";  and Part III,  Item 12.
"Certain Relationships and Related Transactions".

           In September 1998, the Company sold 20,000 shares of its unrestricted
Common Stock to one (1) investor for  $10,000.  For such  offering,  the Company
relied upon Section 3(b) of the Act and Rule 504 and Section  517.061(11) of the
Florida  Code.  See  Part  III,  Item 12.  "Certain  Relationships  and  Related
Transactions".

           In  September   1998,   the  Company  sold  100,000   shares  of  its
unrestricted  Common Stock to one (1) investor for $25,000.  For such  offering,
the  Company  relied  upon  Section  3(b) of the Act and  Rule  504 and  Section
49:3-50(b)(9)  of  the  New  Jersey  Code.  See  Part  III,  Item  12.  "Certain
Relationships and Related Transactions".

           In September 1998, the Company sold 80,000 shares of its unrestricted
Common Stock to one (1) investor for  $15,000.  For such  offering,  the Company
relied upon Section 3(b) of the Act and Rule 504 and Section  517.061(11) of the
Florida  Code.  See  Part  III,  Item 12.  "Certain  Relationships  and  Related
Transactions".

           In  September   1998,  the  Company  issued  100,000  shares  of  its
unrestricted common stock in exchange for legal services valued at $10,000.  For
such  offering,  the Company  relied upon Section 3(b) of the Act,  Rule 504 and
Section  517.061(11)  of the  Florida  Code.  See Part  III,  Item 12.  "Certain
Relationships and Related Transactions".

           In October 1998, the Company entered into a consulting agreement with
International   Investment   Partners,   Ltd.,  an  Irish  corporation  ("IIP"),
memorializing an oral agreement made in

                                        4

<PAGE>



July 1998, to provide  financial,  consulting  and advisory  services  valued at
$35,000 in exchange for the  issuance of 350,000  shares,  of which  243,760 are
unrestricted Common Stock of the Company and 106,240 are restricted Common Stock
of the Company, the grant of warrants to purchase an additional 1,600,000 shares
of the  unrestricted  Common  Stock  of the  Company  exercisable  without  time
limitation  at an  exercise  price of $0.06 per share,  the grant of warrants to
purchase an  additional  350,000  shares of the  restricted  Common Stock of the
Company  exercisable  without time  limitation at an exercise price of $3.90 per
share and in  consideration  of $100 the grant of  warrants to purchase an 5% of
the restricted  Common Stock of the Company on a fully-diluted  basis at a price
of $1.00 per share.  In January 1999, IIP received 93,760 shares of Common Stock
in lieu of payment  for  services  which was due in the amount of  $14,064.  IIP
exercised its warrant to purchase  1,600,000 shares in April 1999 at an exercise
price of $96,000.  As to the  warrant  that  entitles  IIP to purchase 5% of the
restricted Common Stock of the Company,  in February 2000, IIP purchased 136,000
shares at an exercise price of $136,000 and in March 2000, IIP purchased  50,000
shares at an exercise price of $50,000.  Such shares  represent  1.22% of the 5%
interest  that IIP is  entitled to acquire,  thereby  entitling  IIP to purchase
additional shares representing 3.88%. The Agreement is for a period of three (3)
years and is still in effect.  The Company must also pay a monthly fee of $4,000
the first  year,  $6,000 the second  year and  $8,000  the third  year.  For the
unrestricted  shares and warrants to purchase  unrestricted  shares, the Company
relied upon Section 3(b) of the Act and Rule 504. For the restricted  shares and
warrants to purchase  restricted shares, the Company relied upon Section 4(2) of
the Act and Rule  506.  No state  exemption  was  necessary,  as IIP is an Irish
corporation.  See Part I, Item 1.  "Description  of  Business - (b)  Business of
Issuer  -  Employees  and   Consultants";   and  Part  III,  Item  12.  "Certain
Relationships and Related Transactions".

           In October,  1998,  the Company  entered into a consulting  agreement
with  Insidestock.com,  Inc., a Florida  corporation  ("Inside.com")  to provide
media relations  services and consulting advice to the Company valued at $41,250
in exchange for the issuance of 275,000 shares of the unrestricted  Common Stock
of the Company and the grant of  warrants  to  purchase  an  additional  155,000
shares of the unrestricted  Common Stock of the Company exercisable for a period
of one (1) year at a price of $0.645 per share. Inside.com exercised its warrant
to purchase  155,000 shares in April 1999 at an exercise price of $100,000.  The
Agreement  is for a term of one (1)  year  and is  still  in  effect.  For  such
issuance,  the  Company  relied  upon  Section  3(b) of the Act and Rule 504 and
Section  517.061(11)  of the Florida Code. See Part I, Item 1.  "Description  of
Business - (b) Business of Issuer - Employees  and  Consultants";  and Part III,
Item 12. "Certain Relationships and Related Transactions".

           From  December 1998 through  January  1999,  the Company sold 896,665
shares of its unrestricted Common Stock to eight (8) investors for $134,500. For
such offering,  the Company relied upon Section 3(b) of the Act and Rule 504 and
Section 11-51-308(1)(j) of the Colorado Code, Section 517.061(11) of the Florida
Code and Section  49:3-50(b)(9)  of the New Jersey Code. No state  exemption was
required  for two (2)  Bahamian  investors.  See Part  III,  Item  12.  "Certain
Relationships and Related Transactions".

           From February 1999 through May 1999,  the Company sold forty-six (46)
units to twenty- four (24) investors for $1,150,000. Each unit consisted of: (i)
a note  payable in two (2) years with an option for the Company to extend it for
an additional two (2) years in the principal  amount of $24,900 bearing interest
at 9% per annum payable  quarterly in cash or, at the option of the Company,  in
unrestricted  shares of the Company's  Common Stock;  (ii) a warrant to purchase
18,750 shares of the Company's  restricted Common Stock  exercisable  during the
period in which the note is  outstanding  at an exercise  price equal to 125% of
the  average  closing  price of the  stock  for the  thirty  (30)  trading  days
immediately  prior to  February  1,  1999,  which  warrants  contain  piggy-back
registration  rights;  and  (iii)  twenty-five  (25)  of  the  Company's  Senior
Convertible  Preferred  shares.  In the event of a default in  repayment  of the
notes, all outstanding  Senior  Convertible  Preferred shares shall be converted
into Common Stock of the Company in an amount which will equal 51% of the issued
and outstanding shares,  warrants and options of the Company. For such offering,
the  Company  relied  upon  Section  4(2) of the Act and  Rule  506 and  Section
14-4-126(f)  of the  Arizona  Code,  Section  25102(f) of the  California  Code,
Section  517.061(11) of the Florida Code,  Section 130.293 of the Illinois Code,
Section 191-50.14(502) of the Iowa Code, Section 451.803.7 of the Michigan Code,
Section  359(f)(2)(d)  of the New  York  Code  and  Section  70P.S.1-211  of the
Pennsylvania  Code. See Part III, Item 12.  "Certain  Relationships  and Related
Transactions".

           In March and April  1999,  the  Company  sold  875,000  shares of its
unrestricted  Common Stock to one (1) investor for $350,000.  For such offering,
the Company relied upon Section 3(b) of the Act and Rule 504. No state exemption
was required, as the investor was a Bahamian corporation. See Part III, Item 12.
"Certain Relationships and Related Transactions".

           In March 1999, the Company  entered into a consulting  agreement with
Buying Power Network ("BPN") to provide  financial public  relations  consulting
services  to the  Company  for which the  Company  agreed to pay $40,000 for the
first month, and $30,000 for the second and third months, with subsequent months
to be  agreed  upon,  each of which is  payable  in  unrestricted  shares of the
Company's Common Stock the number of which is determined by dividing the monthly
payment by $1.00.  The contract term was through  September 1999 and has expired
without  renewal.  In exchange for services  rendered by BPN, the Company issued
100,000  shares of its  unrestricted  Common  Stock  valued at $106,200 to Joyce
Research  Group,  of which BPN is a division.  For the  fourth,  fifth and sixth
months of the  contract,  the Company  granted Joyce  Research  Group options to
purchase 150,000 shares of the Company's  restricted Common Stock at an exercise
price  equal to 60%,  65% and 70% of the  market  price  respectively.  For such
offering,  the  Company  relied  upon  Section  3(b) of the Act and Rule 504 and
Florida Code Section 517.061(11). See Part I, Item 1. "Description of Business -
(b)  Business of Issuer - Employees  and  Consultants";  and Part III,  Item 12.
"Certain Relationships and Related Transactions".

           In April 1999, the Company  entered into a share  exchange  agreement
with SATLINK 3000, Inc. d/b/a Independent Network Services, a Nevada corporation
formed in April,  1998,  ("INS") whereby the Company exchanged 250,000 shares of
its  Redeemable  Convertible  Preferred  stock valued at $500,000 for all of the
outstanding  capital stock of INS. Such Redeemable  Convertible  Preferred stock
contains 1 for 1 conversion rights after one (1) year and is redeemable at $2.00
per share. The President of INS, Peter M. Stazzone, remained with the

                                        5

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Company as the  President  of the  subsidiary.  At the time of the  exchange Mr.
Stazzone became Secretary,  Treasurer and Chief Financial Officer of the Company
under an employment  agreement.  Also at the time of the exchange,  Mr. Stazzone
received  50,000 shares of the  Redeemable  Convertible  Preferred  Stock of the
Company.  Pursuant to the Employment  Agreement,  Mr. Stazzone  received 200,000
shares of the Company's Restricted Common Stock, a stock bonus of 100,000 shares
of the  Restricted  Common Stock deemed earned on the date of the Share Exchange
Agreement,  but to be delivered on the earlier of (i) the first anniversary date
or (ii) Mr. Stazzone's termination and options to purchase an additional 200,000
shares of the restricted Common Stock of the Company exercisable for a period of
three (3) years at an exercise price of $1.00 per share. It was represented that
INS had acquired  certain  assets,  including the rights to INS' name,  from the
Bankruptcy  Court in the  Chapter  11 filing on  behalf of  Telsave  Corporation
("Telsave"). Mr. Stazzone was the Chief Financial Officer of Telsave at the time
the bankruptcy was filed and the Bankruptcy  Court was provided with  disclosure
of his involvement with INS prior to the Court's approval of the sale of certain
Telsave  assets to INS. In June 1998, Mr.  Stazzone was loaned  $100,000 by INS,
which loan bears no interest and has no stated  repayment  terms. At the time of
the acquisition of INS, the Company believed that it was acquiring the rights to
the carrier  identification  code 10-10-460 ("CIC Code"). The purchase price was
based in part upon an  appraisal of the value of the CIC Code which is loaded in
approximately  60% of the  domestic  market.  However,  during the course of the
audit,  it was  discovered  that  clear  title  may not have  passed  to INS and
subsequently  the  Company as the owner of INS.  Therefore,  the Board  resolved
that, in the event clear title had not passed to the Company, it would be in the
best interest of the shareholders to unwind the transaction.  The Company sought
a legal  opinion  on the  status of such title and just prior to filing its Form
10SB  discovered  that there was no clear link between the  ownership of the CIC
Code and INS.  Therefore the Company voted to unwind the  transaction ab initio,
to  rescind  the  issuances  made  under  the  acquisition  and  the  employment
agreements and to terminate Mr. Stazzone's employment. Mr. Stazzone and INS have
instituted suit against the Company. For such offering,  the Company relied upon
Section 4(2) of the Act and Rule 506,  Section  14-4-126(f)  of the Arizona Code
and Section  90.530(11) of the Nevada Code. See Part I, Item 1.  "Description of
Business - (b) Business of Issuer - Employees and Consultants";  Part I, Item 3.
Legal  Proceedings";  Part I, Item 4. "Security  Ownership of Certain Beneficial
Owners  and  Management";  Part I, Item 6.  "Executive  Compensation  - Employee
Contracts and  Agreements";  and Part III, Item 12. "Certain  Relationships  and
Related Transactions".

           In April 1999,  the Company  entered into a marketing  agreement with
Benae  International,  Inc.,  a  Nevada  Corporation  ("Benae")  to  market  the
Company's  telephony  services  and to register a minimum of one  hundred  (100)
customers  in the thirty  (30)  cities in which  IPVC  plans to offer  telephony
services  within  twelve(12)  months  in  exchange  for  200,000  shares  of the
unrestricted  Common Stock of the Company valued at $206,200.  The shares are to
be returned to the Company if the  minimum is not met.  For such  offering,  the
Company relied upon Section 3(b) of the Act and Rule 504 and Section  90.530(11)
of the Nevada Code. See Part I, Item 1.  "Description  of Business - Business of
Issuer - Internet  Telephony";  Part I, Item 1.  "Description  of Business - (b)
Business  of  Issuer -  Employees  and  Consultants";  and Part  III,  Item 127.
"Certain Relationships and Related Transactions".

                                        6

<PAGE>



           In April,  1999, the Company entered into a marketing and advertising
agreement  with  Netgenie.com,  Inc., an Arizona  corporation  ("NG") to provide
marketing  services  to a minimum  of 75,000  customers  in thirty  (30)  cities
designated  by IPVC  within a twelve (12) month  period in exchange  for 100,000
shares of the restricted  Common Stock of the Company valued at $103,100,  which
shares  must be  returned  if NG fails to  deliver a minimum of eight (8) cities
with a total of 75,000 customers  before December 31, 1999. In addition,  NG may
earn performance  bonuses of: 50,000  restricted  shares if eight (8) cities are
delivered  within ninety (90) days of  execution;  50,000  restricted  shares if
fifteen  (15)  cities are  delivered  within one hundred  fifty (150) days;  and
10,000 restricted shares for each additional city thereafter before December 31,
1999 up to 30 cities.  Further,  NG will be granted  warrants to purchase 30,000
shares of the Company's  restricted Common Stock exercisable for a period of two
(2) years at an  exercise  price of $2.50  per  share  for every  block of 5,000
pre-registered  customers up to 75,000 pre-registered customers in a twelve (12)
month period. For such offering, the Company relied upon Section 4(2) of the Act
and Rule 506 and Section  14-4-126(F)  of the Arizona Code.  See Part I, Item 1.
"Description  of  Business - Business of Issuer - Internet  Telephony";  Part I,
Item 1.  "Description  of  Business - (b)  Business  of Issuer -  Employees  and
Consultants";  and  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

           In  September   1999,   the  Company  issued  10,000  shares  of  its
unrestricted Common Stock in exchange for legal services valued at $10,000.  The
shares  were  issued  pursuant to an  obligation  incurred in 1998.  The Company
relied  upon  Section  3(b) of the  Act,  Rule  504  and  Florida  Code  Section
517.061(11).   See  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

           On  November  11,  1999,  the  Company  executed a letter  employment
agreement  dated November 10, 1999 with Harry R. Bowman.  Under the terms of the
agreement,  Mr. Bowman is to serve as an Executive Vice President of the Company
for a term of two (2) years at a base salary of $78,000 per year.  In  addition,
Mr.  Bowman,  a resident of  Pennsylvania,  receives  health  insurance,  a paid
vacation,  travel  twelve  (12)  times  a year  to  his  residence  and  living,
automobile and subsistence allowances.  Mr. Bowman is required to spend at least
three (3) weeks a month at the  Company's  offices in Phoenix and one (1) week a
month at a location to be decided in  Pennsylvania..  The  agreement  included a
sixty (60) day probationary period. Under the terms of the agreement, Mr. Bowman
was granted four (4) years  options to purchase  50,000  shares of the Company's
Common Stock at an exercise price of $1.75  exercisable  one half when the stock
trades  for any ten (10) days out of thirty  (30)  consecutive  days at or above
$7.00 per share  and one half  when the stock  trades at or above  $12.00 in the
same manner.  Any shares acquired under the option must be held for the two-year
period in which Mr.  Bowman has  committed to work for the Company,  and, in the
event  the  commitment  is not  met or Mr.  Bowman  is  discharged  due to  poor
performance  or cause,  unexercised  options  expire  and  shares  acquired  are
forfeited.  For such  offering,  the Company relied upon Section 4(2) of the Act
and Rule 506 and Section 201.[70 P.S. 1.201] of the Pennsylvania  Code. See Part
I, Item 1.  "Description  of Business - (b)  Business of Issuer - Employees  and
Consultants";  Part III, Item 10. "Executive  Compensation - Employee  Contracts
and Agreements";  Part III, Item 11. "Security  Ownership of Certain  Beneficial
Owners  and  Management";  and Part III,  Item 12.  "Certain  Relationships  and
Related Transactions".

                                        7

<PAGE>



           At a meeting of the Board in November  1999,  the Company  granted to
Russell  Watson,  a Director of the Company,  four (4) years options to purchase
20,000  shares  of the  Company's  Common  Stock at an  exercise  price of $1.75
exercisable  one half when the stock  trades for any ten (10) days out of thirty
(30)  consecutive  days at or above  $7.00 per share and one half when the stock
trades at or above $12.00 in the same  manner.  For such  offering,  the Company
relied upon Section 4(2) of the Act and Rule 506 and Section 201.[70 P.S. 1.201]
of the  Pennsylvania  Code. See Part I, Item 4.  "Security  Ownership of Certain
Beneficial Owners and Management"; Part III, Item 12. "Certain Relationships and
Related Transactions".

           On  November  17,  1999,   the  Company   executed  a  memorandum  of
understanding  with Telic.net  whereby the parties entered a strategic  alliance
under which  Telic.net  will  provide  enhanced  services to the Company and the
Company will acquire from Telic.net  gateways at Telic.net's cost for use by the
Company's  customers.   Although  a  non-binding  agreement,  the  parties  have
expressed  the wish to maintain the alliance as long as it is beneficial to each
of them.  The Company  maintains the right to purchase  hardware  elsewhere.  In
addition,  the Company  can license  certain of  Telic.net's  software,  acquire
certain  source  codes and  Telic.net  will  modify the  Company's  gateways  to
accommodate  the  Company's  billing  system and call flow.  It is intended that
Telic.net will provide full network  support for the Company  thereby  advancing
the Company's timetable for full integration of its network. See Part I, Item 1.
"Description of Business - Business of Issuer - Internet Telephony

           Effective  November  29,  1999,  the Company  executed an  engagement
letter  with  McGinn,  Smith  & Co.,  Inc.  ("McGinn")  to act as a  broker  and
financial advisor to the Company in the private placement of up to $5 million of
the Company's securities.  Under the agreement McGinn is to use its best efforts
with regard to such  placement.  The  agreement is effective  through  March 24,
2000. From the date of the engagement  letter through March 24, 2000, McGinn has
the exclusive  right to offer the Company's  securities.  In the event McGinn is
successful,  it will  receive a fee equal to ten  percent  (10%) of the first $5
million  and eight  percent  (8%) of any amount in excess of $5 million and will
receive three year  warrants  equal to 2% of the proceeds with a strike price of
125%  of the bid  price  on the  date  of  closing.  Such  warrants  are to have
piggy-back  registration  rights.  Upon execution of the engagement  letter, the
Company was required to issue 10,000 shares of its restricted  Common Stock as a
non-refundable  Retainer/Investment  Banking fee and the Company is obligated to
reimburse  McGinn for pre- approved  expenses.  The Company has not accepted the
terms of any private  placements  under this Agreement.  For such issuance,  the
Company  relied  upon  Section  4(2)  of  the  Act  and  Rule  506  and  Section
359(f)(2)(d) of the New York Code. See Part I, Item 1.  "Description of Business
- (b) Business of Issuer - Employees  and  Consultants";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

           On December 9, 1999, the shareholders  adopted an executive incentive
stock award plan under which  1,000,000  are reserved for grants under the plan.
The plan takes  effect on January 1, 2000 and  terminates  on December 31, 2005.
Under  the  plan,  options  can  be  granted  to  select  employees,   officers,
executives, directors and consultant and advisors to the Company. It is intended
that all options be granted at fair market value on a particular date determined
by the

                                        8

<PAGE>



Compensation and Option Committee which is made up of James Howson, Director and
Chief Executive Officer and Russell Watson,  Director;  however,  a lesser price
may be set by such Committee.  The exercise period for the options is determined
by the Committee  but cannot exceed six (6) years.  Pursuant to the terms of the
approved  plan,  the Board of Directors is authorized to alter,  amend or modify
the plan under certain  conditions.  The Board of Directors  approved a modified
plan on February 28, 2000 that  maintains  the key features of the approved plan
as  required.  Part  III,  Item  10.  "Executive  Compensation  -  Employee  and
Consultants Stock Option Plans";  and Part III, Item 12. "Certain  Relationships
and Related Transactions".

           Effective  February  16,  2000,  the Company  executed an  engagement
letter with Delano Group  Securities LLP ("Delano") to act as a placement  agent
and  financial  advisor to the  Company in the private  placement  of up to $2.5
million of the Company's  securities.  Under the agreement  Delano is to use its
best efforts with regard to such  placement.  Delano was listed with McGinn as a
broker with whom they were working prior to the McGinn engagement letter. In the
event Delano is successful, it will receive a fee equal to seven percent (7%) of
the proceeds, a non-accountable expense allowance equal to three percent (3%) of
the proceeds and five year warrants to purchase  100,000 shares of the Company's
Common  Stock at a strike  price  equal to 120% of the lowest  closing bid price
during the five (5) trading days prior to the closing. Such warrants are to have
piggy-back  registration  rights.  The Company has not accepted the terms of any
private  placements  under this Agreement.  See Part I, Item 1.  "Description of
Business - (b) Business of Issuer - Employees and Consultants".

           See (b) "Business of Issuer"  immediately  below for a description of
the Company's business.

(b)        Business of Issuer.

Background of the Industry

           The $88.6  billion U.S.  long  distance  industry is dominated by the
nation's three largest long distance providers,  AT&T,  MCI/WorldCom and Sprint,
which together generated approximately 80.3% of the aggregate revenue of all U.S
long distance  interexchange  carriers in 1997.  Other long distance  companies,
some with national capabilities, accounted for the remainder of the market.

           As published on the Federal Communications Commission ("FCC') Website
located                                                                       at
www.fcc.gov/Bureaus/Common_Carrier/Reports/FCC-State_Link/socc/97socc.pdf., toll
service  revenues of U.S. long distance  interexchange  carriers have grown from
$38.8 billion in 1984 to $88.6  billion in 1997.  While  industry  revenues have
grown at a compounded  annual rate of 6.6% since 1984,  the revenues of carriers
other than AT&T,  MCI/WorldCom  and Sprint  have grown at a  compounded  rate of
33.7% during the same period.  As a result,  the  aggregate  market share of all
interexchange  carriers other than AT&T,  MCI/WorldCom and Sprint has grown from
2.6% in 1984 to 19.8% in 1997. During the same period,  the market share of AT&T
declined from 90.1% to 44.5%.

                                        9

<PAGE>



           Prior  to the  Telecommunications  Act  (the  "TC  Act"),  signed  by
President  Clinton on February  8, 1996,  the long  distance  telecommunications
industry  had been  principally  shaped by a court  decree  between AT&T and the
United States Department of Justice, known as the Modification of Final Judgment
(the  "Consent  Decree") that in 1984  required the  divestiture  by AT&T of its
twenty-two  (22) Bell operating  companies and divided the country into some two
hundred (200) Local Access and Transport  Areas, or "LATAs." The twenty-two (22)
operating companies,  which were combined into seven (7) Regional Bell Operating
Companies,  or "RBOCs", were given the right to provide local telephone service,
local  access  service to long  distance  carriers  and  intraLATA  toll service
(service within LATAs),  but were prohibited  from providing  interLATA  service
(service between LATAs).  The right to provide  interLATA service was maintained
by AT&T and the other carriers.

           To encourage  the  development  of  competition  in the long distance
market,  the Consent Decree and the Federal  Communications  Commission  ("FCC")
require  most Local  Exchange  Carriers  ("LECs") to provide all  carriers  with
access to local  exchange  services that is equal in type,  quality and price to
that  provided to AT&T and with the  opportunity  to be selected by customers as
their preferred long distance carrier.  These so-called equal access and related
provisions are intended to prevent preferential treatment to AT&T.

           On  February  8, 1996,  the  President  signed  the TC Act,  which is
intended to introduce more competition to the U.S.  telecommunications  markets.
In addition to  codifying  the  provisions  of the  Consent  Decree,  the TC Act
codifies LECs equal access and  non-discrimination  obligations  with respect to
the local services market by requiring LECs to permit  interconnection  to their
networks  (i.e.  customer's  telephone  or modem  which  connects to the service
provider's equipment) and establishing among other things, LECs obligations with
respect to access,  resale,  number  portability (the capability of individuals,
businesses,  and organizations to retain their existing telephone  number(s) and
the same quality of service when  switching  to a new local  service  provider),
dialing  parity (the duty to provide  dialing  parity to competing  providers of
telephone exchange service and telephone toll service and the duty to permit all
such providers to have non-discriminatory  access to telephone numbers, operator
services,  directory  assistance  and directory  listing,  with no  unreasonable
dialing  delays),  access to  rights-of-way  (the  duty to afford  access to the
poles,  ducts,  conduits and  rights-of-way of a LECs to competing  providers of
telecommunications  services at the same rates and on the same terms afforded by
the LECs, and mutual compensation. In essence, the TC Act codifies the LECs duty
to provide to independent  service providers (such as the Company) access to the
LECs network under the same terms and  restrictions to which the LEC is subject.
The TC Act  allows  the  Company to compete  with  previously  established  long
distance and local  telephone  providers  under the same terms and conditions as
those to which the providers are subject.

           Regulatory,  judicial and technological factors have helped to create
the foundation for smaller  companies to emerge as competitive  alternatives  to
AT&T, MCI/WorldCom and Sprint for long distance telecommunications services. The
FCC requires that AT&T not restrict the resale of its services,  and the Consent
Decree and regulatory  proceedings have ensured that access to LECs networks are
in most cases, available to all long distance carriers.

                                       10

<PAGE>



General

           The  Company  was  formed  in  February  1997  and had  little  or no
operations  until  March  1998,  when it  acquired  IPVCDE.  At the  time of the
acquisition, IPVCDE principally was involved in developing its MultiCom Business
Management  Software.  Such software was developed by Anthony Welch,  the Senior
Vice President of the Company.

           With the  acquisition of INS in April 1999,  the Company  intended to
gain licenses to provide telecommunications  services. INS currently is licensed
in  thirty-one  (31) states and the District of Columbia  and is pending  tariff
licensing in one other  state.  INS is a  switchless  reseller of long  distance
telephone services.  At the time of the acquisition of INS, the Company believed
that it was acquiring the CIC Code designated 10-10-460. As result of the audit,
there appeared to be a question of whether INS gained title to the CIC Code and,
in the event that it did not,  the Company  resolved to unwind the  acquisition.
Just prior to filing its Form 10SB in  November  1999,  it was  determined  that
there was no clear link between the ownership of the CIC Code and INS. Therefore
the  Company  voted to unwind  the  transaction  ab initio  and to  rescind  the
issuances made under the acquisition and the employment  agreements.  While such
CIC Code is not  operational at this time, if such title issue had been resolved
and if the  Company  elected  to make such  service  operational,  it would have
allowed the Company to diversify  into  distinct  segments of the long  distance
market not currently  provided by the Company.  INS has instituted  suit against
the Company.  See Part I, Item 1. "Description of the Business - (b) Business of
the  Issuer  -  Government  Regulation  -  State;  and  Part I,  Item 3.  "Legal
Proceedings."

           Today,  the Company focuses its attention on Internet  telephony.  In
the fast moving world of  communications,  especially  Internet  telephony,  the
companies  with systems in the market are currently  establishing  both open and
closed systems. IPVC has developed an open system which it believes will have an
edge on closed systems. In a closed system, the provider is limited to receiving
calls only. In an open system, the provider can both send and receive calls from
any other telephone carrier in the market.

           With  the  meteoric  rise of the  Internet  (which  is  predicted  to
continue at a staggering rate), the Company believes that Internet telephony can
provide cost savings to the consumer when such  telephony  services are provided
by a small Internet telephone company providing this service.  Smaller companies
are able to compete with large established  telecommunications companies in this
market  because it is easier for them to assimilate  new technology and to adapt
and make changed as they are developed.  The Company  believes that its billing,
management  network and marketing  programs give it a competitive edge. AT&T and
MCI currently are not utilizing Internet telephony.

           As the  Internet  telephony  market  continues  to grow,  which  many
industry  analysts  predict  it will,  it is an area that the large  traditional
telephone companies will certainly look to enter, probably through acquisitions.
The Company believes that with its ever-growing installed client base, a network
of customers,  its developing  international  presence and the software which it
has developed, tested and implemented,  IPVoice could be viewed as a potentially
attractive buyout candidate.

                                       11

<PAGE>





Internet Telephony

           Traditional telephone networks give every call a nailed-down circuit.
This means that a dedicated  circuit must be utilized for the full time that the
call is connected.  Such circuitry wastes expensive  resources  because only one
person can talk at a time and also because there are breaks in the conversation.
In a normal conversation,  one person speaks while the other listens, using half
of the  capacity of the  dedicated  circuit.  At best, a  traditional  telephone
network  uses 25% of capacity  for each call.  This  significantly  inflates the
costs of making telephone calls.

           Internet Protocol ("IP") is the most significant of the communication
methods on which the Internet (and thus the World Wide Web) is based.  It allows
a packet of information  (voice,  video,  e-mail,  data, images,  etc.) to cross
multiple networks on its way to its final  destination.  Thus, instead of having
one  dedicated   circuit  for  a  call,  the  entire  network  is  shared.   The
"conversation"  (voice,  data,  images,  video,  etc.) is split  into many small
packets  and each  packet  is sent  down  whichever  path is open at that  time.
Packets are reassembled at the destination. Until recently, packet switching was
very slow. New technology  can zip packets around  networks at lightning  speed.
Fast packet  networks will make voice sound as good (and  possibly  better) than
the circuit-switched voice networks used currently.

           Since its inception, the Company's MultiCom system has been installed
and run in a carrier-  grade  switching  environment to interact with voice over
the Internet applications.  It is marketed under the product name of TrueConnect
Gateways ("Gateway").  By introducing carrier-grade business management into the
marketplace,  IPVoice is poised to take advantage of the explosive  potential in
Internet telephony.  IPVoice is in the final stages of developing products which
allow  companies and  individuals to route their phone calls,  faxes,  and other
data across the Internet at substantial  cost savings with limited  sacrifice of
voice transmission quality.

           IPVoice  has  proprietary  rights in  state-of-the-art  software  and
hardware  solutions  which it believes will bridge the gap between the telephone
and the Internet. The Company's technology includes billing,  management network
and marketing programs.

           The hardware  technology  to route calls over the Internet  (Internet
Telephony)  has existed  since  August  1998.  It avoids  traditional  telephone
networks,  and is faster,  more direct and efficient.  These factors  ultimately
result in cheaper call cost than traditional telephone networks.

           Competition  in  the  industry  has  been  focused  on  the  software
applications necessary to switch an Internet call.

           The business of telephone  companies  is to sell  minutes.  Blocks of
minutes represent the commodity of the industry. The more minutes you can switch
through your network switches,  the more money you make. Under traditional phone
networks,  a call  from a home to New  York  City  will  pass  through  switches
belonging to a local provider near the home, a regional provider, a

                                       12

<PAGE>



national  provider,  a second  regional  provider and the local  provider on the
other end. Each provider benefits from the "per minute charge".

           Internet  Telephony  provides the ability to leapfrog the middle men,
thereby  creating a huge  dollar  savings to the  customer,  as well as allowing
immediate monitoring of telephone services which were not available prior to the
new technology.

           The  deregulation  of the telephone  industry which resulted from the
Consent  Decree  and the TC Act  allowed  independent  companies  access  to the
lucrative telephone market. The Company's  technology can achieve savings of 30%
to 70% over circuit-switched voice for both domestic and international calls.

           The  potential  market for Internet  telephony  appears to be without
limit.  Industry  analysts have  speculated  that revenues could grow as much as
sixteen-fold  from  1995  to the  turn of the  century  and  International  Data
Corporation  ("IDC")  predicted that the IP Telephony market could be worth $560
million in 1999 and have a cumulative annual growth rate of over 382%

Products

           The Company's  products are being designed at its facilities  located
in  Phoenix,   Arizona  and  Denver,   Colorado.  Its  products  are  made  from
company-designed software and company- configured hardware, as well as materials
purchased  from a few  major  suppliers.  See Part I,  Item 1.  "Description  of
Business - (b) Business of Issuer - Sources and  Availability of Raw Materials."
In the first  quarter of 1999,  the  Company  commenced  operation  of its first
Gateway in Hong Kong. Its Gateways now are installed in London, New York and Los
Angeles.

           The launch of its Gateway  product,  follows three years of extensive
research and development, field-testing and trials of the MultiCom system, which
is the business management software behind the Gateway.  The Gateway bridges the
public telephone system with the Internet and is able to conduct real-time, full
duplex,  high quality  two-way voice  communications  over the  Internet.  It is
anticipated  that this  method  will  produce  substantial  savings  compared to
standard  long  distance  services.  The Company  currently  is  completing  the
development of its next generation of IP Telephony  Gateways which it has called
SuperConnect.  SuperConnect  will  provide the  ability for fax and  "softphone"
capabilities.  "Softphone"  is  software  within  a  computer  that  allows  the
placement  of calls  without a  telephone  through the use of a  microphone  and
speaker.

           To support its Gateway  product,  the Company has  developed  several
proprietary products that allow the Company and its distributors to offer a full
solution in Internet  Telephony.  These products  include:  (i) MultiCom,  which
offers a complete order entry, billing,  customer service,  agent management and
switching network management system for telecommunication  businesses worldwide;
and (ii)  AuditRite,  a software  module add-on for the MultiCom  system,  which
allows MultiCom to read and interpret carrier-supplied data-tapes. The AuditRite
system provides a powerful tool for analyzing call patterns and finding possible
errors in a vendor's billing.

                                       13

<PAGE>



           The Company also has developed  TrueWeb,  a Web-browser  interface to
MultiCom,  which the Company  believes will change the way businesses  function,
when  introduced  to the world of IP Telephony.  TrueWeb is a complete  business
management  system  available  over the Internet and is scheduled for release in
the first half of 2000. In addition, the Company plans to develop PCTruePhone, a
software package for softphoning and Click 'N Call, a software package that will
allow a  business  have  visitors  to its  website  connect  immediately  to the
business  simply by clicking a display  button via telephone or PC at no cost to
the visitor.

           The  Company  has applied for trademark protection for several of its
product names.  See Part I, Item 1.  "Description  of Business - (b) Business of
Issuer - Patents, Trademarks and Copyrights."

           With the new technology,  software  applications  control  everything
from routing to billing.  Many companies entering the industry have concentrated
on software which simply  switches the minutes  across the network,  without any
concern as to how they will manage the network,  conduct  billing and  implement
feature  functionality.  The  Company's  MultiCom,  AuditRite,  TrueConnect  and
SuperConnect   platforms   were   designed  to  handle  the   expansion  of  the
manageability, billing, design upgrades and service options as future technology
develops.  The Company protects itself against pirating by randomly changing its
source code on its software, up to four times daily.

           The  company  believes  that it has a twelve  (12)  month  advance on
competing  companies.  Lucent  Technologies Inc.  ("Lucent") has begun buying up
companies which it will use to develop Internet Telephony capabilities.  Through
the efforts of its President, Barbara S. Will, a former MCI marketing executive,
the Company has established its network and has begun providing newer and better
services which it believes can compete even with major players such as Lucent in
the field.

           IPVC software includes:

           Real-Time   Billing  -  Not  currently  offered  by  other  telephone
companies,  real-time  billing  provides a customer  with the  ability to secure
reports on the  volume of calls,  locations  called,  exact  amount  owed and it
provides a host of other features.

           Full Feature Functionality - IPVC can add services to its software at
will, as a customer  online or when requested.  Traditional  phone companies are
saddled  with huge costs and  implementation  time,  as they  update each switch
individually  across  their  network.  IPVC can update its entire  international
network from its home base.

           Unrivaled  Agent  Control  - A  single  agent  can sit in  front of a
Gateway terminal and control the entire operation.  Moreover,  IPVC can directly
control  the  entire  network  from its  main  office  in the U.S.  This has the
capability to add and service  customers  from its home base without the need of
onsite installation.


                                       14

<PAGE>



           IPVC's software can switch through multiple  networks,  both Internet
and traditional, giving it a universal application. To the best of the Company's
knowledge,  no other  stand-alone  switch can do this.  The  Company's  Gateways
employ an open  system,  which means that the Gateways can both send and receive
calls from any other telephone carrier in the market.  Other telephone companies
are limited to receiving calls only.

           IPVC's  Gateway  switches  cost a partner from $55,000 for a domestic
installation  and $65,000 for an  international  installation and up to $135,000
installed (with volume discounts for multiple units).  In addition,  cost to the
partner  can be even less if it  installs  its unit or units  itself.  A single,
similar  traditional  switch,  with all the  attendant  hardware and support for
services and billing functions, would cost anywhere from $500,000 to $5 million.

           The MultiCom  software  allows for the use of prepaid  debit card and
travel  calling  card  functions  which are already  built into the system.  The
software modules have been designed to work seamlessly and efficiently with each
other,  to provide  the most  extensive  and well  thought  out  approach to the
business end of the technology.

           Given its technology, IPVC's business plan is simple and flexible. It
can set up its own switches, or partner with a local switching business and take
a percentage  of the minutes.  Its Gateways can route calls over the Internet in
areas  where its network is  established,  or use  traditional  phone lines when
desired or  necessary  and the Company can also  procure bulk minutes at a lower
rate.

Contractual Relationships

           In order to manufacture a Gateway,  the Company currently relies upon
arrangements with Natural Microsystems Corporation ("NMS") and Telic.net.

           The  arrangement  with NMS  commenced  in  February  1998 and is on a
purchase order basis. For each shipment ordered under an invoice, the Company is
granted a sixty (60) day  evaluation  period from the date it receives  from NMS
both hardware and the operating software for the Gateways. After such sixty (60)
day period, the Company may purchase the product, or ship it back to NMS with no
further obligation.

           On  November  17,  1999,   the  Company   executed  a  memorandum  of
understanding  with Telic.net  whereby the parties entered a strategic  alliance
under which  Telic.net  will  provide  enhanced  services to the Company and the
Company will acquire from Telic.net  gateways at Telic.net's cost for use by the
Company's  customers.   Although  a  non-binding  agreement,  the  parties  have
expressed  the wish to maintain the alliance as long as it is beneficial to each
of them.  The Company  maintains the right to purchase  hardware  elsewhere.  In
addition,  the Company  can license  certain of  Telic.net's  software,  acquire
certain  source  codes and  Telic.net  will  modify the  Company's  gateways  to
accommodate  the  Company's  billing  system and call flow.  It is intended that
Telic.net will provide full network  support for the Company  thereby  advancing
the Company's timetable for full integration of its network.

                                       15

<PAGE>



           Each of the Company's Gateways operates as a transporter  between the
incoming carrier (access) and the outgoing  termination  (egress).  The Gateways
can be installed  in customer  locations or under  co-location  agreements.  The
Company may construct some of its own locations in the future.

           Access/Egress  Carriers (Local Providers):  Carriers provide IPVC the
ability to originate  and  terminate  calls across their  traditional  telephone
networks.  In addition,  the Company purchases  wholesale minutes from them. The
Company  can  acquire  such  services  from a  Local  Bell  Company  or  from an
independent.

           In June 1999, the Company  entered into an agreement with ICG Telecom
Group,  Inc. ("ITG") for local exchange  service.  The term of the contract is a
period of three (3) years,  although  it is  terminable  by IPVC  earlier in the
event that ITG raises its prices  twenty  (20%) above the amounts  stated in the
contract. In addition,  in the event IPVC wishes to purchase  telecommunications
services from a third party in ITG's areas of service,  IPVC must first offer to
purchase like services from ITG.

           In July 1999,  the Company  entered  into an  agreement  with RSL Com
U.S.A.,  Inc.  ("RSL") for the purchase of wholesale  long distance  minutes for
domestic  and  international  calls..  The term is for a period of  twelve  (12)
months and may be  terminated  by either  party upon  thirty  (30) days  written
notice.  The Company is  required  to purchase a minimum of 100,000  minutes per
month.

           In August  1999,  the Company  entered  into an  agreement  with Star
Telecommunications,  Inc. for telephone  communications between its locations in
New York and Los  Angeles  and the  outbound to  termination  points  around the
world. The initial term is for six (6) months and it is automatically  renewable
on a month to month basis .

           In August  1999,  the  Company  entered  into an  agreement  with ILD
Communications,  Inc. ("ILD") for switching services and long distance wholesale
minutes.  The  agreement  is for a term of one  (1)  year  and is  automatically
renewable.

           Internet (Bandwidth):  Internet  bandwidth  provides the Company with
the ability to transmit and receive information utilizing IP technology.

           In June 1999,  the Company  entered  into an  agreement  with Level 3
Communications, LLC ("Level 3") for wholesale bandwidths. The contract is for no
defined  period  of time and the  terms of each  order  are  governed  by both a
separate  Customer Order Form which is filled out for each  individual  order as
well as by the original agreement signed in June 1999.

           In August,  1999,  the Company  entered  into an  agreement  with MCI
WorldCom  Technologies,  Inc.  for  use  of  its  UUNET  network  for  wholesale
bandwidths. The contract is for a term of three (3) years. In December 1999, the
Company  entered  into an  agreement  with  UUNET  to  provide  hosting  for the
Company's website and e-mail facilities. The Company is billed

                                       16

<PAGE>



monthly for these  services and this  arrangement  replaces  the one  previously
established on behalf of the Company by INS.

           Gateway Locations.

           The Company  has entered  into a series of  agreements  for  customer
locations of its Gateways.

           In March 1999, the Company entered into a TruePartner  Agreement with
Teleco  Service  International,  Inc.  ("Teleco"),  wherein the Company  granted
Teleco the exclusive to market,  advertise  and sell the Company's  products and
services in China,  Nicaragua,  El  Salvador,  Guatemala,  Honduras  and Panama.
Teleco and IPVC will share all revenues  resulting from the proceeds of sales in
the  Teleco  territory.  The term of the  agreement  is for a period  of two (2)
years. Due to non-performance, Teleco lost the rights to China and Panama.

           In March 1999, the Company entered into a TruePartner  Agreement with
Billion  Telecommunication  Services,  Ltd.  ("Billion"),  wherein  the  Company
granted Billion the exclusive right to market,  advertise and sell the Company's
products  and services in Hong Kong and Taiwan.  As payment for these  services,
IPVC must pay Billion  commissions  on all sales of the  Company's  products and
services.  The term of the  agreement is for a period of three (3) years.  Under
the  agreement,  Billion  can  acquire  the  rights to China as well.  The first
Gateway was delivered to Billion and is in the demonstration stage.

           In May 1999,  the Company  entered  into an agreement  with  FirstNet
Telephony Ltd. ("FirstNet"),  wherein the Company granted FirstNet the exclusive
right to market,  advertise  and sell the  Company's  products  and  services in
London and  Manchester,  with a right of first  refusal in the  remainder of the
United Kingdom.  As consideration for these services by FirstNet to the Company,
FirstNet is entitled to purchase  Company  products  and services at a wholesale
rate.  The term of the agreement is for a period of two (2) years.  The FirstNet
Gateway  was  delivered  in  October  1999 and this  installation  currently  is
completed.

           In July 1999,  the Company  entered into an agreement  with MetroPlus
Communication  Technology,  Inc.  ("MetroPlus"),  wherein  the  Company  granted
MetroPlus  the  exclusive  right to  market,  advertise  and sell the  Company's
products and services in certain  cities in Canada,  Washington  and Oregon.  As
consideration  for these  services by  MetroPlus  to the  Company,  MetroPlus is
entitled to purchase  Company products and service at a wholesale rate. The term
of the agreement is for a period of three (3) years.  No date has been scheduled
for this installation.

           IPVC is retaining  the rights for New York and Los Angeles,  where it
has  installed  two (2)  Gateways  in each city.  These  sites are to be used as
demonstration  sites for sale of the Company's  network.  In January  2000,  the
Company  entered into a three (3) year  equipment  lease with IIP. IIP purchased
three (3) Gateways from Telic.net for  installation in New York and Los Angeles.
The Company pays $3,342.26 per month under the lease.  The Company has an option
to renew the lease for an addition term on similar terms and  conditions and has
the option to

                                       17

<PAGE>



purchase the  equipment at the end of the initial term for  $66,946.77 or at any
time during the lease for $66,946.77  plus all outstanding  lease payments.  IIP
provides  financial and consulting  services for the Company and has purchased a
number of the Company's  shares under warrants granted as part of its consulting
agreement.  The Company believes that the lease arrangement with IIP is at least
as favorable  as it could have  secured  from an outside  third party in an arms
length transaction.

           The Company  previously had entered one agreement for  co-location of
its Gateways.

           In  February  1999,  the  Company  entered  into  an  agreement  with
BluegrassNet ("Bluegrass"), wherein the Company located one of its Gateways. The
agreement  was for a term of one (1) year.  The Company  paid $250 per month for
each server at the location. This site is no longer operational and was used for
research and development purposes.

           The Company  secures  Gateway  sales and sales of other  products and
services,  as  well as  assistance  in the  acquisition  of  wholesale  minutes,
co-locations and carriers through a series of agency agreements.

           In July 1998,  the Company  entered into an agreement  with Armstrong
wherein  the  Company  granted  Armstrong  the  non-exclusive  right to  market,
advertise and sell the Company's domestic and international calling services. As
payment for these services,  IPVC issued  Armstrong  warrants to purchase 50,000
shares of the Company's  Common Stock  exercisable at a price of $0.75 per share
or, at the option of IPVC,  for a total sum of $37,500 as well as commissions on
sales of the Company's products and services. The term of the agreement is for a
period of three (3) years.  See Part III, Item 12.  "Certain  Relationships  and
Related Transactions".

           In February  1999,  the Company  entered into an  agreement  with IIP
wherein the Company granted IIP the non-exclusive right to market, advertise and
sell the Company's domestic and international  calling services.  As payment for
these services, IPVC must pay IIP commissions on sales of the Company's products
and services. The term of the agreement is for a period of three (3) years.

           In March 1999, the Company  entered into an agreement with Kenneth M.
Brown ("Brown"),  wherein the Company granted Brown the  non-exclusive  right to
market,  advertise and sell the  Company's  domestic and  international  calling
services.  As payment for these  services,  IPVC must pay Brown  commissions  on
sales of the Company's products and services. The term of the agreement is for a
period of three (3) years.

           In April,  1999, the Company entered into a marketing and advertising
agreement with NG to provide marketing services to a minimum of 75,000 customers
in thirty (30) cities  designated  by IPVC within a twelve (12) month  period in
exchange for 100,000 shares of the restricted Common Stock of the Company valued
at  $103,100,  which shares must be returned if NG fails to deliver a minimum of
eight (8) cities each for a total of 75,000  customers before December 31, 1999.
In addition,  NG may earn performance  bonuses of: 50,000  restricted  shares if
eight (8)

                                       18

<PAGE>



cities are delivered  within ninety (90) days of  execution;  50,000  restricted
shares if fifteen (15) cities are delivered within one hundred fifty (150) days;
and 10,000 restricted shares for each additional city thereafter before December
31,  1999 up to 30 cities.  Further,  NG will be granted  warrants  to  purchase
30,000 shares of the Company's  restricted Common Stock exercisable for a period
of two (2) years at an  exercise  price of $2.50  per  share for every  block of
5,000 pre-  registered  customers  up to 75,000  pre-registered  customers  in a
twelve (12) month period.  For such  offering,  the Company  relied upon Section
4(2) of the Act and Rule 506 and Section 14-4- 126(F) of the Arizona  Code.  See
Part III, Item 12. "Certain Relationships and Related Transactions".

           In April 1999,  the Company  entered into a marketing  agreement with
Benae to market the  Company's  telephony  services and to register a minimum of
one  hundred  (100)  customers  in the thirty (30) cities in which IPVC plans to
offer telephony services within twelve(12) months in exchange for 200,000 shares
of the unrestricted  Common Stock of the Company valued at $206,200.  The shares
are to be returned to the Company if the minimum is not met. For such  offering,
the  Company  relied  upon  Section  3(b) of the Act and  Rule  504 and  Section
90.530(11) of the Nevada Code. See Part III, Item 12. "Certain Relationships and
Related Transactions".

Planned Additional Services

           In  addition to the sale of the  Gateways  and the  licensing  of its
software,  the  Company  plans  to  derive  its  revenues  from  the sale of the
following pre-paid services:

     -    flat-rate calling plans
     -    wholesale long distance services for other international carriers
     -    prepaid long distance calling card services
     -    corporate long distance, fax and data networking services
     -    e-commerce communications services for businesses selling products and
          services over the Internet
     -    other telecommunications applications and services


Flat-Rate Calling Plans

           The Company is in the  process of  establishing  a flat-rate  calling
plan option to be  marketed  under the name  Flat25  which will allow  unlimited
calling  between  cities in which the  Company's  Gateways are  installed  for a
single rate per month of $25.

           In  addition,  the Company has  designed a pre-paid,  flat-rate  long
distance  plan for calls  originating  from any of its  Gateways  to be marketed
under the name Flat5  which will allow calls from the Gateway to anywhere in the
mainland United States and Canada for $.05 per minute. The customer will receive
a number  to  access  the  nearest  Company  Gateway.  There  will be a one time
registration  fee  of  $25  and  the  customer  may  elect  from  three  monthly
pre-payment plans.


                                       19

<PAGE>



           Further,  the Company has designed a pre-paid flat-rate long distance
plan for calls  originating  from any of its  Gateways to be marketed  under the
name 4+4 which will allow calls from the  Gateway to  anywhere  in the  mainland
United  States  and  Canada  for $.04 per  minute  plus  calls to up to four (4)
international  countries at a 10%  discounted  rate. The customer will receive a
number  to  access  the  nearest  Company  Gateway.  There  will  be a one  time
registration  fee  of  $25  and  the  customer  may  elect  from  three  monthly
pre-payment plans.

Wholesale Long Distance Services

           The Company plans to market its Internet  telephony services to other
international  long distance carriers and wholesale  customers which have a need
for large blocks of long distance  telephone  time between  selected  locations.
Although margins at the wholesale level are lower than retail margins,  the sale
of blocks of long  distance  time to other  carriers  will enable the Company to
generate revenues with only a limited number of gateways installed.  The Company
is in the process of  pre-marketing  its  services  and has  identified  several
potential wholesale sellers of block minutes.

Prepaid Calling Cards

           The  Company  plans  to  market  prepaid  calling  cards  to  persons
traveling to  destinations  such as Mexico,  Central,  and South America,  Asia,
Europe and other countries where long distance telephone calls are substantially
more expensive than domestic long distance  telephone  calls. In September 1999,
the  Company  shipped  cards for which it  received  $50,000 in revenue  and has
received a total of $261,279 in revenues  through  December 31, 1999. Based upon
expressions  of interest by the current buyer and others,  the Company  believes
that this market can produce between $10,000 and $50,000 per month in revenues.

           A typical  long  distance  telephone  call from Mexico to  Vancouver,
British Columbia, made from a public payphone in Mexico can cost more than $2.00
per minute, and frequently surcharges are levied by third party credit card call
processing  companies located outside of Mexico.  However, due to competition in
North  America,  rates for calls from North America to Central and South America
are  significantly  less  expensive  than  calls  made  from  this area to North
America.

           The  pre-paid  calling  cards  will be sold  through  travel  agents,
tourist agencies,  airline ticketing offices,  tourist agencies, tour companies,
car rental  agencies and hotel personnel in  denominations  of $10, $20, $30 and
$50 and an automated  voice response system is planned to enable card holders to
add time to their  calling  cards by  charging  their  credit  card while on the
phone.

           The Company's  calling card will provide  instructions for the use of
the  Company's  system.  To place a long  distance  call to North  America,  the
cardholder  dials a local  access  number  (or an 800  number if an  originating
gateway does not exist in the local  calling  area) and is then prompted to dial
the destination number as well as the cardholder's calling card number. The call
is then

                                       20

<PAGE>



routed to the  nearest  originating  gateway.  After  reaching  the  originating
gateway the call is  transmitted  over the  Company's  network to a  terminating
gateway or the least cost route to the destination number. Once the call reaches
the terminating gateway the call is then switched to the local telephone network
and is routed to the destination number.

           Travelers making long distance calls from a local calling areas which
do not have originating  gateways will nevertheless be able to use the Company's
calling cards.  However, the Company's operating margin will be less since these
calls must be routed via an 800 number to a distant originating gateway.

           By  establishing   gateways  in  North  America  and  select  foreign
countries,  the Company believes it can service a large and identifiable  market
of travelers with  cost-effective  prepaid calling cards to use in placing calls
to North America.

Corporate Services

           The Company also plans to market its services on a selective basis to
small-to-mid  sized  corporate  customers  who  need a  cost-effective  means of
combining  long  distance  voice,  fax and video  communications  between  their
international  offices.  The  Company  plans to begin  marketing  its  corporate
Internet  Telephony  services to medium sized US and Canadian  corporations  who
operate branch  offices or  subsidiaries  in the foreign  countries in which the
Company operates its Gateways.

E- Commerce Services

           The Company's software also will support "web-to-phone" and "call-me"
services.

           "Click 'N Call"  connections  enable the users of  multimedia  PCs to
establish a voice conversation with the owner of the website or their designated
customer service representative.  The Company will introduce this new capability
to website  owners and  developers  in those  markets in which the  Company  has
gateways and demand for e-commerce services is increasing.  The Company believes
that this service will  contribute to the  development of sales made through the
Internet.  "Click 'N Call"  provides  new  capabilities  for  customers to speak
directly  with sales  people and  reservation  agents  while they are online and
reviewing the content of a particular website.  "Click 'N Call" personalizes the
experience  of shopping  over the  Internet and provides a new level of customer
service.

           PCTruePhone is the Company's  planned software for softphoning.  This
software will allow users to place telephone calls to any telephone in the world
using their computer and a connection to the Internet.

           In  addition  to  developing  and  marketing   these   communications
applications, the Company will also evaluate investing in or acquiring companies
engaged in the development of innovative IP software and network applications.

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<PAGE>



Business Strategy

           The Company intends to attempt to corner the market with its products
since many are the first of their kind and competitors will be required to spend
years in research to develop similar  products.  IPVC's technology is capable of
transforming  competitors  into  customers,  as IPVC's  billing  and  management
software  can  communicate  with other  platforms  due to its own open  platform
design.  Current  competitors  lack a  critical  component  to their  solutions:
effective  data-  management  and  billing.  IPVC is  capable of  providing  the
following unique features:

          1.   IP Telephony solutions and a mature, real-time billing system for
               ease of use, affordability and quality.

          2.   Real-time remote access and manageability of information.

          3.   IP telephony technology,  Internet remote-access technology and a
               comprehensive   order-entry   and  invoicing   system  which  can
               instantly address and secure new marketplaces and opportunities.

           The Company has targeted international markets and supports its sales
efforts by participating in trade shows targeting the telecommunication industry
and  large  businesses.   The  Company  also  utilizes  professional   articles,
peer-reviewed  studies,  direct calls and a comprehensive  marketing campaign in
its sales.

           The Company has already executed  TruePartner  agreements for Gateway
installations in the following locations:

          Billion: Hong Kong and Taiwan (China was originally granted to Teleco,
          but  Billion  now has the option to for it).  The  Billion  Gateway is
          operational and in the demonstration stage.

          FirstNet: London and Manchester, England. This Gateway was shipped and
          installed and is currently operational.

          MetroPlus:  certain major Canadian cities, Oregon and Washington. This
          Gateway has not been scheduled for shipment.

           IPVC is retaining  the rights for New York and Los Angeles,  where it
has  installed  two (2)  Gateways  in each city.  These  sites are to be used as
demonstration sites for sale of the Company's network.

           In  addition,  the  Company  has  entered  into a  series  of  agency
agreements for the sale of its Gateways and other products and for assistance in
the acquisition of wholesale  minutes,  co- locations and carriers.  The Company
intends to seek  associations  with  professional  agents who will help  promote
their products and services.

                                       22

<PAGE>



Marketing and Distribution

Marketing

           According to industry sources, the global  telecommunications  market
could generate  revenues in excess of $250 billion  annually.  According to IDC,
international switched  telecommunications  traffic grew from 28 billion minutes
of use in 1989 to 81.8 billion minutes in 1997 and is projected to reach between
approximately 128.7 and 158.6 billion minutes by 2001. Also according to IDC, in
the United  States,  residential  long  distance  calls  represent a $67 billion
dollar  market.  In its  infancy  today,  the IP  telephony  services  market is
estimated  to increase to $1.8  billion by the year 2001.  Due to  deregulation,
competition  has reduced  rates for both business and  residential  calls placed
within North America.  However this is not the case for  international  calls to
certain  countries where higher per minute rates are common.  The  international
telecommunications industry is growing rapidly due to:

            -        deregulation
            -        privatization
            -        expansion of telecommunications infrastructure
            -        technological improvements
            -        globalization of the world's economies; and
            -        free trade

           In  addition  to  the  growth  in  the  telecommunications  industry,
significant  improvements  have occurred in the compression and  transmission of
voice over the Internet over the last several  years.  The quality of service of
Internet  Telephony  is now  capable  of being  equivalent  to that of a digital
cellular phone or a quality  analog cell phone  connection.  Internet  Telephony
technology is evolving continuously and it is expected that further improvements
will allow it to rival conventional  telephony  networks.  The Gateway equipment
being deployed by the Company utilizes the newest digital signal  processing and
error  correction  technologies  for improved voice sampling and compression and
reduced  latency.  Latency is the time spent waiting for a signal to travel from
one  Gateway  to another  and it is  affected  network  conditions  between  the
Gateways  as well as the  processing  time  required  to create  the  signal for
transmission.  These  technologies  enable the Company to provide high  quality,
commercial voice services with carrier class reliability  (99.999%  availability
of service).  Carrier class reliability is determined by how often the system is
operational.  It is the  Company's  goal to have at least the same if not better
reliability  as those  systems  commonly  used by the  large  telecommunications
companies such as AT&T and MCI.

           The Company  plans to market its  products  and  services  using four
methods. The first of those methods is to rely upon its agreements for marketing
in the agent direct True Partner  Master  Distributorship  program,  such as the
agreements it has with NG, Armstrong,  IIP and Brown. There can be no assurances
that the current agreements will continue, that the efforts of such parties will
be successful or that the Company will be able to develop additional  agreements
in the  future.  The second  method of  marketing  the  Company's  products  and
services is through outside

                                       23

<PAGE>



telemarketing  agencies.  These firms are paid on a commission  only basis.  The
Company has not engaged any such firm to date and there can be no assurance that
they will engage one,  or that if engaged,  that such firm would be  successful.
The third method of marketing the Company's  products and services  utilizes its
own sales force.  The Company's sales effort currently is headed by Ms. Will who
has extensive  experience in the  telecommunications  business.  There can be no
assurance  that  these  endeavors  will be  successful.  The  fourth  method  of
marketing the Company's products and services utilizes the Internet. The Company
currently markets and distributes its products and services through the Internet
utilizing its  IPVoice.com  web page.  There can be no assurances  that such web
page will generate sufficient interest as a marketing tool.

           The Company believes these four marketing methods will be adequate to
sustain the Company now and for the foreseeable future.

Distribution

           The Company  distributes  its  products  through  agreements  for its
Gateway  locations  with Teleco,  Billion,  FirstNet and  MetroPlus  and through
agency  agreements  with Armstrong,  IIP, Brown, NG and Benae.  The Company also
believes  that its  strategic  alliance  with  Tel.net  will  enhance the market
potential for its products.  See Part I, Item 1.  "Description of Business - (b)
Business of Issuer - Internet Telephony - Contractual Relationships."

           The  Company  intends to seek other  professional  agents who wish to
promote its products.

Status of Publicly Announced New Products and Services

           TrueConnect  Gateways are the Company's  in-house-produced  telephony
gateways  for the  delivery of IP  Telephony  services.  This system is based on
Natural  MicroSystems  hardware  and is  controlled  by the  Company's  in-house
developed software that controls the hardware as well as interfaces to MultiCom.
TrueConnect  Gateways are being  deployed now.  Enhancements  are made on an "as
needed" basis.  The Company is completely  development of its next generation of
Gateway designated SuperConnect.

           MultiCom  is a complete  telecommunications  and  network  management
system  addressing  every aspect of operating and managing a  telecommunications
network and operations which provides a complete "backoffice" solution. MultiCom
provides a low barrier of entry for partners and  alliances of the Company as it
does not require  special  computers  for access.  The  Company,  as well as its
partners,  can access  MultiCom and manage their  business  operations  from any
location at any time of day.  The  MultiCom  Data  Management  platform is fully
functional and complete. Enhancements are made on an "as needed" basis.

           AuditRite  is a software  module  add-in  for  MultiCom  that  allows
MultiCom to read and interpret carrier-supplied data-tapes. AuditRite provides a
tool for  analyzing  call  patterns  and finding  possible  errors in a vendor's
billing. AuditRite system is fully active.


                                       24

<PAGE>



           TrueWeb is a  soon-to-be-released  web-browser interface to MultiCom.
Included  within the  functions of this  interface is its ability to display and
interact  with the user in his or her  native  language,  including  the  native
alphabet. The Company believes the TrueWeb multi-lingual capability to be unique
to the Company. TrueWeb is currently in alpha-production. The Company expects to
release the initial version by the second quarter 2000.

           PCTruePhone and Click 'N Call are in development. The Company expects
to release the initial versions in the third or fourth quarter of 2000.

Competition

           Two significant  barriers to entry in the  traditional  long distance
telephone market are size (minimum efficient scale of operations) and regulatory
constraints  which preclude smaller  companies from gaining  significant  market
share. Internet telephony effectively eliminates or reduces these barriers since
it is presently unregulated and enjoys economies of scope and scale by using the
Internet  and  private IP networks  as a common  voice  video and data  network.
Internet  telephony will decrease barriers to entry and increase  competition in
the long distance industry.

           The  Company  believes  that its  ability to compete in the  Internet
Telephony Industry successfully will depend upon a number of factors,  including
the pricing  policies of competitors and suppliers;  the capacity,  reliability,
availability and security of the Internet telephony  infrastructure;  marketing;
the timing of introductions of new products and services into the industry;  the
Company's  ability to support  existing and  emerging  industry  standards;  the
Company's  ability to balance network demand with the fixed expenses  associated
with network capacity; and industry and general economic trends.

           The market for  telecommunications  services is extremely competitive
and  there  are a  growing  number  of  competitors  in the  Internet  Telephony
Industry.  There are many companies that offer business  communications services
and which will  compete  with the Company at some  level.  These  include  large
telecommunications  companies  and  carriers  such as  AT&T,  MCI,  and  Sprint;
smaller,  regional  resellers  of  telephone  line  access;  and other  existing
Internet  telephony  companies.  These companies,  as well as others,  including
manufacturers  of hardware  and  software  used in the  business  communications
industry such as Lucent,  could in the future develop products and services that
could  compete  with  those  of the  Company  on a direct  basis.  Many of these
entities  have far  greater  financial  and  organizational  resources  than the
Company  and  control  significant  market  share in their  respective  industry
segments.  There is no assurance  that the Company will be able to  successfully
compete in the Internet telephony Industry.

           Certain large public telephone  companies are positioning  themselves
to enter the Internet telephony market to protect their dominant domestic market
from  competition.  Many  of  these  companies  are  testing  existing  Internet
telephony  gateway  technology which at the present time has limited call volume
capabilities.  A number of companies  are waiting for gateway  manufacturers  to
introduce advanced gateways that will be able to handle larger call volumes and

                                       25

<PAGE>



provide better quality and service.

           In North America  considerable  discounting  has been  experienced in
recent years as competition  has increased.  While in many countries  outside of
North America local  telephone  companies have begun offering  discounts to very
large  business and government  customers with high call volumes,  there are few
discounts  available for individuals or small and medium sized companies.  It is
expected that competition in the United States will be led by carriers providing
low cost but high quality Internet telephony services at rates of $0.05 to $0.09
per minute.  Smaller Internet service providers and new carriers are expected to
focus primarily on international or niche markets.

           International  markets are  attractive  to smaller  carriers  and new
entrants  while  large   carriers  are  still   evaluating  the  technology  and
marketplace and contending with  competition and  deregulation in their domestic
markets.  With  international long distance rates in many countries costing well
in excess of $0.50 per minute,  the Company believes that it can earn attractive
gross  profit  margins  while  offering  service  at  substantial  discounts  to
currently available long distance rates.

           Although the Company anticipates that its primary competitors will be
other Internet telephony  companies which offer  phone-to-phone  services,  none
have as of yet  addressed  the  international  market which the Company plans to
continue to pursue with Gateway  installations  and its pre-paid  calling cards,
nor has any competitor introduced a full billing system or an integrated product
offering containing corporate and e-commerce communications services.

Sources and Availability of Raw Materials

           IPVoice  products  are  made  from   company-designed   software  and
company-configured  hardware  as well as  materials  purchased  from a few major
suppliers. They include the following:

           In February  1998,  the Company  entered into an agreement  with NMS.
Under the terms of the contract, the Company acquires both hardware and software
for its Gateways.  With regard to both hardware and software,  the Company takes
advantage of free  shipping  and a no-risk  sixty (60) day trial  period,  after
which the  Company  may  purchase  the  product,  or ship it back to NMS with no
further obligation.

           On  November  17,  1999,   the  Company   executed  a  memorandum  of
understanding  with Telic.net  whereby the parties entered a strategic  alliance
under which  Telic.net  will  provide  enhanced  services to the Company and the
Company will acquire from Telic.net  gateways at Telic.net's cost for use by the
Company's  customers.   Although  a  non-binding  agreement,  the  parties  have
expressed  the wish to maintain the alliance as long as it is beneficial to each
of them.  The Company  maintains the right to purchase  hardware  elsewhere.  In
addition,  the Company  can license  certain of  Telic.net's  software,  acquire
certain  source  codes and  Telic.net  will  modify the  Company's  gateways  to
accommodate  the  Company's  billing  system and call flow.  It is intended that
Telic.net will provide full network  support for the Company  thereby  advancing
the Company's timetable for full integration of its network.

                                       26

<PAGE>





Dependence on Major Customers

           In March 1999, the Company  entered into an agreement with Teleco for
installation of Gateways in China, Nicaragua, El Salvador,  Guatemala,  Honduras
and Panama. Teleco lost the rights to China and Panama due to non-performance.

           In March 1999, the Company entered into an agreement with Billion for
the  installation  of a Gateway in Hong Kong.  This unit is installed and in the
demonstration stage.

           In May 1999,  the Company  entered into an agreement  with  FirstNet,
wherein the Company granted  FirstNet the exclusive  right to market,  advertise
and sell the Company's  products and services in London and  Manchester,  with a
right of first refusal in the remainder of the United Kingdom. This installation
was completed in October 1999 and currently is operational.

           In July 1999, the Company  entered into an agreement with MetroPlus ,
wherein the Company granted  MetroPlus the exclusive right to market,  advertise
and sell the  Company's  products  and  services  in  certain  cities in Canada,
Washington and Oregon. The installation date has not been scheduled.

Patents, Trademarks and Copyrights

           The Company neither holds nor has applied for any patents.

           On August 18, 1998,  the Company  filed for service  mark  protection
with the United  States  Patent and  Trademark  Office  ("USPTO")  for  IPVoice,
MultiCom, AuditRite, 4Com, ICB Connect, TrueConnect and IPJack Design.

           In March 30, 1999, the USPTO issued Office Actions on MultiCom,  4Com
and  TrueConnect,  finding  that  MultiCom  could be  confused  with an existing
trademark;  finding  that 4Com's  identification  of goods was  unacceptable  as
indefinite;  and finding  that  TrueConnect  could be confused  with an existing
trademark. The Company's trademark attorney filed responses to each of these.

           On April 7 and 8, 1999, the USPTO issued Office Actions on AuditRite,
TruePartner and ICB Connect finding that AuditRite's identification of goods was
unacceptable as indefinite  finding that  TruePartner  could be confused with an
existing trademark;  and finding that ICB Connect's  identification of goods was
unacceptable as indefinite. The Company's trademark attorney has been authorized
to file responses to each of these. Responses for AuditRite and TruePartner were
filed October 7, 1999 and a response for ICB Connect was filed October 8, 1999.


                                       27

<PAGE>



           On April 23,  1999,  the  USPTO  issued  Office  Actions  on  IPVOICE
stylized and design  finding that IPVOICE  design's  recitation  of services was
unacceptable   as  indefinite;   and  finding  that  IPVOICE   stylized  was  an
inappropriate  mark since it merely  describes  the  applicant's  services.  The
response  was due  October 14,  1999.  As to the  response  filed on the IPVOICE
stylized and design finding, on December 6, 1999, the USPTO notified the Company
that it did not find the response  acceptable  and required the Company to amend
its filing.  A response is due by June 6, 2000. As to the response  filed on the
IPVOICE  stylized,  the USPTO has advised the Company that it is maintaining its
position  that  the  mark  is  inappropriate   since  it  merely  describes  the
applicant's services.

           On September 4, 1998,  the Company filed for service mark  protection
with the USPTO for IPJack. On June 7, 1999, the USPTO issued an Office Action on
IPJACK finding the drawing  unacceptable  because the mark is not typed entirely
in capital  letters.  The  Company's  trademark  attorney  filed a  response  on
December 7, 1999.

           On October 16, 1998,  the Company  filed for service mark  protection
with the USPTO for  COMMUNICATIONS  OUT OF THE BOX and COMMUNICATIONS OUT OF THE
BOX stylized.  On April 30. 1999,  the USPTO issued an Office Action finding the
mark unacceptable as indefinite. A response was filed on November 1, 1999.

           The Company is in the process of filing for service  mark  protection
with the USPTO for IPVOICE.NET, IPVOICE.COM and FLAT25.

           As to  IPVOICE.NET,  on November 8, 1999,  the USPTO issued an Office
Action finding the proposed mark was merely a descriptive  term combined with an
address. A response is due by May 8, 2000.

           As to  IPVOICE.COM,  on November 8, 1999,  the USPTO issued an Office
Action  refused the filing  stating  that the specimen did not show the proposed
mark. A response is due by May 8, 2000.

           As to FLAT25,  on November 8, 1999, the USPTO issued an Office Action
stating  that the Company  must amend to specify the common  commercial  name or
indicate the nature of the service. A response is due by May 8, 2000.

Government Regulation

Federal

           The Company has a current  license with the FCC. The Company uses the
Internet for transmission of long distance telephone calls.  Presently,  the FCC
does not regulate  companies that provide Internet  Telephony services as common
carriers or  telecommunications  service providers.  Notwithstanding the current
state of the rules, the FCC's potential  jurisdiction over the Internet is broad
because the  Internet  relies on wire and radio  communications  facilities  and
services over which these regulatory  authorities have long-standing  authority.

                                       28

<PAGE>





           In  Canada,  the  Canadian   Radio-Television  and  Telecommunication
Commission   ("CRTC")  determined  in  1998  that  Internet  Telephony  services
providers  must pay local  contribution  charges for calls  terminating on local
telephone networks,  while those calls that originate and terminate on computers
are not  subject  to these  charges.  The  possibility  exists  that  regulatory
authorities  may  one day  make a  determination  to  apply  international  call
termination fees or otherwise tariff Internet telephony.

           The Company  also will be  required  to comply  with the  regulations
regarding the  operation of its business in several  foreign  jurisdictions  and
will be subject to compliance with the  requirements of the authorities of these
locales regarding the establishment and operation of its business.

           Access  charges are  assessed by local  telephone  companies  to long
distance  companies for the use of the local telephone  network to originate and
terminate  long distance calls  generally on a per minute basis.  Access charges
have long been a source of dispute;  with long distance  companies  arguing that
the  access  rates are  substantially  in  excess  of cost and  local  telephone
companies  arguing that access  rates are needed to subsidize  lower local rates
for end user and  other  purposes.  The FCC  currently  is  considering  whether
subscriber calls to Internet  service  providers should be classified as "local"
or  "interstate"  calls.  Although the FCC to date has determined  that Internet
service  providers  should not be required to pay  interstate  access charges to
local  telephone  companies,  this decision may be reconsidered in the future if
the FCC finds  these calls to be  "interstate."  The  Company's  costs for doing
business would  increase if the Company were required to pay  interstate  access
charges.

State

           The Company is subject to varying  levels of regulation in the states
in  which  it  currently  anticipates  providing  intrastate  telecommunications
services.  The vast  majority  of the states  require  the  Company to apply for
certification to provide intrastate  telecommunications services, or at least to
register or to be found exempt from  regulation,  before  commencing  intrastate
service.  The vast  majority  of states  also  require  the  Company to file and
maintain detailed tariffs listing its rates for intrastate service.

           Many states also impose various reporting requirements and/or require
prior  approval  for  transfers  of control  of  certified  carriers,  corporate
reorganizations,  acquisitions of telecommunications operations,  assignments of
carrier  assets,   including  subscriber  bases,  carrier  stock  offerings  and
incurrence  by  carriers  of  significant  debt  obligations.   Certificates  of
authority  can  generally be  conditioned,  modified,  canceled,  terminated  or
revoked by state regulatory authorities for failure to comply with state law and
the rules,  regulations and policies of the state regulatory authorities.  Fines
and other penalties,  including the return of all monies received for intrastate
traffic  from  residents  of a state,  may be imposed  for such  violations.  In
certain states,  prior  regulatory  approval may be required for acquisitions of
telecommunications operations.

                                       29

<PAGE>



           As the Company expands its efforts to resell long distance  services,
the  Company  will  have to  remain  attentive  to  relevant  federal  and state
regulations.  FCC rules  prohibit  switching a customer  from one long  distance
carrier to another  without the customer's  consent and specify how that consent
can be obtained.  Most states have consumer  protection laws that further define
the framework within which the Company's marketing activities must be conducted.
The  Company  intends  to comply  fully with all laws and  regulations,  and the
constraints of federal and state restrictions could impact the success of direct
marketing efforts.

           The Company is not  currently  subject to any State  regulation  with
respect to its Internet related  services.  However,  there can be no assurances
that  the  Company  will  not be  subject  to such  regulations  in the  future.
Additionally,  the  Company is not aware of any pending  legislation  that would
have a material adverse effect on the Company's operations.

Effect of Existing or Probable Governmental Regulation on the Business

           As the Company's services are available over the Internet in multiple
states and foreign countries,  these jurisdictions may claim that the Company is
required to qualify to do business as a foreign  corporation  in each such state
and foreign country.  New legislation or the application of laws and regulations
from  jurisdictions  in this  area  could  have a  detrimental  effect  upon the
Company's business.

           In a report to Congress, the FCC has stated its intention to consider
whether to regulate voice and fax telephony  services provided over the Internet
as  "telecommunications"  even  though  Internet  access  itself  would  not  be
regulated.  The FCC is also considering  whether such  Internet-based  telephone
service  should be subject to  universal  service  support  obligations,  or pay
carrier  access  charges  on the same  basis as  traditional  telecommunications
companies.

           A  governmental  body  could  impose  sales  and  other  taxes on the
provision of the  Company's  services,  which could  increase the costs of doing
business.  A number of state and local  government  officials  have asserted the
right or indicated a willingness  to impose taxes on  Internet-related  services
and commerce,  including sales, use and access taxes; however, no such laws have
become  effective to date. The Company  cannot  accurately  predict  whether the
imposition  of any such  taxes  would  materially  increase  its  costs of doing
business or limit the services  which it  provides,  since it may be possible to
pass on some of these costs to the consumer and continue to remain competitive.

           If, as the law in this area develops,  the Company becomes liable for
information carried on, stored on, or disseminated through its Gateways,  it may
be  necessary  for the Company to take steps to reduce its exposure to this type
of liability through  alterations in its equipment,  insurance or other methods.
This may  require  the  Company  to spend  significant  amounts of money for new
equipment or premiums and may also require it to discontinue offering certain of
its products or services.


                                       30

<PAGE>



           Due  to  the  increasing  popularity  and  use of the Internet, it is
possible that additional laws and regulations may be adopted with respect to the
Internet,  covering issues such as content,  privacy, access to adult content by
minors, pricing, bulk e-mail (spam), encryption standards,  consumer protection,
electronic  commerce,  taxation,  copyright  infringement and other intellectual
property issues.  IPVC cannot predict the impact, if any, that future regulatory
changes or developments may have on the Company's business, financial condition,
or results of operation.  Changes in the regulatory  environment relating to the
Internet  access  industry,   including  regulatory  changes  that  directly  or
indirectly affect telecommunication costs or increase the likelihood or scope of
competition  from regional  telephone  companies or others,  could  increase the
Company's  operating  costs,  limit its ability to offer services and reduce the
demand for its services.

           Local  telephone  companies  assess  access  charges to long distance
companies for the use of the local telephone  network to originate and terminate
long distance calls, generally on a per-minute basis. Access charges have been a
matter of continuing dispute,  with long distance companies complaining that the
rates are substantially in excess of cost, and local telephone companies arguing
that access rates are justified to subsidize lower local rates for end users and
other purposes.  Both local and long distance companies,  however,  contend that
Internet-based  telephony should be subject to these charges.  Since the Company
has current  plans to install its Gateways and to offer  telephony,  it would be
directly affected by these  developments.  However,  IPVC cannot predict whether
these  debates  will  cause  the FCC to  reconsider  its  current  policy of not
regulating Internet service providers.

Cost of Research and Development

           All research and  development was completed prior to the formation of
IPVCDE and its  acquisition  by the Company.  However,  the Company paid a third
party for additional testing in fiscal 1999 at a cost of $97,403.

           At the current time,  there are no costs associated with research and
development, and accordingly,  none will be bourne directly or indirectly by the
customer;  however  there is no guarantee  that such costs will not be bourne by
customers in the future and, at the current time,  the Company does not know the
extent to which such costs will be bourne by the customer, if at all.

Cost and Effects of Compliance with Environmental Laws

           The Company's  business is not subject to regulation  under the state
and Federal laws regarding  environmental  protection  and hazardous  substances
control,  including the  Occupational  Safety and Health Act, the  Environmental
Protection Act, and Toxic  Substance  Control Act. The Company is unaware of any
bills  currently  pending in Congress which could change the application of such
laws so that they would affect the Company.




                                       31

<PAGE>



Employees and Consultants

           At December 31, 1999,  the Company  employed seven (7) persons all of
whom are employed on a full-time basis.  None of these employees are represented
by a labor union for purposes of collective  bargaining.  The Company  considers
its relations with its employees to be excellent.

           The Company has  employment  agreements  with Barbara  Will,  Anthony
Welch,  and Harry Bowman,  who  respectively  act as the President,  Senior Vice
President,  and  Executive  Vice  President.  Ms. Will and Mr. Welsh have agreed
effective  September 1999  voluntarily to reduce each of the salaries to $90,000
per year.  Both of these agreed  reductions  shall continue until the Company is
profitable  and  there  are  no  accruals  of any  unpaid  amounts  under  their
respective  contracts.  Further,  neither of these parties has any  expectations
regarding the amount foregone at any future date. The Company  previously had an
employment   agreement   with  Peter   Stazzone   when  he  was  acting  as  the
Secretary/Treasurer  of the  Company.  When the Board  voted to  unwind  the INS
acquisition  ab initio,  it rescinded the issuances  under the  acquisition  and
employment agreement and to terminated Mr. Stazzone's  employment.  Mr. Stazzone
has  instituted   suit  against  the  Company.   See  Part  I,  Item  3.  "Legal
Proceedings";  and  Part  III,  Item  10.  "Executive  Compensation  -  Employee
Contracts and Agreements."

           In November 1997,  prior to its  acquisition  by the Company,  IPVCDE
entered  into a  consulting  agreement  with Condor,  whereby  Condor  agreed to
provide certain sales,  marketing and public relations  services in exchange for
600,000 shares of IPVCDE's  unrestricted  Common Stock to be issued upon listing
of IPVCDE's stock on the OTC Bulletin  Board.  Such shares were never issued and
the agreement was amended in July 1998 deleting the issuance of such shares. The
consulting  agreement  was  modified in July 1998 to revoke all  interest in the
shares. The term of the Agreement was for a period of six (6) years and is still
in effect.  James K.  Howson,  the  Company's  Chairman  and CEO,  serves as the
Chairman and CEO of Condor and he is the beneficial  owner of Condor.  Effective
September 1999, Condor agreed to reduce its consulting fees to $90,000 per year.
This agreed  reduction  will shall  continue until the Company is profitable and
there are no accruals of any unpaid amounts under the Condor contract.  Further,
none  Condor has no  expectations  regarding  the amount  foregone at any future
date. See Part III, Item 11. "Security  Ownership of Certain  Beneficial  Owners
and  Management";  and Part III,  Item 12.  "Certain  Relationships  and Related
Transactions".

           In March 1998, the Company's predecessor,  Nova, entered into a share
exchange  agreement  with  IPVCDE  and  its  shareholders  whereby  Nova  issued
9,000,000  shares of its  restricted  Common  Stock valued at $9,000 to IPVCDE's
shareholders  for all of the  outstanding  capital  stock of IPVCDE,  which then
became a wholly-owned subsidiary of Nova. In connection with the agreement,  the
Company  entered  into  employment  agreements  with Barbara  Will,  its current
Director, Chief Operating Officer and President and with Anthony Welch, designer
of the  Company's  proprietary  software,  who  currently  serves as the  Senior
Vice-President of Research and Development.  As part of the exchange,  Ms. Will,
Mr. Welch and Condor each received 3,000,000 shares of the Company's  restricted
common stock. Mr. Howson, the Company's

                                       32

<PAGE>



Chairman and Chief Executive  Officer,  is the beneficial  owner of Condor.  For
such  offering,  the Company  relied  upon  Section  4(2) of the Act,  Rule 506,
Section 11-51-308(1)(j) of the Colorado Code, Section 7309(b)(9) of the Delaware
Code and Section  90.530(17) of the Nevada code.  The Company relied on no state
exemption for the issuance to Condor, which is a Bahamian corporation.  See Part
III, Item 10. "Executive Compensation - Employee Contracts and Agreements"; Part
III, Item 11. "Security  Ownership of Certain Beneficial Owners and Management";
and Part III, Item 12. "Certain Relationships and Related Transactions".

           In July 1998,  the Company  entered into a consulting  agreement with
Calpe, to provide public relations  consulting services valued at $85,000 to the
Company in exchange  for 850,000  shares of the  Company's  unrestricted  Common
Stock,  of which  200,000  shares were given to ICG  pursuant to its  consulting
contract  (as more fully  described  herein) and 23,000  shares were given to CI
pursuant  to its  consulting  contract  (as more  fully  described  herein).  In
consideration of its 627,000 shares, Calpe agreed to forego commissions equal to
$62,700 from IPVC product  sales.  The term of the Agreement was for a period of
three (3) years and is still in effect.  For such  offering,  the Company relied
upon Section 3(b) of the Act and Rule 504. No state  exemption was necessary for
the Calpe  shares,  as Calpe is a Bahamian  corporation.  However,  the  Company
relied  upon  Section  10-5-9(13)  of the  Georgia  Code for the ICG  shares and
Section  14-4-140 of the Arizona Code for the CI shares.  See Part III, Item 12.
"Certain Relationships and Related Transactions".

           In July,  1998, the Company entered into a consulting  agreement with
ICG to provide  financial public relations and direct marketing  advertising and
consulting services to the Company. For such services, the Company agreed to pay
ICG $75,000 over the term of the Agreement  and to issue  200,000  shares of the
unrestricted  Common  Stock of the  Company,  and to grant  warrants to purchase
100,000 shares of the restricted  Common Stock of the Company  exercisable for a
period of two (2) years at an exercise  price of $2.00 per share.  Such warrants
have  piggy-back  registration  rights.  Such  issuance of shares were valued at
$20,000, while the warrants were valued at $0. IPVC has a right of first refusal
to buy back any shares  proposed  to be sold by ICG to any third  party.  Of the
850,000 shares of its unrestricted Common Stock issued to Calpe,  200,000 shares
were given to ICG pursuant to its  contract.  The contract term was for a period
of six (6) months  and has since  terminated.  For such  offering,  the  Company
relied  upon  Section  3(b) of the Act and Rule 504.  The  Company  relied  upon
Section  10-5-9(13) of the Georgia Code for the issuance of ICG shares. See Part
III, Item 12. "Certain Relationships and Related Transactions".

           In July 1998, the Company entered into a consulting agreement with CI
to provide public and investor relations  consulting  services to the Company in
exchange for 23,000  shares of the  Company's  unrestricted  Common  Stock.  The
Agreement  was for a term of three (3) months and  terminated  automatically  in
November 1998. Of the 850,000 shares of its unrestricted  Common Stock issued to
Calpe,  23,000  shares were given to CI pursuant  to its  contract.  The Company
relied  upon  Section  3(b) of the Act and Rule 504.  The  Company  relied  upon
Section  14-4-140 of the Arizona  Code for the  issuance of CI shares.  See Part
III, Item 12. "Certain Relationships and Related Transactions".

                                       33

<PAGE>



           In September  1998, the Company  entered into a consulting  agreement
for a term of six (6) months with First Capital, to provide financial consulting
services  to the  Company.  In the event that First  Capital was  successful  in
securing  debt or equity  financing  for the  Company,  First  Capital  would be
granted  warrants to purchase  125,000 shares of the restricted  Common Stock of
the Company  exercisable for a period of three (3) years at an exercise price of
$1.00 per share. Such warrants would have piggy-back  registration  rights.  See
Part III, Item 12. "Certain Relationships and Related Transactions".

           In October 1998, the Company entered into a consulting agreement with
IIP,  memorializing  an oral agreement made in July 1998, to provide  financial,
consulting and advisory  services valued at $35,000 in exchange for the issuance
of 350,000 shares, of which 243,760 are unrestricted Common Stock of the Company
and 106,240 are restricted Common Stock of the Company, the grant of warrants to
purchase an additional  1,600,000 shares of the unrestricted Common Stock of the
Company  exercisable  without time  limitation at an exercise price of $0.06 per
share,  the grant of warrants to purchase an  additional  350,000  shares of the
restricted Common Stock of the Company exercisable without time limitation at an
exercise  price of $3.90  per share  and in  consideration  of $100 the grant of
warrants to purchase an 5% of the  restricted  Common  Stock of the Company on a
fully-diluted basis at a price of $1.00 per share. In January 1999, IIP received
93,760  shares of Common Stock in lieu of payment for services  which was due in
the amount of $14,064. IIP exercised its warrant to purchase 1,600,000 shares in
April 1999 at an exercise price of $96,000.  As to the warrant that entitles IIP
to purchase 5% of the restricted Common Stock of the Company,  in February 2000,
IIP purchased 136,000 shares at an exercise price of $136,000 and in March 2000,
IIP  purchased  50,000  shares at an  exercise  price of  $50,000.  Such  shares
represent  1.22% of the 5% interest  that IIP is  entitled  to acquire,  thereby
entitling IIP to purchase additional shares representing 3.88%. The Agreement is
for a period of three (3) years and is still in effect.  The  Company  must also
pay a monthly  fee of $4,000 the first  year,  $6,000 the second year and $8,000
the  third  year.  For  the   unrestricted   shares  and  warrants  to  purchase
unrestricted  shares,  the Company  relied upon Section 3(b) of the Act and Rule
504. For the restricted shares and warrants to purchase  restricted  shares, the
Company relied upon Section 4(2) of the Act and Rule 506. No state exemption was
necessary,  as IIP is an Irish  corporation.  See Part  III,  Item 12.  "Certain
Relationships and Related Transactions".

           In October,  1998,  the Company  entered into a consulting  agreement
with Inside.com to provide media relations services and consulting advice to the
Company  valued at $41,250 in exchange for the issuance of 275,000 shares of the
unrestricted  Common  Stock of the Company and the grant of warrants to purchase
an additional  155,000  shares of the  unrestricted  Common Stock of the Company
exercisable  for a  period  of one (1)  year at a price  of  $0.645  per  share.
Inside.com  exercised its warrant to purchase 155,000 shares in April 1999 at an
exercise  price of $100,000.  The Agreement is for a term of one (1) year and is
still in effect. For such issuance,  the Company relied upon Section 3(b) of the
Act and Rule 504 and Section 517.061(11) of the Florida Code. See Part III, Item
12. "Certain Relationships and Related Transactions".

           In March 1999, the Company  entered into a consulting  agreement with
BPN to provide financial public relations consulting services to the Company for
which the Company agreed to

                                       34

<PAGE>



pay $40,000 for the first  month,  and $30,000 for the second and third  months,
with  subsequent  months  to be  agreed  upon,  each  of  which  is  payable  in
unrestricted  shares  of the  Company's  Common  Stock  the  number  of which is
determined  by dividing  the monthly  payment by $1.00.  The  contract  term was
through September 1999 and has expired without renewal. In exchange for services
rendered by BPN, the Company issued 100,000  shares of its  unrestricted  Common
Stock valued at $106,200 to Joyce  Research  Group,  of which BPN is a division.
For the fourth,  fifth and sixth  months of the  contract,  the Company  granted
Joyce  Research  Group  options  to  purchase  150,000  shares of the  Company's
restricted  Common  Stock at an exercise  price equal to 60%, 65% and 70% of the
market price  respectively.  For such offering,  the Company relied upon Section
3(b) of the Act and Rule 504 and Florida Code Section 517.061(11). See Part III,
Item 12. "Certain Relationships and Related Transactions".

           In April 1999, the Company  entered into a share  exchange  agreement
with  INS  whereby  the  Company  exchanged  250,000  shares  of its  Redeemable
Convertible  Preferred  stock  valued  at  $500,000  for all of the  outstanding
capital stock of INS. Such Redeemable Convertible Preferred stock contains 1 for
1 conversion rights after one (1) year and is redeemable at $2.00 per share. The
President of INS, Peter M. Stazzone,  remained with the Company as the President
of the subsidiary.  At the time of the exchange Mr.  Stazzone became  Secretary,
Treasurer  and  Chief  Financial  Officer  of the  Company  under an  employment
agreement. Also at the time of the exchange, Mr. Stazzone received 50,000 shares
of the Redeemable  Convertible  Preferred Stock of the Company.  Pursuant to the
Employment  Agreement,  Mr.  Stazzone  received  200,000 shares of the Company's
Restricted  Common  Stock,  a stock  bonus of 100,000  shares of the  Restricted
Common Stock deemed earned on the date of the Share Exchange  Agreement,  but to
be  delivered  on the  earlier  of (i) the  first  anniversary  date or (ii) Mr.
Stazzone's  termination and options to purchase an additional  200,000 shares of
the restricted Common Stock of the Company exercisable for a period of three (3)
years at an exercise price of $1.00 per share. It was  represented  that INS had
acquired certain assets,  including the rights to INS' name, from the Bankruptcy
Court in the Chapter 11 filing of Telsave.  Mr. Stazzone was the Chief Financial
Officer of Telsave at the time the bankruptcy was filed and the Bankruptcy Court
was provided with  disclosure of his  involvement  with INS prior to the Court's
approval  of the sale of  certain  Telsave  assets  to INS.  In June  1998,  Mr.
Stazzone  was loaned  $100,000 by INS,  which loan bears no interest  and has no
stated  repayment  terms.  At the time of the  acquisition  of INS,  the Company
believed that it was acquiring  the rights to the CIC Code.  The purchase  price
was based in part upon an appraisal of the value of the CIC Code which is loaded
in approximately 60% of the domestic market.  However,  during the course of the
audit,  it was  discovered  that  clear  title  may not have  passed  to INS and
subsequently the Company. Therefore, the Board resolved that, in the event clear
title had not passed to the  Company,  it would be in the best  interest  of the
shareholders  to unwind the  transaction.  The Company sought a legal opinion on
the status of such title and just prior to filing its Form 10SB in November 1999
discovered  that there was no clear link  between the  ownership of the CIC Code
and INS.  Therefore the Company voted to unwind the  transaction  ab initio,  to
rescind the issuances made under the acquisition  and the employment  agreements
and to terminate Mr. Stazzone's employment. Mr. Stazzone and INS have instituted
suit against the Company.  For such  offering,  the Company  relied upon Section
4(2) of the Act and  Rule  506,  Section  14-4-126(f)  of the  Arizona  Code and


                                       35

<PAGE>



Section 90.530(11) of the Nevada Code. See Part I, Item 3. "Legal  Proceedings";
Part III, Item 10. "Executive Compensation - Employee Contracts and Agreements";
Part  III,  Item 11.  "Security  Ownership  of  Certain  Beneficial  Owners  and
Management";   and  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

           In April 1999,  the Company  entered into a marketing  agreement with
Benae to market the  Company's  telephony  services and to register a minimum of
one  hundred  (100)  customers  in the thirty (30) cities in which IPVC plans to
offer telephony services within twelve(12) months in exchange for 200,000 shares
of the unrestricted  Common Stock of the Company valued at $206,200.  The shares
are to be returned to the Company if the minimum is not met. For such  offering,
the  Company  relied  upon  Section  3(b) of the Act and  Rule  504 and  Section
90.530(11) of the Nevada Code.  See Part III, Item 127.  "Certain  Relationships
and Related Transactions".

           In April,  1999, the Company entered into a marketing and advertising
agreement with NG to provide marketing services to a minimum of 75,000 customers
in thirty (30) cities  designated  by IPVC within a twelve (12) month  period in
exchange for 100,000 shares of the restricted Common Stock of the Company valued
at  $103,100,  which shares must be returned if NG fails to deliver a minimum of
eight (8) cities with a total of 75,000  customers  before December 31, 1999. In
addition,  NG may earn performance bonuses of: 50,000 restricted shares if eight
(8) cities are delivered within ninety (90) days of execution; 50,000 restricted
shares if fifteen (15) cities are delivered within one hundred fifty (150) days;
and 10,000 restricted shares for each additional city thereafter before December
31,  1999 up to 30 cities.  Further,  NG will be granted  warrants  to  purchase
30,000 shares of the Company's  restricted Common Stock exercisable for a period
of two (2) years at an  exercise  price of $2.50  per  share for every  block of
5,000 pre-registered customers up to 75,000 pre-registered customers in a twelve
(12) month period.  For such  offering,  the Company relied upon Section 4(2) of
the Act and Rule 506 and Section  14-4-126(F) of the Arizona Code. See Part III,
Item 12. "Certain Relationships and Related Transactions".

           On  November  11,  1999,  the  Company  executed a letter  employment
agreement  dated November 10, 1999 with Harry R. Bowman.  Under the terms of the
agreement,  Mr. Bowman is to serve as an Executive Vice President of the Company
for a term of two (2) years at a base salary of $78,000 per year.  In  addition,
Mr.  Bowman,  a resident of  Pennsylvania,  receives  health  insurance,  a paid
vacation,  travel  twelve  (12)  times  a year  to  his  residence  and  living,
automobile and subsistence allowances.  Mr. Bowman is required to spend at least
three (3) weeks a month at the  Company's  offices in Phoenix and one (1) week a
month at a location to be decided in  Pennsylvania..  The  agreement  included a
sixty (60) day probationary period. Under the terms of the agreement, Mr. Bowman
was granted four (4) years  options to purchase  50,000  shares of the Company's
Common Stock at an exercise price of $1.75  exercisable  one half when the stock
trades  for any ten (10) days out of thirty  (30)  consecutive  days at or above
$7.00 per share  and one half  when the stock  trades at or above  $12.00 in the
same manner.  Any shares acquired under the option must be held for the two-year
period in which Mr.  Bowman has  committed to work for the Company,  and, in the
event  the  commitment  is not  met or Mr.  Bowman  is  discharged  due to  poor
performance  or cause,  unexercised  options  expire  and  shares  acquired  are
forfeited.  For such  offering,  the Company relied upon Section 4(2) of the Act
and Rule 506 and Section 201.[70 P.S.

                                       36

<PAGE>



1.201] of the Pennsylvania Code. See Part III, Item 10. "Executive  Compensation
- Employee Contracts and Agreements";  Part III, Item 11. "Security Ownership of
Certain  Beneficial  Owners and  Management";  and Part III,  Item 12.  "Certain
Relationships and Related Transactions".

           Effective  November  29,  1999,  the Company  executed an  engagement
letter with McGinn,  to act as a broker and financial  advisor to the Company in
the private placement of up to $5 million of the Company's securities. Under the
agreement  McGinn is to use its best efforts with regard to such placement.  The
agreement is effective  through March 24, 2000.  From the date of the engagement
letter  through  March 24,  2000,  McGinn has the  exclusive  right to offer the
Company's securities.  In the event McGinn is successful,  it will receive a fee
equal to ten percent (10%) of the first $5 million and eight percent (8%) of any
amount in excess of $5 million and will receive three year warrants  equal to 2%
of the  proceeds  with a strike  price  of 125% of the bid  price on the date of
closing.  Such  warrants  are  to  have  piggy-back  registration  rights.  Upon
execution  of the  engagement  letter,  the Company was required to issue 10,000
shares of its restricted  Common Stock as a  non-refundable  Retainer/Investment
Banking fee and the Company is obligated to  reimburse  McGinn for  pre-approved
expenses. The Company has not accepted the terms of any private placements under
this Agreement.  For such issuance,  the Company relied upon Section 4(2) of the
Act and Rule 506 and Section  359(f)(2)(d)  of the New York Code.  See Part III,
Item 12. "Certain Relationships and Related Transactions".

           Effective  February  16,  2000,  the Company  executed an  engagement
letter  with  Delano to act as a placement  agent and  financial  advisor to the
Company  in the  private  placement  of up to  $2.5  million  of  the  Company's
securities. Under the agreement Delano is to use its best efforts with regard to
such  placement.  Delano was listed  with McGinn as a broker with whom they were
working  prior  to  the  McGinn  engagement  letter.  In  the  event  Delano  is
successful, it will receive a fee equal to seven percent (7%) of the proceeds, a
non-accountable  expense  allowance  equal to three percent (3%) of the proceeds
and five year warrants to purchase  100,000 shares of the Company's Common Stock
at a strike price equal to 120% of the lowest  closing bid price during the five
(5) trading days prior to the  closing.  Such  warrants  are to have  piggy-back
registration  rights.  The  Company  has not  accepted  the terms of any private
placements under this Agreement.

Item 2.  Description of Property

           The Company  maintains its executive offices at 5050 No. 19th Avenue,
Suite 416/417,  Phoenix,  Arizona 85015.  Its telephone number is (602) 335-1231
and its facsimile number is (602) 335-1577.

           The  Company  leases   approximately   three  thousand  five  hundred
sixty-five  (3,565)  square feet of office space in Phoenix,  Arizona  which now
serve as its executive  offices.  This space was occupied by INS, and this lease
replaced INS' previous  lease at the same  location.  The lease is for a term of
one (1) year  commencing  August 1, 1999 and ending July 31,  2000.  The Company
pays monthly rent in the amount of $3,862.08 plus a ratable cost  adjustment and
taxes.



                                                                  37

<PAGE>


           The Company leases a corporate apartment in Phoenix, AZ which is used
by Mr. Bowman when he is in Phoenix and by other corporate  personnel when he is
not.  The  lease  is for a term of one  year  commencing  November  1,  1999 and
terminating  October 31,  2000.  The Company  pays monthly rent in the amount of
$866.12 plus a ratable adjustment for taxes. The lease has an automatic month to
month  renewal at the end of the term that extends  until the landlord  receives
30-day notice that the tenant intends to vacate.

           The Company owns no real property and its personal  property consists
of hardware, inventory,  software, furniture, fixtures and equipment,  prototype
molds and  leasehold  improvements  with an original cost of $41,968 on December
31, 1998.

           In December 1999, the Company executed an agreement effective January
2000 replaced the phone system equipment  previously installed by INS with a new
system under a finance lease purchase arrangement. The arrangement is for a term
of four (4)  years and the  Company  makes  monthly  payments  in the  amount of
$374.52.

           The  Company  currently  employs  its  capital  reserves  in a  sweep
account. Activity is monitored on a daily basis.

Item 3.  Legal Proceedings

           On December 9, 1999,  the  Company  was advised  that Peter  Stazzone
intended to bring a lawsuit  against  the  Company  and certain of its  advisors
relative to his  termination  as an Officer and Director of the Company in which
he will allege breach of his  employment  contract,  breach of fiduciary duty by
certain  advisors,  tortious  interference  by  certain  advisors,   intentional
misrepresentation by the Company and negligent misrepresentation by the Company.
Although the suit had not been filed at that time, the Company's  attorneys were
provided  with a draft copy of the suit which they  intended to file in Maricopa
County,  Arizona.  On December 22, 1999,  Mr.  Stazzone filed a suit against the
Company [Peter M. Stazzone v. IPVoice.com,  Inc, a Nevada Corporation,  Superior
Court of the  State of  Arizona,  County of  Maricopa,  No.  CV  99-22828]  (the
"Stazzone Action").  The Stazzone Action contains a one count breach of contract
claim in which Mr. Stazzone seeks his salary,  liquidated damages,  the award of
stock and options,  interest and attorneys fees. The Company intends  vigorously
to defend such  action and  believes it has  meritorious  defenses.  The Company
filed an answer on January 18, 2000.

           Also on December 9, 1999,  the Company was advised  that INS [Satlink
3000,  Inc.]  intended  to bring a lawsuit  against  the  Company  for breach of
contract  as  a  result  of  the  Company's   decision  to  rescind  the  merger
transaction.  Although the suit had not been filed at that time,  the  Company's
attorneys  were  provided  with a draft copy of the suit which they  intended to
file in Maricopa County, Arizona. On December 17, 1999, INS filed a suit against
the Company [Satlink 3000,  Inc., a Nevada  Corporation v.  IPVoice.com,  Inc, a
Nevada Corporation,  Superior Court of the State of Arizona, County of Maricopa,
No. CV  99-22560]  (the "INS  Action").  The INS  Action is  seeking  actual and
punitive damages as a result of the rescission.  The Company intends  vigorously
to defend such action and believes it has meritorious defenses and counterclaims
against INS. The Company made a Motion to Dismiss on the basis that the injury

                                       38

<PAGE>



claimed  was that of the INS  shareholders  and that the suit had to be in their
names,  not the  Company  name.  INS  conceded  this  point and filed an Amended
Complaint in February 2000 listing all but one of its shareholders.  The Company
intends to file a reply stating that all of the shareholders are not named.

           Prior to the vote by the  Shareholders  and the Board of Directors of
the Company to rescind the  transactions  with INS and Mr.  Stazzone,  advice of
counsel was sought as to the  appropriateness of such actions. It was determined
that affirmative  legal action instigated by the Company was not the best use of
the  Company's  assets  which  would be  better  spent  pursuing  the  Company's
business.  However, it was determined that, in the event Mr. Stazzone and/or INS
took action, that the Company would defend and pursue all of its remedies at law
and in equity.

           The  Company  knows of no other  legal  proceedings  to which it is a
party or to  which  any of its  property  is the  subject,  which  are  pending,
threatened or contemplated or any unsatisfied judgments against the Company.

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

           During the fourth quarter 1999, the following matters were voted upon
by the Shareholders.

           On October 29, 1999,  Shareholders  representing a majority of shares
entitled  to  vote,  at an  emergency  meeting  called  in  accordance  with the
Company's Bylaws, by a vote of 11,253,666 shares to 0 voted to rescind the Share
Exchange  Agreement dated April 7, 1999 with Satlink ab initio and to remove Mr.
Stazzone as a Director for cause.  At a meeting of the Board called  immediately
thereafter, by unanimous vote, Mr. Stazzone was removed as an Officer for Cause.

           The Company  held its annual  meeting on December 9, 1999 in Phoenix,
Arizona at which time the shareholders, by a vote of 9,823,189 shares to 0 voted
(1) to have Barbara Will,  Anthony Welch,  James Howson and Russell Watson serve
on the Board of  Directors  for  another  one (1) year term,  (2)  ratified  the
appointment of Durland & Company, CPAs, P.A. as its auditors for the year ending
December  31,  1999 and (3)  adopted a stock  award plan which  allows for up to
1,000,000 shares to be reserved for grants under the plan.


                                     PART II


Item 5. Market for Common Equity and Related Stockholder Matters


     (a) Market Information.


The Common Stock of the Company  currently  is quoted on the OTC Bulletin  Board
under the symbol "IPVC" and has been since July 1998.  The high, low and average
bid information for each quarter since July 1998 to the present are as follows:


                                       39

<PAGE>



 Quarter                  High Bid        Low Bid       Average Bid

 Third Quarter 1998        1.17              .55             .86
 Fourth Quarter 1998        .56              .10             .24
 First Quarter 1999        1.38              .19             .95
 Second Quarter 1999       7.50              .75            3.13
 Third Quarter 1999        3.06             1.50            2.17
 Fourth Quarter 1999       4.06             1.44            2.01

           The  quotations  may  reflect  inter-dealer  prices,  without  retail
mark-up, mark-down or commissions and may not reflect actual transactions.

           (b)        Holders.

           As of December 31, 1999 the Company had 87  shareholders of record of
its  16,422,758  outstanding  shares of  Common  Stock,  9,239,429  of which are
restricted  Rule 144 shares and 7,183,349 of which are  free-trading.  As of the
date hereof, the Company has outstanding options to purchase 2,583,879 shares of
Common  Stock.  Of the Rule 144  shares,  5,856,523  shares  have  been  held by
affiliates  of the  Company  for more than one (1) year.  The  Company  voted to
unwind the INS  transaction  ab initio,  to rescind the issuances made under the
acquisition  and the  employment  agreements  and to  terminate  Mr.  Stazzone's
employment.  The 300,000 shares issued to Mr. Stazzone were rescinded and all of
the Redeemable Convertible Preferred Shares were canceled. The Company has 1,150
shares of Senior Convertible Preferred outstanding.

           (c)        Dividends.

           The Company has never paid or declared  any  dividends  on its Common
Stock and does not anticipate paying cash dividends in the foreseeable future.

Item 6.  Plan of Operation

           The following discussion contains certain forward-looking  statements
that are subject to  business  and  economic  risks and  uncertainties,  and the
Company's  actual  results could differ  materially  from those  forward-looking
statements.  The following  discussion regarding the financial statements of the
Company  should be read in conjunction  with the financial  statements and notes
thereto.

Discussion and Analysis

           The  Company,  IPVoice  Communications,  Inc.  is a Nevada  chartered
development stage corporation which conducted  business from its headquarters in
Denver,  Colorado until August 1999 when it relocated to Phoenix,  Arizona.  The
Company was  incorporated on February  19,1997,  as Nova  Enterprises,  Inc. and
changed its name to IPVoice  Communications in March,  1998. On May 24, 1999 the
Company formally changed its name to IPVoice.com, Inc.

                                       40

<PAGE>



           The  Company  is  principally  involved  in  the  Internet  telephony
industry. Current activities include software and hardware development,  raising
additional equity, and negotiating with key personnel and facilities.

           Inventory  consists  mainly  of  computer  parts  to be  used  in the
assembly  of units to be sold to  customers,  or  utilized by the Company in its
operations.  Once the assembly is complete,  the respective  computer part costs
are charged to operations or reclassified to property and equipment based on the
nature of the  transaction.  Inventory is valued at the lower of cost or market.
Cost is determined using the first-in, first-out (FIFO) method.

           In March 1998,  IPVoice  Communications,  Inc., a Nevada corporation,
acquired  100% of the  issued  and  outstanding  shares of the  common  stock of
IPVoice Communications, Inc., a Delaware corporation, in a reverse merger, which
was accounted for as a reorganization of the Delaware company.

           The  Company  is  in  the  development  stage,  it is  acquiring  the
necessary operating assets and it is beginning its proposed business.  While the
Company is developing  tools necessary to enter the Internet  telephony  market,
there is no  assurance  that any benefit will result from such  activities.  The
Company  will receive  limited  operating  revenues  and will  continue to incur
expenses during its development, possibly in excess of revenue.

           The  ability  of the  Company  to  continue  as a  going  concern  is
dependent upon increasing sales and obtaining  additional capital and financing.
The financial  statements do not include any adjustments that might be necessary
if the  Company  is  unable to  continue  as a going  concern.  The  Company  is
currently seeking financing to allow it to begin its planned operations.

           On  April  7,  1999,  the  Company  acquired  all of the  issued  and
outstanding common stock of INS. The Company issued 250,000 shares of redeemable
convertible  preferred  shares,  each convertible on or after one (1) year after
Closing into one share of the Company's common stock or, at the sellers' option,
redeemable by the Company at a redemption  price of $2.00 per share. The Company
rescinded  this  transaction  ab initio  just  prior to filing  its Form 10SB in
November  1999 after  finding that there was no clear link between the ownership
of the CIC Code and INS. INS has instituted suit against the Company.

           The purchase was done to acquire FCC tariffs, corporate certification
in over 30 states in the  United  States,  and the INS name.  At the time of the
acquisition,  the Company  believed  that it was  acquiring the CIC. The Company
also  obtained  all cash,  furniture  and  equipment,  staff and office space in
Arizona.  An independent  business  valuation  solely of the intangible  assets,
which  are  comprised  of the CIC code and  state  certifications  and  tariffs,
concluded a fair market value at the date of acquisition of $460,000. During the
course of the audit,  it was discovered  that clear title may not have passed to
INS and subsequently  the Company.  The Company believed that the acquisition of
INS would provide the Company with an operational and marketing advantage in the
United  States,  by being  tariffed and,  provided clear title had passed to the
Company, by having the CIC.

                                       41

<PAGE>



           The acquisition was subject to IPVC entering into agreements with the
Company's  President and Chief Executive Officer,  including but not limited to,
an employment agreement,  consulting agreement,  compensation  agreement,  stock
option  agreement,  and  stock  grant  agreement.  The   Employment/Compensation
Agreement  provides  compensation  for  services  performed  in the  capacity of
Director and Chief Financial Officer of the Company. In addition,  certain stock
incentives  were provided.  The Board voted to unwind the transaction ab initio,
to rescind the issuances made under the  acquisition  and employment  agreements
and to terminate Mr.  Stazzone's  employment.  Mr.  Stazzone has instituted suit
against the Company.

           During the second  quarter of 1999,  the  Company  raised  $1,150,000
through  the  issuance  of  forty-six  (46)  investment  units in the  amount of
$25,000.  Each unit  consisted  of a two-year  note in the  principal  amount of
$24,900 including  interest payable quarterly in cash at 9% per annum; a warrant
for the purchase of 18,750 shares of restricted stock of the Company; and twenty
five (25) Senior Convertible Preferred shares.  Management  anticipated that the
net proceeds,  less initial expenses payable,  would provide  sufficient working
capital to meet the  Company's  capital  needs through the first quarter of 2000
and anticipated that it would generate  sufficient revenue and/or be required to
raise additional  capital in order to meet its needs through calendar year 2000.
However, there can be no assurance that sufficient revenues will be generated or
that additional capital can be raised, if needed.

           The Company recently  installed Gateways in New York, Los Angeles and
London and began receiving revenues from the sale of prepaid calling cards.

Results of  Operations  - Full Fiscal Years - December 31, 1999 and December 31,
1998

Revenues

           Revenues  for the twelve  month  period  ended  December 31, 1999 was
$321,279 and for the twelve  month  period ended  December 31, 1998 was $41,254.
The  Company  engaged in the sale of prepaid  calling  cards  which  resulted in
revenues for the twelve months ended December 31, 1999.

Operating Expenses

           Operating  Expenses for the twelve  months of calendar year 1999 were
$1,897,084  versus $548,939 in the comparable  period in calendar year 1998. Net
loss was $1,973,834 and $507,685for the twelve months ended December 31,1999 and
1998, respectively.

           During 1999,  consulting  fees of $136,500  were paid to two officers
and $131,064 a shareholder.  There was $40,896 outstanding in respect to fees to
shareholders as of December 31, 1999.




                                       42

<PAGE>



Assets and Liabilities

           Assets were  $633,903 as of December  31,  1999,  and  $191,513 as of
December  31,  1998.  As of December 31,  1998,  assets  consisted  primarily of
inventory  of $152,980  and  equipment  with a net book value of $37,625.  As of
December  31, 1999,  assets  consisted  primarily  of cash of $98,592,  accounts
receivable   of  $108,100  and  property  and   equipment  of  $377,555  net  of
depreciation.  Liabilities  were $1,551,739 and $307,129 as of December 31, 1999
and  December  31, 1998  respectively.  As of  December  31,  1999,  liabilities
consisted  primarily of trade accounts  payable of $326,524 and long-term  notes
payable of $1,145,400.

           At December  31, 1998 and 1999,  the Company owed two of its officers
$34,268 and $17,403 respectively for reimbursement of expenses paid on behalf of
the Company.

           At  December  31,  1998  and  1999,  the  Company  owed  two  of  its
shareholders  $20,564 and $40,896 respectively for consulting services performed
on behalf of the Company.  Total consulting fees incurred to shareholders during
the year ended  December  31, 1998 and 1999  amounted  to $31,096  and  $131,064
respectively.  During the year ended December 31, 1999, total consulting fees of
$136,500 were paid to two officers of the Company,  one of whom was paid $30,000
in consulting fees prior to his election as an officer.

           During  the  year  ended  December  31,  1998,  one of the  Company's
shareholders  advanced funds totaling  $24,750 for payment of general  operating
expenses. This amount was repaid in 1999.

           During 1999, the Company purchased for cash approximately  $14,000 of
furniture and fixtures from an officer of the Company at fair market value.

Stockholders' Equity

           Stockholders'  equity was  ($917,836)  as of  December  31,  1999 and
($115,616) as of December 31, 1998.  The Company had  16,422,758  and 12,578,999
shares of common  stock  issued and  outstanding  at December 31, 1999 and 1998,
respectively.

           In February 1997, the Company issued 9,000,000 shares to its founders
for services  rendered to the Company valued at par value,  or $9,000.  In March
1997,  the Company  completed a Regulation D Rule 504  Placement  for  1,400,000
shares in exchange for $14,000 cash.

           In March 1998, a majority  shareholder  donated  9,000,000  shares of
common stock to the Company.  These  shares were  simultaneously  issued for the
acquisition of IPVoice Communications,  Inc., a Delaware corporation. During the
second  quarter of 1998,  the Company  issued 144,000 shares of common stock for
$144,000 in cash. The Company issued 473,000 shares of common stock for services
rendered, valued at the current market rate of $47,300, during the third quarter
of 1998.  Also during the third  quarter,  the Company  issued 183,333 shares of
common  stock for  $85,000 in cash,  and  627,000  shares of common  stock for a
subscription  receivable of $62,700.  In the fourth quarter of 1998, the Company
issued 275,000

                                       43

<PAGE>



shares of common stock for services rendered,  valued at the current market rate
of $41,250. In the same quarter,  476,666 shares of common stock were issued for
$121,800 in cash.

           In January 1999,  the Company issued 93,760 shares of common stock in
exchange for  services,  valued at $14,064.  In January and February  1999,  the
Company  issued  499,999 shares of common stock in exchange for $75,000 in cash.
In March 1999,  the Company issued 187,500 shares of common stock for $75,000 in
cash.  These  issuances  were to then current  stockholders.  In March 1999, the
Company  issued  400,000  shares of common  stock  for  services,  valued at the
current market rate of $415,500, to three previously unrelated entities.

           In April 1999,  the Company  issued 250,000 shares of common stock to
an  existing   stockholder  for  $100,000  cash.  In  April  1999,  an  existing
stockholder  exercised a warrant for 155,000 shares of common stock by tendering
$100,000  cash. In April 1999, an existing  stockholder  exercised a warrant for
1,600,000  shares of common  stock by tendering  $96,000 in cash.  In the second
quarter,  the Company  completed a Regulation D Rule 506 Private  Placement  for
units,  which  included  the  issuance  of 1,150  shares of  senior  convertible
preferred  stock in  exchange  for  $4,600  in cash.  These  senior  convertible
preferred shares, as a group, are convertible into common shares equaling 51% of
the issued and outstanding  common shares after  conversion,  in the event of an
uncured default of the notes payable.

           In July 1999, the Company  discovered that it had failed to issue and
record 10,000 shares of common stock in exchange for legal  services,  valued at
$10,000 in 1997,  as originally  contracted.  These shares were recorded in July
1999.  In August 1999,  the Company  issued  437,500  shares of common stock for
$175,000 cash.  All common stock shares issued in exchange for cash,  except the
two warrant  exercises,  were  subscribed for in January 1999. In November 1999,
the Company issued 10,000 shares of common stock in exchange for services valued
at $23,750. In December 1999, the Company discovered that it had failed to issue
and record 200,000 shares of common stock for services valued at $20,000,  which
had been contracted for in October 1998, and were recorded in December 1999.

Financial Condition, Liquidity and Capital Resources

           At  December  31,1999  the Company had cash of $98,592 as compared to
$908 at December 31, 1998.

           During the second  quarter of 1999,  the  Company  raised  $1,150,000
through  the  issuance  of  forty-six  (46)  investment  units in the  amount of
$25,000.  Each unit  consisted  of a two-year  note in the  principal  amount of
$24,900 including  interest payable quarterly in cash at 9% per annum; a warrant
for the purchase of 18,750 shares of restricted stock of the Company; and twenty
five (25) Senior Convertible  Preferred shares.  Management  anticipates the net
proceeds,  less initial expenses  payable,  will provide working capital for the
Company through the first quarter of 2000.



                                       44

<PAGE>



           The  Company  is  seeking to raise additional capital through private
and/or public sales of securities in the future and has retained the services of
a registered  broker/dealer.  Under this engagement,  the Company is negotiating
with an investment group introduced by the broker/dealer for an investment of up
to $5 million in two  tranches  of $2.5  million  within  the next  twelve  (12)
months. There can be no guarantee that the Company and the investment group will
come to agreeable terms.

Impact of the Year 2000 Issue

           The Year  2000  Issue  was the  result  of  potential  problems  with
computer  systems or any equipment  with computer chips that use dates where the
date has been stored as just two digits (e.g. 98 for 1998).  On January 1, 2000,
any clock or date recording  mechanism  including date sensitive  software which
used only two digits to represent the year, might have recognized the date using
00 as the year 1900  rather  than the year 2000.  This could have  resulted in a
system failure or miscalculations  causing  disruption of operations,  including
among  other  things,  a  temporary  inability  to  process  transactions,  send
invoices, or engage in similar activities.

           The Company was aware of the issues  associated  with the programming
code in existing computer systems as the millennium (Year 2000) approached.  All
software used for the Company's systems has been supplied by software vendors or
outside  service  providers.  The Company had confirmed with such providers that
its present software was Year 2000 Compliant.

           The Company  believes,  after  investigation,  that all  software and
hardware products that it is currently in the process of developing (directly or
through  vendors)  are  Year  2000  compliant.   The  Company  believes,   after
investigation,  that its own software  operating systems are Year 2000 compliant
and in fact,  has  experienced  no Year 2000  problems  since  January  1, 2000.
Further the Company has  experienced no  difficulties  or adverse effects due to
untimely  conversion  or failure to convert by any other  company  upon which it
relies.

           The Company  believes that it has disclosed all required  information
relative to Year 2000 issues relating to its business and operations.

Forward-Looking Statements

           This Form 10-KSB  includes  "forward-looking  statements"  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities  Exchange Act of 1934, as amended.  All statements,  other
than  statements of historical  facts,  included or incorporated by reference in
this Form 10-KSB which  address  activities,  events or  developments  which the
Company expects or anticipates  will or may occur in the future,  including such
things as future capital expenditures (including the amount and nature thereof),
demand for the  Company's  products and  services,  expansion  and growth of the
Company's  business and operations,  and other such matters are  forward-looking
statements.  These statements are based on certain assumptions and analyses made
by the  Company in light of its  experience  and its  perception  of  historical
trends,  current  conditions and expected  future  developments as well as other
factors it believes  are  appropriate  in the  circumstances.  However,  whether
actual results or developments will conform with the Company's

                                       45

<PAGE>



expectations and predictions is subject to a number of risks and  uncertainties,
general economic market and business conditions;  the business opportunities (or
lack  thereof)  that may be presented to and pursued by the Company;  changes in
laws or regulation;  and other factors,  most of which are beyond the control of
the Company.  Consequently,  all of the forward-looking  statements made in this
Form 10-KSB are  qualified by these  cautionary  statements  and there can be no
assurance  that the actual  results or  developments  anticipated by the Company
will be realized  or, even if  substantially  realized,  that they will have the
expected consequence to or effects on the Company or its business or operations.




                                       46

<PAGE>


Item 7.  Financial Statements





                                IPVoice.com, Inc.

                        (A Development Stage Enterprise)

                          Audited Financial Statements

                        For the Years Ended December 31,
                    1999 and 1998 and from February 19, 1997
                      (Inception) through December 31, 1999











<PAGE>







                          INDEX TO FINANCIAL STATEMENTS


Independent Auditors' Report................................................F-2

Consolidated Balance Sheets.................................................F-3

Consolidated Statements of Operations.......................................F-4

Consolidated Statements of Stockholders' Deficiency.........................F-5

Consolidated Statements of Cash Flows.......................................F-6

Notes to Consolidated Financial Statements..................................F-7

















                                       F-1

<PAGE>




                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholders
IPVoice.com, Inc.
(A Development Stage Enterprise)
Phoenix, Arizona

We have audited the  accompanying  consolidated  balance sheets of  IPVoice.com,
Inc., a development  stage  enterprise,  (the "Company") as of December 31, 1999
and 1998 and the related  consolidated  statements of operations,  stockholders'
deficiency  and cash flows for the years  ended  December  31, 1999 and 1998 and
from February 19, 1997 (Inception) through December 31, 1999. 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  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
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 financial  position of the Company as of
December  31, 1999 and 1998 and the results of their  operations  and their cash
flows for the years ended  December 31, 1999 and 1998 and from February 19, 1997
(Inception)  through  December 31, 1999, 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 discussed in Note 4 to the
consolidated financial statements,  the Company has experienced a net loss since
inception, and reflects negative working capital and stockholders' deficiency as
of December 31, 1999.  The Company's  financial  position and operating  results
raise  substantial  doubt  about its  ability to  continue  as a going  concern.
Management's  plans in regard to these matters are also described in Note 4. The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.




/s/ Durland & Company
Durland & Company, CPAs, P.A.

Palm Beach, Florida
March 7, 2000



                                       F-2

<PAGE>


<TABLE>
<CAPTION>
                                IPVoice.com, Inc.
                        (A Development Stage Enterprise)
                           Consolidated Balance Sheet
                                  December 31,


                                                                        1999           1998
                                                                   ------------- -------------
<S>                                                                <C>           <C>
                                         ASSETS
CURRENT ASSETS
   Cash                                                            $    98,592   $         908
   Certificate of deposit - restricted                                    25,205             0
   Accounts receivable                                                   108,100             0
   Inventory                                                               7,586       152,980
   Prepaid expenses                                                       16,865             0
                                                                   ------------- -------------

          Total current assets                                           256,348       153,888
                                                                   ------------- -------------

PROPERTY AND EQUIPMENT
   Computer equipment                                                    369,619        30,953
   Office equipment                                                       19,019        11,015
   Furniture and fixtures                                                 29,445             0
                                                                   ------------- -------------
                Subtotal property and equipment                          418,083        41,968
        Less accumulated depreciation                                    (40,528)       (4,343)
                                                                   ------------- -------------

          Total property and equipment                                   377,555        37,625
                                                                   ------------- -------------

Total Assets                                                       $    633,903  $     191,513
                                                                   ============= =============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
   Accounts payable and accrued expenses
      Trade                                                        $     326,524 $     191,817
      Officer                                                             17,403        34,268
      Related party                                                       40,896        20,564
   Accrued payroll taxes                                                   1,005        35,730
   Accrued interest - stockholders                                        12,690             0
   Deferred revenue                                                        7,821             0
   Advances from stockholder                                                   0        24,750
                                                                   ------------- -------------

          Total current liabilities                                      406,339       307,129
                                                                   ------------- -------------

LONG-TERM LIABILITIES
   Notes payable                                                       1,145,400             0
                                                                   ------------- -------------

           Total long-term liabilities                                 1,145,400             0
                                                                   ------------- -------------

Total Liabilities                                                      1,551,739       307,129
                                                                   ------------- -------------

STOCKHOLDERS' DEFICIENCY
  Senior Convertible Preferred stock, $0.001 par value,
     authorized 10,000,000 shares                                              1             0
     1,150 and 0 issued and outstanding shares
  Common stock, $0.001 par value, authorized 50,000,000 shares;
16,422,758 and 12,578,999 issued and outstanding shares                   16,423        12,579
  Additional paid-in capital                                           1,570,240       465,171
  Stock subscription receivable                                                0       (62,700)
  Deficit accumulated during the development stage                    (2,504,500)     (530,666)
                                                                   ------------- -------------

          Total stockholders' deficiency                                (917,836)     (115,616)
                                                                   ------------- -------------

Total Liabilities and  Stockholders' Deficiency                    $    633,903  $     191,513
                                                                   ============= =============
</TABLE>




                 The accompanying notes are an integral part of
                            the financial statements

                                       F-3

<PAGE>



<TABLE>
<CAPTION>
                                IPVoice.com, Inc.

                        (A Development Stage Enterprise)
                      Consolidated Statements of Operations


                                                                                                      Period from
                                                                                                   February 19, 1997
                                                                                                      (Inception)
                                                            Year Ended December 31,                     through
                                                 -------------------------------------------

                                                          1999                   1998               December 31, 1999
                                                ------------------------ -------------------- -----------------------
<S>                                             <C>                      <C>                  <C>
NET SALES                                       $                321,279 $             41,254 $               362,533
COST OF SALES                                                    305,434                    0                 305,434
                                                ------------------------ -------------------- -----------------------

          Gross profit                                            15,845               41,254                  57,099
                                                ------------------------ -------------------- -----------------------

OPERATING EXPENSES
   Compensation
      Officers                                                   340,896              140,076                 484,353
      Other                                                       78,522               37,715                 112,856
      Consulting                                                 470,765                    0                 516,115
      Consulting - related party                                 267,564               91,096                 322,291
   General and administrative                                    605,749              275,709                 881,458
   Research and development                                       97,403                    0                  97,403
   Organization expense - related party                                0                    0                  14,000
   Depreciation and amortization                                  36,185                4,343                  40,528
                                                ------------------------ -------------------- -----------------------

          Total operating expenses                             1,897,084              548,939               2,469,004
                                                ------------------------ -------------------- -----------------------

Loss from operations                                          (1,881,239)            (507,685)             (2,411,905)
                                                ------------------------ -------------------- -----------------------

OTHER INCOME (EXPENSE)
   Interest expense                                              (64,387)                   0                 (64,387)
   Interest income                                                20,324                    0                  20,324
   Write-off of receivable                                       (48,532)                   0                 (48,532)
                                                ------------------------ -------------------- -----------------------

          Total other income (expense)                           (92,595)                   0                 (92,595)
                                                ------------------------ -------------------- -----------------------

Net loss                                        $             (1,973,834)$           (507,685)$            (2,504,500)
                                                ======================== ==================== =======================

Loss per common share                           $                  (0.13)               (0.04)
                                                ======================== ====================

Number of weighted average common shares
outstanding                                                   15,413,751           11,620,451
                                                ======================== ====================
</TABLE>







    The accompanying notes are an integral part of the financial statements


                                       F-4

<PAGE>


<TABLE>
<CAPTION>
                               IPVoice.com, Inc.
                        (A Development Stage Enterprise)
               Consolidated Statements of Stockholders' Deficiency




                                                                                                          Deficit
                                                                                                          Accumulated     Total
                                                             Par Value         Additional   Stock         During the   Stockholders'
                                                         -------------------
                                    Number of Shares     Preferred  Common     Paid-in      Subscription  Development     Equity
                                  --------------------
                                  Preferred    Common     Stock     Stock       Capital     Receivable       Stage      (Deficiency)
                                  --------  ----------   -------   ---------   ----------   -----------   -----------  ------------
<S>                               <C>       <C>          <C>       <C>         <C>          <C>           <C>          <C>
February 19, 1997 (Inception)            0           0   $      0  $        0  $          0 $        0  $           0  $          0

2/97 - founder's serv. ($0.001/sh.)      0   9,000,000          0       9,000             0          0             0          9,000
3/97 - cash ($0.01/sh.)                  0   1,400,000          0       1,400        12,600    (12,274)            0          1,726

Net loss                                 0           0          0           0             0          0       (22,981)
                                  --------- -----------   --------  ----------  ------------ ---------- -------------  -------------

BALANCE,
December 31, 1997                        0  10,400,000   $      0  $   10,400  $     12,600  $  (12,274)$     (22,981) $    (12,255)

3/19 - donated-rel. party ($0.001/sh.)   0  (9,000,000)         0      (9,000)        9,000          0             0              0
3/19 - acquisition ($0.001)              0   9,000,000          0       9,000        (9,000)         0             0              0
3/20 - cash received                     0           0          0           0             0     12,274             0         12,274
2nd qtr, - cash ($1.00/sh.)              0     144,000          0         144       143,856          0             0        144,000
3rd qtr. - cash ($1.00/sh.)              0      10,000          0          10         9,990          0             0         10,000
3rd qtr. - cash ($0.75/sh.)              0      53,333          0          53        39,947          0             0         40,000
3rd qtr. - cash ($0.50/sh.)              0      20,000          0          20         9,980          0             0         10,000
3rd qtr. - cash ($0.25/sh.)              0     100,000          0         100        24,900          0             0         25,000
3rd qtr. - cash $0.10/sh.)               0     627,000          0         627        62,073    (62,700)            0              0
3rd qtr. - services ($0.10/sh.)          0     473,000          0         473        46,827          0             0         47,300
4th qtr. - cash ($0.15/sh.)              0     396,666          0         397        56,103          0             0         56,500
4th qtr. - services ($0.15/sh.)          0     275,000          0         275        40,975          0             0         41,250
4th qtr. - cash ($0.19/sh.)              0      80,000          0          80        14,920          0             0         15,000

Net loss                                 0           0          0           0             0          0      (507,685)      (507,685)
                                  --------- -----------   --------  ----------  ------------ ---------- -------------  -------------
BALANCE,
December 31, 1998                        0  12,578,999          0      12,579       465,171    (62,700)     (530,666)      (115,616)

1st qtr. - cash ($0.22/sh.)              0     687,499          0         687       149,313          0             0        150,000
1st qtr. - services ($0.87/sh.)          0     493,760          0         494       429,070          0             0        429,564
2nd qtr. - cash received                 0           0          0           0             0     60,000             0         60,000
2nd qtr. - cash ($4.00/sh.)          1,150           0          1           0         4,599          0             0          4,600
2nd qtr. - cash ($0.15/sh.)              0   2,005,000          0       2,005       293,995          0             0        296,000
3rd qtr. - cash ($0.40/sh.)              0     437,500          0         438       174,562          0             0        175,000
3rd qtr. - cash received                 0           0          0           0             0      2,700             0          2,700
3rd qtr. - services ($1.00)              0      10,000          0          10         9,990          0             0         10,000
4th qtr. - services ($0.21)              0     210,000          0         210        43,540          0             0         43,750

Net loss                                 0           0          0           0             0          0    (1,973,834)    (1,973,834)
                                  --------- -----------   --------  ----------  ------------ ---------- -------------  -------------
BALANCE,
December 31, 1999                    1,150  16,422,758   $      1  $   16,423  $  1,570,240  $        0 $  (2,504,500) $   (917,836)
                                  ========= ===========   ========  ==========  ============ ========== =============  =============
</TABLE>






     The accompanying notes are an integral part of the financial statements


                                       F-5

<PAGE>


<TABLE>
<CAPTION>
                                IPVoice.com, Inc.
                        (A Development Stage Enterprise)
                      Consolidated Statements of Cash Flows



                                                                                                                 Period from
                                                                                                              February 19, 1997
                                                                                                                 (Inception)
                                                                             Year Ended December 31,               through
                                                                       -----------------------------------

                                                                           1999              1998           December 31, 1999
                                                                     ----------------- ----------------- -----------------------
<S>                                                                  <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                           $      (1,973,834)$        (507,685)$            (2,504,500)
  Adjustments to reconcile net loss to net cash used by
      operating activities:
         Stock issued for services - related party                              34,064            88,550                 131,614
         Stock issued for services - other                                     449,250                 0                 449,250
         Depreciation                                                           36,185             4,343                  40,528
         Interest credited to certificate of deposit                              (205)                0                    (205)
  Changes in operating assets and liabilities
         (Increase) decrease in inventory                                       (7,586)         (152,980)                 (7,586)
         (Increase) decrease in accounts receivable                           (108,100)                0                (108,100)
         (Increase) decrease in prepaid expenses                               (16,865)                0                 (16,865)
         Increase (decrease) in accounts payable - trade                       134,707           191,817                 326,524
         Increase (decrease) in accounts payable - officer                     (16,865)           34,268                  17,403
         Increase (decrease) in accounts payable - related party                20,332             6,564                  40,896
         Increase (decrease) in deferred revenue                                 7,821                 0                   7,821
         Increase (decrease) in accrued payroll taxes                          (34,725)           35,730                   1,005
         Increase (decrease) in accrued interest                                12,690                 0                  12,690
                                                                     ----------------- ----------------- -----------------------

Net cash used by operating activities                                       (1,463,131)         (299,393)             (1,609,525)
                                                                     ----------------- ----------------- -----------------------

CASH FLOW FROM INVESTING ACTIVITIES:
  Purchase certificate of deposit                                              (25,000)                0                 (25,000)
  Purchase of property and equipment                                          (223,135)          (41,968)               (418,083)
                                                                     ----------------- ----------------- -----------------------

Net cash used by investing activities                                         (248,135)          (41,986)               (443,083)
                                                                     ----------------- ----------------- -----------------------

CASH FLOW FROM FINANCING ACTIVITIES :
Increase (decrease) in advance from shareholder                                (24,750)           24,750                       0
Proceeds from notes payable                                                  1,145,400                 0               1,145,400
Common stock issued for cash                                                   621,000           303,500                 926,226
Preferred stock issued for cash                                                  4,600                 0                   4,600
Proceeds from stock subscription receivable                                     62,700            12,274                  74,974
                                                                     ----------------- ----------------- -----------------------

Net cash provided by financing activities                                    1,808,950           340,524               2,151,200
                                                                     ----------------- ----------------- -----------------------

Net increase (decrease) in cash                                                 97,684              (837)                 98,592

CASH, beginning of period                                                          908             1,745                       0
                                                                     ----------------- ----------------- -----------------------

CASH, end of period                                                  $98,592           $             908 $98,592
                                                                     ================= ================= =======================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
         Interest paid in cash                                       $          51,697 $               0 $                51,697
                                                                     ================= ================= =======================

Non-Cash Financing Activities:
         Stock subscription receivable                               $0                $         (62,700)$0
                                                                     ================= ================= =======================

         Donated capital - related party                             $0                $           9,000 $9,000
                                                                     ================= ================= =======================

         Inventory transferred to property and equipment             $         152,980 $               0 $               152,980
                                                                     ================= ================= =======================
</TABLE>



     The accompanying notes are an integral part of the financial statements


                                       F-6

<PAGE>



                                IPVoice.com, Inc.
                        (A Development Stage Enterprise)
                   Notes to Consolidated Financial Statements


(1) Summary of Significant Accounting Principles
       The  Company  IPVoice.com, Inc.,  (the "Company"),  is a Nevada chartered
          development   stage  corporation  which  conducts  business  from  its
          headquarters  in Phoenix,  Arizona.  The Company was  incorporated  on
          February 19, 1997 as Nova  Enterprises,  Inc., and changed its name to
          IPVoice Communications,  Inc. in March 1998, and to IPVoice.com,  Inc.
          in April 1999.  The company is  principally  involved in the  internet
          telephone industry.  The Company is in the development stage. Although
          the Company has received revenue, it is not yet considered material to
          its  intended  operations.  Company  has  received  limited  operating
          revenues and will continue to incur expenses  during its  development,
          possibly in excess of revenue.

           The following summarize the more significant accounting and reporting
policies and practices of the Company:

          a) Use of estimates The  consolidated  financial  statements have been
          prepared in conformity with generally accepted accounting  principles.
          In preparing  the  consolidated  financial  statements,  management is
          required to make  estimates and  assumptions  that affect the reported
          amounts of assets and  liabilities as of the date of the statements of
          financial  condition,  and  revenues  and  expenses  for the year then
          ended. Actual results may differ from those estimates.

          b) Significant acquisition In March 1998, IPVoice.com,  Inc., a Nevada
          corporation, acquired 100% of the issued and outstanding shares of the
          common stock of IPVoice Communications,  Inc., a Delaware corporation,
          in a reverse merger,  which was accounted for as a  reorganization  of
          the Delaware company.

          c) Principles of consolidation The consolidated  financial  statements
          include  the  accounts  of  IPVoice.com,  Inc.  and its  wholly  owned
          subsidiary.  All  intercompany  balances  and  transactions  have been
          eliminated.

          d) Net loss per share Basic net loss per weighted average common share
          is computed by dividing the net loss by the weighted average number of
          common shares outstanding during the period.

          e) Stock  compensation for services rendered The Company issues shares
          of common stock in exchange for  services  rendered.  The costs of the
          services  are  valued  according  to  generally  accepted   accounting
          principles and have been charged to operations.

          f) Inventory  Inventory  consists of unused  telephone time related to
          the prepaid  calling  cards sold.  The  Company  receives  transaction
          reports by activated PIN codes from the long distance provider.

          g) Property and  equipment  All property and  equipment is recorded at
          cost and  depreciated  over their  estimated  useful lives,  using the
          straight-line  method. Upon sale or retirement,  the costs and related
          accumulated   depreciation   are  eliminated  from  their   respective
          accounts, and the resulting gain or loss is included in the results of
          operations.  Repairs and maintenance charges which do not increase the
          useful lives of the assets are charged to operations as incurred.

          h) Revenue  recognition The Company currently has two revenue streams:
          1) prepaid  telephone calling cards and 2) the sale of its "Gateways".
          The Company  recognizes  revenue on the prepaid  telephone cards based
          upon  actual  usage as  provided  by the  service  provider in reports
          detailing usage by activated PIN codes. Since








                                       F-7

<PAGE>




                                IPVoice.com, Inc.
                        (A Development Stage Enterprise)
                   Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Principles (Continued)

           h) Revenue  recognition  (continued) the Company  requires payment in
           full by the  wholesaler  upon PIN code  activation,  in  blocks,  the
           amount  received  by the  Company in excess of that  reported  by the
           provider is classified as deferred revenue.  Revenue from the sale of
           the  Company's  "Gateways"  is  recognized  upon  acceptance  of  the
           equipment  by the  purchaser.  Although  the  accounting  for the two
           revenue  streams is  different,  they are both part of the  Company's
           single line of business.

          i)  Research  and  development  Research  and  development  costs  are
          expensed in the period incurred.

(2)        Stockholders' Equity The Company has authorized  50,000,000 shares of
           $0.001 par value  common  stock and  10,000,000  shares of $0.001 par
           value preferred  stock.  Rights and privileges of the preferred stock
           are to be determined by the Board of Directors prior to issuance. The
           Company had 16,422,758  and 12,578,999  shares of common stock issued
           and  outstanding  at December  31, 1999 and 1998,  respectively.  The
           Company has 1,150 and 0 shares of senior convertible  preferred stock
           issued and  outstanding at December 31, 1999 and 1998,  respectively.
           In February 1997, the Company issued  9,000,000 shares to its founder
           for services  rendered to the Company valued at par value, or $9,000.
           In  March  1997,  the  Company  completed  a  Regulation  D Rule  504
           Placement for 1,400,000 shares in exchange for $14,000 cash.

           In March 1998, a majority  shareholder  donated  9,000,000  shares of
           common stock to the  Company.  9,000,000  shares were  simultaneously
           issued  for  the  acquisition  of  IPVoice  Communications,  Inc.,  a
           Delaware corporation (Note (1)(b). During the second quarter of 1998,
           the Company  issued  144,000  shares of common  stock for $144,000 in
           cash.  The Company issued 473,000 shares of common stock for services
           rendered,  valued at the current  market rate of $47,300,  during the
           third  quarter of 1998.  Also during the third  quarter,  the Company
           issued  183,333  shares of  common  stock for  $85,000  in cash,  and
           627,000  shares of  common  stock for a  subscription  receivable  of
           $62,700.  In the fourth  quarter of 1998,  the Company issued 275,000
           shares of common stock for services  rendered,  valued at the current
           market rate of $41,250. In the same quarter, 476,666 shares of common
           stock were issued for $121,800 in cash.

           In January 1999,  the Company issued 93,760 shares of common stock in
           exchange  for  services,  valued at $14,064.  In January and February
           1999,  the Company  issued 499,999 shares of common stock in exchange
           for $75,000 in cash. In March 1999, the Company issued 187,500 shares
           of common  stock for $75,000 in cash.  These  issuances  were to then
           current  stockholders.  In March  1999,  the Company  issued  400,000
           shares of common  stock for  services,  valued at the current  market
           rate of $415,500, to three previously unrelated entities.

           In April 1999,  the Company  issued 250,000 shares of common stock to
           an existing stockholder for $100,000 cash. In April 1999, an existing
           stockholder exercised a warrant for 155,000 shares of common stock by
           tendering  $100,000  cash.  In April 1999,  an  existing  stockholder
           exercised a warrant for 1,600,000 shares of common stock by tendering
           $96,000 in cash.  In the second  quarter,  the  Company  completed  a
           Regulation D Rule 506 Private Placement for units, which included the
           issuance of 1,150  shares of senior  convertible  preferred  stock in
           exchange  for  $4,600 in cash.  These  senior  convertible  preferred
           shares,  as a group,  are convertible into common shares equaling 51%
           of the issued and outstanding common shares after conversion,  in the
           event of an uncured default of the notes payable.





                                       F-8

<PAGE>




                                IPVoice.com, Inc.
                        (A Development Stage Enterprise)
                   Notes to Consolidated Financial Statements


(2)        Stockholders' Equity (Continued) In July 1999, the Company discovered
           that it had failed to issue and record  10,000 shares of common stock
           in  exchange  for legal  services,  valued  at  $10,000  in 1997,  as
           originally  contracted.  These shares were  recorded in July 1999. In
           August 1999,  the Company  issued  437,500 shares of common stock for
           $175,000  cash.  All common stock shares issued in exchange for cash,
           except the two  warrant  exercises,  were  subscribed  for in January
           1999. In November  1999,  the Company  issued 10,000 shares of common
           stock in exchange for services  valued at $23,750.  In December 1999,
           the Company discovered that it had failed to issue and record 200,000
           shares of common stock for services valued at $20,000, which had been
           contracted for in October 1998, and were recorded in December 1999.

(3)        Income  Taxes  Deferred  income  taxes  (benefits)  are  provided for
           certain income and expenses which are recognized in different periods
           for  tax  and  financial  reporting  purposes.  The  Company  had net
           operating   loss  carry-   forwards   for  income  tax   purposes  of
           approximately  $2,504,500,  which expire beginning December 31, 2117.
           There may be certain  limitations on the Company's ability to utilize
           the loss carry-forwards in the event of a change of control resulting
           from the conversion of the senior convertible preferred stock, should
           that occur.

           The  amount  recorded  as a  deferred  tax  asset,  cumulative  as of
           December 31, 1999, is $1,002,000,  which represents the amount of tax
           benefits of the loss  carry-forwards.  The Company has  established a
           valuation allowance for this deferred tax asset of $1,002,000, as the
           Company has no history of profitable operations.

           The  significant  components  of the net  deferred  tax  asset  as of
December 31, 1999 are:


Net operating losses                          $             1,002,000
                                              -----------------------
Valuation allowance                                        (1,002,000)
                                              -----------------------
Net deferred tax asset                        $                     0
                                              =======================

(4)        Going  Concern As shown in the  accompanying  consolidated  financial
           statements,  the Company has incurred a net loss of $2,504,500  since
           inception.  At  December  31,  1999,  the Company  reflects  negative
           working   capital  of   approximately   $150,000  and   stockholders'
           deficiency  of   approximately   $918,000.   These  conditions  raise
           substantial  doubt as to the  ability of the Company to continue as a
           going  concern.  The  ability of the  Company to  continue as a going
           concern is dependent upon increasing  sales and obtaining  additional
           capital and  financing.  The financial  statements do not include any
           adjustments  that  might be  necessary  if the  Company  is unable to
           continue as a going concern. The Company has retained the services of
           a registered  broker/dealer and is in negotiations with an investment
           group,  introduced by the  broker/dealer,  for an investment of up to
           $5,000,000 in  two  traunches  of  $2.5  million  within  the next 12
           months.

(5)        Related  Parties At December  31,  1999,  the Company owed two of its
           officers $17,403 for  reimbursement of expenses paid on behalf of the
           Company. This amount is represented in Accounts payable - officer. At
           December 31, 1999, the Company owed two of its  shareholders  $40,896
           for  consulting  services  performed on behalf of the  Company.  This
           amount is  represented  in Accounts  payable - related  party.  Total
           consulting fees incurred to a shareholder during the year amounted to
           $131,064.  Consulting fees in the amount of $136,500 were paid to two
           officers,  $30,000  of  which  was paid to one  officer  prior to his
           election.




                                       F-9

<PAGE>




                                IPVoice.com, Inc.
                        (A Development Stage Enterprise)
                   Notes to Consolidated Financial Statements


(5)        Related Parties  (Continued) During the year ended December 31, 1998,
           one of the Company's shareholders advanced funds totaling $24,750 for
           payment  of general  operating  expenses.  This  amount was repaid in
           1999.

           During 1999, the Company purchased for cash approximately  $14,000 of
           furniture  and  fixtures  from an officer of the  Company at the fair
           market value.

(6)        Significant Acquisition On April 7, 1999, the Company acquired all of
           the issued and outstanding  common stock of SatLink 3000, Inc., d/b/a
           Independent Network Services, a Nevada Corporation (INS). The Company
           issued 250,000  shares of redeemable  convertible  preferred  shares.
           Each share is convertible,  on or after one year after Closing,  into
           one share of the  Company's  common  stock  or, at the  shareholder's
           option,  redeemable by the Company at a price of $2 per share, giving
           a total valuation of $500,000 to this transaction.

           During  the  course  of the  audit of the  SatLink  3000,  Inc.  1998
           financial  statements,  certain  information  was  disclosed  to  the
           Company.  Based on this information,  the Board of Directors elected,
           on October 29, 1999, to rescind the acquisition transaction ab initio
           and nullify the  above-mentioned  agreements  with the  President and
           Chief Executive Officer of SatLink 3000, Inc.  These were unwound and
           accourdingly, have not been given any accounting  recognition  in the
           accompanying  finacial  statements,  except  for the assumption of an
           office space lease and the writeoff of a  receivable  of $48,532. See
           Note 9.

(7)        Private Offering of Securities During the second quarter of 1999, the
           Company   raised   $1,150,000   through  the  issuance  of  forty-six
           investment  units in the amount of $25,000.  Each unit consisted of a
           two-year note in the principal amount of $24,900,  with a maturity of
           June 3, 2001,  with  interest  payable  quarterly at 9% per annum;  a
           warrant  for  18,750  shares  of  common  stock of the  Company;  and
           twenty-five  senior  convertible   preferred  shares.  The  preferred
           shares,  as a group,  are convertible into common shares equaling 51%
           of the issued and outstanding common shares after conversion,  in the
           event of an uncured  default of the notes  payable.  The note payable
           maturity  can be extended for two  additional  years at the option of
           the Company, with no consideration to the unit holders.

(8)        Restricted  Certificate  of  Deposit  In October  1999,  the  Company
           purchased a $25,000  one-year  certificate  of  deposit,  which bears
           interest at the rate of 4.89%.  The  Company  has pledged  this CD as
           collateral  to a Letter of Credit in the amount of $25,000  issued in
           favor  of the  supplier  of  prepaid  telephone  card  services  as a
           guarantee of payment.

(9) Commitments and Contingencies

           a)  Consulting  agreements - related  parties In December  1997,  the
           Company  entered  into  a  consulting  agreement  with  a  previously
           unrelated company  controlled by the present Chairman of the Board of
           Directors of the Company. This agreement,  as amended, called for the
           payment  of $5,000  per  month  for six  years.  This  agreement  was
           subsequently  amended by verbal agreement,  increasing the payment to
           $12,500 per month and in September 1999,  reduced to $7,500 per month
           until the Company is profitable. At December 31, 1999, the Company is
           obligated  to pay a total of  $90,000  in 2000,  $90,000  in 2001 and
           $82,500 in 2002.









                                      F-10

<PAGE>




                                IPVoice.com, Inc.
                        (A Development Stage Enterprise)
                   Notes to Consolidated Financial Statements


(9) Commitments and Contingencies (Continued)

           a) Consulting  agreements - related  parties  (continued)  In October
           1998,  the  Company  entered  into  a  consulting  agreement  with  a
           previously unrelated party. This agreement called for the issuance of
           350,000  shares of common  stock  valued at  $35,000,  an option  for
           1,600,000  shares of common  stock at an exercise  price of $0.06 per
           share,  an option for 350,000  shares of common  stock at an exercise
           price of $3.90 per share, a five-year warrant for common stock shares
           equal  to five per cent of the then  issued  and  outstanding  common
           stock  at  exercise  with a  strike  price of  $1.00  per  share  and
           consulting  fees for a 30 month period,  beginning in September 1998,
           in the  amounts of : $4,000 per month for the first 6 months,  $6,000
           per month for the next 12 months,  and $8,000 for the last 12 months.
           At December 31, 1999, fifteen months remain under this agreement. The
           Company is  obligated  for  payments  totaling  $90,000 in 2000,  and
           $24,000 in 2001.

           At the end of the first  quarter of 1999,  the Company  entered  into
           three marketing agreements with three previously unrelated companies.
           Those  agreements  called for the  issuance of  100,000,  200,000 and
           100,000  shares of common stock.  One  agreement  also called for the
           performance  based  issuance of up to 150,000  shares of common stock
           and the  performance  based  issuance of  warrants  for up to 450,000
           shares of common stock, with an exercise price of $2.50 per share.

           b) Consulting  agreements - other In June 1999,  the Company  entered
           into a one-year  consulting  agreement  with an unrelated  individual
           which  called for payment of  $100,000.  In 1999,  the  Company  paid
           $45,800 of this fee,  and is  obligated  to pay the  $54,200  balance
           during 2000.

           c) Leases The Company  entered  into a one-year  lease for its office
           space  beginning in August  1999.  The Company is obligated to rental
           payments  amounting  to $27,000 in 2000.  In 1999,  the Company  paid
           $35,000 in office rent. In November 1999, the Company  entered into a
           one-year  lease for an apartment for the Company's  use. In 1999, the
           Company paid $1,700 in rent, and is obligated to pay $8,700 in 2000.

           d) Pending Litigation  In  December 1999,  SatLink  filed  a  lawsuit
`          alleging  breach of  contract  as a result  of the  recission  of the
           acquisition in October 1999, as discussed in Note 6 above.In December
           1999,  the former  CFO of the Company filed a lawsuit alleging breach
           of contract as a result of the recission of the employment  agreement
           in October  1999, as discussed in Note 6 above.  The Company believes
           these suits have no merit and intends to vigorously defend them.

           e)  Employment  agreements  In April 1998,  the Company  entered into
           three-year  employment  agreements  with the President and the Senior
           Vice President.  These  agreements call for salaries in the amount of
           $150,000  per year for each of those  officers.  In  September  1999,
           those officers agreed to reduce this compensation to $90,000 per year
           until  such  time  as  the  Company  is  profitable.   The  reduction
           agreements do not call for an accrual and payment of the  difference.
           In November  1999,  the Company  entered  into a two-year  employment
           agreement with its Executive Vice President, (EVP), which calls for a
           salary of $78,000 per year and granted the EVP four-year  options for
           50,000 shares of common stock, with an exercise price of $1.75. These
           options are not  exercisable  until the stock  trades above $7.50 and
           $12.00  per  share  for ten  days  out of  thirty  consecutive  days,
           one-half and one-half,  respectively. The Company is obligated to pay
           a total of  $258,000 in  2000  and  $110,000  in  2001,  under  these
           employment agreements.





                                      F-11

<PAGE>




                                IPVoice.com, Inc.
                        (A Development Stage Enterprise)
                   Notes to Consolidated Financial Statements


(10) Subsequent Events

           a) Leases In January 2000, the Company entered into a financing lease
           for a telephone system valued at $13,000, which calls for the Company
           to make payments totaling $4,500 per year for four years.

           In January  2000,  the Company  entered into a  three-year  operating
           lease with a stockholder of the Company.  This lease calls for a fair
           market value  purchase at lease end.  The lease is for the  Company's
           "Gateway"  equipment  located in New York City and Los  Angeles.  The
           Company is  obligated  to the  following  payments:  $36,800 in 2000;
           $40,000 in 2001; $40,000 in 2002 and $3,300 in 2003.

           b) Stock option plan In December 1999, the stockholders  approved for
           the Board of Directors to adopt an employee  stock option plan.  This
           plan  reserves up to 1,000,000  shares to be issued upon the exercise
           of such granted  options.  The plan,  which was not  finalized  until
           early  2000,  allows for the grant of  qualified  and non-  qualified
           options,  as defined by Section 422 of the  Internal  Revenue Code of
           1986, as amended.  To be eligible,  a grantee must have been employed
           by the  Company  for a minimum of 60 days,  or be a  Director  of the
           Company.   The  plan  contains  various  exercise  price  calculation
           formats. No options have been granted pursuant to this plan.







                                      F-12



<PAGE>



Item 8.  Changes  In  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure

           None

                                    PART III

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

           (a) Set forth below are the names, ages, positions,  with the Company
and business experiences of the executive officers and directors of the Company.


Name                 Age      Position(s) with Company
---------           ----      --------------------------
Barbara S. Will      47       Director, President and Chief Operating
                              Officer

Anthony Welch        31       Director, Senior Vice President of Research
                              and Development

Harry R. Bowman      56       Executive Vice President

Julie J. Bahavar     54       Controller [Chief Accounting Officer]

James K. Howson      57       Chairman, Chief Executive Officer

Russell Watson       50       Director

           All  directors  hold  office  until the next  annual  meeting  of the
Company's shareholders and until their successors have been elected and qualify.
Officers  serve at the  pleasure of the Board of  Directors.  The  officers  and
directors  will devote such time and effort to the  business  and affairs of the
Company as may be  necessary  to perform  their  responsibilities  as  executive
officers and/or directors of the Company.

Family Relationships

           There  are no family  relationships  between  or among the  executive
officers and directors of the Company.




                                       47

<PAGE>



Business Experience

           Barbara S. Will, age 47, currently serves as Director,  President and
COO.  She has served as a Director,  President  and COO since  March  1998.  She
previously served as Chairman between March 1998 to June 1999. Ms. Will has over
twenty  (20)  years  of  experience  in all  areas of  telecommunications,  both
domestic and  international.  Prior to joining IPVC, from 1984 to 1997, Ms. Will
was in a senior  capacity with MCI and was  responsible  for signing some of the
largest contracts with a  carrier/reseller  in MCI's history.  Her vast industry
experience includes international and international private line;  International
800; data; DSO, DSI, DSC, OC3; dedicated in and outbound;  One-Plus; calling and
debit cards;  Operator  Assistance;  Internet;  Enhanced Services;  and Enhanced
Network.  During  her  time  at  MCI,  she  received  numerous  awards  for  her
outstanding  performance.  Ms. Will attended  Colorado State  University for two
years.

           Anthony K. Welch, age 31, current serves as a Director and the Senior
Vice-President.  He has served as a Director  and Senior  Vice  President  since
March,  1998 and as Senior Vice  President  of Research  and  Development  since
August 1999. Anthony Welch is the original designer of the MultiCom,  AuditRite,
and  TrueConnect  platforms  and has  served as  Special  Consultant  to various
telecommunications  organizations.  From 1997 to 1998, Mr. Welch was involved in
the  formation  of the  Company and the  development  of the  MultiCom  Business
Management  Software.  From 1991 to 1997, Mr. Welch served as Special Consultant
and  Project  Design  Leader  for  such   organizations   as  Nation's  Bank  CS
Headquarters,    Frito-Lay   Worldwide   Headquarters,    NEC   America   Mobile
Radio/Cellular/Pager   Division  Headquarters,   and  Southwestern  Bell  Mobile
(Cellular/Pager)  Systems  Headquarters.  Mr. Welch has received numerous awards
and recognition  for his work in Artificial  Intelligence - both in Military and
Academic  circles - and has  applied  this  experience  to  creating  technology
solutions that are both  intelligent  and flexible.  The  technology  behind the
MultiCom  system has received  recognition  from several telecom trade magazines
("Computer Telephony" and "Telephony" magazines). Mr. Welch obtained first place
in the International Science competition for Artificial  Intelligence at the age
of 17. Mr.  Welch  attended  the  University  of  Mississippi  and was the first
freshman  in the  history of the  college  to be  admitted  into the  artificial
intelligence Ph.D. Program.

           Harry  R.  Bowman,   age  56,  currently  serves  as  Executive  Vice
President.  He has served as Executive Vice  President  since November 1999. Mr.
Bowman is an  experienced  telecommunications  operations  professional  who was
employed  by AT&T from 1961 until 1995,  when he  retired.  During his time with
AT&T, Mr. Bowman held various managerial positions,  last serving as Manager for
Creative Software, where he was responsible for sales, contracts,  personnel and
financials.  Previously  he had served as Manager of  Technical  Services,  Date
Center Operations and in other management  positions.  After spending four years
in retirement,  Mr. Bowman was provided with the opportunity to join the Company
has its  Executive  Vice  President,  which he accepted.  Mr.  Bowman holds a BS
Degree in Accounting from St. Joseph's University, Philadelphia, Pennsylvania.



                                       48

<PAGE>



           Julie J. Bahavar,  age 54,  currently  serves  as  Controller  [Chief
Accounting  Officer].  She has  served in this  capacity  since  March 1,  2000.
During1999,  Ms. Bahavar served as Chief  Financial  Officer/Controller  for the
Arizona  Industries for the blind,  which is a  manufacturing,  distribution and
retail sales operation.  During 1998, Ms. Bahavar was a Senior Financial Analyst
for Apollo Group Inc. From 1994 through  1997,  Ms.  Bahavar was an  independent
consultant,  representing  such companies as Carboraudom  Micro  Electronics and
Wells  Fargo  Bank.  From 1985 to 1994,  Ms.  Bahavar  was  employed as a Budget
Manager and Audit Manager with the State of Arizona.  Ms. Bahavar  received a BS
Degree in Accounting  from the  University of Denver in 1979 and an MBA from the
University of Denver in 1981. She is a Certified Public Accountant  certified in
the States of Arizona and Colorado.

           James K. Howson, age 57,  currently  serves  as  Chairman  and  Chief
Executive  Officer.  He has  served  as  Chairman  since  June1999  and as Chief
Executive  Officer since September  1999. Mr. Howson is an entrepreneur  and has
been an  investor  for  thirty  (30)  years in  small  businesses  and  start-up
companies in Europe,  Latin American and the United  States.  From 1991 to 1996,
Mr. Howson was an investor in and  consultant  to  Mid-America  Venture  Capital
Partners, Inc., a privately held company that provided seed capital to promising
young businesses. Mr. Howson was also an investor in Environmental Systems, Inc.
located in Lancaster,  Pennsylvania.  Mr. Howson attended Roan College in London
England in 1959.

           Russell Watson, age 50, currently serves as a Director. He has served
as a Director  since  September,  1999.  Currently,  Mr.  Watson is the Business
Manager for Behrwood Capital  Service,  Inc., an investment  management  company
which he  joined in 1998.  Also,  he is the Vice  President  of  Operations  for
Venison America, Inc., a meat processor and distributor which he joined in 1998.
From 1994 to 1998, Mr. Watson was  Operations  Manager for  Mid-Atlantic  Snack,
Inc.,  a snack food  distributor.  Mr.  Watson  owned and  operated a snack food
marketing  business from 1993 to 1994. From 1974 to 1993, Mr. Watson was CFO and
Operations  Manager for  Weyerhauser  Company,  Hardwood  Division.  Mr.  Watson
received a B.S. degree from Indiana University of Pennsylvania in 1971.

           (b)       Section 16(a) Beneficial Ownership Reporting Compliance

           No Director, Officer, Beneficial Owner of more than ten percent (10%)
of any  class of equity  securities  of the  Company  failed to file on a timely
basis  reports  required by Section  16(a) of the  Exchange  Act during the most
recent fiscal year or prior fiscal years.



                                       49

<PAGE>



Item 10.  Executive Compensation

<TABLE>
<CAPTION>
Name and           Year     Annual      Annual    Annual    LT       LT         LTIP          All
Post                        Comp        Comp      Comp      Comp     Comp       Payouts       Other
                            Salary      Bonus     Other     Rest     Options                   (1)
                                        ($)                 Stock
-----------------------------------------------------------------------------------------------------
<S>                <C>      <C>         <C>       <C>       <C>      <C>        <C>           <C>
Barbara            1997     $   -0-     $ -0-                                                 $-0-
S. Will,           1998     $48,000     $ -0-                                                 $-0-
Director,          1999     $106,956    $ -0-                                                 $-0-
President and
COO
-----------------------------------------------------------------------------------------------------
James K.           1997                           $   -0-                                     $-0-
Howson,            1998                           $35,000                                     $-0-
Chairman and       1999                           $   -0-                                     $-0-
Chief                                                (2)
Executive
Officer

------------------------------------------------------------------------------------------------------
Anthony            1997     $   -0-     $ -0-                                                 $-0-
K. Welch,          1998     $48,000     $ -0-                                                 $-0-
Director and       1999     $51,996     $ -0-                                                 $-0-
Senior Vice-
President of
Research and
Development
-----------------------------------------------------------------------------------------------------
Harry R.           1999     $10,734               $30,000            50,000                   $-0-
Bowman,                      (4)                   (4)
Executive
Vice
President
------------------------------------------------------------------------------------------------------
Peter M.           1997     $   -0-     $ -0-                                                 $-0-
Stazzone,          1998     $   -0-     $ -0-                                                 $-0-
Director,          1999     $ 52,500    $ -0-                                                 $-0-
Secretary,
Treasurer and
Chief Financial
Officer and
President of INS (3)
------------------------------------------------------------------------------------------------------
Michael            1997     $   -0-                                                           $-0-
McKim, Vice        1998     $44,076                                                           $-0-
President of       1999     $63,750                                                           $-0-
Research and
Development
(3)
------------------------------------------------------------------------------------------------------
</TABLE>


                                       50

<PAGE>


(2)  All other compensation  includes certain health and life insurance benefits
     paid by the Company on behalf of its employee.

(3)  Ms. Will and Mr. Welsh have agreed effective  September 1999 voluntarily to
     reduce  each of the  salaries  to  $90,000  per year and  Condor has agreed
     effective September 1999 to reduce its consulting fees to $90,000 per year.
     Each of these  agreed  reductions  shall  continue  until  the  Company  is
     profitable  and there are no  accruals  of any unpaid  amounts  under their
     respective  contracts.  Further,  none of the parties has any  expectations
     regarding the amount foregone at any future date.

(4)  Mr.  Howson was a  consultant  to the Company  prior to becoming  the Chief
     Executive  Officer  in  June  1999  and  continues  to be  paid  under  the
     consulting  agreement  the Company has with Condor which had a six (6) year
     term commencing November 1997.

(4)  Mr.  Bowman  joined the Company in November,  1999 and the salary  reflects
     payments  made from that date.  Prior to joining the  Company,  Mr.  Bowman
     provided  consulting services which are reflected as other compensation for
     1999. In addition to health insurance,  Mr. Bowman receives travel, living,
     automobile  and  subsistence  allowances  and  has  use  of  the  corporate
     apartment when he is in Phoenix.

(5)  Mr.  Stazzone was  terminated  on October 29, 1999.  Mr. McKim  resigned in
     September 1999.



                                       51

<PAGE>



Year End Option Values for Executive Officers


Name (1)     Exercised     Value Realized     No. of           Value of
                                              Unexercised      Unexercised
                                              Exercisable/     Exercisable/
                                              Unexercisable    Unexercisable

Barbara S.      -0-          -0-                  -0-/-0-          -0-/-0-
Will
Anthony K.      -0-          -0-                  -0-/-0-          -0-/-0-
Welch
Harry R.        -0-          -0-                  50,000/-0-       $-0-/-0- (2)
Bowman
James K.        -0-          -0-                  -0-/-0-          -0-/-0-
Howson

(1)  Neither Mr. Stazzone nor Mr. McKim were included in this table because they
     were not  executive  officers  at the year  end  1999 and  neither  had any
     unexercised exercisable/unexercised options.

(2)  No value has been  placed  on their  options  because  only one half may be
     exercised when the Company's stock has traded for a designated period at $7
     and the other half may be exercised when the Company's stock has traded for
     a  designated  period at $12. At the time the  options  were  granted,  the
     Company's Common Stock was trading at $1.75.

           The  Company  has  adopted  an  Employee  Stock  Option  Plan  and  a
Consultant Stock Option Plan.

Employee Contracts and Agreement

           The Company has entered into employment agreements with Ms. Will, Mr.
Welch and Mr.  Bowman.  In  addition,  the  Company  had an  agreement  with Mr.
Stazzone  which  was  rescinded  at the  same  time as the INS  transaction  was
rescinded ab initio.

           In April 1998, the Company entered into an employment  agreement with
Barbara S. Will,  the Company's  President and COO for a term of three (3) years
at a salary of $150,000  per year.  Ms. Will  received  3,000,000  shares of the
Company's Common Stock at the time of the share exchange  agreement  between the
Company and IPVCDE. Ms. Will has agreed effective  September 1999 voluntarily to
reduce her salary to $90,000 per year. This agreed reduction will continue until
the Company is profitable  and there are no accruals of any unpaid amounts under
her  contract.  Further,  Ms.  Will has no  expectations  regarding  the  amount
foregone at any future date.

                                       52

<PAGE>



           In April 1998, the Company entered into an employment  agreement with
Anthony  K.  Welch,   the  Company's  Senior  Vice  President  of  Research  and
Development  for a term of three (3) years at a salary of $150,000 per year. Mr.
Welch received 3,000,000 shares of the Company's Common Stock at the time of the
share exchange  agreement between the Company and IPVCDE in consideration of all
of his rights,  title and interest in the Company's  proprietary  software.  Mr.
Welch has agreed  effective  September 1999  voluntarily to reduce his salary to
$90,000  per year.  This agreed  reduction  will  continue  until the Company is
profitable  and there are no accruals of any unpaid  amounts under his contract.
Further,  Mr. Welch no expectations  regarding the amount foregone at any future
date.

           On  November  11,  1999,  the  Company  executed a letter  employment
agreement  dated November 10, 1999 with Harry R. Bowman.  Under the terms of the
agreement,  Mr. Bowman is to serve as an Executive Vice President of the Company
for a term of two (2) years at a base salary of $78,000 per year.  In  addition,
Mr.  Bowman,  a resident of  Pennsylvania,  receives  health  insurance,  a paid
vacation,  travel  twelve  (12)  times  a year  to  his  residence  and  living,
automobile and subsistence allowances.  Mr. Bowman is required to spend at least
three (3) weeks a month at the  Company's  offices in Phoenix and one (1) week a
month at a location  to be decided in  Pennsylvania.  Mr.  Bowman has use of the
corporate  apartment when he is in Phoenix.  The agreement included a sixty (60)
day  probationary  period.  Under the terms of the  agreement,  Mr.  Bowman  was
granted four (4) years options to purchase 50,000 shares of the Company's Common
Stock at an exercise price of $1.75  exercisable  one half when the stock trades
for any ten (10) days out of thirty (30)  consecutive days at or above $7.00 per
share and one half when the stock  trades at or above $12.00 in the same manner.
Any shares  acquired  under the option must be held for the  two-year  period in
which Mr.  Bowman has  committed to work for the Company,  and, in the event the
commitment  is not met or Mr. Bowman is discharged  due to poor  performance  or
cause,  unexercised  options expire and shares acquired are forfeited.  For such
offering,  the  Company  relied  upon  Section  4(2) of the Act and Rule 506 and
Section  201.[70 P.S.  1.201] of the  Pennsylvania  Code. See Part III, Item 12.
"Certain Relationships and Related Transactions".

           In April 1999,  the Company  entered into an  employment/compensation
agreement  with Peter M.  Stazzone,  the  President  of INS and Chief  Financial
Officer,  Treasurer an Secretary of the Company for term of three (3) years at a
base  annual  salary  of  $140,000  commencing  August  1999.  Pursuant  to  the
Employment  Agreement,  Mr.  Stazzone  received  200,000 shares of the Company's
Restricted  Common  Stock,  a stock  bonus of 100,000  shares of the  Restricted
Common Stock deemed earned on the date of the Share Exchange  Agreement,  but to
be  delivered  on the  earlier  of (i) the  first  anniversary  date or (ii) Mr.
Stazzone's  termination and options to purchase an additional  200,000 shares of
the restricted Common Stock of the Company exercisable for a period of three (3)
years at an exercise  price of $1.00 per share.  The Company voted to unwind the
INS  transaction ab initio,  to rescind the issuances made under the acquisition
and the employment  agreements and to terminate Mr. Stazzone's  employment.  Mr.
Stazzone  has  instituted  suit  against  the  Company.  See Part III,  Item 12.
"Certain Relationships and Related Transactions".


                                       53

<PAGE>



Key Man Life Insurance

           The  Company  does not have nor does it  intend  to apply for Key Man
Life Insurance.

Employee and Consultants Stock Option Plans

           On December 9, 1999, the shareholders  adopted an executive incentive
stock award plan under which  1,000,000  are reserved for grants under the plan.
The plan takes  effect on January 1, 2000 and  terminates  on December 31, 2005.
Under  the  plan,  options  can  be  granted  to  select  employees,   officers,
executives, directors and consultant and advisors to the Company. It is intended
that all options be granted at fair market value on a particular date determined
by the  Compensation  and  Option  Committee  which is made up of James  Howson,
Director and Chief Executive Officer and Russell Watson,  Director;  however,  a
lesser price may be set by such  Committee.  The exercise period for the options
is determined by the Committee but cannot exceed six (6) years.  Pursuant to the
terms of the approved plan, the Board of Directors is authorized to alter, amend
or modify the plan under certain  conditions.  The Board of Directors approved a
modified  plan on  February  28,  2000 that  maintains  the key  features of the
approved plan as required.  See Part III, Item 12.  "Certain  Relationships  and
Related Transactions."

Compensation of Directors

           The  Company  has  no  standard  arrangements  for  compensating  the
Directors  of the  Company  for their  attendance  at  meetings  of the Board of
Directors.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

           The following  table sets forth  information as of December 31, 1999,
regarding the ownership of the Company's Common Stock by each shareholder  known
by the Company to be the beneficial  owner of more than five percent (5%) of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group.  Except as otherwise  indicated,  each of the shareholders
has sole voting and  investment  power with respect to the share of Common Stock
beneficially owned.

Name and Address of            Title of        Amount and Nature of   Percent of
Beneficial Owner               Class           Beneficial Owner          Class
--------------------------------------------------------------------------------


James Howson (2)(3)           Common              0                      0.0%
7553 South Mount Zirkel
Littleton, CO 80127

Barbara S. Will(3)            Common           3,000,000                18.267%
8027 East La Junta Road
Scottsdale, AZ 85255


                                       54

<PAGE>



Anthony K. Welch(3)           Common           2,856,523                17.394%
6554 South Olympian Road
Evergreen, CO 80439

Harry R. Bowman (4)           Common                  0                  0.0%
181 Woodland Drive
York, PA 17403

Russell Watson                Common                  0                  0.0%
105 Leader Heights Road
York, PA 17403 (5)

Condor Worldwide, Ltd.  (2)(3)Common           3,000,000                18.237%
328 Bay Street
Nassau, The Bahamas

All Executive Officers and
Directors as a Group
(Five (5) persons)                             8,856,523                53.928%
----------

(1)  The  percentages   are  based  upon  16,422,758   shares  of  Common  Stock
     outstanding as of December 31, 1999. In addition to the shares owned by the
     Executive   Officers  and  Directors,   said  officers  and  directors  own
     (including  those  beneficially  held) options to purchase 70,000 shares of
     the Company's  Common Stock. In the event all such options to purchase were
     exercised,  this  group  would  own a  total  of  8,926,523  shares  of the
     Company's Common Stock which would represent 54.124% of the total shares of
     Common Stock  outstanding.  None of these  options may be exercised  within
     thirty  (30)  days,  and then only in the event  that the  Company's  stock
     trades  for any ten (10)  days out of that  thirty  (30)  consecutive  days
     period at or above $7.00.

(2)  In November 1997,  prior to its acquisition by the Company,  IPVCDE entered
     into a consulting  agreement with Condor,  whereby Condor agreed to provide
     certain  sales,  marketing  and public  relations  services in exchange for
     600,000  shares of  IPVCDE's  unrestricted  Common  Stock to be issued upon
     listing of IPVCDE's stock on the OTC Bulletin Board. Such shares were never
     issued and the  agreement was amended in July 1998 deleting the issuance of
     such shares.  The consulting  agreement was modified in July 1998 to revoke
     all interest in the shares.  The term of the  Agreement was for a period of
     six (6)  years  and is still in  effect.  James K.  Howson,  the  Company's
     Chairman  and CEO,  serves as the  Chairman and CEO of Condor and he is the
     beneficial  owner of Condor.  Effective  September  1999,  Condor agreed to
     reduce its consulting fees to $90,000 per year. This agreed  reduction will
     shall continue until the Company is profitable and there are no accruals of
     any unpaid amounts under the Condor contract.  Further,  none Condor has no
     expectations  regarding  the amount  foregone at any future date.  See Part
     III, Item 12.  "Certain Relationships and Related Transactions".

                                                                 55

<PAGE>




(3)  In March  1998,  the  Company's  predecessor,  Nova,  entered  into a share
     exchange  agreement  with IPVCDE and its  shareholders  whereby Nova issued
     9,000,000  shares  of its  restricted  Common  Stock  valued  at  $9,000 to
     IPVCDE's  shareholders for all of the outstanding  capital stock of IPVCDE,
     which then became a wholly-owned subsidiary of Nova. In connection with the
     agreement,  the Company  entered into  employment  agreements  with Barbara
     Will, its current Director,  Chief Operating Officer and President and with
     Anthony  Welch,  designer  of  the  Company's  proprietary  software,   who
     currently serves as the Senior  Vice-President of Research and Development.
     As part of the  exchange,  Ms.  Will,  Mr.  Welch and Condor each  received
     3,000,000 shares of the Company's  restricted common stock. Mr. Howson, the
     Company's Chairman and Chief Executive Officer,  is the beneficial owner of
     Condor. For such offering, the Company relied upon Section 4(2) of the Act,
     Rule 506, Section  11-51-308(1)(j) of the Colorado Code, Section 7309(b)(9)
     of the Delaware Code and Section 90.530(17) of the Nevada code. The Company
     relied  on no  state  exemption  for the  issuance  to  Condor,  which is a
     Bahamian  corporation.  See Part III, Item 12. "Certain  Relationships  and
     Related Transactions".

(4)  On November 11, 1999, the Company  executed a letter  employment  agreement
     dated  November  10,  1999  with  Harry R.  Bowman.  Under the terms of the
     agreement,  Mr.  Bowman is to serve as an Executive  Vice  President of the
     Company  for a term of two (2) years at a base  salary of $78,000 per year.
     In  addition,  Mr.  Bowman,  a resident of  Pennsylvania,  receives  health
     insurance,  a paid  vacation,  travel  twelve  (12)  times  a  year  to his
     residence and living, automobile and subsistence allowances.  Mr. Bowman is
     required to spend at least three (3) weeks a month at the Company's offices
     in  Phoenix  and one (1)  week a  month  at a  location  to be  decided  in
     Pennsylvania. Mr. Bowman has the use of the Company apartment when he is in
     Phoenix. The agreement included a sixty (60) day probationary period. Under
     the terms of the  agreement,  Mr. Bowman was granted four (4) years options
     to purchase  50,000  shares of the  Company's  Common  Stock at an exercise
     price of $1.75  exercisable one half when the stock trades for any ten (10)
     days out of thirty  (30)  consecutive  days at or above $7.00 per share and
     one half when the stock trades at or above  $12.00 in the same manner.  Any
     shares  acquired  under the option must be held for the two-year  period in
     which Mr. Bowman has  committed to work for the Company,  and, in the event
     the  commitment  is  not  met or  Mr.  Bowman  is  discharged  due to  poor
     performance or cause,  unexercised  options expire and shares  acquired are
     forfeited.  For such offering,  the Company relied upon Section 4(2) of the
     Act and Rule 506 and Section 201.[70 P.S. 1.201] of the Pennsylvania  Code.
     See Part III, Item 12. "Certain Relationships and Related Transactions."

(5)  At a meeting of the Board in November 1999, the Company  granted to Russell
     Watson,  a Director  of the  Company,  four (4) years  options to  purchase
     20,000 shares of the Company's  Common Stock at an exercise  price of $1.75
     exercisable  one half  when the stock  trades  for any ten (10) days out of
     thirty (30) consecutive days at or above $7.00 per

                                       56

<PAGE>



     share  and one half when the  stock  trades at or above  $12.00 in the same
     manner. For such offering,  the Company relied upon Section 4(2) of the Act
     and Rule 506 and Section 201.[70 P.S. 1.201] of the Pennsylvania  Code. See
     Part III, Item 12. "Certain Relationships and Related Transactions".

           There are no  arrangements  which may result in the change of control
of the Company by such certain beneficial owners and management.


Item 12.  Certain Relationships and Related Transactions

           In February 1997,  prior to its  acquisition  of IPVCDE,  the Company
sold  1,400,000  shares of its  unrestricted  Common  Stock to  sixty-nine  (69)
individuals for $14,000. For such offering, the Company relied upon Section 3(b)
of the Securities  Act of 1933, as amended (the "Act") and Rule 504  promulgated
under  Regulation  D of the Act  ("Rule  504") and  Section  517.061(11)  of the
Florida Code,  Section 4[5/4](G) of the Illinois Code, Section 90.530(11) of the
Nevada  Code,   Section  78  A-17(9)  of  the  North  Carolina   Code,   Section
48-2-103(b)(4) of the Tennessee Code and Section 5[581-5]I(c) of the Texas Code.
No state  exemption was  necessary  for the sales made to Bahamian,  Canadian or
French investors.

            In November 1997,  prior to its  acquisition by the Company,  IPVCDE
entered  into a  consulting  agreement  with Condor,  whereby  Condor  agreed to
provide certain sales,  marketing and public relations  services in exchange for
600,000 shares of IPVCDE's  unrestricted  Common Stock to be issued upon listing
of IPVCDE's stock on the OTC Bulletin  Board.  Such shares were never issued and
the agreement was amended in July 1998 deleting the issuance of such shares. The
consulting  agreement  was  modified in July 1998 to revoke all  interest in the
shares. The term of the Agreement was for a period of six (6) years and is still
in effect.  James K.  Howson,  the  Company's  Chairman  and CEO,  serves as the
Chairman and CEO of Condor and he is the beneficial  owner of Condor.  Effective
September 1999, Condor agreed to reduce its consulting fees to $90,000 per year.
This agreed  reduction  will shall  continue until the Company is profitable and
there are no accruals of any unpaid amounts under the Condor contract.  Further,
none  Condor has no  expectations  regarding  the amount  foregone at any future
date.

           During 1997, the Company  incurred  certain  organizational  expenses
totaling  $14,000  which were paid for by a company  under common  control.  The
balance owed to this related  party at December 31, 1997 was paid in full during
1998.

           In March 1998, the Company's predecessor,  Nova, entered into a share
exchange  agreement  with  IPVCDE  and  its  shareholders  whereby  Nova  issued
9,000,000  shares of its  restricted  Common  Stock valued at $9,000 to IPVCDE's
shareholders  for all of the  outstanding  capital  stock of IPVCDE,  which then
became a wholly-owned subsidiary of Nova. In connection with the agreement,  the
Company  entered  into  employment  agreements  with Barbara  Will,  its current
Director, Chief Operating Officer and President and with Anthony Welch, designer
of the  Company's  proprietary  software,  who  currently  serves as the  Senior
Vice-President of Research

                                       57

<PAGE>



and  Development.  As part of the exchange,  Ms. Will, Mr. Welch and Condor each
received 3,000,000 shares of the Company's  restricted common stock. Mr. Howson,
the Company's Chairman and Chief Executive  Officer,  is the beneficial owner of
Condor. For such offering, the Company relied upon Section 4(2) of the Act, Rule
506, Section  11-51-308(1)(j)  of the Colorado Code,  Section  7309(b)(9) of the
Delaware Code and Section  90.530(17) of the Nevada code.  The Company relied on
no state exemption for the issuance to Condor, which is a Bahamian corporation.

           In April 1998,  the Company sold 154,000  shares of its  unrestricted
Common Stock to five (5) investors for $154,000.  For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504 and Section  517.061(11) of the
Florida Code and Section  359(f)(2)(d)  of the New York Code. No state exemption
was necessary for the shares sold to a United Kingdom corporation.

           In July 1998,  the  Company  sold 53,333  shares of its  unrestricted
Common Stock to one (1) investor for $40,000.75.  For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504 and Section  517.061(11) of the
Florida Code.

           In July 1998,  the Company  entered into a consulting  agreement with
Calpe, to provide public relations  consulting services valued at $85,000 to the
Company in exchange  for 850,000  shares of the  Company's  unrestricted  Common
Stock,  of which  200,000  shares were given to ICG  pursuant to its  consulting
contract  (as more fully  described  herein) and 23,000  shares were given to CI
pursuant  to its  consulting  contract  (as more  fully  described  herein).  In
consideration of its 627,000 shares, Calpe agreed to forego commissions equal to
$62,700 from IPVC product  sales.  The term of the Agreement was for a period of
three (3) years and is still in effect.  For such  offering,  the Company relied
upon Section 3(b) of the Act and Rule 504. No state  exemption was necessary for
the Calpe  shares,  as Calpe is a Bahamian  corporation.  However,  the  Company
relied  upon  Section  10-5-9(13)  of the  Georgia  Code for the ICG  shares and
Section 14-4-140 of the Arizona Code for the CI shares.

           In July,  1998, the Company entered into a consulting  agreement with
ICG to provide  financial public relations and direct marketing  advertising and
consulting services to the Company. For such services, the Company agreed to pay
ICG $75,000 over the term of the Agreement  and to issue  200,000  shares of the
unrestricted  Common  Stock of the  Company,  and to grant  warrants to purchase
100,000 shares of the restricted  Common Stock of the Company  exercisable for a
period of two (2) years at an exercise  price of $2.00 per share.  Such warrants
have  piggy-back  registration  rights.  Such  issuance of shares were valued at
$20,000, while the warrants were valued at $0. IPVC has a right of first refusal
to buy back any shares  proposed  to be sold by ICG to any third  party.  Of the
850,000 shares of its unrestricted Common Stock issued to Calpe,  200,000 shares
were given to ICG pursuant to its  contract.  The contract term was for a period
of six (6) months  and has since  terminated.  For such  offering,  the  Company
relied  upon  Section  3(b) of the Act and Rule 504.  The  Company  relied  upon
Section 10-5-9(13) of the Georgia Code for the issuance of ICG shares.


                                       58

<PAGE>



           In July 1998, the Company entered into a consulting agreement with CI
to provide public and investor relations  consulting  services to the Company in
exchange for 23,000  shares of the  Company's  unrestricted  Common  Stock.  The
Agreement  was for a term of three (3) months and  terminated  automatically  in
November 1998. Of the 850,000 shares of its unrestricted  Common Stock issued to
Calpe,  23,000  shares were given to CI pursuant  to its  contract.  The Company
relied  upon  Section  3(b) of the Act and Rule 504.  The  Company  relied  upon
Section 14-4-140 of the Arizona Code for the issuance of CI shares.

           In July 1998,  the Company  entered into an agreement  with Armstrong
wherein  the  Company  granted  Armstrong  the  non-exclusive  right to  market,
advertise and sell the Company's domestic and international calling services. As
payment for these services,  IPVC issued  Armstrong  warrants to purchase 50,000
shares of the Company's  Common Stock  exercisable at a price of $0.75 per share
or, at the option of IPVC,  for a total sum of $37,500 as well as commissions on
sales of the Company's products and services. The term of the agreement is for a
period of three (3) years.

           In September  1998, the Company  entered into a consulting  agreement
for a term of six (6) months with First Capital, to provide financial consulting
services  to the  Company.  In the event that First  Capital was  successful  in
securing  debt or equity  financing  for the  Company,  First  Capital  would be
granted  warrants to purchase  125,000 shares of the restricted  Common Stock of
the Company  exercisable for a period of three (3) years at an exercise price of
$1.00 per share. Such warrants would have piggy-back registration rights.

           In September 1998, the Company sold 20,000 shares of its unrestricted
Common Stock to one (1) investor for  $10,000.  For such  offering,  the Company
relied upon Section 3(b) of the Act and Rule 504 and Section  517.061(11) of the
Florida Code.

           In  September   1998,   the  Company  sold  100,000   shares  of  its
unrestricted  Common Stock to one (1) investor for $25,000.  For such  offering,
the  Company  relied  upon  Section  3(b) of the Act and  Rule  504 and  Section
49:3-50(b)(9) of the New Jersey Code.

           In September 1998, the Company sold 80,000 shares of its unrestricted
Common Stock to one (1) investor for  $15,000.  For such  offering,  the Company
relied upon Section 3(b) of the Act and Rule 504 and Section  517.061(11) of the
Florida Code.

           In  September   1998,  the  Company  issued  100,000  shares  of  its
unrestricted common stock in exchange for legal services valued at $10,000.  For
such  offering,  the Company  relied upon Section 3(b) of the Act,  Rule 504 and
Section 517.061(11) of the Florida Code.

           In October 1998, the Company entered into a consulting agreement with
IIP,  memorializing  an oral agreement made in July 1998, to provide  financial,
consulting and advisory  services valued at $35,000 in exchange for the issuance
of 350,000 shares, of which 243,760 are unrestricted Common Stock of the Company
and 106,240 are restricted Common Stock of the Company, the grant of warrants to
purchase an additional 1,600,000 shares of the unrestricted

                                       59

<PAGE>



Common Stock of the Company  exercisable  without time limitation at an exercise
price of $0.06 per  share,  the grant of  warrants  to  purchase  an  additional
350,000 shares of the restricted Common Stock of the Company exercisable without
time limitation at an exercise price of $3.90 per share and in  consideration of
$100 the grant of warrants to purchase an 5% of the  restricted  Common Stock of
the Company on a  fully-diluted  basis at a price of $1.00 per share. In January
1999, IIP received 93,760 shares of Common Stock in lieu of payment for services
which was due in the amount of $14,064.  IIP  exercised  its warrant to purchase
1,600,000  shares  in April  1999 at an  exercise  price of  $96,000.  As to the
warrant that entitles IIP to purchase 5% of the  restricted  Common Stock of the
Company,  in February 2000, IIP purchased 136,000 shares at an exercise price of
$136,000 and in March 2000, IIP purchased  50,000 shares at an exercise price of
$50,000.  Such shares represent 1.22% of the 5% interest that IIP is entitled to
acquire, thereby entitling IIP to purchase additional shares representing 3.88%.
The  Agreement  is for a period of three (3) years and is still in  effect.  The
Company must also pay a monthly fee of $4,000 the first year,  $6,000 the second
year and $8,000 the third  year.  For the  unrestricted  shares and  warrants to
purchase  unrestricted  shares,  the Company relied upon Section 3(b) of the Act
and Rule 504.  For the  restricted  shares and  warrants to purchase  restricted
shares,  the Company  relied upon Section 4(2) of the Act and Rule 506. No state
exemption was necessary, as IIP is an Irish corporation.

           In October,  1998,  the Company  entered into a consulting  agreement
with Inside.com to provide media relations services and consulting advice to the
Company  valued at $41,250 in exchange for the issuance of 275,000 shares of the
unrestricted  Common  Stock of the Company and the grant of warrants to purchase
an additional  155,000  shares of the  unrestricted  Common Stock of the Company
exercisable  for a  period  of one (1)  year at a price  of  $0.645  per  share.
Inside.com  exercised its warrant to purchase 155,000 shares in April 1999 at an
exercise  price of $100,000.  The Agreement is for a term of one (1) year and is
still in effect. For such issuance,  the Company relied upon Section 3(b) of the
Act and Rule 504 and Section 517.061(11) of the Florida Code.

           At  December  31,  1998,  the  Company  owed  Ms.  Will  $34,268  for
reimbursement  of expenses paid on behalf of the Company.  During the year ended
December 31, 1998,  the Company  owed two of its  shareholders,  Condor and IIP,
$20,564  for  consulting  services  performed  on behalf of the  Company.  Total
consulting  fees incurred to these  shareholders  during the year ended December
31, 1998 amounted to $31,096. During 1998, additional consulting fees of $35,000
were paid to Mr.  Howson and  $25,000 in  professional  fees were paid to ICG, a
shareholder in the Company. There were no outstanding amounts owed respective to
these fees as of December 31, 1998. During the year ended December 31, 1998, IIP
advanced funds totally $24,750 for payment of general  operating  expenses which
was repaid in fiscal 1999.

           During the period ended December 31, 1998,  one of the  shareholder's
who received a portion of the Company's Redeemable  Convertible  Preferred Stock
at the acquisition of INS paid consulting fees in the amount of $5,000 on behalf
of INS. This amount was  outstanding  at December 31, 1998 and was paid in March
1999.


                                       60

<PAGE>



           From  December 1998 through  January  1999,  the Company sold 896,665
shares of its unrestricted Common Stock to eight (8) investors for $134,500. For
such offering,  the Company relied upon Section 3(b) of the Act and Rule 504 and
Section 11-51-308(1)(j) of the Colorado Code, Section 517.061(11) of the Florida
Code and Section  49:3-50(b)(9)  of the New Jersey Code. No state  exemption was
required for two (2) Bahamian investors.

           From February 1999 through May 1999,  the Company sold forty-six (46)
units to twenty- four (24) investors for $1,150,000. Each unit consisted of: (i)
a note  payable in two (2) years with an option for the Company to extend it for
an additional two (2) years in the principal  amount of $24,900 bearing interest
at 9% per annum payable  quarterly in cash or, at the option of the Company,  in
unrestricted  shares of the Company's  Common Stock;  (ii) a warrant to purchase
18,750 shares of the Company's  restricted Common Stock  exercisable  during the
period in which the note is  outstanding  at an exercise  price equal to 125% of
the  average  closing  price of the  stock  for the  thirty  (30)  trading  days
immediately  prior to  February  1,  1999,  which  warrants  contain  piggy-back
registration  rights;  and  (iii)  twenty-five  (25)  of  the  Company's  Senior
Convertible  Preferred  shares.  In the event of a default in  repayment  of the
notes, all outstanding  Senior  Convertible  Preferred shares shall be converted
into Common Stock of the Company in an amount which will equal 51% of the issued
and outstanding shares,  warrants and options of the Company. For such offering,
the  Company  relied  upon  Section  4(2) of the Act and  Rule  506 and  Section
14-4-126(f)  of the  Arizona  Code,  Section  25102(f) of the  California  Code,
Section  517.061(11) of the Florida Code,  Section 130.293 of the Illinois Code,
Section 191-50.14(502) of the Iowa Code, Section 451.803.7 of the Michigan Code,
Section  359(f)(2)(d)  of the New  York  Code  and  Section  70P.S.1-211  of the
Pennsylvania Code.

           In March and April  1999,  the  Company  sold  875,000  shares of its
unrestricted  Common Stock to one (1) investor for $350,000.  For such offering,
the Company relied upon Section 3(b) of the Act and Rule 504. No state exemption
was required, as the investor was a Bahamian corporation.

           In March 1999, the Company  entered into a consulting  agreement with
BPN to provide financial public relations consulting services to the Company for
which the Company agreed to pay $40,000 for the first month, and $30,000 for the
second and third months, with subsequent months to be agreed upon, each of which
is payable in  unrestricted  shares of the Company's  Common Stock the number of
which is determined by dividing the monthly payment by $1.00.  The contract term
was through  September  1999 and has expired  without  renewal.  In exchange for
services  rendered by BPN, the Company issued 100,000 shares of its unrestricted
Common  Stock  valued at $106,200  to Joyce  Research  Group,  of which BPN is a
division.  For the fourth,  fifth and sixth months of the contract,  the Company
granted Joyce Research Group options to purchase 150,000 shares of the Company's
restricted  Common  Stock at an exercise  price equal to 60%, 65% and 70% of the
market price  respectively.  For such offering,  the Company relied upon Section
3(b) of the Act and Rule 504 and Florida Code Section 517.061(11).

           In April 1999, the Company  entered into a share  exchange  agreement
with  INS  whereby  the  Company  exchanged  250,000  shares  of its  Redeemable
Convertible Preferred stock valued at

                                       61

<PAGE>



$500,000  for all of the  outstanding  capital  stock  of INS.  Such  Redeemable
Convertible  Preferred  stock  contains 1 for 1 conversion  rights after one (1)
year and is  redeemable  at $2.00 per  share.  The  President  of INS,  Peter M.
Stazzone,  remained with the Company as the President of the subsidiary.  At the
time  of the  exchange  Mr.  Stazzone  became  Secretary,  Treasurer  and  Chief
Financial Officer of the Company under an employment agreement. Also at the time
of  the  exchange,  Mr.  Stazzone  received  50,000  shares  of  the  Redeemable
Convertible  Preferred  Stock  of  the  Company.   Pursuant  to  the  Employment
Agreement,  Mr.  Stazzone  received  200,000 shares of the Company's  Restricted
Common Stock,  a stock bonus of 100,000  shares of the  Restricted  Common Stock
deemed earned on the date of the Share Exchange  Agreement,  but to be delivered
on the  earlier  of (i)  the  first  anniversary  date or  (ii)  Mr.  Stazzone's
termination  and  options  to  purchase  an  additional  200,000  shares  of the
restricted  Common  Stock of the Company  exercisable  for a period of three (3)
years at an exercise price of $1.00 per share. It was  represented  that INS had
acquired certain assets,  including the rights to INS' name, from the Bankruptcy
Court in the Chapter 11 filing of Telsave.  Mr. Stazzone was the Chief Financial
Officer of Telsave at the time the bankruptcy was filed and the Bankruptcy Court
was provided with  disclosure of his  involvement  with INS prior to the Court's
approval  of the sale of  certain  Telsave  assets  to INS.  In June  1998,  Mr.
Stazzone  was loaned  $100,000 by INS,  which loan bears no interest  and has no
stated  repayment  terms.  At the time of the  acquisition  of INS,  the Company
believed that it was acquiring  the rights to the CIC Code.  The purchase  price
was based in part upon an appraisal of the value of the CIC Code which is loaded
in approximately 60% of the domestic market.  However,  during the course of the
audit,  it was  discovered  that  clear  title  may not have  passed  to INS and
subsequently the Company. Therefore, the Board resolved that, in the event clear
title had not passed to the  Company,  it would be in the best  interest  of the
shareholders  to unwind the  transaction.  The Company sought a legal opinion on
the status of such title and just prior to filing its Form 10SB in November 1999
discovered  that there was no clear link  between the  ownership of the CIC Code
and INS.  Therefore the Company voted to unwind the  transaction  ab initio,  to
rescind the issuances made under the acquisition  and the employment  agreements
and to terminate Mr. Stazzone's employment. Mr. Stazzone and INS have instituted
suit against the Company.  For such  offering,  the Company  relied upon Section
4(2) of the Act and  Rule  506,  Section  14-4-126(f)  of the  Arizona  Code and
Section 90.530(11) of the Nevada Code.

           In April 1999,  the Company  entered into a marketing  agreement with
Benae to market the  Company's  telephony  services and to register a minimum of
one  hundred  (100)  customers  in the thirty (30) cities in which IPVC plans to
offer telephony services within twelve(12) months in exchange for 200,000 shares
of the unrestricted  Common Stock of the Company valued at $206,200.  The shares
are to be returned to the Company if the minimum is not met. For such  offering,
the  Company  relied  upon  Section  3(b) of the Act and  Rule  504 and  Section
90.530(11) of the Nevada Code.

           In April,  1999, the Company entered into a marketing and advertising
agreement with NG to provide marketing services to a minimum of 75,000 customers
in thirty (30) cities  designated  by IPVC within a twelve (12) month  period in
exchange for 100,000 shares of the restricted Common Stock of the Company valued
at $103,100, which shares must be returned if NG fails to

                                       62

<PAGE>



deliver a minimum  of eight (8) cities  for a total of 75,000  customers  before
December  31, 1999.  In addition,  NG may earn  performance  bonuses of:  50,000
restricted  shares if eight (8) cities are delivered  within ninety (90) days of
execution;  50,000 restricted shares if fifteen (15) cities are delivered within
one hundred fifty (150) days; and 10,000  restricted  shares for each additional
city thereafter  before December 31, 1999 up to 30 cities.  Further,  NG will be
granted  warrants to purchase 30,000 shares of the Company's  restricted  Common
Stock  exercisable  for a period of two (2) years at an exercise  price of $2.50
per  share  for  every  block of 5,000  pre-registered  customers  up to  75,000
pre-registered  customers in a twelve (12) month period. For such offering,  the
Company relied upon Section 4(2) of the Act and Rule 506 and Section 14-4-126(F)
of the Arizona Code.

           In  September   1999,   the  Company  issued  10,000  shares  of  its
unrestricted Common Stock in exchange for legal services valued at $10,000.  The
shares  were  issued  pursuant to an  obligation  incurred in 1998.  The Company
relied  upon  Section  3(b) of the  Act,  Rule  504  and  Florida  Code  Section
517.061(11).

           On  November  11,  1999,  the  Company  executed a letter  employment
agreement  dated November 10, 1999 with Harry R. Bowman.  Under the terms of the
agreement,  Mr. Bowman is to serve as an Executive Vice President of the Company
for a term of two (2) years at a base salary of $78,000 per year.  In  addition,
Mr.  Bowman,  a resident of  Pennsylvania,  receives  health  insurance,  a paid
vacation,  travel  twelve  (12)  times  a year  to  his  residence  and  living,
automobile and subsistence allowances.  Mr. Bowman is required to spend at least
three (3) weeks a month at the  Company's  offices in Phoenix and one (1) week a
month at a location to be decided in  Pennsylvania..  Mr.  Bowman has the use of
the corporate  apartment when he is in Phoenix.  The agreement  included a sixty
(60) day probationary period.  Under the terms of the agreement,  Mr. Bowman was
granted four (4) years options to purchase 50,000 shares of the Company's Common
Stock at an exercise price of $1.75  exercisable  one half when the stock trades
for any ten (10) days out of thirty (30)  consecutive days at or above $7.00 per
share and one half when the stock  trades at or above $12.00 in the same manner.
Any shares  acquired  under the option must be held for the  two-year  period in
which Mr.  Bowman has  committed to work for the Company,  and, in the event the
commitment  is not met or Mr. Bowman is discharged  due to poor  performance  or
cause,  unexercised  options expire and shares acquired are forfeited.  For such
offering,  the  Company  relied  upon  Section  4(2) of the Act and Rule 506 and
Section 201.[70 P.S. 1.201] of the Pennsylvania Code.

           At a meeting of the Board in November  1999,  the Company  granted to
Russell  Watson,  a Director of the Company,  four (4) years options to purchase
20,000  shares  of the  Company's  Common  Stock at an  exercise  price of $1.75
exercisable  one half when the stock  trades for any ten (10) days out of thirty
(30)  consecutive  days at or above  $7.00 per share and one half when the stock
trades at or above $12.00 in the same  manner.  For such  offering,  the Company
relied upon Section 4(2) of the Act and Rule 506 and Section 201.[70 P.S. 1.201]
of the Pennsylvania Code.

           Effective  November  29,  1999,  the Company  executed an  engagement
letter with McGinn,  to act as a broker and financial  advisor to the Company in
the private placement of up to $5

                                       63

<PAGE>



million of the Company's  securities.  Under the agreement  McGinn is to use its
best efforts with regard to such placement.  The agreement is effective  through
March 24, 2000.  From the date of the engagement  letter through March 24, 2000,
McGinn has the exclusive right to offer the Company's  securities.  In the event
McGinn is  successful,  it will receive a fee equal to ten percent  (10%) of the
first $5 million  and eight  percent  (8%) of any amount in excess of $5 million
and will receive three year  warrants  equal to 2% of the proceeds with a strike
price of 125% of the bid price on the date of closing. Such warrants are to have
piggy-back  registration  rights.  Upon execution of the engagement  letter, the
Company was required to issue 10,000 shares of its restricted  Common Stock as a
non-refundable  Retainer/Investment  Banking fee and the Company is obligated to
reimburse  McGinn for  pre-approved  expenses.  The Company has not accepted the
terms of any private  placements  under this Agreement.  For such issuance,  the
Company  relied  upon  Section  4(2)  of  the  Act  and  Rule  506  and  Section
359(f)(2)(d) of the New York Code.

           On December 9, 1999, the shareholders  adopted an executive incentive
stock award plan under which  1,000,000  are reserved for grants under the plan.
The plan takes  effect on January 1, 2000 and  terminates  on December 31, 2005.
Under  the  plan,  options  can  be  granted  to  select  employees,   officers,
executives, directors and consultant and advisors to the Company. It is intended
that all options be granted at fair market value on a particular date determined
by the  Compensation  and  Option  Committee  which is made up of James  Howson,
Director and Chief Executive Officer and Russell Watson,  Director;  however,  a
lesser price may be set by such  Committee.  The exercise period for the options
is determined by the Committee but cannot exceed six (6) years.  Pursuant to the
terms of the approved plan, the Board of Directors is authorized to alter, amend
or modify the plan under certain  conditions.  The Board of Directors approved a
modified  plan on  February  28,  2000 that  maintains  the key  features of the
approved plan as required.

           At  December  31,  1999,  the  Company  owed Mr.  Howson and Ms. Will
$17,363 and $40  respectively.  During the year ended  December  31,  1999,  the
Company  owed IIP and  Behrwood  Capital  $40,000 and $896  respectively.  Total
consulting  fees  paid to IIP  during  the year  amounted  to  $131,0644.  Total
consulting  fees  paid to  Condor  and Mr.  Bowman  were  $106,500  and  $30,000
respectively.  Mr. Bowman received  consulting fees prior to becoming an officer
of the  Company.  During  1999,  the Company  purchased  for cash  approximately
$14,000 of furniture and fixtures from Ms. Will at the fair market value.

Item 13.  Exhibits and Reports on Form 8-K

           (a)       Exhibits

<TABLE>
<S>        <C>       <C>
Item No.             Description

3.(i).1    [1]       Articles of Incorporation of Nova Enterprises, Inc. filed February 19, 1997.

3.(i).2    [1]       Certificate of Amendment of Articles of Incorporation changing name to IPVoice
                     Communications, Inc. filed March 24, 1998.
</TABLE>

                                       64

<PAGE>


<TABLE>
<S>        <C>       <C>
3.(i).3    [1]       Certificate of Amendment of Articles of Incorporation changing name to
                     IPVC.com, Inc.

3.(i).4    [1]       Certificate of Amendment of Articles of Incorporation changing name to
                     IPVoice.com, Inc.

3.(ii).1   [1]       Bylaws of Nova Enterprises, Inc.

4.1        [1]       Form of Private Placement Offering of 1,600,000 common shares at $0.01 per
                     share.

4.2        [1]       Form of Private Placement Offering of 992,500 common shares at $1.00 per share.

4.3        [1]       Form of Private Placement Offering of 100,000 common shares at $0.50 per share.

4.4        [1]       Form of Private Placement Offering of 1,000,000 common shares at $0.15 per
                     share.

4.5        [1]       Form of Private Placement Offering of 1,250,000 common shares at $0.40 per
                     share.

4.6        [1]       Form of Private Placement Offering of 104 Units at $25,000.00 per unit.

4.7        [1]       Form of Promissory Note for Private Placement Offering of 104 Units at $25,000
                     per unit.

4.8        [1]       Form of Warrant for Private Placement Offering of 104 Units at $25,000 per unit.

10.1       [1]       Agreement dated March 1998 with Nova Enterprises, Inc.

10.2       [1]       Agreement dated April 1999 with Independent Network Services.

10.3       [1]       Agreement dated February 1998 with Natural MicroSystems Corporation.

10.4       [1]       Agreement dated June 1999 with ICG Telecom Group, Inc.

10.5       [1]       Agreement dated August 1999 with RSL Com U.S.A., Inc.

10.6       [1]       Agreement dated July 1999 with Star Telecommunications, Inc.

10.7       [1]       Agreement dated August 1999 with ILD Communications, Inc.

10.8       [1]       Agreement dated June 1999 with Level 3 Communications LLC.
</TABLE>


                                       65

<PAGE>


<TABLE>
<S>        <C>       <C>
10.9       [1]       Agreement dated August, 1999 with Worldcom Technologies, Inc.

10.10      [1]       Agreement dated March 1999 with Teleco Service International, Inc.

10.11      [1]       Agreement dated March 1999 with Billion Telecommunication Services, Ltd.

10.12      [1]       Agreement dated May 1999 with Firstnet Telephany Ltd.

10.13      [1]       Agreement dated July 1999 with MetroPlus Communication Technology, Inc.

10.14      [1]       Agreement dated February 1999 with BlueGrass Net.

10.15      [1]       Agreement dated July 1998 with The Armstrong International Group, Inc.

10.16      [1]       Agreement dated February 1999 with International Investment Partners, Ltd.

10.17      [1]       Agreement dated March 1999 with Kenneth M. Brown

10.18      [1]       Agreement dated April 1999 with Netgenie.com LLC

10.19      [1]       Agreement dated April 1999 with Benae International Inc.

10.20      [1]       Consulting Agreement dated November 1997 with Condor Worldwide, Ltd.

10.21      [1]       Consulting Agreement dated July 1998 with Calpe, Ltd.

10.22      [1]       Consulting Agreement dated July 1998 with The Investor Communications Group,
                     Inc.

10.23      [1]       Consulting Agreement dated July 1998 with Corporate Imaging.

10.24      [1]       Consulting Agreement dated September 1998 with First Capital Partners, Inc.

10.25      [1]       Consulting Agreement dated October 1998 with International Investment Partners,
                     Ltd.

10.26      [1]       Consulting Agreement dated October 1998 with Insidestock.com, Inc.

10.27      [1]       Consulting Agreement dated March 1999 with Buying Power Network.

10.28      [1]       Employment Agreement dated April 1998 with Barbara S. Will.

10.29      [1]       Employment Agreement dated April 1998 with Anthony K. Welch.
</TABLE>


                                       66

<PAGE>


<TABLE>
<S>        <C>       <C>
10.30      [1]       Employment Agreement dated April 1999 with Peter M. Stazzone.

10.31      [1]       Lease effective August 1, 1999 for Phoenix offices

10.32      [2]       Employment Agreement dated November 10, 1999 with Harry R.  Bowman

10.33      [2]       Memorandum of Understanding between the Company and Telic.net dated
                     November 17, 1999

10.34      [2]       Executive Incentive Stock Awards Plan adopted by Shareholders on December 9,
                     1999

10.35      *         Engagement Letter dated November 24, 1999 with McGinn, Smith & Co., Inc.

10.36      *         Engagement Letter dated February 16, 2000 with Delano Group Securities

10.37      *         UUNET Agreement dated December 15, 1999

10.38      *         Equipment Lease dated January 20, 2000 with International Investment Partners

10.39      *         Professional Service Agreement dated October 8, 1999 with Natural Microsystems
                     Corp.

10.40      *         Apartment Rental Agreement effective November 1, 1999

10.41      *         Telephone Equipment Lease/Purchase Agreements dated December 10, 1999

10.42      *         Amended 2000 Stock Plan

27.1       *         Financial Data Sheet.
</TABLE>
----------------

[1]  Previously  filed with the Company's Form 10SB filed  November  November 3,
     1999

[2]  Previously  filed  with the  Company's  Form  10QSB for the  Quarter  ended
     September 30, 1999

(*  Filed herewith)

           (b)       Reports on Form 8K

           There were no reports of Form 8K for the last quarter covered by this
report.



                                       67

<PAGE>



                                    SIGNATURE

           In  accordance  with  Section 13 and 15(d) of the  Exchange  Act, the
Registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                  IPVoice.com, Inc.
                                  (Registrant)

Date: March 31, 2000      By:/s/ Barbara S. Will
                             -------------------
                                Barbara S. Will, Director, President
                                and Chief Operating Officer

                          By:/s/ James Howson
                                James Howson, Chairman, Chief
                                Executive Officer

                          By:/s/ Julie Bahavar
                                Julie Bahavar, Controller and
                                Chief Accounting Officer

           Pursuant to the  requirements  of the Exchange  Act,  this report has
been  signed  by the  following  persons  in  the  capacities  and on the  dates
indicated.

<TABLE>
<S>                                  <C>                                   <C>
Signature                            Title                                 Date

/s/James K.  Howson                  Chairman of the Board                 March 31, 2000
- ---------------------------        and Chief Executive Officer
 James K.  Howson

/s/Barbara S.  Will            .     President and Chief Operating         March 31, 2000
- ---------------------------        Officer and Director
Barbara S.  Will

/s/Anthony K.  Welch                 Senior Vice President of Research     March 31, 2000
- ---------------------------        and Development  and Director
Anthony K.  Welch

/s/Russell Watson                    Director                              March 31, 2000
- ---------------------------
 Russell Watson
</TABLE>




                                       68