<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

        Annual Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                      For the year ended December 31, 2000

                           Commission File No. 0-24684

                             LONE WOLF ENERGY, INC.
                 (Name of small business issuer in its charter)

                                    Colorado
         (State or other jurisdiction of Incorporation or Organization)

                                   73-1587867
                      (IRS Employer Identification Number)

                          201 Robert S. Kerr, Suite 500
                          0klahoma City, Oklahoma 73102
                                 (405) 943-4615
        (Address, including zip code and telephone number, including area
                     Code of registrant's executive offices)

                               K&S VENTURES, INC.
                           (Former Name of Registrant)

      Securities registered under Section 12(b) of the Exchange Act: none

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

                         Common Stock, $0.001 par value
                                (Title of class)

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

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

Issuer's revenues for its most recent fiscal year: $ 7,411,171

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates, computed by reference to the price at which the common equity
was sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days:

As of March 17, 2001 the aggregates market value of the voting and non-voting
common equity held by non-affiliates was $1,075,332 based on the last trade on
the OTC bulletin board on that date.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of March 17, 2001 there were
36,479,790 shares of the Company's common stock issued and outstanding.

Documents Incorporated by Reference: None





<PAGE>   2

                                     PART I

Item 1. Description of Business

DISCONTINUED OPERATIONS

Lone Wolf Energy, Inc. (formerly K&S Ventures) was incorporated on March 4,
1991 in the state of Colorado. In February 1999 the Company signed a Master
Equipment Sales Agreement, ("MESA") with Eagle Capital International, LTD. to
sell specialized equipment. The MESA called for the Company to provide 15 pieces
of equipment over the next three years. In February 2000 the Company terminated
the MESA and sold the equipment it was financing under that agreement. Under the
terms of the termination agreement and sale of the equipment the Company
recorded a note receivable for $1,625,000 of which $775,000 had been collected
as of December 31, 2000. Eagle has filed a court claim attempting to negate the
original MESA. The company is vigorously defending the claim and believes it
will be successful in that defense. The Company has terminated the business
segment of equipment leasing activities.

In March 2000 the Company purchased the assets of EP Distributing Company
("EPD") for $100,000 in cash and 1,000,000 shares of common stock valued at
$40,000. EPD is currently operated as a division of the Company. The division
sells nutritional products, with its primary line being Earth Pharmacy brand
products, and also brokers medical supplies. The company ceased this operation
at the end of December 2000 and is currently negotiating with the prior owners
to transfer the assets of that division back to them. The Company does not
believe the operations of EP fit with the future plans for the company's
operations.

CHURCHLINK.COM

On May 11, 2000, the Company acquired ChurchLink.com, Inc. ("ChurchLink") as a
wholly-owned subsidiary. ChurchLink has developed a software product that
provides an online communications hub for churches and their members. This is
all possible by the programming source code that is unique and totally
customized to ChurchLink. The program was approximately two years in development
to make it perform the complex intricacies of interaction yet remain simple to
the end user. The program is very user friendly. To the church member in their
home, the program is very self-explanatory and simple to use, yet highly secure
with user name and password protection and massive firewall features. To the
church office worker or volunteer who is the ChurchLink.com administrator the
program requires one session and an easy to read pamphlet to be able to get the
church up and functioning online.

     The following are the key features to the program which will be provided to
churches on a fee basis:

     Online Pictorial Church Directory Service

     ChurchLink links church members and leaders in a searchable database of
     images and information which can be instantaneously updated eliminating the
     costs of a quickly outdated printed directory

     Church E-mail Communications Systems

     ChurchLink links church members, leaders and missionaries through the
     ability to communicate by e- mail individually or with any grouping or
     subgrouping in the entire congregation. For example, if a pastor wants to
     e-mail all men in his church who were born on March 7, 1956 or all members
     of the choir, he can do so with a simple search and click command



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     Electronic Outreach Ministry

     ChurchLink links church leaders with church prospects through individual
     input and extensive record storing and retrieving capability.

     Church Business Directory Service

     ChurchLink links church members and the businesses of other church members
     through a searchable Business Directory. The ChurchLink.com Business
     Directory can find a specific type of business associated with a member of
     one's church or geographic region.

     Prayer Link Ministry

     ChurchLink links members to a local and world wide prayer ministry in which
     they can actively participate from home or office 24 hours a day. No longer
     will it be necessary to have people leave their homes every hour of the
     night to go to the church building to participate in a 24- hour
     intercessory prayer ministry. All updates will be done immediately online
     and can be viewed on a local church level or on a worldwide basis.

     Cyber Sermon

     ChurchLink links digitally recorded church messages with the world. The
     traveling layman can now have access to his minister's weekly message via
     ChurchLink. Those who are new to a community can point and click to hear a
     message from a local minister to welcome them to the community.

     ChurchFinder Service

     ChurchLink links churches to prospects anywhere in the world who will be
     moving to the Churches Ministry Field and are looking for a church home.
     All subscribing churches will have a presence on the ChurchLink.com
     ChurchFinder. When someone from out of town is moving to the community they
     can go to ChurchFinder and fill out the profile and the ChurchFinder will
     match them with all churches in the community that meet the criteria they
     have entered. This aspect of ChurchLink.com will greatly simplify finding a
     new church when moving to a new community as well as bring many new members
     to subscribing churches.

Competition to ChurchLink

Our research has shown no direct competition to its product. As churches are
historically the last place that "new " technology is adapted, our research
confirms that churches are 5 to 10 years behind the technological business
curve. This being the case, our primary competition is existing printed
pictorial directories and individual church web sites.

While there are a growing number of churches that are developing web sites,
ChurchLink has not identified any individual companies that appear to offer the
identical range of services being offered by us. There are, however, many
companies that are offering one or more of the elements of the ChurchLink
package.

Most notably, there are a large number of companies offering web site hosting
services to churches. While most of these services are small companies offering
minimal functionality, some of them are offering more extensive components.
Examples of these companies include FaithSite.com, which offers calendar, prayer
list, member directory, church directory, e-mail list and multimedia featured
web sites to churches and ministries at "affordable prices." Also of note is
ThinkChurch.com, a Catholic-focused web site service company offers a
customizable web site, church locator service, member profiles, "interactive
communication with parishioners," and parish-specific content.

A second area of competing services being utilized by churches are the broader,
non-church-focused portals that are offering free web site hosting services,
such as Microsoft Network, Yahoo (GeoCities), Tripod and AngelFire. Microsoft
Network, for example, allows users to create "web communities" that could easily
represent individual churches, with links to chat rooms, message boards and
"sponsor's" pages unique to the content of that community.

Another competing source is the number of denominations offering basic but free
web site hosting services to their member churches. For example, the United
Methodist Church through its General Board of Global



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Ministries offers free space to individual UM Churches on its web server. As of
November 2000, the Board was reporting over 6,000 United Methodist churches and
groups who were taking advantage of this service. The Presbyterian Church offers
a similar service (PresbyChurch Online) to its member churches. There appear to
be over 200 individual Presbyterian churches that are taking advantage of this
service.

Many churches offer a pictorial directory, which typically takes from
six-to-twelve months to publish. ChurchLink offers a real time database where
information can be updated and accessed anytime, any day, or any location with
Internet access. Additionally, any picture can be used for the directory.
However, this is a change in the way pictorial directories have typically been
produced and it may not be possible for us to change the thinking of the way
church directories should be done.

Church web sites may also be considered competition. However, ChurchLink can be
a traffic generator by providing links to church web sites. ChurchLink.com will
also host any existing church web site at no additional cost.

Risk Factors to Churchlink

In order for ChurchLink to be profitable it will take in excess of three hundred
churches subscribing to the program. No guarantee can be made that we will be
able to sell the product to a sufficient number of churches to make ChurchLink a
viable business venture.

It may take more capital than the company can raise or internally generate to
cause ChurchLink to become profitable.

ChurchLink is completing the beta test stage with selected churches and is
making final revisions to the software. Regional marketing efforts for the
software began in March 2001. Significant revenues from this division are not
anticipated until the third quarter of 2001.

ZENEX COMMUNICATIONS

On June 21, 2000 the Company completed the acquisition of Prestige Investments,
Inc. and it's wholly owned subsidiary Zenex Long Distance, Inc. (d/b/a Zenex
Communications, Inc.), ("Zenex").

Prestige Investments, Inc. and its wholly owned subsidiary, Zenex are engaged
primarily in the wholesale of long distance minutes for prepaid calling cards.
Zenex does business as Zenex Communications, Inc. and primarily markets its
product to distributors and switchless resellers who in-turn market the products
to retailers.

Prestige was incorporated in Oklahoma on July 31, 1998. Zenex was incorporated
on January 27,1994 in Oklahoma. Prestige was formed solely for the purpose of
business acquisitions and investments, and had minimal activities prior to the
acquisition of Zenex. Prestige's only operations are those of its wholly owned
subsidiary, Zenex.



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<PAGE>   5

The Company's telecommunications business segment consists primarily of the
rendering of Interactive Voice Response (IVR) services. IVR is most easily
described by thinking of IVR as a voice computer. Where a computer has a
keyboard for entering information, an IVR uses remote touch-tone telephones.
Where a computer has a screen for showing the results, an IVR uses a prerecorded
human voice that is stored (digitized) on a hard drive. In addition, it can use
a synthesized voice (computerized voice) for read back information that is
constantly changing. The synthesized voice is commonly referred to as
Text-to-Speech.

Several companies sell IVR software and equipment that businesses buy and use in
their operations. The Company offers IVR services to businesses that do not want
to invest in the software and equipment. The Company combines the telephone
service with the IVR services so that it can serve multiple line needs and
multiple types of services via an 800 number through its phone switch (see "Item
2. Description of Properties" below).

IVR does not require a caller to say anything. The Company's system selects
pre-recorded voice messages to play to the caller to prompt the caller to do
something, such as "please enter your calling card number now," "please enter
your account number," or "press `1' for customer service."

The advantage of using an IVR service such as the Company's is that the volume
of calls that can be handled is much greater than what most businesses could
achieve on their own. The disadvantage to contracting for an IVR service is that
the business pays for the service continuously. It is the same decision a
business makes when deciding whether to lease or buy. However, even businesses
that invest in their own IVR equipment still must pay for the 800 number to
bring the call into the equipment.

IVR Services

 The Company's IVR services primarily include wholesale sale of long distance
minutes to distributors of prepaid and postpaid calling cards, automatic call
direction, automated customer service, information lines, automated
telemarketing, and automated product ordering. The following is a description of
each of these services.

PREPAID AND POSTPAID CALLING CARDS. The Company sells IVR service, along with
both "inbound" and "outbound" long distance service, to distributors of prepaid
and postpaid calling cards on a "per minute" basis. The difference between a
prepaid calling card and a postpaid calling card is in the timing of the payment
by the end-user. With a prepaid card, the end-user pays for the card prior to
making the first call. Upon purchase, the card's "pin," or personal
identification number, is revealed to the end-user by peeling a tape off the
card or scratching off an opaque substance. The end-user uses the card by first
dialing the 800 number printed on the card, and then dialing the card pin number
and the desired long distance phone number when asked to do so by the
prerecorded voice generated by the Company's IVR equipment. Each prepaid card
has a finite number of long distance minutes preprogrammed onto the card. When
the number of long distance minutes has been consumed, the card expires
automatically.

 With postpaid calling cards, the end-user pays for the number of long distance
minutes consumed, but after the call is made, typically on a monthly basis. A
postpaid card is used the same way as a prepaid card. The end-user is given a
pin number and an 800 number upon issuance of the card (usually the 800 number
is also printed on the card itself). The end-user uses the card by dialing the
800 number and then the pin number and desired long distance number when
prompted by the Company's IVR equipment. Postpaid cards are typically requested
by organizations for distribution to their employees for business use. Like
prepaid cards, there is usually a limit imposed on the number of long distance
minutes available for all of the postpaid cards furnished to an organization.



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The Company's sales of IVR services and long distance minutes are primarily to
wholesale distributors that do not have their own switch or calling card
platform. For example, the Company may generate for Business a one million pin
numbers. Business A may print the pin numbers on a million prepaid calling cards
that it manufactures or causes to be manufactured, and then sell the cards to
Business B at a discount. Business B may then sell the cards on a prepaid basis
to individual store chains, convenience stores, and other ultimate sources for
end-user purchases of prepaid cards. When a card is used, Business A pays the
Company for every long distance minute consumed by the end-user.

AUTOMATIC CALL DIRECTION. The Company offers its clients automated call
direction, or "call-forwarding," services. For example, the Company's system may
prompt the caller to dial "1" to find the person now, or to dial "2" to leave a
message. If "1" is dialed, the Company's system will automatically forward the
call to the client's pre-instructed phone number. The Company markets its
automatic call direction services primarily to small businesses.

AUTOMATED CUSTOMER SERVICE. The Company offers its clients automated customer
service assistance. This involves the creation of recordings that ask a series
of questions regarding the service problems most frequently experienced by
end-users of the client's products or services. If the caller dials the
appropriate response with respect to a particular prerecorded service message,
the Company's IVR equipment then plays a prerecorded message giving suggested
solutions to the problem. By using this service, customer service providers
typically experience a significant reduction in the number of personnel needed
to respond to customer service inquiries. The Company markets its automated
customer service services primarily to small, medium and large businesses.

INFORMATION LINES. The Company offers its clients automated information lines.
This involves the creation of recordings for the Company's clients that provide
information to callers. For example, a client in the seminar production business
may use the Company's service to advertise an 800 number to obtain information
about upcoming seminars. When a call comes in, the Company's IVR system will
say: "For a complete listing of upcoming seminars in your area, please enter
your area code." When the caller enters the area code, the system plays the
recording designated by the client for the caller's area. The Company markets
its information line services primarily to small, medium and large businesses.

AUTOMATED TELEMARKETING. The Company offers its clients automated telemarketing
services. For example, the Company's system can place multiple telemarketing
calls on behalf of a client. If the Company's system detects that an answering
machine has answered the call, the system will leave a message for the homeowner
to call an 800 number selected by the Company's client. If the Company's system
detects that a person has answered the call, the system will ask the person to
hold while a live person comes on the line. While some of the Company's
competitors offer "canned" IVR software platforms, the Company individually
tailors and constructs the software required to meet its clients' specific
needs. The Company markets its automated telemarketing services primarily to
small businesses.

AUTOMATED PRODUCT ORDERING. The Company offers its clients automated
product-ordering services. For example, the Company's client may use the system
to advertise an 800 number to order concert tickets. When a call comes in to
order tickets, the Company's system will ask for the caller's credit card
number, validate the credit card, and process the transaction. The Company
markets its automated products ordering services primarily to small businesses
and as an adjunct to businesses engaged in E-commerce.

Sources and Availability of Long Distance Minutes



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For its operations, the Company purchases its long distance minutes from long
distance carriers. The Company connects directly with its contracted long
distance carriers and buys minutes of use on a monthly basis. In general, there
are many sources for these minutes. The Company currently buys minutes directly
or indirectly through Qwest, Telco, and St Andrews and others. The Company, like
many of its competitors, is not "locked in" to a set price for long distance
minutes and it can terminate its long distance carrier contracts if the
contracted carrier increases its per-minute rate by more than five percent. If
the Company were to experience a material increase in the cost of minutes, it
would likely attempt to pass the cost along to its customers. Any such material
increase would probably similarly affect many of the Company's competitors, thus
reducing the odds that the Company's customers might switch service providers.
However, there can be no assurance that the Company's customers would not switch
to another service provider.

The Company faces certain risks when a significant customer requests the
Company to promise delivery of services on or before a specific date. One risk
inherent in this type arrangement is that there can be significant delays
between the ordering of new facilities to connect with the long distance
carriers and the actual connection. The Company may rely on outside vendors to
make the proper connection of T-1 lines to meet the anticipated increase in
demand. If the Company experiences delays in the vendor's promised connection
date, the Company could experience more customer demand than facilities to
supply. In this situation, some of the attempted calls from all customers would
be blocked at the Company's switch and callers would experience busy signals. As
a result, these customers might choose to discontinue using the Company's
services and the Company could suffer long-term harm.

A similar risk arises whenever the Company contracts with a new customer to
fulfill the customer's distribution requirements for long distance minutes and
that customer significantly underestimates the number of minutes it expects to
sell. In that event, if the Company's equipment were not sufficient to handle
the unexpected volume, callers experiencing busy signals would likely complain
to the Company's customer and the Company could suffer long-term harm.

With the Company's current switching equipment, management believes that it
could increase its existing call traffic by 80% to 100%. To grow beyond that
point will require significant capital expenditures and no assurances can be
given that the Company can raise the amount of capital needed.

Marketing Strategies

The Company markets its IVR Services primarily through direct sales, trade
journal ads, and attendance at trade shows and conventions. The Company employs
a marketing and sales staff and also retains independent marketing and sales
agents who are paid on a commission basis. New accounts must be great enough to
cover attrition in order to sustain growth.

The Company seeks to capture and retain clients through its experienced sales
staff by offering superior client service, support and responsiveness Because
the Company has its own source code to its IVR platform, the Company is in a
better position to make changes to the functionality of software than some of
its competitors that offer only "canned" software. The Company also is a
relatively small business compared to some of its competitors, which enables the
Company to interact with its clients on a more personal level. The Company's
small size also enables it to have relatively lower overhead costs. Unlike some
of its competitors, the Company also currently has extra capacity to meet
additional demand for its services.



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<PAGE>   8

IVR Contracts Terminable at Will; Dependence on One Customer

Although the Company has several IVR clients, either party renders virtually
all IVR services pursuant to contracts that are terminable either at the will of
either party or upon short notice. One particular IVR client accounted for
approximately 76% of the Company's revenues in 2000. Loss of this client would
have a materially adverse impact on the Company's operations and revenues.
Subsequent to 2000 new customers have been cultivated which has reduced this
dependence.

Competition

The telecommunications industry is highly competitive and the Company faces
intense current and future competition with respect to the Company's IVR service
offerings. Many of the Company's current and potential competitors have
financial, technical, personnel and other resources, including brand name
recognition, substantially greater than the Company's. There has also been, and
the Company believes there will continue to be, significant merger and joint
venture activity and the creation of strategic alliances within the
telecommunications industry that will result in competitors with even greater
financial resources and other competitive advantages. In addition, rapidly
evolving technology, and new applications of existing technology, may also
provide competitors in the Company's markets with significant competitive
advantages over the Company. The Company cannot provide any assurance that the
Company will be able to respond to such competitive pressures or that
competition will not have a material adverse effect on the Company's business.
The Company's competitors may be able to respond more quickly to new or emerging
technologies and changes in customer requirements. They may also be able to
devote greater resources to the development, promotion and sale of their
products and services than the Company can.

The Company competes primarily on the basis of pricing, quality of service and
customer loyalty. The Company's ability to compete effectively will depend on
the Company's ability to maintain high quality services at prices generally
equal to or below those charged by the Company's competitors. If the Company's
competition lowers their prices or the Company is otherwise forced to lower its
prices, the Company will be adversely affected.

Regulation

Overview. The Company's services are subject to federal, state and local
regulation. The Company holds various federal and state regulatory
authorizations. The Federal Communications Commission (FCC) exercises
jurisdiction over telecommunications common carrier services to the extent the
carriers provide, originate and/or terminate interstate or international
communications. The FCC also establishes rules and has other authority over
certain issues related to local telephone competition. State regulatory
commissions retain jurisdiction over telecommunications carriers to the extent
they provide, originate or terminate intrastate communications. Local
governments may require the Company to obtain licenses, permits or franchises in
order to use the public rights of way or obtain zoning approvals necessary to
install and operate its networks.

Federal Regulation. The FCC categorizes the Company as a non-dominant carrier,
and as a result the Company is subject to relatively limited regulation of its
interstate and international services. Tariffing and certain general policies
and rules apply, as well as certain reporting requirements, but the Company's
rates are not subject to prior FCC approval. The Company has all the operating
authority required by the FCC to conduct long distance and international
business at present. Additionally, as a non-dominant carrier, the Company may
install and operate additional facilities for the transmission of domestic and
international interstate communications without additional FCC, authorization,
except to the extent that radio licenses or international authorizations are
required or that installation of a facility



                                      -8-
<PAGE>   9

raises certain environmental impact issues under the FCC's rules. The FCC also
imposes prior approval requirements on transfers of control and assignments of
radio and microwave licenses and authorizations for the provision of
international telecommunications services. The FCC has the authority generally
to condition, modify, cancel, terminate or revoke licenses and operating
authority for failure to comply with federal laws and/or the rules, regulations
and policies of the FCC. Fines or other penalties also may be imposed for such
violations. The Company cannot provide any assurance that the FCC or third
parties will not raise issues with regard to the Company's compliance with
applicable laws and regulations.

State Regulation. The Company is also subject to various state laws and
regulations. Most public utility commissions require providers such as the
Company to obtain authority from the commission prior to the initiation of
intrastate service. The Company has been certified to provide interexchange toll
services in all states except Alaska and Hawaii. Interexchange authority
(sometimes referred to as intraLATA authority) allows the Company to provide
toll services within each of these states listed above. In those states that
require tariffs, the Company has tariffs setting forth the terms, conditions and
prices for services that are classified as intrastate. The Company is also
required to update or amend its tariffs when it adjusts its rates or adds new
products, and it is subject to various reporting and record-keeping
requirements. Many states also require prior approval for transfers of control
of certified carriers, corporate reorganizations, acquisitions of
telecommunications operations, assignment of carrier assets, carrier stock
offerings and the incurring 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/or the rules, regulations and policies of state regulatory
authorities. Fines or other penalties also may be imposed for such violations.
The Company cannot provide any assurance that state utilities commissions or
third parties will not raise issues with regard to the Company's compliance with
applicable laws or regulations.

Future Regulation. From time to time, federal or state legislators propose
legislation that could affect the Company, either beneficially or adversely. The
Company cannot provide any assurance that federal or state legislation will not
be enacted, or that regulations will not be adopted or actions taken by the FCC
or state regulatory authorities that might adversely affect the Company's
business.



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<PAGE>   10

 EMPLOYEES

         On December 31, 2000 the Company had 15 full time employees. Our future
performance depends in significant part upon the continued service of our key
technical and management personnel and our continuing ability to attract and
retain highly qualified and motivated personnel in all areas of our operations.
Competition for qualified personnel is intense. We provide no assurance that we
can retain key managerial and technical employees or that we can attract,
assimilate or retain other highly qualified personnel in the future. Our
employees are not represented by a labor union. We have not experienced any work
stoppages and consider our employee relations to be good.

Item 2. Description of Property

  Facilities

         The offices are occupied under a lease agreement with BOK Plaza
Associates, LLC, which expires August 31, 2005 and requires payment of monthly
rent of $ 5,694. We consider the space in which our offices are occupied to be
adequate for our current needs. In the event we are required to relocate our
office upon termination of the existing lease, we believe other office space is
available under favorable leasing terms in Oklahoma City.

  Equipment

         The Company owns a Harris 20/20 telecom switch and software and
approximately 40 computers that interface with the switch. Currently, the
Company has approximately 180 T-1 lines connected to its switch. With the
Company's current switching equipment, management believes that it could
increase its existing call traffic by 80% to 100%. To grow beyond that point
will require significant capital expenditures and no assurances can be given
that the Company can raise the amount of capital needed.

Item 3. Legal Proceedings

         In the normal course of its business, we may become involved in
litigation or in settlement proceedings relating to claims arising out of our
operations. Other than as described below, we are not a party to any legal
proceedings, the adverse outcome of which, individually or in the aggregate,
could have a material adverse effect on our business, financial condition and
results of operations.

         Eagle Capital International, LTD filed a suit against the Company in
The United States District Court of Utah-Central Division (case number:
2:00CV0988k) in December 2000. Eagle is claiming that the contract with the
Company to provide equipment under a Master Sales Agreement was fraudulently
induced and therefore the $850,000 note they owe the Company should not be paid.
The Company believes this lawsuit is without merit and will use all available
resources to defend this claim.

         The Company is plaintiff in a suit against an individual filed in the
District Court of Oklahoma County, Oklahoma (case number: -CIV-2000-2290 over
the payment of services provided by that person. After the year end the Company
agreed to settle this case for a payment of 312,500 shares of the Company's
common stock to the individual. Joint application for approval of this
settlement has been filed with the Court.

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

         During the fourth quarter of 2000, the Company did not submit any
matters to a vote of its shareholders.



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                                     PART II

Item 5. Market for Registrant's Common Stock and Related Shareholder Matters

           The Company's Common Stock is traded on the OTC Bulletin Board and is
quoted under the symbol "LWEI." The following table sets forth, for the periods
presented, the high and low bid quotations in the over-the-counter market as
quoted on the OTC Bulletin Board. The bid quotations reflect inter-dealer prices
without adjustment for retail markups, markdowns, or commissions and may not
reflect actual transactions.

<TABLE>
<CAPTION>
                    2000              1999
               ---------------   ---------------
QUARTER ENDED   LOW      HIGH     LOW      HIGH
-------------  ------   ------   ------   ------
<S>            <C>      <C>      <C>      <C>
December 31    $ 0.03   $ 0.19   $ 0.04   $ 0.09
September 30   $ 0.13   $ 0.38   $ 0.06   $ 0.25
June 30        $ 0.17   $ 0.81   $ 0.12   $ 0.34
March 31       $ 0.04   $ 1.09   $ 0.18   $ 0.75
</TABLE>

Holders of the Company's Common Stock

         At the date of this report the Company believes there are in excess of
300 shareholders of its common stock.

Dividend Policy

         The Company's dividend policy is to retain its earnings to support the
expansion of its operations. The Board of Directors does not intend to pay cash
dividends on its common stock in the foreseeable future. Any future cash
dividends will depend on future earnings, capital requirements, Company's
financial condition and other factors deemed relevant by the Board of Directors.

Penny Stock Trading Rules

         The Company's common stock is subject to the penny stock trading rules.
These rules impose additional duties and responsibilities upon broker-dealers
recommending the purchase of a penny stock (by a purchaser that is not an
accredited investor as defined by Rule 501(a) promulgated by the Commission
under the 1933 Act) or the sale of a penny stock. Among such duties and
responsibilities, with respect to a purchaser who has not previously had an
established account with the broker-dealer, the broker-dealer is required to (i)
obtain information concerning the purchaser's financial situation, investment
experience, and investment objectives and (ii) make a reasonable determination
that transactions in the penny stock are suitable for the purchaser and the
purchaser (or his independent adviser in such transaction has sufficient
knowledge and experience in financial matters and may be reasonably capable of
evaluating the risks of such transactions, followed by receipt of a manually
signed written statement which sets forth the basis for such determination and
which informs the purchaser that it is unlawful to effectuate a transaction in
the penny stock without first obtaining a written agreement to the transaction.
Furthermore, until the purchaser becomes an established customer (i.e., having
had a account with the dealer for at least one year or, the dealer had effected
three sales or more of penny stocks on three or more different days involving
three or more different issuers), the broker-dealer must obtain from the
purchaser a written agreement to purchase the penny stock which sets forth the
identity and number of shares or units of the security to be purchased prior to
confirmation of the purchase. A dealer is obligated to provide certain
information disclosure to the purchaser of a penny stock, including (i) a
generic risk disclosure document which is required to be delivered to the
purchaser before the initial



                                      -11-
<PAGE>   12

transaction in a penny stock, (ii) a transaction-related disclosure prior to
effecting a transaction in the penny stock (i.e., confirmation of the
transaction) containing bid and asked information related to the penny stock and
the dealer's and salesperson's compensation (i.e., commissions, commission
equivalents, markups and markdowns) in connection with the transaction and (iii)
the purchaser-customer must be furnished account statements, generally on a
monthly basis, which include prescribed information relating to market and price
information concerning the penny stocks held in the customer's account. The
penny trading rules do not apply to those transactions in which a broker-dealer
or salesperson does not make any purchase or sale recommendation to the
purchaser or seller of the penny stock.

         Required compliance with the penny stock trading rules affect or will
affect the ability to resell the Common Stock by a holder principally because of
the additional duties and responsibilities imposed up on the broker-dealers and
salespersons recommending and effecting sale and purchase transactions in such
securities. In addition, many broker-dealers will not effect transactions in
penny stocks, except on an unsolicited basis, in order to avoid compliance with
the penny stock trading rules. The penny stock trading rules consequently may
materially limit or restrict the liquidity typically associated with other
publicly traded equity securities. In this connection, the holder of Common
Stock may be unable to obtain on resale the quoted big price because a dealer of
group of dealers may control the market in such securities and may set prices
that are not based on competitive forces. Furthermore, at times there may be a
lack of bid quotes which may mean that the market among dealers is not active,
in which case a holder of Common Stock may be unable to sell such securities.
Because market quotations in the over-the-counter market are often subject to
negotiation among dealers and often differ from the price at which transactions
in securities are effected, the bid and asked quotations of the Common Stock may
not be reliable.

Sales of Common Stock During the Fourth Quarter of 2000


<TABLE>
<CAPTION>
                                                                        Number
                                  Date                                    of
     Security Issued             Issued     Issued To                   Shares       Purpose
--------------------------       -------                                ------
<S>                              <C>       <C>                          <C>       <C>
Common Stock                     10/6/00   Brian Bates                  5,000     Employee bonus

Common Stock                     10/6/00   Chad Nesmith                 5,000     Employee bonus
</TABLE>

         The Company relied on Rules 505 and 506 of Regulation D and Sections
3(b) and 4(2) of the Act for exemption from the registration requirements of the
Act. Each of the certificates representing the Company's common stock was
stamped with a legend restricting transfer of the securities represented
thereby, and the Company issued stop transfer instructions to OTR, Inc., the
transfer agent and registrant of Company's common stock, with respect to all
certificates representing the common stock of the Company held by the
aforementioned shareholders of the Company.



                                      -12-
<PAGE>   13

Item 6. Management's Discussion and Analysis of Plan of Operations.

         The following discussion should be read in conjunction with the
accompanying financial statements and notes thereto of the Company.

RESULTS OF OPERATIONS

         The following table sets forth selected results of operations for the
years ended December 31, 2000 and 1999, which are derived from the audited
consolidated financial statements of the Company. The results of operations for
the periods presented are not necessarily indicative of the Company's future
operations.

<TABLE>
<CAPTION>
                                                           FOR THE YEAR ENDED DECEMBER 31,
                                           --------------------------------------------------------------
                                                       2000                             1999
                                           ----------------------------     -----------------------------
                                              AMOUNT         PERCENT           AMOUNT          PERCENT
                                           ------------    ------------     ------------     ------------
<S>                                        <C>             <C>              <C>              <C>
Revenues                                   $  6,650,483           100.0%    $  1,183,087            100.0%
Cost of revenues                              5,144,593            77.4%         947,578             80.1%
                                           ------------    ------------     ------------     ------------
Gross Profit                                  1,505,890            22.6%         235,509             19.9%
                                           ------------    ------------     ------------     ------------
Operating expenses
    Selling, general and administrative       1,334,089            20.1%       1,442,137            121.9%
    Depreciation and amortization               278,346             4.2%         222,758             18.8%
                                           ------------    ------------     ------------     ------------
Total operating expenses                      1,612,435            24.2%       1,664,895            140.7%
                                           ------------    ------------     ------------     ------------
                                               (106,545)          (1.6)%      (1,429,386)          (120.8)%
                                           ------------    ------------     ------------     ------------
Other income (expense)
    Interest (net)                                3,577             0.1%             566              0.0%
    Merger related costs                       (381,323)           (5.7)%             --               --
    Research and development                   (224,335)           (3.4)%             --               --
    Other                                         8,714             0.1%         898,319             75.9%
                                           ------------    ------------     ------------     ------------
                                               (593,367)           (8.9)%        898,885             76.0%
                                           ------------    ------------     ------------     ------------
Income from continuing
    operations before taxes                    (699,912)          (10.6)%       (530,501)           (44.8)%
Income tax benefit                              254,000             3.8%         314,000             26.5%
                                           ------------    ------------     ------------     ------------
Income from continuing operations              (445,912)           (6.7)%       (216,501)           (18.3)%
Discontinued operations
    Loss from operations of discontinued
       operations, net of tax benefit           (43,337)           (0.7)%         60,894              5.1%
    Gain on disposal of discontinued
       operations, net of taxes                 299,449             4.5%              --               --
                                           ------------    ------------     ------------     ------------
Net income (loss)                              (189,800)           (2.9)%       (155,607)           (13.2)%
Other comprehensive income                      (19,875)           (0.3)%         (7,969)            (0.7)%
                                           ------------    ------------     ------------     ------------
Comprehensive income (loss)                $   (209,675)           (3.2)%   $   (163,576)           (13.8)%
                                           ============    ============     ============     ============
</TABLE>



                                      -13-
<PAGE>   14

         During the year ended December 31, 2000 the Company acquired Zenex Long
Distance, Inc. (Zenex) through a merger with Prestige Investments, Inc., the
parent company of Zenex. This merger was accounted for under the pooling of
interest and, accordingly, the December 31, 1999 financial statements of the
Company have been restated.

         The operating revenues for both years are from the Zenex operation. The
$5,500,000 or 562% increase in revenue was due to an increase in minutes sold
from 14 million minutes in 1999 to 192 million minutes in 2000. While the
Company expects its volume of minutes to continue to increase, the Company does
not expect the increase to be at the same rate as the year 2000 increase. In
order to attain this increase in minutes, our average revenue per minute
decreased from 8.5 cents in 1999 to 3.5 cents in 2000. The Company negotiated
lower costs from its suppliers in 2000 than in 1999, which enabled the Company
to be more competitive and generate significant amounts of new business. While
doing this the Company also increased its gross profit margin by 2.7% from 19.9%
in 1999 to 22.6% in 2000. The Company continues to seek lower supplier costs and
higher margin revenue and believes it can continue to improve its gross margins.

         Selling, general and administrative expenses in 2000 were reduced by
$108,000 in 2000 from 1999. This was in spite of the fact that the Company
experienced considerable additional expenses as a result of being publicly held
in 2000 verses being privately held in 1999. The Company believes that these
expenses have been reduced to their maximum level and should stabilize in the
future.

         Depreciation increased from $223,000 in 1999 to $278,000 in 2000 or
$55,000, which was a result of additional equipment purchased to increase the
capacity of our switch.

         Merger related costs in 2000 were the result of legal and accounting
fees and a commission in the merger of Zenex into the Company. Included in this
total is a non-cash expense for 1,000,000 shares of stock issued as a
commission, which was valued at $172,500.

         Research and development costs of $224,000 are general and
administrative expenses of ChurchLink.com which remains in the development
stage. An additional $125,000 was spent on programming and equipment in 2000.
The product is currently in the beta test stage and sales on a regional basis
began in March 2001. The Company expects ChurchLink to cost approximately
$50,000 per month until its operations become profitable, which is anticipated
to be in the third quarter of 2001. No assurance can be given that the
operations of ChurchLink will become profitable during this period or that the
Company will have the cash flows from other operations to provide capital
resources to maintain the ChurchLink operations. We are exploring other sources
of capital financing which include a joint venture partner or loans. No
assurance can be given that these sources of capital resources will be available
to the Company.

         Other income in 2000 reduced to an insignificant amount in 2000 from
$899,000 in 1999. The 1999 income was from the settlement of some old accounts
payable of the Company and are not expected to repeat in the future.

         The loss attributable to discontinued operations was the loss in EP
Distributing of $55,000 and profit in the discontinued equipment leasing
business of $12,000 for a net loss of $43,000 in 2000. All of the $61,000 profit
in this business segment in 1999 was from equipment leasing activity.

         The gain on disposal of discontinued operations in 2000 was from the
termination of the Master Equipment Sales Agreement with Eagle Capital
International, LTD. The Company had a net profit after taxes and expenses of
$440,000 from this termination. This profit was reduced by a charge of $141,000
after taxes from terminating EP Distributing for a net profit of $299,000 from
disposal of these discontinued operations.

         Other comprehensive income was from the write down to market value of
the 15,000 shares of ECIC common stock held by the Company.

Liquidity and Capital Resources

         The Company's growth has been financed through the sale of equity
securities and bank borrowings. Net cash used in operating activities totaled
$401,325 in 2000 compared to $560,270 in 1999. As of December 31, 2000, the
Company had a working capital deficit of $54,361 compared to a working capital
deficit of $823,606 at December 31, 1999. The decrease in the working capital
deficit was do in part to common stock issued for services of $238,500 and for
cash of $250,000, a total of $488,500. Also in 2000 the Company's short-term
portion of notes receivable increased



                                      -14-
<PAGE>   15

$416,272 from $135,385 at December 31, 1999 to $551,657 at December 31, 2000.
The current portion of long-term debt increased $293,831 from $183,465 at
December 31, 1999 to $476,996 at December 31, 2000.

         In the event the Company's revenues increase as anticipated by
management, the Company's working capital requirements will also increase and
such requirements may exceed the net cash provided by operating activities and
require cash be used in operating activities from sources other than operations,
including the raising of cash through borrowing or issuance of equity
securities. The increase in cash used in operations will principally be due to
the timing differences between Company's payment for services from its suppliers
and employee work force, and the time at which the Company receives payment from
its customers.

         On October 25, 2000, the Company entered into a one-year revolving loan
commitment with Federal Bank Centre for $450,000 to be used in operating
activities of the Company. As of December 31, 2000 the outstanding principal on
this note was $407,927. Advances on this loan are based upon the Company not
being in default on this Agreement, borrower or any guarantor not declaring
bankruptcy or dying, no material adverse change in the Company's financial
condition, or lender in good faith not deeming itself insecure. The outstanding
principal amount of this loan bears interest at 1.5% over the Wall Street Prime
(currently 8%) and is payable monthly. All assets of the Company and the
guarantee of certain officers of the Company secure the loan.

Future Operations and Liquidity

         Prestige Investments, Inc., a wholly owned subsidiary, of the Company
acquired Zenex Long Distance, Inc. in accordance with a letter of intent dated
January 27, 1999 and a subsequent Stock Purchase Agreement (" The Agreement")
dated February 19, 1999. The business combination was accounted for as a
purchase. In accordance with the terms of the Agreement, the initial purchase
price was $6,353 for 100% of the 635,295 outstanding common shares. The
Agreement includes a provision whereby the sellers may earn additional amounts
if the cumulative collected gross sales revenue reach certain levels, (the "Earn
Out Rights"), as follows:

              (a) When collected gross sales revenue reach Ten Million
                  ($10,000,000), the sellers will be paid an additional Fifty
                  Cents ($0.50) per share totaling $317,647.

              (b) When collected gross sales revenue reach Twenty Million
                  ($20,000,000), the sellers will be paid and additional One
                  Dollar ($1.00) per share totaling $635,295.

              (c) When collected gross sales revenue reach thirty-six Million
                  ($36,000,000), the sellers will be paid an additional
                  One-Dollar ($1.00) per share totaling $635,590.

              (d) In no event will the Purchase Price exceed the amount of Two
                  Dollars and fifty-one Cents per share totaling $1,594,590.

Collected gross sales revenues through December 31, 2000 are approximately
$7,300,000. Management expects the $ 10,000,000 gross sales revenue to be
achieved in the year 2001.

         As of the date of this report, other than as described above, the
Company does not have any significant future capital commitments. The Company
anticipates that existing loan commitments and funds to be generated from future
operations will be sufficient to fund operations and future commitments.

         FORWARD LOOKING STATEMENTS AND BUSINESS. 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. The words "anticipate," "believe," "expect," "plan," "intend,"
"project," "forecast," "could" and similar expressions are intended to identify
forward-looking statements. All statements other than statements of historical
facts included in this Form 10-KSB regarding our financial position, business
strategy, budgets and plans and objectives of management for future operations
are forward-looking statements. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, no assurance can be
given that actual results may not differ materially from those in the
forward-looking statements herein for reasons including the effect of
competition, the level of sales and renewal certifications, marketing, product
development and other expenditures, economic conditions, the legislative and
regulatory environment and the condition of the capital and equity markets.



                                      -15-
<PAGE>   16

         Readers are cautioned to consider the specific business factors
described in this report and not to place undue reliance on the forward-looking
statements contained herein, which speak only as of the date hereof. We
undertake no obligation to publicly revise forward-looking statements to reflect
events or circumstances that arise after the date hereof.

Item 7. Financial Statements

         The financial statements are presented beginning on page F-1 thru F-18
of this report

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

         There have been neither changes in nor disagreements with accountants;
however, Henderson Sutton & Co., P.C. changed its name to Sutton Robinson
Freeman & Co., P.C. in the year 2000.


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons

         Directors are elected for one-year terms or until the next annual
meeting of shareholders and until their successors are duly elected and
qualified. Officers serve at the discretion of the Board of Directors. Pursuant
to the Agreement and Plan of Reorganization between the Company and Prestige
Investments, Inc., the Board of Directors was set at five members. This
Agreement provides that the former Prestige shareholders are entitled to elect
two of the members of the Board of Directors and for the shareholders of Lone
Wolf prior to the effective date of the merger are entitled to elect three
members to the Board of Directors and continues for each year after that
agreement.

         The Directors and Officers of the Company as of the date of this report
are as follows:


<TABLE>
<CAPTION>
        Name                      Age                        Position
--------------------            -------       --------------------------------------
<S>                             <C>           <C>
Marc W. Newman                    31          President and Director

Douglas A. Newman                 53          Vice President, Secretary and Director

Dr. Robert N. Boyles              45          President, ChurchLink.com and Director

Debra G. Morehead                 40          Vice President and Director

Brian D. Gustas                   37          President, Zenex Communications

Joey Alfred                       29          Vice President, Zenex Communications
</TABLE>

         MARC W. NEWMAN Has been President and a Director of the Company since
November 1998. From 1991 to November 1998 Mr. Newman was a private investment
consultant. From 1992 to July 1998 Mr. Newman was a registered investment
broker. Prior to that time Mr. Newman was a full time student.

         DOUGLAS A. NEWMAN has been Vice President, Secretary and a Director of
the Company since November 1998. From 1991 to 1998 Mr. Newman was Chairman, Vice
President and Secretary of Hospital Rehabilitation Services, Inc., a privately
held company he co-founded, which provided contract Physical Therapy services to
hospitals four states. From 1985 to 1990 Mr. Newman was Chairman, CFO, Secretary
and a Director of Wedding Information Network, Inc. (NASDAQ;WINN), a franchisor
and operator of " The Wedding Pages", a leading publication for bridal planning
and direct marketing to brides to be. Prior to his employment with Wedding
Information Network, inc. Mr. Newman was a partner in the CPA firm of Newman and
Nanfito in Omaha, Nebraska. Douglas Newman is the father of Marc Newman,
President of the Company.



                                      -16-
<PAGE>   17

         DR. ROBERT N. BOYLES has been President ChurchLink.com, Inc. since
March 2000 and a Director of the Company since November 2000. Dr. Boyles has
been the Pastor of four fast growing churches the most recent being Eagle
Heights Baptist Church in Oklahoma City from 1994 through 1999. He has been a
sought after speaker at churches worldwide having been a speaker at over 500
churches. He has written five inspirational books and is also the founder and
President of Wingspread Ministries.

         DEBRA G. MOREHEAD has been a Director of the Company since November
2000. She has been employed since 1998 as Chief Financial Officer of The Naylor
Companies, principally a national construction firm. Prior to that time she was
a partner in the Oklahoma City CPA firm of Olson and Potter.

         BRIAN D. GUSTAS has been President and Chief Executive Officer of Zenex
Communications since September 1999. From 1996 to 1999 Mr. Gustas was President
of ComSource, Inc., a wholesaler of telecommunications services. Prior to that
time, from 1989 to 1996, Mr. Gustas worked for Westel Long Distance, a facility
based communications provider where his final position was regional manager over
seven offices.

         JOEY ALFRED joined Zenex communications in 1995 shortly after
graduating from the University of Oklahoma. He has been promoted repeatedly at
Zenex and now serves as Vice President of operations for the Company.

Item 10. Executive Compensation

         The following table sets forth certain information with respect to the
total compensation, paid or accrued, of the President and Chief executive
Officer of the Company. and each of the executive officers that during 2000
received compensation in excess of $100,000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
        Name                                                                                    Other
         and                                                                                   Annual
      Principal                                                                                Compen-
       Position                             Year             Salary(1)       Bonus(2)         sation(3)
-----------------------                     ----             ---------       --------         ---------
<S>                                         <C>              <C>              <C>             <C>
Marc. W. Newman, CEO                        2000             $ 80,000        $ 38,000         $ 35,000
                                            1999                   --              --               --

Brian Gustas, President
  Zenex Communications                      2000             $105,593        $ 32,932               --
                                            1999             $ 28,172              --               --
</TABLE>

(1) Dollar value of base salary earned during the year

(2) Dollar value of bonus earned during the year

(3) The amount reflect is for the valuation of 3,500,000 shares of stock issued
    as a bonus during the year.

         As of January 1, 2000, the Company entered into separate Employment
Agreements with Marc W. Newman, President and Chief Executive Officer, and
Douglas A. Newman, Vice President and Chief Financial Officer. Each agreement is
for an initial term of three years, subject to automatic renewal for successive
one-year terms unless either party provides notice to the other at least 90 days
prior to the end of either the initial three-year term or any successive
one-year term that the agreement will not be renewed.

         The annual salaries for Marc W. Newman and Douglas A. Newman are not
less than $120,000 and not less than $84,000, respectively, subject to annual
review. In addition to salaries, each executive is entitled to receive such
other bonuses, either in cash, in Company stock or in kind, in such amounts and
at such time or times as the Company, in its sole discretion, shall deem
appropriate. Additionally,



                                      -17-
<PAGE>   18

each executive is entitled to receive four weeks paid vacation per year and to
participate in any medical or other benefit plans generally available to
employees of the Company.

         The employment of each executive may be terminated prior to the end of
the term of his agreement for "cause," which is defined as any felony conviction
of the executive for criminal conduct adversely affecting the operations of the
Company, as determined in good faith by a written resolution duly adopted by the
affirmative vote of not less than the unanimous consent of the Board (excluding
for this purpose the executive if the executive is then serving on the Board of
Directors), at a meeting duly called and held for that purpose after reasonable
notice to the executive and an opportunity for the executive and his counsel to
be heard.

         As of November 28, 2000, the Company entered into an Employment
Agreements with Brian D. Gustas, President and Chief Executive Officer, of Zenex
Long Distance, Inc. The agreement is for an initial term of three years from
June 20, 2000.

         The base annual salary for Mr. Gustas is $120,000 per year. In addition
to the base salary, Mr. Gustas is entitled to receive a bonus of 10% of the net
profits from operations of Zenex Long Distance, Inc. The minimum cash portion of
this bonus is capped at $130,000. For any amount of bonus earned in excess of
$130,000 the Company has the option to grant to Mr. Gustas a five-year stock
option to purchase 4 shares of the Company's common stock at $0.11 per share for
every dollar of bonus earned in excess of $130,000. In addition, Mr. Gustas was
given a five-year option to purchase 250,000 shares of the Company's common
stock at $0.11 per share at the signing of the agreement and another 250,000
shares on each anniversary date of the agreement up to a total of 1,000,000
shares.

         The employment may be terminated by the Company prior to the end of the
term of his agreement for "cause," which is defined as any breach in any
material terms of the agreement, bad faith in performance of duties consisting
of willful acts or omission, to the detriment of the Company, use of illegal
drugs or alcoholism or a felony conviction of the executive for criminal
conduct. The Company may terminate the agreement at any time without cause for a
payment of $100,000 to Mr. Gustas.



                                      -18-
<PAGE>   19

Item 11. Security Ownership of Certain Beneficial Owners, Management and more
than 5% Shareholders

         The following table lists the beneficial ownership of the Company's
voting securities, as of March 17, 2001, by all of the directors and officers
and of all persons known to the Company to own more than five percent of any
voting securities of the Company. Unless otherwise indicated, the shareholders
listed possess sole voting and investment power with respect to the shares
shown.

<TABLE>
<CAPTION>
    Title       Name and Address                              Position                    Amount and            Percent
     of               of                                        With                       Nature of               of
    Class       Beneficial Owner                               Company                Beneficial Ownership       Class
--------------  ------------------                     ------------------------       --------------------      -------
<S>             <C>                                    <C>                            <C>                       <C>
                Marc W.. Newman                        President and CEO,
                14800 Glenmark Dr.                     Lone Wolf Energy, Inc./
Common          Edmond, Ok. 73013                      Director                             5,256,498(1)          14.4%

                                                       Secretary and CFO, Lone
                                                       Wolf Energy,Inc./
Common          Douglas A. Newman                      Director                             1,630,000              4.5%

                                                       President and CEO,
                                                       ChurchLink.com, Inc./
Common          Dr. Robert N. Boyles                   Director                                70,000(2)           0.2%

                                                       Vice President,
                                                       Lone Wolf Energy, Inc./
Common          Debra G. Morehead                      Director                               407,935              1.1%

                                                       President and CEO.
                                                       Zenex Comm.,  Inc./
Common          Brian Gustas                           Director                               100,000              0.3%

                                                       Vice President,
Common          Joey Alfred                            Zenex Comm., Inc.                      250,000              0.7%

                Naylor Concrete Construction Co.
                821 SW 66th
Common          Oklahoma City, Ok 73139                NONE                                 7,400,000             20.3%

                Fireball Enterprises, L.L.C.
                1300 SW 108 Pl.
                Oklahoma City, Ok 73139                NONE                                 7,400,000             20.3%


                All Officers and Directors as a
Common          group (7 persons)                                                           7,714,433             21.1%
</TABLE>

     (1) Includes 551,064 shares held indirectly through Mr. Newman's spouse and
         205,434 shares held indirectly through Newboy, inc., a corporation
         controlled by Mr. Newman.

     (2) These shares are owned by Wingspread Ministries, a non-profit entity
         controlled by Dr. Boyles.



                                      -19-
<PAGE>   20

Item 12. Certain Relationships and Related Transactions

         Contained below is a description of transactions and proposed
transactions the Company entered into with its officers, directors and
shareholders that beneficially own more than 5% of the Company's common stock
during 2000 and 1999. These transactions may continue in effect and may result
in conflicts of interest between the Company and these individuals. Although the
Company's officers and directors have fiduciary duties to the Company and its
shareholders, there is no assurance that these conflicts of interest will always
be resolved in favor of the Company and its shareholders.

         On February 25, 2000 Marc W. Newman, President and CEO and a Directory
of the Company and Douglas A. Newman, Secretary and a Director of the Company
were granted 3,500,000 and 500,000 shares respectively of the Company's common
stock for services rendered to the Company. The value attributed to the stock
granted was $0.01 per share.

         On June 20, 2000, 7,400,000 shares of common stock were issued to
Naylor Concrete Construction, Inc. and 7,400,000 shares of common stock were
issued to Fireball Enterprises, L.L.C. in connection with the acquisition of
Prestige Investments, Inc., making them each more than 5% shareholders. In
connection with that same transaction, Brian Gustas, President and CEO of Zenex
Long Distance , Inc. and a Director of the Company was issued 100,000 shares of
common stock, Joey Alfred, Vice President of Zenex Long Distance, Inc. was
issued 250,000 shares of common stock, and Debra Morehead, Vice President and a
Director of the Company was issued 350,000 shares of common stock. Registration
rights were given to these people in connection with the issuance of these
shares.

Item 13. Exhibits and Reports on form 8-K.

         a.      Exhibits

                 Exhibit No.                Description of Exhibit

                 3.1            Amended and Restated Articles of Incorporation
                                of the Company and filed as an exhibit to
                                Registrant's Form S-3 Registration Statement
                                filed with the Commission on August 2, 2000 is
                                incorporated herein by this reference.

                 3.2            Amended and Restated Bylaws of the Company,
                                filed as an exhibit to Registrant's Form 8-K
                                filed with the Commission on August 2, 2000, is
                                incorporated herein by this reference.

                 10.1           Agreement and Plan Reorganization dated May 5,
                                2000, by and among Lone Wolf Energy, Inc.,
                                Prestige Investments, Inc., Zenex Long Distance,
                                Inc., and others, filed as an exhibit to
                                Registrant's Form 8-K filed with the Commission
                                on May 19,2000 is incorporated herein by this
                                reference.

                 10.2           Plan and Agreement of Merger dated May 5, 2000,
                                by and among Lone Energy, Inc., Lone Wolf
                                Acquisition Sub I, Inc., ChurchLink.com, Inc.
                                and Switchless Resellers Services, Inc. filed as
                                an exhibit to Registrant's Form S-3 Registration
                                Statement filed with the Commission on August 2,
                                2000 is incorporated herein by this reference.

                 10.3           Registration Rights Agreement dated May 5, 2000,
                                by and between Lone Energy, Inc. and Switchless
                                Reseller Services, Inc. filed as an exhibit to
                                Registrant's Form S-3 Registration Statement
                                filed with the Commission on August 2, 2000 and
                                incorporated herein by this reference.

                 10.4           Service Agreement dated as of February 16,2000,
                                by and between Lone Wolf Energy, Inc. and
                                Ensynq, Inc. filed as an exhibit to Registrant's
                                Form S-3 Registration Statement filed with the
                                Commission on August 2, 2000 and incorporated
                                herein by this reference.



                                      -20-
<PAGE>   21

                  10.5     Employment Agreement dated as of January 1, 2000, by
                           and between Lone Wolf Energy, Inc. and Marc W.
                           Newman, as amended by letter agreement dated June 20,
                           2000 filed as an exhibit to Registrant's Form S-3
                           Registration Statement filed with the Commission on
                           August 2, 2000 and incorporated herein by this
                           reference.

                  10.6     Employment Agreement dated as of January 1, 2000, by
                           and between Lone Wolf Energy, Inc. and Douglas A.
                           Newman, as amended by letter agreement dated June 20,
                           2000 filed as an exhibit to Registrant's Form S-3
                           Registration Statement filed with the Commission on
                           August 2, 2000 and incorporated herein by this
                           reference.

                  10.7     Employment Agreement dated as of November 28, 2000 by
                           and between Lone Wolf Energy, Inc. Zenex Long
                           Distance, Inc. and Brian Gustas.

                  21.1     Subsidiaries of the Company


                  Reports on Form 8-K.

                  None.



                                   SIGNATURES

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


                                      LONE WOLF ENERGY, INC.

                                      /s/ Marc W. Newman
                                      -------------------------
                                      By: Marc W. Newman, President and Director



                                      /s/ Douglas A. Newman
                                      -------------------------
                                      By: Douglas A. Newman, CFO and Director



                                      /s/ Debra G. Morehead
                                      -------------------------
                                      By: Debra G. Morehead, Director



                                      /s/ Brian Gustas
                                      -------------------------
                                      By: Brian Gustas, Director


March 27, 2001



                                      -21-
<PAGE>   22

                          INDEPENDENT AUDITOR'S REPORT




Board of Directors and Stockholders
Lone Wolf Energy, Inc.

We have audited the accompanying consolidated balance sheets of Lone Wolf
Energy, Inc. as December 31, 2000 and 1999, and the related consolidated
statements of income, cash flows, and changes in stockholder's equity for the
years then ended. These financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the 2000 and 1999 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of Lone
Wolf Energy, Inc. as of December 31, 2000 and 1999, and the results of it's
operations and it's cash flows for the years then ended, in conformity with
generally accepted accounting principles.


Sutton Robinson Freeman & Co., P.C.
Certified Public Accountants

Tulsa, Oklahoma
March 9, 2001



                                      F-1
<PAGE>   23
                             LONE WOLF ENERGY, INC.
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
                 ASSETS                           2000            1999
                                              ------------    ------------
<S>                                           <C>             <C>
Current Assets
    Cash                                      $         --    $    108,921
    Accounts receivable                            599,903         135,385
    Current portion of notes receivable            551,657         132,169
    Deposits                                         4,784              --
    Inventory                                        7,000           7,000
                                              ------------    ------------
                                                 1,163,344         383,475
                                              ------------    ------------

PROPERTY AND EQUIPMENT                           1,817,722       1,324,425
    Less accumulated depreciation                 (595,185)       (389,317)
                                              ------------    ------------
                                                 1,222,537         935,108
                                              ------------    ------------
Other
    Goodwill (net)                                 461,633         457,502
    Notes receivable-net of Current Portion             --         844,148
    Organization costs (net)                        14,890          34,988
    Investments                                      4,500          24,375
    Deferred tax asset                             213,000         130,000
                                              ------------    ------------
                                                   694,023       1,491,013
                                              ------------    ------------

                                              $  3,079,904    $  2,809,596
                                              ============    ============
</TABLE>

See Accompanying Notes to Financial Statements

See Accountants Report



                                      F-2
<PAGE>   24

                             LONE WOLF ENERGY, INC.
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999




<TABLE>
<CAPTION>
           LIABILITIES & STOCKHOLDERS' EQUITY                       2000            1999
                                                                ------------    ------------
<S>                                                             <C>             <C>
CURRENT LIABILITIES
     Current portion of long-term debt                          $    476,996    $    183,465
     Accounts payable                                                625,325         848,156
     Accrued expenses                                                 92,734          96,150
     Prepayments and customer deposits                                22,650          79,310
                                                                ------------    ------------
                                                                   1,217,705       1,207,081
                                                                ------------    ------------

OTHER LIABILITIES
     Long-term debt-net of current portion                           264,079         409,633
     Deposits                                                             --          24,000
     Other liabilities                                               242,862         160,449
                                                                ------------    ------------
                                                                     506,941         594,082
                                                                ------------    ------------

TOTAL LIABILITIES                                                  1,724,646       1,801,163
                                                                ------------    ------------

STOCKHOLDER'S EQUITY
     Preferred stock ($0.001 par value,  20,000,000 shares
         authorized, no shares issued and outstanding)                    --              --
     Common stock ($0.001 par value, 100,000,000 shares
         authorized, 36,485,790 shares issued and outstanding
         at December 31, 2000 and 27,220,000 issued and
         outstanding at December 31, 1999)                            36,496          27,220
     Paid-in capital                                               1,754,842       1,201,618
     Treasury stock(6000 shares @ $0.01)                              (6,000)             --
     Unrealized Gain (Loss) on Available for Sale Securities         (27,844)         (7,969)
     Retained earnings (deficit)                                    (402,236)       (212,436)
                                                                ------------    ------------
                                                                   1,355,258       1,008,433
                                                                ------------    ------------

                                                                $  3,079,904    $  2,809,596
                                                                ============    ============
</TABLE>

See Accompanying Notes to Financial Statements

See Accountants Report



                                      F-3
<PAGE>   25

                             LONE WOLF ENERGY, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999




<TABLE>
<CAPTION>
                                               2000            1999
                                           ------------    ------------
<S>                                        <C>             <C>
REVENUES                                   $  6,650,483    $  1,183,087


OPERATING EXPENSES
     Cost of sales                            5,144,593         947,578
     Selling, general and administrative      1,334,089       1,442,137
     Depreciation and amortization              278,346         222,758
                                           ------------    ------------
                                              6,757,028       2,612,473
                                           ------------    ------------

OPERATING INCOME (LOSS)                        (106,545)     (1,429,386)
                                           ------------    ------------

OTHER INCOME (EXPENSE)
     Interest income                             60,336             566
     Interest expense                           (56,759)             --
     Gain (Loss) on sale of equipment            (3,425)        (86,462)
     Merger related costs                      (381,323)             --
     Research and development                  (224,335)             --
     Other income                                12,139         984,781
                                           ------------    ------------
                                               (593,367)        898,885
                                           ------------    ------------

NET INCOME (LOSS) FROM OPERATIONS
     BEFORE INCOME TAXES                       (699,912)       (530,501)
     Income Tax (Expense) Benefit               254,000         314,000
                                           ------------    ------------

NET INCOME (LOSS) BEFORE DISCONTINUED
     OPERATIONS                            $   (445,912)   $   (216,501)
                                           ------------    ------------
</TABLE>

See Accompanying Notes to Financial Statements

See Accounts Report



                                      F-4
<PAGE>   26

                             LONE WOLF ENERGY, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999



<TABLE>
<CAPTION>
                                                               2000            1999
                                                           ------------    ------------
<S>                                                        <C>             <C>
NET INCOME (LOSS) BEFORE DISCONTINUED
     OPERATIONS AND SALE OF DISCONTINUED
     BUSINESS                                              $   (445,912)   $   (216,501)
                                                           ------------    ------------

DISCONTINUED  OPERATIONS
     Sales                                                      262,239         120,893
     Costs and expenses                                         305,576          59,999
                                                           ------------    ------------

     Profit (loss) from discontinued business operations
         net of income taxes                                    (43,337)         60,894

     Gain on sale of discontinued operation
         net of income taxes                                    299,449              --
                                                           ------------    ------------

NET INCOME (LOSS)                                              (189,800)       (155,607)

OTHER COMPREHENSIVE INCOME:
     Unrealized holding losses                                  (19,875)         (7,969)
                                                           ------------    ------------

COMPREHENSIVE INCOME (LOSS)                                $   (209,675)   $   (163,576)
                                                           ============    ============



     PRIMARY EARNINGS (LOSS) PER SHARE                              nil             nil
                                                           ============    ============
     FULLY DILUTED EARNINGS (LOSS) PER SHARE                        nil             nil
                                                           ============    ============
</TABLE>

See  Accompanying Notes to Financial Statements

See Accountants Report



                                      F-5
<PAGE>   27

                             LONE WOLF ENERGY, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                                                                           Deficit
                                                                                                       Accumulated
                                            Shares of                                    Additional     During the
                                               Common         Common       Treasury         Paid in    Development     Accumulated
                                                Stock          Stock          Stock         Capital          Stage         Deficit
                                         ------------   ------------   ------------    ------------   ------------    ------------
<S>                                      <C>            <C>            <C>             <C>            <C>             <C>
Balance at December 31, 1997                4,250,000   $      4,250   $         --    $     19,165   $    (10,830)   $    (19,557)
                                         ------------   ------------   ------------    ------------   ------------    ------------
  Common Stock Issued for Cash                420,000            420
  Common Stock Issued for Services          6,500,000          6,500
  Capital Contributed by Shareholders                                                        26,776
  Net Loss                                                                                                 (26,442)
                                         ------------   ------------   ------------    ------------   ------------    ------------
Balance at December 31, 1998               11,170,000         11,170              0          45,941        (37,272)        (19,557)
                                         ------------   ------------   ------------    ------------   ------------    ------------
  Common Stock Issued for Acquisitions     15,550,000         15,550
  Common Stock Issued for Services            500,000            500
  Capital Contributed by Shareholders                                                     1,155,677
  Unrealized Holding (Loss)
  Net Income                                                                                                              (155,607)
                                         ------------   ------------   ------------    ------------   ------------    ------------
Balance at December 31, 1999               27,220,000         27,220              0       1,201,618        (37,272)       (175,164)
                                         ------------   ------------   ------------    ------------   ------------    ------------
  Common Stock Issued for Cash              1,315,790          1,316                        248,684
  Common Stock Issued for Services          6,860,000          6,860                        237,640
  Common Stock Issued for Acquisitions      1,100,000          1,100                         66,900
  Treasury Stock acquired                                                    (6,000)
  Unrealized Holding (Loss)
  Net Income                                                                                                              (189,800)
                                         ------------   ------------   ------------    ------------   ------------    ------------

Balance at December 31, 2000               36,495,790   $     36,496   $     (6,000)   $  1,754,842   $    (37,272)   $   (364,964)
                                         ============   ============   ============    ============   ============    ============
</TABLE>

<TABLE>
<CAPTION>
                                          Unrealized
                                             Holding           Total
                                               Gains   Stockholders'
                                            (Losses)          Equity
                                        ------------   -------------
<S>                                     <C>            <C>
Balance at December 31, 1997            $         --    $     (6,972)
                                        ------------    ------------
  Common Stock Issued for Cash                                   420
  Common Stock Issued for Services                             6,500
  Capital Contributed by Shareholders                         26,776
  Net Loss                                                   (26,442)
                                        ------------    ------------
Balance at December 31, 1998                       0             282
                                        ------------    ------------
  Common Stock Issued for Acquisitions                        15,550
  Common Stock Issued for Services                               500
  Capital Contributed by Shareholders                      1,155,677
  Unrealized Holding (Loss)                   (7,969)         (7,969)
  Net Income                                                (155,607)
                                        ------------    ------------
Balance at December 31, 1999                  (7,969)      1,008,433
                                        ------------    ------------
  Common Stock Issued for Cash                               250,000
  Common Stock Issued for Services                           244,500
  Common Stock Issued for Acquisitions                        68,000
  Treasury Stock acquired                                     (6,000)
  Unrealized Holding (Loss)                  (19,875)        (19,875)
  Net Income                                                (189,800)
                                        ------------    ------------

Balance at December 31, 2000            $    (27,844)   $  1,355,258
                                        ============    ============
</TABLE>

See Accompanying Notes to Financial Statements

See Accounts report



                                      F-6
<PAGE>   28

                             LONE WOLF ENERGY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES                            2000            1999
                                                            ------------    ------------
<S>                                                         <C>             <C>
     Net Income (Loss)                                      $   (209,675)   $   (163,576)
     Reconciliation of net income to net cash provided by
         operating activities
     Depreciation and amortization                               278,346         222,758
     Common stock issued for goodwill                             40,000              --
     Issuance of common stock for services                       238,500             500
     Decrease in carrying value of investments                    19,875           7,969
     Book value of assets disposed                                 8,425          86,462
     (Increase) decrease from changes in:
         Deferred Taxes                                          (83,000)       (314,000)
         Accounts receivable                                    (464,518)         30,068
         Deposits                                                 (4,784)             --
         Inventory                                                    --          23,706
     Increase (Decrease) from changes in:
         Accounts payable                                       (222,831)       (411,824)
         Accrued liabilities                                      (3,416)       (126,879)
         Other liabilities                                        82,413         184,449
         Prepayments and customer deposits                       (80,660)        (99,903)
                                                            ------------    ------------
                                                                (401,325)       (560,270)
                                                            ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Goodwill in businesses acquired                             (15,000)             --
     Cash received for property and equipment sold                    --          11,215
     Investments received for services rendered                       --         (32,344)
     Purchase of property and equipment                         (515,233)        (28,865)
                                                            ------------    ------------
                                                                (530,233)        (49,994)
                                                            ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Common stock issued for cash                                250,000          10,000
     Purchase of Zenex stock                                          --          (6,353)
     Increase in paid in capital                                               1,345,227
     Common stock issued for goodwill                                                 --
     Change in notes receivable                                  424,660        (976,317)
     Change in notes payable                                     147,977         258,871
                                                            ------------    ------------
                                                                 822,637         631,428
                                                            ------------    ------------

NET INCREASE (DECREASE) IN CASH                                 (108,921)         21,164

CASH AT BEGINNING OF PERIOD                                      108,921          87,757
                                                            ------------    ------------

CASH AT END OF PERIOD                                       $         --    $    108,921
                                                            ============    ============
</TABLE>



See Accompanying Notes to Financial Statements

See Accountants Report



                                      F-7
<PAGE>   29

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF BUSINESSES


Lone Wolf Energy, Inc. (formerly K&S Ventures was incorporated on March 4, 1991
in the state of Colorado. In February 1999 the Company signed a Master Equipment
Sales Agreement, the ("MESA") with Eagle Capital, Inc. (OTCBB:ECIC) to sell
specialized equipment. The MESA called for the Company to provide fifteen pieces
of equipment over the next three years. In February 2000 the Company terminated
the MESA and sold the equipment it was financing under that agreement. Under the
terms of the termination agreement and sale of the equipment the Company
recorded notes receivable for $1,625,000 of which $775,000 had been collected as
of December 31, 2000. Eagle has filed a court claim attempting to negate the
original MESA. The company is vigorously defending the claim and believes it
will be successful in it's defense. The Company has terminated the business of
equipment leasing.

In March 2000 the Company purchased the assets of EP Distributing Company
("EPD") for $100,000 in cash and 1,000,000 shares of common stock valued at
$40,000. EPD is currently operated as a division of the Company. The division
sells nutritional products, with its primary line being Earth Pharmacy brand
products, and also brokers medical supplies. The acquisition was accounted for
as a purchase. The company ceased this operation at the end of December 2000 and
is currently negotiating with the prior owners to transfer the assets of that
division back to them. The company is to receive $125,000 over a period of time
and the million shares stock returned at closing. The payment is dependant on
successful future operations of that company and a reserve has been set up on
the books for the full amount due.

On May 11, 2000, the Company acquired ChurchLink.com, Inc., ("ChurchLink").
ChurchLink is operating as a subsidiary of the Company. ChurchLink has developed
a software product that provides an online communications hub for churches and
their members. ChurchLink is completing the beta test stage with selected
churches and is making final revisions to the software. Regional marketing
efforts for the software began in March 2001. Significant revenues from this
division are not anticipated until the third quarter of 2001. The purchase price
of ChurchLink was 100,000 shares of the Company's Common Stock. The terms of the
acquisition provide that an additional 400,000 shares of the Company's Common
Stock will be issued as churches subscribe to the service. The additional stock
will be issued as follows:

    20,000 shares for each block of 100 churches up to 1,000 churches - 200,000
    shares

    20,000 shares for each block of 300 churches from 1,000 to 2500
    churches - 100,000 shares

    20,000 shares for each block of 500 churches from 2,500 to 5,000 churches -
    100,000 shares

The fair market value of the shares issued was $28,000. The acquisition was
accounted for as a purchase.

On June 21, 2000 the Company completed the acquisition of Prestige Investments,
Inc. and it's wholly owned subsidiary Zenex Long Distance, Inc. (d/b/a Zenex
Communications, Inc.), ("Zenex"). A newly formed wholly owned subsidiary of the
Company, Prestige Acquisition, Corp. ("Prestige Acquisition"), was merged with
and into Prestige Investments, Inc. ("Prestige Investments"), the parent company
of



                                      F-8
<PAGE>   30

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


Zenex. Prestige Investments was the surviving corporation in the merger. The
merger was pursuant to an Agreement and Plan of Reorganization dated May 4,
2000, by and among the Company, Prestige Acquisition, Prestige Investments and
the five shareholders of Prestige Investments (the "Zenex Merger Agreement").
Pursuant to the Zenex Merger Agreement, the Company issued 15,550,000 of the
Company's common stock to the shareholders of Prestige investments in return for
their surrender to the company of all of their shares of common stock of
Prestige Investments. Following the merger, Prestige Investments became a wholly
owned subsidiary of the Company with Zenex operating as a wholly owned
subsidiary of Prestige Investments. The business combination was accounted for
as a pooling of interest. The accompanying 1999 financial statements have been
restated (see note 9) to include the assets, liabilities and operations of
Prestige and its wholly owned subsidiary Zenex.

Prestige Investments, Inc. and its wholly owned subsidiary, Zenex Long Distance,
Inc. ("Zenex") are engaged primarily in the wholesale of long distance minutes
for prepaid calling cards. Zenex does business as Zenex Communications, Inc. and
primarily markets its product to distributors and switchless resellers who
in-turn market the products to retailers.

Prestige was incorporated in Oklahoma on July 31, 1998. Zenex was incorporated
on January 27,1994 in Oklahoma. Prestige was formed solely for the purpose of
business acquisitions and investments, and had minimal activities prior to the
acquisition of Zenex. Prestige's only operations are those of its wholly owned
subsidiary, Zenex. Prestige acquired Zenex in accordance with a letter of intent
dated January 27, 1999 and a subsequent Stock Purchase Agreement (" The
Agreement") dated February 19, 1999. The business combination of Prestige and
Zenex was accounted for as a purchase.

The Company's December 31, 2000 consolidated balance sheets includes the wholly
owned subsidiary, Prestige and Prestige's wholly owned subsidiary, Zenex, and
Churchlink. The December 31, 1999 consolidated balance sheet includes the wholly
owned subsidiary, Prestige and its wholly owned subsidiary Zenex Long Distance,
Inc. The Company's consolidated statement of operations for the year ended
December 31, 2000 includes the pooled entity of Prestige and its wholly owned
subsidiary Zenex for the presented periods. The purchased entities of EPD and
Churchlink are included from their respective dates of purchase. The Company's
consolidated statement of operations for the year ended December 31, 1999
includes the pooled entity of Prestige and its wholly owned subsidiary Zenex.
All significant inter-company accounts have been eliminated in the consolidated
financial statements.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid debt or equity instruments purchased
with an original maturity at the date of purchase of 90 days or less to be cash
equivalents.

INVENTORY

Inventory of prepaid long-distance calling cards are stated at the lower of cost
or fair market value.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments include cash, receivables, short-term
payables, and notes payable. The carrying amounts of cash, receivables, and
short-term payables approximate fair value due to their short-term nature. The
carrying amounts of notes payable approximate fair value based on borrowing
terms currently available to the Company.



                                      F-9
<PAGE>   31

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


ADVERTISING COST

Advertising costs are expensed as incurred as selling, general and
administrative expenses in the accompanying statement of operations.

INCOME TAXES

The company accounts for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes. This statement prescribes the use of the liability
method whereby deferred tax assets and liabilities are determined based on the
differences between financial reporting and tax bases of assets and liabilities
and measured at tax rates that will be in effect when the differences are
expected to reverse. Valuation allowances are established, when necessary, to
reduce deferred tax assets when it is more likely than not that the deferred tax
asset will not be realized.

REVENUE RECOGNITION

The Company earns revenues by providing access to and usage of long distance
networks and the sale of nutritional products. Revenue is recognized in the
month the service is provided. The Company records deferred revenue for calling
cards sold and recognize revenue as the customer utilizes the calling time.

NET LOSS PER SHARE

The Company computes net income (loss) per share in accordance with SFAS No.
128, Earnings per Share and SEC Staff Accounting Bulletin No. 98 ("SAB 98").
Under the provisions of SFAS No. 128 and SAB 98 basic net income (loss) per
share is calculated by dividing net income (loss) available to common
stockholders for the period by the weighted average number of common shares
outstanding during the period.

CONCENTRATIONS

In connection with providing long distance service to customers, Zenex has
contractual agreements with certain carriers, which provide access to and usage
of their long distance network. The contracts include an agreed-upon billing
rate and a term for these services. During the period one vendor carried
approximately 77% of the Company's long-distance traffic. Although other
carriers are available to provide access and usage of their long distance
network, there are a limited number of such sources. Additionally the time
required to efficiently transfer system connections makes the Company vulnerable
to a risk of a near-term significant impact in the event of a natural disaster
or any other termination of the carrier's service. However the Company has the
ability to utilize back up systems in the event of the carriers termination of
services.

Although Zenex has a significant number of customers, one customer accounted for
approximately seventy-eight (76%) of the Zenex revenue for the year ended
December 31, 2000. The loss of this customer would have a materially adverse
impact on the company's revenues and operations.

The Company's receivables are from a small number of companies in the same
industry, which are subject to business cycle variations. This concentration
subjects the Company to a credit risk if the general industry or the companies
fail to perform.



                                      F-10
<PAGE>   32

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


REGULATION

Zenex Long Distance, Inc. is subject to regulation by the Federal Communications
Commission and by various state public service and public utility commissions.
The Company's management and regulatory legal counsel believe the Company is in
compliance with regulations in all states.

USE OF ESTIMATES

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

SEGMENT INFORMATION

Effective January 1, 1998, the Company adopted the provisions of SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information. The Company
identifies its operating segments based upon business activities, management
responsibilities and geographical location. Following is a summary of operations
of the Company by segment for the year ended December 31, 2000:


<TABLE>
<CAPTION>
                             Lone                                     Church
                             Wolf         Zenex          EPD           Link         Total
                          ----------    ----------    ----------    ----------    ----------
<S>                       <C>           <C>           <C>           <C>           <C>
REVENUE                           --     6,650,483            --            --     6,650,483
                          ----------    ----------    ----------    ----------    ----------

Operating expense           (316,074)   (6,162,608)           --            --    (6,478,682)
Depreciation and Amort        (6,796)     (270,983)           --        (2,905)     (280,684)
                          ----------    ----------    ----------    ----------    ----------

OPERATING INCOME            (322,870)      216,892            --        (2,905)     (108,883)

Other income(expense)         42,427       (30,136)           --            --        12,291
Merger related costs        (242,500)     (138,823)           --            --      (381,323)
Developmental costs               --            --            --      (224,335)     (224,335)
Discontinued operations      746,563            --      (317,113)           --       429,450
                          ----------    ----------    ----------    ----------    ----------

INCOME BEFORE TAXES          223,620        47,933      (317,113)     (227,240)     (272,800)
                          ==========    ==========    ==========    ==========    ==========
</TABLE>


RECLASSIFICATIONS

Certain reclassifications have been made to the prior period financial
statements to conform to the current period presentation.



                                      F-11
<PAGE>   33

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


NOTE 2 - NOTES RECEIVABLE

<TABLE>
<CAPTION>
At December 31, 2000 and 1999, the Company had notes receivable as follows:    2000       1999
                                                                             --------   --------
<S>                                                                          <C>        <C>
Due from an unrelated corporation, payable in minimum monthly installments
of $5,000, including interest at 4.42%, with remaining
unpaid principal and interest due on December 10, 2002                       $     --   $340,000

Due from an unrelated corporation, payable in monthly installments of
$12,000 including interest imputed at 12% with remaining
principal due on March 7, 2007, secured by equipment                               --    636,317

Due from an unrelated corporation, payable in minimum monthly installments
of $50,000 plus interest at 12% with remaining
Principal due on August 1, 2001                                           (a) 551,657
                                                                             --------   --------

Total                                                                         551,657    976,317

Less current portion                                                          551,657    132,169
                                                                             --------   --------

Notes receivable -net of current portion                                     $     --   $844,148
                                                                             ========   ========
</TABLE>

(a) The note due August 1, 2000 is for a total of $850,000. However, the Company
has certain payment obligations upon the collection of the note. The note is
included in the financial statements at the net realizable value to the Company
after the payment of those obligations. This note is in default as of December
31, 2000 and the maker has filed a lawsuit to void the contract from which the
note originated. The company is vigorously fighting the lawsuit and believes it
will be successful in collecting the full amount due.



                                      F-12
<PAGE>   34

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


NOTE 3 - PROPERTY AND EQUIPMENT, ACCUMULATED DEPRECIATION AND AMORTIZATION

Property and equipment are recorded at cost. Expenditures for repairs and
maintenance are charged to operations when incurred. Major improvements and
renewals that extend the useful life of the related asset are capitalized and
depreciated over the remaining useful life. Depreciation and amortization are
computed for financial and income tax reporting purposes using straight-line and
accelerated methods over estimated useful lives ranging from three years to ten
years. Depreciation charged to operations was $219,378 and $168,883 for the
years ended December 31, 2000 and 1999. The following table summarizes the
classifications of property and equipment; total accumulated depreciation and
the related estimated useful lives:


<TABLE>
<CAPTION>
            Property and Equipment                          COST          YEARS
            ----------------------                       ----------       -----
<S>                                                      <C>              <C>
            Equipment                                    $1,470,599        5-10
            Software development                             76,664         5
            Office software and equipment                   218,267        5-7
            Autos                                            32,525         5
            Leasehold improvements                           19,667         5
                                                         ----------
                  Total                                   1,817,722
            Less accumulated depreciation                   595,185
                                                         ----------
                  Net property and equipment             $1,222,537
                                                         ==========
</TABLE>


NOTE 4 - INTANGIBLE ASSETS

Goodwill represents the excess of the cost of assets acquired over the fair
value at date of acquisition. Goodwill is being amortized on the straight-line
method over fifteen years. Accumulated amortization at December 31, 2000 and
1999 totaled $147,863 and $110,537, and amortization expense of $38,870 and
$37,869 was charged to operations in the years ended December 31, 2000 and 1999.

Organization costs primarily include legal and professional fees associated with
organizing operations. These costs are deferred and amortized using the
straight-line method over five years. Accumulated amortization at December 31,
2000 and 1999, totaled $90,605 and $70,506. Amortization expense of $20,098 was
charged to operations in each of the years ended December 31, 2000 and 1999.



                                      F-13
<PAGE>   35

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


NOTE 5 - LONG-TERM DEBT

     The company has notes payable at December 31, 2000 and 1999 as follows:

<TABLE>
<CAPTION>
                                                                             2000       1999
                                                                           --------   --------
<S>                                                                        <C>        <C>
First National Bank of Midwest City, 9.5% note secured by all Zenex
equipment and Zenex common stock, due in monthly installments of $5,227,
including interest through January 2005                                    $216,869         --

First National Bank of Midwest City, 9.75% note secured by all Zenex
equipment and Zenex common stock, due in monthly installments of $2,124,
including interest through March 2005                                        86,741         --

Federal Bank Centre, Tulsa, Oklahoma, 9.75% note secured by auto, due in
monthly installments of $688 including interest, due May 30, 2005            29,538         --

Federal Bank Centre, Tulsa, Oklahoma, $450,000 line of credit note
with interest payable monthly at 1.5% over Wall Street Journal prime
(currently 10%), secured by all assets of Wolf Energy, Inc. and the
personal guarantee of certain directors, due November 2001                  407,927         --

Federal Bank Centre, Tulsa, Oklahoma, 8.75% note secured by note
receivable, due in monthly installments of $7,900, including interest
through April 2006                                                               --    466,097

Capital Lease, 12.5% obligation secured by equipment,
due in monthly installments of $3,557 including interest
through June 2000                                                                --     27,001

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

   Total                                                                    741,075    493,098

   Less Current Portion                                                     476,996     83,465
                                                                           --------   --------

   Long-Term Debt                                                          $264,079   $409,633
                                                                           ========   ========
</TABLE>

Estimated principal payments on the notes for each of the five years subsequent
to December 31, 2000 are as follows:

<TABLE>
<S>                                                                <C>
                           2001                                    $ 479,996
                           2002                                       75,358
                           2003                                       82,908
                           2004                                       91,214
                           2005                                       11,599
</TABLE>



                                      F-14
<PAGE>   36

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


NOTE 6 - INCOME TAXES

At December 31, 2000, the Company had net operating losses of approximately
$2,005,000 available to reduce future federal and state taxable income. Unless
utilized, the carryforward amounts will begin to expire in 2012. For federal and
state tax purposes, the Company's net operating loss carryforward amounts are
subject to an annual limitation due to a greater than 50% change in stock
ownership, as defined by federal and state tax law.

Under the provisions of FAS-109, Accounting for Income Taxes, deferred tax
liabilities and assets are measured using the applicable tax rate based on the
taxable and deductible temporary differences and operating loss carryforward
amounts. Taxable temporary differences result principally from the excess of
depreciation for tax purposes over the amount deducted for financial reporting
purposes. Deductible temporary differences and operating loss carryforwards,
giving rise to deferred tax assets, are reduced by a valuation allowance if it
is more likely than not that some or all of the deferred tax assets will not be
realized.

The following are components of the net deferred tax asset at:

<TABLE>
<CAPTION>
                                                    December 31,
                                                 2000          1999
                                              ----------    ----------
<S>                                           <C>           <C>
Deferred tax liability on depreciation        $ (129,000)   $ (103,000)
Deferred tax assets for loss carryforwards       802,000       693,000
                                              ----------    ----------
    Deferred tax asset                           673,000       590,000
Less valuation allowance                        (460,000)     (460,000)
                                              ----------    ----------
    Net deferred tax asset                    $  213,000    $  130,000
                                              ==========    ==========
</TABLE>

The Company has established a valuation allowance for a portion of its net
deferred tax assets because of limitations on the use of loss carryforwards due
to ownership changes.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

CUSTOMER BILLING SERVICE

On June 1, 1999, the Zenex entered into a billing service agreement with a third
party outsource service provider. The agreement extends for a period of
forty-two (42) months. Under the terms of the agreement the service fee is
$2,750 per month for recording up to 750,000 detail call records per month The
additional monthly fee for call records in excess of 750,000 is on a declining
scale of .00395(cent) to .00310(cent) per record.

OPERATING LEASES

The Company leases its facilities under operating leases, which expire at
various intervals through September 30, 2005. Under the terms of the leases the
Company is responsible for its share of common area maintenance and operating
expenses. Rent expense under operating leases for the years ended December 31,
2000 and 1999 totaled $62,551 and $51,565.



                                      F-15
<PAGE>   37

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


As of December 31, 2000, the future minimum lease commitments under the leases
were as follows:

<TABLE>
<CAPTION>
YEAR    AMOUNT
----   --------
<S>    <C>
2001   $ 69,039
2002     71,886
2003     74,739
2004     77,583
2005     59,787
       --------
       $370,016
       ========
</TABLE>

ACQUISITION OF ZENEX LONG DISTANCE, INC

Prestige Investments, Inc., a wholly owned subsidiary, of the Company acquired
Zenex Long Distance, Inc. in accordance with a letter of intent dated January
27, 1999 and a subsequent Stock Purchase Agreement (" The Agreement") dated
February 19, 1999. The business combination was accounted for as a purchase. In
accordance with the terms of the Agreement, the initial purchase price was
$6,353 for 100% of the 635,295 outstanding common shares. The Agreement includes
a provision whereby the sellers may earn additional amounts if the cumulative
collected gross sales revenue reach certain levels, (the "Earn Out Rights"), as
follows:

              (e) When collected gross sales revenue reach Ten Million
                  ($10,000,000), the sellers will be paid an additional Fifty
                  Cents ($0.50) per share totaling $317,647.

              (f) When collected gross sales revenue reach Twenty Million
                  ($20,000,000), the sellers will be paid and additional One
                  Dollar ($1.00) per share totaling $635,295.

              (g) When collected gross sales revenue reach thirty-six Million
                  ($36,000,000), the sellers will be paid an additional
                  One-Dollar ($1.00) per share totaling $635,590.

              (h) In no event will the Purchase Price exceed the amount of Two
                  Dollars and fifty-one Cents per share totaling $1,594,590.

Collected gross sales revenues through December 31, 2000 are approximately
$7,300,000. Management expects the $ 10,000,000 gross sales revenue to be
achieved in the year 2001

NOTE 9 - RESTATED FINANCIAL STATEMENTS - BUSINESS COMBINATION OF PRESTIGE
INVESTMENTS, INC.

On June 21, 2000 the Company acquired Prestige Investments, Inc. and its wholly
owned subsidiary, Zenex Long Distance, Inc. in a business combination which was
accounted for as a pooling of interest. Condensed consolidated financial
information of Prestige which is included in the restated December 31, 1999
consolidated balance sheet and the year ended December 31,1999 statement of
operations is as follows:



                                      F-16
<PAGE>   38

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


<TABLE>
<CAPTION>
                                                                  LONE
                                                   PRESTIGE       WOLF       COMBINED
                                                  ----------   ----------   ----------
<S>                                               <C>          <C>          <C>
DECEMBER 31, 1999 BALANCE SHEET
     Current Assets                               $  198,153   $  185,322   $  383,475
     Property and equipment (net)                    935,108           --      935,108
     Other assets                                    902,490      588,523    1,491,013
                                                  ----------   ----------   ----------
     Total assets                                 $2,035,751   $  773,845   $2,809,596
                                                  ==========   ==========   ==========


     Current liabilities                          $1,043,839   $  163,242   $1,207,081
     Other liabilities                                    --      594,082      594,082
     Stockholders' equity                            991,912       16,521    1,008,433
                                                  ----------   ----------   ----------
     Total liabilities and stockholders' equity   $2,035,751   $  773,845   $2,809,596
                                                  ==========   ==========   ==========
</TABLE>


<TABLE>
<CAPTION>
                                                                            LONE
                                                          PRESTIGE          WOLF          COMBINED
                                                        ------------    ------------    ------------
<S>                                                     <C>             <C>             <C>
DECEMBER 31, 1999 STATEMENT OF OPERATIONS
     Revenue                                            $  1,183,087    $         --    $  1,183,087
     Cost of sales                                           947,578              --         947,578
                                                        ------------    ------------    ------------
     Gross profit                                            235,509              --         235,509
     Operating expenses                                   (1,627,709)        (37,186)     (1,664,895)
     Other income (expense)                                  898,885              --         898,885
                                                        ------------    ------------    ------------
     Net income (loss) before discontinued operations       (493,315)        (37,186)       (530,501)
     Discontinued operations                                      --          60,894          60,894
                                                        ------------    ------------    ------------
     Net income (loss) before income taxes                  (493,315)         23,708        (469,607)
     Income tax benefit (expense)                            314,000              --         314,000
                                                        ------------    ------------    ------------
         Net income (loss)                              $   (179,315)   $     23,708    $   (155,607)
                                                        ============    ============    ============
</TABLE>


NOTE 10 - EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                       Year ended
                                                      December 31,
                                                    ---------------
                                                     2000     1999
                                                    ------   ------
<S>                                                 <C>      <C>
Primary Earnings Per Share:(in thousands)
              Common shares outstanding             36,486   27,220
                                                    ======   ======
              Weighted average shares outstanding   31,960   26,904
                                                    ======   ======
              Earnings per share                       nil      nil
                                                    ======   ======

Fully Diluted Earnings Per Share:
              Common shares outstanding             36,486   27,220
                                                    ======   ======
              Weighted average shares outstanding   31,960   26,904
                                                    ======   ======
              Earnings per share                       nil      nil
                                                    ------   ------
</TABLE>



                                      F-17
<PAGE>   39

                             Lone Wolf Energy, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2000


NOTE 11 - STOCK OPTIONS

         In April 1999 a five year option was granted to Federal bank Centre to
purchase 500,000 shares of the Company's common for $0.15 per share in
accordance with the terms of a loan agreement



                                      F-18
<PAGE>   40
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
                EXHIBIT
                NUMBER                         DESCRIPTION
                -------                        -----------
<S>                        <C>
                  3.1      Amended and Restated Articles of Incorporation of the
                           Company and filed as an exhibit to Registrant's Form
                           S-3 Registration Statement filed with the Commission
                           on August 2, 2000 is incorporated herein by this
                           reference.

                  3.2      Amended and Restated Bylaws of the Company, filed as
                           an exhibit to Registrant's Form 8-K filed with the
                           Commission on August 2, 2000, is incorporated herein
                           by this reference.

                  10.1     Agreement and Plan Reorganization dated May 5, 2000,
                           by and among Lone Wolf Energy, Inc., Prestige
                           Investments, Inc., Zenex Long Distance, Inc., and
                           others, filed as an exhibit to Registrant's Form 8-K
                           filed with the Commission on May 19,2000 is
                           incorporated herein by this reference.

                  10.2     Plan and Agreement of Merger dated May 5, 2000, by
                           and among Lone Energy, Inc., Lone Wolf Acquisition
                           Sub I, Inc., ChurchLink.com, Inc. and Switchless
                           Resellers Services, Inc. filed as an exhibit to
                           Registrant's Form S-3 Registration Statement filed
                           with the Commission on August 2, 2000 is incorporated
                           herein by this reference.

                  10.3     Registration Rights Agreement dated May 5, 2000, by
                           and between Lone Energy, Inc. and Switchless Reseller
                           Services, Inc. filed as an exhibit to Registrant's
                           Form S-3 Registration Statement filed with the
                           Commission on August 2, 2000 and incorporated herein
                           by this reference.

                  10.4     Service Agreement dated as of February 16,2000, by
                           and between Lone Wolf Energy, Inc. and Ensynq, Inc.
                           filed as an exhibit to Registrant's Form S-3
                           Registration Statement filed with the Commission on
                           August 2, 2000 and incorporated herein by this
                           reference.
</TABLE>



<PAGE>   41

<TABLE>
<S>                        <C>
                  10.5     Employment Agreement dated as of January 1, 2000, by
                           and between Lone Wolf Energy, Inc. and Marc W.
                           Newman, as amended by letter agreement dated June 20,
                           2000 filed as an exhibit to Registrant's Form S-3
                           Registration Statement filed with the Commission on
                           August 2, 2000 and incorporated herein by this
                           reference.

                  10.6     Employment Agreement dated as of January 1, 2000, by
                           and between Lone Wolf Energy, Inc. and Douglas A.
                           Newman, as amended by letter agreement dated June 20,
                           2000 filed as an exhibit to Registrant's Form S-3
                           Registration Statement filed with the Commission on
                           August 2, 2000 and incorporated herein by this
                           reference.

                  10.7     Employment Agreement dated as of November 28, 2000 by
                           and between Lone Wolf Energy, Inc. Zenex Long
                           Distance, Inc. and Brian Gustas.

                  21.1     Subsidiaries of the Company


                  Reports on Form 8-K.

                  None.
</TABLE>