SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    Form 10-Q

(Mark One)

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the Quarterly Period Ended March 31, 2000

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                   For the Transition Period from ____ to ____

                        Commission File Number: 000-26425


                           NextPath Technologies, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            NEVADA                                               84-1402416
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                            1615 N. 24th West Avenue
                              Tulsa, Oklahoma 74127
               --------------------------------------------------
               (Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code:  918-295-8289

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

As  of  May  15,  2000,  there  were  40,235,775  shares  of  our  common  stock
outstanding.

<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           NextPath Technologies, Inc.

                        Consolidated Financial Statements

                                 March 31, 2000


<PAGE>







                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Stockholders of
NextPath Technologies, Inc.
Tulsa, Oklahoma


We have  reviewed  the  accompanying  condensed  consolidated  balance  sheet of
NextPath  Technologies,  Inc.  as of March 31,  2000 and the  related  condensed
consolidated  statements  of income and cash flows for the  period  then  ended.
These financial statements are the responsibility of the company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the condensed consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards, the balance sheet as of December 31, 1999, and the related statements
of  income,  retained  earnings,  and cash  flows for the year then  ended  (not
presented  herein);  and in our  report  dated May 12,  2000,  we  expressed  an
unqualified  opinion  on  those  financial  statements.   In  our  opinion,  the
information set forth in the accompanying condensed balance sheet as of December
31,  1999,  is fairly  stated,  in all  material  respects,  in  relation to the
consolidated balance sheet from which it has been derived.

The  accompanying  statements of operations  and cash flows for the period ended
March 31, 1999 were not audited or  reviewed by us and,  accordingly,  we do not
express an opinion on them.



Crouch, Bierwolf & Chisholm
May 17, 2000


<PAGE>



                           NextPath Technologies, Inc.
                           Consolidated Balance Sheets

                                     Assets
<TABLE>
<CAPTION>

                                                     March 31,    December 31,
Current assets                                         2000          1999
                                                   ------------  -------------
<S>                                                <C>           <C>
   Cash                                            $   555,356   $    658,837
   Accounts receivable (net of allowance
      Of $41,480)                                      389,498        282,051
   Inventory                                           513,158        138,057
   Prepaid expenses                                     29,455         42,674
   Advances to shareholders                             43,192          6,487
   Advances & notes receivable (net of
      allowance of $1,360,075 and $1,235,075)         5,891,512     3,260,161
                                                    ------------   -----------
Total Current Assets                                  7,422,171     4,388,267
                                                    ------------   -----------

Property & Equipment, Net                             1,356,012       535,179
                                                    ------------   -----------

Other Assets
   Investments                                        2,600,000     2,600,000
   Goodwill                                          24,264,239    17,883,754
   Deposits                                               5,530         4,250
                                                     -----------   -----------
Total Other Assets                                   26,869,769    20,488,004
                                                     -----------   -----------
      Total Assets                                  $35,647,952   $25,411,450
                                                     ===========   ===========

                      Liabilities and Stockholders' Equity

Current Liabilities
   Accounts payable                                     753,179       384,148
   Accrued expenses                                     961,666       192,654
   Deferred taxes                                        14,882        14,882
   Notes payable - related party                      5,652,179     3,455,869
                                                     -----------   -----------
Total Current Liabilities                             7,381,906     4,047,553
                                                     -----------   -----------

Stockholders' Equity
   Common Stock, authorized
     100,000,000 shares of $.001 par value,
     issued and outstanding 39,935,775 and
     37,136,430 shares, respectively                     39,936        37,136

   Additional Paid in Capital                        73,829,101    58,623,056
   Deficit Accumulated During the
     Development Stage                              (45,602,991)  (37,296,295)
                                                     -----------   -----------
Total Stockholders' Equity                           28,266,046    21,363,897
                                                     -----------   -----------
Total Liabilities and Stockholders' Equity          $35,647,952   $25,411,450
                                                     ===========   ===========
</TABLE>


<PAGE>

                           NextPath Technologies, Inc.
                      Consolidated Statements of Operations
<TABLE>
<CAPTION>

                                                    For the three For the three
                                                     months ended months ended
                                                      March 31        March 31
                                                        2000            1999
                                                     -----------    -----------

<S>                                                  <C>            <C>
SALES                                                $   931,900    $        -

COST OF GOODS SOLD                                       889,940             -
                                                     -----------     ----------

GROSS PROFIT                                              41,960             -
                                                     -----------     ----------

OPERATING EXPENSES
   General And Administrative Expenses                 3,193,945         70,943
   Consulting Expense                                  3,675,000         35,278
   Sales                                                 171,018              -
   Research and Development                                    -              -

TOTAL OPERATING EXPENSES                               7,039,963        106,221
                                                      ----------     ----------

OPERATING INCOME (LOSS)                               (6,998,003)             -
                                                      ----------     ----------

OTHER INCOME AND (EXPENSES)
   Interest Expense                                      (10,693)             -
   Dividend income                                        30,000              -
   Other Income/(loss)                                     6,869              -
   Depreciation and Amortization                      (1,338,306)             -
   Interest Income                                         3,437              -
                                                      ----------     ----------
     Total Other Income and (Expenses)                (1,308,693)             -
                                                      ----------     ----------

NET INCOME (LOSS)                                    $(8,306,696)      (106,221)
                                                      ==========     ==========

NET INCOME (LOSS) PER SHARE                          $     (.215)   $     (.012)
                                                      ==========     ==========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES              38,548,381      8,523,510
                                                      ==========     ==========
</TABLE>


<PAGE>

                           NextPath Technologies, Inc.
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                    For the three  For the three
                                                    months ended   months ended
                                                      March 31,      March 31,
                                                        2000           1999
                                                    -------------  -------------
Cash Flows From Operating Activities

<S>                                                  <C>             <C>
Net income (loss)                                    $(8,306,696)    $(106,221)
Adjustments to Reconcile Net Income (Loss) to
  Net Cash Used in Operating Activities:
   Depreciation & Amortization                         1,338,306             -
   Bad Debt                                              125,000             -
   Stock issued for services                           3,675,000             -
 Change in Assets and Liabilities (Net of
      effects of acquisition of Essentia)
  (Increase) Decrease in:
   Accounts Receivable                                   (11,782)            -
   Inventory                                            (296,354)            -
   Prepaid Expenses                                       34,410             -
   Increase/(decrease) in:
   Accounts Payable and Accrued Expenses               1,011,186       (27,180)
   Deferred Expenses                                           -             -
                                                      ----------      --------

     Net Cash Provided (Used) by Operating Activities (2,430,930)     (133,401)
                                                      ----------      --------

Cash Flows from Investing Activities
  Cash paid for Notes Receivable                      (2,937,350)     (106,518)
  Purchase of Property and Equipment                    (583,127)            -
  Cash paid for deposits                                  (1,280)            -
  Cash acquired in acquisition                            55,142             -
                                                      ----------      --------
     Net Cash Provided (Used) by Investing Activities (3,466,615)     (106,518)
                                                      ----------      --------

Cash Flows from Financing Activities

  Proceeds from debt financing                         2,522,515        82,000
  Principal payments on debt financing                  (608,000)            -
  Stock issued for cash                                3,879,549       157,919
                                                      ----------      --------

     Net Cash Provided (Used) by Financing Activities  5,794,064       239,919
                                                      ----------      --------

Net Increase (Decrease) in Cash and Cash Equivalents    (103,481)            -
                                                      ----------      --------

Cash and Cash Equivalents
  Beginning                                              658,837             -
                                                      ----------      --------

  Ending                                             $   555,356     $       -
                                                      ==========      ========

Supplemental Disclosures of Cash Flow Information:
  Cash payments for interest                         $    10,693     $       6
                                                      ==========      ========
  Cash payments for income taxes                     $         -     $       -
                                                      ==========      ========

Supplemental Schedule of Noncash Investing and
  Financing Activities

 Common shares issued for services                   $ 3,675,000     $      -
                                                      ==========      ========
</TABLE>

<PAGE>

                           NextPath Technologies, Inc.
                                 March 31, 2000




NOTES TO FINANCIAL STATEMENTS

          NextPath  Technologies,  Inc.  (the  "Company")  has  elected  to omit
          substantially all footnotes to the financial  statements for the three
          months ended March 31, 2000, since there have been no material changes
          (other  than  indicated  in  other   footnotes)  to  the   information
          previously  reported by the Company in their  Annual  Report  filed on
          Form 10- K/A for the Fiscal year ended December 31, 1999.

UNAUDITED INFORMATION

          The information  furnished herein was taken from the books and records
          of the Company without audit.  However,  such information reflects all
          adjustments  which are, in the  opinion of  management,  necessary  to
          properly reflect the results of the period presented.  The information
          presented is not necessarily indicative of the results from operations
          expected for the full fiscal year.

ACQUISITION OF ESSENTIAL WATER, INC.

          On January 21, 2000,  the Company  acquired  Essentia  Water,  Inc., a
          Woodinville  Washington  based bottled water  marketing  company.  The
          Company  issued  585,760  shares  for all  the  outstanding  stock  of
          Essentia. The purchase was recorded at a value of $7,654,294. Essentia
          had assets of $543,974  and  liabilities  of $526,857 at December  31,
          1999.  Goodwill of  $7,676,487  was recorded in the  acquisition.  The
          operating history of Essentia is included in the consolidated  numbers
          of the Company effective January 1, 2000. The acquisition was recorded
          using the purchase method of a business combination.






<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

"Safe Harbor" Statement Under  the  Private Securities Litigation  Reform Act of
1995.

        This 10-Q contains  statements  that plan for or anticipate  the future.
Forward-looking  statements  include  statements about future business plans and
strategies and most other statements that are not historical in nature.  In this
10-Q,   forward-looking   statements  are  generally  identified  by  the  words
"anticipate,"   "plan,"   "believe,"   "estimate,"   and   the   like.   Because
forward-looking  statements  involve future risks and  uncertainties,  there are
factors  that  could  cause  actual  results  to differ  materially  from  those
expressed  or  implied,  including,  but not  limited  to, our ability to obtain
infusion of equity capital or financing on terms reasonably  satisfactory to us,
competition,  changes in consumer trends, and competitors' marketing strategies.
These forward-looking  statements are based on our current expectations or those
of the  preparer of the  statement.  Readers of this 10-Q are  cautioned  not to
place undue  reliance on the  forward-looking  statements.  The  forward-looking
statements  included  in this  10-Q are made as of the date of this  10-Q and we
don't  undertake any obligation to update them to reflect  subsequent  events or
circumstances.

        The terms  "NextPath,"  the  "Company,"  "we,"  "our" and "us"  refer to
NextPath  Technologies,  Inc. and its  subsidiaries  and  affiliates  unless the
context suggests otherwise.

Overview

        We are a development stage holding company that identifies, acquires and
manages  what  we  believe  to be  state-of-the-art  technology  companies  that
together  form a  community  of shared  resources.  We are  organized  into four
operating groups as follows:  Precision Technologies Group,  Electronic Commerce
Group, Environmental Technologies Group and Health Products Group.

        We don't have any significant  operating  history other than that of our
wholly  owned  subsidiaries.  We  currently  derive all of our revenue  from the
operations of our wholly owned subsidiaries and from our other  investments.  We
intend to continue to identify and pursue  acquisitions which provide attractive
investment  opportunities,  particularly  when  we can  add  value  through  our
technical  expertise.  Our  operating  expenses are comprised of our general and
administrative overhead and the expenses of our subsidiaries.

        We intend to provide our subsidiaries with sufficient funds so that they
can  grow  their  businesses   nationally  and  internationally  by  effectively
developing,  marketing and expanding their  products,  services and market base.
However,  absent an infusion of equity capital or financing on terms  acceptable

                                      -2-
<PAGE>

to us,  we do not  believe  that we have the  liquidity  and  capital  resources
necessary  to  operate  our  business  and  those  of our  subsidiaries  for the
foreseeable future. We are actively engaged in negotiations with debt and equity
sources and we will continue to purse all such options on an aggressive basis.

First Quarter Transactions

        The following is a summary of our transactions during the  first quarter
        of 2000:

        o      On January 21, 2000, we acquired Essentia Water, Inc.

        o      On January 28,  2000,  our  wholly   owned  subsidiary,  NextPath
               Environmental Services, Inc. ("NES"),  formed a limited liability
               company with Thermogenics, Inc. named NextPath Thermogenics, LLC,
               but  NES has  not made  all of  its intitial  required $1,750,000
               capital contribution.

        o      On January 24, 2000, NES formed a limited  liability company with
               Tetra   Separation   Systems,   LLC  named  NextPath   Separation
               Solutions,  LLC,  but NES has not yet made its  initial  required
               $5,000,000 capital contribution.

        o      Our wholly owned  subsidiary,  NextPath  AES,  Inc.  ("NAES") has
               negotiated  an Asset  Purchase  Agreement  to acquire  all of the
               assets of Agri-Covers,  Inc., but a definitive  agreement has not
               been signed pending funding by NAES.

        o      On April 4, 2000,  we executed a definitive  agreement to acquire
               20% of US Certified Letters, LLC ("USCL"), which has licensed the
               right to proprietary  technology for transmitting any instruments
               by  certified  mail via the Internet or other medium (the "C-mail
               Technology")  within the continential  United States,  Alaska and
               Hawaii  (the "USCL  Transaction").  Closing is set to occur on or
               before June 4, 2000.

        o      On April 4, 2000, our wholly owned  subsidiary,  Global Certified
               Mail,  Inc.  ("GCM"),  signed  a  License  Agreement  by which it
               licensed   the  C-mail   Technology   for  use   outside  of  the
               continential  United  States,  Alaska and Hawaii in exchange  for
               which GCM  transferred 20% of its stock to the Licensor (the "GCM
               Transaction"). Closing is set to occur on or before June 4, 2000.

Our Business

        Through our wholly owned  subsidiaries,  we're currently involved in the
        following businesses:

        o      We design,  develop,  manufacture and  market positioning devices
               known as gimbals.

        o      We design and market motion control systems.

        o      We design and market wireless communication technology.

        o      We design and market  fiber optic switching and other fiber optic
               technology.

        o      We bottle  and market  alkaline and  electrolyte enhanced premium
               water products.

        o      We develop energy and micro economic systems technology.

        o      Upon making the required  capital  contribution  to the  NextPath
               Thermogenics, LLC,  we  will  design,  engineer,  fabricate, own,
               sell,  lease and  operate systems which convert waste products to
               energy.

                                      -3-
<PAGE>

        o      Upon making the required  capital  contribution to the Separation
               Solutions,  LLC,  we  will  design,  engineer,   fabricate,  own,
               operate, market and sell systems which remove waste products from
               soil and water.

        o      Upon  closing  the USCL  Transaction,  we will be involved in the
               commercialization  and marketing of the C-mail  Technology within
               the continental United States, Alaska and Hawaii.

        o      Upon  closing  the GCM  Transaction,  we will be  engaged  in the
               commercialization  and marketing of the C-mail Technology outside
               the continental United States, Alaska and Hawaii.

Our Growth Strategy and Plan of Operation

        Our goal is to  enhance  shareholder  value  by  increasing  cash  flow,
earnings and the value of our common stock. To  successfully  reach our goal, we
believe we must implement the following  growth  strategy and plan of operations
for  the  foreseeable  future:  o We  must  continue  to  identify,  pursue  and
capitalize  acquisitions  that  provide  attractive  investment   opportunities,
particularly where we can add value through our technical expertise.

        o      We must effectively integrate our businesses and technologies.

        o      We must  grow our  business  nationally  and  internationally  by
               effectively  developing, marketing and expanding our products and
               services and our market base.

        o      We must  continue  to  identify,  attract,  retain  and  motivate
               qualified personnel.

        o      We must  continue  to  identify  and  close  sources  of  working
               capital.

        In view of our current working capital,  we will need to raise or borrow
additional funds during the foreseeable future to meet the expenditures required
for operating our business.  We are actively  engaged in negotiations  with debt
and  equity  sources  and we will  continue  to pursue  all such  options  on an
aggressive basis.

Results of Operations

        During the first quarter of 2000, we incurred a net loss  of  $8,306,696
For the same period of 1999, we incurred a net loss of $106,221.

        Our  first   quarter  corporate  overhead  costs  include  expenses  for
corporate infrastructure  development,  staffing and the  establishment of a new
corporate office headquarters in Tulsa, Oklahoma.

Liquidity and Capital Resources

        We do not believe that our existing  working  capital,  the  anticipated
revenues  of our  subsidiaries,  and the  anticipated  revenues  from our  other
investments  will be sufficient to fund our cash  requirements and capital needs
for the  foreseeable  future.  The extent of  additional  financing  needed will
depend on the success of our  business  and our  ability to identify  and pursue
additional acquisitions that provide attractive investment opportunities.  While
to the extent possible we intend to fund future acquisitions  primarily with our
common stock, most  acquisitions  require that a portion of the consideration be
in the  form  of  cash.  If we  significantly  increase  the  operations  of our
subsidiaries  or our  acquisitions  beyond planned levels or if our revenues are
lower than  anticipated,  our cash needs will be  increased.  In  addition,  our
future capital requirements will depend on a number of other factors,  including
the  level  of our  product  research  and  development,  the  level  of  market
acceptance  of our  goods  and  services,  and the  feasibility  and  extent  of
international expansion.

                                      -4-
<PAGE>

        Competition  from  larger  and more  established  companies  may  hamper
marketability.  NextPath and its subsidiaries may face intense  competition from
similar, more  well-established  competitors,  including national,  regional and
local companies possessing substantially greater financial, marketing, personnel
and other  resources than  NextPath.  NextPath may not be able to market or sell
its products if faced with direct product  competition from these larger or more
established companies.

        Patents, trademark protection and proprietary marks. Notwithstanding any
potential registration of patents and certain trade names with the United States
Patent Office and the United States Trademark Office, there is no assurance that
NextPath or its subsidiaries  would be able to enforce against use of any of the
proprietary  products or marks of its  subsidiaries.  There is also no assurance
that NextPath will be able to prevent competitors from using the same or similar
products,  names,  marks,  concepts or appearances of it or its  subsidiaries or
that it will have the financial resources necessary to protect its marks against
infringing use.

        Issuance  of future  shares  may  dilute  investors'  share  value.  The
Articles of  Incorporation  as amended of NextPath  authorizes  the  issuance of
100,000,000  shares of common stock.  The future  issuance of all or part of the
remaining  authorized  common  stock may result in  substantial  dilution in the
percentage of our common stock held by our then existing shareholders. Moreover,
any common stock issued in the future may be valued on an arbitrary basis by us.
The  issuance  of our  shares  for  future  services  or  acquisitions  or other
corporate  actions may have the effect of diluting  the value of the shares held
by investors, and might have an adverse effect on any trading market.

        Current trading market for the Company's securities. Our common stock is
traded on the OTC Bulletin  Board  operated by Nasdaq under the symbol NPTK. The
NASD has  implemented  a change in its rules  requiring  all  companies  trading
securities on the OTC Bulletin  Board to be  registered as a reporting  company.
The Company was required to become a reporting  company by the close of business
on December 15, 1999. NextPath effected the merger with Epilogue on November 11,
1999 and became a successor issuer thereto in order to comply with the reporting
company requirements implemented by the NASD.

        Penny Stock  Regulation.  Our common  stock may be deemed a penny stock.
Penny stocks generally are equity securities with a price of less than $5.00 per
share other than securities  registered on certain national securities exchanges
or quoted on the Nasdaq Stock  Market,  provided  that current  price and volume
information  with respect to  transactions in such securities is provided by the
exchange or system.  Our  securities  may be subject to "penny stock rules" that
impose additional sales practice  requirements on  broker-dealers  who sell such
securities to persons other than established  customers and accredited investors
(generally  those with assets in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000  together with their spouse).  For transactions  covered by
these rules, the broker-dealer must make a special suitability determination for
the  purchase of such  securities  and have  received  the  purchaser's  written
consent  to  the  transaction  prior  to the  purchase.  Additionally,  for  any
transaction  involving a penny  stock,  unless  exempt,  the "penny stock rules"
require  the  delivery,  prior  to the  transaction,  of a  disclosure  schedule
prescribed by the SEC relating to the penny stock market. The broker-dealer also
must  disclose  the  commissions  payable  to  both  the  broker-dealer  and the
registered  representative and current  quotations for the securities.  Finally,
monthly  statements  must be sent  disclosing  recent price  information  on the
limited  market in penny  stocks.  Consequently,  the  "penny  stock  rules" may
restrict the ability of  broker-dealers  to sell our  securities.  The foregoing
required  penny  stock  restrictions  will not apply to our  securities  if such
securities  maintain a market price of $5.00 or greater.  As of the date of this
10-K/A,  the trading price of our common stock is less than $5.00 per share, and
there can be no assurance  that the price of our  securities  will exceed such a
level.

        We are currently  operating at a loss.  Until the recent  acquisition of
Sagebrush,  Willow, LaserWireless and Essentia, we had no operations or revenues
and we borrowed  funds or sold our  securities to begin our  operations and fund
our  acquisitions.  Our  ability to develop  operations  is  dependent  upon our
ability to acquire companies for which we will need to raise capital through the
placement of our  securities or from other debt or equity  financing.  If we are
not able to raise such  financing or to obtain  alternative  sources of funding,
management will be required to curtail operations. There is no assurance that we
will be able to continue to operate if additional sales cannot be generated.

                                      -5-
<PAGE>

        We have a limited operating  history.  We have only a limited history of
operations which to date have not been profitable. Our operations are subject to
the risks and  competition  inherent in the  establishment  of a relatively  new
business  enterprise.  There can be no assurance that future  operations will be
profitable.  Revenues and  profits,  if any,  will depend upon various  factors,
including market acceptance of its concepts,  market awareness,  reliability and
acceptance of the  Internet,  dependability  of its  distribution  network,  and
general  economic  conditions.  There is no  assurance  that we will achieve our
expansion  goals and the  failure  to achieve  such goals  would have an adverse
impact on us.

        Possible inability to finance acquisitions.  In transactions in which we
agree to  acquire a  company  for cash,  we will have to locate  financing  from
third-party  sources such as banks or other  lending  sources or we will have to
raise cash through the sale of our  securities.  There is no assurance that such
funding  will be  available  to us when  required to close a  transaction  or if
available on terms acceptable to us.

        Operation  of  LaserWireless   business  involves  the  use  of  lasers.
LaserWireless  utilizes lasers.  Although the lasers are of relatively low power
and to be located in  unpopulated  areas such as rooftops and although the laser
devices are marked with "hazard" signs, there can be no assurance that passersby
will not cross the path of a laser,  causing damage to the eyes or causing other
health hazards.

        Unforeseen risks of acquired  companies.  Companies that may be acquired
by us or with which we enter into business  relationships  may face  competition
from more-established or better financed companies. In addition, any one or more
of these  companies may produce or  manufacture  equipment,  technology or other
goods that pose inherent  risks in production or operation.  It is impossible to
foresee these risks herein, but we will consider such risks before entering into
any business combination.

        Our  acquisition  program  may  lead to  uncertain  liabilities.  We are
currently  engaged in an active  acquisition  program.  Although we evaluate all
potential acquisitions, the acquisition of going concerns could potentially lead
to the acquisition of the target  company's  liabilities,  including  patent and
trademark  infringement  claims,  product liability  claims,  breach of contract
claims,  or shareholder  derivative  claims.  There can be no assurance that any
companies that we acquire are free of potential liabilities.

                         THE PRECISION TECHNOLOGY GROUP
                         ------------------------------

In General

        The Precision  Technologies  Group (the "PTG")  consists of three wholly
owned subsidiaries: LaserWireless, Inc. ("LaserWireless"), located in Lancaster,
Pennsylvania;  Willow Systems,  Inc.  ("Willow"),  located in  Albuquerque,  New
Mexico; and Sagebrush Technology,  Inc.  ("Sagebrush"),  located in Albuquerque,
New Mexico.  In turn,  Willow owns  NextWave  Photonics,  LLC and Reflex LLC and
holds a stock position in Skycam Systems, Inc. Together,  these entities design,
engineer,  manufacture,  and market  precision  motion  control  systems,  laser
communications  systems,  and  purpose-designed,   precision-controlled  imaging
systems.  Additionally,  Willow,  through  NextPath  Photonics,  is  engaged  in
feasibility and design work on a solid state optical switching system.

        First  quarter  operating  costs  for   the Precision  Technology  Group
reflect the  addition of  full time professional/managerial  staff to take a new
look at costs and pricing, institute program management  and project  management
systems, improve operational efficiency, and achieve ISO certification.

Sagebrush Technologies, Inc.
----------------------------

Overview

        Sagebrush is an engineering and  manufacturing  company  specializing in
providing  innovative  solutions  based  primarily on its  patented  Roto-Lok(R)
rotary drive technology.  Its principal executive offices are located at 10300-A
Constitution,  NE, Albuquerque,  New Mexico 87112. Its telephone number is (505)
299-6623.  Its website is www.sagebrushtech.com.

                                      -6-
<PAGE>

Growth Strategy and Plan of Operations

        Sagebrush  designs,  develops,   manufactures  and  markets  positioning
devices.  Its objective is to bring the latest technologies and best engineering
talents  together to address its clients' needs.  Its business  philosophy is to
provide  products  that meet  specifications,  are safe to use,  are kind to the
environment,  are fairly priced,  and are delivered on time.  Sagebrush's growth
strategy  will be to increase its  production of  positioning  devices and other
quality  products  and  to  expand  its  customer  base  through  an  aggressive
advertising  and marketing  campaign to publicize its products.  Key elements of
its growth strategy include:

        Products.  Sagebrush provides products,  systems and Original  Equipment
Manufacture (OEM) activators for  applications  that  require  state  of the art
precision, smoothness, reliability and  cost  effective performance in all types
of environment.  Its specialties include:

        o      laser communications gimbal systems

        o      low earth orbit satellite tracking systems

        o      stabilized platforms and gimbals

        o      medical and industrial activators and turntables

        Gimbals are positioning devices. The mechanism that supports a telescope
so it can look at all different parts of the sky is a typical gimbal. It is most
often  called a telescope  mount but it can gimbal or swing in two axes,  up and
down and side to side.  Most people have seen  gyroscopes  that are mounted in a
gimbal  arrangement so the gyroscope  wheel stays oriented in the same direction
even when the base of the gimbal is rotated.  Gyroscopic gimbal systems are used
in ships,  airplanes,  missiles and many other applications to indicate a stable
reference  plane,  even  when the  vehicle  is  pitching,  rolling  or  changing
direction.

        Antenna  positioners  are the devices  that point  antennas at a target.
Satellite antennas that are portable such as those used by the military,  by the
networks or by local television  stations  require  positioners that can lay the
antenna  down  flat  during  transit,  then  quickly  raise  it up and  point it
accurately  at a satellite.  The large surface area of an antenna acts as a sail
in high  winds.  To keep the  antenna  pointed  at the  satellite,  the  antenna
positioner  must be extremely  stiff.  The  Sagebrush  Roto-Lok(R)  rotary drive
provides the stiffest drive currently available.

        Sagebrush manufactures and sells several innovative products including a
20 lb. capacity Model-20 Pan & Tilt Gimbal.

        Product Research and Development. Sagebrush believes that strong product
research and  development  capabilities  are essential to maintain a competitive
edge with its  products.  Since  inception,  it has  focused  its  research  and
development  efforts on  developing  the finest  gimbals  and other  positioning
devices available. Its research and development efforts will continue.

        Target Market. A major part of Sagebrush's  business is supplying rotary
drive  systems  on an OEM basis for  military,  industrial,  space,  commercial,
aerospace,  medical and research  applications.  Its products can be provided to
fit a customer's particular application.

        The basic idea of the  Roto-Lok(R)  drive is the essence of  simplicity.
But what this  simplicity  delivers to  Sagebrush's  customers  is  unparalleled
performance  and cost  benefits  that go right to their  bottom  line.  For some
customers the  Roto-Lok(R)  drive solution allows them to proceed with a project
that  otherwise  might not be  possible  to  complete  - at any cost.  For other
customers,  Roto-Lok(R) drive technology is providing a major advantage in their
quest for superior quality and cost effectiveness.

                                      -7-
<PAGE>

        Sagebrush Technology.  Sagebrush owns all rights to United States Patent
No.  5,105,672  issued on April 21, 1992 and entitled  "Rotary  Drive  Apparatus
Having One Member with Smooth Outer Peripheral  Surface." It also owns all title
to the registered trademark  "Roto-Lok," Serial No. 73-451065  (Registration No.
1347219) dated July 9, 1985.

        The  Roto-Lok(R)  rotary drive is an  elegantly  simple,  yet  powerful,
technology that utilizes the averaging  effect of many cables - each sharing the
load - wrapped  around a drive  capstan  and a driven  drum.  It was  originally
invented as an inexpensive way to rotate large observatory telescopes accurately
and smoothly.  Traditionally,  precision  gears have been used to position those
loads.  However,   even  the  best  gears  suffer  from  high  friction,   drive
irregularities  and backlash,  and they are expensive.  They also require costly
precision  sealed housings to support the gears and their lubricants and to keep
them clean.  All  Roto-Lok(R)  rotary drive  machined  components are smooth and
round,  making the parts easy to produce.  The many cables  serve to average the
rotation rate so that  imperfections,  dirt or other slight  irregularities on a
single cable or drum do not have a  significant  effect.  This results in superb
drive smoothness with no cogging or drive rate irregularity.

        The following  are some of the many advantages and benefits of the Roto-
Lok(R) rotary drive:

        o      The load bearing elements  (cables) are  statically  tensioned to
               increase  the no-load  stiffness of the  drive.  In a gear drive,
               that tensioning will create friction and shorten the useful zero-
               backlash life of the gears.

        o      Many load  bearing  elements can be  paralleled  to meet the peak
               load requirements without significantly  impacting the cost while
               simultaneously improving the precision of the drive.

        o      The use of multiple cables virtually  eliminates  "cogging" found
               in  traditional  gear  drives.  Near-perfect  smoothness  can  be
               attained with a properly  designed drive because of the averaging
               effect of the many cables.

        o      Where weight and power are at a premium,  the Roto-Lok(R)  drives
               excel because they produce superior  performance along with a 60%
               to 70%  savings in both  weight and power.  Because  the drive is
               stiff and efficient,  smaller  motors,  wiring and power supplies
               can be used.

        The three primary performance attributes of the Roto-Lok(R) rotary drive
are its extremely high torsional  stiffness,  its high torque capacity,  and its
total freedom from backlash.

        Manufacturing Strategy.  Sagebrush's ongoing manufacturing strategy will
be designed to increase capacity, improve quality, and reduce costs. It plans to
gradually  increase its production in order to sustain its projected  growth. In
any given year, its ability to reach its targeted  production  level will depend
upon,  among other  factors,  its ability to (i) continue to realize  production
efficiencies at its existing  production  facilities  through  implementation of
innovative manufacturing techniques and other means, (ii) successfully implement
production  capacity  increases  in its  facility,  and  (iii)  sell  all of the
products it can produce.

        Sagebrush will not  manufacture any of the parts it needs to produce its
products and it'll have to rely on outside suppliers to provide them.

        Sagebrush's income projections are as follows:
<TABLE>
<CAPTION>

                          Sagebrush Income Projections
                          ----------------------------

                                     2000        2001       2002         2003
                                     ----        ----       ----         ----

<S>                              <C>         <C>         <C>         <C>
Net Sales                        $4,739,450  $5,269,750  $8,049,750  $8,199,750
Operating Costs and Expenses      5,894,168   4,681,178   7,043,531   7,051,785
                                  ---------   ---------   ---------   ---------
Income (Loss) From Operations    (1,154,718)    578,573   1,006,219   1,147,965
Other income (Expenses)                  --          --          --          --
Net Income (Loss)                (1,154,718)    578,573   1,006,219   1,147,965
</TABLE>
                                      -8-
<PAGE>

        Marketing Strategy. Sagebrush will conduct an aggressive advertising and
marketing  campaign to  publicize  its  products.  Sagebrush  believes  that its
potential  customers  can best be reached  through  advertising  in trade shows,
technical publications and direct marketing and on the Internet.

Sagebrush Facility

        Sagebrush's executive offices and manufacturing  facility are located in
a light  industrial area in Albuquerque.  They consist of  approximately  10,650
square feet of leased space under a lease which expires in July 2000.

Competition

        Sagebrush   believes  that  it  is  at  the  forefront  in  the  design,
development and manufacturing of positioning  devices and related  products.  It
emphasizes  quality,   reliability,   cost-effectiveness  and  timely  delivery.
Nonetheless,  other  companies  are  engaged  in  the  design,  development  and
manufacturing  of  positioning   devices  and  related  products  which  may  be
competitive with Sagebrush's products. Many of those entities have substantially
greater financial, technical,  manufacturing,  marketing,  distribution or other
resources than Sagebrush. Sagebrush's profitability will depend upon its ability
to compete in its market area.

Product Liability

        The sale of its  products  may expose  Sagebrush  to  product  liability
claims. It believes that its products are, and will be, safe and that it will be
able to obtain product liability insurance at a reasonable cost. However, in the
event of an uninsured or inadequately insured product liability claim, or in the
event of an  indemnification  claim by a third party,  Sagebrush's  business and
financial condition could be materially adversely affected.

Regulation

        Sagebrush's  products and business may be subject to federal,  state and
local  regulations,   including  environmental   regulations.   Sagebrush  can't
calculate  exactly how much it will cost to comply with  government  regulation,
but it will try to ensure  that its  facilities  and  products  comply  with all
applicable  regulations  and standards.  In any event, it doesn't think that the
cost of compliance will materially affect its financial condition.

Management

        Sagebrush is currently  managed by August  Sanchez,  its Vice President.
Don Carson,  the founder of Sagebrush and the inventor of the Roto-Lok(R)  drive
system with  nearly 40 years  experience  developing  precision  mechanical  and
opto-mechanical systems for worldwide research, industrial, military, aerospace,
medical and commercial  customers,  serves as a consultant to Sagebrush  under a
Consulting Agreement which expires in December, 2003.

Employees

        As of May 8, 2000, Sagebrush employed  twenty-seven  full-time employees
and two part-time employees.  None of Sagebrush's  employees is represented by a
union and management believes its employee relations are good.

Operating Results

        The results in the following table do not necessarily  indicate  results
Sagebrush will achieve in the future.

                                      -9-
<PAGE>
<TABLE>
<CAPTION>

                           Sagebrush Operating Results
                           ---------------------------

                                              Three Months Ended March 31,
                                                  2000           1999(1)
                                                 ------         -----
Income Statement Data:
<S>                                           <C>              <C>
Revenues                                      $  665,796       $  461,329
Cost of Goods Sold                               492,790          119,389
Selling, General and Administrative Expenses     335,967          219,319
Income (Loss) from Operations                   (162,961)         122,621
Depreciation                                       9,608                0
Other Income                                       8,053            2,151
Net Income (Loss)                             $ (164,516)      $  124,595
                                               =========        =========

Balance Sheet Data:
Current Assets                                $  780,615       $  363,975
Property and Equipment                           289,200           36,839
Other Assets                                       3,250                0
Total Assets (2)                               1,073,065          400,815
Current Liabilities                              246,979          326,472
Long-Term Debt                                 1,518,641                0
Total Liabilities                              1,765,620                0
Retained Earnings (Accumulated Deficit)         (638,869)       1,765,620
Common Stock                                         140           20,219
Paid in Capital                                  110,690                0
Current Earnings                                (164,516)         124,595
Stockholder Equity                              (692,555)          74,342
Total Liabilities & Shareholder Equity        $1,073,065       $  400,815
                                               =========        =========
--------------------------------
</TABLE>

(1)     Sagebrush was acquired in December 1999.
(2)     Net of Accumulated depreciation and amortization

Sagebrush's   first  quarter  income  includes  direct  customer   billings  for
engineering  services  performed  by Willow  on  Sagebrush  customer  contracts.
Additional  marketing costs are a result of increased  trade show  participation
and other product promotions performed in the first quarter of 2000.  Additional
general and  administrative  costs are a result of the Sagebrush  management and
business merger transition activities.

Willow Systems, Inc.
--------------------

Overview

        Willow is an  engineering  and  manufacturing  company  specializing  in
providing  custom  real-time  motion  control  and  electronics  solutions.  Its
principal executive offices are located at 15100 Central Avenue SE, Albuquerque,
New  Mexico  87193.  Its  telephone  number is (505)  299-2486.  Its  website is
www.willowsystems.com.

Growth Strategy and Plan of Operations

        Willow   specializes  in  translating  its  customers'   motion  control
requirements into reliable, custom hardware solutions. Its objective is to bring
the latest  technologies  and best  engineering  talents together to address its
clients'  needs.  Its  business  philosophy  is to  provide  products  that meet
specifications, are safe to use, are kind to the environment, are fairly priced,
and are  delivered on time.  Willow's  growth  strategy  will be to increase its
production of motion  control  devices and other quality  products and to expand
its customer base through an aggressive  advertising  and marketing  campaign to
publicize its products. Key elements of its growth strategy include:

        Willow  designs  and  markets  custom  motion   control,   robotics  and
electronics solutions with leading edge technologies in the areas of gimbals and
photographic/electro-optical  systems.  Willow has the  capability  to translate
real-time motion control requirements into reliable, hardware solutions, and its
technologies have potential application in a wide range of businesses.

                                      -10-
<PAGE>

        Willow is also engaged in the business of designing and  developing  new
and  innovative   MicroElectro   Mechanical  Systems  ("MEMS")   technology  and
associated controls and electronics,  primarily for optical  applications.  MEMS
are machines so small that they are imperceptible to the human eye.

        Willow is also  developing  a  high-speed  fiber optic  switch that will
control  communications  routing over fiber optic networks.  This switch will be
compatible with the high capacity wavelength division  multiplexed ("WDM") fiber
optic  systems  that are  expected  to dominate  the fiber optic  communications
market over the next decade.

        Products.  Willow  provides gimbals, camera and electro-optical systems.
Its specialties include:

        o      Gimbals and pedestals

        o      real-time control systems

        o      specialized board designs

        o      analog designs

        o      camera systems

        o      real-time micro controller, DSP, and state machine designs

        Product  Research and  Development.  Willow believes that strong product
research and  development  capabilities  are essential to maintain a competitive
edge with its  products.  Since  inception,  it has  focused  its  research  and
development  efforts on developing the finest motion control systems  available.
Its research and development efforts will continue.

        Target  Market.  A major part of Willow's  business is supplying  motion
control  systems on an OEM basis for military,  industrial,  space,  commercial,
aerospace, and motion picture applications.  Its products can be provided to fit
a customer's particular application.

        Willow uses focused system engineering  approach to all of its projects.
It is able to do this  because it  possesses a very broad range of  expertise in
all aspects of precision  motion  control and  electro-optical  systems,  and in
supporting engineering  disciplines.  Willow specializes in precision-engineered
solutions  -  cutting-edge  design,  engineering,  manufacturing,  testing,  and
customer support - to provide maximum value for its customer's program dollar.

        Willow   applies  this  systems   approach  using   integrated   product
development  teams.  Each  development  team  typically  includes  not  only the
internal engineering and management capabilities required for a project, but its
customers and key suppliers as well. Regular technical  interchange ensures that
Willow remains focused on its customers'  needs and provides  timely  visibility
throughout the design process.  Involvement of essential  suppliers helps ensure
that components and subsystems meet design  parameters.  This integrated product
development  approach  helps to provide  its  customers  with a product  that is
reliable,  manufacturable,  high-quality  and that will  test to the  customer's
specifications.

        Manufacturing Strategy.  Willow's ongoing manufacturing strategy will be
designed to increase  capacity,  improve quality,  and reduce costs. It plans to
gradually  increase its production in order to sustain its projected  growth. In
any given year, its ability to reach its targeted  production  level will depend
upon,  among other  factors,  its ability to (i) continue to realize  production
efficiencies at its existing  production  facilities  through  implementation of
innovative manufacturing techniques and other means, (ii) successfully implement
production  capacity  increases  in its  facility,  and  (iii)  sell  all of the
products it can produce.

                                      -11-
<PAGE>

        Willow will assemble its products;  however Willow will not  manufacture
all of the parts it needs to  produce  its  products  and it'll  have to rely on
outside suppliers to provide most of them.

        Willow's income projections are as follows:
<TABLE>
<CAPTION>

                            Willow Income Projections
                            -------------------------

                                  2000         2001         2002         2003
                                  ----         ----         ----         ----

<S>                            <C>         <C>          <C>          <C>
Net Sales                      $1,234,664  $20,164,000  $45,823,250  $91,726,000
Operating Costs and Expenses    1,109,562   18,066,944   40,920,162   61,636,140
                                ---------   ----------   ----------   ----------
Income (Loss) From Operations     125,100    2,097,056    4,903,088   10,089,860
Other income (Expenses)                --           --           --           --
Net Income (Loss)                 125,100    2,097,056    4,903.088   10,089,860
</TABLE>

        Marketing  Strategy.  Willow will conduct an aggressive  advertising and
marketing campaign to publicize its products. Willow believes that its potential
customers can best be reached  through  advertising  in technical  publications,
trade shows and direct marketing and on the Internet.

Willow Facility

        Willow's  executive offices and manufacturing  facility are located in a
light industrial area in Albuquerque. They consist of approximately 5,960 square
feet of leased space under a lease which expires in October 2001.

Competition

        Willow  believes that it is at the forefront in the design,  development
and manufacturing of motion control devices and related products.  It emphasizes
quality, reliability, cost-effectiveness and timely delivery. Nonetheless, other
companies are engaged in the design,  development  and  manufacturing  of motion
control  devices and related  products  which may be  competitive  with Willow's
products.   Many  of  those  entities  have  substantially   greater  financial,
technical,  manufacturing,  marketing,  distribution  or  other  resources  than
Willow.  Willow's  profitability  will depend upon its ability to compete in its
market area.

Product Liability

        The sale of its products may expose Willow to product  liability claims.
It believes that its products are, and will be, safe and that it will be able to
obtain product liability  insurance at a reasonable cost.  However, in the event
of an uninsured or inadequately insured product liability claim, or in the event
of an  indemnification  claim by a third party,  Willow's business and financial
condition could be materially adversely affected.

Regulation

        Willow's  products  and  business  may be subject to federal,  state and
local regulations,  including environmental regulations.  Willow can't calculate
exactly how much it will cost to comply with government regulation,  but it will
try to ensure  that its  facilities  and  products  comply  with all  applicable
regulations  and  standards.  In any event,  it  doesn't  think that the cost of
compliance will materially affect its financial condition.

Management

        Willow is currently  managed by Doug  Elerath,  its  President,  and Sam
Rogers, Jr., its Vice President.

                                      -12-
<PAGE>

Employees

        As of May 8, 2000, Willow employed  twenty-two  full-time  employees and
two part-time  employees.  None of Willow's  employees is represented by a union
and management believes its employee relations are good.

Operating Results

        The results in the following table do not necessarily  indicate  results
Willow will achieve in the future.
<TABLE>
<CAPTION>

                            Willow Operating Results
                            ------------------------

                                             Three Months Ended March 31,
                                                  2000           1999(1)
                                                 ------         -----
Income Statement Data:
<S>                                          <C>             <C>
Revenues (Net Sales)(2)                      $        0      $  316,373
Cost of Goods Sold (2)                          219,629         180,318
General and Administrative Expenses             493,605          75,971
Income (Loss) from Operations                  (713,234)         60,084
Depreciation                                     18,791               0
Other Income                                        300              35
Net Income                                     (713,725)         60,119
                                              =========       =========

Balance Sheets Data:
Current Assets                                  286,440         268,781
Property and Equipment                          567,005          30,109
Other Assets                                      1,280               0
Total Assets (3)                                854,725         298,890
Current Liabilities                             485,459          55,874
Long Term Debt                                1,682,241               0
Total Liabilities                             2,167,700          55,874
Common Stock                                        200             200
Retained Earnings (Accumulated Deficit)        (581,450)        182,698
Current Earnings                               (731,725)         60,119
Shareholder Equity                           (1,312,975)        243,017
Total Liabilities & Shareholder Equity          854,725         298,890
--------------------------------              =========       =========
</TABLE>

(1)     Willow Systems was acquired in November 1999.
(2)     See narative disclosure below:  Sales and transfer pricing.
(3)     Net of accumulated depreciation and amortization.


Willow had no revenue for the first quarter of 2000.  The accounting of transfer
pricing  between Willow and Sagebrush was not completed  until May 2000.  Willow
performed  engineering  services under Sagebrush customer  contracts.  Sagebrush
billed and held all contract  service amounts with no revenue transfer to Willow
during the first quarter.

First quarter revenue was delayed by uncertainties  over the NextPath and Willow
merger  closing.  This impacted work  scheduling and performance for a number of
engineering contracts.

Willow  experienced  increases in several labor cost accounts from 1999 to 2000.
After the merger was completed in November  1999,  staff was added to accelerate
and improve efforts on existing projects and prepare for new projects. The staff
additions  also  provide  Willow with  broader  program  and project  management
capabilities.

LaserWireless, Inc.
-------------------

        LaserWireless,  which began its  operations in 1999,  specializes in the
development, sale and support of state-of-the-art wireless optical communication
systems capable of  transmitting  video,  voice,  telephone and data through the
atmosphere using eye-safe laser  technology.  This capability  offers a solution
for private communications where a leased line cannot be used, for example, when
land is not owned between two sites or where physical barriers,  such as rivers,
highways,  parking lots, etc.,  prevent use of conventional  cables. The systems
include full time electronic  tracking for maximum  availability.  Its principal
executive  offices are located at 2145 Lincoln Plaza,  Lancaster,  Pennsylvania.
Its telephone number is (877) 527-3757. Its website is www.laserwireless.com.

                                      -13-
<PAGE>

Growth Strategy and Plan of Operations

        LaserWireless    designs,    develops,    manufactures    and    markets
state-of-the-art  atmospheric laser  communications  equipment for voice, video,
phones and data.  Its  objective  is to bring the latest  technologies  and best
engineering  talents  together  to address  its  clients'  needs.  Its  business
philosophy is to provide products that meet specifications, are safe to use, are
fairly priced, and are delivered on time. LaserWireless' growth strategy will be
to increase its  production  of laser  communications  systems and other quality
products and to expand its customer base through an aggressive  advertising  and
marketing  campaign  to  publicize  its  products.  Key  elements  of its growth
strategy include:

        Products.  There is a growing  need in  today's  information  society to
augment   existing   communication   systems  with   reliable,   high  bandwidth
communication  capability.  Laser  communication  systems  provide users with an
alternative   to   traditional   copper   or  fiber   communications   pathways.
LaserWireless systems facilitate immediate communication  enhancements with full
network interface support.

        The  LaserWireless   LightBridge  155   communication   system  features
electronic  tracking to ensure  continuous  alignment of both  transmitting  and
receiving optical links. A typical system consists of two Laser Transceivers and
two Digital Remote Status Monitors.  The Laser Transceivers provide a high speed
full-duplex data link between sites,  while the Remote Status Monitors allow the
user to verify  correct  system  operation.  Two  advance  features  - Full Time
Electronic  Tracking and Remote Factory  Diagnostics - ensure the highest levels
of reliability and availability. Currently the system will support data rates to
155 million bits per second (Mbps) with a range to 2.5  kilometers  (1.5 miles).
Development plans include systems supporting  tomorrow's  ultra-high data rates.
Other features include remote status monitoring and diagnostics,  both supported
by 24-hour technical support.

        Product  Research and  Development.  LaserWireless  believes that strong
product  research  and  development  capabilities  are  essential  to maintain a
competitive edge with its products. Since inception, it has focused its research
and  development  efforts on developing the finest laser  communication  devices
available. Its research and development efforts will continue.

        Target Market.  Current applications for LaserWireless  products include
university and office campuses,  building-to-building  communications,  military
mobile   communications,   emergency   communication   networks  and   temporary
communications.  Important military  applications include mobile, high bandwidth
communications  using a  battery-powered  system  that is easily  transportable,
non-detectable,  and  secure.  Emergency  communication  needs arise in disaster
areas where  damage has occurred to above  ground or  underground  communication
systems. Other temporary  communication needs include conventions,  expositions,
trade shows, and mobile command and control.

        LaserWireless  is preparing for the future of high-speed  communications
with  system  development  efforts  focused  on  providing  622 Mbps and 2+ Gbps
communication capabilities.

        LaserWireless Technology. LaserWireless' system is the latest technology
in optical  communications  for distances up to 2.5 kilometers with greater than
95% availability.  The system incorporates full real-time electronic tracking to
ensure continuous  alignment.  The transmitters are easy to install and operate,
requiring only a clear line-of-sight and solid supporting locating for mounting.
Any problems in the field can be diagnosed by the factory using  standard  phone
lines.  The  transceivers are field repairable and include full factory support.
There are no license or right-of-way requirements.

        The following are some of the features of the LaserWireless system:

        o      data rates from 1 to 155 Mbps

        o      2.5 kilometer range (1.5 miles)

                                      -14-
<PAGE>

        o      electronic tracking system

        o      no licensing required

        o      D.C. operational

        o      remote status monitor

        o      complete diagnostics from factory

        o      7 plus years MTBF

        o      waterproof, modular design

        o      protocol transparent

        o      highly cost effective

        o      secure transmission

        o      very high bandwidth capabilities

        o      compatible with all network interfaces

        o      eye-safe design

        o      certified CSA, UL, CDRH and CE

        Manufacturing  Strategy.  LaserWireless'  ongoing manufacturing strategy
will be designed to increase  capacity,  improve  quality,  and reduce costs. It
plans to gradually  increase its  production  in order to sustain its  projected
growth.  In any given year, its ability to reach its targeted  production  level
will depend upon,  among other  factors,  its ability to (i) continue to realize
production   efficiencies  at  its  existing   production   facilities   through
implementation  of innovative  manufacturing  techniques  and other means,  (ii)
successfully  implement production capacity increases in its facility, and (iii)
sell all of the products it can produce.

        LaserWireless  will not manufacture any of the parts it needs to produce
its products and it'll have to rely on outside suppliers to provide the rest.

        LaserWireless' income projections are as follows:
<TABLE>
<CAPTION>

                        LaserWireless Income Projections
                        --------------------------------

                                 2000          2001         2002          2003
                                 ----          ----         ----          ----

<S>                           <C>          <C>          <C>          <C>
Net Sales                     $2,311,932   $5,064,740   $10,775,318  $20,599,640
Operating Costs and Expenses   2,018,832    4,001,145     7,679,160   10,923,880
                               ---------    ---------     ---------   ----------
Income (Loss) From Operations    293,100    1,063,595     3,096,158    9,675,760
Other income (Expenses)               --           --            --           --
Net Income (Loss)                293,100    1,063,595     3,096,158    9,675,760
</TABLE>

        Marketing Strategy. LaserWireless will conduct an aggressive advertising
and marketing  campaign to publicize its products.  LaserWireless  believes that
its potential  customers can best be reached through  advertising in trade shows
and direct marketing and on the Internet.

                                      -15-
<PAGE>

LaserWireless Facility

        LaserWireless'  executive offices and manufacturing facility are located
in  a  light  industrial  area  in  Lancaster,  Pennsylvania.  They  consist  of
approximately  10,500 square feet of leased space under a lease which expires in
January 2003.

Competition

        LaserWireless  believes  that  it is at the  forefront  in  the  design,
development and  manufacturing  of laser  communication  systems.  It emphasizes
quality, reliability, cost-effectiveness and timely delivery. Nonetheless, other
companies  are  engaged  in the  design,  development  and  manufacturing  laser
communication  systems which may be competitive  with  LaserWireless'  products.
Many  of  those  entities  have  substantially  greater  financial,   technical,
manufacturing,  marketing,  distribution or other resources than  LaserWireless.
LaserWireless'  profitability  will  depend  upon its  ability to compete in its
market area.

Product Liability

        Although  LaserWireless  believes  its laser  systems  to be safe at any
distance, the sale of its products may expose LaserWireless to product liability
claims. It believes that its products are, and will be, safe and that it will be
able to obtain product liability insurance at a reasonable cost. However, in the
event of an uninsured or inadequately insured product liability claim, or in the
event of an indemnification claim by a third party,  LaserWireless' business and
financial condition could be materially adversely affected.

Regulation

        LaserWireless'  products and  business may be subject to federal,  state
and local regulations, including environmental regulations.  LaserWireless can't
calculate  exactly how much it will cost to comply with  government  regulation,
but it will try to ensure  that its  facilities  and  products  comply  with all
applicable  regulations  and standards.  In any event, it doesn't think that the
cost of compliance will materially affect its financial condition.

Management

        LaserWireless is currently managed by Richard Walter, its President.

Employees

        As of May 8, 2000,  LaserWireless  employed nine full-time employees and
one part-time  employee.  None of  LaserWireless'  employees is represented by a
union and management believes its employee relations are good.

Operating Results

        The results in the following table do not necessarily  indicate  results
LaserWireless will achieve in the future.

                                      -16-
<PAGE>

                         LaserWireless Operating Results
                         -------------------------------

                                             Three Months Ended March 31,
                                                 2000           1999(1)
                                                ------         -----
Income Statement Data:
Revenues (Net Sales)                         $        0
Operating Expenses                              259,797
Operating Income (Loss)                        (259,797)
Other Income                                        504
Net Income (Loss)                              (259,293)
Other Income

Balance Sheet Data:
Current Assets                                  125,003
Property and Equipment                          182,819
Other Assets                                      1,000
Total Assets (2)                                308,821
Current Liabilities                              43,589
Long Term Debt                                  983,656
Total Liabilities                             1,027,245
Common Stock                                        100
Retained Earnings                              (459,231)
Current Earnings                               (259,293)
Shareholder Equity                             (718,424)
Total Liabilities & Shareholder Equity          308,821
--------------------------------              =========

(1)     Not available.  Laser Wireless did not conduct operations during the \
        first quarter of 1999.
(2)     Net of accumulated depreciation and amortization.

        LaserWireless  did not conduct  operations  during the first  quarter of
1999. In March 1999, we obtained the leased space which we now occupy,  but none
of the employees  started until October  1999.  Richard  Walter,  LaserWireless'
President,  made several trips to  Albuquerque to begin the design for the front
end assembly of our proposed system. Since Willow was already chartered with the
early design work using its  engineers,  Mr.  Walter  communicated  with them on
design  issues and they  carried  on with the work.  Mr.  Walter  spent his time
preparing the leased space for the eventual official opening.

        The first  quarter of 2000 was  extremely  different.  All ten employees
were  officially  on staff and the  section of the "new"  laser  system was well
under way. By the end of the first quarter, we had completed the design and were
wating  for  Willow to  deliver  the  assemblies  per our plan.  Not only had we
finished  their  design,  on budget,  but with several  benefits not  originally
considered in the original  plan  concept.  In the process of the work, at least
one patent  evolved and is presently in the pending  process,  with probably two
more to come very soon.  The new  LightBridge  155 will  incorporate a brand new
feature not presently  being used by anyone in the world to our  knowledge,  and
that is the incorporation of a Remote Diagnostics with each system. This feature
will allow any customer in the world who  experiences a problem to contact us by
telephone.  We can access that system  anywhere in the world by way of a regular
phone and we can diagnose  the problem from the factory.  We do not believe that
any of our competitors have this remote diagnostic capability.

        LaserWireless is now working on a "new" design to reduce costs and allow
for easier assembly. We believe that this design will position  LaserWireless to
enter the higher bandwidth  markets with a system that will be at least half the
cost of the competition as we know it today.

LaserWireless had no income for the first quarter.

LaserWireless is in an advanced  research and development  state.  First quarter
operating  costs are primarily  associated  with the planning and preparation of
the LightBridge 155-laser communication system product release.

First quarter  expenditures  included equipment and hardware asset purchases for
final development and testing of the LightBridge 155.

                              HEALTH PRODUCTS GROUP
                              ---------------------

Essentia Water, Inc.

                                      -17-
<PAGE>

Overview

        Essentia Water,  Inc.  ("Essentia") is  a Woodinville,  Washington based
bottled water marketing company  acquired by  NextPath on January 21,  2000. Its
principal  executive  offices are located at 24100 State Route 9 SE,   Bldg.  A,
Woodinville, Washington. Its phone number is (425) 488-9400.  Its   website   is
www.essentiawater.com.

Growth Strategy and Plan of Operations

        Essentia  is  engaged  in the  business  of  developing,  manufacturing,
packaging, and marketing bottled alkaline and electrolyte enhanced premium water
products  with  health  and  hydration  benefits.  Essentia  water is  initially
pre-filtered  and purified using reverse  osmosis and ozonation to achieve 99.9%
purity.  A  bio-available  electrolyte  formulation of  bicarbonate,  magnesium,
potassium,  sodium and  calcium is added and the water is then  processed  using
Essentia's ionic  separation  technology to increase its alkalinity to assist in
balancing the acidic  nature of American  diets and to aid in producing a smooth
taste. Key elements of its growth strategy include:

        Products.  Bottled in 20 oz., 1.0 liter and 1.5 liter recyclable  P.E.T.
(Polyethylene  Terephtalate)  bottles,  Essentia  water is  distributed  through
natural/health  food and retail grocery channels  (natural sets only) throughout
the United States. In addition to manufacturing bottled water products under its
own name,  Essentia bottles under private labels such as Wild Water(TM) for Wild
Oats Community Markets, the second largest national chain of health food stores;
BonH2O(TM) for The Bon Marche, a flagship brand of Federated  Department Stores;
and PETsMART.

        In  contrast  to so many  bottled  waters,  Essentia  avoids  the use of
"source"  water  from  springs,  glaciers,  mountains,  etc.  because  of  their
inconsistencies.  Instead,  Essentia's  unique process  involves first purifying
water to its essence through reverse osmosis, then adding nutrient minerals that
are more bio-available (absorbable) by the body.

        As a result,  no other  bottled water has the unique  biological  active
properties  of Essentia  Water.  Certified  lab analysis  verifies that Essentia
(compared  to other  bottled  waters)  provides  an  abundant  source  of active
hydrogen that "quenches free  radicals;"  has less cohesion  (better  saturating
water) thus promoting faster  hydration;  is higher in alkalinity (+/- 9.5) thus
assisting  the body in  maintaining  proper pH  balance by  neutralizing  acidic
conditions;  and  delivers  a  proprietary  formula of pure  minerals  for vital
cellular electrolyte replenishment.

        All these active  properties  enhance the body's innate  ability to heal
itself.  These unique processes mean Essentia can bottle Essentia Water anywhere
in the world,  consistently and within stringent quality assurance standards set
forth by  Essentia  while  incorporating  federal  and state  guidelines  as the
foundation.  Thus,  Essentia  Water is lab  certified,  user  endorsed  and 100%
satisfaction  guaranteed  to  ensure  consumer  trust  - an  important  part  of
continued purchases and long term brand loyalty.

        Product Research and Development.  Essentia believes that strong product
research and  development  capabilities  are essential to maintain a competitive
edge  with  its   products.   Essentia  is  committed  to  making   Essentia  an
international  brand.  Essentia realizes that a successful brand is not built by
accident,  but  requires  the brand to become the focal  point of the  company's
vision.  Essentia  has  gathered  a seasoned  team of  business  executives  and
industry  professionals  all  committed  to  research,  development  and product
engineering to further the Essentia vision.

        Target Markets.  Essentia currently  co-packs,  markets,  and sells high
alkaline  (pH) and  electrolyte  enhanced  bottled  water  under the brand  name
Essentia Water. Bottled in PET - 20 oz., 1.0 liter and 1.5 liter sizes, Essentia
Water is  distributed  through  natural/health  food  stores and retail  grocery
channels (natural sets only) throughout most of the United States.  Essentia has
developed a national distribution infrastructure for catalog and Internet sales,
which provides direct delivery to Essentia's  customers,  adding to its national
distribution capabilities.

        Essentia Technology.  We believe Essentia Water is the only water of its
kind in the market  today.  Unlike  source waters  (spring,  glacier,  mountain,
etc.),  Essentia,  using its unique  process,  removes all foreign  minerals and
contaminates  commonly  known  as TDS  (total  dissolved  solids)  that  survive
standard filtration.

                                      -18-
<PAGE>


        Essentia  specifications require our water to be purified to < three (3)
parts per million  (PPM) TDS.  Some  source  waters have been tested and contain
over 100 times more TDS than Essentia  Water.  The amount and class of TDS found
in source water as compared to Essentia  Water will change from bottle to bottle
giving little consistency to the water taste and profile.

        Once Essentia  Water is purified,  our  proprietary,  pure  electrolyte,
formulation is added.  This formulation  contains vital pure minerals  including
calcium, magnesium,  potassium, sodium and bicarbonates the human body requires.
Compared to source water,  these minerals can be easily assimilated by the body.
Additionally, our proprietary formulation is tasteless,  colorless, odorless and
water soluble.

        After the electrolytes  have been added, the purified water runs through
our proprietary  Ionic  Separation  Technology.  This  technology  separates the
water's  alkaline  ions  (negative  charged)  from  the  acidic  ions  (positive
charged).  Essentia bottles only the alkaline water we call "negative  charged."
Essentia  water has a pH level to +/- 9.5  compared  to source  water  having an
average  pH  level  of  7.0.  A  diagram  of  our   process   can  be  found  at
www.essentiawater.com.

        Marketing  Strategy.   Essentia's  marketing  strategy  is  designed  to
increase sales by (i) expanding its product lines,  (ii)  continuing to increase
its distribution  network, and (iii) adding a new east coast production facility
(co-packer).  In any given year,  its ability to reach its targeted  sales level
will depend  upon,  among  other  factors,  (i) its ability to obtain  financial
resources,  (ii) market acceptability of its new products, and (iii) its ability
to successfully increase its East coast production capacity.

        Financial Summary.  Since its inception in July 1998,  Essentia has seen
product  sales grow from 18,000 cases in the second half of 1998 to 75,000 cases
in 1999. Essentia expects sales of 200,000 cases in year 2000.
<TABLE>
<CAPTION>

Results of Operations:                        2000 (forecast)  2001 (forecast)
----------------------                        ---------------  ---------------
<S>                                              <C>              <C>
    Net Revenues                                 $ 3,111,300      $ 5,093,900
    Cost of Goods Sold                             1,929,400        2,995,900
                                              ---------------  ---------------
    Gross Profit                                   1,181,900        2,098,000
    Operating Expenses                             1,715,700        1,872,000
    Depreciation & Amortization                       86,700          111,200
                                               --------------  ---------------
    Loss from Operations                            (620,500)         114,800
    Other Income (Expense), Net                       57,400           44,600
                                               =============== ===============
    Net Income                                    $ (563,100)      $  159,400
    (Loss)                                     =============== ===============
</TABLE>

        These  financial  forecasts  do not reflect an increase in net  revenues
from sources other than those derived by Essentia's normal course of business in
the natural and health foods channels, in both branded and private label product
sales.

Essentia Facility

        Essentia's  executive  offices are located in  Woodinville,  Washington,
which is located outside Seattle.  They consist of approximately 800 square feet
of leased  space under a lease  which is month to month.  Essentia is planning a
corporate  office move to Phoenix,  Arizona within the next 90 days.  Essentia's
current  business  strategy is to continue to "partner"  with  contract  packing
companies to produce its products under Essentia'a  product  specifications  and
quality   control   standards.   Essentia   believes   that   contract   packing
("co-packing")  provides the most flexibility and the least capital  investment.
Essentia  anticipates  having multiple plants  strategically  located around the
United States by the end of 2000. Currently Essentia's co-packers are California
Bottling  Company  located in  Roseville,  California  and  Renegade  of America
located in Glendale, Arizona.

                                      -19-
<PAGE>

Competition

        Essentia  believes that Essentia  Water is the only water of its kind in
the market today.  However, many other water bottlers have substantially greater
financial,  technical,  bottling,  marketing or other  resources  than Essentia.
Essentia's  profitability  will depend upon its ability to compete in its market
area.

Product Liability

        The sale of its  products  may  expose  Essentia  to  product  liability
claims. It believes that its products are, and will be, safe and that it will be
able to continue to obtain  product  liability  insurance at a reasonable  cost.
However, in the event of an uninsured or inadequately  insured product liability
claim, or in the event of an indemnification claim by a third party,  Essentia'a
business and financial condition could be materially adversely affected.

Regulation

        Essentia's  products and  business may be subject to federal,  state and
local regulations, including environmental regulations. Essentia can't calculate
exactly how much it will cost to comply with government regulation,  but it will
try to ensure  that its  facilities  and  products  comply  with all  applicable
regulations  and  standards.  In any event,  it  doesn't  think that the cost of
compliance will materially affect its financial condition.

Management

        Essentia is currently  managed by Kenneth  Uptain,  its Chief  Executive
Officer, and by James Tonkin, its President and Chief Operating Officer.

Employees

        As of May 8, 2000,  Essentia  employed five full-time  employees and one
part-time employee plus four contract consultants, two of whom are full-time and
two of whom are  part-time.  None of Essentia'a  employees is  represented  by a
union and management believes its employee relations are good.

Operating Results

        The results in the following table do not necessarily  indicate  results
Essentia will achieve in the future.

                           Essentia Operating Results
                           --------------------------

                                               Three Months Ended March 31,
                                                   2000           1999
                                                  ------         -----
Income Statement Data:
Net Revenues                                   $   266,104    $   102,569
Cost of Goods Sold                                 177,521         68,373
Gross Profit (Loss)                                 88,583         34,196
General, Administrative & Operating Expenses       135,374         77,136
Selling Expenses                                   171,018        110,049
Operaing Income (Loss)                            (217,809)      (152,989)
Depreciation                                        13,905         11,550
Other Income (Expense)                             (10,693)        (8,180)
Net Profit (Loss)                                 (242,407)      (172,719)
                                                 =========      =========
Balance Sheet Data:
Current Assets                                     504,978         65,672
Property and Equipment                             309,777        308,032
Total Assets (2)                                   814,755        450,122
Current Liabilities                                661,545        567,578
Long Term Debt                                     528,500              0
Total Liabilities                                1,190,045        567,578
Common Stock                                     1,058,847        558,847
Retained Earnings (Accumulated Deficit)         (1,191,730)      (503,584)
Current Earnings                                  (242,407)      (172,719)
Shareholder Equity                                (375,290)      (117,456)
Total Liabilities & Stockholder Equity             814,755        450,122
                                                 =========      =========

                                      -20-
<PAGE>

Operations
----------

        First  Quarter  2000 sales of  $266,104  were up 159.4% from last year's
first quarter sales of $102,569,  principally  as a result of increased  private
label sales and of having  nationwide  distribution  of branded  products in the
current quarter as compared with distribution limited to the West, Southwest and
Midwest  regions  during  last year's  comparable  quarter.  Current  year first
quarter  sales  for the  comparable  regions  were up  88.7%  over  those of the
previous year.  Gross profits,  expressed as a percentage of sales,  remained at
33.3% for the current and previous year's first quarters.

        Last year's first  quarter loss of $172,719  increase by 40.4% to a loss
of $242,407 during the first quarter of 2000, principally due to increased sales
and  marketing  costs  associated  with  expanding  and  supporting   nationwide
distribution  of products and the test marketing of new products.  Additionally,
general and  administrative  costs increased  significantly as a result of audit
and consulting fees.

                        ENVIRONMENTAL TECHNOLOGIES GROUP
                        --------------------------------

Overview

        The  Environmental  Technologies  Group  ("ETG") was created in October,
1999,  is  headquartered  in  Tulsa,   Oklahoma,   and  is  concerned  with  the
acquisition,  development,  and application of specific,  environmentally-benign
technologies.

NextPath AES, Inc.

        In General.  NextPath AES, Inc.  ("NAES"),  a wholly owned subsidiary of
NextPath,  was formed in  November  1999.  AES  (Agro-Economic  Systems)  is the
acronym used to denote our self-sustaining, integrated agribusiness initiatives.
There were no investments in, or transactions involving, NextPath AES during the
first  quarter  of 2000.  It is  anticipated  that  NextPath  AES will  commence
operations at the Tulsa location during the second quarter 2000. NextPath AES is
developing  integrated food production facilities with self-contained energy and
waste   management   systems,   and  include   capabilities  to:  (1)  integrate
fish-culture  (aquaculture)  and  hydroponics  ("aquaponics");  (2) research and
develop  "bio-fuels"  (fuels produced from plants,  and plant and animal waste);
(3) extract  beneficial  compounds for nutrition and health from plants; and (4)
produce plant  nutrients  from animal  wastes,  and animal  nutrients from plant
wastes.

        Status and Mission.  Home-based in Tulsa, Oklahoma, NAES was established
to design, build, own, and operate AES facilities worldwide.  Our AES facilities
are being  designed to grow,  process,  and package  fresh produce and fish on a
continuous,  year-round basis. To the maximum extent possible,  produce and fish
are to be certifiable as "organically"  or "naturally"  grown in accordance with
national  organic  growing  standards.  Commercial  facilities  are  to  include
self-contained energy systems. Light, temperature,  humidity,  nutrient streams,
water  quality,  effluent,  and emissions at our AES  facilities are to be fully
controlled. Fish-tank water is to be used in plant nutrition ("aquaponics"), and
effluent  water from  plant-beds  and  processing  lines is to be  filtered  and
recycled. Waste products are to be recycled as fuel for the energy system.

        Design Productivity.  The target  design-productivity of our typical AES
facility  is to be  considerably  greater  than  that  of  known  hydroponic  or
aquaponic systems.  Production and processing is to occur on a continuous basis,
and AES  facilities  are to be able to schedule  just-in-time  (JIT) delivery of
fresh food to  retailers,  with  consequent  savings in cold  storage  costs and

                                      -21-
<PAGE>

reduction in spoilage.  Additionally,  production costs are to be reduced by not
having to accommodate harvesting and processing "surges." Thus, processing lines
can be smaller,  with fewer employees  needed for harvesting and processing.  At
the same time, technical tasks will be more sophisticated and varied,  requiring
a larger proportion of trained, salaried workers.

        Two Models.  Two models are being developed:  a large-scale,  commercial
version and a "community food  security"  (CFS)  model  devised  for  developing
economies.  Needful Provision, Inc. (NPI), a  non-profit organization located in
Tahlequah,  Oklahoma,  which  licenses  proprietary  processes  and  sub-systems
to NextPath, has been engaged to develop the CFS model, test basic  bio-systems,
and  provide  training  for operations and technical personnel.

        Support  Entities.  A Tulsa  architectural  and construction  management
firm, Ragsdale and Associates, has been engaged to oversee facilities design and
engineering. A gasifier-based energy system, designed and built by Thermogenics,
Inc., Albuquerque,  New Mexico, has been selected for use at our AES facilities.
Our AES will employ proprietary aquaponics systems and technologies developed by
Agri-Covers,  Ltd.,  of  Gridley,  Illinois.  We have  negotiated  a  definitive
agreement to acquire the assets and  intellectual  property of Agri-Covers,  but
await funding to close the acquisition.

        Prototype  Commercial Facility. A number of potential Oklahoma sites are
being considered for the prototype  facility.  Upon completion of current design
and  engineering  work,  contracts  will  be let to  construct  and  equip  that
facility.

        Production and Installation Standards. AES facilities are to be built in
modules.  Each module is to represent a specific  set of growing and  processing
conditions and  production  objectives.  Energy  requirements,  and,  therefore,
self-contained  heating and  electrical  systems,  are to be sized  accordingly.
Modular  structures,  fixtures,  and  operating  equipment  are  to  incorporate
appropriate  ISO  9001,  ASME,  and  DIN  specifications.   Products,   outputs,
environmental  control  features,  and sizes of our AES facilities  will vary by
market region.  Modular  structures and equipment sets are to be supplied in kit
configuration,  suitable for  containerized  shipment to foreign sites.  The AES
program envisions installation of facilities at land reclamation sites, in urban
locations,  in areas where severe climate prevents outdoor  cultivation,  and in
lesser-developed regions in order to enhance general nutrition. In some locales,
we may supplement  production through contract growers using  company-prescribed
techniques and systems under our supervision.

        Marketing Plan and Revenue  Sources.  Revenues are to come from the sale
of bulk and packaged  vegetables,  fish,  herbs,  plant oil extracts  (including
health-related  products), and ornamental plants. Facilities are to be sized for
economies of scale, with some  installations  requiring more than fifty acres of
installation  space.  Target profit margins of 25% or greater per year have been
projected for AES facilities in developed-nation configurations. These are to be
achieved through precise selection of the types of produce grown and value-added
processing.  Wholesale  lots are to be marketed  over the  Internet  and through
direct,  forward supply contracts to large retailers.  Some health-food  related
products are to be direct-marketed  through NextPath's Health Products Group. We
are studying the  possibility of marketing  fresh produce and fish via overnight
air delivery service.

        Estimated Near-Term Capital Requirements. We estimate that approximately
$14,000,000 will be required to implement our business plan for NAES in the near
term.

NextPath Environmental Services, Inc.

        In General.  NextPath Environmental Services, Inc. ("NES"), also located
in Tulsa,  Oklahoma,  was formed in November  1999 to develop,  sell,  own,  and
operate  systems  that  convert  waste  to  energy,   clean-up  water  and  soil
contaminated  by fuel,  oil,  and  chemical  spills,  provide  potable  water at
locations that have no water treatment  systems,  and provide  on-site  effluent
control,  filtration  and treatment  systems,  and, more  recently,  to acquire,
develop,  and market devices to drastically reduce exhaust emissions from, while
increasing  the  energy  efficiency  of,  internal   combustion   engines.   NES
participates in two co-ventures  (Limited Liability  Companies--LLCs),  NextPath

                                      -22-
<PAGE>

Thermogenics,  LLC, located in Albuquerque,  New Mexico, and NextPath Separation
Solutions, LLC, in Pocatello,  Idaho. There were no investments in, or financial
transactions  directly  involving,  NES or NextPath  Separation  Solutions,  LLC
during the first quarter of 2000; however,  pursuant to terms of the January 28,
2000 agreement to form NextPath  Thermogenics,  LLC, NextPath corporate provided
direct operational support to NextPath Thermogenics,  LLC for personnel,  office
facilities,  office  expense,  marketing,  and gasifier  test and  demonstration
efforts  during  the first  quarter  of 2000.  It is  anticipated  that NES will
commence  operation  at the Tulsa  location  during the second  quarter 2000 and
begin to assume responsibility for financial and operational support to NextPath
Thermogenics, LLC and NextPath Separation Solutions, LLC.

        NextPath Thermogenics, LLC.
        ---------------------------

        In General.  NextPath Thermogenics,  LLC (the "Thermogenics,  LLC") is a
limited  liability  company owned 51% by Thermogenics,  Inc.,  Albuquerque,  New
Mexico,  and owned 49% by NES. The  Thermogenics,  LLC designs,  fabricates  and
sells proprietary  gasification systems that use virtually any hydrocarbon-based
waste product as fuel to create a low-temperature, high-quality gas.

        Technology  Base.  This  gas is  known as  "producer  gas" or  "syngas".
Depending  on  the  design  of  the  system,  the  gas  can be  either  low-  or
medium-heating  value.  The  process  involves a first  stage  high  temperature
decomposition  without combustion in a low-oxygen  environment.  The system uses
neither a  combustion  process nor  incineration.  Further,  when  coupled to an
engine,  gas  turbine  or  boiler,  there  are no  gaseous  emissions  from  the
gasification  system and  therefore  the system can meet  rigorous  air  quality
standards.  This gas can be cleanly burned,  liquefied, or used in a bio-process
to produce ethanol. The Thermogenics,  LLC is actively pursuing opportunities in
this regard with existing  process  equipment and catalyst  suppliers as well as
with waste  generators and academic  research  facilities.  Typically,  this gas
would be combusted  to produce heat for heat  exchangers  or steam  boilers,  or
directly  fed to an  internal  combustion  or gas  turbine  engine  linked to an
electricity  generation  device.  Thus,  these units can be used for small-scale
electrical power generation (co-generation). For these reasons, the Thermogenics
unit was selected as the on site energy  system for  NextPath's  AES  facilities
(see above).  The unit itself has no regulated  emissions.  Inert solid residues
from the reaction  process can be safely  land-filled or mixed with a binder and
used as a paving or building material.

        Mission.  The purpose of the  Thermogenics,  LLC is to build,  own,  and
operate waste-to-energy systems installed for specific waste disposal and energy
generation  tasks.  This normally  would involve  multiple  units  configured to
handle various waste streams,  including municipal solid waste (MSW),  discarded
tires, oil sludge, trap grease, animal wastes, plant residues,  dewatered sewage
sludge,  coal tailings,  textile waste,  automobile  shredder waste,  industrial
wastes such as paint  sludge and used oils,  food  processing  wastes,  and wood
products  waste.  After removal of larger metallic  solids,  these wastes can be
batched or blended, depending upon energy output requirements.

        Peripheral  Equipment  Requirements  While  Thermogenics,  Inc.  is  the
provider and manufacturer of patented gasification systems that form the core of
the Thermogenics, LLC's waste-to-energy business, complete projects will utilize
equipment from a variety of  international  manufacturers  for the processing of
waste and the  conversion of the gas produced by the  gasification  systems into
different forms of energy. This could include shredders, grinders, a briquetting
system, various conveyor systems, internal combustion engines configured for use
with liquid  petroleum or natural gas, gas turbines,  electrical  generators and
turbo-alternators    steam   boilers,    heat-exchangers,    distillation    and
bio-conversion units (ethanol production) and other peripherals.

        System Control,  Safety,  and Standards.  Waste-to energy and peripheral
systems are to be electronically  controlled  through desktop  computers,  using
proprietary control logic,  circuit boards, and software.  All systems are to be
equipped with automated safety and shut-down  systems.  Facilities and equipment
designed and supplied by the  Thermogenics,  LLC are to be compliant  with local
environmental  regulations.  The  Thermogenics,  LLC has  committed to bring its
equipment and facilities  into  conformance  with ISO 9000 and 9001 standards at
the earliest possible date.

Project Types and Bases

        Build, Own, Operate (BOO). This type of project is to be a long-term (10
years or more) commitment by the Thermogenics,  LLC to design, build and operate

                                      -23-
<PAGE>

a  waste-to-energy  facility.  Typically a local  partner  will be involved  and
contribute  a portion  of the  equity,  while  Thermogenics,  LLC  provides  the
majority of the funding. Long-term contracts for the supply of the waste and for
the sale of energy would be involved. In most cases the land for the facility is
supplied  under a lease  agreement  with the customer with only a nominal rental
fee. In some cases  improvements to the site are  cost-shared  with the customer
and landowner.

        Build-Own-Operate-Transfer  (BOOT). A BOOT project is similar to the BOO
project,  except that there would be a predetermined time in the future, usually
3 to 5 years when ownership  would be  transferred to a governmental  or private
entity. The Thermogenics, LLC would usually continue to operate and maintain the
facility under a long-term contract with the new owner.

        Turn-Key  With a Management  Contract.  This project type would allow an
owner  to  place a single  contract  for the  entire  facility,  sometimes  even
including the site preparation and civil work, and the  Thermogenics,  LLC would
serve  as  General  Contractor,  working  with  local  contractors,  to  design,
construct,  install and start-up the entire plant. The Thermogenics,  LLC could,
at the owner's option, facilitate construction financing, with full payment made
when the  installation  and start-up phase is completed and the plant is in full
operation. The Thermogenics, LLC could then, under a long-term contract with the
owner,  be responsible for operation and maintenance of the facility on a fee or
cost-plus basis.

        Straight Turn-Key. While less attractive to the Thermogenics,  LLC, this
form of project could be expedient when special financing conditions,  or a need
for the technical skills dictate.  In this instance the Thermogenics,  LLC would
be paid progress payments during the design and construction  phases,  and fully
paid off when the plant is accepted and ready to begin full operation. Completed
facilities  would remain  under the  Thermogenics,  LLC service and  maintenance
agreements for an indefinite period. Operators would be trained and certified by
the Thermogenics, LLC.

        Development  Plan.  The  initial  development  plan  envisions  10 to 12
projects  in  the  Western  United  States  and  Europe.  Project  costs  to the
Thermogenics,  LLC include  manufacture  and  procurement of systems and related
equipment, and the hiring and training of operators. Some foreign projects could
involve  co-ventures  with  waste  management  and  power  companies.   In  some
instances,   bank  financing  and  economic  development  incentives  have  been
proffered.  The  Thermogenics,  LLC is  exploring a number of public and private
project finance options.

        Revenue Sources.  Revenues are to be derived from on-site waste disposal
contracts;  tipping fees (fees for the handling of  waste--some  running to more
than $400 per ton of waste received);  contract  management of the Thermogenics,
LLC provided waste-to-energy facilities;  consulting services for purpose-design
of facilities to dispose of particular  wastes or produce  energy for particular
industrial purposes (for example, an ethanol plant, a foundry, AES facilities, a
sugar plant, and a wood products plant);  generation of electrical power (in the
range of  approximately  three to 20 megawatts);  generation of heat for central
steam heating systems; production of derivative fuels including liquid petroleum
gas and  ethanol/methanol;  other byproducts (including ash, carbon dioxide, and
carbon monoxide);  and the sale or leasing of complete systems.  Rates of return
for these operations are being assessed; however, the Thermogenics, LLC criteria
for  acceptance  of  contract  proposals  includes a  requirement  of  projected
internal rates of return on equity greater than 20%.

        Estimated Near-Term Capital Requirements. We estimate that approximately
$16,000,000   will  be  required  to  implement   the  business   plan  for  the
Thermogenics, LLC in the near term.

        NextPath Separation Solutions, LLC.
        -----------------------------------

        In  General.   NextPath  Separation  Solutions,   LLC  (the  "Separation
Solutions,  LLC")  is a  limited  liability  company  owned  51%  by  the  Lewis
Corporation (Tetra, Separation Systems, LLC), Pocatello, Idaho, and owned 49% by
NES.

        Technology  Base.  Tetra,   Separation  Systems,   LLC  /Lewis  designs,
fabricates,  and sells  proprietary  oil-water  separation and soil  remediation

                                      -24-
<PAGE>

systems that feature  patented and  proprietary  components.  These  systems are
transportable  (skid-mounted) or mobile,  and are capable of on-site clean-up of
petroleum  and  chemical  spills,  with  accompanying   on-site  restoration  of
contaminated soils as required.  Systems are automated for two-person operation.
Independent  laboratory  test  results  disclose  that these  systems can reduce
petroleum  contamination in soil to less than 100 parts per million and volatile
organic  compounds  (VOC's)  to trace  levels in a  single-pass  operation.  Oil
contamination   in  water  can  be  virtually   eliminated  in  a  single  pass.
Demonstrations have been successfully conducted for environmental protection and
quality authorities.

        Mission.  The Separation  Solutions,  LLC has been formed to build, own,
and operate these systems for contract clean-up and remediation.  Operations can
involve  three  systems,  the sump system,  the soil system,  and the  oil-water
system.  Operating  systems  would be  installed  at clean-up  sites such as gas
stations and fuel depots,  environmental cleanup zones,  industrial waste dumps,
waste transfer stations, and landfills.

        Development Plan. Two production model systems are already in operation.
The initial  development  plan envisions  equipping 18 operating  locations with
sump systems.  This includes  manufacturing  and  procurement of the systems and
related equipment,  localized marketing efforts,  and the hiring and training of
operators.  Initial target markets include the western and southwestern  regions
of the United States.  This plan would be accelerated to accommodate  additional
domestic and European markets that have been  identified.  Depending upon market
conditions,  and demand, the Separation Solutions,  LLC is prepared to establish
up to 200 operating sites within the first seven years.

        Revenue Sources.  Revenues are to be derived from on-site water and soil
cleanup contracts. For example, a sump system operating at an average rate of 50
gallons  per minute can  process  24,000  gallons  per  8-hour  day.  Processing
contracts,  typically  bring an  average  of $1 per gallon on a range of $.50 to
$1.50 per gallon.  Therefore,  the Separation  Solutions,  LLC projects  average
operating-day  revenue  per sump  system to be  approximately  $24,000,  or $5.4
million per year if operated for 225 days per year. Current projections indicate
potential average margins exceeding 40% beginning in the third year.

        Estimated Near-Term Capital Requirements. We estimate that approximately
$17,000,000  will be required to implement the business  plan of the  Separation
Solutions, LLC in the near term.

NextPath Bio-Products Research; Needful Provision, Inc.

        In General.  Applications  research is to be  sponsored  by all NextPath
entities; however, the main bio-product development arm for the company is to be
Needful Provision,  Inc, ("NPI"), an Oklahoma based non-profit organization that
licenses proprietary systems and processes to NextPath. David Nuttle, NextPath's
Chairman and interim  President and CEO, is also President,  CEO and Chairman of
NPI and the inventor of the proprietary  technology owned by NPI and licensed to
NextPath.  The scope of NPI  operations  for NextPath  remains  proprietary  and
budgets for grants and  research  contracts  to NPI are included in those of the
operating companies. NPI has been previously,  or is now, engaged in cooperative
research  activities  with  Oklahoma  State  University,  North  Carolina  State
University/Research  Triangle  Institute,  and  the  National  Renewable  Energy
Laboratory. NextPath has a first right-of-refusal for commercialization of NPI's
products and processes. Some of NPI's development work on our behalf includes:

        o      development  of  genetic  stocks  of  fish,  plants,  and  micro-
               organisms  for AES operations;

        o      applied research into photo-flash  methods for stimulating  plant
               growth;

        o      applied  research  into the production and refinement of biofuels
               from fresh water micro-algae;

        o      applied  engineering  of  effluent  control  systems  using  bio-
               filtration and vegetative filter beds;

        o      applied research and engineering of  aquaculture  and  hydroponic
               systems;

                                      -25-
<PAGE>

        o      applied  research  into  the  nutritional   properties  of  high-
               protein,   naturally  occurring   grains  and  "ethno-botanicals"
               (plants cultivated and used for nutrition and medicinal  purposes
               by indigenous peoples);

        o      applied  research into  lipid/oil extraction  from vegetation and
               micro-organisms;

        o      applied  research  into  the natural  enhancement  and control of
               nutrients for hydroponic plants and aquaculture fish;

        o      training  curricula  and  contract training for AES operators and
               technicians; and

        o      information compendia for bio-systems development.

                            ELECTRONIC COMMERCE GROUP
                            -------------------------

PriMedium, LLC

        On June 12, 1999,  NextPath  signed an Option  Agreement with PriMedium,
LLC, a Dallas,  Texas,  based  software  development  firm that  specializes  in
creating websites for Internet sales and purchase  ordering.  One of the primary
reasons NextPath signed the Option Agreement was to develop the means for direct
sale of NextPath and its subsidiaries' products and sales over the Internet with
all of  NextPath  websites  linked.  Among  other  terms,  the Option  Agreement
provides that NextPath  would pay  $1,500,000,  issue 600,000 shares of NextPath
common stock,  and grant an annual royalty payment of ten percent (10%) based on
the pre-tax profits of PriMedium to the equity owners of PriMedium. Although the
shares were issued by NextPath at the direction of our former President and CEO,
neither  the Option  Agreement  nor the  issuance  of the stock was known to, or
approved  by,  the  Board.  We are  reevaluating  whether or not to enter into a
definitive  agreement and there can be no assurances that one will ultimately be
consummated.

US CertifiedLetters LLC

        US  CertifiedLetters   LLC  ("USCL")  was  formed  for  the  purpose  of
licensing,   developing   and   commercializing   proprietary   technology   for
transmitting instruments by certified mail via the Internet or other medium (the
"C-mail Technology") in the continental United States, Alaska and Hawaii. C-mail
Technology  will  enable  postal  customers  to send  certified  mail  over  the
Internet.  On April 3, 2000,  NextPath signed a definitive  agreement to acquire
20% of USCL. The purchase price will consist of a combination of cash and stock,
of which  NextPath has advanced  $2,750,000.  The parties expect to complete the
acquisition by June 4, 2000.  There are no assurances that this transaction will
be closed within the anticipated timeframe or that it will close consistent with
terms of the initial agreement.

        USCL provides electronic  business-to-business  and business-to-consumer
mail services,  and has developed Internet  technologies to provide new and more
efficient mail processing capabilities to consumers, particularly in the area of
certified  mail.  USCL  believes it is the first and only  company to be granted
approval by the USPS to provide  certified mail processing  services online.  In
1998, the U.S.  Postal Service  processed  510,878,000  pieces of certified mail
(according  to the USPS website,  www.usps.gov,  and 1998 annual  report).  USCL
expects to capture a portion of this market.

        Through  its  proprietary  web  site,  www.USCertifiedLetters.com,  USCL
believes that it will be one of the most reliable  ways to send  certified  mail
within the continental United States, Alaska and Hawaii.  William T. Carter, the
Manager  and  founder of USCL,  has also  developed  www.globalcertifiedpost.com
(GCP) for overseas certified mail delivery.

        USCL's   licensed  new  generation  of   proprietary,   patent  pending,
information  software,  Automated  Certified  Mail, has been test  marketed,  is
approved by the USPS and is ready to mass market.  This software allows the user

                                      -26-
<PAGE>

to  create a  letter  (or  insert  one from a word  processing  program)  at the
www.USCertifiedLetters.com.  site,  pay on-line,  and then send the letter.  The
automated certified mail system verifies the address,  adds the barcode,  prints
and folds the letter, and automatically  completes the certification  forms with
just a few clicks of a mouse.  The customer can expect a return receipt within 4
to 6 days, compared to the average of 10 to 12 days for manual processing.

Global Certified Mail

        Global  Certified Mail,  Inc.  ("GCM") was formed by NextPath in October
1999 to commercialize the same proprietary  electronic certified mail system for
areas outside the continental United States,  Alaska and Hawaii. Many businesses
and  organizations in other countries  require  verification of mail delivery to
the United  States,  but  traditional  delivery  methods are  expensive and time
consuming.

        On April 3,  2000,  NextPath  signed  an  agreement  to  exchange  a 20%
interest  in GCM  for a  license  from  William  T.  Carter  to use  his  C-mail
Technology  to enable global postal  customers to send  certified  mail over the
Internet  outside of the  continental  United  States,  Alaska and  Hawaii.  The
Company will  maintain an 80% ownership  interest in GCM. The parties  expect to
complete this  transaction  by June 4, 2000.  There are no assurances  that this
transaction  will be closed  within the  anticipated  timeframe  or that it will
close consistent with terms of the initial agreement.

        USCL is currently  developing  the web site to be used by GCM, where the
process  will be similar  to that of  www.USCertifiedLetters.com.  However,  all
letters  will  be  processed  at one  facility  in  Birmingham  into a  standard
certified letter, making the "point of origin" for the letter a point within the
United States,  rather than a foreign city.  This will reduce the delivery time,
speed return  receipts,  and reduce costs compared to the current  alternatives.
GCM intends initially to target multinational businesses, financial institutions
and law firms in Europe.

        USCL recently chose IBM Global  Services  (NYSE:  IBM) and  ITC^DeltaCom
(Nasdaq: ITCD) to design, manage and host both the new USCL site.

                                   INVESTMENTS
                                   -----------

United Paper, Inc.

        We own 1,000  shares of  non-voting  Series A Preferred  Stock of United
Paper, Inc., a Texas corporation ("United Paper"), for which we paid $1,000,000.
Each  share of Series A  Preferred  Stock has the  right to  priority  mandatory
cumulative dividends of $120 per year.

        United  Paper  is  an  independent   paper  distributor  to  newspapers,
publishing  companies,  printers and catalog houses. It is the resulting company
of the August 10, 1999 merger of All-Pro  Paper of Texas,  Crown  Converting  of
Texas,  G.B.  Goldman Paper of  Philadelphia,  and The Paper Group of Chicago on
August 10, 1999.

        All Pro and The Paper Group are merchant wholesalers that currently sell
paper in the South Central and Mid Western United States.  These  company's have
the  ability to  repackage,  cut and  customize  paper for  shipment.  They sell
groundwood  newsprint,  groundwood  coated free sheet,  and coated free sheet to
printers and end users.

        G.B.  Goldman is a paper  wholesaler  that  specializes in uncoated free
sheet,  coated free sheet, and coated  paperboard.  The company has a successful
history of selling in job lot quantities and providing  competitive  value added
services to the paper merchant and converter trade.

        Crown  Converting,  with  locations in  Philadelphia  PA, Lufkin TX, and
Nashville TN, can handle a full range of converting  needs including  rewinding,
slitting, and sheeting.

                                      -27-
<PAGE>

        North  American  Paper was acquired by United Paper in December 1999 and
is a paper  merchant  wholesaler  selling  to  publishing,  catalogs,  and other
periodicals.   The  company  specializes  in  full  graphic,  print,  and  paper
solutions.  Advantage Paper was acquired by United Paper in February 2000 and is
a printer direct seller, handling commodity offset and paper board.

GroupNow, Inc.

        On November  24,  1999 we signed a  Subscription  Agreement  to purchase
1,000,000  shares of Series A Convertible  Preferred Stock in VentureNow,  Inc.,
(now  known  as  GroupNow,  Inc.)  at a price  of $10 per  share.  The  Series A
Convertible  Preferred  Stock has voting  powers per share  equal to  GroupNow's
Common Stock.  However, the holders of the Series A Convertible  Preferred Stock
are entitled,  as a class, to receive seventy percent (70%) of any dividend paid
by GroupNow,  Inc. prior to conversion.  Holders of the Series A Preferred Stock
will share dividends paid by GroupNow,  Inc., if any, ratably in accordance with
their   percentage   ownership   within  the  class  of  Series  A   Convertible
Stockholders.   Each  share  of  Series  A  Convertible   Preferred  Stock  will
automatically convert to one share of Common Stock under certain  circumstances.
As of December 31, 1999, we had paid $1,500,000 to GroupNow,  Inc. in accordance
with the  terms  of the  Subscription  Agreement.  Therefore,  as of this  date,
NextPath  owns 15% of the  Series A  Convertible  Preferred  Stock.  We have not
decided  whether  or not we will  acquire  the  remaining  85% of the  Series  A
Convertible Preferred Stock for $8,500,000 and there can be no assurance that we
will acquire the remaining stock.

        GroupNow,  Inc.  is  a  non-operating  holding  company,  the  operating
subsidiaries  of which are VentureNow,  LLC,  VentureNow  Holdings,  LLC and Now
Securities, LLC.

        VentureNow,  LLC is a venture  capital  investment firm focusing on late
stage investments in Information  Technology and Internet focused companies.  In
addition  to its  proprietary  funds,  VentureNow  plans to  develop  additional
private equity funds targeted toward  different stages of investment (e.g. early
stage,  second stage,  etc.) in its target sectors.  The company plans to derive
revenue  from  turnover  of  its  proprietary  investments  and  from  fees  for
management of the planned private equity funds.

        VentureNow  Holdings,  LLC has been  established  to act as the  general
partner of the  proposed  private  equity funds for which  VentureNow,  LLC will
serve as  manager.  VentureNow  Holdings,  LLC plans to derive  revenue  through
capital gains on its investments and the general  partner's share of any carried
interest  of the  private  equity  funds  for  which it plans to act as  general
partner.

        Now Securities,  LLC is a financial advisory and investment banking firm
in  development.  It currently  focuses on advising  emerging  growth  companies
regarding   corporate   structuring  and   development,   as  well  mergers  and
acquisitions.

LATelco International, Inc.

        On August 10, 1999, we purchased 666,666 Units in the capital of LATelco
International, Inc. ("LATelco") for $100,000, each Unit consisting of one common
share and one non-transferable  share purchase warrant authorizing the holder to
purchase one common share at a price of $0.15 per share on or before  August 10,
2000. There can be no assurance that we will exercise our warrants.

        LATelco, a corporation  continued under the laws of the Turks and Caicos
Islands,  is  headquartered  in San Antonio,  Texas.  Its stock is traded on the
Canadian  Venture Stock  Exchange under the symbol "LTO." It maintains a website
at http://home.flash.net/~latelco. LATelco was organized in 1993 for the purpose
of developing wireless communications systems and providing specialized wireless
services.  Its  principal  business  lines include the design,  manufacture  and
operation  of wireless  data  systems  and  networks  incorporating  proprietary
software and equipment developed by LATelco.

                                      -28-
<PAGE>

                          PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

        NextPath and its former  President,  James R. Ladd, are two of the named
defendants  in the case of Tim McMurray vs. James R. Ladd,  Robert Wehle et al.,
District Court of Dallas County,  Texas (No.  00-00170)  filed January 10, 2000.
The  action  alleges  "tortious  interference  with  existing  and/or  potential
business   relations,"  "civil   conspiracy,"  and  negligence  and  also  seeks
injunctive  relief.  NextPath  believes that this action is wholly without merit
and intends to vigorously defend it.

ITEM 2.  CHANGES IN SECURITIES

        As of May 19, 2000, we are aware of the following  sales of unregistered
securities and transactions  involving  securities which were issued in exchange
for property,  services,  or other securities  during the first quarter of 2000.
The  transaction  set forth below is not intended to be all  inclusive and there
may be  other  transactions,  the  exact  facts  and  details  of  which  we are
investigating.  However,  should other transactions be discovered,  they will be
disclosed,  if  required,  in an amended  10-Q or other  appropriate  report.

        o      Essentia  Water,  Inc.  In connection with our acquisition of all
               3,657,966 shares  of outstanding  common stock of Essentia Water,
               Inc. ("Essentia") on January 21, 2000, we issued $7,654,294 worth
               of  our  restricted   common  stock   (585,760  shares)  to   the
               shareholder of Essentia in exchange for its common   stock.   The
               transaction was exempt from the registration requirements  of the
               Securities Act pursuant to  Section 4(2)  on  the  basis that the
               transaction did not involve a public offering.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

        None

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

        No matters  were  submitted  to a vote of  security  holders  during the
quarter ended March 31, 2000.

ITEM 5.  OTHER INFORMATION

        None

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

        (a)    Exhibits

               23.1 Consent of Independent Public Accountants
               27.1 Financial Data Schedule

        (b)    Reports on Form 8-K.

        On February 3, 2000, we filed a Form 8-K which reported our  acquisition
of Essentia Water, Inc.

        On February 14, 2000, we filed a Form 8-K which reported that:

        o      Crouch, Bierwolf & Chisholm, Certified Public Accountants,  whose
               address is 50 West  Broadway,  Suite 1130,  Salt Lake City,  Utah

                                      -29-
<PAGE>

               84101, the independent accountant which was previously engaged as
               the   principal   accountant   to  audit   NextPath's   financial
               statements,  was  dismissed  on February 8, 2000 so that we could
               engage the services of Gray & Northcutt Inc.

        o      Weinberg & Company,  P.A.,  Certified Public  Accountants,  whose
               address is 6100  Glades  Road,  Suite 314,  Boca  Raton,  Florida
               33434, the independent accountant which was previously engaged as
               the  principal  accountant to the audit  financial  statements of
               Epilogue  Corporation,  with whom we merged on November 12, 1999,
               was  dismissed  on  February  8,  2000 so that  NextPath,  as the
               surviving corporation in the merger, could engage the services of
               Gray & Northcutt Inc.

        o      On February 8, 2000, Gray & Northcutt,  located in Oklahoma City,
               Oklahoma,  was  engaged by us to audit the  consolidated  balance
               sheets of NextPath and its wholly-owned subsidiaries.

        On  March 23,  2000,  Gray & Northcutt,  Inc.  resigned  from  the audit
engagement of NextPath  effective that date.  Gray & Northcutt,  Inc.  agreed to
complete its audits of our  subsidiaries,  Laser Wireless, Inc., Willow Systems,
Inc. and Sagebrush Technology, Inc.

        On April 7, 2000,  we engaged  Crouch,  Bierwolf & Chisholm,  our former
auditors,  to complete the audit of the Company begun by Gray & Northcutt,  Inc.
so that the Form 10-K for the fiscal year ended  December  31, 1999 and the 10-Q
for the period ended March 31, 2000 could be filed.

                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                        NEXTPATH TECHNOLOGIES, INC.

                        /s/ David A. Nuttle                         May 22, 2000
                        -----------------------------
                        David A. Nuttle
                        Chairman, Chief Executive Officer and President
                        (principal executive officer)


                        NEXTPATH TECHNOLOGIES, INC.

                        /s/ Robert Woodward                         May 22, 2000
                        -----------------------------
                        Robert Woodward
                        Vice Chairman and Chief Financial Officer
                        (principal financial and accounting officer)



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