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                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

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

         For the fiscal year ended June 30, 2000

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

Commission file number: 0-15992

                       e.NVIZION COMMUNICATIONS GROUP LTD
                 (Name of small business issuer in its charter)

             Colorado                                         84-1031311
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification No.)

               600 17th Street, Suite 950S, Denver, Colorado 80202
          (Address of principal executive offices, including ZIP Code)

                    Issuer's telephone number: (303) 260-6482

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

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         The issuer's revenues for its most recent fiscal year ended June 30,
2000 were $550,940.

         The aggregate market value of the 12,742,368 shares of the issuer's
outstanding common stock held by non-affiliates of the issuer was $2,389,194 as
of November 17, 2000, based on the closing bid price of $0.1875 per share as
reported on the OTC Bulletin Board on that date.

         The issuer had 45,000,288 shares of its common stock issued and
outstanding as of November 17, 2000, the latest practicable date before the
filing of this report.




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                       e.NVIZION COMMUNICATIONS GROUP LTD

                     INDEX TO ANNUAL REPORT ON FORM 10-KSB

<TABLE>
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PART I .............................................................................................2
         Item 1. Description of Business............................................................2
         Item 2. Description of Property...........................................................36
         Item 3. Legal Proceedings.................................................................36
         Item 4. Submission of Matters to a Vote of Security Holders...............................36

PART II ...........................................................................................37
         Item 5. Market for Common Equity and Related Stockholder Matters..........................37
         Item 6. Management's Discussion and Analysis..............................................38
         Item 7. Financial Statements..............................................................46
         Item 8. Disagreements With Accountants on
                 Changes In and Accounting and Financial Disclosure...............................47

PART III ..........................................................................................47
         Item 9. Directors, Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act................................47
         Item 10. Executive Compensation...........................................................48
         Item 11. Security Ownership of Certain Beneficial Owners and Management...................48
         Item 12. Certain Relationships and Related Transactions...................................49
         Item 13. Exhibits and Reports on Form 8-K.................................................50

SIGNATURES.........................................................................................52
</TABLE>




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                CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

         This Annual Report on Form 10-KSB and the information incorporated by
reference may include "forward-looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. In particular, we
direct your attention to Item 1. Business, Item 2. Properties, Item 3. Legal
Proceedings, Item 6. Management's Discussion and Analysis of Financial Condition
and Results of Operation, and Item 6A. Quantitative and Qualitative Disclosures
About Market Risk, and Item 8. Financial Statements and Supplementary Data. We
intend the forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements in these sections. All statements
regarding our expected financial position and operating results, our business
strategy, our financing plans and the outcome of any contingencies are
forward-looking statements. These statements can sometimes be identified by our
use of forward-looking words such as "may," "believe," "plan," "will,"
"anticipate," "estimate," "expect," "intend," and other phrases of similar
meaning. Known and unknown risks, uncertainties and other factors could cause
the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and was
derived using numerous assumptions.

         Although we believe that our expectations that are expressed in these
forward-looking statements are reasonable, we cannot promise that our
expectations will turn out to be correct. Our actual results could be materially
different from our expectations, including the following:

         o        we may lose customers or fail to grow our customer base;

         o        we may not be able to sustain our current growth or to
                  successfully integrate new customers or assets obtained
                  through acquisitions;

         o        we may fail to compete with existing and new competitors;

         o        we may not adequately respond to technological developments
                  impacting the Internet;

         o        we may fail to implement proper security measures to protect
                  our network from inappropriate use, which could overload our
                  network's capacity and cause us to experience a major system
                  failure;

         o        we may issue a substantial number of shares of our common
                  stock, thereby causing significant dilution in the value of
                  your investment;

         o        we may not be able to obtain needed financing.



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         This list is intended to identify some of the principal factors that
could cause actual results to differ materially from those described in the
forward-looking statements included elsewhere in this report. These factors are
not intended to represent a complete list of all risks and uncertainties
inherent in our business, and should be read in conjunction with the more
detailed cautionary statements included in this Annual Report on Form 10-KSB
under the caption "Risk Factors," our other Securities and Exchange Commission
filings, and our press releases.

PART I

ITEM 1.  DESCRIPTION OF BUSINESS


HISTORY AND CURRENT STATUS

         e.NVIZION COMMUNICATIONS GROUP LTD. (Formerly, OTC America, Inc.), is a
Colorado corporation. We were originally incorporated under the laws of the
State of Colorado on June 13, 1986 for the primary purpose of providing
management and business consulting services to start-up and development stage
entities. In November, 1987, the Company acquired used printing equipment and
started a printing business under the name American Printing. In February 1989,
the Company discontinued all operations and became an inactive shell company.
The Company had no operations between February 1989 and November 1997.

         In November 1997, Randy L. Phillips, who at June 30, 2000, was the
Company's sole director, Chairman of the Company's Board of Directors and Chief
Executive Officer ("CEO"), acquired approximately 13.8% of the Company's then
outstanding common stock from a former director of the Company. In connection
with that transaction, the former director appointed Phillips a director and CEO
of the Company and himself resigned as a director and officer.

         Between November 1997 and November 1999/February 2000, The Company's
operations consisted solely of seeking suitable acquisition candidates in
accordance with the Company's evolving Plan of Operation as disclosed in the
Company's Securities and Exchange Commission filings during that period. In May
1999, the Company raised $2,500,000 in a private placement of 2,500,000 shares
of its Series A Preferred Stock in order to advance its evolving strategic plan.
Ultimately, the Company focused on seeking suitable acquisition candidates in
the Internet and telecommunication industries, in the belief that entering into
one or both of these industries on an operating basis would offer the potential
for valuable investor returns.

         During the calendar year 1999, the Company identified what it believed
was a suitable acquisition candidate, XZ HOLDINGS LTD. (Formerly, A-Z NET. COM,
INC.), an Internet service provider in Syracuse, New York with approximately
11,000 customers. In October 1999, the Company arranged for the acquisition of
this target by a related party, e.NVIZION WEB SOLUTIONS (Formerly, NGP HOLDINGS
LTD., "WEB SOLUTIONS"), a




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Delaware corporation incorporated in October 1999. On November 5, 1999, WEB
SOLUTIONS purchased substantially of the assets of XZ HOLDINGS LTD. WEB
SOLUTIONS commenced operations on that date, dba A-Znet.com!, under management
common to both the Company and WEB SOLUTIONS. On February 29, 2000, the Company
acquired all of the outstanding capital stock of WEB SOLUTIONS, making WEB
SOLUTIONS the Company's wholly-owned, operating subsidiary.

         The Company, through WEB SOLUTIONS is a full service Internet Company.
We provide Internet-related services, products and solutions to individuals and
small businesses located predominantly in smaller metropolitan markets and rural
communities in New York State. We believe individuals and businesses in these
markets value local content and service and have traditionally been under-served
by other national on-line service providers. We believe this lack of service
creates an opportunity for us to meet their growing demand for Internet access
and services. We emphasize creating an integrated relationship with our
subscribers by maintaining a strong local presence in all of our markets. We
intend to continue to strengthen this relationship by launching local
communities and by enhancing customer service through regional customer care
centers.

         WEB SOLUTIONS currently provides dial-up access to the Internet,
co-location services, dedicated Internet access, and Web hosting and Web page
design services. WEB SOLUTIONS' basic rates for dial-up Internet access and Web
hosting are $9.95/mo. (unlimited access, no set-up fee, four e-mail addresses,
10mb of "our domain" web space) and $19.95/mo. ($50 one-time set-up fee, 25mb of
web space, two e-mail addresses), respectively. In the markets we serve, these
are the lowest rates available for dial-up Internet access other than "free,"
and also for Web hosting. These rates are substantially less than the rate
charged by national/larger ISPs, e.g., America Online charges $21.95/mo. for
dial-up Internet access. Additional information regarding our existing and
planned service/product offerings can be obtained at our website, www.envzn.com.

         As part of strengthening our relationship with our subscribers, we plan
to create on-line geographic communities in each of our markets to enhance the
on-line experience of our subscribers and to generate additional revenue. Each
on-line community will be specific to a locale and will serve as a portal
offering local, customized content, community message boards and chat rooms,
Internet telephony, Web-based calendars and e-commerce, among other services.

         Our strategy is to expand our geographic presence, our customer and
revenue base and our Web hosting and broadband capabilities. We intend to
continue to acquire additional Internet service businesses in order to grow our
access, development and presence services. We intend to expand our network
infrastructure and increase our Internet access subscriber base by continuing to
acquire other Internet service providers with a high concentration of small and
medium-sized business customers.

         The broad acceptance of the Internet has created numerous opportunities
for businesses to improve their competitive position in their markets. We
believe the small and





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medium-sized business market generally offers significant opportunity for the
growth of our business because of the large number of these businesses
throughout the United States and their growing presence on the Internet. Small
and medium-sized businesses are increasingly seeking third-party service
providers to help them create, build and implement their Internet strategy. The
analysis, design and implementation of an effective Internet solution require a
range of skills, expertise and technology that only a limited number of small
and medium-sized businesses possess. In response to these needs and the growth
of the Internet as a vehicle for sales and services, we have developed a full
array of services designed to address all of the Internet service requirements
of our small and medium-sized business customers.

         Our mission statement is to be the best customer-driven provider of
Internet access, Internet services and local content to smaller metropolitan
markets and rural communities. We focus on markets that are not within the top
25 metropolitan statistical areas in the United States. We benefit from the
relatively low fixed costs for personnel and facilities in our markets. When
fully integrated, we also expect to benefit from the reduced telecommunications
and operating costs resulting from our regional scale.

         Our objective is to become the leading single-source provider of voice,
data, and video services to residential and small and medium-sized business
consumers in each of our markets. We will achieve this goal by offering
individual or bundled service options, superior customer service and competitive
prices over our own enhanced communications network.

         We believe that we will enjoy significant competitive advantages due to
our planned ability to:

         o        deliver bundled services (voice, high-speed Internet access,
                  and video programming) to any given customer on our own
                  network;

         o        provide superior customer service;

         o        deliver reliable, secure and high-speed services to our
                  customer base; and

         o        offer customers highly competitive price packages based on the
                  bundling of services.

         In summary, we plan to utilize enhanced technology to provide
differentiated, bundled service offerings to growing segments of the voice,
high-speed data, and Internet and video communications markets. Among our many
unique capabilities and plans is our ability to sell direct to residential
subscribers -- which in turn will have pull through to commercial sales -- to
emphasize customer service by concentrating on customer care and billing, and to
target under-served areas. Finally, our ISP rollup campaign will provide a solid
foundation for our position as a strong technical player in an increasingly
competitive market.




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INDUSTRY OVERVIEW

         In recent years, the Internet has experienced a rapid increase in its
number of users. As a result, Internet access services is one of the fastest
growing segments of the global communications services marketplace. According to
a survey conducted by NUA Ltd. Internet Surveys, there were 201 million people
online worldwide as of September 1999. This same study predicts that by 2005,
the number of people online globally will increase to 350 million. NUA Ltd.
reported that business-to-business online transactions in the United States
alone were expected to reach $109 billion by the end of 1999 and $843 billion by
2002.

         The rapid development and growth of the Internet has resulted in an
industry of local, regional and national Internet service providers in the
United States. These companies provide Internet access to their subscribers by
developing a proprietary network infrastructure, by purchasing Internet access
from a wholesale provider or through a combination of both. Internet access
services represent the means by which Internet service providers interconnect
either businesses or individual consumers to the Internet's resources or to
corporate intranets and extranets.

         Recent technological advances, combined with cultural changes and
evolving business practices, have led to integration of the Internet into the
activities of individuals and the operations and strategies of commercial
organizations. Use of the Internet by individuals and small and medium-sized
businesses has been accelerated by dramatic increases in cost-effective
processing power and data storage capabilities in personal computer workstations
and servers, as well as widespread availability of multimedia, fax/modem and
networking capabilities. Today, businesses are increasingly recognizing that the
Internet is fundamentally transforming the way they compete. This realization is
forcing businesses to reevaluate their Internet strategies and review their
entire operational models in order to align their business objectives more
closely with their business processing and systems. Businesses are attempting to
utilize innovative Internet solutions to improve their competitive position and
take advantage of:

         o        greater opportunities to attract and retain profitable
                  customers;

         o        lower costs;

         o        improved operational efficiencies;

         o        strengthened supply chain partner relationships; and

         o        improved communications within organizations.

         As a result, businesses are increasingly seeking third-party service
providers to help them create and build business-driven Internet solutions. To
service this emerging need, traditional service providers such as management
consultants, traditional information technology




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service providers and advertising firms have created groups within their
organizations that focus on the Internet needs of their clients. Many of these
traditional service providers lack, however, the breadth of services to provide
comprehensive Internet solutions, and businesses have begun to seek new
third-party providers that can provide them with Internet solutions balancing
their strategy, marketing and technology needs. This demand has led to the
emergence of integrated Internet services firms that have the expertise to
service this emerging market and can also provide a structured approach to
integrating strategy, marketing and technology to create a single, unified
Internet solution.

         We believe that all of these factors provide us with significant
opportunities for growth in this marketplace. Therefore, we intend to continue
to focus on Internet access and e-commerce services for consumers both at home
and in the workplace, and for small businesses.

OUR MARKET OPPORTUNITY

         The 25 largest metropolitan areas in the United States comprise only
50% of the U.S. population, leaving approximately 135 million individuals in
hundreds of smaller markets as potential customers. In addition, the Internet
penetration rate of these smaller markets is less than that of larger
metropolitan areas. The local content to be provided by our geographic
communities, our managerial talent, technological competence and localized sales
and marketing skills provide us with what we believe are significant competitive
advantages. Many of the national on-line service providers with whom we
currently compete provide access in our markets which require long-distance toll
calls, making access more expensive for subscribers. All of our networks are and
will be accessible to our subscribers by a local telephone call.

         According to International Data Corporation, total United States ISP
revenues are projected to grow from approximately $10.7 billion in 1998 to
approximately $37.4 billion in 2003. In addition, International Data Corporation
estimates that the number of users in the United States accessing the World Wide
Web will increase from approximately 63 million at the end of 1998 to
approximately 177 million in 2003.


OUR GROWING MARKET

         Internet use is experiencing dramatic growth in the number of users and
the amount of user time spent on the Internet. International Data Corporation
estimates that at the end of 1998 there were approximately 77 million Internet
users in the United States and that by the end of 2002, the number of United
States Internet users will increase to over 148 million. In the northeastern
United States alone, Upside Magazine estimates that the number of Internet
service subscribers will increase by approximately 30 million in the next three
years. With respect to the use of the Internet and enhanced Web services by
businesses, International Data predicts that the percentage of small and
medium-sized businesses with on-line access will double in the next three years.




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         The functionality and accessibility of the Internet have made it an
increasingly attractive commercial medium by providing features that
historically have been unavailable through traditional distribution channels.
These advantages combined with the increasing availability of products and
services over the Internet, and the presence of more and more companies and
organizations on the Internet, have resulted in a huge demand for Web services.
eMarketer predicts that the demand for Web services (including Internet access,
Web hosting, Web site development, e-commerce solutions, Internet marketing
solutions, demand for bandwidth.), which was $1 billion in 1998, will grow to
$14 billion by 2003.


OUR STRATEGY

         We intend to enhance the value of our company by continuing to grow our
subscriber base and then leveraging our subscriber base to increase revenues and
reduce costs. The following are the key elements of our strategy.

     MAINTAIN A HIGH LEVEL OF CUSTOMER SATISFACTION. We believe our subscribers
     are satisfied with our service as evidenced by our low churn rate. We
     intend to maintain and grow our subscriber base by continuing to provide
     easy-to-use Internet access and local and national marketing initiatives,
     as well as continuing to focus on local presence, providing superior
     customer service and technical support and introducing new products and
     services.

     CONTINUE TO FOCUS ON LOCAL PRESENCE. We believe that having a strong local
     presence in our markets helps us create an integrated relationship with our
     subscribers and is a key factor in our high subscriber retention rates and
     strong word-of-mouth referrals. We maintain our local presence by operating
     offices staffed with local sales and service personnel and by targeting our
     advertising and marketing campaign on a local level. In addition, by
     creating geographic communities to provide local content and community
     functionality, we believe that we can offer value-added services to our
     subscribers which will result in frequent and extended traffic and
     incremental revenue.

     COMMUNITY PRESENCE AND INVOLVEMENT. We target our advertising and marketing
     initiatives on a local level, by, among other things, sponsoring local
     events. We serve our existing subscribers and intend to attract new
     subscribers through our local offices and commission-sale storefronts,
     staffed with local sales and service personnel which allow subscribers to
     stop in and sign up for our Internet access in person.

     CREATING GEOGRAPHIC COMMUNITIES. Our planned geographic communities will
     provide local content and community functionality. We believe that these
     services will become an integral part of our subscribers' daily routine,
     promoting increased usage and loyalty. In general, they will seek to
     aggregate content through alliances and partnerships with different
     providers. By sourcing customized content from our partners, we expect to
     offer each locale's subscribers specific access to local information of




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     interest, such as local news, entertainment and community events. In
     addition to local newspaper content, we also plan to build out local
     e-commerce platforms in our geographic communities. As a targeted
     distribution mechanism for advertising and e-commerce products, we provide
     advertisers and e-commerce products with an efficient method of reaching
     their targeted markets. We have agreements with several local and national
     providers to bring content and functionality to our geographic communities.
     These agreements provide for revenue sharing based on fees for service and
     advertising.

     PROVIDE SUPERIOR CUSTOMER SERVICE AND TECHNICAL SUPPORT. We believe
     superior customer service is critical to our ability to retain existing
     subscribers and attract new subscribers. Our subscribers depend on the
     speed and reliability of our network and our ability to keep them connected
     to the Internet at all times. The knowledge and service-orientation of our
     customer service and technical support personnel is a key element in our
     ability to assist our subscribers in quickly resolving problems. To
     maintain the local, personalized nature of our customer service, we also
     intend to employ local customer service representatives who will be trained
     to respond to referrals from our planned regional customer care centers.

     We provide network monitoring and emergency subscriber assistance services
     from 9:00 a.m. to 12:00 midnight, Mondays through Fridays, holidays
     excluded. We plan to implement "24 x 7" technical support during 2001. In
     house technical personnel respond to telephone and e-mail inquiries. In
     June 2000, we moved all customer service and technical support services
     "in-house," in order to maintain the support levels required to retain
     customers in a competitive market. There can be no assurance, however, that
     our customer support resources will be sufficient to manage any expansion
     in our subscriber base. Any failure to adequately match customer support
     resources to projected increases in subscribers could adversely affect us.

     INTRODUCE NEW PRODUCTS AND SERVICES. We intend to capitalize on
     opportunities to sell more profitable, value-added products and services to
     our existing subscribers and to pursue opportunities to open new markets
     through new and existing products and services, including:

     o    wireless and broadband services, which allow the simultaneous
          transmission of voice, video and data channels;

     o    Web hosting, which allows subscribers to have a Web site using our Web
          servers and equipment;

     o    Web design, which includes all facets of designing a Web site for a
          subscriber; and

     o    e-commerce applications, which allow businesses to easily create and
          operate a `storefront' to sell merchandise over the Internet.




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     REALIZE BENEFITS OF SCALE. A primary focus of our company is to realize the
     benefits of scale in the following areas:

     Incremental revenue streams. We expect to leverage our growing subscriber
     base and user traffic to establish relationships with sponsors that want an
     Internet presence, third-party vendors, Internet portals and content
     providers. We expect these relationships to generate sponsorship and
     e-commerce revenues. We anticipate that these relationships will be
     incorporated into our on-line geographic communities and into the
     portals/websites accessed through our local/regional POPs.

     Reduce costs. We intend to take advantage of a growing scale to increase
     our network and bandwidth purchasing power and consolidate business
     functions, thereby reducing our costs. Specifically, we intend to implement
     the following steps to reduce costs:

     o    reduce our telecommunications costs system-wide by negotiating two or
          more relationships with national backbone providers to connect our
          subscribers to the Internet;

     o    negotiate favorable local loop contracts, and establish and expand
          co-location arrangements with local exchange carriers to substantially
          reduce our local loop costs;

     o    establish and expand private peering relationships to reduce our costs
          and improve access and reliability for our subscribers;

     o    consolidate our business functions;

     INCREASE FOCUS ON BUSINESS CUSTOMERS. We believe that one of the most rapid
     areas of growth in our revenue will be in business sales and service.
     Recognizing this potential, we are creating a dedicated business sales and
     service group. This new group will focus on the needs of small to
     medium-sized businesses in our markets. We intend to compete in this area
     with other national and regional providers through a local presence and by
     providing high quality customer service and competitive products. The types
     of services our dedicated business sales group may provide include:

     o    dedicated Internet access, which provides a continuous connection to
          the Internet;

     o    Web hosting, which offers businesses a presence on the Internet using
          our Web servers and related equipment;

     o    Virtual Private Networks (VPN's), which allow businesses a secure
          means of transferring data between office locations and communicating
          with other users on the Web;





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     o    co-location facilities, which allow businesses to locate their own Web
          server at one of our points of presence; and

     o    networking products, which consist of routers and local access
          networks.


     CONTINUE TO ACQUIRE ADDITIONAL ISPS. We intend to continue our growth by
     acquiring additional ISPs and subscribers within existing and contiguous
     markets to increase our density in these markets, and by acquiring
     independent ISPs and subscribers in targeted new markets to increase our
     scale and geographic scope. As of June 30, 2000, we had executed two
     Letters of Intent to acquire two ISPs, both in New York State, with a
     combined subscriber base of approximately 28,000. As of June 30, 2000, we
     were actively seeking financing to complete these acquisitions.

     The ISP industry remains fragmented, with over 8,300 ISPs in the United
     States as of June 1,2000, according to Internet.com. Many of these ISPs
     operate in the markets in which we will focus our strategy. When
     determining which ISPs to acquire, we focus on the following criteria:

     o    rapid revenue and subscriber growth;

     o    strong EBITDA margins;

     o    low subscriber turnover or churn rates;

     o    proximity to our existing ISPs, or sufficient scale in a new target
          market;

     o    high density, defined as a high ratio of subscribers to POPs;

     o    limited competition;

     o    consistent network platforms provided by common vendors that can be
          integrated readily into our network; and

     o    experienced and capable management teams.

     We believe ISPs in our target markets will continue to be attracted to and
     benefit from the opportunity to affiliate with us. We believe that we offer
     local ISP owners an attractive acquisition opportunity based upon, among
     other factors:

     o    empowering local ISP owners to use their local market knowledge to
          build market share and density by providing them with access to
          sufficient capital and resources;





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     o    reducing telecommunications costs and improving network infrastructure
          attributable to a larger, national scale; and

     o    offering current owners and employees a combination of liquidity and
          upside financial potential through equity ownership in a publicly
          traded entity.


PRODUCTS AND SERVICES

         We currently provide dial-up access to the Internet, co-location
services, dedicated Internet access, and Web hosting and Web page design
services. Together with planned offerings, we intend to offer a comprehensive,
cost-effective range of Web and Internet services to business and residential
customers in the Northeast United States. We are designing a scalable,
state-of-the-art, private, fiber optic transport/data center network, which when
deployed will be able to address comprehensive data intensive applications,
including Voice Over Internet Protocol ("VoIP") and unified messaging services,
and ensure the speed and performance necessary for mission-critical Internet and
Web applications in commercial settings. Our products and services offerings
will include:

     WEB HOSTING. Our planned, high capacity network services and
     state-of-the-art technology will enable us to provide advanced Web hosting
     services. We will provide our customers with data back up and Web site
     firewall protection, a comprehensive facility-wide security system, current
     Web traffic statistics for market tracking, and 24 x 7 network and Web site
     technical support.

     SERVER CO-LOCATION, WHOLESALE AND MANAGED SERVICES. From our Network
     Operations Center ("NOC") in Syracuse, New York, we can offer co-location,
     Web hosting, private-label-ISP and other managed services. This presents
     our existing and prospective customers with the convenience of having
     "in-house" server and/or modem banks without the responsibilities
     associated with supporting their own network infrastructure. Additionally,
     we expect to be providing managed services for outsource applications,
     including the wholesaling of VoIP gateway services and unified messaging.
     Our NOC features technology that reduces customers' bandwidth costs,
     increases their available bandwidth and extends redundancy. We provide our
     customers with 24 x 7 day network monitoring.


     HIGH SPEED BROADBAND INTERNET ACCESS, (WIRELESS AND DSL), AND FRAME RELAY,
     T-1 AND T-3 SERVICES. We believe these additional product offerings will
     accommodate the greater functionality and user requirements of our target
     markets while generating higher-margin profits over our existing product
     offerings. We are working with existing xDSL and ADSL wholesalers to
     provide underlying xDSL and ADSL capabilities, while maintaining the option
     of deploying xDSL and ADSL on our own at some later point in time when
     deemed economically feasible. At June 30, 2000,




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     we were in negotiations with a fixed, wireless solutions provider to enter
     into a strategic alliance to offer wireless broadband Internet access and
     other wireless services/products in selected target markets in our existing
     subscriber footprint.

     DIAL-UP INTERNET ACCESS. We provide fast, reliable, low-cost dial-up access
     to the Internet to approximately 11,000 customers.


BUSINESS STRATEGY

         We plan to continue to penetrate our target secondary and tertiary
markets in the Northeast by acquiring profitable, Web and Internet service
providers, and to strengthen our regional organization, which is committed to
being an efficient source of global communications services for our growing
customer base. Our philosophy is to deliver cost-effective, comprehensive,
state-of-the-art services while staying close to our customers.

         Following that philosophy, we are executing a multiple product line
strategy by providing combinations of Web and Internet services to our
customers. Also, we expect to expand our service offerings to include local and
long distance telephone Services. We intend to build data centers in underserved
secondary and tertiary markets. We will offer wholesale Internet and related
services to independent Internet service providers. We will also continue to add
national content providers to our Web pages to increase site loyalty.


TARGET MARKETS

         We plan to continue to penetrate secondary and tertiary Northeast
markets through acquisitions of existing Internet, web design/hosting and other
telecommunications service providers, and by consolidating and building enhanced
Internet services operations in those markets. We are concentrating on small and
medium size businesses in this segment because we believe the following:

     o    Small and medium size businesses typically outsource their Web service
          requirements due to capital and personnel constraints (unlike larger
          firms in primary metropolitan markets, which, in most cases, support
          their own Web and telecommunications infrastructure);

     o    There are approximately 1 million small and medium-size businesses in
          the Northeast (Source: Upside Magazine) many of which will need to
          develop e-commerce solutions to increase revenues and/or remain
          competitive;

     o    The number of Internet subscribers in secondary markets in the
          Northeast alone could potentially rise by 30 million over the next
          three years (Source: eMarketer);




                                       12
<PAGE>   15


     o    Small and medium sized businesses will exhibit higher customer loyalty
          and lower than average customer turnover;

     o    Costs associated with providing services in secondary markets will be
          lower than the major urban markets, potentially resulting in higher
          margins;

     o    Secondary markets are currently more fragmented because of
          undercapitalized local competitors, while still containing large
          customer bases;

     o    There is greater potential to more quickly gain market share and
          secure market coverage through carefully selected acquisition
          candidates and an emphasis on customer service and product
          combinations; and

     o    There is greater potential to develop strong regional brand
          recognition and brand equity in a shorter time.


SALES & MARKETING

         We intend to become one of the leading brands in the enhanced Internet
services market in the Northeast. We do and will continue to sell our services
via the Web, and using a knowledgeable sales force staffed by people native to
our markets. We intend to maintain our in-house sales staff and hire additional
sales personnel, while converting each acquired company's location into a
regional sales office. Our sales and marketing strategy is as follows:


     BUILD OUT OUR EXISTING DIRECT INTERNET SALES FORCE. We are growing our
     existing sales force. We intend to hire a sales manager to head each
     branch-office sales force, and to hire additional, accomplished sales
     personnel who have Internet and telecommunications sales experience in
     their respective regions. We expect to build our sales force in each
     regional sales office to up to six people in the immediate term.

     PROACTIVE SALES PHILOSOPHY AND AGGRESSIVE ADVERTISING We are actively
     marketing our services to existing and potential customers in the New York
     through a number of marketing initiatives aimed at building our brand
     equity. Our marketing initiatives include or are planned to include: a
     telemarketing program for current and prospective customers; participation
     in industry trade shows; public relations exercises; aggressive print,
     billboard, and radio and television advertising; direct mail and e-mail
     solicitations. We plan to follow an aggressive pricing strategy for all of
     our products and services, and to emphasize to existing and potential
     customers our regional presence and enhanced Internet services
     infrastructure as an advantage over local and national competitors. We are
     also currently developing alternative distribution channels, and engaging
     potential agents or resellers who will retail our products and services. We
     plan to take advantage of the cross merchandising opportunities presented
     by the Internet




                                       13
<PAGE>   16

     by advertising and offering our bundled services on our resellers' and
     selected Web hosting customers' Web pages.

     PROMOTE VALUE-ADDED, BUNDLED SERVICES TO CUSTOMERS. We offer and plan to
     make additional offerings of value added, packaged services while retaining
     our regional focus, which will make us an attractive proposition for
     customers. We plan to bundle Web, Internet, local dial tone, and long
     distance services while providing convergent billing with real-time Web
     based access to account data. We also offer our customers the option of
     using a credit card billing system for monthly recurring local and flat
     rate charges.

     FOCUS ON CUSTOMER SERVICE. We are focused heavily on customer service. We
     plan to maintain first-line technical support at each branch, and we will
     upgrade established customer service operations to include fully convergent
     billing and customer care systems, accessible by a toll free telephone
     number, 24 hours per day, 7 days per week.


ACQUISITIONS

         A significant component of our growth strategy is to continue to
penetrate markets by acquiring well-established Internet service providers,
and/or Competitive Local Exchange Carriers ("CLECs") and long distance service
providers. We then plan to integrate and bundle their services with our own,
offering our customers an ever-widening, more comprehensive suite of products
and services, typically on one integrated monthly bill.

         Our strategy is to initially purchase "anchor" Web or Internet service
providers, CLECs or long distance service providers within a target market
region, and then acquire other, complementary local companies. As we execute our
acquisition strategy, we will integrate resources of the acquired companies into
our broader network in order to bring increased scope and the benefits of
economies of scale. Historically, networks and administrative functions of newly
acquired companies can be integrated into a single system within 90 days. We
further believe that economies of scale advantages will facilitate a reduction
in operating costs of acquired companies. We plan to offer our complete product
line to customers of our acquired companies immediately follow their acquisition
in an effort to rapidly increase sales. We believe that our regional focus will
enables us to better control costs and to maximize the financial, operating and
marketing benefits of consolidating local Web and Internet services providers.


COMPETITION

         The market for Internet access and related services is extremely
competitive. We expect competition to increase as Internet use grows and
established national Internet service providers, telecommunications and computer
equipment vendors expand their traditional





                                       14
<PAGE>   17

products and services and new start-ups emerge. The significant financial
resources of many of our competitors could lead to severe price cutting in an
effort to secure market share, which could have a negative effect on our
revenues and results of operations. Our competitors in the markets in which we
operate include:

     o    National and regional commercial Internet service providers such as
          Verio, Earthlink, Frontline Communications, Log-on-America,
          Business-on-line.com and OneMain;

     o    Established on-line commercial information providers such as AOL,
          Prodigy and MSN;

     o    Local Internet service providers in New York State who provide
          products and services that are similar to ours to small to medium
          sized businesses;

     o    Cable television operators such as Time Warner and AT&T Broadband
          Services;

     o    National long distance telecommunications carriers such as AT&T,
          MCI/Worldcom, and Sprint;

     o    Computer hardware and software companies, such as IBM and Compaq;

     o    Regional telephone operating companies such as Verizon and Frontier;
          and

     o    "Free access" Internet services providers such as JUNO and NetZero.

         We also believe that new competitors will continue to enter the
Internet access market, such as large computer hardware and software companies,
media and telecommunications entities, and companies that provide direct service
to residential customers, including cable television operators, wireless
communication companies, local and long distance telephone companies and
electric utility companies.

         Many of our competitors are larger and have greater financial,
technical, and operating resources than we do. We will need to distinguish
ourselves by our product and service knowledge, our responsiveness to our
targeted market of small to medium-sized businesses, our ability to market and
sell customized combinations of products and services within our market, and our
capacity to offer a diverse Internet product line. We also believe that our
ability to be flexible and to respond quickly in providing solutions to our
customer's Internet needs will be an advantage over some of our competitors.

         As a result of an increase in the number of competitors, and vertical
and horizontal integration in the industry, we currently face and expect to
continue to face significant competition. Many of our competitors have greater
market presence, brand recognition and financial, technical and personnel
resources than we do, including, in some instances, a large, existing commercial
subscriber base. Telecommunications providers also have the ability to bundle
Internet access with basic local and long-distance telecommunications services.
Other



                                       15

<PAGE>   18


alternative service companies are approaching the Internet access market with
various newer wireless terrestrial- and satellite-based service technologies.

         In addition, a number of national Internet service providers recently
entered into alliances with traditional chain retailers under which the retailer
will feature its allied Internet service provider in its stores. Examples
include recently announced alliances between America Online and Wal-mart,
America Online and Best Buy, and Microsoft Network and Kmart. These alliances
may prove to have a significant negative impact on our business since these
retail chains provide a ready-made distribution channel into our targeted
smaller metropolitan markets and rural communities. In addition, the recently
announced merger between America Online and Time Warner, Inc. will provide
America Online with substantial content for its portal and the ability to offer
broadband Internet access via cable, which could have a significant negative
impact on our business.

         We believe the primary competitive factors that will enable us to
succeed in our markets are our local presence, knowledgeable salespeople,
responsive customer support personnel, quality technical support and local
content. Other important factors include price, the timing of introductions of
new products and services and industry and general economic trends.


PROPRIETARY RIGHTS

         Although we believe that our success is more a function of our
infrastructure, the technical expertise of our personnel and customer service
than our intellectual property or other proprietary rights, our success and
ability to compete depends in part upon brand recognition and loyalty and the
protection of the "way we do business." We rely on a combination of copyright,
trademark and trade secret laws, and contractual restrictions, to establish and
protect our intellectual property. It is our policy to require employees and
consultants, and, when possible, suppliers to execute confidentiality agreements
upon the commencement of their relationships with us. These agreements provide
that confidential information developed or made known during the course of a
relationship with us must be kept confidential and not disclosed to third
parties except in specific circumstances. We cannot provide any assurances that
the steps we have taken will be adequate to prevent misappropriation of any
technology we develop or our "business plan," or that our competitors will not
independently develop technologies that are substantially equivalent or superior
to them. All Web content we produce is noticed as subject to copyright, and we
are in the process of registering our brand name, "e.NVIZION," and our tag line,
"Our Vision. Your Reality" for federal trademark protection.



                                       16
<PAGE>   19


REGULATION

GENERAL REGULATORY ENVIRONMENT.

         The telecommunications businesses in which we operate or intend to
operate, namely, providing traditional long distance service, providing long
distance service by means of IP Telephony and activities as a CLEC, are subject
to extensive federal and state regulation. In particular, these services are
subject to the provisions of the Communications Act of 1934, as amended,
including amendments effected by the 1996 Telecommunications Act and the FCC
regulations thereunder, as well as the applicable laws and regulations of the
various states, including regulation by public utility commissions and other
state agencies. Federal laws and FCC regulations apply to the facilities of and
services offered by, telecommunications common carriers including regulating the
prices charged, to the extent that those facilities are used to provide,
originate, or terminate interstate communications. State regulatory authorities
retain jurisdiction over telecommunications both originating and terminating
within the state. The regulation of the telecommunications industry is changing
rapidly and the regulatory environment varies substantially from state to state.
Moreover, as deregulation at the federal level occurs, some states are
reassessing the level and scope of regulation that may be applicable to us. All
of our operations are also subject to a variety of environmental, safety,
health, and other governmental regulations. We cannot assure that future
regulatory, judicial, or legislative activities will not adversely affect us, or
that regulators, competitors, or third parties will not raise material issues
with regard to our compliance or noncompliance with applicable regulations.

         The 1996 Telecommunications Act effected changes in regulation at both
the federal and state levels that affect virtually every segment of the
communications industry. The stated purpose of the 1996 Telecommunications Act
is to promote competition in all areas of communications and to reduce
unnecessary regulation to the greatest extent possible. While it will take years
for the industry to feel the full impact of the 1996 Telecommunications Act, it
is already clear the legislation provides us with both opportunities and
challenges. The 1996 Telecommunications Act, among other things, allows the
regional Bell operating companies to enter the long distance business and
enables other entities, including entities affiliated with power utilities and
ventures between local exchange companies and cable television companies, to
provide an expanded range of telecommunications services. Entry of such
companies into the long distance business would result in substantial
competition to our intended telecommunications services (i.e., traditional long
distance, IP Telephony, and local exchange carrier services) and may have a
material adverse effect on our business, financial condition, and results of
operations and cash flow.

         Under the 1996 Telecommunications Act, the regional Bell operating
companies may immediately provide long distance service outside those states in
which they provide local exchange service ("out-of-region" service) and long
distance service within the regions in which they provide local exchange service
("in-region" service) upon meeting certain conditions. The 1996
Telecommunications Act does, however, impose certain restrictions on, among
others, the regional Bell operating companies in connection with their provision
of long distance services. Out-of-region services by regional Bell operating
companies are subject to receipt of any necessary state and/or federal
regulatory approvals that are otherwise applicable to the provision of
intrastate and/or interstate long distance service. In-region services by
regional Bell operating



                                       17
<PAGE>   20


companies are subject to specific FCC approval and satisfaction of other
conditions, including a checklist of pro-competitive requirements. The regional
Bell operating companies may provide in-region long distance services only
through separate subsidiaries with separate books and records, financing,
management, and employees and all affiliate transactions must be conducted on an
arm's length and nondiscriminatory basis. The regional Bell operating companies
are also prohibited from jointly marketing local and long distance services,
equipment, and certain information services unless competitors are permitted to
offer similar packages of local and long distance services in their market.
Further, the regional Bell operating companies must obtain in-region long
distance authority before jointly marketing local and long distance services in
a particular state. Additionally, AT&T and other major carriers serving more
than 5% of prescribed long distance access lines in the United States are also
restricted from packaging other long distance services and local services
provided over regional Bell operating company facilities


FEDERAL REGULATION.

         The FCC has established different levels of regulation for dominant and
non-dominant carriers. Of domestic common carrier service providers, only GTE,
the regional Bell operating companies and other incumbent local exchange
companies ("ILECs") are classified as dominant carriers and all other providers
of domestic common carrier services, which will include us upon completion and
approval of our planned applications for "CLEC status/licenses," are classified
as non-dominant carriers. The 1996 Telecommunications Act provides the FCC with
the authority to forebear from imposing any regulations it deems unnecessary,
including requiring non-dominant carriers to file tariffs. On November 1, 1996,
in its first major exercise of regulatory forbearance authority granted by the
1996 Telecommunications Act, the FCC issued an order de-tariffing domestic
inter-exchange services. The order required mandatory de-tariffing and gave
carriers nine months to withdraw federal tariffs and move to contractual
relationships with their customers. A federal appeals court subsequently stayed
this order.

         On April 18, 1997, the FCC ordered that the regional Bell operating
companies and incumbent ILECs offering domestic interstate inter-LATA (local
access and transport areas) services, in-region or out-of-region, be regulated
as non-dominant carriers. However, such services offered in-region must be
offered in compliance with the structural separation requirements mentioned
above. AT&T was classified as a dominant carrier, but AT&T successfully
petitioned the FCC for non-dominant status in the domestic interstate
inter-exchange market in October 1995 and in the international market in May
1996. Therefore, certain pricing restrictions that once applied to AT&T have
been eliminated. A number of parties have, however, sought the FCC's
reconsideration of AT&T's status. We are unable to predict the outcome of these
proceedings on its operations.

         On May 8, 1997, the FCC released an order intended to reform its system
of interstate access charges to make that regime compatible with the
pro-competitive deregulatory framework of the 1996 Telecommunications Act.
Access service is the use of local exchange facilities for the origination and
termination of interchange



                                       18
<PAGE>   21


communications. The FCC's historical access charge rules were formulated largely
in anticipation of the 1984 divestiture of AT&T and the emergence of long
distance competition and were designated to replace piecemeal arrangements for
compensating local exchange companies for use of their networks for access, to
ensure that all long distance companies would be able to originate and terminate
long distance traffic at just, reasonable, and non-discriminatory rates and to
ensure that access charge revenues would be sufficient to provide certain levels
of subsidy to local exchange service. While there has been pressure on the FCC
historically to revisit its access pricing rules, the 1996 Telecommunications
Act has made access reform timely. The FCC's recent access reform order adopts
various changes to its rules and policies governing interstate access service
pricing designed to move access charges, over time, to more economically
efficient levels and rate structures. Among other things, the FCC modified rate
structures for certain non-traffic sensitive access rate elements, moving some
costs from a per-minute-of-use basis to flat-rate recovery, including one new
flat rate element; changed its structure for interstate transport services; and
affirmed that ISPs may not be assessed interstate access charges. In response to
claims that existing access charge levels are excessive, the FCC stated that it
would rely on market forces first to drive prices for interstate access to
levels that would be achieved through competition but that a "prescriptive"
approach, specifying the nature and timing of changes to existing access rate
levels, might be adopted in the absence of competition. The FCC intends to
address these and other related matters in subsequent proceedings.

         Though we believe that access reform through lowering and/or
eliminating excessive access service charges will have a positive effect on its
service offerings and operations, it cannot predict how or when such benefits
may present themselves, or the outcome of any possible judicial appeal or
petition for FCC reconsideration

         The FCC also released a companion order on universal service reform on
May 8, 1997. The universal availability of basic telecommunications service at
affordable prices has been a fundamental element of U.S. telecommunications
policy since enactment of the Communications Act of 1934. The current system of
universal service is based on the indirect subsidization of local exchange
carrier pricing, funded as part of a system of direct charges on some local
exchange carrier customers, including IXCs and above-cost charges for certain
local exchange carrier services such as local business rates and access charges.

         In accordance with the 1996 Telecommunications Act, the FCC adopted
plans to implement the recommendations of a Federal-State Joint Board to
preserve universal service, including a definition of services to be supported
and defining carriers eligible for contributing to and receiving from universal
service subsidies. The FCC ruled, among other things, that: contributions to
universal service funding be based on all IXCs' gross revenues from both
interstate and international telecommunications services; only common carriers
providing a full complement of defined local services be eligible for support;
and up to $2.25 billion in new annual subsidies for discounted
telecommunications services used by schools, libraries, and rural health care
providers be funded by an assessment on total interstate and intrastate revenues
of all IXCs. The FCC stated that it intends to study the mechanism for continued
support of universal



                                       19
<PAGE>   22


service in high cost areas in a subsequent proceeding. We are unable to predict
the outcome of these proceedings or of any judicial appeal or petition for FCC
reconsideration on its operations.

         On April 10, 1998, the FCC submitted a report to Congress in which it
stated that telephone-to-telephone IP Telephony bears the characteristics of
"telecommunications services" and that the providers of those services may be
"telecommunications carriers," as those terms are defined in the 1996
Telecommunications Act. The FCC deferred a more definitive resolution of this
issue until a more "fully-developed" record is available. However, the April 10,
1998 report states that, to the extent the FCC concludes that certain forms of
telephone-to-telephone IP Telephony service are "telecommunications services,"
and to the extent the providers of those services obtain the same
circuit-switched access as obtained by other IXCs and therefore impose the same
burdens on the local exchange as do other IXCs, the FCC "may find it reasonable
that they" become subject to the same regulations, including the requirement to
pay access fees to local exchange carriers and to contribute to universal
service subsidies.

STATE REGULATION.

         Companies conducting local and intrastate long distance
telecommunications operations are subject to various state laws and regulations
including, in many jurisdictions, certification and tariff filing requirements.
Generally, these providers, which will include us upon completion and approval
of our planned applications for "CLEC status/licenses," must obtain and maintain
certificates of authority from regulatory bodies in most states in which it
offers intrastate services.


RISK FACTORS

         You should carefully consider the risks described below before making
an investment decision.


BECAUSE WE HAVE A LIMITED OPERATING HISTORY, WE MAY NOT BE ABLE TO SUCCESSFULLY
MANAGE OUR BUSINESS OR ACHIEVE PROFITABILITY.

         We were restructured in March 2000, and acquired our first Internet/Web
services provider in February 2000. Our management team faces the challenge of
successfully implementing company-wide administrative and operating systems and
managing our newly acquired companies. We may not be able to successfully manage
our business to achieve or maintain profitability of any of our individual
Internet service providers, or overall. In addition, our pro forma financial
results cover periods when we did not control or manage our Internet service
providers and may not be indicative of our future financial results.



                                       20
<PAGE>   23


OUR GROWTH BY ACQUISITIONS STRATEGY IS RISKY.

         Our business strategy depends largely on our ability to expand into new
markets and enhance our presence in our existing markets by acquiring additional
Web/Internet service providers and telecommunications providers that meet our
financial, geographic and other acquisition criteria. Although our acquisition
strategy may provide opportunities for rapid growth, we will face numerous
risks, including the following:

         o        difficulty in combining newly acquired operations, technology
                  and personnel;

         o        loss of subscribers as a result of ownership or management
                  changes;

         o        failure of acquired businesses to achieve expected results;

         o        diversion of management's attention from existing operations;

         o        possible acquisition of substantial contingent or undisclosed
                  liabilities;

         o        risks of entering markets in which we have no direct prior
                  experience.

We may not be successful in overcoming these risks or any other problems
encountered in connection with future acquisitions.


COMPETING BIDS FOR INTERNET AND TELECOMMUNICATIONS SERVICE PROVIDERS MAY DRIVE
UP PURCHASE PRICES AND LIMIT OUR ABILITY TO CARRY OUT OUR GROWTH STRATEGY.

         Our business strategy depends largely on our ability to expand into new
markets and enhance our presence in our existing markets by acquiring additional
Web/Internet service providers telecommunications providers that meet our
financial, geographic and other acquisition criteria. We believe that
competition from other companies, which seek to acquire and consolidate
Web/Internet service providers and telecommunications providers, is significant
and that acquisition prices may rise with the growth in demand for these
companies in the future. We may not have sufficient financial resources to
afford these higher prices. The potential increase in acquisition prices could
increase the amount of goodwill and other intangibles allocated from the
purchase price for these companies, which could adversely affect our financial
condition, and operating results.


OUR SUCCESS DEPENDS ON OUR ABILITY TO RETAIN RANDY PHILLIPS AND OTHER KEY
PERSONNEL.

         We believe that the related management experience of Randy L Phillips,
our Chairman and CEO is critical to our success in our existing ISP business and
in our growth by acquisition. The loss of his services would have a detrimental
impact on our business. Our



                                       21
<PAGE>   24


success will also depend on our ability to hire and retain other qualified
management, including competent marketing, technical and sales personnel. We may
be unable to locate and hire these personnel. We may also be unable to retain or
integrate the personnel of acquired companies into our operations.


BECAUSE WE WILL DEPEND ON OTHER COMPANIES FOR TELECOMMUNICATIONS PRODUCTS AND
SERVICES, WE MAY EXPERIENCE DELAYS AND INCREASED COSTS IF DEMAND FOR THESE ITEMS
CONTINUES TO INCREASE.

         We will depend on major companies such as Applied Theory, Adelphia
Business Solutions, AT&T, Cisco and Sprint to provide connectivity and equipment
capacity to us. We will also depend on third-party suppliers of hardware
components. As we and other ISPs/ICPs grow, our suppliers will face significant
demand for their products; some of these suppliers may have limited resources
and production capacity. If our suppliers fail to adjust to meet increasing
demand, they may be unable to supply components and products in the quantities,
at the quality levels and at the times required by us, or at all. In addition,
prices for these components and products may increase significantly. If our
suppliers fail to provide equipment and we are unable to develop alternative
sources of supply, we will experience delays and increased costs in expanding
our network.


THE INTERNET SERVICE MARKET CHANGES RAPIDLY AND WE MAY NOT BE SUCCESSFUL IN
ADAPTING TO NEW TECHNOLOGIES OR ALTERNATIVE INTERNET ACCESS SYSTEMS.

         Our industry is characterized by rapidly changing technology,
constantly evolving industry standards, emerging competition and frequent new
service information. We are unable to predict whether we will have the necessary
resources to adapt to this changing marketplace. For example, our existing ISP
and likely ISP/ICP targets provide Internet access and communications services
across telephone lines to computers. If the Internet becomes easily accessible
by screen-based telephones, television or other electronic devices, or if the
means of delivery changes to satellite or other wireless technology, we may need
to change our network design and develop new technology. Our pursuit of these
technological advances would require substantial time and expense. We cannot
assure you that we will be successful in adapting our business to alternative
access systems or that new technologies will be available or affordable for us.


WE MAY BECOME SUBJECT TO GOVERNMENT REGULATION WHICH COULD DECREASE OUR REVENUES
AND INCREASE OUR COSTS.

         As an ISP, we are not subject to direct regulation by the Federal
Communications Commission or any other governmental agency, other than the
regulations applicable to



                                       22
<PAGE>   25


businesses generally. However, we could become subject to the Federal
Communications Commission or other regulatory agency regulation especially as
Internet services and telecommunication services converge. We will become
subject to certain of these regulations when we complete and obtain approval of
our planned applications for "CLEC status/licenses," Changes in the regulatory
environment could decrease our revenue and increase our costs. For example, the
Federal Communications Commission may decide that Internet-based telephone
services should be subject to pay carrier access charges on the same basis as
traditional telecommunications companies

         The Federal Telecommunications Act of 1996 imposed fines on Internet
service providers, in part, for providing access to indecent and obscene
services. The United States Supreme Court found this part of the Federal
Telecommunications Act of 1996 unconstitutional in June of 1997. However, on
March 12, 1998, the Senate Commerce Committee approved two bills that attempt to
reconstruct these unconstitutional provisions. Although it is too early to
determine the ultimate course of these bills, and to evaluate the
constitutionality of the proposals, these provisions, if enacted and upheld,
could expose us to liabilities.

         Additional laws and regulations may be adopted with respect to the
Internet, covering issues such as Universal Service Fund support payments,
content, user privacy, pricing, libel, obscene material, indecency, gambling,
intellectual property protection and infringement, technology export, and other
controls. Other federal Internet-related legislation has been introduced which
may limit commerce and discourse on the Internet. The Federal Communications
Commission currently is considering:

         o        whether Internet service providers are regulated
                  telecommunications providers;

         o        whether Internet service providers are required to contribute
                  to the Universal Service Fund; and

         o        how various companies in the Internet and telecommunications
                  industries should be classified.


WE MAY FACE POTENTIAL LIABILITY FOR INFORMATION DISSEMINATED OVER OUR NETWORK.

         The law relating to liability of Internet service providers for
information carried on or disseminated through their network is unsettled.
Companies like ours face potential liability for the actions of subscribers and
others using our systems, including liability for infringement of intellectual
property rights, rights of publicity, defamation, libel and criminal activity
including transmission of obscene materials. As the law in this area develops,
our potential liability for information carried on or disseminated through our
network could require us to implement measures to reduce our exposure to this
liability, which may require the



                                       23
<PAGE>   26


expenditure of substantial resources or the discontinuation of some product or
service offerings, any of which could be detrimental to our business, financial
condition and results of operation.


OUR SYSTEMS MAY BE VULNERABLE TO SECURITY RISKS OR UNINTENTIONAL INTERRUPTIONS
IN SERVICE.

         Our systems will be vulnerable to computer viruses, sabotage,
unauthorized access and other intentional or accidental actions of Internet
users, subscribers, employees or others, which could result in temporary or
prolonged delays in providing Internet-related service. Unauthorized access
could also jeopardize confidential information of our customers stored in our or
the customer's computer systems, which may deter potential subscribers and
result in liability claims against us. Fixing problems caused by computer
viruses or other inappropriate uses or security breaches may require
interruptions, delays, or stops in service to our subscribers. Until more
comprehensive and cost-effective security technologies are developed, the
security and privacy concerns of existing and potential customers may inhibit
the growth of the Internet service industry in general, and our customer base
and revenues in particular.

         Our business depends and will continue to depend on our ability to
deliver high quality uninterrupted access to the Internet and/or other
communications services interconnections. However, there is a risk that our
services will be interrupted as a result of:

         o        network equipment damage caused by natural disasters like
                  earthquakes and fires;

         o        hardware failures at our operational centers;

         o        increased stress on network hardware and traffic management
                  systems;

         o        local power losses or other telecommunications systems
                  failures; and

         o        capacity constraints either at a particular telecommunications
                  facility or system wide.

         Any system failure that causes interruption in our service,
particularly during our early stages of development, could have a negative
effect on our business, financial condition and results of operations.


OUR NETWORK AND SYSTEM

NETWORK INFRASTRUCTURE

         Our telecommunications network currently is comprised of leased
high-speed data lines and two POPs, which allow Internet access throughout
Upstate New York State. These POPs permit customers in their service areas to
access the Internet by making a local telephone



                                       24
<PAGE>   27


call from a modem connected to their computers. We currently support a variety
of modems, including 33.6 and V90 Kbps, at both of our POPs.

         Our network is monitored 24 hours a day, seven days a week by us from
our NOC in Syracuse, New York. The NOC provides network monitoring, performance
support and traffic management. It also furnishes real-time network status
updates to our technical support and customer service staff and assists with
problem resolution. Our technology team monitors and upgrades our network
technology when necessary. Access to our NOC is limited to security personnel
and technical team members.

         Our network equipment receives conditioned, or regulated, power to
protect it from damaging voltage spikes and brownouts. Backup power systems
automatically supply emergency power to our network equipment in the event of a
total power outage. Our NOC contains a separate, dedicated industrial-specified
air conditioner to reduce the heat generated by our equipment in order to
prevent shut downs and the overheating of critical equipment and to allow our
servers to operate at peak efficiency.

         Using a phased approach, we are now integrating our local network into
a single, unified network with local and regional components. The specific phase
one plan will connect networks in close geographic proximity to form a regional
network with high speed, redundant Internet connections. Each regional network
will have network connectivity to our planned data centers. Dual ATM/IP network
will allow us to maintain cost effective and consistent connectivity to vital
subscriber services located at our data centers.

         When fully integrated, our network will permit the implementation of a
central, highly scalable server architecture. We are currently in contract
negotiations with several telecommunications carriers to procure regional
contracts for upstream Internet connectivity, regional ATM/IP network
connectivity and regional network connectivity. The contracts, in their current
form, will reduce network costs per subscriber in several areas, and allow us to
respond quickly to new business requirements for network connectivity.


WE DEPEND UPON OUR NETWORK AND FACILITIES INFRASTRUCTURE.

         Our success depends upon our ability to implement, expand and adapt our
network and data center infrastructure and support services to accommodate an
increasing amount of data traffic and evolving customer requirements at an
acceptable cost. This has required and will continue to require that we enter
into agreements with providers of infrastructure capacity, equipment, facilities
and support services on an ongoing basis. We cannot assure you that any of these
agreements can be obtained on satisfactory terms and conditions. We also
anticipate that future expansions and adaptations of our network infrastructure
and data center facilities may be necessary in order to respond to growth in the
number of customers served, increased demands to transmit and host larger
amounts of data and more complex applications, and changes to our customers'
product and service requirements.



                                       25
<PAGE>   28


This will require substantial financial, operational and managerial resources.
In addition, if we do not attract customers to new data centers in a timely
manner, or at all, our business would be adversely affected. We cannot assure
you that we will be able to expand or adapt our network infrastructure to meet
the industry's evolving standards or our customers' growing demands and changing
requirements on a timely or cost-effective basis, or at all.


OUR NETWORK OR DATA CENTERS COULD FAIL, WHICH COULD NEGATIVELY IMPACT OUR
REVENUES.

         Our success depends upon our ability to deliver reliable, high-speed
access to the Internet and telecommunications interconnections, and upon the
ability and willingness of our telecommunications providers to deliver reliable,
high-speed telecommunications service through their networks. Our customers
often have business-critical and confidential information in the Web sites we
host for them, so we also must provide a reliable and secure platform for our
Web hosting services, in a robust, reliable and secure physical environment. Our
network and facilities, and other networks and facilities providing services to
us, are vulnerable to damage, unauthorized access, or cessation of operations
from human error and tampering, breaches of security, fires, earthquakes, severe
storms, power losses, telecommunications failures, software defects, intentional
acts of vandalism including computer viruses, and similar events, particularly
if the events occur within a high traffic location of the network or at one of
our data centers. A significant portion of our computer equipment, including
components critical to the operation of our regional backbone, is located at our
NOC in Syracuse, New York. Occasionally, we experience temporary outages and
service interruptions in these facilities as a result of various events and
factors. We believe that this type of service interruption is not abnormal in
the industry. However, the occurrence of a natural disaster or other
unanticipated problems at the NOC, key sites at which we locate routers,
switches and other computer equipment which make up the backbone of our network
infrastructure, or at one or more of our data centers, could substantially
impact our business. Furthermore, the failure of an individual POP would result
in interruption of service to the customers served by such POP until necessary
repairs were effected or replacement equipment was installed.

         We have designed, deployed and are constantly upgrading our network
infrastructure to minimize the risk of such system failure. In addition, we
engage in capacity planning and perform field-testing before integrating new and
emerging technology into the network. Nonetheless, we cannot assure you that we
will not experience failures or shutdowns relating to individual facilities or
even catastrophic failure of the entire network. Despite precautions we have
taken, a natural disaster or other unanticipated problems at our NOC or POPs
could result in interruptions in our services or significant damage to customer
equipment. Any damage to or failure of our systems or service providers could
result in reductions in, or terminations of, services supplied to our customers,
which could have a material adverse effect on our business.



                                       26
<PAGE>   29


ALTHOUGH WE HAVE IMPLEMENTED NETWORK SECURITY MEASURES, OUR NETWORK MAY
EXPERIENCE SECURITY BREACHES.

         We have implemented various network security measures, such as limiting
physical and network access to our routers. Nonetheless, we cannot assure you
that our network infrastructure will not be vulnerable to human error,
intentional acts of vandalism, including computer viruses, break-ins and similar
security breaches and disruptive problems caused by our customers or other
Internet users. Computer viruses, break-ins or other problems caused by third
parties could lead to interruptions, delays or cessation in service to our
customers. Such incidents could deter potential customers and adversely affect
existing customer relationships.

         Security problems represent an ongoing threat to public and private
data networks. Attacks upon the security of Internet sites and infrastructure
continue to be reported with highly public and visible ramifications to some of
the largest and most visited commercial Web sites. Inappropriate use of the
network by third parties could potentially jeopardize the security of
confidential information stored in our computer systems and our customer's
computer systems. We may face liability and may lose potential subscribers as a
result. Although we intend to continue to implement industry-standard security
measures, such measures occasionally have been circumvented in the past, and we
cannot assure you that our security measures will not be circumvented in the
future. Addressing problems caused by computer viruses, break-ins or other
problems caused by third parties could have a material adverse effect on us, and
the cost of eliminating these security breaches could be prohibitively
expensive.


PROVIDING SERVICES TO CUSTOMERS WITH MISSION-CRITICAL WEB SITES AND WEB-BASED
APPLICATIONS COULD POTENTIALLY EXPOSE US TO LAWSUITS FOR CUSTOMERS LOST PROFITS
OR OTHER DAMAGES.

         Because our Web site and application hosting services are critical to
many of our customers' businesses, any significant security breaches or
interruption in our services could result in claims of lost profits or other
indirect or consequential damages by our customers. Our customers are required
as a general matter to sign server order forms that incorporate our standard
terms and conditions. Although these terms disclaim our liability for any such
damages, a customer could still bring a lawsuit against us claiming lost profits
or other consequential damages as the result of a service interruption or other
Web site or application problems that the customer may ascribe to us. There can
be no assurance a court would enforce any limitations on our liability, and the
outcome of any lawsuit would depend on the specific facts of the case and legal
and policy considerations. We also believe we would have meritorious defenses to
any such claims, but there can be no assurance we would prevail. In such cases,
we could be liable for substantial damage awards. Such damage awards might
exceed our liability insurance by unknown but significant amounts, which would
seriously harm our business.

         Such claims, regardless of their ultimate outcome, could result in
costly litigation and adversely affect our business or reputation or our ability
to attract and retain customers.



                                       27
<PAGE>   30


Moreover, the security and privacy concerns of existing and potential customers
may inhibit the growth of the Internet service industry and our customer base
and revenues.


WE DEPEND ON THE INTERNET AND INTERNET INFRASTRUCTURE DEVELOPMENT.

         Our products and services are targeted toward users of the Internet,
which has experienced rapid growth. Critical issues concerning the commercial
use of the Internet remain unresolved and may impact the growth of Internet use,
especially in our target business market. Despite growing interest in the many
commercial uses of the Internet, many businesses have been deterred from
purchasing Internet access services for a number of reasons, including:

         o        inconsistent quality of service;

         o        lack of availability of cost-effective, high-speed options;

         o        a limited number of local access points for corporate users;

         o        an inability to integrate business applications on the
                  Internet;

         o        the need to deal with multiple and frequently incompatible
                  vendors;

         o        inadequate protection of the confidentiality of stored data
                  and information moving across the Internet; and

         o        a lack of tools to simplify Internet access and use.

         In particular, numerous published reports have indicated that the
perceived lack of security of commercial data, such as credit card numbers, has
significantly impeded commercial use of the Internet to date. There can be no
assurance that encryption or other technologies will satisfactorily address
these security concerns. Published reports have also indicated that capacity
constraints caused by growth in the use of the Internet may, unless resolved,
impede further development of the Internet to the extent that users experience
delays, transmission errors and other difficulties. The adoption of the Internet
for commerce and communication, particularly by those individuals and
enterprises that have historically relied upon alternative means of commerce and
communication, generally requires the understanding and acceptance of a new way
of conducting business and exchanging information. In particular, enterprises
that have already invested substantial resources in other means of conducting
commerce and exchanging information may be particularly reluctant or slow to
adopt a new strategy that may make their existing personnel and infrastructure
obsolete.

         If the market for Internet access services fails to develop, develops
more slowly than expected, or becomes saturated with competitors, or if Internet
access and services are not



                                       28
<PAGE>   31


broadly accepted, our business, financial condition and results of operations
will be materially adversely affected. In addition, the rate of development and
adoption of the Internet has been slower outside the United States and the cost
of transmitting data over the Internet has been higher. The recent growth in the
use of the Internet has caused frequent periods of performance degradation,
requiring the upgrade of routers and switches, telecommunications links and
other components forming the infrastructure of the Internet by providers and
other organizations with links to the Internet. Any perceived degradation in the
performance of the Internet as a whole could undermine the benefits of our
services. Consequently, the emergence and growth of the market for our services
is dependent on improvements being made to the entire Internet infrastructure to
alleviate overloading and congestion.


WE MUST KEEP UP WITH TECHNOLOGY TRENDS AND EVOLVING INDUSTRY STANDARDS.

         The market for Internet access and related services is characterized by
rapidly changing technology, evolving industry standards, changes in customer
needs and frequent new product and service introductions. Our future success
will depend, in part, on our ability to effective leading technologies, continue
to develop our technical expertise, enhance our current services, to develop new
products and services that meet changing customer needs and influence and
respond to emerging industry standards and other technological changes on a
timely and cost-effective basis. We cannot assure you that we will be successful
in accomplishing these tasks or that such new technologies or enhancements will
achieve market acceptance. We believe that our ability to compete Successfully
is also dependent upon the continued compatibility and interoperability of our
services with products and architectures offered by various vendors. We cannot
assure you that we will be able to effectively address the compatibility and
interoperability issues raised by technological changes or new industry
standards. In addition, we cannot assure you that services or technologies
developed by others will not render our services or technology uncompetitive or
obsolete. For example, our services rely on the continued widespread commercial
use of transmission control protocol/Internet protocol. Alternative open and
proprietary protocol standards that compete with transmission control
protocol/Internet protocol, including proprietary protocols developed by IBM and
Novell, Inc., have been or are being developed. The failure of the market for
business-related Internet solutions to continue to develop would adversely
impact our business financial condition and results of operations.


WE FACE POTENTIAL COSTS AND LIABILITY IN CONNECTION WITH THE INFORMATION WE HOST
AND THAT IS DISSEMINATED THROUGH OUR NETWORK.

         We are not currently subject to direct federal, state or local
government regulation, other than regulations applicable to businesses
generally. There currently is only a small body of laws and regulations directly
applicable to the provision of access to or commerce services on the Internet.
For example, in late 1998, Congress enacted the Digital Millennium Copyright
Act, which includes a limitation on liability of on-line service providers for
copyright



                                       29
<PAGE>   32


infringement for transmitting, routing or providing connections, storage or
caching of data at the direction of a user. This limitation on liability applies
if the service provider has no actual knowledge that the particular data
infringed on third party intellectual property rights and if certain other
conditions are met. Because this law is relatively new, we are not sure how it
will be applied to limit any liability that we may face in the future for
possible copyright infringement-related issues that arise in connection with the
services we provide. This law also requires that service providers follow
certain notice and take-down procedures with respect to allegedly infringing
materials in order to take advantage of the limitation on liability provided by
the Act. We are in the process of implementing these sorts of procedures across
our operations. Certain provisions of the Communications Decency Act, which
imposes criminal penalties for using an interactive computer service for
transmitting obscene or indecent communications, have been found
unconstitutional by the U.S. Supreme Court.

         Other federal legislation, that was enacted to require limitations on
access to pornography and other material deemed harmful to minors was determined
to violate the First Amendment, but that decision is on appeal. We are unable to
predict the outcome of this appeal or whether other similar legislation will be
enacted or enforced. In addition, the Federal Trade Commission has adopted final
rules that are to become effective April 21, 2000, regarding the Children's
Online Privacy Protection Act's prohibition of unfair and deceptive acts and
practices in connection with the collection and use of personal information from
and about children on the Internet. The rules provide that Web sites directed at
children under 13 years of age must obtain verifiable parental consent before
collecting personal information from children and must take other measures
intended to safeguard children's privacy. Additional requirements may be imposed
on Web site operations relating to the use, dissemination and collection of
personal information. We have adopted a standard acceptable use policy that
applies to all of our customers, that prohibits them from posting, transmitting,
or storing material on or through our services that we determine to be in
violation of third party intellectual property rights. Our acceptable use policy
also imposes other restrictions on our customers in connection with the use of
our services, including prohibitions on illegal activity or other activity that
is destructive or potentially destructive to our business or reputation or to
our customers. We initially designed and continue to evolve our acceptable use
policy to promote the security, reliability and privacy of our systems and
network. However, we cannot assure that our policy will accomplish this goal or
shield us from liability under the Digital Millennium Copyright Act or otherwise
with respect to the activities of, or the content hosted or transmitted by, our
customers or other Internet users.

         Because of the increased popularity and use of the Internet, it is
likely that a number of additional laws and regulations may be adopted at the
federal, state and local levels, governing such issues as user privacy, freedom
of expression, pricing, taxation, advertising, intellectual property rights,
information security and the convergence of traditional telecommunications
services with on-line services and Internet communications. Legislation
addressing such things as on-line security, privacy, mass unsolicited commercial
e-mail messages, and the regulation of sales of products, such as
pharmaceuticals, firearms, and drug paraphernalia and gambling is proposed
regularly in many states and in Congress. The implementation of any such
legislation could



                                       30
<PAGE>   33


result in direct or indirect regulation of on-line service providers generally,
including us. In that case, it is likely that we would have to implement
additional policies and procedures designed to assure our compliance with the
particular legislation.

         The imposition on Internet service providers or Web hosting providers
of potential liability for materials carried on or disseminated through their
systems could require us to implement measures to reduce our exposure to such
liability. These measures may require that we spend substantial resources or
discontinue certain product or service offerings. Any of these actions could
have a material adverse effect on our business, financial condition and results
of operations. Further, the adoption of such laws and regulations might decrease
growth of the Internet generally, which in turn could negatively impact our
business. In addition, applicability to the Internet of existing laws governing
such things as property ownership, intellectual property rights, taxation,
obscenity, defamation, libel and personal property is uncertain. Because so many
of the existing laws on these topics were adopted prior to the advent of the
Internet and related technologies, as a result they do not contemplate, address
or readily apply to the unique issues that the Internet and its use create.

         The law relating to the regulation and liability of Internet access
providers in relation to information carried or disseminated is also developing
in other countries. For example, the European Union has enacted its own data
privacy regulations, and Australia has imposed new obligations on Internet
service providers to block access to certain types of content. Decisions, laws,
regulations and other activities regarding regulation and content liability may
significantly affect the development and profitability of companies offering
on-line and Internet access services.


OUR SUCCESS DEPENDS ON OUR ABILITY TO SUCCESSFULLY INTEGRATE THE OPERATIONS WE
HAVE ACQUIRED AND MAY ACQUIRE IN THE FUTURE.

         A key element of our business strategy is to grow through acquisitions,
and our success depends in large part on our ability to integrate the operations
and management of the independent Internet operations we have acquired and those
we may acquire in the future. To integrate our newly acquired Internet
operations successfully, we must:

         o        install and standardize adequate operational and control
                  systems;

         o        deploy standard equipment and telecommunications facilities;

         o        employ qualified personnel to provide technical and marketing
                  support in new as well as existing locations;

         o        eliminate redundancies in overlapping network systems and
                  personnel;

         o        incorporate acquired technology and products into our existing
                  service offerings;



                                       31
<PAGE>   34


         o        implement and maintain uniform standards, procedures and
                  policies;

         o        standardize marketing and sales efforts under the common
                  e.NVIZION brand; and

         o        continue the expansion of our managerial, operational,
                  technical and financial resources.

         o        The process of consolidating and integrating acquired
                  operations takes a significant period of time, places a
                  significant strain on our managerial, operating and financial
                  resources, and could prove to be even more expensive and
                  time-consuming than we have predicted. We may increase
                  expenditures in order to accelerate the integration and
                  consolidation process with the goal of achieving longer-term
                  cost savings and improved profitability.

         The key integration challenges we face in connection with our
acquisitions include:

         o        acquired operations, facilities, equipment, service offerings,
                  networks, technologies, brand names and sales, marketing and
                  service development efforts may not be effectively integrated
                  with our existing operations;

         o        anticipated cost savings and operational benefits may not be
                  realized;

         o        in the course of integrating an acquired operation, we may
                  discover facts or circumstances that we did not know at the
                  time of the acquisition that adversely impact our business or
                  operations, or make the integration more difficult or
                  expensive;

         o        integration efforts may divert our resources from our existing
                  business;

         o        standards, controls, procedures and policies may not be
                  maintained;

         o        employees who are key to the acquired operations may choose to
                  leave; and

         o        we may experience unforeseen delays and expenses.


WE FACE RISKS ASSOCIATED WITH ACQUISITIONS GENERALLY.

         We expect to continue our acquisition and expansion strategy. Future
acquisitions could materially adversely affect our operating results as a result
of dilutive issuances of equity securities and the incurrence of additional
debt. In addition, the purchase price for many of these acquired businesses
likely will significantly exceed the current fair value of the net identifiable
assets of the acquired businesses. As a result, material goodwill and other
intangible assets would be required to be recorded which would result in
significant amortization charges in future



                                       32
<PAGE>   35


periods. These charges, in addition to the financial impact of such
acquisitions, could have a material adverse effect on our business, financial
condition and results of operations.


THE FINANCIAL INFORMATION CONCERNING BUSINESSES WE ACQUIRE MAY BE INACCURATE.

         A number of the Internet businesses we have acquired did not have
audited financial statements, and this may be true for subsequent acquisitions
as well. These companies often have varying degrees of internal controls and
detailed financial information, and the financial information we are able to
provide for recently completed acquisitions may not be audited. Our subsequent
audits of those acquired companies may reveal significant issues with respect to
revenues, expenses and liabilities, contingent or otherwise.


OUR OPERATING RESULTS FLUCTUATE DUE TO A VARIETY OF FACTORS AND ARE NOT
NECESSARILY A MEANINGFUL INDICATOR OF FUTURE PERFORMANCE.

         Our operating results have fluctuated in the past and may fluctuate
significantly in the future depending upon a variety of factors, including the
incurrence of capital costs and the introduction of new products and services.
Additional factors that may contribute to variability of operating results
include:

         o        the pricing and mix of services we offer;

         o        our customer retention rate;

         o        changes in pricing policies and product offerings by our
                  competitors

         o        one-time costs associated with acquisitions and the
                  consolidation and integration of our acquired operations; and

         o        general telecommunications services' performance and
                  availability.

         We also have experienced seasonal variation in Internet use.
Accordingly, our revenue streams may fluctuate. In response to competitive
pressures, we may take certain pricing or marketing actions that could have a
material adverse effect on our business, financial condition and results of
operations. Therefore, we believe that period-to-period comparisons of our
operating results are not necessarily meaningful and cannot be relied upon as
indicators of future performance. If our operating results in any future period
fall below the expectations of securities analysts and investors, the market
price of our securities would likely decline.

         We depend on key personnel and could be affected by the loss of their
services because of the limited number of qualified people in our industry.
Competition for qualified



                                       33
<PAGE>   36


employees and personnel in the Internet services industry is intense and there
are a limited number of people with knowledge of and experience in the Internet
service industry. The process of locating personnel with the combination of
skills and attributes required to carry out our strategies is often lengthy. Our
success depends to a significant degree upon our ability to attract and retain
qualified management, technical, marketing and sales personnel and upon the
continued contributions of such people. We cannot assure you that we will be
successful in attracting and retaining qualified executives and personnel. In
addition, our employees may voluntarily terminate their employment with us at
any time. The loss of the services of key personnel or our failure to attract
additional qualified personnel could have a material adverse effect on our
business, financial condition and results of operations.


FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET COULD ADVERSELY AFFECT OUR
STOCK PRICE AND OUR ABILITY TO RAISE FUNDS IN NEW EQUITY OFFERINGS.

         No prediction can be made as to the effect, if any, that future sales
of shares of common stock or the availability for future sales of shares of
common stock or securities convertible into or exercisable for our common stock
will have on the market price of common stock prevailing from time to time.
Sale, or the availability for sale, of substantial amounts of common stock by
existing stockholders under Rule 144, through the exercise of registration
rights or the issuance of shares of common stock upon the exercise of stock
options or warrants, or the conversion of our convertible preferred stock, or
the perception that such sales or issuances could occur, could adversely affect
prevailing market prices for our common stock and could materially impair our
future ability to raise capital through an offering of equity securities.


THE MARKET PRICE AND TRADING VOLUME OF OUR COMMON STOCK ARE VOLATILE.

         The market price of our common stock has fluctuated significantly in
the past, and is likely to continue to be highly volatile. In addition, the
trading volume in our common stock has fluctuated, and significant price
variations can occur as a result. We cannot assure you that the market price of
our common stock will not fluctuate or decline significantly in the future. In
addition, the U.S. equity markets have from time to time experienced significant
price and volume fluctuations that have particularly affected the market prices
for the stocks of Internet-related companies, specifically and technology and
telecommunications companies generally. These broad market fluctuations may
materially adversely affect the market price of our common stock in the future.
Such variations may be the result of changes in our business, operations or
prospects, announcements of technological innovations and new products by
competitors, new contractual relationships with strategic partners by us or our
competitors, proposed acquisitions by us or our competitors, financial results
that fail to meet public market analyst expectations, regulatory considerations
and domestic and international market and economic conditions.



                                       34
<PAGE>   37


WE MAY BE UNABLE TO RAISE ADDITIONAL FUNDS THAT WE WILL NEED TO REMAIN
COMPETITIVE.

         We depend on a number of different financing sources to fund our growth
and continued losses from operations. However, we cannot assure you that we will
be able to raise such funds on favorable terms or at all. In the event that we
are unable to obtain such additional funds on acceptable terms or otherwise, we
may be unable or determine not to take advantage of new opportunities or take
other actions that otherwise might be important to our operations.

         We expect to make significant capital expenditures in order to maintain
our competitive position and continue to meet the increasing demands for service
quality, availability and competitive pricing. In addition to our continuing
acquisition efforts, we currently expect that our significant capital
expenditures will include the following:

         o        network equipment;

         o        network operating and data centers;

         o        network monitoring equipment;

         o        information technology systems; and

         o        customer support systems.

         We believe that we will have a reasonable degree of flexibility to
adjust the amount and timing of these capital expenditures. However, we may need
to raise additional funds in order to take advantage of unanticipated
opportunities, such as acquisition opportunities that may arise in the U.S. and
internationally. In addition, we may need to raise additional funds to develop
new products or otherwise respond to changing business conditions or
unanticipated competitive pressures. We may be required to delay or abandon some
of our planned future expansion or expenditures if we fail to raise sufficient
funds.


EMPLOYEES

         As of June 30, 2000, we had 5 employees in addition to our 1 executive
officer. None of our employees are represented by a union. We consider our
employee relations to be good.



                                       35


<PAGE>   38
ITEM 2. DESCRIPTION OF PROPERTIES

                  We maintain a virtual corporate headquarters in Denver,
Colorado, at 600 17th Street, Suite 950 South under a month-to-month
license/service agreement which renews automatically each month. Our
wholly-owned operating subsidiary, e.NVIZION WEB SOLUTIONS LTD. maintains its
operating headquarters in Syracuse, New York, at 290 Elwood Davis Road, Suite
290 under a license/service agreement which expires January 31, 2001. All
executive, sales and marketing and administrative functions relating to the
Company's current operations are performed at this location.

                  WEB SOLUTIONS also maintains an approximately 900 square foot
network operations center in Syracuse, New York, at 109 South Warren Street,
Suite 312 under a lease which expires June 30, 2003. All network operations
functions relating to our current operations are performed at this location. WEB
SOLUTIONS also maintains two Points-of-Presence in Syracuse, New York and
Amherst, New York (a suburb of Buffalo, New York) under co-location agreements
with Adelphia Business Solutions, WEB SOLUTIONS' primary teleco provider.


ITEM 3. LEGAL PROCEEDINGS

                  No legal proceedings of a material nature to which e.NVIZION
is a party were pending during the reporting period, and we know of no legal
proceedings of a material nature, pending or threatened, or judgments entered
against any director or officer of e.NVIZION in his capacity as such.


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

                  A special meeting of shareholders was held on June 16, 2000 to
consider approving an Amendment to the our Articles of Incorporation to change
our name from OTC America, Inc. to e.NVIZION COMMUNICATIONS GROUP LTD. As of
April 14, 2000, the record date for the determination of shareholders entitled
to notice of and to vote at the special meeting, there were outstanding
approximately 10,900,096 shares of common stock of the Company. The Company had
no other class of voting securities outstanding and eligible to vote at the
special meeting.

                  The meeting was attended by shareholders who as of April, 14,
2000 held 7,656,640 shares of the Company's outstanding common stock. 7,656,640
shares voted in favor of the Amendment to our Articles of Incorporation and
therefore to change our name from OTC America, Inc. to e.NVIZION COMMUNICATIONS
GROUP LTD. There were no votes cast opposition.




                                       36
<PAGE>   39

PART II.


ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

                  (a) Principal Market or Markets. The Company's stock is traded
on the over-the-counter market, and is presently quoted on the NASD OTC Bulletin
Board under the symbol "ENCG". The following table sets forth the high and low
bid prices of the Common Stock during the two years ended June 30, 1999 and June
30, 2000 as quoted by the NASD OTC Bulletin Board. The prices reflect
inter-dealer quotations, without retail mark-up, mark-down or commissions, and
may not represent prices at which actual transactions occurred.

<TABLE>
<CAPTION>
           Quarter Ended            High ($)(1)             Low ($)(1)
<S>                                 <C>                     <C>
September 30, 1998                     .2500                  .0833
December 31, 1998                      .1667                  .1667
March 31, 1999                         .0017                  .0017
June 30, 1999                          .0017                  .0017

September 30, 1999                     .0017                  .0017
December 31, 1999                      .1667                  .0017
March 31, 2000                          8.33                  .0267
June 30, 2000                          1.667                   .354
</TABLE>

(1) The Company's fair market values indicated above have been adjusted to
reflect a 1 for 100 reverse stock split which was effective in December 1998, a
4 for 1 stock split which was effective in February 2000 and a 3 for 1 stock
dividend which was effective in September 2000.

         (b) Approximate Number of Holders of Common Stock. The number of
holders of record of our common stock at November 15, 2000 was approximately
472.

         (c) Dividends. Holders of our common stock are entitled to receive such
dividends as may be declared by the Board of Directors. We have not paid
dividends on our common stock and do not anticipate paying dividends in the
foreseeable future.

         (d) Recent Sales of Unregistered Securities.

         During the year ended June 30, 2000 we issued 4,900,000 shares of our
common stock in various transactions as set forth below pursuant to an exemption
from registration provided by Section (4)(2) of the Securities Act of 1933. This
disclosure gives effect to the four shares for one share forward split which was
accomplished during February 2000.


         1.    On or about October 1999, the Company issued 2,600,000 shares to
               Randy L. Phillips, our Chief Executive Officer as reimbursement
               for expenses incurred on behalf of the Company.

         2.    Also on or about October 4, 1999, the Company issued 400,000
               shares of its common stock to Richard T. Bruno, our Executive
               Vice President, Secretary and General Counsel, as payment for
               legal services rendered.

         3.    On or about October 15, 1999, the Company issued 600,000 shares
               of our common stock to Felipe Aragon in exchange for the
               acquisition of certain property and equipment.

         4.    In a series of transactions concluded on or about February 25,
               2000, the Company acquired all of the issued and outstanding
               shares of Extelligent Web Solutions, Inc. in exchange for a total
               of 1,300,000 shares of our common stock issued to the three
               shareholders of Extelligent.

         5.    On or about March 3, 2000, the Company issued 40,000 shares of
               its common stock to Lara & Lee, LLC. in exchange for consulting
               services.

         6.    On or about June 16, 2000, the Company issued 2,000,000 shares of
               its common stock to the Dixon Family Remainder Trust in exchange
               for all of our issued and outstanding preferred stock acquired by
               the Dixon Family Remainder Trust in May of 1999.



                                       37
<PAGE>   40

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

INTRODUCTION

                  The financial information discussed below is from the
Company's audited Consolidated Financial Statements included in this Form
10-KSB. This information should be read in conjunction with these Statements and
the Notes thereto. Also of critical importance, is to read the Statements and
Notes and the following discussion in the context that: (1) in the year ended
June 30, 1999, the Company was still a "development stage company," which had no
operations and no revenue from operations; (2) while the Company emerged from
the development stage during the year ended June 30, 2000, it did not have
operations or operating revenue, costs and expenses until March 1, 2000, meaning
the Financial Statements report audited results of operations for only four (4)
months, March 1, 2000 through June 30, 2000; and (3) the Financial Statements
include both capitalized and non-capitalized extraordinary expenses related to
the Company's February 29, 2000 acquisition of e.NVIZION WEB SOLUTIONS LTD.
("WEB SOLUTIONS"), which is the Company's wholly-owned ISP subsidiary.

                  As disclosed elsewhere in this Form 10-KSB and in the
Financial Statements and Notes thereto, the acquisition of WEB SOLUTIONS on
February 29, 2000 was a "related party transaction." WEB SOLUTIONS was acquired
by parties related to the Company on November 5, 1999, and effectively became
subject to the Company's plan of operations on that date. The table below, which
was compiled from the audited financial statements of WEB SOLUTIONS' predecessor
for the year ended December 31, 1999, and its books of account from November 5,
1999 through June 30, 2000, discloses additional information important to
management's discussion and analysis of the financial condition and results of
operations of the Company not only for the year ended June 30, 2000, and looking
forward:


                             e.NVIZION WEB SOLUTIONS
                  ADDITIONAL ANALYSIS OF RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                        4 MONTHS ENDED   8 MONTHS ENDED      MONTHLY
                          06/30/2000       06/30/2000        AVERAGE
                           AUDITED         UNAUDITED         AUDITED
                          ---------        ---------        ---------
<S>                     <C>              <C>                <C>
   Revenue                $ 550,940        $ 873,668        $ 137,735
   Operating Expenses     $ 568,399        $ 935,308        $ 142,100
   Net Loss               $ (17,459)       $ (61,640)       $  (4,365)
   Interest Expense       $  (3,773)(1)    $  (6,236)(1)    $    (943)(1)
   Taxes                  $      --        $      --        $      --
   Depreciation           $ (60,241)       $(120,482)       $ (15,060)
   Amortization           $(180,395)       $(360,790)       $ (45,099)
                          ---------        ---------        ---------
   EBITDA                 $ 226,950(2)     $ 425,868(2)     $  56,738(2)
                          =========        =========        =========
</TABLE>

(1) Interest expense is a cash item.

(2) Represents cash flow from our only operation subsidiary. This historic cash
flow is not adequate to cover the parent's current forebearance fees, interest
expense and current portions of principal which now are due commencing in
January, 2001.




                                       38
<PAGE>   41

REVENUE

                  Through our wholly-owned, operating ISP subsidiary, WEB
SOLUTIONS, we derive revenue primarily from subscriptions and set-up fees
charged to individuals and small businesses for dial-up access to the Internet.
Subscription and set-up fees vary by billing plan within our subscriber base. We
also earn revenue by providing co-location services, dedicated Internet access,
and Web hosting and Web page design services. Finally, we earn revenue in the
form of "reciprocal compensation" from the providers of our leased, dial-up
telephone lines, which is based on the number of minutes our customers use those
lines.

                  Subscription revenue is recognized over the period in which
dial-up Internet Access is provided. The same is true for co-location services,
dedicated Internet Access and Web Hosting services. Fee revenue for set-up
services and Web page design services are recognized as those services are
performed. The Company carries on its balance sheet an item entitled "unearned
revenue," which represents prepaid customer subscriptions. As of June 30, 2000,
unearned revenue was $219,664. "Teleco compensation revenue" is recognized
monthly as reported by the providers of our leased telephone lines. Revenue is
reported "net refunds and allowances," it being our policy to refund prepaid
subscriptions for whole months in which we do not provide Internet access or Web
hosting services. In addition, existing customers receive one month free access
for each new customer they refer to us.

                  During the four months ended June 30, 2000, we earned $424.830
in operating revenue from providing dial-up Internet access to individuals and
small businesses; $126,537 in revenue from teleco compensation; the balance,
0.83% from all other sources combined.

                  We do not anticipate any adverse change in existing revenue.
WEB SOLUTIONS' basic rates for dial-up Internet access and Web hosting are
$9.95/mo. (unlimited access, no set-up fee, four e-mail addresses, 10mb of "our
domain" web space) and $19.95/mo. ($50 one-time set-up fee, 25mb of web space,
two e-mail addresses), respectively. In the markets we serve, we believe these
are the lowest rates available for dial-up Internet access other than "free,"
and also for Web hosting. These rates are substantially less than the rate
charged by national/larger ISPs, e.g., America Online charges $21.95/mo. for
dial-up Internet access. While we do anticipate that teleco "reciprocal
compensation" will decline over time as a result of the re-negotiation of
interconnect and reciprocal compensation agreements under existing
reinterpretations of The Telecommunications Deregulation Act of 1996, our most
important contract in this regard does not expire until November 1, 2001. In
addition, we anticipate that our strategy to become a facilities-based
Competitive Local Exchange Carrier in the areas we offer dial-up Internet
access, will, as a result of cost savings and the creation of other sources of
"teleco revenue," offset decline in telco revenue.

                  Our strategy to increase revenue is three fold: (1)
Aggressively pursue our acquisition strategy which is discussed in detail
elsewhere in this Form 10-KSB, (2) Aggressively pursue the deployment of
broadband Internet access technology and infrastructure so as to be able to
offer higher-margin Internet access and other broadband services. (3)




                                       39
<PAGE>   42

Aggressively pursue the deployment of our own "private" fiber backbone transport
and data center network, which is currently being designed by AT&T Network
Solutions, so as to be able to offer a full suite of bundled and unbundled
communications and Internet services to both existing ISP customers and new
"ICP" customers. "ICP" is the acronym for Integrated Communications Provider.
(4) While the build-out and ramp-up of strategies (2) and (3) proceed,
aggressively market our low cost/high value existing ISP services to potential
customers in our New York State market.

COSTS AND EXPENSES

                  Cost of revenue consisted primarily of the costs of
maintaining sufficient capacity to provide Internet access to our customers. For
an ISP, capacity is a measurement of the ISP's ability to connect subscribers to
the Internet. These costs included:

                  o        The cost of leased routers and access servers and
                           recurring telecommunications costs, including the
                           cost of leased telephone lines to carry customer
                           calls to our points of presence, or POPs;

                  o        The costs associated with leased telephone lines
                           connecting our POPs directly to the Internet or to
                           our operations centers and connecting the operations
                           centers to the Internet; and

                  o        Internet backbone costs, which are the amounts we pay
                           to Internet backbone providers for bandwidth, which
                           allows us to transmit data from the Internet to our
                           customers and allows our customers to transmit data
                           to others on the Internet.

                  We expect the cost of maintaining sufficient Internet access
capacity to increase over time on an absolute basis as our customer base grows.
As we execute our acquisition strategy, we expect, however, to leverage the
combined scale of our ISPs to lower these costs as a percentage of revenue by:

                  o        Negotiating one or more relationships with national
                           backbone providers to connect our ISPs to the
                           Internet;

                  o        Negotiating favorable local loop contracts and
                           establishing co-location arrangements with local
                           exchange carriers;

                  o        Establishing relationships to reduce costs and
                           improve access and reliability for our subscribers;
                           and

                  o        Negotiating discounts with equipment vendors.




                                       40
<PAGE>   43

                  Cost of revenue also consisted of the costs of providing
customer service and technical support to our ISP customers. During the year
ended June 30, 2000, these services were outsourced on a cost per customer basis
to a national provider which provides these services from a national call center
to ISPs throughout the United States.

                  We expect the cost of providing customer service and technical
support to increase over time on an absolute basis to support new customers and
expand existing customers' level and quality of service. New customers tend to
have particularly heavy initial customer service and technical support
requirements. Because we anticipate rapid growth in our customer base to
continue, these costs are expected to comprise an increased percentage of
revenue in the near term. In addition, we intend to implement a customer care
center strategy which will provide customer service and technical support 24
hours a day, seven days a week in all markets we serve. This strategy will also
increase these costs in the near term. In the longer term, and as we execute our
acquisition strategy, we expect, however, to leverage the combined scale of our
ISPs to lower these costs of revenue as a percentage of revenue.

                  For the year ended June 30, 1999, we reported no cost of
revenue, because we had no operations.

                  For the year ended June 30, 2000, we reported costs and
expenses for stock-based compensation, legal fees and stock-based compensation,
consulting fees, which represented in total only 0.83% of the Company's revenue
for the year ended June 30, 2000. These expenses were associated, respectively,
with the acquisition of WEB SOLUTIONS, and our nascent efforts to provide
investment relations services to existing and potential shareholders, potential
sources of debt and equity financing and the general public. In the near term,
we do not anticipate issuing restricted shares of our common stock for either of
these purposes. We will, however, when appropriate and after evaluating all
relevant factors, including the dilution of existing shareholders' holdings,
consider issuing shares in lieu of cash for the payment of costs and expenses.
For the year ended June 30, 1999, we reported no costs or expenses in these
categories.

                  For the year ended June 30, 2000, we reported depreciation and
amortization totaling $647,124. Of this amount, $586,133 was attributable to
amortization primarily related to the amortization of goodwill and customer
lists resulting from the acquisition of WEB SOLUTIONS. Our expense for
amortization is expected to increase as we acquire additional ISPs. Our policy
is to amortize, on a straight-line basis, the portion of the purchase price for
an acquisition attributable to customer lists and goodwill over a three-year
period.

                  For the year ended June 30, 2000, our depreciation expense was
$60,991, primarily attributable to the ISP network/data center infrastructure of
WEB SOLUTIONS. Our policy is to depreciate assets over their estimated useful
lives on a straight-line basis. Our expense for depreciation is expected to
increase as we make capital expenditures to expand our operations. Specifically,
we anticipate that financial resources will be utilized to acquire additional
communications and network equipment and for improvements to technology that
will




                                       41
<PAGE>   44

allow our network to grow to support new and acquired customers, build network
operation and customer care centers, and integrate common billing, customer
service and financial reporting systems.

                  Depreciation and amortization for the year ended June 30, 1999
was $10,643.

                  General and administrative expenses consisted primarily of:

                  o        The salaries, payroll taxes and benefits of our
                           management and administrative employees;

                  o        The cost of consulting and professional fees related
                           to acquisitions (non-capitalized), the integration of
                           acquired entities and legal compliance matters; and

                  o        The cost of such items as advertising and marketing,
                           credit card processing fees, travel and
                           entertainment, equipment and office rental, utilities
                           and other items ordinarily classified as general and
                           administrative expenses.


                  We expect general and administrative expenses to increase over
time on an absolute basis as we grow. Because we expect growth in our customer
base to continue, these expenses are expected to comprise an increased
percentage of revenue in the near term, particularly, as we execute our
acquisition strategy, and it becomes necessary to integrate our operations with
the operations of other ISPs by establishing network operations centers and
customer care centers, and by implementing common billing, customer service and
financial reporting systems. In the longer term, we expect, however, to leverage
the combined scale of our ISPs to lower these expenses as a percentage of
revenue as efficiencies from integration are realized. General and
administrative expenses for the year ended June 30, 1999 were $56,318.

ACQUISITIONS

                  Acquisitions have historically been and will continue to be a
significant part of our growth strategy. In the year ended June 30, 2000, we
completed the acquisition of WEB SOLUTIONS (Formerly, NGP HOLDINGS LTD. dba
A-Znet.com!), an Internet service provider in Syracuse, New York.

                  The acquisition was accounted for using the purchase method of
accounting with the results of the acquisition included in our Consolidated
Financial Statements for the year ended June 30, 2000 from the date of the
acquisition, February 29, 2000. Our acquisition resulted in our recording a
significant intangible asset. As of the year ended June 30, 2000, we had
recorded an intangible asset, denominated "Customer List," in the amount of
$3,855,891, net $121,232 accumulated amortization. This intangible asset is
being amortized over a period of three years.




                                       42
<PAGE>   45

COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 1999 AND 2000

                  Revenue. Revenue from operations increased from $0 for the
year ended June 30, 1999 to $550,940 for the year ended June 30, 2000. The
increase was exclusively due to the acquisition of WEB SOLUTIONS and the
undertaking of its continued operations. We had approximately 11,000 customers
at June 30, 2000 compared to -0- customers at June 30, 1999.

                  Cost of Revenue. For the year ended June 30, 2000, cost of
revenue increased by $125,585. The Company had no cost of revenue in the prior
year. The increase was exclusively due to the acquisition of WEB SOLUTIONS and
the undertaking of its continued operations.

                  Stock-based compensation, legal fees. For the year ended June
30, 2000, stock-based compensation, legal fees increased by $6,000. The Company
granted no comparable compensation in the prior year. The increase was
exclusively due to the acquisition of WEB SOLUTIONS and the undertaking of its
continued operations.

                  Stock-based compensation, consulting fees. For the year ended
June 30, 2000, stock-based compensation, consulting fees increased by $26,668.
The Company granted no comparable compensation in the prior year. The increase
was due to the Company's desire to generate more investor exposure and possible
sources of acquisition and working capital.

                  Related party [expense]. For the year ended June 30, 2000,
related party [expense] was reduced by $7,100 or (100.0)% over the prior year.
The decrease was due to it being unnecessary for the Company to have its then
sole officer and director advance personal funds for to support the Company's
operations.

                  Depreciation and Amortization. For the year ended June
30,2000, depreciation and amortization increased by $636,481 to $647,124. The
increase was primarily due to the acquisition of WEB SOLUTIONS and the
undertaking of its continued operations.

                  General and administrative expenses. For the year ended June
30, 2000, general and administrative expenses increased by $412,656 to $468,974.
The increase was primarily due to the acquisition of WEB SOLUTIONS and the
undertaking of its continued operations.

                  Interest expense. For the year ended June 30,2000, interest
expense increased by $2,323,062 to $2,667,774. $ 2,211,462 of this increase
(82.89% of our total interest expense for the year ended June 30, 2000)
represented the "accretion expense," a non-cash expense, charged to account for
the mandatory redemption provisions of the Company's preferred stock. $450,000
of this increase represented dividends due to the holder of that stock. Together
these charges represented $2,661,462 (99.76% of our total interest expense for
the year ended June 30, 2000).




                                       43
<PAGE>   46

                  On May 11, 1999, we issued 2,500,000 shares of Series A
Preferred Stock for $2,500,000 in order to have the capital to necessary advance
our strategic plan. The preferred stock was mandatorily redeemable, at the
option of the holder, on June 11, 2000. The stock had a stated value of $1.00
per share and was redeemable at $2.00 per share or $5,000,000. Dividends, at the
rate of eighteen percent per year of the stated value of the stock
($450,000/yr.), were payable monthly from the date of issuance commencing thirty
days after issuance and continuing to the mandatory redemption date, i.e., June
11, 2000. On June 16, 2000, the holder converted the preferred stock into
2,000,000 shares of the Company's common stock, and thus the Company avoided the
necessity of paying the holder of the preferred stock $5,000,000. Thus too, the
"accretion expense" has been fully accounted for and may for all practical
purposes be considered a "one time charge against earnings." The former holder
of the preferred shares remains entitled to a dividend at the rate of nine
percent per year of the original stated value of the preferred stock
($225,000/yr.) for two additional years, i.e., until June 11, 2002. Therefore,
and unless or until we incur additional debt as a result of acquisitions or in
order to fund capital expenditures, we expect to report substantially less
interest expense in the near term.

                  Net loss. We incurred significant losses and anticipate that
we will continue to incur losses until sufficient revenues are generated to
offset the substantial up-front expenditures (capital and non-capital) and
operating costs associated with attracting and retaining additional customers
whether by acquisition or organically, and the substantial up-front expenditures
(capital and non-capital) necessary to build-out and deploy our planned
transport network/data center infrastructure. For the years ended June 30, 2000
and 1999, we incurred net losses of $3,354,151 and $394,548, respectively. It
should be noted, however, that $2,888,192 or 86.10% of our net loss for the year
ended June 30, 2000 was attributable to non-cash transactions. Of these
$2,211,462 or 65.93% of our net loss for the year ended June 30, 2000 was
attributable to the one-time, non-cash accretion expense charged to account for
the mandatory redemption provisions of the now no longer outstanding preferred
stock of the Company.

                  In addition, when only the operations of WEB SOLUTIONS are
considered, and referring the table contained in the introduction to this Item
6, only $61,640 or 1.83% of our net loss for the year ended June 30, 2000 was
attributable to the operations of this subsidiary. On a monthly basis, WEB
SOLUTIONS is showing an average net loss of $4,365 and an average positive
EBITDA of $56,738.

LIQUIDITY AND CAPITAL RESOURCES.

                  Our working capital at June 30,2000 was $(938,467) compared to
working capital of $2,431,994 at June 30, 1999. This change in working capital
was due almost exclusively to the acquisition of WEB SOLUTIONS and the
undertaking of its continued operations. A significant portion of our current
working capital deficit is attributable to the principal balance due under a
note payable assumed by WEB SOLUTIONS when it acquired certain liabilities of
the former owner of the assets of XZ HOLDINGS LTD. (Formerly, A-Z NET. COM,
INC.). Included in those liabilities was a note payable for $1,300,000 due
November 1, 2000. The note called for principal payments of $15,000 per month
beginning January 1, 2000. As of June 30, 2000, e.NVIZION was current in its
obligations under the note, and the principal balance due under the




                                       44
<PAGE>   47

note was $1,060,000. In November 2000, we completed negotiations with the note
holder to extend the note beyond November 1, 2000. A new/replacement note in
exchange for the original note in the principal amount of $1,000,000, together
with interest at the rate of ten percent per year, will be payable beginning
with principal installments of $250,000 plus accrued interest in January and
March 2001. Principal installments of $125,000 plus accrued interest will be
payable in May, July, September and November 2001.

                  The development and expansion of our business will require
substantial capital investment for the design, procurement and construction of
our planned transport network/data center infrastructure. Outside of the
acquisition of WEB SOLUTIONS, capital expenditures were negligible in the years
ended June 30, 1999 and 2000. The Company expects capital expenditures to be
significantly higher in future periods.

                  Our capital requirements may vary based upon the timing and
success of our acquisition and transport network/data center rollout strategies;
or as a result of regulatory, technological and competitive developments; or if:

                  o        Demand for our services or our anticipated cash flow
                           from operations is less or more than expected; or

                  o        Development plans or projections change or prove to
                           be inaccurate; or

                  o        We engage in any acquisitions; or

                  o        We accelerate deployment of our transport
                           network/data centers or otherwise alters the schedule
                           or targets of our rollout plan.

                  We intend to continue to expand its operations at a rapid pace
and expects to continue to operate at a loss for the foreseeable future. The
nature of the expenses contributing to our future losses will include network
and related service costs in existing and new markets; legal, marketing and
selling expenses as we enter each new market; payroll-related expenses as we
continue to add employees; general overhead to support increases in the scale of
our operations; and interest expenses arising from financing capital
expenditures (acquisition- and non-acquisition-related) and working capital
requirements.

                  We will seek additional capital before June 30, 2001, the
timing of which will depend upon, among other things, market conditions. The
actual amount and timing of our future capital requirements may differ
materially from our estimates as a result of, among other things, the demand for
our services and regulatory, technological and competitive developments,
including additional market developments and new opportunities in our industry.
We may also need additional financing if: we alter the schedule, targets or
scope of our transport network/data center rollout plan; our plans or
projections change or prove to be inaccurate; or we acquire other companies or
businesses. We




                                       45
<PAGE>   48

may obtain additional financing through commercial bank borrowings, equipment
financing or the private or public sale of equity or debt securities. We may be
unable to raise additional capital on terms that we consider acceptable, that
are within the limitations contained in our existing financing agreements or
that will not impair our ability to develop our business. If we fail to raise
sufficient funds, we may need to modify, delay or abandon some planned future
expansion or expenditures, which, in turn, could have a material adverse effect
on our business, prospects, financial condition and results of operations. We
can not assure you we will be able to raise additional capital as necessary.

                  Our primary capital requirements are to payoff current
portions of our debt, fund acquisitions of ISP/ICP customers and related
infrastructure and lines of businesses, design, purchase and deploy transport
network/data center infrastructure and for working capital. To date, we have
financed our capital requirements primarily through the issuance of debt
instruments. We do not have any lines of credit. The availability of capital
resources is dependent upon prevailing market conditions, interest rates and our
financial condition. We expect our capital expenditures to increase as we
continue to expand our operations. We anticipate that financial resources will
be utilized to acquire additional transport network/data center infrastructure
and improvements to technology that will allow our transport network/data center
infrastructure to grow to support new customers, and to integrate billing,
customer service and financial reporting systems.

                  We are currently pursuing, and intend to continue to pursue,
additional acquisitions, which we expect to be funded through a combination of
cash and the issuance of shares of our common stock. To the extent we elect to
pursue acquisitions involving the payment of significant amounts of cash to fund
the purchase price of such acquisitions and the repayment of assumed
indebtedness, we are likely to require additional sources of financing to fund
such non-operating cash needs. We may determine to raise additional debt or
equity capital to finance potential acquisitions and/or to fund accelerated
growth. Any significant acquisitions or increases in our growth rate could
materially affect our operating and financial expectations and results,
liquidity and capital resources. We can not assure you we will be able to raise
additional capital to finance our operations and for our anticipated growth

ITEM 7. FINANCIAL STATEMENTS

The report of the independent auditors on the financial statements appears at
Page F and the financial statements and their accompanying footnotes appear at
Pages F-7 through F-16 hereof. These financial statements and related financial
information required to be filed hereunder are incorporated herein by reference





                                       46
<PAGE>   49

ITEM 8. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company did not have any disagreements on accounting and financial
disclosures with its present accounting firm during the reporting period.



PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

         (a) Directors and Executive Officers. The names and ages of the
Directors and executive officers of e.NVIZION are as follows:

<TABLE>
<CAPTION>
Name                    Age      Position                             Since
----                    ---      --------                             -----
<S>                     <C>      <C>                                <C>
Randy L. Phillips       34       Director, President and            October 1997
                                 Chief Executive Officer
Richard T. Bruno        45       Executive Vice President,          April 2000
                                 Secretary and General Counsel
</TABLE>

Randy L. Phillips; Mr. Phillips has served as director, President and Chief
Executive Officer of e.NVIZION since October of 1997. He has also served as
director, Chairman of the Board of Directors and Chief Executive Officer of Web
Solutions since October 1999. In 1994, Mr. Phillips started his own private
investment firm, specializing in mergers and acquisitions, of which he is
currently the sole owner and manager. From 1992 to 1994, Mr. Phillips served as
Director of Trading for an offshore hedge fund.

Richard T. Bruno; Mr. Burno has served as the President and Chief Operating
Officer since March 2000 and Executive Vice President, Secretary and General
Counsel for e.NVIZION since April 2000. From October 1993 to January 1997, Mr.
Bruno was in house General Counsel to Bateman Engineering Inc., of Denver,
Colorado, the U.S. subsidiary of an international engineering and construction
company primarily serving the mining, minerals and petrochemical industries.
From 1982 through February 2000, Mr. Bruno primarily practiced law in private
practice and "in house," generally concentrating in the areas of corporate
(transactional and mergers and acquisitions) and general business law.

Section 16(a) Beneficial Reporting Compliance

         Under U.S. securities laws, directors, executive officers and persons
holding more than 10% of e.NVIZION's common stock must report their initial
ownership of the common stock




                                       47
<PAGE>   50

and any changes in that ownership on reports which must be filed with the SEC.
The SEC has designated specific deadlines for these reports and we must identify
in this Form 10-KSB those persons who did not file these reports when due.

         Based upon information provided to e.NVIZION by its directors,
executive officers and persons holding more than 10% of our common stock, we
believe that Richard T. Bruno inadvertently filed his respective Form 3 late in
connection with his initially becoming subject to the filing requirements of
Section 16 of the U.S. securities laws.


ITEM 10. EXECUTIVE COMPENSATION.

         No officers or directors have been compensated during the fiscal years
ended June 30, 1998, 1999 and 2000. We have no retirement, pension, profit
sharing, insurance or other similar programs.

         We have agreed to reimburse Mr. Phillips for his expenses and intends
to reward him on a performance basis at such time as the acquisition of an
operating company or business completed. It is likely both the reimbursement and
performance award will be in the form of stock grants.

         To date no options have been granted under our Incentive Stock Option
Plan.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table presents as of November 18, 2000 the common stock
ownership of each person known by us to be the beneficial owner of five percent
or more of our common stock, and our directors and executive officers. Except as
noted, each person has sole voting and investment power with respect to the
shares shown. As of November 18, 2000, there were 45,000,288 shares of our
common stock issued and outstanding, which reflect a four for one forward stock
split effective for shareholders of record as of February 29, 2000, and a three
for one stock dividend effective for shareholders of record as of September 15,
2000

<TABLE>
<CAPTION>
            Name and Address of                             Number of Shares of           Percent of
             Beneficial Owner                                  Common Stock               Ownership
            -------------------                             -------------------           ----------
<S>                                                         <S>                            <C>
          Dixon Family Remainder Trust                           6,000,000                  13.3%
          P.O. Box 100
          Palmer Lake, CO 80133

          Randy L. Phillips                                     23,281,920                  51.7%
          Director,   Chairman   of  the  Board  of
          Directors and CEO
          600 17th Street, Suite 950 South
          Denver, CO 80202
</TABLE>



                                       48
<PAGE>   51

<TABLE>
<S>                                                              <C>                         <C>
          Richard T. Bruno                                       2,976,000                   6.6%
          Director, Executive Vice
          President, Secretary and
          General Counsel
          600 17th Street, Suite 950 South
          Denver, CO 80202

          Directors  and  Officers  as a  group  (2             26,257,920                  58.35%
          persons)
</TABLE>

         * less than 1%


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During the year ended June 30, 1999, Mr. Randy L. Phillips, who was
then the sole officer and director of e.NVIZION , provided consulting, office
space and administrative services to e.NVIZION valued at $7,100. These amounts
are included in e.NVIZION 's financial statements as costs and expenses, related
party.

         E.NVIZION also incurred certain legal, accounting, transfer agent fees
and general and administrative costs during the years ended June 30, 2000 and
1999 totaling $21,823 and $34,224, respectively, which were paid on behalf of
e.NVIZION by Mr. Phillips. During the year ended June 30, 1999, $34,224 was
credited to additional paid-in capital. During the year ended June 30, 2000,
e.NVIZION issued 2,600,000 (650,000 shares before a split on February 14, 2000)
shares to Mr. Phillips as full payment of the $21,823 liability. In addition,
Mr. Phillips advanced e.NVIZION $12,222, which is included in e.NVIZION's
financial statements as due to related party.

         e.NVIZION also advanced $176,000 to Colorado Emergency Medical Services
Foundation and Robert W. Sutton, shareholders of WEB SOLUTIONS and affiliated
with the Dixon Family Remainder Trust, e.NVIZION's preferred shareholder. The
advances were made as a goodwill gesture to the shareholders. The terms of
e.NVIZION's acquisition of WEB SOLUTIONS called for registration of the
restricted common shares issued as consideration for the purchase price.
e.NVIZION has not registered the common shares issued to the shareholders and,
therefore, agreed to make the advances. E.NVIZION anticipates full reimbursement
of the $176,000 upon registration of the shareholders' common shares.

         On February 25, 2000, e.NVIZION entered into an agreement with Colorado
Emergency Medical Services Foundation, Robert W. Dixon and David Dixon, the
shareholders of WEB SOLUTIONS, whereby e.NVIZION would purchase all of the
outstanding common shares of WEB SOLUTIONS in exchange for 1,300,000 (325,000
before our February 14, 2000 stock




                                       49
<PAGE>   52

split) shares of e.NVIZION's restricted common shares (which were to be
subsequently registered with the Securities and Exchange Commission). The common
shares were valued at the prevailing market price of e.NVIZION's common stock,
which at the time of the agreement, was $6.00 per share or a total of
$1,950,000. The purchase price also included cash payments of approximately
$923,081. The shareholders of WEB SOLUTIONS were affiliates with the Dixon
Family Remainder Trust, e.NVIZION's preferred shareholder.

         On May 11, 1999, e.NVIZION issued 2,500,000 shares of its Series A
Preferred Stock for $2,500,000 to the Dixon Family Reminder Trust The preferred
stock was mandatory redeemable, at the option of the holder, thirteen months
after the date the stock was issued. The stock had a stated value of $1.00 per
share and was redeemable at $2.00 per share or $5,000,000. Dividends, at the
rate of eighteen percent per year of the stated value of the stock, were payable
monthly from the date of issuance commencing thirty days after issuance. The
holder of the preferred stock is entitled to dividends at the rate of nine
percent per year of the stated value of the preferred stock for a period of two
years after the mandatory redemption date, regardless of whether e.NVIZION
redeems the stock in accordance with the mandatory redemption provisions. In the
event of any liquidation, the holder of the preferred stock is entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of e.NVIZION to the holders of e.NVIZION's common stock, two times
the stated value of the preferred stock plus all unpaid dividends.

         In June 2000, e.NVIZION converted the preferred shares to 2,000,000
shares of e.NVIZION's common stock. In accordance with the preferred shareholder
agreement, e.NVIZION continues to pay a dividend of $37,500 per month to the
Dixon Family Remainder Trust.

         During the year ended June 30, 2000, Mr. Richard T. Bruno, who became
an officer of e.NVIZION and WEB SOLUTIONS, provided legal services to and
incurred expenses on behalf of e.NVIZION which were paid partly in cash by
e.NVIZION and partly by e.NVIZION issuing 400,000 (100,000 before our February
14, 2000 stock split) shares of restricted common stock to him in full payment
of these legal fees and expenses. These payments occurred before Mr. Bruno
became an officer of e.NVIZION and WEB SOLUTIONS and are included in e.NVIZION's
financial statements as Stock-based compensation-legal fees and general and
administrative expenses.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      The following exhibits are furnished as part of this report:

Exhibit No.       Description

2.1               Stock Purchase Agreement by and between e.NVIZION and the
                  shareholders of Xtelegent Web Solutions Inc. dated February
                  25, 2000 (filed as exhibit 10.1 to




                                       50
<PAGE>   53

                  e.NVIZION's current report on Form 8-K filed on March 15,
                  2000, and incorporated herein by reference).

3.1               Articles of Incorporation (filed as exhibit 3 to the annual
                  report on Form 10-KSB for the year ended June 30, 1997, and
                  incorporated herein by reference).

3.2               Articles of Amendment to the Articles of Incorporation dated
                  June 10, 1999 (filed as exhibit 3.1 to the annual report on
                  Form 10-KSB for the year ended June 30, 1999, and incorporated
                  herein by reference).

3.3               Articles of Amendment to the Articles of Incorporation dated
                  June 16, 2000 (filed herewith)

3.4               Bylaws of e.NVIZION (filed herewith)

10.1              Preferred Stock Purchase Agreement dated May 11, 1999 between
                  the Company and Dixon Family Charitable Remainder Trust (filed
                  as exhibit 10 to the annual report on Form 10-KSB for the year
                  ended June 30, 1999, and incorporated herein by reference).

10.2              Subscription Agreement dated June 16, 2000 between the Company
                  and Dixon Family Charitable Remainder Trust (filed herewith)

21.1              Subsidiaries of e.NVIZION (filed herewith)

27.               Financial Data Schedule (filed herewith)

(b) Reports on Form 8-K. The Company did not file any reports on Form 8-K during
the last quarter of the fiscal year ended June 30, 2000.




                                       51
<PAGE>   54

                                   SIGNATURES


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

                                 e.NVIZION COMMUNICATION GROUP LTD.

Date: November 20, 2000          By: /s/ Randy L. Phillips
                                    -----------------------------------
                                         Randy L. Phillips, President and Chief
                                         Executive Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.


/s/ Randy L. Phillips                             Date: November 20, 2000
------------------------------------------
Randy L. Phillips.
President, Chief Executive Officer,
and a Director


/s/Richard T. Bruno                               Date: November 20, 2000
-------------------------------------------
Richard T. Bruno
Executive Vice President, Secretary,
General Counsel and a Director



                                       52
<PAGE>   55

                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)


<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                            ----

<S>                                                                                                        <C>
Independent auditors' report............................................................................    F-2

Consolidated balance sheet as of June 30, 2000..........................................................    F-3

Consolidated statements of operations, for the years ended June 30, 2000 and 1999.......................    F-4

Consolidated statement of shareholders' equity for the two years ended June 30, 2000....................    F-5

Consolidated statements of cash flows, for the years ended June 30, 2000 and 1999.......................    F-6

Notes to the consolidated financial statements..........................................................    F-7
</TABLE>



                                      F-1
<PAGE>   56

To the Board of Directors and Shareholders
e.NVIZION COMMUNICATIONS GROUP LTD.
(Formerly OTC America, Inc.)


                          INDEPENDENT AUDITORS' REPORT

We have audited the accompanying consolidated balance sheet of e.NVIZION
COMMUNICATIONS GROUP LTD. (Formerly OTC America, Inc.) and subsidiary as of June
30, 2000 and the related consolidated statements of operations, shareholders'
equity and cash flows for the years ended June 30, 2000 and 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of e.NVIZION
COMMUNICATIONS GROUP LTD. (Formerly OTC America, Inc.) and subsidiary as of June
30, 2000 and the results of their operations and cash flows for the years ended
June 30, 2000 and 1999 in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As shown in the accompanying
consolidated financial statements, the Company incurred a net loss of $3,354,151
for the year ended June 30, 2000, negative cash flows from operations and has a
limited operating history. These and other factors discussed in Note A to the
consolidated financial statements raise a substantial doubt about the ability of
the Company to continue as a going concern. Management's plans in regard to
those matters are also discussed in Note A. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

During the year ended June 30, 2000, the Company entered into significant
related party transactions, including the acquisition of a subsidiary owned and
controlled by an affiliate of the Company's preferred shareholder.


Cordovano and Harvey, P.C.
Denver, Colorado
October 11, 2000



                                      F-2
<PAGE>   57

                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                           CONSOLIDATED BALANCE SHEET
                                  June 30, 2000
                                     ASSETS

<TABLE>
<S>                                                                                             <C>
CURRENT ASSETS
      Cash and cash equivalents................................................................ $    12,991
      Accounts receivable......................................................................     290,457
      Due from related party...................................................................     176,000
      Prepaid expenses.........................................................................      29,161
                                                                                                -----------
                                                                           TOTAL CURRENT ASSETS     508,609

CUSTOMER LIST, net of $684,930 accumulated amortization........................................   3,855,891

PROPERTY & EQUIPMENT, net of $121,232 accumulated depreciation.................................     439,594
                                                                                                -----------
                                                                                                $ 4,804,094
                                                                                                ===========

                             LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts payable......................................................................... $    91,326
      Accrued expenses.........................................................................      27,305
      Unearned revenue.........................................................................     219,664
      Note payable.............................................................................   1,060,000
      Current portion of capital leases payable................................................      18,378
      Due to related party.....................................................................      30,403
                                                                      TOTAL CURRENT LIABILITIES   1,447,076

CAPITAL LEASES PAYABLE.........................................................................      46,701
                                                                                                -----------
                                                                             TOTAL  LIABILITIES   1,493,777


SHAREHOLDERS' EQUITY
      Preferred stock, no par value, 20,000,000 shares authorized;
        -0-shares issued and outstanding.......................................................          --
      Common stock, $.0001 par value; 150,000,000 shares authorized;
        13,060,096 shares issued and outstanding ..............................................       1,306
      Additional paid in capital...............................................................   7,629,152
      Deferred stock compensation..............................................................     (53,332
      Accumulated deficit......................................................................  (4,266,809
                                                                                                -----------
                                                                     TOTAL SHAREHOLDERS' EQUITY   3,310,317
                                                                                                -----------
                                                                                                $ 4,804,094
                                                                                                ===========
</TABLE>



         See accompanying notes to the consolidated financial statements



                                       F-3
<PAGE>   58

                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                    For the Years Ended June 30,
                                                                                    ----------------------------
                                                                                        2000            1999
                                                                                    ------------     -----------

<S>                                                                                 <C>              <C>
REVENUE............................................................................ $    550,940     $        --

COSTS AND EXPENSES
    Cost of revenue................................................................      125,585              --
    Stock-based compensation, legal fees...........................................        6,000              --
    Stock-based compensation, consulting fees......................................       26,668              --
    Related party..................................................................           --           7,100
    Depreciation and amortization..................................................      647,124          10,643
    General and administrative.....................................................      468,974          56,318
                                                                                    ------------     -----------
                                                           TOTAL COSTS AND EXPENSES    1,274,352          74,061
                                                                                    ------------     -----------
                                              NET LOSS BEFORE OTHER INCOME (EXPENSE)    (723,412)        (74,061)

OTHER INCOME (EXPENSE)
    Interest expense...............................................................   (2,667,774)       (344,712)
    Interest income................................................................       33,973          19,853
    Realized gain on investments...................................................        3,062              --
    Unrealized gain on investments.................................................           --           4,372
                                                                                    ------------     -----------
                                                       NET LOSS BEFORE INCOME TAXES   (3,354,151)       (394,548)

INCOME TAXES.......................................................................           --              --
                                                                                    ------------     -----------
                                                                           NET LOSS $ (3,354,151)    $  (394,548)
                                                                                    ============     ===========

NET LOSS PER COMMON SHARE:
    Basic and diluted.............................................................. $      (0.35)    $     (0.32)
                                                                                    ============     ===========

SHARES USED FOR COMPUTING NET LOSS PER COMMON SHARE:
    Basic and diluted..............................................................    9,493,429       1,244,723
                                                                                    ============     ===========
</TABLE>



         See accompanying notes to the consolidated financial statements



                                       F-4
<PAGE>   59
                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                      For the two years ended June 30, 2000

<TABLE>
<CAPTION>
                                                               Preferred Stock            Common Stock            Additional
                                                               ---------------       -----------------------       Paid-in
                                                               Shares   Amount         Shares*        Amount       Capital
                                                               ------   ------       ----------       ------      ----------
<S>                                                            <C>      <C>          <C>              <C>         <C>
                                      BALANCE, June 30, 1998       --       --        1,947,668         195         506,749

Third party administrative costs
  paid by shareholder ......................................       --       --               --          --          34,224

Shares issued in exchange for payment
  of expenses and consulting, at cost
  of services and expenses .................................       --       --        4,052,428         405          16,062

Net loss for the year ended June 30, 1999 ..................       --       --               --          --              --
                                                               ------   ------       ----------       -----       ---------
                                      BALANCE, June 30, 1999       --       --        6,000,096         600         557,035

Stock issued for payment of amounts due
  to related party .........................................       --       --        2,600,000         260          21,563

Stock issued in exchange for legal services ................       --       --          400,000          40           5,960

Stock issued in exchange for furniture and
  equipment ................................................       --       --          600,000          60          14,940

Stock issued in acquisition of subsidiary ..................       --       --        1,300,000         130       1,949,870

Stock issued in conversion of mandatorily
  redeemable preferred shares ..............................       --       --        2,000,000         200       4,999,800

Stock issued for consulting services .......................       --       --          160,000          16          79,983

Net loss for the year ended June 30, 2000 ..................       --       --               --          --              --
                                                               ------   ------       ----------       -----       ---------
                                      BALANCE, June 30, 2000       --       --       13,060,096       1,306       7,629,152
                                                               ======   ======       ==========       =====       =========

<CAPTION>

                                                                   Deferred       Accumulated       Shareholders'
                                                                 Compensation       Deficit           Equity
                                                                 ------------     -----------       -------------
<S>                                                              <C>              <C>               <C>
                                      BALANCE, June 30, 1998            --          (518,110)          (11,166)

Third party administrative costs
  paid by shareholder ......................................            --                --            34,224

Shares issued in exchange for payment
  of expenses and consulting, at cost
  of services and expenses .................................            --                --            16,467

Net loss for the year ended June 30, 1999 ..................            --          (394,548)         (394,548)
                                                                   -------        ----------        ----------
                                      BALANCE, June 30, 1999            --          (912,658)         (355,023)

Stock issued for payment of amounts due
  to related party .........................................            --                --            21,823

Stock issued in exchange for legal services ................            --                --             6,000

Stock issued in exchange for furniture and
  equipment ................................................            --                --            15,000

Stock issued in acquisition of subsidiary ..................            --                --         1,950,000

Stock issued in conversion of mandatorily
  redeemable preferred shares ..............................            --                --         5,000,000

Stock issued for consulting services .......................       (53,332)               --            26,668

Net loss for the year ended June 30, 2000 ..................            --        (3,354,151)       (3,354,151)
                                                                   -------        ----------        ----------
                                      BALANCE, June 30, 2000       (53,332)       (4,266,809)        3,310,317
                                                                   =======        ==========        ==========
</TABLE>


*Common shares retroactively restated for 3:1 stock split


        See accompanying notes to the consolidated financial statements




                                      F-5


<PAGE>   60
                                 E.NVIZION COMMUNICATIONS GROUP LTD.
                                     (Formerly OTC America, Inc.)

                                CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                        For the Years Ended June 30,
                                                                                       ------------------------------
                                                                                          2000               1999
                                                                                       -----------        -----------
<S>                                                                                    <C>                <C>
OPERATING ACTIVITIES
     Net loss ..................................................................       $(3,354,151)       $  (394,548)
     Non-cash transactions:
        Depreciation and amortization expense ..................................           647,124             10,643
        Realized gain on marketable securities .................................            (3,062)            (4,372)
        Accretion of preferred stock ...........................................         2,211,462            288,462
        Stock-based compensation expense .......................................            32,668                 --
     Sale (purchase) of marketable securities, classified as trading ...........           147,747           (144,685)
     Increase in receivables, net of $184,411 received in acquisition ..........          (294,075)                --
     Increase in current liabilities, net of $35,729 received in acquisition ...           310,203             14,301
     Current liabilities satisfied with issuance of common stock ...............            21,823                 --
     Third party expenses paid by shareholder on behalf
     of the Company, recorded as additional-paid-in capital ....................                --             34,224
                                                                                       -----------        -----------
                                                                NET CASH USED IN
                                                            OPERATING ACTIVITIES          (280,261)          (195,975)
                                                                                       -----------        -----------

INVESTING ACTIVITIES
     Pre-acquisition advances to subsidiary ....................................          (950,973)                --
     Cash paid for acquisition of subsidiary, net of $20,315 received ..........          (902,766)                --
                                                                                       -----------        -----------
                                                                NET CASH USED IN
                                                            INVESTING ACTIVITIES        (1,853,739)                --
                                                                                       -----------        -----------

FINANCING ACTIVITIES
     Principal payments on capital leases ......................................            (4,793)                --
     Principal payments on note payable ........................................           (60,000)                --
     Proceeds from issuance of preferred stock .................................                --          2,500,000
     Costs paid to issue mandatorily redeemable preferred stock ................                --            (92,241)
                                                                                       -----------        -----------
                                                  NET CASH (USED IN) PROVIDED BY
                                                            FINANCING ACTIVITIES           (64,793)         2,407,759
                                                                                       -----------        -----------

NET CHANGE IN CASH AND CASH EQUIVALENTS ........................................        (2,198,793)         2,211,784
Cash and cash equivalents, beginning ...........................................         2,211,784                 --
                                                                                       -----------        -----------
Cash and cash equivalents, ending ..............................................       $    12,991        $ 2,211,784
                                                                                       ===========        ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest .........................................................       $   456,312        $    75,000
                                                                                       ===========        ===========
Cash paid for income taxes .....................................................       $        --        $        --
                                                                                       ===========        ===========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued in satisfaction amounts due to shareholder ........................       $    21,283        $    16,467
                                                                                       ===========        ===========
Stock issued for acquisition of furniture and equipment ........................       $    15,000        $        --
                                                                                       ===========        ===========
Stock issued in acquisition of subsidiary ......................................       $ 1,950,000        $        --
                                                                                       ===========        ===========
Conversion of mandatorily redeemable preferred stock to common stock ...........       $ 5,000,000        $        --
                                                                                       ===========        ===========
</TABLE>


        See accompanying notes to the consolidated financial statements



                                      F-6


<PAGE>   61
                       E.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE A:  NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF ORGANIZATION:

e.NVIZION COMMUNICATIONS GROUP LTD. (formerly OTC America, Inc.) (the "Company")
was incorporated in the State of Colorado on June 13, 1986. During the year
ended June 30, 1988, the Company commenced operations in the financial services,
public relations, and printing businesses. During the year ended June 30, 1989,
the Company discontinued all operations and became an inactive shell company.
Effective July 1, 1997, the Company reentered the development stage in
accordance with Statement of Financial Accounting Standard ("SFAS") No. 7.
Concurrently with the acquisition of the Company's wholly-owned subsidiary,
e.NVIZION WEB SOLUTIONS LTD. dba A-Znet.com! ("WEB SOLUTIONS"), the Company
commenced operations and is no longer in the development stage. WEB SOLUTIONS is
an Internet service provider with operations primarily in the State of New York.

As shown in the accompanying financial statements, the Company incurred a net
loss of $3,354,151 for the year ended June 30, 2000, has a working capital
deficit, negative cash flows from operations and has a limited operating
history. Those factors, as well as the uncertain condition that the Company will
successfully satisfy the terms of its outstanding debt, create an uncertainty
about the Company's ability to continue as a going concern. The Company
renegotiated a significant note payable with the terms disclosed in Note H -
Subsequent events.

Management pursued extended terms with the note holder (See Note H - Subsequent
events), and plans to aggressively attempt to raise an additional $5,000,000 in
equity and/or long-term debt financing. The ability of the Company to continue
as a going concern is dependent on the success of these plans, and ultimately
upon achieving profitability and positive cash flows from operations. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of consolidation

The consolidated financial statements include the accounts of e.NVIZION
COMMUNICATIONS GROUP LTD. and its wholly owned subsidiary e.NVIZION WEB
SOLUTIONS LTD. All significant intercompany balances and transactions have been
eliminated in consolidation.

Use of estimates

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



                                      F-7
<PAGE>   62
                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Reclassifications

Certain prior-year amounts have been reclassified for comparative purposes to
conform to the current-year presentation.

Cash and cash equivalents

The Company considers all short-term, highly liquid investments with an original
maturity date of three months or less to be cash equivalents.

Income taxes

Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and tax basis
of assets and liabilities for financial and income tax reporting. The deferred
tax assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset future federal income taxes.

Fair value of financial instruments

SFAS 107, "Disclosure About Fair Value of Financial Instruments," requires
certain disclosures regarding the fair value of financial instruments. The
Company has determined, based on available market information and appropriate
valuation methodologies, the fair value of its financial instruments
approximates carrying value. The carrying amounts of cash, accounts receivable,
accounts payable, and other accrued liabilities approximate fair value due to
the short-term maturity of the instruments.

Revenue recognition

The Company recognizes revenue when Internet-related services are provided.

Intangible assets

Intangible assets are stated net of accumulated amortization and include a
customer list acquired as a result of the Company's acquisition of WEB
SOLUTIONS. Amortization is provided using the straight-line method over three
years. The Company evaluates on a regular basis whether events and circumstances
have occurred that indicate that the carrying amount of intangible assets may
warrant revision. Management believes that there has been no impairment to the
intangible assets as reflected in the Company's consolidated financial
statements as of June 30, 2000.

Sources of supplies

The Company relies on third-party networks, local telephone companies and other
companies to provide data communications capacity. Although management feels
alternative telecommunications facilities could be found in a timely manner, any
disruption of these services could have an adverse effect on operating results.



                                      F-8
<PAGE>   63
                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Stock-based compensation

The Company accounts for any stock-based compensation plans using the intrinsic
value method prescribed by the Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"). Compensation cost for
stock options, if any, is measured as the excess of the quoted market prices of
the Company's stock at the date of grant over the amount an employee must pay to
acquire the stock.

SFAS No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123") was issued
in October 1995. This accounting standard permits the use of either a fair value
based method or the method defined in APB 25 to account for stock-based
compensation arrangements. Companies that elect to use the method provided in
APB 25 are required to disclose the pro forma net income and earnings per share
that would have resulted from the use of the fair value based method. The
Company has elected to continue to determine the value of the stock-based
compensation arrangements under the provision of APB 25 and, when applicable,
will disclose the pro forma information as proscribed by SFAS 123. For any
stock-based compensation arrangements to non-employees, the Company has adopted
SFAS 123.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation.
Depreciation is provided using the straight-line method over the estimated
useful lives of the assets, which is estimated to be three to five years.
Expenditures for repairs and maintenance are charged to expense when incurred.
Expenditures for major renewals and betterments, which extend the useful lives
of existing equipment, are capitalized and depreciated. Upon retirement or
disposition of property and equipment, the cost and related accumulated
depreciation are removed from the accounts and any resulting gain or loss is
recognized in the consolidated statements of operations.

Leased property meeting certain criteria is capitalized and the present value of
the related lease payments is recorded as a liability. Amortization of
capitalized leased assets is computed on the straight-line method over the term
of the lease.

Loss per share

In February 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 128, "Earnings Per Share" (SFAS 128). The Company adopted SFAS 128 for the
two year period ended June 30, 1999. Under SFAS 128, net loss per share-basic
excludes dilution and is determined by dividing loss available to common
shareholders by the weighted average number of common shares outstanding during
the period. Net loss per share-diluted reflects the potential dilution that
could occur if securities and other contracts to issue common stock were
exercised or converted into common stock. As of June 30, 2000, there were no
outstanding options, however, the Company issued a convertible note payable,
which, if converted, would be anti-dilutive and is therefore not reflected in
the calculation of the diluted loss per share.



                                      F-9
<PAGE>   64
                      e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



NOTE B:  RELATED PARTY TRANSACTIONS

During the year ended June 30, 1999, an individual who was then the sole officer
and director of the Company, provided consulting, office space and
administrative services to the Company valued at $7,100. These amounts are
included in the financial statements as costs and expenses, related party.

The Company incurred certain legal, accounting, transfer agent fees and general
and administrative costs during the year ended June 30, 2000 and 1999 totaling
$21,823 and $34,224, respectively, which were paid on behalf of the Company by
the same individual mentioned above. During the year ended June 30, 1999 $34,224
was credited to additional paid-in capital. During the year ended June 30, 2000
the Company issued 2,600,000 (650,000 pre-split) shares to the officer as full
payment of the $21,823 liability. In addition, the officer advanced the Company
$12,222 which is included in the consolidated financial statements as due to
related party.

WEB SOLUTIONS made advances to an employee of WEB SOLUTIONS, and has offset his
reimbursements of those advances against sums due to a related party of the
employee resulting in a net amount due to the related party of $18,181. This
amount is included in the consolidated financial statements as due to related
party.

The Company also advanced to certain shareholders $176,000. The shareholders
were the previous owners of WEB SOLUTIONS and also affiliated with the Company's
preferred shareholder. The advances were made as a goodwill gesture to the
shareholder. The terms of the Company's acquisition of WEB SOLUTIONS called for
registration of the restricted common shares issued in consideration of the
purchase price. The Company has not registered the common shares issued to the
shareholders and, therefore, agreed to make the advances. The Company
anticipates full reimbursement of the $176,000 upon registration of the
shareholders' common shares.

During the year ended June 30, 2000, an individual who became an officer of the
Company and WEB SOLUTIONS, provided legal services to and incurred expenses on
behalf of the Company which were paid partly in cash by the Company and partly
by the Company issuing 400,000 (100,000 pre-split) shares of restricted common
stock to the individual in full payment of these legal fees and expenses. These
payments occurred before the individual became an officer of the Company and WEB
SOLUTIONS and are in included in the financial statements as Stock-based
compensation-legal fees and general and administrative expenses.

On February 25, 2000 the Company entered into an agreement with the shareholders
of WEB SOLUTIONS, whereby the Company would purchase all of the outstanding
common shares of WEB SOLUTIONS in exchange for 325,000 shares of the Company's
restricted common shares (which were to be subsequently registered with the
Securities and Exchange Commission). The common shares were valued at the
prevailing market price of the



                                      F-10


<PAGE>   65
                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Company's common stock, which at the time of the agreement, was $6.00 per share
or a total of $1,950,000. The purchase price also included cash payments of
approximately $923,081. The shareholders of WEB SOLUTIONS were affiliates and
related to the Company's mandatory redeemable preferred shareholders. (See Note
G - Redeemable preferred stock.)

Net liabilities of WEB SOLUTIONS as of the date of the acquisition totaled
$44,181. The excess of the purchase price over the fair value of the assets and
liabilities received, in the amount of $2,917,263 has been allocated to the
customer list. At the time of the acquisition, WEB SOLUTIONS had $1,623,558
capitalized as customer list. The total consolidated value assigned to the
customer list is $4,540,821 and is being amortized over thirty six months.
Consolidated amortization expense of $586,133 has been recorded in the
accompanying consolidated financial statements for the year ended June 30, 2000.

The Company has recorded the transaction as a purchase in accordance with
Accounting Principles Board Opinion No. 16. The accompanying consolidated
financial statements include the results of operations of WEB SOLUTIONS from the
approximate date of the acquisition, March 1, 2000 through June 30, 2000.

WEB SOLUTIONS began operations on November 6, 1999 with the acquisition of
certain assets and assumption of certain liabilities of XZ HOLDINGS LTD.
(Formerly A-Z NET.COM, INC.). Therefore, the following pro forma condensed
consolidated statement of operations gives effect to the acquisition of WEB
SOLUTIONS as if it had occurred at the beginning of the period presented, and no
pro forma information is presented for the year ended June 30, 1999. The pro
forma financial information should be read in conjunction with the separate
audited financial statements and notes thereto of each of the companies included
in the pro forma.

The pro forma condensed consolidated statement of operations are not necessarily
indicative of results of operations had the acquisition occurred at the
beginning of the period presented nor of results to be expected in the future.

            PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                        For the year ended June 30, 2000

<TABLE>
<CAPTION>
                                                                             Thru 2/29/00                 Pro forma
                                                             Company        WEB SOLUTIONS  Adjustments   Consolidated
                                                           ------------    --------------  -----------   -----------
<S>                                                        <C>            <C>              <C>           <C>
Revenues .................................................  $   550,940    $   322,728             --    $   873,668
Operating expenses .......................................   (1,274,352)      (363,791)      (648,281)    (2,286,424)
(Loss) income from operations ............................     (723,412)       (41,063)      (648,281)    (1,412,756)
Interest expense .........................................   (2,667,774)        (3,118)            --     (2,670,892)
Interest income ..........................................       33,973             --             --         33,973
Realized gain on investments .............................        3,062             --             --          3,062
Net (loss) income ........................................   (3,354,151)       (44,181)      (648,281)    (4,046,613)
Net (loss) income per share - basic and diluted ..........  $     (0.35)   $     (1.77)                  $     (0.39)
Basic and diluted shares outstanding .....................    9,493,429         25,000                    10,360,096
</TABLE>


                                      F-11
<PAGE>   66
                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Pro forma adjustments

The consolidated financial statements of the Company include the results of
operations of WEB SOLUTIONS for the period March 1, 2000 through June 30, 2000.
The financial information of WEB SOLUTIONS presented in the pro forma statement
is the results of operations for WEB SOLUTIONS for the period November 1, 1999
(inception) through February 29, 2000. The adjustments include the increased
amortization expense resulting from the customer list as if the list was
amortized for the full year.

The pro forma condensed consolidated financial information does not show any
adjustments for a change in the income tax benefit as the total pro forma
consolidated benefit for income taxes would be offset by any valuation allowance
due to any deferred tax asset derived from net operating losses. The valuation
allowance offsets the net deferred tax asset for which there is no assurance of
recovery.

NOTE C:  PROPERTY AND EQUIPMENT

Furniture and equipment consisted of the following at June 30, 2000:

<TABLE>
<CAPTION>
                                                   Property
                                     Property    under Capital   Total
                                      Owned          Lease     Property
                                     ---------    ---------    ---------
<S>                                  <C>          <C>          <C>
Furniture and fixtures ............  $  40,000    $      --    $  40,000
Computer equipment ................    450,956       69,870      520,826
                                     ---------    ---------    ---------
                                       490,956       69,870      560,826
Less accumulated depreciation .....   (113,304)      (7,928)    (121,232)
                                     ---------    ---------    ---------
                                     $ 377,652    $  61,942    $ 439,594
                                     =========    =========    =========
</TABLE>

NOTE D:  INCOME TAXES

A reconciliation of the U.S. statutory federal income tax rate to the effective
tax rate follows:

<TABLE>
<CAPTION>
                                                               June 30,
                                                           ------------------
                                                             2000      1999
                                                           --------  --------
<S>                                                        <C>       <C>
    U.S. statutory federal rate .........................    34.00%    34.53%
    State income tax rate,
       net of federal benefit ...........................     3.14%     3.27%
    Net operating loss for which no tax
      benefit is currently available ....................   (37.14)   (37.80%)
                                                           -------   -------
                                                                - %        - %
                                                           =======   =======
</TABLE>


                                      F-12
<PAGE>   67

                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Deferred taxes consisted of the following:

<TABLE>
<CAPTION>
                                                                 June 30,
                                                    ---------------------------------
                                                       2000                   1999
                                                    -----------             ---------
<S>                                                 <C>                     <C>
    Deferred tax assets,
       Net operating loss ......................    $ 1,394,712             $149,158
    Valuation allowance ........................     (1,394,712)            (149,158)
                                                    -----------             --------
          Net deferred taxes ...................    $       -0-             $    -0-
                                                    ===========             ========
</TABLE>

The valuation allowance offsets the net deferred tax asset for which there is no
assurance of recovery. The change in the valuation allowance for the years ended
June 30, 2000 and 1999 totaled $1,245,564 and $149,158, respectively which
approximates the current tax benefit for each period. The net operating loss
carryforward expires through the year 2020. The valuation allowance will be
evaluated at the end of each year, considering positive and negative evidence
about whether the deferred tax asset will be realized. At that time, the
allowance will either be increased or reduced; reduction could result in the
complete elimination of the allowance if positive evidence indicates that the
value of the deferred tax assets is no longer impaired and the allowance is no
longer required.

Should the Company undergo an ownership change as defined in Section 382 of the
Internal Revenue Code, the Company's tax net operating loss carryforwards
generated prior to the ownership change will be subject to an annual limitation,
which could reduce or defer the utilization of these losses.

NOTE E:  SHAREHOLDERS' EQUITY

Preferred Stock

The Company is authorized to issue twenty million shares of no par value
preferred stock, which may be issued in series with such designations,
preferences, stated values, rights, qualifications or limitations as determined
by the Board of Directors.

Common Stock

On February 14, 2000 the Company's Board of Directors approved a four for one
stock split, resulting in the distribution of three additional shares of common
stock for each share of common stock held as of the record date (February 29,
2000).


                                      F-13
<PAGE>   68

                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE F:  COMMITMENTS

Non-cancelable leases

The Company leases office space under a non-cancelable operating lease effective
July 1, 2000 expiring June 30, 2003. Total office rent expense incurred under
these leases for the year ended June 30, 2000 was $-0-. Future minimum lease
payments for the lease as of June 30, 2000 are as follows:

<TABLE>
<S>                                               <C>
               June 30, 2001 .....................  $ 10,560
               June 30, 2002 .....................  $ 10,877
               June 30, 2003 .....................  $ 11,203
</TABLE>

NOTE G:  DEBT

Redeemable Preferred Stock

On May 11, 1999 the Company issued 2,500,000 shares of its Series A Preferred
Stock for $2,500,000. The preferred stock was mandatorily redeemable, at the
option of the holder, thirteen months after the date the stock was issued. The
stock had a stated value of $1.00 per share and was redeemable at $2.00 per
share or $5,000,000. Dividends, at the rate of eighteen percent per year of the
stated value of the stock, were payable monthly from the date of issuance
commencing thirty days after issuance. The holder of the preferred stock is
entitled to dividends at the rate of nine percent per year of the stated value
of the preferred stock for a period of two years after the mandatory redemption
date, regardless whether the Company redeems the stock in accordance with the
mandatory redemption provisions. In the event of any liquidation, the holder of
the preferred stock is entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the Company to the holders
of the Company's common stock, two times the stated value of the preferred stock
plus all unpaid dividends.

Due to the mandatory redemption provisions of the preferred stock, the Company
recorded the preferred stock outside of the equity section. The accretion
expense was charged to interest expense during the years ended June 30, 2000 and
1999. All dividend payments have accordingly been charged to interest expense
during the years ended June 30, 2000 and 1999.

In June 2000, the Company converted the preferred shares to 2,000,000 shares of
the Company's common stock. In accordance with the preferred shareholder
agreement, the Company continues to pay a dividend of $37,500 per month to the
former preferred shareholder.

Note Payable

WEB SOLUTIONS acquired certain liabilities of the former owner of the assets of
XZ HOLDINGS LTD. (Formerly, A-Z NET. COM, INC.). Included in those liabilities
was a note


                                      F-14
<PAGE>   69

                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


payable for $1,300,000 due November 1, 2000. The note called for
principal payments of $15,000 per month beginning January 1, 2000. As of June
30, 2000, the Company was current in its obligations under the note. In the
event the principal payments are not made at maturity the note will accrue
interest at nine percent. The note is convertible into shares of the Company's
common stock based on the market value of the common stock as of the date of
conversion. The Company completed negotiations with the note holder to extend
the note beyond November 1, 2000. See Note H - Subsequent events.

Capital leases payable

<TABLE>
<S>                                                                        <C>
CAPITAL LEASES PAYABLE:
Capital lease, due in monthly installments of
$1,097, net of imputed interest, maturing February
2002, collateralized by equipment..........................................  $ 16,343

Capital lease, due in monthly installments of
$1,100, net of imputed interest, maturing February
2003, collateralized by equipment..........................................  $ 21,885

Capital lease, due in monthly installments of
$1,083, net of imputed interest, maturing April
2004, collateralized by equipment..........................................    26,851
                                                                             ---------
                                                                               65,079
Less: current maturities...................................................   (18,378)
                                                                             ---------
                                                                             $ 46,701
                                                                             =========
</TABLE>

Maturities on capital leases payable, subsequent to June 30, 2000 are as
follows:

<TABLE>
<S>                                                                          <C>
2001.......................................................................  $ 18,378
2002.......................................................................    34,960
2003.......................................................................    21,796
2004.......................................................................    10,830
                                                                             ---------
                                                                               85,964
Less: imputed interest.....................................................   (20,885)
                                                                             ---------
Present value of net minimum lease payments................................  $ 65,079
                                                                             =========
</TABLE>


                                      F-15
<PAGE>   70

                       e.NVIZION COMMUNICATIONS GROUP LTD.
                          (Formerly OTC America, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE H:  SUBSEQUENT EVENTS

Common stock dividend

On August 10, 2000, the Company's Board of Directors declared a three for one
stock dividend, resulting in the distribution of two additional shares of common
stock for each share common stock held as of the record date (September 15,
2000).

Extension of note payable

During November 2000, the Company completed negotiations with its note holder to
extend the terms of the original note. The new/replacement note in exchange for
the original note in the principal amount of $1,000,000, together with interest
at the rate of ten percent per year will be payable beginning with principal
installments of $250,000 plus accrued interest on January and March 2001.
Principal installments of $125,000 plus accrued interest will be payable on May,
July, September and November 2001.

A monthly forbearance fee will be paid to the holder in the amount of $10,000
beginning November 2000 and monthly thereafter through February 2001. An
extension/modification fee will be paid in the form of the Company issuing
500,000 shares of its restricted common stock to the holder.

The replacement note will be secured by a collateral assignment of certain of
the Company's account receivables and a security interest in certain fixed
assets of the Company.


                                      F-16
<PAGE>   71

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                        DESCRIPTION
-------                       -----------
<S>       <C>
2.1       Stock Purchase Agreement by and between e.NVIZION and the shareholders
          of Xtelegent Web Solutions Inc. dated February 25, 2000 (filed as
          exhibit 10.1 to e.NVIZION's current report on Form 8-K filed on March
          15, 2000, and incorporated herein by reference).

3.1       Articles of Incorporation (filed as exhibit 3 to the annual report on
          Form 10-KSB for the year ended June 30, 1997, and incorporated herein
          by reference).

3.2       Articles of Amendment to the Articles of Incorporation dated June 10,
          1999 (filed as exhibit 3.1 to the annual report on Form 10-KSB for the
          year ended June 30, 1999, and incorporated herein by reference).

3.3       Articles of Amendment to the Articles of Incorporation dated June 16,
          2000 (filed herewith)

3.4       Bylaws of e.NVIZION (filed herewith)

10.1      Preferred Stock Purchase Agreement dated May 11, 1999 between the
          Company and Dixon Family Charitable Remainder Trust (filed as exhibit
          10 to the annual report on Form 10-KSB for the year ended June 30,
          1999, and incorporated herein by reference).

10.2      Subscription Agreement dated June 16, 2000 between the Company and
          Dixon Family Charitable Remainder Trust (filed herewith)

21.1      Subsidiaries of e.NVIZION (filed herewith)

27.       Financial Data Schedule (filed herewith)
</TABLE>