<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                    FORM 10-Q
       (Mark One)

           /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1999

                                       OR

          / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

          For the transition period from _____________ to ______________

                         COMMISSION FILE NUMBER 33-19435


                              eVENTURES GROUP, INC.
             (Exact name of registrant as specified in its charter)


             DELAWARE                                    75-2233445
   (State or other jurisdiction            (I.R.S. Employer Identification No.)
        of incorporation)

                         ONE EVERTRUST PLAZA, 8th FLOOR
                          JERSEY CITY, NEW JERSEY 07302
                                 (201) 200-5515
          (Address and telephone number of principal executive offices)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

(1)  Yes        No   X
         -----     -----
(2)  Yes        No   X
         -----     -----

On December 15, 1999, 45,207,673 shares of the registrant's Common Stock were
outstanding.

   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                  Page 1 of 20


<PAGE>   2

                              eVENTURES GROUP, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                   Page No.
<S>                                                                                                                 <C>
                                             PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

        Consolidated Balance Sheets - June 30, 1999 and September 30, 1999 (unaudited)                                 3

        Consolidated Statements of Operations - Three months ended September 30, 1998 and 1999 (unaudited)             4

        Consolidated Statement of Shareholders' Equity (Deficit)- Three months ended September 30, 1999 (unaudited)    5

        Consolidated Statements of Cash Flows - Three months ended September 30, 1998 and 1999 (unaudited)             6

        Notes to Consolidated Financial Statements                                                                     7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations                         10

Item 3. Quantitative and Qualitative Disclosures about Market Risk                                                    14

                                            PART II: OTHER INFORMATION

Item 1. Legal Proceedings                                                                                             16
Item 2. Changes in Securities                                                                                         16
Item 3. Defaults Upon Senior Securities                                                                               17
Item 4. Submission of Matters to a Vote of Securities Holders                                                         17
Item 5. Other Information                                                                                             17
Item 6. Exhibits and Reports on Form 8-K                                                                              17
</TABLE>


WHEN USED IN THIS REPORT, THE WORDS "INTEND," "EXPECTS," "PLANS," "ESTIMATES,"
"ANTICIPATES," "PROJECTS," "BELIEVES," AND SIMILAR EXPRESSIONS ARE INTENDED TO
IDENTIFY FORWARD-LOOKING STATEMENTS. SPECIFICALLY, STATEMENTS INCLUDED IN THIS
REPORT THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS ABOUT THE COMPANY'S
BELIEFS AND EXPECTATIONS ABOUT ITS BUSINESS AND ITS INDUSTRY ARE FORWARD-LOOKING
STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD
CAUSE ACTUAL RESULTS OR OUTCOMES TO DIFFER MATERIALLY. SUCH RISKS AND
UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, THE DEGREE TO WHICH THE COMPANY
IS LEVERAGED AND THE RESTRICTIONS IMPOSED ON THE COMPANY UNDER ITS EXISTING DEBT
INSTRUMENTS THAT MAY ADVERSELY AFFECT THE COMPANY'S ABILITY TO FINANCE ITS
FUTURE OPERATIONS, TO COMPETE EFFECTIVELY AGAINST BETTER CAPITALIZED COMPETITORS
AND TO WITHSTAND DOWNTURNS IN ITS BUSINESS OR THE ECONOMY GENERALLY; AND OTHER
FACTORS DISCUSSED IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION. FORWARD-LOOKING STATEMENTS INCLUDED IN THIS REPORT SPEAK ONLY AS OF
THE DATE HEREOF AND THE COMPANY UNDERTAKES NO OBLIGATION TO REVISE OR UPDATE
SUCH STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR
TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                  Page 2 of 20


<PAGE>   3
ITEM 1: FINANCIAL STATEMENTS

                              eVENTURES GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                        June 30,         September 30,
                           ASSETS                                         1999               1999
                                                                      ------------       -------------
                                                                                          (unaudited)
<S>                                                                   <C>                <C>
Current Assets:
   Cash                                                               $     39,379       $   6,346,023
   Accounts receivable                                                       6,129           1,158,221
   Other receivables                                                        11,164              71,988
   Prepaid expenses and other                                               13,250             189,933
   Deposits                                                                242,310             299,071
   VAT receivable                                                        2,757,368           2,436,268
                                                                      ------------       -------------
                                                                         3,069,600          10,501,504
                                                                      ------------       -------------
Long-term Assets
   Restricted cash                                                       1,107,437           1,820,752
   Property and equipment, net                                           6,219,874           7,429,945
   Investments in affiliates                                             2,191,498           2,240,890
   Goodwill, net                                                         3,072,908          19,591,050
   Other                                                                        --              79,300
                                                                      ------------       -------------
                                                                        12,591,717          31,161,937
                                                                      ------------       -------------
Total Assets                                                          $ 15,661,317       $  41,663,441
                                                                      ============       =============

LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Accounts payable                                                   $  4,609,806       $   7,716,609
   Accrued other                                                         1,477,757           2,037,272
   Accrued interest payable                                                383,163              25,512
   Customer deposits and deferred revenues                               1,272,682           2,106,447
   Notes payable                                                                --              26,250
   Capital leases, current portion                                       1,916,761           2,001,531
                                                                      ------------       -------------
                                                                         9,660,169          13,913,621
                                                                      ------------       -------------

Long-term Liabilities
   Debentures                                                            6,828,948                  --
   Capital leases, net of current portion                                2,031,513           1,750,160
                                                                      ------------       -------------
                                                                         8,860,461           1,750,160
                                                                      ------------       -------------

Stockholders' Equity (Deficit)
   Common stock                                                                 36                 757
   Preferred stock                                                              --                  --
   Additional paid-in capital                                            4,310,144          36,933,715
   Accumulated deficit                                                  (7,169,493)        (10,481,812)
   Deferred compensation                                                        --            (453,000)
                                                                      ------------       -------------
                                                                        (2,859,313)         25,999,660
                                                                      ------------       -------------
Total Liabilities & Stockholders' Equity (Deficit)                    $ 15,661,317       $  41,663,441
                                                                      ============       =============
</TABLE>



   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                  Page 3 of 20


<PAGE>   4

                              eVENTURES GROUP, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                    Three Months Ended September 30,
                                                    --------------------------------
                                                         1998               1999
                                                    ------------        ------------
                                                               (unaudited)
<S>                                                 <C>                <C>
Revenues                                            $  4,205,662       $  8,675,719
Direct costs                                           3,495,587          8,729,520
                                                    ------------       ------------
Gross profit (loss)                                      710,075            (53,801)
Selling, general and administrative expenses           1,588,526          1,816,032
                                                    ------------       ------------
Loss from operations                                    (878,451)        (1,869,833)

Other (income) expenses
  Interest expense, net                                  359,435            519,231
  Write off of unamortized debt discount                      --            917,615
  Equity in loss of affiliate                                 --             18,730
  Foreign currency (gain) loss                             8,238             (6,502)
  Other                                                    7,946             (6,588)
                                                    ------------       ------------
                                                         375,619          1,442,486
                                                    ------------       ------------
Net loss                                              (1,254,070)        (3,312,319)
                                                    ============       ============
Net Loss per Share (basic and diluted)              $      (0.08)      $      (0.17)
Weighted Average Number of Shares
  Outstanding (basic and diluted)                     16,000,000         19,744,397
</TABLE>





   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                  Page 4 of 20


<PAGE>   5

                              eVENTURES GROUP, INC.
            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>


                                  Preferred Stock        Common Stock      Additional
                                 ----------------     ------------------    Paid-in      Accumulated      Deferred
                                 Shares    Amount     Shares      Amount     Capital       Deficit      Compensation       Total
                                 ------    ------     ------      ------     -------       -------      ------------       -----
<S>                              <C>       <C>        <C>         <C>        <C>         <C>            <C>              <C>

Balance, June 30, 1999               --        --        3,600       36      4,310,144    (7,169,493)            --      (2,859,313)

Net effect of reverse merger      1,000        --   37,860,010      721     32,170,571            --             --      32,171,292

Intrinsic value of
     stock option                    --        --           --       --        453,000            --       (453,000)             --

Net Loss                             --        --           --       --             --    (3,312,319)            --      (3,312,319)
                                  -----     -----   ----------     ----    -----------   -----------      ---------    ------------
Balance, September 30, 1999       1,000     $  --   37,863,610     $757    $36,933,715  $(10,481,812)     $(453,000)   $ 25,999,660
                                  =====     =====   ==========     ====    ===========  ============      =========    ============
</TABLE>

   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                  Page 5 of 20


<PAGE>   6

                              eVENTURES GROUP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                Three Months Ended September 30,
                                                                --------------------------------
                                                                    1998                1999
                                                                ------------        ------------
                                                                          (unaudited)
<S>                                                             <C>                 <C>
Cash Flows From Operating Activities:
  Net loss                                                       $(1,254,070)       $ (3,312,319)
  Adjustments to reconcile net income to net cash (used in)
    provided by net operating activities:
    Depreciation and amortization                                    522,064           1,708,406
    Other expenses                                                   370,689                  --
    Write-off accounts receivable - Touchstone                            --                  --
    Write-off certain intangible assets                                   --                  --
    Foreign currency (gain) loss                                       8,238              (6,502)
    Equity in unconsolidated affiliate                                    --              18,730
    Change in operating assets and liabilities:
      Accounts receivable                                           (989,939)            (97,493)
      Other receivables                                              (37,152)            (60,824)
      Prepaid expenses and other                                     (16,038)             (7,263)
      VAT receivable                                                (334,936)            321,100
      Restricted cash                                             (1,067,490)           (713,315)
      Accounts payable                                               835,036           1,170,492
      Accrued other                                                  (53,406)            309,516
      Accrued interest payable                                       129,220             142,508
      Customer deposits                                             (200,000)            679,765
                                                                 -----------        ------------
Net cash (used in) provided by operating activities               (2,087,784)            152,801
                                                                 -----------        ------------

Cash Flow From Investing Activities
  Deposits                                                             2,906             (56,761)
  Proceeds from sale of available-for-sale securities                246,580                  --
  Purchase of property and equipment                              (1,131,808)           (574,379)
  Net cash acquired in reverse merger acquisition                         --           1,049,688
  Investments in affiliates                                               --             (68,122)
                                                                 -----------        ------------
Net cash (used in) provided by investing activities                 (882,322)            350,426
                                                                 -----------        ------------
Cash Flow From Financing Activities
  Advances - shareholders                                             10,688                  --
  Issuance of common stock and preferred stock                            --           6,000,000
  Proceeds from the issuance of debentures                           850,000                  --
  Payments on capital leases                                         (46,517)           (196,583)
                                                                 -----------        ------------
Net Cash Provided (Used In) By Financing Activities                  814,171           5,803,417
                                                                 -----------        ------------
Net change in cash (before restricted cash)                       (2,155,935)          6,306,644
Cash and cash equivalents, beginning of period                     2,417,216              39,379
                                                                 -----------        ------------
Cash and cash equivalents, end of period                         $   261,281        $  6,346,023
                                                                 ===========        ============

Supplemental schedule of non-cash investing and financing activities:

  Goodwill arising from change in ownership
    and reverse merger acquisitions                              $        --        $ 16,639,971
                                                                 ===========        ============
  Net assets of subsidiary acquired through an
    issue of stock                                               $        --        $  1,241,162
                                                                 ===========        ============
</TABLE>



   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                  Page 6 of 20



































<PAGE>   7


                              eVENTURES GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     ORGANIZATION AND BUSINESS:

       The financial information and other statistical data contained herein
       represent the financial condition and results of operations of (i)
       e.Volve Technology Group, Inc. ("eVolve") for all periods prior to July
       1, 1998 and (ii) the accounting acquirer pursuant to a series of
       reorganization transactions completed on September 22, 1999 (the
       "Reorganization") described herein for all periods from July 1, 1998
       through September 30, 1999. As a result, the financial statements as of
       any date and for the period beginning July 1,1998 and ending on or prior
       to September 30, 1999 reflect the financial condition and results of
       operations of e.Volve as if the Company had acquired the interest of
       Infinity Investors Limited ("IIL"), IEO Investments, Limited ("IEOIL"),
       and Infinity Emerging Subsidiary Limited ("IESL") (collectively, the
       "Infinity entities") in e.Volve on July 1, 1998, except that (a)the
       balance sheet as of June 30, 1999 reflects the acquisition of the
       minority interest in i2v2.com Inc. ("i2v2.com") and (b) the balance sheet
       as of September 30, 1999 reflects the acquisition of Axistel
       Communications, Inc. ("Axistel"). Financial information and other data as
       of any date after September 30, 1999 is financial information and other
       data of eVentures.

       The Company was originally incorporated in 1987 as "Adina, Inc." The
       Company allowed its corporate existence to lapse in March 1996 and were
       subsequently reinstated as "eVentures Group, Inc." in August 1999. From
       1987 until the Reorganization, the Company was an inactive company. As a
       result of the Reorganization, the Company's business is now based on the
       operations of two wholly owned subsidiaries, e.Volve and Axistel and
       strategic investments in three companies.

       The Company operates in one business segment, the provision of
       Internet-based communications services and operation of Internet-based
       communications networks based on Internet Protocol ("IP") and
       Asynchronous Transfer Mode ("ATM") technologies. The Company currently
       has network facilities and points of presence in the United States and
       five foreign countries: Mexico, India, Syria, Sri Lanka and the United
       Kingdom.

       The operating companies provide communications services and operate
       communications networks based on IP and ATM technologies. The operating
       companies provide high quality communications services, including
       offering international voice, data, Internet access and other value-added
       applications over private fiber optic networks and the Internet. The
       customers of the Company include corporate and governmental
       communications service providers and individual business customers in the
       United States and internationally.

       Both the e.Volve and Axistel networks are scalable networks built around
       digital packet switching equipment. This switching equipment, together
       with other components of the networks, incorporate ATM and IP
       technologies. The networks meet voice over internet protocol ("VOIP")
       standards. Internationally, our networks offer communications services
       through leased or owned fiber optic cable under direct operating
       agreements with telecommunications authorities and internet service
       providers ("ISP").

       Strategic Investments

       In conjunction with its operations, the Company also intends to make
       strategic acquisitions and investments. These investments may be in
       companies at an early, middle or late stage of development. The Company
       also may, from time to time, form a company following a business model if
       it wants to make a strategic investment but cannot find an appropriate
       investment vehicle. Although it may from time to time vary the types of
       companies in which it makes strategic investments, the Company intends to
       focus its strategic investments on companies that are well-positioned to
       take advantage of next-generation networks and services and that can
       exploit the growth of the Internet as a medium for communications,
       commerce and the provision of information. In making these investments,
       it intends to provide (in addition to capital) operational assistance and
       strategic relationships, including strategic relationships with the
       operating companies.



                                  Page 7 of 20

<PAGE>   8

                              eVENTURES GROUP, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


       As of December 31st, 1999, the Company has made strategic investments in
       the following companies:

<TABLE>
<CAPTION>
       Company Name                                          Date of Investment            % Ownership
       ------------                                          ------------------            -----------
<S>                                                      <C>                           <C>
       Innovative Calling Technologies, LLC                      April, 1999                  50.0%
       i2v2.com Inc. (d/b/a PhoneFree.com)                       June, 1999                   16.0%
       FonBox, Inc.                                            November, 1999                  8.0%
</TABLE>

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

       INTERIM FINANCIAL DATA

       The consolidated balance sheet as of September 30, 1999 and the
       consolidated statements of operations, shareholders' equity and cash
       flows for the three month periods ended September 30, 1998 and 1999 have
       been prepared by the Company without audit. In the opinion of management,
       all adjustments, consisting of only normal recurring adjustments,
       necessary to present fairly the consolidated financial position, results
       of operations and cash flows have been made. The results of operations
       for the interim periods are not necessarily indicative of the results for
       the full year. The accompanying financial statements should be read with
       the Company's consolidated financial statements included in the Company's
       8K-A and Form 10 filed with the Securities and Exchange Commission on
       December 9, 1999 and December 20, 1999, respectively.

       USE OF ESTIMATES

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

3      PROPERTY AND EQUIPMENT:

       Property and equipment consists of the following at September 30, 1999:

<TABLE>
<S>                                                         <C>
          Property, Plant & Equipment:
          Leasehold Improvements                            $    311,540
          Network equipment under capital leases               7,044,305
          Other equipment                                      1,242,662
          Furniture and fixtures                                  37,451
                                                            ------------
                                                               8,635,958
          Accumulated depreciation                            (1,206,013)
                                                            ------------
                                                            $  7,429,945
                                                            ============
</TABLE>

       Depreciation expense was $122,506 and $412,526 for the three months ended
       September 30, 1998 and 1999, respectively.

4      NET LOSS PER SHARE:

       The Financial Accounting Standards Board issued Statement of Financial
       Accounting Standards  No. 128 ("SFAS 128"), Earnings Per Share ("EPS").
       SFAS 128 requires dual presentation of basic EPS and diluted EPS on the
       face of all income statements issued after December 15, 1997 for all
       entities with complex capital structures. Basic EPS is computed as net
       income divided by the weighted average number of common shares
       outstanding for the period. Diluted EPS reflects the potential dilution
       that could occur from common shares issuable through stock options,
       warrants and convertible debentures.


                                  Page 8 of 20

<PAGE>   9
                              eVENTURES GROUP, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


       Diluted EPS has not been presented for the effects of stock
       options, warrants and convertible debentures as the effect would be
       antidilutive. Accordingly, basic and diluted EPS did not differ for any
       period presented. For purposes of computation of EPS, the shares issued
       for the acquisition of e.Volve (16,000,000 shares) are deemed to have
       been in existence for the entire period.

5      SUBSEQUENT EVENTS:

       On October 14, 1999, eVentures exchanged accounts payable to a vendor of
       $4,307,437 for $1,107,967 cash plus 221,000 shares of eVentures' Common
       Stock.

       To consummate the September 22, 1999 Transaction (see Note 1), eVentures
       acquired the remaining 33.3% of e.Volve on October 19,1999, through an
       extension of eVentures original offer. This purchase was settled through
       an issuance of 5,831,253 shares of eVentures' Common Stock.

       On November 18, 1999, eVentures issued 2,500 shares of Series B
       Convertible Preferred Stock and on November 24, 1999, eVentures issued
       3,725 shares of Series B Convertible Preferred Stock, both at a price of
       $1,000 per share. The par value of both classes of shares is $0.00002.
       The shares are convertible to Common Stock at a price of $13.80 per
       share, subject to normal anti-dilution adjustments. The conversion price
       was determined using the average of the closing bid price per share of
       eVentures common stock for the 10 trading days ended October 29, 1999.
       These shares convert to eVentures' Common Stock on the second anniversary
       of date of issue.

       On November 30, 1999, the Company terminated its marketing agreement with
       Corpovision. The Company settled its liability to Corpovision and       ,
       terminated the agreement through an issue of 137,500 shares of eVentures
       Common Stock. As a result, the Company will record a charge in the
       statement of operations of approximately $1,000,000 in November, 1999 for
       the difference between the value of the shares issued and the book value
       of the note payable to Corpovision.

       On December 15, 1999, the Company issued and sold 775 shares of its
       Series B Convertible Preferred Stock to an aggregate of 14 investors for
       $775,000 at a price of $1,000 per share. The par value of both classes of
       shares is $0.00002. The shares are convertible to Common Stock at a price
       of $13.80 per share, subject to normal anti-dilution adjustments. The
       conversion price was determined using the average of the closing bid
       price per share of eVentures common stock for the 10 trading days ended
       October 29, 1999. These shares convert to eVentures common stock on the
       second anniversary of date of issue.


                                  Page 9 of 20

<PAGE>   10
                              eVENTURES GROUP, INC.
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


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

OVERVIEW

The financial information and other statistical data contained herein represent
the financial condition and results of operations of (i) e.Volve for all periods
prior to July 1, 1998 and (ii) the accounting acquirer pursuant to a series of
reorganization transactions completed on September 22, 1999 (the
"Reorganization") described herein for all periods from July 1, 1998 through
September 30, 1999. As a result, our financial statements as of any date and for
any period beginning July 1,1998 and ending on or prior to September 30, 1999
reflect the financial condition and results of operations of e.Volve as if we
had acquired the interest of the Infinity Entities in e.Volve on July 1, 1998,
except that (a)our balance sheet as of June 30, 1999 reflects the acquisition of
our minority interest in i2v2.com and (b) our balance sheet as of September 30,
1999 reflects the acquisition of Axistel. Financial information and other data
as of any date after September 30, 1999 is financial information and other data
of eVentures.

We were originally incorporated in 1987 as "Adina, Inc." We allowed our
corporate existence to lapse in March 1996 and were subsequently reinstated as
"eVentures Group, Inc." in August 1999. From 1987 until the Reorganization, we
were an inactive company. As a result of the Reorganization, our business is now
based on the operations of two wholly owned subsidiaries, e.Volve and Axistel
and strategic investments in three companies.

NET REVENUES. Net revenues are generated through the sale of international
Internet telephony minutes on a wholesale basis to other U.S. long-distance
providers. The Company's agreements with its wholesale customers are short term
in duration and the rates charged to customers are subject to change from time
to time. Due to increasing competition, management expects these rates to
decline, which could have a material adverse effect on our financial condition
or results of operation. The Company's three largest customers accounted for
substantially all its net revenues.

DIRECT COSTS. Direct costs include per minute termination charges and lease
payments and fees for fiber optic cable. Prior to September 1999, the Company
only provided international telecommunication services from the United States to
Mexico. The majority of the termination fees and certain fiber optic lease
payments were payable in Mexican pesos. As a result, we were exposed to exchange
rate risk due to the fluctuation of the Mexican peso compared to the US dollar.
Continued fluctuation in the exchange rate may have a material adverse impact on
our financial condition or results of operation. During September 1999, we began
providing international telecommunication services from the United States to
India. All direct costs related to the India operation is billed in US dollars.
Two vendors in Mexico provided substantially all of our terminating capabilities
in Mexico. If one of these vendor relationships were terminated, it could have a
material adverse effect on our financial condition and results of operation.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. These expenses include corporate
expenses and management salaries, sales and marketing expenses, travel and
development expenses, benefits, occupancy costs, and administrative expenses.
The Company maintains a corporate office and two switch facilities. Due to the
international nature of its business, travel and development costs have been
significant and could continue to increase as we seek to expand our network.


                                  Page 10 of 20


<PAGE>   11

                              eVENTURES GROUP, INC.
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

SUMMARY OF OPERATING RESULTS

The table below summarizes the Company's operating results

<TABLE>
<CAPTION>
                                                         Three Months Ended September 30,
                                                  ---------------------------------------------
                                                      1998         %           1999         %
                                                  -----------    -----     -----------    -----
                                                                   (unaudited)
<S>                                               <C>            <C>       <C>            <C>
Revenues                                          $ 4,205,662    100.0%    $ 8,675,719    100.0%
Direct costs                                        3,495,587     83.1%      8,729,520    100.6%
                                                  -----------    -----     -----------    -----
Gross profit (loss)                                   710,075     16.9%        (53,801)    (0.6)%
Selling, general and administrative                 1,588,526     37.8%      1,816,032     20.9%
                                                  -----------    -----     -----------    -----
Loss from operations                                 (878,451)   (20.9)%    (1,869,833)   (21.6)%

Other (income) expenses
     Interest expense, net                            359,435      8.5%        519,231      6.0%
     Write off of unamortized debt discount              --        0.0%        917,615     10.6%
     Equity in loss of affiliate                         --        0.0%         18,730      0.2%
     Foreign currency (gain) loss                       8,238      0.2%         (6,502)    (0.1)%
     Other                                              7,946      0.2%         (6,588)    (0.1)%
                                                  -----------    -----     -----------    -----
                                                      375,619      8.9%      1,442,486     16.6%
                                                  -----------    -----     -----------    -----
Net loss                                           (1,254,070)   (29.8)%    (3,312,319)   (38.2)%
                                                  ===========    =====     ===========    =====
</TABLE>

THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1998

NET REVENUES. Net revenues increased to $8.7 million during the three months
ended September 30, 1999 from $4.2 million during the three months ended
September 30, 1998, an increase of 106.3%. This primarily resulted from an
increase in traffic transmitted to Mexico and the startup of providing VOIP
services to India during September 1999, offset by a decrease in the average net
revenue per minute as a result of increased competition in the Mexican market.

DIRECT COSTS. Direct costs increased to $8.7 million during the three months
ended September 30, 1999 from $3.5 million during the three months ended
September 30, 1998, an increase of 149.7%. This increase in direct costs
resulted from an increase in termination fees associated with the increase in
traffic transmitted to Mexico, additional costs related to the termination of
traffic in India and an increase in costs for fiber optic connections between
our points of presence. As a percentage of revenues, direct costs during the
three months ended September 30, 1999 increased to 100.6% from 83.1%.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased to $1.8 million during the three months ended September 30,
1999 from $1.6 million during the three months ended September 30,1998, an
increase of 14.3%. This increase resulted primarily from an increase in
operating staff and general operating activities, and an increase in
depreciation expense.

INTEREST EXPENSE, NET. Interest expense, net increased to $519,231 during the
three months ended September 30, 1999 from $359,435 during the three months
ended September 30, 1998, a increase of 44.5%. This increase was a result of
higher charges related to capital leases for new equipment.

WRITE OFF OF UNAMORTIZED DEBT DISCOUNT. The write off of unamortized debt
discount during the three months ended September 30, 1999 resulted from the
purchase of e.Volve's outstanding debentures by eVentures and the subsequent
elimination upon consolidation of these debentures in our consolidated balance
sheet.

EQUITY IN LOSS OF UNCONSOLIDATED AFFILIATE. Equity in loss of unconsolidated
affiliate was $18,730 during the three months ended September 30, 1999. These
losses occurred as a result of a joint venture formed with e.Volve in April
1999.



                                Page 11 of 20
<PAGE>   12
                             eVENTURES GROUP, INC.
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

FOREIGN CURRENCY (GAIN) LOSS. Foreign currency (gain) loss during the three
months ended September 30, 1999 was a gain of $6,502 compared with a loss of
$8,238 during the three months ended September 30, 1998.

OTHER. Other income of $6,588 during the three months ended September 30, 1999
changed from an expense of $7,946 during the three months ended September 30,
1998.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, we have funded our operations primarily through cash from
operations and from the private placement of common stock, preferred stock,
warrants to purchase common stock and debt. As of September 30, 1999, we have
raised a total of $15.0 million to finance operations and to fund capital
expenditures primarily through borrowings from and equity investments by the
Infinity Entities and the proceeds of capital leases.

On September 28, 1999, we completed a private placement of common and preferred
stock of approximately $6.0 million. Proceeds from these issuances were used for
general corporate purposes and as capital for new investments and projects.

Our principal uses of cash are to fund working capital requirements, capital
expenditures and the operating losses.

As of September 30, 1999, we had current assets of $10.5 million, including
cash, cash equivalents and short-term investments of $7.4 million, and a working
capital deficit of $3.4 million. Current assets included restricted cash of $1.8
million and a tax refund receivable of $2.4 million.

CASH FLOWS FROM OPERATING ACTIVITIES:

Our operating activities generated cash of $152,801 during the three months
ended September 30, 1999. During the three months ended September 30, 1999 cash
flows from operating activities primarily resulted from non-cash depreciation
and amortization expenses, an increase in accounts payable, an increase in
customer deposits and a decrease in tax refund receivable, off-set by net losses
and an increase in restricted cash.

CASH FLOWS FROM INVESTING ACTIVITIES:

We generated cash flow from investing activities of $350,426 during the three
months ended September 30, 1999. During the three months ended September 30,
1999, cash generated by investing activities primarily consisted of cash
acquired in the reverse merger acquisitions offset by uses to purchase
equipment, fund a recently formed joint venture, and make certain deposits.

CASH FLOWS FROM FINANCING ACTIVITIES:

Our cash flow from financing activities was $5.8 million during the three months
ended September 30, 1999. During the three months ended September 30, 1999 cash
provided was attributable to the issuance of $6.0 million of common stock and
preferred stock, offset by capital lease payments.

GENERAL

Our business plans will continue to require a substantial amount of capital to
fund its expansion of existing and recently acquired markets, continuing to
develop its network and fund operating losses and debt and capital lease service
requirements. We also continue to make strategic investments and to evaluate
acquisitions in light of our long range plans. Such strategic investments and
acquisitions, if realized, could require expenditure of a material portion of
our financial resources and would accelerate the need for raising additional
capital in the future. Sources of funding for our financing requirements may
include vendor financing, bank loans and public offerings or private placements
of equity and/or debt securities. There can be no assurance that additional
financing will be available or, if available, that financing can be obtained on
a timely basis and on acceptable terms. The failure to obtain such financing on
acceptable terms could have a material adverse effect on our business and
prospects.

                                 Page 12 of 20

<PAGE>   13
                            eVENTURES GROUP, INC.
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Our cash and short-term investments are expected to provide sufficient liquidity
to meet our capital requirements for approximately the next twelve months.

EQUIPMENT LEASING AND FINANCING. We have leased equipment manufactured by
various equipment manufacturers including Network Equipment Technologies, Inc.,
Harris Corporation and Lucent Technologies. We have entered into approximately
$7.0 million of capital leases with BA Capital Corp., Arrendadora BankAmerica,
S.A. and Ascend Credit Corporation.

SUBSEQUENT EVENTS:

On October 14, 1999, we exchanged accounts payable to a vendor of $4,307,437 for
$1,107,967 cash plus 221,000 shares of our Common Stock.

To consummate the September 22, 1999 Transaction (see Note 1), we acquired the
remaining 33.3% of e.Volve on October 19,1999, through an extension of our
original offer. This purchase was settled through an issuance of
5,831,253 shares of our common stock.

On November 18, 1999, we issued 2,500 shares of Series B Convertible Preferred
Stock and on November 24, 1999, we issued 3,725 shares of Series B Convertible
Preferred Stock, both at a price of $1,000 per share. The par value of both
classes of shares is $0.00002. The shares are convertible to Common Stock at a
price of $13.80 per share, subject to normal anti-dilution adjustments. The
conversion price was determined using the average of the closing bid price per
share of our Common Stock for the 10 trading days ended October 29, 1999. These
shares convert to our Common Stock on the second anniversary of date of issue.

On November 30, 1999, we terminated our marketing agreement with Corpovision. We
settled our liability to Corpovision and terminated the agreement through an
issue of 137,500 shares of eVentures' Common Stock. As a result, we will record
a charge in the statement of operations of approximately $1,000,000 in November,
1999 for the difference between the value of the shares issued and the book
value of the note payable to Corpovision.

On December 15, 1999, we issued and sold 775 shares of our Series B Convertible
Preferred Stock to an aggregate of 14 investors for $775,000 at a price of
$1,000 per share. The par value of both classes of shares is $0.00002. The
shares are convertible to Common Stock at a price of $13.80 per share, subject
to normal anti-dilution adjustments. The conversion price was determined using
the average of the closing bid price per share of our common stock for the 10
trading days ended October 29, 1999. These shares convert to our Common Stock on
the second anniversary of date of issue.


                                 Page 13 of 20

<PAGE>   14

                             eVENTURES GROUP, INC.
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

EFFECTS OF INFLATION

Management does not believe that its business is impacted by inflation to a
significantly different extent than is the general economy. However, there can
be no assurances that inflation will not have a material effect on the Company's
operations in the future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to the impact of political instability, foreign currency,
and other risks.

Political Instability Risks. The Company has relationships with foreign
suppliers in Syria, Mexico, India, Sri Lanka and other countries. The Company
has not experienced any negative economic consequences as a result of
relationships with foreign suppliers in these countries, but may be negatively
affected should political instability in any of these countries develop.


                                 Page 14 of 20

<PAGE>   15

                             eVENTURES GROUP, INC.
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Foreign Currency Risks. Since the agreements the Company has entered into with
foreign suppliers in Syria, India, Sri Lanka and other countries are denominated
in U.S. dollars, the Company is not exposed to risks associated with
fluctuations in these foreign currencies. However, because the Company's
agreements with Mexican suppliers are denominated in Mexican pesos, the Company
may be exposed to fluctuations in Mexican pesos, as well as to downturns in the
Mexican economy, all of which may affect profitability. During the period ended
September 30, 1999, substantially all of our termination costs in Mexico were
denominated in Mexican pesos.

Other Market Risks. The Company is also exposed to potential risks in dealing
with foreign suppliers in foreign countries associated with potentially weaker
protection of intellectual property rights, unexpected changes in regulations
and tariffs, and varying tax consequences.

                                 Page 15 of 20

<PAGE>   16

                                     PART II
Item 1. Legal Proceedings

       The Company is involved in legal proceedings from time to time, none of
       which management believes, if decided adversely to the Company, would
       have a material adverse effect on the business, financial condition or
       results of operations of the Company.

Item 2. Changes in Securities

       In the past four months, we have issued and sold unregistered securities
       in the transactions described below.

       On September 22, 1999, in connection with the Reorganization, we issued
       and sold:

       (i)     an aggregate of 14,562,193 shares of Common Stock to IEOIL and
               IESL as merger consideration for all of the equity interests in
               IEOH;

       (ii)    an aggregate of 6,381,000 shares of Common Stock to certain
               shareholders of AxisTel in exchange for the outstanding shares of
               capital stock of AxisTel not owned by IEOH; and

       (iii)   5,682,807 shares of common stock to IIL in exchange for shares
               of capital stock of e.Volve representing approximately one-third
               of the outstanding capital stock of e.Volve. The issuance of such
               shares was exempt from the registration requirements of the
               Securities Act pursuant to Regulation D, Section 4(2) and/or Rule
               506 promulgated pursuant to the U.S. Securities Act of 1933, as
               amended (the "Securities Act").

       On September 22, 1999, we issued and sold 1,000 shares of Series A
       Compatible Preferred Stock to an investor for $1,000,000 in a transaction
       exempt from the registration requirements of the Securities Act pursuant
       to Regulation D, Section 4(2) and/or Rule 506 promulgated pursuant to the
       Securities Act. No general solicitations were made in connection with
       this transaction.

       On September 22, 1999, we issued and sold an aggregate of 2,482,500
       shares of Common Stock to 25 investors for $4,965,000 in a transaction
       exempt from the registration requirements of the Securities Act pursuant
       to Regulation D, Section 4(2) and/or Rule 506 promulgated pursuant to the
       Securities Act. No general solicitations were made in connection with
       this transaction.

       On October 14, 1999, we entered into an agreement to exchange Common
       Stock to a vendor to settle certain accounts payable due to the vendor in
       the amount of $3.2 million.

       On October 19, 1999, pursuant to the Exchange Agreement, we issued and
       sold an aggregate of 5,831,253 shares of Common Stock to certain
       shareholders of e.Volve in exchange for the outstanding shares of capital
       stock of e.Volve not owned by us in a transaction exempt from the
       registration requirements of the Securities Act pursuant to Regulation D,
       Section 4(2) and/or Rule 506 promulgated pursuant to the Securities Act.
       No general solicitations were made in connection with this transaction.

       On November 11, 1999, we gave notice of the exercise of our option to
       convert the shares of our Series A Preferred Stock into 200,000 shares of
       our Common Stock to the holder of the shares of our Series A Preferred
       Stock upon conversion of such Series A Preferred Stock in a transaction
       exempt from the registration requirements of the Securities Act pursuant
       to Section 3(a)(9).

       On November 18, 1999, we issued and sold 2,500 shares of our Series B
       preferred stock to an investor for $2,500,000 in a transaction exempt
       from the registration requirements of the Securities Act pursuant to
       Section 4(2) of the Securities Act, Regulation D and/or Rule 506
       promulgated pursuant to the Securities Act. No general solicitations were
       made in connection with this transaction.

                                 Page 16 of 20

<PAGE>   17

       On November 24, 1999, we issued and sold 3,725 shares of our Series B
       Preferred Stock to an investor for $3,725,000 in a transaction exempt
       from the registration requirements of the Securities Act pursuant to
       Regulation D, Section 4(2) and/or Rule 506 promulgated pursuant to the
       Securities Act. No general solicitations were made in connection with
       this transaction.

       On November 30, 1999 we agreed to issue shares of Common Stock to
       extinguish $1.1 million of notes payable to a vendor.

       On December 15, 1999, we issued and sold 775 shares of our Series B
       Preferred Stock to an aggregate of 14 investors for $775,000 in a
       transaction exempt from the registration requirements of the Securities
       Act pursuant to Regulation D, Section 4(2) and/or Rule 506 promulgated
       pursuant to the Securities Act. No general solicitations were made in
       connection with this transaction.

Item 3. Defaults Upon Senior Securities

       None

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

       None

Item 5. Other Information

       None

Item 6. Exhibits and Reports on Form 8-K

        (a)     The exhibit listed in the accompanying Index to Exhibits are
                filed as part of this Report on Form 10-Q.

        (b)     Reports on 8-K

                    1)   On October 7, 1999, the Company filed a report on Form
                         8-K announcing that it had acquired (i) all of the
                         outstanding shares of AxisTel, (ii) approximately
                         two-thirds of the outstanding shares of e.Volve
                         and (iii) approximately 17% of the outstanding shares
                         of i2v2.com Inc. pursuant to the Reorganization.

                    2)   On November 3, 1999, the Company filed a report on Form
                         8-K announcing that on October 19, 1999 it had acquired
                         the remaining one-third interest of e.Volve, making
                         eVolve a wholly owned subsidiary of the Company.

                    3)   On December 7, 1999, the Company filed a report on Form
                         8-K/A which amends the Form 8-K previously filed on
                         October 7, 1999. The Form 8-K/A reported that the
                         Company was unable to provide historical financial
                         information statements and pro forma financial
                         information statements as of December 6, 1999 as was
                         previously planned, but anticipated filing the
                         historical financial information statements and pro
                         forma financial information statements on or prior to
                         December 9, 1999.

                    4)   On December 9, 1999, the Company filed a report on Form
                         8-K/A which amends the Form 8-K previously filed on
                         October 7, 1999, as later amended on December 7, 1999.
                         The Form 8-K/A filed on December 9, 1999 included the
                         historical financial information statements and pro
                         forma financial information statements, as well as
                         unaudited financial statements of the Company as of
                         September 30, 1999 and for the three months ended
                         September 30, 1999 and September 30, 1998.

                    5)   On December 14, 1999, the Company filed a report on
                         Form 8-K announcing that (i) it had engaged BDO Seidman
                         LLP at its auditors and dismissed Larry O'Donnell,
                         C.P.A. as of December 9, 1999 and (ii) it had changed
                         its fiscal year end date from April 30, 1999 to
                         June 30, 1999.


                                 Page 17 of 20

<PAGE>   18
                    6)   On December 20, 1999, the Company filed a report on
                         Form 8-K/A which amends the financial statements
                         reported in the December 9, 1999 Form 8-K/A.

                    7)   On December 28, 1999, the Company filed a report on
                         Form 8-K/A which amends the Form 8-K filed on December
                         14, 1999 in order to provide the letter addressed to
                         the Securities and Exchange Commission by the Company's
                         former accountant required pursuant to Item 304 of
                         Regulation S-K.





                                 Page 18 of 20

<PAGE>   19




                                   SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.


eVENTURES GROUP, INC.


Date: January 5, 2000                By:   /s/ Barrett N. Wissman
     ------------------------              -------------------------------------
                                           Barrett N. Wissman
                                           President and Chief Executive Officer

Date: January 5, 2000                By:   /s/ John Stevens Robling Jr.
     ------------------------              -------------------------------------
                                           John Stevens Robling Jr.
                                           Chief Financial Officer



                                 Page 19 of 20


<PAGE>   20


                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER       DESCRIPTION
-------      -----------
<S>          <C>
 27.1        Financial Data Schedule
</TABLE>