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Worldwide Web Networx Corp · S-1 · On 2/26/01

Filed On 2/26/01 12:17pm ET · SEC File 333-56176 · Accession Number 912057-1-6613

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 2/26/01  Worldwide Web Networx Corp        S-1                    2:147                                    Merrill Corp/FA

Registration Statement (General Form) · Form S-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-1         Registration Statement (General Form)                145    763K 
 2: EX-5.1      Opinion re: Legality                                   2      9K

S-1 · Registration Statement (General Form)
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) ATMcenter.com ATM Ltd ATM Shareholders Agreement Employment Agreements and Termination of Employment and Change in Control Arrangements Entrade Inc Equity income (loss) Exhibits and Financial Statement Schedules Indemnification of Directors and Officers Intangible Assets International Markets Letter of Intent Concerning the Acquisition of eMarketplaces International, Inc New America Network, Inc. and Real Quest, Inc Offering, The Other Expenses of Issuance and Distribution Our Business Our Stock Issuance Agreement with Warren Rothstein Recent Sales of Unregistered Securities Release of Collateral Report of Independent Auditors Revenues Risk Factors Subsequent Events The Offering Trade Credits Undertakings Worldwide Web Networx Corporation WWWX-Jencom, LLC and InterCommerce China, LLC 1999 Equity Compensation Plan
1	1st Page
2	Worldwide Web Networx Corporation
5	The Offering
8	Risk Factors
29	Revenues
35	Equity income (loss)
38	Our Business
43	Trade Credits
44	ATMcenter.com
"	International Markets
47	Our Stock Issuance Agreement with Warren Rothstein
"	ATM Shareholders Agreement
48	New America Network, Inc. and Real Quest, Inc
50	WWWX-Jencom, LLC and InterCommerce China, LLC
51	Entrade Inc
56	Subsequent Events
"	Release of Collateral
"	Letter of Intent Concerning the Acquisition of eMarketplaces International, Inc
66	1999 Equity Compensation Plan
68	Employment Agreements and Termination of Employment and Change in Control Arrangements
86	Report of Independent Auditors
97	Intangible Assets
115	ATM Ltd
131	Item 13. Other Expenses of Issuance and Distribution
"	Item 14. Indemnification of Directors and Officers
132	Item 15. Recent Sales of Unregistered Securities
134	Item 16. Exhibits and Financial Statement Schedules
142	Item 17. Undertakings

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Sponsored Ads...

As filed with the Securities and Exchange Commission on February 26, 2001
REGISTRATION NO. 333-_____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------------------
WORLDWIDE WEB NETWORX CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

DELAWARE 7389 58-2280078
(State or Other (Primary standard (I.R.S. Employer
Jurisdiction of industrial Identification
Incorporation or classification Number)
Organization) code number)

------------------------------------
521 FELLOWSHIP ROAD, SUITE 130
MT. LAUREL, NEW JERSEY 08504
(856) 914-3100
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)

CAROL C. KNAUFF
WORLDWIDE WEB NETWORX CORPORATION
521 FELLOWSHIP ROAD, SUITE 130
MT. LAUREL, NEW JERSEY 08504
(856) 914-3100
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent for Service)
------------------------------------
WITH A COPY TO:

G. DAVID ROSENBLUM, ESQ.
WorldWide Web NetworX Corporation
521 FELLOWSHIP ROAD, SUITE 130
MT. LAUREL, NJ 08054
(856) 914-3149

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable on or after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. |_|

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| ______________

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| ________________

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| ________________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
-------------------------------------------------------------------------------

[Enlarge/Download Table]

-------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
==============================================================================================================================
AMOUNT OF
SHARES TO BE OFFERING PRICE PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE REGISTERED REGISTERED PER SHARE (1) AGGREGATE OFFERING PRICE REGISTRATION FEE
------------------------------------------------------------------------------------------------------------------------------

Common Stock, $0.001 par value 19,814,802 $ 0.11 $ 2,179,628 $ 545.00
------------------------------------------------------------------------------------------------------------------------------

==============================================================================================================================

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Securities Act of 1933, as amended, based
on the average of the bid and asked prices of our common stock as quoted
on the OTC Electronic Bulletin Board on February 23, 2001.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================

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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission, hereafter, the SEC, is effective. This
Prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.

DATED FEBRUARY 26, 2001

PROSPECTUS

WORLDWIDE WEB NETWORX CORPORATION

19,814,802 SHARES OF COMMON STOCK

This prospectus is part of a registration statement that covers the
following:

1. 5,964,522 shares of common stock purchased by our stockholders in
our private placement offerings;

2. 4,910,849 shares of common stock issued in connection with
acquisitions;

3. 198,950 shares of common stock issued as a placement agent fee in
connection with the offering of our Series A 6% Cumulative
Convertible Debentures;

4. 705,014 shares of common stock issued upon the conversion of our
outstanding Series A 6% Cumulative Convertible Debentures, dated
March 22, 1999;

5. 95,000 shares of common stock issued for legal services rendered;

6. Up to 560,000 shares of common stock that are issuable upon the
conversion of our outstanding Series A 6% Cumulative Convertible
Debentures, in the principal amount of $125,000;

7. Up to 6,240,000 shares of common stock that are issuable to the
holder upon the conversion of our Convertible Promissory Note, dated
August 22, 2000, in the principal amount of $3,600,000;

8. Up to 200,000 shares of common stock that are issuable upon exercise
of warrants issued to individuals who rendered consulting services
to the company; and

9. Up to 940,467 shares of common stock that are issuable upon exercise
of warrants issued to the placement agent in connection with our
private placement offering and the purchase of shares of our common
stock by the placement agent.

This prospectus relates to the offer and sale of outstanding shares of our
common stock by the selling stockholders identified on pages 19-22 of this
prospectus. We will not receive any proceeds from the sale of our common stock
by the selling stockholders. The selling stockholders may offer and sell some,
all or none of the common stock under this prospectus. The selling stockholders
may determine the prices at which they will sell their shares of common stock,
which may be at market prices prevailing at the time of sale or some other
price. In connection with such sales, the selling stockholders may use brokers
or dealers who may receive compensation or commissions for such sales. The
selling stockholders may also attempt to sell their shares in isolated private
transactions, at negotiated prices, with institutional or other investors.

The shares of our common stock are listed on the OTC Electronic Bulletin
Board under the symbol "WWWX." On February 23, 2001, the closing price of one
share of our common stock on the OTC Electronic Bulletin Board was $0.094 per
share.

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You should read this prospectus carefully before you invest.

INVESTING IN THESE SECURITIES INVOLVES SIGNIFICANT RISKS. SEE THE RISK
FACTORS SECTION BEGINNING ON PAGE 7.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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

The date of this prospectus is February 26, 2001.

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TABLE OF CONTENTS

[Download Table]

Page

SUMMARY 4
RISK FACTORS 7
FORWARD-LOOKING STATEMENTS 18
USE OF PROCEEDS 18
DIVIDEND POLICY 18
CAPITALIZATON 19
SELLING SECURITY HOLDERS 20
PLAN OF DISTRIBUTION 23
INTERESTS OF NAMED EXPERTS AND COUNSEL 24
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING
INFORMATION 24
SUPPLEMENATARY FINANCIAL INFORMATION 25
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION 25
OUR BUSINESS 37
MARKET FOR OUR COMMON STOCK 58
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 59
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 60
MANAGEMENT 60
EXECUTIVE COMPENSATION AND OTHER INFORMATION 63
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT 69
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 71
DESCRIPTION OF CAPITAL STOCK 77
ANTI-TAKEOVER CONSIDERATIONS AND SPECIAL PROVISIONS 78
TRANSFER AGENT 79
SHARES ELIGIBLE FOR FUTURE SALE 79
LEGAL MATTERS 83
EXPERTS 83
WHERE YOU CAN FIND MORE INFORMATION 83

You should rely only the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may be used only where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.

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SUMMARY

THIS SUMMARY CONTAINS BASIC INFORMATION ABOUT US AND THE OFFERING. BECAUSE
IT IS A SUMMARY, IT DOES NOT CONTAIN ALL THE INFORMATION THAT YOU SHOULD
CONSIDER BEFORE INVESTING. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY,
INCLUDING THE RISK FACTORS AND OUR FINANCIAL STATEMENTS AND THE RELATED NOTES TO
THOSE STATEMENTS INCLUDED IN THIS PROSPECTUS. EXCEPT AS OTHERWISE REQUIRED BY
THE CONTEXT, REFERENCES IN THIS PROSPECTUS TO "WE," "OUR," "US," "THE COMPANY"
AND "OUR COMPANY" REFER TO WORLDWIDE WEB NETWORX CORPORATION. UNLESS OTHERWISE
INDICATED, ALL INFORMATION IN THIS PROSPECTUS ASSUMES NO EXERCISE OF THE
UNDERWRITERS' OPTION TO PURCHASE ADDITIONAL SHARES OF COMMON STOCK.

ABOUT WORLDWIDE WEB NETWORX CORPORATION

We currently derive revenues from two companies, ATM Service, Ltd. ("ATM")
and The Intrac Group, Ltd. ("Intrac"). ATM and Intrac principally derive revenue
by providing off-line inventory liquidation and asset recovery services and from
the purchase and resale of advertising, merchandise or business services.
However, ATM's web site has not, to date, consummated any meaningful
transactions or produced any meaningful revenue.

OUR OFFICES

We maintain our principal executive offices at 521 Fellowship Road, Suite
130, Mt. Laurel, New Jersey 08054. Our telephone number is (856) 914-3100.

THE OFFERING

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Common stock offered by the Selling The 19,814,802 shares registered with this
Stockholders prospectus include:

5,964,522 shares of our common stock
purchased by stockholders in our private
placement offerings;

4,910,849 shares of our common stock
issued in connection with acquisitions;

198,950 shares of our common stock issued
as a placement agent fee in connection
with the offering of our Series A 6%
Cumulative Convertible Debentures;

705,014 shares of our common stock issued
upon the conversion of certain of our
Series A 6% Cumulative Convertible
Debentures;

95,000 shares of our common stock issued
for legal services rendered;

Up to 560,000 shares of our common stock
issuable upon the conversion of the
remaining Series A 6% Cumulative
Convertible Debentures;

Up to 200,000 shares of our common stock
issuable upon exercise of warrants issued
to individuals who rendered consulting
services to the company;

Up to 940,467 shares of our common stock
issuable upon exercise of warrants issued
to the placement agent in connection with
our private placement offering and the
purchase of shares of our common stock by
the placement agent; and

Up to 6,240,000 shares of our common stock
issuable upon conversion of our
Convertible Promissory Note.

Common stock to be outstanding after The conversion of the convertible
the offering (1) promissory note and the outstanding
convertible debentures, and the exercise
of the warrants, will result in the
issuance of additional shares. For
purposes of this prospectus, we have
assumed that an additional 7,940,467
shares will be issued upon conversion or
exercise of these securities. Because the
number of shares issuable upon conversion
of the outstanding convertible debentures
is based on a formula that varies with the
market price of our common stock, because
we do not know whether the holder of our
convertible promissory note will exercise
its option to extend the maturity date for
up to two

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years, and because there is no
obligation on the holders of the
convertible promissory note, convertible
debentures or warrants to convert or
exercise these securities, we may issue
more or less than the additional 7,940,467
shares covered by this prospectus.

Use of Proceeds We will receive no proceeds from the
sale of the common stock by the Selling
Stockholders. Any proceeds received
by us upon exercise of our warrants may
be used for general working capital or
for acquisitions.

OTC Electronic Bulletin Board WWWX
Trading symbol

(1) Does not include shares issuable upon exercise of all options under (i) our
1999 Equity Compensation Plan, of which 1,240,000 have been granted and remain
outstanding, none of which have been exercised as of February 21, 2001, or (ii)
our 2000 Incentive Option Plan, of which 9,475,000 have been granted and remain
outstanding, none of which have been exercised as of February 21, 2001.

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RISK FACTORS

An investment in our common stock involves a number of very significant
risks. You should carefully consider the following risks and uncertainties in
addition to other information in this annual report in evaluating the Company
and its business before purchasing shares of common stock. Our business and
results of operations could be seriously harmed by any of the following risks.
The trading price of our common stock could decline due to any of these risks,
and you may lose all or part of your investment.

IF WE DO NOT RAISE ADDITIONAL FUNDS FROM THIRD PARTY SOURCES OR
IMMEDIATELY BECOME PROFITABLE, WE MAY BE UNABLE TO CONTINUE OUR OPERATIONS.

Our recurring operating losses and growing working capital needs will
require us to obtain additional capital to operate our business before we have
established that our business will generate significant revenue. As of February
21, 2001, we have accumulated significant losses from our business operations.
The continuation of our operations is dependent upon obtaining long-term
financing and achieving a profitable level of operations. While we are expending
our best efforts to meet our financing needs, there can be no assurance that we
will be successful in raising capital from third parties or generating
sufficient funds from operations and continued development. In the event that we
do not raise sufficient funds from third parties, we may not have adequate
financial resources to continue our business. If additional financing is
obtained, the terms of the financing may be adverse to the interests of existing
stockholders, including the possibility of substantially diluting their
ownership position. These circumstances raise substantial doubt about our
ability to continue as a going concern.

WE MAY HAVE DIFFICULTY OBTAINING FUTURE FUNDING SOURCES, IF NEEDED, AND WE
MIGHT HAVE TO ACCEPT TERMS THAT WOULD ADVERSELY AFFECT OUR STOCKHOLDERS.

Expenses are expected to continue to exceed revenue in fiscal 2001, and we
will need to raise funds from additional financings. Any financings may result
in dilution to our existing stockholders. We may have difficulty obtaining
additional funding, and we may have to accept terms that would adversely affect
our stockholders. For example, the terms of any future financing may impose
restrictions on our right to declare dividends or on the manner in which we
conduct our business. Also, lending institutions or private investors may impose
restrictions on a future decision by us to make capital expenditures,
acquisitions or significant asset sales. Or we may not be able to locate
additional funding sources at all. If we cannot raise funds on acceptable terms,
if and when needed, we will not be able to continue our operations and to pursue
our goal of future strategic acquisitions.

WE ANTICIPATE THAT WE WILL INCUR CONTINUED LOSSES FOR THE FORESEEABLE
FUTURE.

We expect to incur significant losses for the foreseeable future. To date,
we have not been profitable. Even if we are able to obtain additional financing,
we expect to incur significant costs associated with the pursuit of future
strategic acquisitions. Our revenue may not be sufficient to fund our expenses.
We may never be profitable or, if we become profitable, we may be unable to
sustain profitability. Some of our expenses are or will be fixed, including
non-cancelable agreements, equipment leases and real estate leases. Expenses may
also increase due to the potential impact of goodwill and other charges from any
future acquisitions.

OUR TWO REVENUE GENERATING SUBSIDIARIES, ATM SERVICE, LTD. AND THE INTRAC
GROUP, LTD., HAVE LIMITED OPERATING HISTORIES UPON WHICH YOU MAY EVALUATE THEIR
OPERATIONS.

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We formed ATM in December 1998 and acquired Intrac in July 1999.
Accordingly, we have limited operating history upon which you may evaluate us.
Our lack of operating history, and evolving revenue model make it difficult to
evaluate our future prospects and evaluate our business strategy.

This means that you will have only limited information upon which to base
an investment decision. Because of our lack of operating history, we also
believe that period-to-period comparisons of our results of operations will not
be meaningful in the short term and should not be relied upon as indicators of
future performance.

We will encounter risks and difficulties frequently encountered by
early-stage companies in new and rapidly evolving markets. Many of these risks
are described in more detail in this "Risk Factors" section. We may not
successfully address any of these risks. If we do not successfully address these
risks, our business would be seriously harmed.

THE MARKET FOR OUR SOLUTIONS IS AT AN EARLY STAGE AND WE REQUIRE A
CRITICAL MASS OF BUYING ORGANIZATIONS AND THEIR SUPPLIERS TO IMPLEMENT OUR
SOLUTIONS.

The market for Internet-based electronic commerce applications and
services is at an early stage of development. Our success depends on a
significant number of buying organizations, marketplaces and exchanges
implementing our products and services. The implementation of our products and
services by these organizations is complex, time consuming and expensive. In
many cases, these organizations must change established business practices and
conduct business in new ways. Our ability to attract additional customers for
our products and services will depend on using our existing customers as
reference accounts. Unless a critical mass of buying organizations, their
suppliers, marketplaces and exchanges utilize our products and services join,
our solutions may not achieve widespread market acceptance and our business
would be seriously harmed.

OUR STRATEGY OF ESTABLISHING INTERNET MARKETPLACES AS TRADING COMMUNITIES
IS UNPROVEN AND MAY NOT BE SUCCESSFUL.

As part of our business strategy, we intend, directly and through
relationships with strategic partners, to establish and maintain electronic
marketplaces where buyers and suppliers can conduct business-to-business
commerce. If this business strategy is flawed, or if we are unable to execute it
effectively, our business, operating results and financial condition will be
substantially harmed. To date, we have not generated significant revenue from
our marketplaces.

OUR CUSTOMER BASE IS CONCENTRATED AND OUR SUCCESS DEPENDS IN PART ON OUR
ABILITY TO RETAIN EXISTING CUSTOMERS.

In fiscal 2000, four customers in the aggregate provided 65% of the
company's total revenue. One customer accounted for 20% of our total revenues,
one customer accounted for 20%, one customer accounted for 15% and one customer
accounted for 10%. If one or more of our major customers were to substantially
reduce or stop their use of our products or services, our business, operating
results and financial condition would be harmed. We do not have long-term
contractual commitments from any of our current customers and our customers may
terminate their contracts with us with little or no advance notice and without
penalty. As a result, we cannot assure you that any of our current customers
will be customers in future periods. A customer termination would not only
result in lost revenue, but also the loss of customer references that are
necessary for securing future customers.

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WE RELY ON THIRD PARTIES TO EXPAND, MANAGE AND MAINTAIN THE COMPUTER AND
COMMUNICATIONS EQUIPMENT AND SOFTWARE NEEDED FOR THE DAY-TO-DAY OPERATIONS OF
OUR BUSINESS.

We rely on several third parties to provide hardware, software and
services required to expand, manage and maintain the computer and communications
equipment and software needed for the day-to-day operations of our business.
Services provided by these parties include managing our web server, maintaining
communications lines and managing network data centers, which are the locations
on our network where data is stored. We may not successfully obtain these
services on a timely and cost effective basis. Since the installation of the
computer and communications equipment and software needed for the day-to-day
operations of our business to a significant extent will be managed by third
parties, we will be dependent on those parties to the extent that they manage,
maintain and provide security for such equipment and software.

WE COULD BE SUBJECT TO POTENTIAL PRODUCT LIABILITY CLAIMS AND THIRD PARTY
LIABILITY CLAIMS RELATED TO PRODUCTS AND SERVICES PURCHASED THROUGH OUR COMMERCE
SERVICES NETWORK.

Our customers use our products and services to manage their goods and
services procurement and other business processes. Any errors, defects or other
performance problems could result in financial or other damages to our
customers. A product liability claim brought against us, even if not successful,
would likely be time consuming and costly and could seriously harm our business.
Although our customer license agreements typically contain provisions designed
to limit our exposure to product liability claims, existing or future laws or
unfavorable judicial decisions could negate these limitation of liability
provisions.

Our commerce services network provides our customers with indices of
products that can be purchased from participating suppliers. The law relating to
the liability of providers of listings of products and services sold over the
Internet for errors, defects or other performance problems with respect to those
products and services is currently unsettled. We will not pre-screen the types
of products and services that may be purchased through our commerce services
network. Some of these products and services could contain performance or other
problems. We may not successfully avoid civil or criminal liability for problems
related to the products and services sold through our commerce services network
or other electronic networks using our market maker applications. Any claims or
litigation could still require expenditures in terms of management time and
other resources to defend ourselves. Liability of this sort could require us to
implement measures to reduce our exposure to this liability, which may require
us, among other things, to expend substantial resources or to discontinue
certain product or service offerings or to take precautions to ensure that
certain products and services are not available through our commerce services
network or other electronic networks using our market maker applications.

ACQUISITIONS AND NEW STRATEGIC ALLIANCES MAY DISRUPT OR OTHERWISE HAVE A
NEGATIVE IMPACT ON OUR BUSINESS.

As part of our business strategy we have made and expect to continue to
make investments in, or acquisitions of businesses that offer complementary
products, services and technologies. Our investments and acquisitions are
subject to the risks commonly encountered in such activities, including, among
other things:

o acquisitions may cause a disruption in our ongoing business,
distract our relatively new management team and make it difficult to
maintain our standards, controls and procedures;

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o we may acquire companies or make strategic alliances in markets in
which we have little experience;

o we may not be able to successfully integrate the services, products
and personnel of any acquisition or new alliance into our
operations;

o we may be required to incur debt or issue equity securities to pay
for acquisitions, which may be dilutive to existing stockholders;

o our acquisitions may not result in any return on our investment and
we may lose our entire investment; and

o If we were to suffer from one or more of these risks, our business,
financial condition and results of operation could be materially
harmed.

IF INTERNET USAGE DOES NOT GROW, WE MAY BE UNABLE TO EXECUTE OUR BUSINESS
PLAN TO INCREASE OUR OPERATIONS.

Our business will be unable to succeed if Internet usage does not continue
to grow or grows at significantly lower rates compared to current trends. The
continued growth of the Internet depends on various factors, many of which are
outside our control. These factors include, but are not limited to the following
factors:

o the Internet infrastructure's ability to support the demands placed
on it;

o the public's concerns regarding security and authentication concerns
with respect to the transmission over the Internet of confidential
information, such as credit card numbers and attempts by
unauthorized computer users, so-called hackers, to penetrate online
security systems; and

o the public's concern regarding privacy issues, including those
related to the ability of web sites to gather user information
without the user's knowledge or consent.

OUR SUCCESS IS DEPENDENT ON RETAINING OUR CURRENT KEY PERSONNEL.

We believe that our success will depend on continued employment of our
management team and our ability to attract large businesses to use our on-line
web sites for the effective management, purchase and sale of inventory and other
assets. Their experience in e-commerce asset management, sales and procurement
is important to the establishment of our on-line web sites. We do not maintain
key-man life insurance on our key personnel. The loss of the services of one or
more of our management personnel could seriously harm our business. Our success
also depends on having a trained sales force, telesales group and technical and
customer support personnel. We will need to continue to hire additional
personnel as our business grows. Competition for personnel, particularly for
employees with technical expertise, is intense. New hires also frequently
require extensive training before they achieve desired levels of productivity.
If we cannot hire and retain suitable personnel, we may not be able to expand
and develop new business communities effectively or support those that are
developed, resulting in loss of customers and revenues.

WE MAY NOT ACQUIRE EMARKETPLACES INTERNATIONAL, INC.

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Our proposed acquisition of eMarketplaces International, Inc. is
conditioned upon a number of factors. See "Subsequent Events - Letter of Intent
Concerning the Acquisition of eMarketplaces International, Inc." There can be no
assurance that the transaction will be consummated. We will incur certain
expenses in connection with the proposed transaction, even if it is not
consummated, including the cost of obtaining a fairness opinion and legal and
accounting fees. In addition, if the transaction is not consummated and the
$500,000 loan that we have made to eMarketplaces International, Inc. in
connection with the letter of intent is not repaid, as agreed, our ability to
continue our operations will be impaired.

THE INTERESTS OF OUR SIGNIFICANT STOCKHOLDERS MAY CONFLICT WITH OUR
INTERESTS AND THE INTERESTS OF OUR OTHER STOCKHOLDERS.

Our current directors, officers and holders of more than 5% of the
outstanding shares of our common stock collectively own approximately 30% of our
outstanding common stock. As a result of their stock ownership, one or more of
these stockholders may be in a position to affect significantly our corporate
actions, including, for example, mergers or takeover attempts, in a manner that
could conflict with the interests of our public shareholders.

D.H. Blair Investment Banking Corp. is our largest shareholder and Blair
Ventures-Fund I, Inc. ("Fund"), an affiliate of D.H. Blair, is our largest
creditor and holds a $3.6 million convertible promissory note which is secured
by all of our assets. D.H. Blair's interest as a shareholder may conflict with
Fund's interest as a creditor and Fund's exercise of its rights with respect the
collateral may conflict with the interests of other shareholders.

Warren Rothstein, who was our interim chairman, president and chief
executive officer from September 23, 1999 to April 26, 2000, and who continued
to serve as one of our directors until August 24, 2000, also served as the
chairman of ATM from December 1998 until October 19, 2000 and as chairman of
Intrac from July 23, 1999 until October 19, 2000. Mr. Rothstein's duties and
responsibilities with respect to certain of these positions may have been in
conflict with his duties and responsibilities with respect to others.

Thomas Settineri, who was one of our directors from September 23, 1999
until December 27, 2000, was also the president and chief executive officer of
ATM and Intrac from July 23, 1999 to October 19, 2000 and has been the chairman
of ATM and Intrac since October 19, 2000. Mr. Settineri's duties and
responsibilities with respect to certain of these positions may have been in
conflict with his duties and responsibilities with respect to others.

FLUCTUATIONS IN OUR QUARTERLY RESULTS MAY ADVERSELY AFFECT OUR STOCK
PRICE.

Our quarterly operating results will likely vary significantly in the
future. Our operating results will likely fall below the expectations of
investors in some future quarter or quarters. Our failure to meet these
expectations would likely adversely affect the market price of our common stock.
Our quarterly operating results may vary depending on a number of factors,
including:

o demand of buyers and sellers to use our web sites to list and
purchase or sell products and/or services;

o actions taken by our competitors, including new product
introductions, fee schedules, pricing policies and enhancements;

o size and timing of sales of our services;

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o our ability to control costs;

o budget cycles of buyers and sellers of products and/or services and
changes in these budget cycles; and

o general economic factors.

OUR COMMON STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE.

The market price of our common stock is likely to be highly volatile, as
the stock market in general, and the market for Internet-related and technology
companies in particular, has been highly volatile. Our stockholders may not be
able to resell their shares of our common stock following periods of volatility
because of the market's adverse reaction to this volatility. The trading prices
of many technology and Internet-related companies' stocks have been highly
volatile and have reached historical highs and lows within the past 18 months
and have reflected relative valuations substantially above historical levels. We
cannot assure you that our stock will trade at the same levels as other Internet
stocks or predict the market prices for Internet stocks in general.

Factors that could cause this volatility may include, among other things:

o actual or anticipated variations in quarterly operating
results;

o announcements of technological innovations;

o new sales formats or new products or services;

o changes in financial estimates by securities analysts;

o conditions or trends in the asset management industry;

o conditions or trends in the Internet industry;

o changes in the market valuations of other Internet companies;

o announcements by us or our competitors of significant
acquisitions, strategic partnerships or joint ventures;

o changes in capital commitments;

o additions or departures of key personnel;

o sales of our common stock; and

o adequacy of liquidity and capital resources.

Many of these factors are beyond our control. These factors may materially
adversely affect the market price of our common stock, regardless of our
operating performance.

THE PREVAILING MARKET PRICE OF OUR COMMON STOCK MAY BE ADVERSELY AFFECTED
BY SALES OF A SUBSTANTIAL NUMBER OF SHARES INTO THE PUBLIC MARKET.

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As of the date of this registration statement, there were 38,915,596
shares of our common stock outstanding. Of the outstanding shares, 27,624,513
are subject to the volume limitations on sale set forth in Rule 144 under the
Securities Exchange Act of 1934. Sales of the shares issued in private
transactions, as well as the common stock issuable upon conversion of the
convertible promissory note or the outstanding convertible debentures and upon
exercise of our warrants, may affect the market price of our common stock. If
our existing stockholders sell in the public market substantial amounts of our
common stock, then the market price of our common stock could fall.

OUR E-COMMERCE BUSINESS MAY NOT DEVELOP ADDITIONAL REVENUE SOURCES.

We plan to generate revenues through relationships with strategic partners
for the sale of assets and services. To generate significant revenues from
Internet business-to-business e-commerce, we will have to continue to build
these business relationships through our contacts and the expertise of our
current or future personnel. We may not be able to form new strategic alliances
due to a lack of sufficient financial resources or expertise in a newly targeted
industry. If we are not able to build these relationships with strategic
partners, we will have difficulty developing additional businesses to generate
revenues.

MARKETING AND DISTRIBUTION ALLIANCES MAY NOT GENERATE REVENUES OR MAY BE
TERMINATED.

We intend to use marketing, distribution and strategic alliances with
other Internet companies to create traffic on our on-line business communities
and, consequently, to generate revenues. These marketing and distribution
alliances will allow us to link our on-line web sites to Internet search engines
and other web sites. The success of these relationships depends on the amount of
increased traffic we receive from the alliance partners' web sites.

We may have difficulty entering into marketing and distribution alliances.
Also, these arrangements may not generate revenue. Some of the marketing and
distribution alliances and arrangements that we have previously entered into
have not, to date, generated revenue. We also cannot assure you that we will be
able to enter into these marketing and distribution alliances or renew any
marketing and distribution alliances that we are able to establish or that any
or all of these arrangements will generate revenue. If we are unable to
establish these alliances or if any of these agreements is terminated, no
revenue will be generated.

BECAUSE OUR INDUSTRY IS HIGHLY COMPETITIVE AND HAS LOW BARRIERS TO ENTRY,
WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY WITH OTHER PROVIDERS OF E-COMMERCE
SERVICES.

We believe that the strongest potential competition for e-commerce
services does not come from traditional service groups but rather the evolution
of the Internet and the types of business-to-business service providers that
such evolution will create. The market for Internet based, business-to-business
electronic commerce solutions is extremely competitive. As applications for
business-to-business e-commerce begin to proliferate and mature, we will
continue to compete with other technology companies and traditional service
providers that seek to integrate on-line business technologies with their
traditional service mix.

Competition for Internet products and services and electronic business
commerce is intense. We expect that competition will continue to intensify.
Barriers to entry are minimal, and competitors can launch new web sites at a
relatively low cost. We expect that additional companies will establish
competing on-line business communities on a stand-alone basis.

E-commerce applications are in the early stages of development. Currently,
the principal focus of e-commerce business-to-business groups is to provide
information and generate revenues for

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advertisement. As e-commerce evolves, however, we expect that other
entrepreneurs and large, well-known leaders in various industries will create
other niche business-to-business services that may compete with our services.

These large industry leaders would have better name recognition in the
markets that we may target. We also expect competition from large consulting
firms and software solution providers, which have begun developing e-commerce
applications for their existing clients. The larger financial resources of these
competitors may enable them to market to potential buyers and sellers of
inventory and other assets and launch more widespread marketing campaigns that
would make it more difficult for us to compete.

IF WE FAIL TO DEVELOP OUR PRODUCTS AND SERVICES IN A TIMELY AND
COST-EFFECTIVE MANNER, OR IF OUR PRODUCTS AND SERVICES DO NOT ACHIEVE MARKET
ACCEPTANCE, OUR BUSINESS WOULD BE SERIOUSLY HARMED.

We may fail to introduce or deliver new releases or new potential
offerings on a timely and cost-effective basis or at all, particularly given the
expansion of our product offering as a result of our recent and contemplated
acquisitions. The life cycles of our products are difficult to predict because
the market for our products is new and emerging, and is characterized by rapid
technological change, changing customer needs and evolving industry standards.
The introduction of products employing new technologies and emerging industry
standards could render our existing products or services obsolete and
unmarketable. In addition, we have experienced delays in the commencement of
commercial shipments of our new releases in the past. If new releases or
potential new products are delayed or do not achieve market acceptance, we could
experience a delay or loss of revenues and customer dissatisfaction.

OUR SUCCESS DEPENDS, IN PART, ON OUR ABILITY TO USE EFFECTIVE INTERNET AND
OTHER MARKETING STRATEGIES THAT DEPEND ON INTERNET GOVERNANCE AND REGULATION,
WHICH ARE UNCERTAIN.

The future success of our business is dependent, in part, on our ability
to use an effective Internet marketing strategy. Because the original role of
the Internet was to link the government's computers with academic institutions'
computers, the Internet was historically administered by organizations that were
involved in sponsoring research. Private parties have assumed larger roles in
the enhancement and maintenance of the Internet infrastructure. Therefore, it is
unclear what organization, if any, will govern the administration of the
Internet in the future, including the authorization of domain names.

The lack of an appropriate organization to govern the administration of
the Internet infrastructure and the legal uncertainties that may follow pose
risks to the commercial Internet industry and our specific web site business. In
addition, the effective operation of the Internet and our business is also
dependent on the continued mutual cooperation among several organizations that
have widely divergent interests, including the government, Internet service
providers and developers of system software language. These organizations may
find that achieving a consensus may become difficult, impossible, time-consuming
and costly.

Although we are not subject to direct regulation in the United States
other than federal and state business regulations generally, changes in the
regulatory environment could result in the Federal Communications Commission or
other United States regulatory agencies directly regulating our business.
Additionally, as Internet use becomes more widespread internationally, there is
an increased likelihood of international regulation.

We cannot predict whether or to what extent any new regulation affecting
e-commerce will occur. New regulation could increase our costs. For example, we
do not collect sales or other similar taxes with

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respect to the equipment, inventory and other products sold through our on-line
communities. One or more states may seek to impose sales tax collection
obligations on out-of-state companies like ours that engage in or facilitate
e-commerce. State and local governments have made proposals that would impose
additional taxes on the sale of goods and services over the Internet. A
successful assertion by one or more states or any foreign country that we should
collect sales and other taxes on the exchange of equipment, inventory and other
goods on our system could increase costs that we could have difficulty
recovering from users of our web sites.

Governmental agencies and their designees regulate the acquisition and
maintenance of web addresses generally. For example, in the United States, the
National Science Foundation had appointed Network Solutions, Inc. as the
exclusive registrar for the ".com," ".net" and ".org" generic top-level
addresses. Although Network Solutions no longer has exclusivity, it remains the
dominant registrar. The regulation of web addresses in the United States and in
foreign countries is subject to change. As result, we may not be able to acquire
or maintain relevant web addresses in all countries where we conduct business
that are consistent with our brand names and marketing strategy. Furthermore,
the relationship between regulations governing web site addresses and laws
protecting trademarks is unclear.

WE MAY FACE INCREASED ACCESS COSTS FROM BROWSER PROVIDERS AND INTERNET
DISTRIBUTION CHANNELS.

Leading web site, browser providers and other Internet distribution
channels may begin to charge us to provide access to our products and services.
If any of these expenses are not accompanied by increased revenues, our
e-commerce business will be negatively impacted.

CONCERNS REGARDING SECURITY OF TRANSACTIONS AND TRANSMITTING CONFIDENTIAL
INFORMATION OVER THE INTERNET MAY NEGATIVELY IMPACT OUR E-COMMERCE BUSINESS.

We believe that concern regarding the security of confidential information
transmitted over the Internet, including, for example, business and supply
requirements, credit card numbers and other forms of payment methods, prevent
many potential customers from engaging in online transactions. If we do not add
sufficient security features to future product releases, our services may not
gain market acceptance or we may face additional legal exposure.

Despite the measures we have taken in the area of security, our
infrastructure is potentially vulnerable to physical or electronic break-ins,
computer viruses, hackers or similar problems caused by employees, customers or
other Internet users. If a person circumvents our security measures, that person
could misappropriate proprietary information or cause interruptions in our
operations. Security breaches that result in access to confidential information
could damage our reputation and expose us to a risk of loss or liability. These
risks may require us to make significant investments and efforts to protect
against or remedy security breaches, which would increase the costs of
maintaining our web sites.

WE MAY BE SUBJECT TO LEGAL LIABILITY FOR PUBLISHING OR DISTRIBUTING
CONTENT OVER THE INTERNET.

We may be subject to legal claims relating to the content in our
industry-specific on-line web sites, or the downloading and distribution of
content. Providers of Internet products and services have been sued in the past,
sometimes successfully, based on the content of material. The representations as
to the origin and ownership of licensed content that we generally obtain may not
adequately protect us.

In addition, we draw some of the content provided in our on-line business
communities from data compiled by other parties. This data may have errors. If
our content is improperly used or if we supply incorrect information, it could
result in unexpected liability. Our insurance may not cover claims of this

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type, or may not provide sufficient coverage. Costs from these claims that are
not covered by our insurance or exceed our coverage would damage our business
and limit our financial resources.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS OR ARE HELD
LIABLE FOR INFRINGING ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, WE MAY BE
FORCED TO DEVOTE SIGNIFICANT TIME, ATTENTION AND MONEY TO DEFEND THESE CLAIMS.

Litigation regarding intellectual property rights is common in the
Internet and software industries. We expect third-party infringement claims
involving Internet technologies and software products and services to increase.
If an infringement claim is filed against us, we may be prevented from using
certain technologies and may incur significant costs to resolve the claim.

Third parties may infringe or misappropriate our trademarks or other
proprietary rights, which could injure our reputation and business. We may be
subject to or may initiate proceedings in the United States Patent and Trademark
Office, which may demand significant financial and management resources. While
we enter into confidentiality agreements with our employees and consultants, and
generally control access to and distribution of our proprietary information, the
steps we have taken to protect our proprietary rights may not prevent
misappropriation. In addition, we do not know whether we will be able to defend
our proprietary rights since the validity, enforceability and scope of
protection of proprietary rights in Internet-related industries is uncertain and
still evolving.

Many parties are actively developing e-commerce and other Internet related
technologies, as well as a variety of online business models and methods. We
believe that these parties will continue to take steps to protect these
technologies, including, but not limited to, seeking patent protection. As a
result, disputes regarding the ownership of these technologies and rights
associated with online business are likely to arise in the future.

Although we believe our products and information system do not infringe
upon the proprietary rights of others, there can be no assurance that third
parties will not assert infringement claims against us. From time to time in the
ordinary course of business we may be subject to claims of alleged infringement
of the trademarks and other intellectual property rights of third parties. These
claims and any resultant litigation, should this occur, could further subject us
to significant liability for damages. In addition, even if we prevail,
litigation could be time-consuming and expensive to defend, and could result in
the diversion of our time and attention and a reduction in any potential
profits. Any claims from third parties may also result in limitations on our
ability to use the intellectual property subject to these claims unless we are
able to enter into agreements with the third parties making these claims.

WE DEPEND ON THE CONTINUOUS INTRODUCTION OF ENHANCED SOFTWARE CAPABILITIES
AND EXPANSION OF OUR SOFTWARE SERVICES, WHICH WE MAY NOT BE ABLE TO PROJECT
ACCURATELY.

If traffic in our on-line businesses develops, we may need to expand and
upgrade our technology, transaction processing systems and network hardware and
software. We are not able to predict these needs. In addition, we may not be
able to expand and upgrade our systems and network hardware and software
capabilities to accommodate our future needs. If we do not appropriately upgrade
our systems, network hardware and software on an ongoing basis, we may have
difficulty competing effectively.

The life cycles of the software used to support our e-commerce services
are difficult to predict because the market for our e-commerce web sites for
sales and procurement of inventory and other assets is new and emerging and is
characterized by changing customer needs and industry standards. The
introduction of on-line products employing new technologies and industry
standards could render our existing system obsolete and unmarketable. If a new
software language becomes the industry standard, we

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may need to rewrite our software to remain competitive. We may not be able to
respond in a cost-effective way and lose business as a result.

ANTI-TAKEOVER PROVISIONS AND OUR RIGHT TO ISSUE PREFERRED STOCK COULD MAKE
A THIRD-PARTY ACQUISITION OF THE COMPANY DIFFICULT OR DILUTE THE VOTING RIGHTS
OF THE HOLDERS OF OUR COMMON STOCK.

WorldWide Web NetworX Corporation is a Delaware corporation. Anti-takeover
provisions of the Delaware law could make it more difficult for a third party to
acquire control of us, even if a change in control would be beneficial to our
stockholders.

Our articles of incorporation provide that our Board of Directors may
issue preferred stock without shareholder approval. The issuance of preferred
stock could make it more difficult for a third party to acquire us. Our Board of
Directors may issue preferred stock with voting or conversion rights that may
have the effect of delaying, deferring or preventing a change of control of us
and would adversely affect the market price of our common stock and voting and
other rights of holders of our common stock.

Further, if our Board of Directors issues preferred stock with greater
voting rights than our common stock, the voting rights of the holders of our
common stock will be diluted. See "Letter of Intent Concerning the Acquisition
of eMarketplaces International, Inc."

WE MAY NOT BE ABLE TO PROTECT OUR PROPRIETARY RIGHTS, AND WE MAY INFRINGE
ON THE PROPRIETARY RIGHTS OF OTHERS. PROPRIETARY RIGHTS ARE IMPORTANT TO OUR
SUCCESS AND OUR COMPETITIVE POSITION.

We have registered the name "ATMcenter.com" as a service mark for use in
connection with our electronic commerce services on the Principal Register of
the United States Patent and Trademark Office.

Although we seek to protect our proprietary rights, our actions may be
inadequate to protect any trademarks and other proprietary rights or to prevent
others from claiming violations of their trademarks and other proprietary
rights. We may not be able to protect our domain names for our on-line
industry-specific web sites as trademarks because those names may be too generic
or perceived as describing a product or service or its attributes rather than
serving a trademark function.

If we are unable to protect our proprietary rights in trademarks, service
marks and other indications of origin, competitors will be able to use names and
marks that are identical to ours or sufficiently similar to ours to cause
confusion among potential customers between us and our services and our
competitors and their services. This confusion may result in the diversion of
business to our competitors or the loss of potential or existing customers.
Also, to the extent these competitors have problems with the quality of their
services, this confusion may injure our reputation for quality.

Except for a search for the name ATMcenter.com, we have not conducted
searches to determine whether our service marks, trademarks and similar items
may infringe on the rights of third parties.

DIFFICULTY OF PROTECTING PROPRIETARY RIGHTS IN OTHER COUNTRIES.

Copyrights and trademarks may receive limited or no protection in some
countries, and the global nature of the Internet makes it impossible to control
the ultimate destination of our work.

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FORWARD-LOOKING STATEMENTS

Some information contained in this prospectus may contain forward-looking
statements. The use of any of the words "anticipate," "continue," "estimate,"
"expect," "may," "will," "project," "should," "believe" and similar expressions
are intended to identify uncertainties. We believe the expectations reflected in
those forward-looking statements are reasonable. However, we cannot assure you
that these expectations will prove to be correct. You should not unduly rely on
forward-looking statements included in this prospectus. These statements speak
only as of the date of this prospectus. In particular, this prospectus contains
forward looking statements pertaining to the following:

o potential growth in our operations;

o geographic location or focus of our operations;

o potential investments of the proceeds of this offering pending the
application of the net proceeds; and

o expected sources or uses of funds.

Our actual results could differ materially from those anticipated in these
forward-looking statements as a result of the risk factors set forth below and
other factors set forth in, or incorporated by reference into, this prospectus:

o financial market conditions, and the availability of financing on
terms acceptable to our company;

o the success or failure of our efforts to implement our business
strategy;

o the availability of experienced employees; and

o the factors discussed under "Risk Factors."

Many of those factors are beyond our ability to control or predict. Except
as required by law, we are not obligated to publicly release any revisions to
these forward-looking statements to reflect future events or developments. All
subsequent written and oral forward-looking statements attributable to us and
persons acting on our behalf are qualified in their entirety by the cautionary
statements contained in this section and elsewhere in this prospectus.

USE OF PROCEEDS

We will not receive any part of the proceeds from the sale by our
stockholders of our common stock. Any proceeds received by us upon exercise of
our options or warrants may be used for general corporate purposes to grow our
business. The use of any proceeds from the exercise of these securities, or the
timing of such use, will depend on the availability to us of cash from other
sources.

We will bear the expenses of this registration of the shares of common
stock offered herein and estimate that these expenses will be approximately
$35,725.

DIVIDEND POLICY

We have never declared or paid any dividends on our common stock. We do
not anticipate paying any cash dividends in the foreseeable future. We currently
intend to retain future earnings, if any, to finance operations and the
expansion of our business. Any future determination to pay cash dividends

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will be at the discretion of the board of directors and will be dependent upon
our financial condition, operating results, capital requirements and other
factors that the board deems relevant.

CAPITALIZATION

Our Certificate of Incorporation authorizes the issuance of an aggregate
of 100,000,000 shares of common stock at $0.001 par value and 10,000,000 shares
of preferred stock at $0.001 par value. As of February 21, 2001, there were
38,915,596 shares of common stock issued and outstanding and no shares of
preferred stock issued and outstanding.

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SELLING SECURITY HOLDERS

[Enlarge/Download Table]

Shares Beneficially Shares Beneficially
Owned Owned After
Prior to the Offering Offering
-------------------- --------------------
Shares to be
Number of Sold in Number of
Shares Percent Offering Shares Percent
--------- ------- ------------ ------ -------

NAME OF SELLING SECURITY HOLDER

Gary Fragin IRA (Bear Stearns 100,000 * 100,000 100,000 *
Sec. Corp. Custodian) 100,000 * 100,000 100,000 *
TPR Investment Associates Inc. 100,000 * 100,000 100,000 *
Ralph H. Isham 100,000 * 100,000 100,000 *
The M&B Weiss Family LP of 1996 66,667 * 66,667 66,667 *
JenCom Digital Technologies, LLC 2,403,302 6% 2,403,302 2,403,302 6%
The TechDepartment.com, Inc. 426,075 1% 426,075 426,075 1%
Henry Kauftheil 265,550 * 265,500 265,500 *
Arthur Kohn 8,279 * 8,279 8,279 *
Milan Panic 66,667 * 66,667 66,667 *
Richard Fry 22,222 * 22,222 22,222 *
Swanson Estates 184,086 * 184,086 184,086 *
Filter International Corporation 8,279 * 8,279 8,279 *
Irwin Brown 7,547 * 7,547 7,547 *
Sean McNamara 81,551 * 81,551 81,551 *
RER Corporation 33,333 * 33,333 33,333 *
Albert Millstein 33,333 * 33,333 33,333 *
Rhoda Chase 110,000 * 110,000 110,000 *
Martin Lerner 66,667 * 66,667 66,667 *
Putnam Investment Corporation 16,667 * 16,667 16,667 *
World Financial Exchange, Inc. 109,999 * 109,999 109,999 *
John Livingston 4,077 * 4,077 4,077 *
Weiss Capital Group, LLC 66,667 * 66,667 66,667 *
Martin Chopp 40,775 * 40,775 40,775 *
Schon Family Foundation 33,333 * 33,333 33,333 *
Scott and Amy Koppelman JTROS 50,000 * 50,000 50,000 *
Jay Kestenbaum 33,333 * 33,333 33,333 *
Glenn Fishman 20,000 * 20,000 20,000 *
Bernard Cohen 10,000 * 10,000 10,000 *
Jay Fialkoff 66,667 * 66,667 66,667 *
Michael Bollag 66,667 * 66,667 66,667 *
Harold Altman 20,000 * 20,000 20,000 *
Jacob and Channah Borenstein 33,333 * 33,333 33,333 *
Gail Mulvihill 100,000 * 100,000 100,000 *
Barington Capital Group 100,000 * 100,000 100,000 *
Mark Honigsfeld Rev. Living Trust 66,667 * 66,667 66,667 *
Paul Saunders 100,000 * 100,000 100,000 *
Oscar Rosenberg 7,547 * 7,547 7,547 *
Optic Express 30,667 * 30,667 30,667 *

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[Download Table]

Emile Mimran c/f Carolyn M 12,000 * 12,000 12,000 *
Emile Mimran c/f Reina Mimran 12,000 * 12,000 12,000 *
Emile Mimran c/f Adam Mimran 12,000 * 12,000 12,000 *
Estate of Phyllis Trenk 100,000 * 100,000 100,000 *
Paul Friedman 12,667 * 12,667 12,667 *
Martin Sirotkin 66,667 * 66,667 66,667 *
Ethel Sirotkin R/T 66,667 * 66,667 66,667 *
Judith Boim 16,667 * 16,667 16,667 *
James D. Wolfensohn 333,333 * 333,333 333,333 *
Jerry Finkelstein 68,000 * 68,000 68,000 *
Ann Oestricher 66,667 * 66,667 66,667 *
Aaron Shpayher 30,000 * 30,000 30,000 *
Robert B. Meares Retirement Plan 100,000 * 100,000 100,000 *
Harry & Susan Dubow 8,158 * 8,158 8,158 *
Susan Dubow 8,158 * 8,158 8,158 *
Michael Vail 4,077 * 4,077 4,077 *
New America Network, Inc. 1,725,000 4% 1,500,000 1,725,000 4%
Robert Milstein 12,150 * 12,150 12,150 *
Richard & Grace Johnson 8,125 * 8,125 8,125 *
Neil Leibman 2,038 * 2,038 2,038 *
Harusy & Susan Mininberg 100,000 * 100,000 100,000 *
Joseph Giamonco 100,000 * 100,000 100,000 *
The Lionel Trust 133,333 * 133,333 133,333 *
L.F. Global Investments 148,334 * 148,334 148,334 *
Michelle Kain 95,000 * 95,000 95,000 *
JLV Investments 33,333 * 33,333 33,333 *
Raymond and Susan Drapkin 66,667 * 66,667 66,667 *
L&H Family Foundation 20,000 * 20,000 20,000 *
Simon & Leah Barber 26,667 * 26,667 26,667 *
John & Biancotti Sandell 33,333 * 33,333 33,333 *
Peter Hand 4,077 * 4,077 4,077 *
Roman Kent 33,333 * 33,333 33,333 *
Academy Partners 66,667 * 66,667 66,667 *
Melvin Katten 33,333 * 33,333 33,333 *
JBA International, Inc. Retirement Plan 16,667 * 16,667 16,667 *
Joel & Shana Blumberg 16,667 * 16,667 16,667 *
Barry Ogrin 15,000 * 15,000 15,000 *
Frederick Todd 131,100 * 131,100 131,100 *
Philip & Janice Sirianni 40,775 * 40,775 40,775 *
Paul Sirotkin 66,667 * 66,667 66,667 *
Larry Dorfman 66,667 * 66,667 66,667 *
Jack Forgash 23,333 * 23,333 23,333 *
Ruth Robles 5,000 * 5,000 5,000 *
Irma Cruz-Quinones 1,500 * 1,500 1,500 *
Diane Vanderlinden 2,000 * 2,000 2,000 *
Gil Jackson 5,000 * 5,000 5,000 *
Ronald Johnson 4,500 * 4,500 4,500 *
Deborah Cook 10,000 * 10,000 10,000 *
Martin A. Bell 100,000 * 100,000 100,000 *
Alison Brown 25,000 * 25,000 25,000 *
Jonathan Turkel 36,000 * 36,000 36,000 *

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Andrew Plevin 18,000 * 18,000 18,000 *
Louis Herlands 6,000 * 6,000 6,000 *
Leonard Katz 36,000 * 36,000 36,000 *
David Nachamie 5,000 * 5,000 5,000 *
Engex, Inc. 150,000 * 150,000 150,000 *
D.H. Blair Investment Banking 2,214,967 6% 2,214,967 2,214,967 6%
Lorraine Hickson 2,500 * 2,500 2,500 *
OTATO Limited Partnership 203,878 * 203,878 203,878 *
David Shamilzadeh 50,000 * 50,000 50,000 *
Sage Capital Investments Limited 81,551 * 81,551 81,551 *
John & Jean Echternach 8,155 * 8,155 8,155 *
Herman Howard 66,667 * 66,667 66,667 *
Ruki Renov 166,667 * 166,667 166,667 *
Ruki Renov c/f Benjamin Renov 109,804 * 109,804 109,804 *
Ruki Renov c/f Emily Renov 109,804 * 109,804 109,804 *
Ruki Renov c/f Yael Renov 109,804 * 109,804 109,804 *
Ruki Renov c/f Ari Renov 109,804 * 109,804 109,804 *
Ruki Renov c/f Yoni Renov 109,804 * 109,804 109,804 *
Ruki Renov c/f Eli Renov 109,804 * 109,804 109,804 *
Tani Family Partnership 109,804 * 109,804 109,804 *
Tova Family Partnership 109,804 * 109,804 109,804 *
Esther Stahler c/f Lisa Stahler 109,804 * 109,804 109,804 *
Esther Stahler c/f Jamie Stahler 109,804 * 109,804 109,804 *
Esther Stahler c/f Eli Stahler 66,667 * 66,667 66,667 *
Esther Stahler c/f David Stahler 109,804 * 109,804 109,804 *
Esther Stahler c/f Daniel Stahler 109,804 * 109,804 109,804 *
Esther Stahler c/f Avi Stahler 109,804 * 109,804 109,804 *
Gitel Family Limited Partnership 66,667 * 66,667 66,667 *
Sigmund Freundlich 50,000 * 50,000 50,000 *
Felice Gross 42,000 * 42,000 42,000 *
Ace Investments 33,333 * 33,333 33,333 *
Jack Burstein 30,667 * 30,667 30,667 *
Stifel Nicolaus c/f Hanna Bresler 33,333 * 33,333 33,333 *
Stifel Nicolaus c/f Bresler & Bresler 33,333 * 33,333 33,333 *
Arnold Kling 102,200 * 100,000 102,200 *
Raymond Reaback 25,000 * 25,000 25,000 *
Louis Reaback 25,000 * 25,000 25,000 *
Miriam Stern 33,333 * 33,333 33,333 *
Tom Grant 10,000 * 10,000 10,000 *
Mary Sandell 26,667 * 26,667 26,667 *
David & Gabriella Gandara Sandell 20,000 * 20,000 20,000 *
Morris Friedman 30,000 * 30,000 30,000 *
Louis Weisbach 16,667 * 16,667 16,667 *
Zakeni Limited 203,878 * 203,878 203,878 *
Karen Seeman 12,232 * 12,232 12,232 *
Blair Ventures-Fund I, Inc. 6,240,000 16% 6,240,000 6,240,000 16%
Thomas Settineri 750,000 2% 750,000 750,000 2%
Gary Levi 250,000 * 250,000 250,000 *
Goldplate Holdings 198,950 * 198,950 198,950 *
Marian Morrison 7,547 * 7,547 7,547 *

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* Less than one percent

(1) percentages are based on 38,915,596 shares of our common stock outstanding
as of February 21, 2001.

PLAN OF DISTRIBUTION

The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:

o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;

o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

o an exchange distribution in accordance with the rules of the
applicable exchange;

o privately negotiated transactions;

o short sales;

o broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;

o a combination of any such methods of sale; and

o any other method permitted pursuant to applicable law.

The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

The Selling Stockholders may also engage in short sales against the box,
puts and calls and other transactions in our securities or derivatives of our
securities and may sell or deliver shares in connection with these trades. The
Selling Stockholders may pledge their shares to their brokers under the margin
provisions of customer agreements. If a Selling Stockholder defaults on a margin
loan, the broker may, from time to time, offer and sell the pledged shares.

Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

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The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.

We are required to pay all fees and expenses incident to the registration
of the shares, including fees and disbursements of counsel to the Selling
Stockholders. We have agreed to indemnify the Selling Stockholders against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.

INTERESTS OF NAMED EXPERTS AND COUNSEL

Neither the company's counsel, nor any of the experts named in this
registration statement as having prepared or certified any part hereof, had, or
is to receive in connection with this offering, a substantial interest, direct
or indirect, in the company or any of its subsidiaries.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING INFORMATION

You should read the following selected financial information in
conjunction with our consolidated financial statements and related notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Report. The statement of
operations data for the last three years ended September 30, and for the
three month period ended December 31, 2000, and the balance sheet data as of
September 30, 2000, 1999 and 1998 and December 31, 2000 are derived from our
audited financial statements, which are included elsewhere in this Report.
The statement of operations data for the year ended September 30, 1997 and
the balance sheet data as of September 30, 1997 are that of Instra Corp., a
predecessor company, and have been derived from Instra Corp.'s audited
financial statements that are not included in this Report. We have not
included financial information for periods prior to September 30, 1997, as
the prior operations are not meaningful.

[Enlarge/Download Table]

YEAR ENDED SEPTEMBER 30,
---------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
2000 1999 1998 1997
-------- -------- -------- --------
CONSOLIDATED STATEMENT OF OPERATIONS DATA:

Revenues ......................... $ 6,772 $ 1,339 $ 50 $ --
Loss from operations ............. (19,091) (139) (166)
Impairment of investments ........ (19,786) -- -- --
Impairment of intangible asset ... (3,901) -- --
Impairment of investments in and
advances to Affiliated Companies (2,350) -- --
Loss on sale of investments ...... (2,328) -- -- --
Gain on sale of subsidiary ....... -- 25,426 -- --
Net (loss) income ................ (37,081) 1,612 (219) (165)
Net (loss) income per share:
Basic ............................ (.97) .07 (.03) (.08)
Diluted .......................... (.97) .07 (.03) (.08)

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YEAR ENDED SEPTEMBER 30,
---------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
2000 1999 1998 1997
-------- -------- -------- --------
CONSOLIDATED BALANCE SHEET DATA:

Cash and cash equivalents............... $ 2,271 $ 7,234 $ 792 1
Investments............................. 6,005 29,475 - -
Investments in and advances to
Affiliated Companies.................. 3,319 2,744 - -
Total assets............................ 15,707 47,511 986 25
Convertible debt........................ 3,725 990 - -
Total stockholders' equity.............. 4,692 34,475 923 25

The fluctuations from 1998 to 1999 and 2000 reflected in the above tables are
explained in detail in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" below. The detail descriptions can be found
in the subtitles listed above.

SUPPLEMENTARY FINANCIAL INFORMATION

The supplementary financial information required by Item 503 of Regulation
S-K is included in our consolidated financial statements.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION

THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS. THE FOLLOWING DISCUSSION SHOULD
BE READ IN CONJUNCTION WITH OUR AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND
RELATED NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

OVERVIEW OF THE NATURE OF THE COMPANY'S BUSINESS

PLAN OF OPERATIONS

On September 1, 2000, new management came to the Company. The immediate
focus of the new management team was on rationalizing the operating expenses and
assessing the value-creating potential of our affiliated companies. Their intent
was to reduce operating expenses, thereby conserving working capital, while
evaluating the investments the Company had previously made and seeking
opportunities for new investment.

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We took several steps to significantly reduce expenses going forward.
These actions, initiated beginning in late August 2000, included elimination of
positions, closing facilities no longer needed, eliminating services not
essential to our continuing operations and to that of our wholly or majority
owned affiliated companies, ATM and Intrac, negotiating lower prices from
vendors for services still essential to continuing operations, and negotiating
agreements that required funding by the Company. These steps included, among
other things, the actions described below.

In late August and September 2000, we took a series of actions that
reduced the corporate workforce by 40% and our recurring payroll expense by 22%.
These actions included the elimination of positions no longer critical to our
continuing operations.

In September 2000, we decided to close our Mt. Laurel, New Jersey office
and began the process of procuring a subtenant for the space. Excluding payroll
expense, the cost of operating the Mt. Laurel facility was approximately
$325,000 in the fiscal year ended September 30, 2000. Until June 2000, Entrade
shared this facility with us and paid for 70% of the costs.

Also in September 2000, we restructured our relationship with NAI
Direct. This action eliminated our obligation to provide NAI Direct with
an additional $2,660,000 in working capital by March 2001. See "Business -
New America Network, Inc. and Real Quest, Inc."

In October 2000, ATM and Intrac each terminated its management services
contract with Warren Rothstein. Coincident with termination of these contracts,
the ATM facility at Tarrytown, New York was closed and all jobs at that facility
were eliminated. Excluding facility related expenses, the expenses related to
the terminated contracts and eliminated jobs totaled $1.1 million for the fiscal
year ended September 30, 2000.

Limited impact of these changes is reflected in operating results for the
year ended September 30, 2000, because these actions were initiated late in the
fiscal year and there were implementation costs associated with certain actions.
However, monthly general and operating expenses are lower due to the decreased
payroll and professional services resulting from the actions described above and
our working capital requirements have also been reduced as a result of the
restructured relationship with NAI Direct. Our "burn rate" of cash has been
reduced to $120,000 per month and the "burn rate" for our wholly-owned
subsidiary, The Intrac Group, Ltd., and our majority-owned subsidiary, ATM
Service Ltd., has been reduced to $150,000 a month, in the aggregate, down from
$280,000 and $250,000, in the aggregate, respectively.

The foregoing actions have the cumulative effect, to date, of enabling the
Company to continue to operate through at least May 2001. Had these actions not
been taken, cash and cash equivalents would have been expected to have been
depleted by late October 2000.

Our intention is to maintain these rates of monthly expenditures while
seeking new funding for new investment opportunities and continued operations.
Management expects to continue its efforts to reduce expenses, including the
subletting of the Mt. Laurel facility and the further reduction of payroll
expenses.

We currently intend to pursue the following plan of operations during the
next twelve months:

INCREASE REVENUES BY DEVELOPING OUR OPERATING COMPANIES. ATM and Intrac
will continue to develop their customer bases through the efforts of their
present sales and marketing team. ATM and Intrac will also look to develop
emerging markets through their own efforts or through representatives.

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SEEK NEW INVESTMENT OPPORTUNITIES. We intend to seek new investment
opportunities, using our cash, stock and/or Internet expertise as our
capital contributions or to create joint ventures. See "Letter of Intent
Concerning the Acquisition of eMarketplaces International, Inc."

If we are successful in raising additional capital for new investment
opportunities, we anticipate that our operating expenses will increase over the
next twelve months. Without additional sources of funding, we will continue our
efforts to reduce our operating expenses. However, without funding, we will not
be able to continue beyond approximately May 2001. These conditions raise
substantial doubt about our ability to continue as a going concern. Our actual
operating and financial results and actual plan of operations may differ
materially from the stated plan of operations. Factors which may cause a change
from our actual results or actual plan of operations vary but include, without
limitation, decisions of our board of directors not to pursue the stated plan of
operations based on its reassessment of the plan, changes in the Internet
business or in our business strategy, the wholesaling and asset recovery
business and general economic conditions.

GENERAL

We had declining and comparatively small operations until May 18, 1998
when we entered our current line of business by acquiring Keiretsu Corporation.
See "Our Business," page 34. Over the past three fiscal years, we have had $8.2
million in revenues from operations, $33.2 million in losses from operations,
other expenses of $2.5 million and net losses of $35.7 million. Administrative
costs incurred to date have been expended in connection with software
development, marketing expenses, and operating expenses. Operating expenses have
also included general and administrative expenses related to all of our
activities.

EFFECT OF VARIOUS ACCOUNTING METHODS ON OUR RESULTS OF OPERATIONS

The various interests that we acquire in the companies in which we own
interests are accounted for under one of three methods: consolidation, equity
method and cost method. The applicable accounting method is generally determined
based on our voting interest in a company in which we own an interest unless
significant minority rights are present.

CONSOLIDATION. Affiliated companies in which we directly or indirectly own
more than 50% of the outstanding voting securities and exercise control are
generally accounted for under the consolidation method of accounting. Under this
method, an affiliated company's results of operations are reflected within our
Consolidated Statements of Operations. At September 30, 2000, the consolidated
financial statements include the Company, its majority owned and controlled
subsidiary, ATM Service, Ltd., and its wholly owned subsidiary, The Intrac
Group, Ltd. Additionally, the results of operations of Real Quest, Inc. have
been included in the consolidated statement of operations through September 27,
2000 at which point, our investment was restructured and we commenced accounting
for this investment under the cost method of accounting. ATM was recorded using
the equity method from December 1998 through July 23, 1999, when we acquired a
controlling interest.

EQUITY METHOD. Affiliated companies whose results are not consolidated,
but over which the Company exercises significant influence, are accounted for
under the equity method of accounting. Whether or not the Company exercises
significant influence with respect to an affiliated company depends on an
evaluation of several factors including, among others, representation on the
affiliated company's Board of Directors and ownership level, which is generally
a 20% to 50% interest in the voting securities of the company, including voting
rights associated with our holdings in common, preferred and other convertible
instruments in the company. Under the equity method of accounting, the detail of
an

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affiliated company's results of operations are not reflected within our
Consolidated Statements of Operations; however, our share of the earnings or
losses of the affiliated company is reflected in the caption "Equity (income)
loss" in the Consolidated Statements of Operations. During the fiscal year ended
September 30, 2000, we accounted for WWWX-Jencom, LLC and InterCommerce China
under the equity method of accounting. In fiscal 2000, we recorded our share of
WWWX-Jencom's losses until our investment was reduced to zero. At September 30,
2000, we determined that our investment in InterCommerce China was impaired and
accordingly, recorded a valuation allowance of $2.3 million. ATM was accounted
for using the equity method from December 1998 through July 23, 1999, when we
acquired a controlling interest, and we commenced accounting for ATM under the
consolidation method of accounting.

COST METHOD. Affiliated companies not accounted for under the
consolidation or the equity method of accounting are accounted for under the
cost method of accounting. Under this method, the Company's share of the
earnings or losses of these companies is not included in the Consolidated
Statements of Operations. However, cost-method impairment charges are recognized
in the Consolidated Statements of Operations and deducted from the carrying
value in the Consolidated Balance Sheet, while the new cost basis is not
increased if circumstances suggest that the value of the affiliated company has
subsequently recovered. As of September 30, 2000, we accounted for seven
companies under the cost method of accounting. Of these seven companies, Vision
Technologies and VideoNet were determined to have an impaired value with the
value carried on the Consolidated Balance Sheet reduced by $850,000 and
$100,000, respectively.

EFFECT OF VARIOUS ACCOUNTING METHODS ON THE PRESENTATION OF OUR FINANCIAL
STATEMENTS

The presentation of our financial statements may differ from period to
period as a result of whether we apply the consolidation method of accounting,
the equity method of accounting or the cost method of accounting.

RESULTS OF OPERATIONS - Three-year period ended September 30, 2000

REVENUES

For the year ended September 30, 2000, the Company derived approximately
89% of its revenue from customers in the United States. Approximately 11% of
revenue were derived from customers outside the United States, principally in
Israel and Mexico. For the year ended September 30, 2000, four customers for
whom the Company provided these services each accounted for 10% or more of the
Company's total revenue. These four customers combined provided 65% of the
Company's total revenue for the year ended September 30, 2000. For the year
ended September 30, 1999, no customer for whom the Company provided these
services accounted for 10% or more of the Company's total revenue.

Revenues were $6.8 million for the year ended September 30, 2000, $1.3
million for the year ended September 30, 1999, and $50,000 for the year ended
September 30, 1998. The growth in revenues is attributable to the acquisition of
The Intrac Group, Ltd and the formation of ATM Service, Ltd., on July 23, 1999.
For the year ended September 30, 2000, these two affiliated companies provided
revenue for the entire fiscal year, but in fiscal year 1999 they provided
revenue only for the period July 23, 1999 to the fiscal year's end on September
30, 1999. Prior to acquisition and formation of the two affiliated

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companies, revenue was primarily derived from consulting services provided by
Entrade which was sold in September 1999.

Deferred revenue from asset management, liquidation and cost-recovery, and
media buying services, was $3.1 million and $470,000 as of September 30, 2000
and 1999, respectively.

The Company will contract with a customer to sell for the customer large
blocks of assets or inventory under asset management, liquidation, or cost
recovery agreements. In an asset management agreement, the Company acts as an
agent, sells the assets for cash, and receives a percentage of the sale as a
commission. The Company records the commission received as revenue when the
asset is shipped.

Under most liquidation and cost-recovery agreements, the Company takes
title to the assets but does not assume the risk of loss. The Company is not
required, by either type of agreement, to make any cash payment to the customer
for the assets purchased until such time as the Company sells the assets. These
payments pertain to the portion of assets actually sold. The ultimate cost to
the Company is a fixed percentage of the sale price of the inventory for, which
is unknown until a sale occurs. Accordingly, the Company usually does not record
inventory for any assets purchased under these agreements. Only when the Company
assumes the risk of loss and the value of the goods purchased can be reasonably
estimated is inventory recorded. Only one such cost recovery contract was in
effect during the year ended September 30, 2000 and, as a general rule, the
Company does not plan to enter into such agreements in the future.

The transactions conducted under asset management and cost recovery
agreements can also be settled, in part, in trade credits to purchase
advertising media, merchandise, or business services ("trade credits"). The
amount of trade credits issued to customers represents the difference between
the contracted value of the inventory as negotiated with the customer and the
cash paid to the customer upon the sale of the inventory. Trade credits are not
redeemable by customers for cash. The contracted value of the inventory is
mutually agreed upon by the Company and the customer at the time an agreement is
reached and is usually in excess of the cash liquidation value. The Company is
not required to remit cash or any other form of payment other than trade credits
for the difference between the contracted value and the cash paid for the
inventory.

Revenues associated with asset management and cost recovery services are
typically recognized when the inventory sold is shipped. However, if the
transactions involve the issuance of trade credits, the Company will defer a
portion of the revenue attributable to cash received under asset management and
cost-recovery agreements to reflect the outstanding costs applicable to the
future redemption of the trade credits.

The Company issues two types of trade credits, "combination trade credits"
and "straight trade credits." Under a combination trade credit arrangement, the
customer purchases goods and services from the Company in exchange for trade
credits and cash. The ratio of cash to combination trade credits that make up
the total purchase price to be used in purchases from the Company are determined
on a transaction-by-transaction basis. When the Company redeems combination
trade credits, it recognizes revenue equal to the cash received from the
customer for the goods and services plus, if applicable, the pro rata portion of
the deferred revenue relating to the liquidation of the assets that gave rise to
the trade credits. Cost of revenue is recognized for the cash the Company paid
for the goods and services.

Straight trade credits are issued to purchase goods and services from the
Company without the requirement to pay us a portion of the purchase price in
cash. Straight trade credits are issued to purchase pre-negotiated types of
goods and services, which have readily estimable costs. The Company records
deferred revenue for straight trade credits approximating the estimated cost to
purchase future goods and services plus a normal profit margin. When the Company
redeems straight trade credits, it recognizes

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revenue equal to the pro rata portion of the deferred revenue relating to
straight trade credits. Cost of revenue is recognized for the cash the Company
paid for the goods and services.

The source of our revenue, and its attendant costs, has changed
dramatically in the year ended September 30, 2000 from previous fiscal years.
Nearly 57% of our revenue in fiscal year 1999 was from technology consulting
services sold by Entrade. In the year ended September 30, 2000, that share of
our total revenue dropped below 2%, with sales of cost recovery services and
media by ATM and Intrac accounting for 94% of our revenue. The dramatic change
in the source of our revenue was due to the sale of Entrade in September 1999,
after which time Entrade's operating results, which included the revenues
derived from the consulting services provided by Entrade, were no longer
included in our consolidated financial statements, and the inclusion of Intrac's
operations for an entire year. Intrac was not included in our consolidated
operating results until July 23, 1999, when the Company acquired Intrac.

Revenues were $1.2 million for the three months ended December 31, 2000,
compared to revenues of $1 million for the three months ended December 31, 1999.
For the three month period ended December 31, 2000, 39% of our revenue was
provided by liquidation and cost recovery services and 61% of our revenue was
from the purchase and resale of media. For the three months ended December 31,
1999, 46% of our revenue was from liquidation and recovery services, 41% of our
revenue was from the purchase and resale of media services, 7% of our revenue
was from asset management and 6% of our revenue was from consulting services.
For the three months ended December 31, 2000, three customers for whom the
Company provided services each accounted for more than 10% or more of the
Company's total revenue and whom accounted, in the aggregate, for 97% of the
total revenue.

COST OF REVENUE

Cost of revenue consists of goods, freight, warehousing of inventory held
for sale, media purchases, commissions and, in 1999, also included salaries paid
to programmers and consultants.

Cost of revenue was $6.2 million for the fiscal year ended September 30,
2000, $792,000 for the fiscal year ended September 30, 1999 and $36,000 for the
fiscal year ended September 30, 1998. The increases in cost of revenue from 1999
to 2000 corresponds with the increases in our revenues due to the inclusion of
ATM and Intrac in our consolidated financial statements for the entire year in
fiscal 2000 as compared to only 2 months in fiscal 1999. The increase in cost of
revenue from 1998 to 1999 also corresponds to an increase in revenue from the
inclusion of Entrade, ATM and Intrac in 1999.

With the dramatic change in the source of our revenue described in
"REVENUES" above, came a corresponding change in the cost of our revenue. The
cost of producing technology-consulting revenues is significantly lower than the
cost of producing either media sales or cost recovery revenue. Therefore, with
the bulk of revenue in the year ended September 30, 2000 derived from sources
with higher costs of production, the total cost of revenue as a percentage of
total revenue has grown dramatically in 2000 over 1999.

Cost of revenue was $1.4 million and $931 thousand for the three months
ended December 31, 2000 and 1999, respectively. As the proportion of revenue has
shifted from consulting services to asset recovery, liquidation and cost
recovery, and media buying services there has been a corresponding increase in
our cost of revenue when viewed as a proportion of revenue. The cost of
producing technology-consulting services is significantly lower than the cost of
producing either media sales or cost recovery revenue. The cost of revenue for
the three months ended December 31, 1999 had a greater proportion of salaries
and fees paid to programmers and consultants than the quarter ended December 31,
2000, which had no consulting revenues.

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The cost of revenues exceeds revenues in the quarter ended December 31,
2000. This is due to two intertwined factors. First, a large media buy was
purchased from Intrac primarily with excess inventory. The media was utilized in
October 2000, requiring Intrac to outlay cash to purchase the media before the
excess inventory could be converted into cash. Although some of the inventory
was sold in December 2000, the bulk of the sales occurred after the quarter
under report ended. Thus, the revenues from sales of the excess inventory were
not recorded in the quarter ended December 31, 2000 and were unavailable to
offset the cost of purchasing the media.

The second factor is the unusual timing of the transaction. This type of
transaction, which allows media buys for other than cash, is basic to our
business. But, generally, these transactions don't overlap quarters, as this one
has. In addition, this transaction occurred in what is, traditionally, our
slowest quarter for sales of excess inventory. Thus, revenues generated from
other business were insufficient in the quarter to make-up the timing shortfall.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses consist primarily of payroll and
related costs, professional fees, consulting fees, facilities cost and marketing
expenses.

General and administrative expenses were $14.3 million, $5.3 million, and
$140,000 for the years ended September 30, 2000, 1999 and 1998, respectively.
The increases from 1998 to 1999 and to 2000 were primarily due to an increase in
the operations of Entrade, and the acquisitions of Entrade, ATM Service, Ltd.,
The Intrac Group and Real Quest, Inc. As the number of our employees grew to
support our operations and those of our subsidiary companies, our general and
administrative costs increased.

The increases from 1999 to 2000 were primarily due to the inclusion of the
consolidated affiliated companies for the entire year, development of
ATMcenter.com, development and launch of the NAIDirect.com web site, severance
agreements, and costs associated with the registration filing of the Company.
Increases were in payroll and related costs of $5.8 million, professional fees
of $1.4 million, consulting fees of $376,000, advertising and promotion expense
of $754,000, travel and entertainment expense of $1.1 million and rent of
$399,000.

The increases from 1998 to 1999, excluding $1.6 million attributable to
the operations of entrade.com, which was sold in September 1999, were primarily
due to increases in payroll and related costs of $2.1 million, professional fees
of $524,000, consulting fees of $372,000, software development expense of
$366,000, travel and entertainment expense of $227,000 and rent of $118,000.

General and administrative expenses were $1.4 million and $2.7 million for
the three months ended December 31, 2000 and 1999, respectively. The decrease is
largely the result of cost reducing initiatives implemented in late August and
September of 2000. In September 2000, we decided to close our Mt. Laurel, New
Jersey office, which we no longer needed, and we began to search for a
subtenant. This enabled us to eliminate or consolidate certain administrative
functions and to eliminate certain positions. In October 2000, ATM and Intrac
each terminated its management services contract with Warren Rothstein.
Following the termination of these contracts, the ATM facility at Tarrytown, New
York was closed and all jobs at that facility were eliminated. The Tarrytown
space has been sublet, since January 1, 2001, for a monthly base rent of
$12,500. ATM will be required to pay the difference between the rent payable by
ATM under the prime lease, which ranges from approximately $17,326 to $18,055,
and the rent payable to ATM under the sublease.

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Unless we are able to obtain additional financing, we will be unable to
continue to pay these expenses.

DEPRECIATION AND AMORTIZATION

Amortization expense consists of amortization of goodwill and other
intangible assets. Depreciation expense consists of depreciation of furniture,
fixtures, machinery and computer equipment.

Depreciation and amortization was $1.5 million, $597,000 and $13,000 for
the years ended September 30, 2000, 1999 and 1998, respectively. The increase in
depreciation and amortization in fiscal 2000 was primarily due to the
amortization of goodwill of $1.1 million and $277,000 for the acquisitions of
Intrac in July 1999 and Real Quest in September 1999, respectively. The increase
in depreciation and amortization in fiscal 1999 was primarily due to goodwill
amortization of $109,000 relating to The Intrac Group acquisition, and $430,000
relating to Entrade, which was sold in September 1999.

Depreciation and amortization expense was $30,000 and $374,000 for the
three months ended December 31, 2000 and 1999, respectively. The depreciation
and amortization in the three months ended December 31, 2000 was due to
amortization of deferred financing costs and depreciation of fixed assets. The
depreciation and amortization in the three months ended December 31, 1999 was
primarily due to goodwill amortization relating to the acquisition of Intrac. In
fiscal year 2000, the remaining goodwill related to the Intrac acquisition was
written down to zero, eliminating the need for amortization in the quarter ended
December 31, 2000.

WRITE-OFF OF PURCHASED RESEARCH AND DEVELOPMENT

In March 1999, we acquired projects in various stages of development from
JenCom Digital Technologies, Inc. The total cost of the acquisition was $3
million through the issuance of 2 million shares of our common stock. In
conjunction with the acquisition of these projects, we recorded a charge to
operations of $3 million for in-process research and development at the time of
the acquisition, representing the fair value of products under development that
had not reached technological feasibility at the time of the acquisition. We
transferred our ownership interest in these assets to our 50% owned joint
venture WWWX-Jencom, LLC.

The in-process technology acquired consist of four research and
development projects. WWWX-Jencom discontinued development of these projects due
to the lack of funds. The technologies acquired are VuCam, a remote-control
real-time streaming video software; True Sound, a sound compression format;
Student Network Application, an interactive web-based system designed to
facilitate involvement in school activities and the flow of school-related
information; and Power Broker, a communications and trading management program.

The nature of the efforts required to develop the acquired in-process
technology into commercially viable products principally relates to the
completion of all planning, designing, and testing activities that are necessary
to establish that the product or service can be produced to meet its design
requirements, including functions, features, and technical performance
requirements.

WRITE-OFF OF INTANGIBLES

We evaluate impairment of our intangible and long-lived assets in
accordance with Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of" and Accounting Principles Board Opinion No. 17, "Intangible Assets." In
making such determination, management compares the estimated future cash flow

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performance, on an undiscounted basis, of the underlying operations or assets as
compared with their carrying value to determine if any impairment charge is
necessary. At September 30, 2000, we compared the estimated future cash flows
from Intrac's known and consummated transactions with the carrying value of the
goodwill recorded on this investment. As a result of the evaluation, we
wrote-off the remaining unamortized goodwill related to Intrac totaling $3.9
million.

During fiscal year 1999, we determined that the ATM Center System
technology did not meet ATM Service, Ltd.'s current business model and decided
that it would no longer use this technology to support its operations. We also
determined that there was no value to the technology and recorded a charge to
operations for the unamortized value of the technology of $5.6 million. In
September 1999, ATM Service, Ltd. entered into a license agreement with
entrade.com to use the Entrade Transaction Software to run the ATMcenter.com web
sites.

LOSS FROM OPERATIONS

During the year ended September 30, 2000, we incurred a loss from
operations of $19.1 million compared with $13.9 million and $139,000 in the
years ended September 30, 1999 and 1998, respectively. The increased loss is
primarily the result of a $9 million increase in selling, general and
administrative expenditures previously discussed, and a $1 million increase in
depreciation and amortization expenses, offset by the non-recurring 1999 charges
for the write-off of acquired in-process research and development costs of $3
million and decrease in the impairment of intangible assets of $1.7 million. The
increased loss from 1998 to 1999 is primarily the result of increased operations
and the inclusion of our consolidated subsidiaries.

During the three months ended December 31, 2000, we incurred a loss from
operations of $1.5 million compared with a loss of $2.6 million for the three
months ended December 31, 1999. The reduced loss is primarily the result of the
reductions in general and administrative expenses mentioned previously. These
reductions were necessary to properly align the cost of managing the business
with the business we currently operate. They were also necessary to allow us
more time to seek out new investment opportunities and additional sources of
funding as we continue operations.

GAIN ON SALE OF SUBSIDIARY

In September 1999, we completed the sale of Entrade to Artra Group
resulting in a gain of $25.4 million. On the date of the closing, we received
cash of $1.3 million and 1.8 million shares of Entrade common stock, which were
valued at $29.5 million. Additionally, we received $1.3 million in funding for
operations of Entrade from Artra for the period February 28, 1999 through
September 23, 1999.

LOSS ON SALE OF INVESTMENT

In fiscal year 2000, we raised working capital through the sale of shares
of Entrade Inc. The shares, received as compensation from sale of a 90% owned
subsidiary in 1999, were sold for prices ranging from $4.50 per share to $9.375
per share in the period May 2000 through August 2000. These prices, which
reflected market transactions, were all less than our cost basis of $16.375 per
share. The resulting loss from the sale of 225,000 shares of Entrade Inc. was
$2.3 million. At September 30, 2000, we evaluated the financial position,
results of operations, liquidity and capital resources, and the trend of the
market price decline of Entrade Inc. We also considered the overall industry
conditions in which Entrade Inc operates. Based upon our review, we believe that
the decline in the market value of our investment in Entrade, Inc. is other than
temporary. Accordingly, at September 30, 2000, we recorded an impairment loss of
$19.8 million in the statement of operations and established at new cost basis
of $3.8125 per share for our holdings in Entrade Inc.

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IMPAIRMENT OF INVESTMENT IN AND ADVANCES TO AFFILIATED COMPANIES

We continually evaluate the carrying value of our ownership interests in
each of the companies in which we have interests for possible impairment based
on the achievement of business plan objectives and milestones, the value of each
ownership interest in each company relative to carrying value, the financial
condition and prospects of each company, and other relevant factors.

At September 30, 2000, we evaluated the carrying value of our ownership
interest in VideoNet and InterCommerce China. Based on our review, we have
recorded valuation adjustments of $2.4 million in the year ended September 30,
2000. At September 30, 1999, we evaluated the carrying value of our ownership
interest in Vision Technologies, Inc. and WWWX-Jencom and recorded a valuation
allowance of $1.1 million.

INTEREST EXPENSE

Interest expense represents interest on our convertible debt and capital
lease obligations. Interest expense was $67,000, $219,000 and $10,000 for the
years ended September 30, 2000, 1999 and 1998, respectively.

EQUITY INCOME (LOSS)

Equity income (loss) represents our share of the earnings or losses of our
investments accounted for under the equity method. In the year ended September
30, 2000, equity income (loss) is wholly attributable to WWWX-Jencom and
represents our share of its loss until the carrying value of this investment was
reduced to $0. In the year ended September 30, 1999, equity income (loss)
includes $417,000 of goodwill amortization relating to the amount by which our
carrying value exceeded our share of the underlying net assets of ATM Service,
Ltd. and $800,000 of stock compensation earned by Warren Rothstein, the former
Chairman of ATM and Intrac and our former Chairman, President and CEO, for
listings provided to ATM Service, Ltd. The operations of ATM Service, Ltd. are
included in our consolidated operations from July 23, 1999, the date which we
acquired a controlling interest, through September 30, 1999. Additionally, our
fiscal 1999 equity loss includes our share of the loss from WWWX-Jencom of
$361,000.

AMORTIZATION OF DEBT ISSUANCE COSTS

Deferred finance costs consist of expenses related to the issuance of the
convertible debt agreements entered into in March 1999 and the convertible
promissory note issued in August 2000. Amortization of debt issuance costs was
$156,000, $155,000 and $80,000 for the years ended September 30, 2000, 1999 and
1998, respectively.

INTEREST INCOME

Interest income represents interest on the Company's cash and cash
equivalents, which are primarily invested in money market accounts. Interest
income was $193,000, $56,000 and $10,000 for the years ended September 30, 2000,
1999 and 1998, respectively.

INCOME TAX EXPENSE

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The deferred income tax benefit for the year ended September 30, 2000 of
$6,863,000 principally results from the impairment loss recorded for the shares
of Entrade Inc. A deferred tax liability for the same amount was created in
prior year as a result of the initial investment in Entrade Inc.

NET INCOME (LOSS)

For the year ended September 30, 2000, we had a net loss of $37.1 million,
compared with net income of $1.6 million for the year ended September 30, 1999
and a net loss of $219,000 for the year ended September 30, 1998. The decrease
in income resulted primarily from the impairment loss in the value of the
Company's holdings in Entrade Inc., the realized losses on the sale of Entrade
Inc. stock, the impairment of the goodwill recorded on the Intrac acquisition,
the valuation adjustments in advances to other companies, and the increased
operating loss, all of which have been previously discussed.

For the three months ended December 31, 2000, we had net losses of $1.7
million compared to net losses of $2.6 million for the three months ended
December 31, 1999.

LIQUIDITY AND CAPITAL RESOURCES

During the three fiscal years ended September 30, 2000, 1999 and 1998, we
funded our operations with a combination of cash proceeds from the sale of our
common stock, our convertible debentures and our Entrade subsidiary. Since
inception, we have raised approximately $12.9 million from the sale of our
common stock and approximately $5.1 million from the sale of our convertible
debentures. Proceeds from the sale of Entrade stock generated cash proceeds of
approximately $1.4 million.

Cash used in operations increased to $9.3 million in 2000 compared to $3.4
million in 1999, and $95,000 in 1998. The increased cash demand has been paid
for almost entirely from cash flows from the financing activities mentioned
above, a slight decrease in accounts receivable and a modest increase in net
revenues being the only notable exceptions. Cash used in operations was $1.1
million in the three months ended December 31, 2000, down from $2.0 million in
the three months ended December 31, 1999, as a result of our efforts to reduce
operating and general and administrative expenses until revenues can be built up
and additional funding obtained.

Cash used in investing activities was $1 million in 2000 compared with
$3.1 million in 1999 and $145,000 in 1998. The proceeds of $1.4 million from the
sale of short-term investments offset the purchase of $314,000 of property and
equipment. Cash used in investing activities during the three months ended
December 31, 2000, was $3,000, compared to $191,000 in the three months ended
December 31, 1999.

No revenue from asset management, liquidation and recovery services and
media buying services was deferred for the quarter ended December 31, 2000.
Deferred revenue recognized in the three months ended December 31, 2000 was
$206,000. November and December have traditionally been slow months for sales of
cost recovery and asset management services. However, excess inventories of
unsold goods usually build during those months. This build-up in excess
inventory and the changing focus to new selling seasons provide opportunities
for increased sales by ATM and Intrac after the beginning of the new year. The
significant decrease in account receivables is a result of this seasonal
slow-down in sales with the payment of existing receivables outpacing the
creation of new ones. If tradition holds true, sales should pick up dramatically
in February and March 2001. There has been some indication of this uptick in
sales, but there can be no assurance that it will continue for the entire
quarter.

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Our operations are not capital intensive and we have not incurred
significant capital expenditures through December 31, 2000 and do not anticipate
significant capital expenditures during the remainder of fiscal 2001. There were
no material capital asset purchase commitments at December 31, 2000.

In fiscal 2000, holders of $865,000 in principal amount of the Company's
6% cumulative convertible debentures elected to convert into common stock. If
the remaining debentures are not converted into common stock in accordance with
the terms of the debentures, the Company will have to pay the remaining $125,000
principal amount plus interest and related costs to the remaining holders.
Management believes that cash and cash equivalents on hand at December 31,
2000, will be adequate to fund our current operating needs at current levels
through approximately May 2001. In order to continue its operations, the Company
will need to raise additional cash either from future equity offerings or other
debt financing.

On August 22, 2000, Blair Ventures-Fund I, Inc. ("Fund") made a loan to us
in the principal amount of $3.6 million, which is due on September 1, 2001. We
anticipate that Fund will extend the maturity date of the loan, however, there
can be no assurance that it will do so. On October 26, 2000 and January 16,
2001, respectively, ATM Service, Inc. borrowed $200,000 and $75,000 from Marvel
Worldwide, Ltd., which is due on February 23, 2001 and May 16, 2001,
respectively. These loans are secured by certain of ATM's receivables. On
February 9, 2001, ATM borrowed the additional sum of $200,000 from Joyce
LaTerre, which is due on March 26, 2001. This loan is secured by the personal
guarantees of Thomas Settineri and Gary Levi.

Management believes that raising additional capital will be difficult and
that sources of additional financing are limited. If we are able to obtain
additional financing, the interests of our existing shareholders may be diluted,
and we are unable to predict the amount of such possible dilution.

MARKET RISK AND IMPACT OF INFLATION

We are exposed to equity price risks on our ownership interest in the
common stock of Entrade Inc. which is a New York Stock Exchange publicly traded
security denominated in U.S. dollars. From September 30, 2000 through February
21, 2001, the aggregate value of our Entrade stock fluctuated from a low of
$787,500 on December 26, 2000 to a high of $5.3 million on October 2, 2000. A
20% decrease in equity prices would result in an approximate $1.2 million
decrease in the fair value of our holdings of our Entrade stock at September 30,
2000. The value of our holdings may continue to fluctuate. We have not attempted
to reduce or eliminate our market exposure on our holdings.

We are exposed to interest rate risk on our holdings of money market
instruments. Historically, our investment income has not been material to our
financial results, and we do not expect that changes in interest rates will have
a material impact on the results of operations. A 1/2% increase in interest
rates would result in an approximate $5,000 increase in interest income.

We also have issued fixed-rate debt, which is convertible into our common
stock at a pre-determined conversion price. Convertible debt has characteristics
that give rise to both interest rate risk and market risk because the fair value
of the convertible security is affected by both the current interest rate
environment and the underlying price of our common stock. As of September 30,
2000, $865,000 in principal amount of the convertible debentures have been
converted into common stock and $125,000 in principal amount remains
outstanding. In addition, we have a $3.6 million convertible loan due on
September 1, 2001.

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OUR BUSINESS

WorldWide Web NetworX Corporation is a holding company that enters into
joint ventures with or acquires ownership interests in off-line
business-to-business companies in order to migrate the traditional business
transactions of those companies onto the Internet and new business-to-business
opportunities which improve the efficiency of transactions, and that makes other
opportunistic investments. We currently have joint ventures with or have
acquired ownership interests in eleven companies. Although we still have
ownership interests in four of these companies, WWWX-Jencom, LLC
("WWWX-Jencom"), InterCommerce China, LLC ("InterCommerce China"), VideoNet
Corporation ("VideoNet") and Vision Technologies, Inc. ("Vision"), we have
written off our interests in these companies because we have been unable to
confirm that they presently have any value. We currently derive revenues from
two companies, ATM Service, Ltd. ("ATM") and The Intrac Group, Ltd. ("Intrac").
ATM and Intrac principally derive revenue by providing off-line inventory
liquidation and asset recovery services and from the purchase and resale of
advertising, merchandise or business services. However, ATM's web site has not,
to date, consummated any meaningful transactions or produced any meaningful
revenue.

As of February 21, 2001, we owned majority voting and economic interests
in the common stock of Intrac and ATM with the rights and in the approximate
percentages stated in the following table:

[Enlarge/Download Table]

-----------------------------------------------------------------------------------------------
Company Form of Interest Our Ownership Rights Our Percentage Interest
-----------------------------------------------------------------------------------------------

The Intrac Group, Ltd. Common Stock Voting and Economic 100%
-----------------------------------------------------------------------------------------------
ATM Service, Ltd. Common Stock Voting and Economic 68%
-----------------------------------------------------------------------------------------------

We also own interests ranging from 9% to 50% in three companies with the
rights and in the percentages stated in the following table:

[Enlarge/Download Table]

WWWX-Jencom, LLC LLC Interest Voting and Economic 50%
-----------------------------------------------------------------------------------------------
InterCommerce China, LLC LLC Interest Voting and Economic 33%
-----------------------------------------------------------------------------------------------
Entrade Inc. Common Stock Voting and Economic 9%
-----------------------------------------------------------------------------------------------

As stated above, although we own 50% of WWWX-Jencom and 33% of
InterCommerce China, we have written these investments down to zero because we
have been unable to confirm that they have any value. For more information on
WWWX-Jencom and InterCommerce China, see the section entitled "WWWX-Jencom, LLC
and InterCommerce China, LLC." In addition, we have determined that the decline
in the market value of our investment in Entrade during fiscal 2000 is other
than temporary and, accordingly, we have written this investment down to its
fair market value at September 30, 2000. See the section entitled "Entrade."

Lastly, we own interests of 5% or less in the common stock of New
America Network, Inc., One World Networks Integrated Technologies, Inc.,
Vision Technologies, Inc., VideoNet Corporation, AssetTRADE.com, Inc. and
Real Quest, Inc.

LIQUIDITY

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New management came to the Company on September 1, 2000 with the
appointment of Carol C. Knauff, a former AT&T executive, as our Chairman,
President and Chief Executive Officer. The immediate focus of the new management
team was on rationalizing our operating expenses and assessing the
value-creating potential of our affiliated companies. Their intent was to reduce
operating expenses, thereby conserving working capital, while evaluating the
investments the Company had previously made and seeking opportunities for new
investment.

Management has taken several steps to significantly reduce our expenses
going forward. These actions, which were initiated in late August and September
2000, included the reduction of employees, closing facilities that were no
longer needed, eliminating services that are not essential to our continuing
operations or to those of our majority owned or controlled affiliated companies,
ATM and Intrac, negotiating lower prices from vendors for services that are
still essential to our continuing operations, and renegotiating prior agreements
that required funding by the Company.

The specific actions that were taken by management are described in more
detail elsewhere in this annual report, but include the following:

o In late August and September 2000, we took a series of actions that
reduced the corporate workforce by 40% and our recurring payroll
expense by 22%.

o In September 2000, we determined to close our Mt. Laurel, New Jersey
office and began searching for a subtenant for the Mt. Laurel
facility.

o Also in September 2000, we restructured our relationship with NAI
Direct, which eliminated our obligation to provide a substantial
amount of additional working capital to NAI Direct.

o In November 2000, ATM and Intrac each terminated its management
services contract with Warren Rothstein. Coincident with termination
of those contracts, we closed the ATM facility at Tarrytown, New
York and eliminated all of the jobs at that facility. The Tarrytown
facility has been sublet as of January 1, 2001.

Our operating results for the year ended September 30, 2000 do not reflect
substantial savings from the foregoing actions, because they were initiated late
in the fiscal year and there were implementation costs associated with certain
of these actions. However, management believes that the impact on operating
results in fiscal year 2001 will be material, although the precise impact cannot
be determined at this time. These actions have the cumulative effect, to date,
of enabling the Company to continue to operate through at least May 2001. Had
these actions not been taken, cash and cash equivalents were expected to have
been depleted by late October 2000.

Management contemplates further reductions in general and operating
expenses. The cost of space that we no longer need or use will be reduced when
the Mt. Laurel facility has been sublet.

However, as of February 21, 2001, we have incurred recurring operating
losses and have a working capital deficiency. In addition, we will not be able
to meet our working capital needs after May 2001 or to satisfy our $3.6 million
of convertible secured debt with a cash payment upon maturity unless we are able
to raise additional capital. These conditions raise substantial doubt about our
ability to continue as a going concern. We will not be able continue to operate
beyond approximately May 2001 unless we secure additional funding and we cannot
assure you that we will be successful in obtaining the necessary funding.

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STRATEGY

If we are able to secure adequate financing, we plan to continue to enter
into joint ventures with or acquire ownership interests in off-line
business-to-business companies in order to migrate the traditional business
transactions of those companies onto the Internet; new business-to-business
opportunities which improve the efficiency of business transactions; and makes
other opportunistic investments. Our goal is to expand the markets, services and
products and improve the efficiencies of these businesses by, among other
things, initiating, increasing or changing their use of Internet technology. We
are continually searching for new opportunities to forge relationships with
companies which we believe would benefit from our business strategy. See "Letter
of Intent Concerning the Acquisition of eMarketplaces International, Inc."

HISTORY

WorldWide Web NetworX Corporation was originally incorporated in Idaho in
July 1979 under the name "Gold Cache, Inc." We subsequently changed our name to
"Instra Corp" in August 1988. In July 1996, we changed our domicile to Delaware
by merging into a newly incorporated Delaware corporation named "Instra Corp."

On September 3, 1996, we filed a disclosure statement pursuant to Rule
15c2-11 of the Securities Exchange Act of 1934 with the National Association of
Securities Dealers, Inc. for the purpose of including our common stock, $0.001
par value per share, for trading on the OTC Bulletin Board, a quotation service
for securities which are not listed or traded on a national securities exchange.
Our common stock is currently listed on the OTC Bulletin Board under the symbol
"WWWX."

After a period of relatively little operating activity, we entered into
our current line of business in May 1998, when we acquired Keiretsu Corporation,
a privately-held Nevada corporation, incorporated on September 26, 1997
("Keiretsu"). The stockholders of Keiretsu exchanged all of their Keiretsu
shares for shares of our common stock. Our then current management resigned, the
management of Keiretsu became our new officers and directors, and we changed our
name to "WorldWide Web NetworX Corporation."

On June 12, 2000, we filed an amended registration statement with the
Securities and Exchange Commission on Form 10.

OUR COMPANIES AND STRATEGIC RELATIONSHIPS

The following is a description of our subsidiaries and the other companies
in which we have interests. For each of the following companies, we discuss, to
the extent applicable, the history of the company, joint venture partners,
traditional lines of business, corporate governance provisions and significant
agreements.

ATM SERVICE, LTD. AND THE INTRAC GROUP, LTD.

ATM is an off-line business that assists companies to optimize their
return on excess assets, closeouts, discontinued merchandise, excess plant
capacity and production time and to develop new markets for their goods and
services. ATM also engages in media buying for its customers and clients. ATM's
customers include retailers, distributors, wholesalers, manufacturers (of
consumer products, industrial machinery, equipment and supplies, and commodities
such as petroleum products) and service providers such as printing companies,
telecommunications companies and companies engaged in the travel industry.

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Intrac is also an off-line business that, prior to our acquisition,
engaged in media buying for clients and purchased products and services for
trade credits (which are described in more detail below) which could be used for
or in connection with the purchase of advertising media and other products and
services.

For our fiscal year ended September 30, 2000, four of ATM and Intrac's
customers, Exxon/Mobil, Budget Rent A Car Corporation, State of Israel and
Candie's, each represented 10% or more of our consolidated revenues, totaling in
the aggregate 65% of our consolidated revenues. The loss of any one of these
four customers would be considered material.

HISTORY

In December 1998, we formed ATM with Warren Rothstein, who served as our
Interim Chairman, President and Chief Executive Officer until April 26, 2000, as
one of our directors until August 22, 2000 and as the Chairman of both ATM and
Intrac until October 19, 2000. Initially, WorldWide Web NetworX Corporation and
Mr. Rothstein each owned a 50% equity interest in ATM. In connection with the
formation of ATM, we agreed to issue 5,000,000 shares of our common stock to Mr.
Rothstein, subject to forfeiture. See "Our Stock Issuance Agreement with Warren
Rothstein." In July 1999, Mr. Rothstein relinquished his right to 1,000,000 of
these shares, as well as to a 26% interest in ATM, in order to enable us to use
those shares and a part of the 26% interest in ATM to acquire Intrac. Mr.
Rothstein later relinquished an additional 2,600,000 of his shares of our common
stock and the entire balance of his equity interest in ATM, in November 2000, in
connection with his resignation as the Chairman of ATM and Intrac.

In July 1999, we acquired Intrac, a privately held international marketing
and asset management organization through a merger with our wholly-owned
acquisition subsidiary, Intrac Acquisition Corporation, which later changed its
name to The Intrac Group, Ltd. Our acquisition subsidiary acquired Intrac from
its two stockholders, Thomas Settineri and Gary Levi, in exchange for (1)
1,000,000 shares of our common stock; (2) $1,500,000 in cash; and (3) 24% of
ATM's outstanding stock. The 1,000,000 shares of our common stock that were
issued to Messrs. Settineri and Levi were simultaneously released by Warren
Rothstein, reducing the number of shares issued to Mr. Rothstein and subject to
forfeiture to 4,000,000. The 24% interest in ATM that was issued to Messrs.
Settineri and Levi was also transferred by Warren Rothstein and, together with
an additional 2% of ATM released by Mr. Rothstein to us, reduced his interest in
ATM to 24%. We also agreed to provide Intrac with a $1,000,000 working capital
loan. We loaned this sum to ATM which, in turn, loaned this amount to Intrac.

In connection with our acquisition of Intrac, Thomas Settineri became
President and Chief Executive Officer of ATM and Intrac and Gary Levi became
Chief Operating Officer of ATM and Intrac. On September 23, 1999, Thomas
Settineri also became a director of WorldWide Web NetworX Corporation. Warren
Rothstein remained as Chairman of ATM and became Chairman of Intrac, thereby
making the management team for both companies identical.

On October 19, 2000, Warren Rothstein resigned as Chairman of ATM and
Intrac. Upon Mr. Rothstein's resignation, Thomas Settineri was elected Chairman
of ATM and Intrac and Gary Levi was elected President. On November 15, 2000, in
connection with Mr. Rothstein's resignation, he relinquished his entire equity
interest in ATM and an additional 2,600,000 shares of our common stock which,
together with the shares previously relinquished and shares sold by Mr.
Rothstein, reduced the number of shares of our common stock held by Mr.
Rothstein to 1,380,000.

BUSINESSES

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ATM and Intrac offer the following services:

LIQUIDATION: In a simple liquidation, ATM purchases the assets of a
customer for cash. This method offers the customer the lowest form of recovery
for under-performing assets as the price ATM pays for the assets is usually
below what it cost the customer to acquire or produce the assets. ATM typically
sells the assets at a price greater than the price ATM paid for the assets to a
buyer ATM has identified before actually purchasing the assets.

PURCHASES AND RESALES OF MEDIA: Often, in connection with the
utilization of trade credits, which are described more fully below, Intrac
purchases and resells advertising media. Media is currently the predominant
service that Intrac provides to its customers to redeem trade credits. Such
media includes television air time, cable television air time, radio air time,
print media, outdoor advertising, special programming and other types of media.

ASSET MANAGEMENT: In an asset management transaction, ATM acts as an
agent and remarkets a customer's assets for cash and receives a percentage of
the sale as a commission. This method generally provides a greater recovery for
customers than a liquidation because ATM is generally able to sell the assets at
higher prices by selling them selectively and over time rather than selling the
whole lot immediately. In some asset management transactions, ATM also issues
trade credits.

COST RECOVERY: In a cost recovery transaction, ATM buys the
customer's assets for cash and trade credits (a non-monetary form of currency
which are discussed in more detail below) at a price that is equal to the
customer's cost to acquire or produce the assets. A cost recovery transaction is
more complex than the previous two transactions and has various aspects that are
negotiated at the inception and during the transaction.

The following list outlines the initial steps in a typical cost
recovery transaction:

o ATM buys the assets from the customer and then sells the assets for
cash.

o ATM pays a negotiated portion of the cash received to the customer
and ATM keeps the balance of the cash.

o Along with the cash payment, ATM or Intrac issues the customer trade
credits to make up the balance of the purchase price.

The following example demonstrates a reason a company may enter into a
cost recovery transaction:

A company has inventory in its warehouse that it cannot use or
market at the prices it expects and thus needs to dispose of this inventory. A
liquidation sale for cash would only bring 20% of the amount it cost the
customer to acquire or produce the inventory. In a cost recovery transaction, by
using a combination of cash and trade credits, ATM can acquire the inventory for
the same amount it cost the customer to acquire or produce the inventory. The
cash portion of the purchase price is slightly less than 20% of the customer's
cost to acquire or produce the inventory and the trade credits make up the
balance. The customer benefits from this transaction by avoiding the loss
associated with a liquidation sale by recovering its costs in cash and trade
credits that can be used in the future to purchase goods and services it needs
for its operations using, typically, some combination of cash and trade credits
as discussed below. Recently our revenues have been concentrated in the media
sales and cost recovery areas, however, we do not expect that we are, or will
be, more dependent on any one of these services, or a group of any of these
services, in future periods.

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TRADE CREDITS

The trade credits issued by ATM or Intrac represent the right to purchase
assets or services from their issuer and, in most cases, may only be used if
some portion of cash is also paid for the assets or services. A customer can use
its trade credits to purchase media, merchandise or any business services that
the customer would normally purchase on an all-cash basis. Trade credits
typically expire within two to five years after they are issued, however, in
certain cases, there is no specified expiration date for the trade credits
issued by ATM. Many customers negotiate to obtain trade credits that represent
the ability to purchase media, because they have a predetermined media budget
and plan for each fiscal year. The advertising and media services Intrac can
obtain include radio, television, print, Internet, and outdoor advertising, such
as billboards and bus stop shelters. Intrac also provides a wide range of
non-media trade credits which can include virtually any other asset or business
service a customer normally purchases on an all-cash basis.

The following is an actual example of such a transaction:

Intrac developed a five-year reciprocal trade program between an oil
company and a car rental company. The oil company had lubricant it desired to
sell and the car rental company required a steady supply of lubricant for its
rental fleet. The oil company agreed to sell to Intrac, for resale to the car
rental company, lubricant at fixed purchase prices, subject to annual
negotiation, for a five-year period. Intrac purchased the lubricant for a
combination of cash and trade credits and sold the oil to the car rental company
for cash. The oil company utilized the trade credits to purchase advertising
media and special events marketing from Intrac for a purchase price of 30% trade
credits and the remainder in cash.

In connection with each of the services described above, the merchandise
ATM purchases may remain in the custody of the seller until it is resold or ATM
may take care, custody, and control of the merchandise it purchases from a
customer. If ATM takes custody, ATM arranges for the transportation and storage
of the merchandise in an insured commercial warehouse facility until it is
resold. ATM may also manage the disposition process including shipping,
handling, billing, collecting, and remitting to customers the proceeds of the
sales made on their behalf.

ATM AND INTRAC'S RELATIONSHIP

Intrac and ATM are currently conducting their businesses in the following
manner:

o Intrac refers to ATM all new transactions involving the buying
and selling of assets and services and ATM refers to Intrac
all transactions involving the purchase and sale of media and
uses Intrac for the fulfillment of all of the trade credits
issued by ATM in connection with its transactions.

o ATM pays Intrac a fee for the fulfillment of the trade credits
issued by either ATM or Intrac in connection with ATM's
transactions equal to 110% of the costs incurred by Intrac,
which include the cost of purchasing the advertising media,
assets or services provided to ATM's customers in connection
with their use of the trade credits.

o Intrac also continues to provide fulfillment for the trade
credits that it issued prior to our acquisition of Intrac.

o Any cash paid by a customer in connection with the use of
trade credits that exceeds the 110% fee payable to Intrac is
retained by ATM.

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o ATM provides billing and collection for Intrac, at no
additional cost.

o ATM and Intrac each pay one-half of the salary of Thomas
Settineri, the Chairman and Chief Executive Officer of both
ATM and Intrac, and Gary Levi, the President and Chief
Operating Officer of both ATM and Intrac.

o Our management may determine to merge ATM and Intrac at some
time in the future.

ATMCENTER.COM

ATM is an off-line business that assists companies to optimize their
return on excess assets, closeouts, discontinued merchandise, excess plant
capacity and production time. ATM uses the ATMcenter.com web site as a marketing
tool to list merchandise for sale and to elicit offers to buy or sell
merchandise. ATM and Intrac refer their existing customers to the ATMcenter.com
web site to obtain information about merchandise that is available for sale.
However, ATM consummates all of its transactions off-line and we expect that
this practice will continue.

INTERNATIONAL MARKETS

ATM owns a number of URLs, which are branded for use in different
countries and with various organizations. Each of these web sites is a
customized, one-page "front door" that links onto the ATMcenter.com web site.
The only difference between each country "front door" is the country's flag and
name on the "front door" web page. The web pages are used to recruit in-country
trading partners and distributors. ATM is planning to make available a Spanish
language version of the ATMcenter.com web site during fiscal year 2001. By using
these web sites in conjunction with its current and any future representatives
in foreign countries, the ATMcenter.com web sites can assist manufacturers,
retailers and industrial companies to promote their products to buyers around
the world.

ATMcenter.com and its related web sites offer a potentially cost-efficient
solution to promote the merchandise that companies have available for sale to a
larger market. By using translations of the ATMcenter.com web sites and
in-country representatives, ATM can market products to buyers and sellers within
a region or country to assist trade among such parties, and to encourage parties
outside that region or country to buy or sell products in that region or
country.

ATM's approach to marketing in countries other than the United States is
to recruit in-country representatives or master distributors that are
established companies in their respective regions. An in-country representative
may receive either the exclusive or the non-exclusive right to represent ATM in
a specific territory and does not pay any up-front fee to ATM. A master
distributor must pay an up-front fee to ATM and will receive the exclusive right
to represent ATM in a designated area. The amount of the up-front fee will
depend on the size of the territory and may be paid in either cash or in
products or services, or by a combination of these three forms of payment. A
master distributor may appoint sub-distributors within its territory, subject to
ATM's approval.

When their products are sold by ATM or through the ATMcenter.com site,
sellers will pay transaction fees to ATM. A potential buyer is not required to
pay any fee to utilize the ATMcenter.com service, but must register on the web
site in order to purchase goods or services. An ATM representative will receive
a negotiated percentage of the net revenues that ATM receives from the
representative's territory, which will range from 25% to 30% depending upon the
investment made and the services to be performed by the representative. A master
distributor will receive 50% of any membership fees, annual renewals and
transaction fees paid by members enrolled by the master distributor in its
territory.

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Currently ATM has agreements with the following companies:

MEXICO: CUARTO NIVEL, S.A. DE C.V.

ATM formed a joint venture with Cuarto Nivel, S.A. de C.V. ("Cuarto
Nivel"), a subsidiary of Operadora Protel, S.A. de C.V., ("Protel") in April
2000, to sell and promote the services provided by ATM in Mexico. In
consideration for Cuarto Nivel's interest in the joint venture, Cuarto Nivel
agreed to cause Protel to supply certain telecommunications services to the
joint venture, for distribution by the joint venture. Pursuant to the agreement
between the parties, ATM will share the net revenues derived from both the
distribution of Protel's telecommunications services and the sale of ATM's
services in Mexico. To date, ATM has not received any meaningful revenues from
this joint venture and we cannot assure you that ATM will receive any such
revenues. However, ATM has already commenced the distribution of Protel's
telecommunication services between the United States and Mexico through Latino
Communications Corp., an affiliate of Protel located in the United States, and
ATM is entitled to receive commissions in connection with the distribution of
those services.

FUNDACION PRIMERO MEXICO

Intrac entered into an agreement, in March 1999, with Fundacion Primero
Mexico, a foundation for the development of social and welfare programs for the
citizens of Mexico, to act as the exclusive on- and off-line remarketer of the
assets donated to the Fundacion by Mexican corporations. The agreement has an
initial 24-month term which automatically extends each year for an additional
one year term until terminated by either party. The donated assets may include
consumer products and services, commodities, real estate, industrial equipment,
vehicles, construction services, building equipment/materials, or any other
assets. On April 22, 1999, the agreement was amended in order to add ATM as a
party to the contract.

The agreement with the Fundacion requires that ATM and Intrac remarket
donations on-line for each donating company. In return, ATM and Intrac will
provide acceptable products and services that the Fundacion requires for the
people of Mexico. The Fundacion has received donations of goods and ATM is in
the process of marketing those goods. However, to date, neither ATM nor Intrac
has received any revenues from their relationship with Fundacion Primero or
ATM's related web sites and we cannot assure you that either ATM or Intrac will
receive any such revenues.

FREETRADEZONES.COM

ATM entered into an agreement, in July 2000, with Juan Torrents & Assoc.,
whereby the parties agreed to form a joint venture known as FreeTradeZones.com.
The purpose of the joint venture is to use the ATM e-commerce platform to
provide asset management and disposition services, bulk and specific sales of
products and services, both off-line and on-line, auction services and other
transactions, such as trade and barter, to companies located within the Free
Trade Zones. ATM advanced $12,500 to the joint venture, in November 2000, to
cover the initial costs of travel and expenses of implementation. This advance
is to be repaid from the first funds available to the joint venture.
Representatives of both ATM and Juan Torrents & Association made a presentation
of ATM's services to the Free Trade Zone World Federation, in Geneva,
Switzerland, in September 2000. ATM has a 62% equity interest in the joint
venture and the right to receive 50% of any distributions of available cash by
the joint venture. However, to date, ATM has not received any revenues from the
joint venture and we cannot assure you that either ATM will receive any such
revenues. As of February 21, 2001, FreeTradeZones.com had not begun operations
nor did it have any assets or liabilities.

UNITED STATES HISPANIC CHAMBER OF COMMERCE FOUNDATION, INC.

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ATM entered into an agreement, on September 25, 2000 with the United
States Hispanic Chamber of Commerce Foundation, Inc. (the "Foundation"), whereby
ATM will remarket and sell merchandise, goods, services and other types of
non-cash assets donated to the Foundation by various corporations and receive a
sales commission equal to 20% of the sale proceeds, as well as reimbursement for
the remarketing expenses incurred by ATM. The agreement has an initial 12-month
term which automatically extends each year for an additional one year term until
terminated by either party. The parties have approved the form of solicitation
that ATM will use to solicit donations to the Foundation and expect to commence
the solicitation process during the first quarter of 2001. However, to date, ATM
has not received any revenues from its relationship with the Foundation and we
cannot assure you that it will receive any such revenues.

SALES AND MARKETING

ATM has a sales and marketing staff that consists of five employees and
three independent contractors. Two of ATM's employees, Thomas Settineri and Gary
Levi, also work for Intrac. ATM's sales and marketing staff identifies potential
transactions and finds buyers for the assets and services offered by ATM. The
sales and marketing staff employed by ATM are compensated with a base salary and
a commission of between 5% and 50% of ATM's gross profit on any transactions in
which the staff participated on ATM's behalf. Intrac has only two employees,
Thomas Settineri and Gary Levi, who are shared with ATM, and retains the
services of one media purchasing consultant and a media assistant. In addition,
Intrac uses the services of other media purchasing businesses to service its
trade credits fulfillment and media purchasing business. ATM also has informal
arrangements with representatives in the United States and abroad who bring
potential transactions to ATM for a negotiated percentage of the gross profit of
the transaction, typically between 5% and 25% depending on the amount of effort
expended and cost to the representative. In addition, ATM has exclusive
marketing agreements with representatives in Mexico discussed in detail under
the heading "Business--International Markets." Currently, approximately 90% of
ATM and Intrac's transactions are generated from ATM's in-house sales and
marketing team.

FREED MAXICK ABL SERVICES, INC.

In July 2000, ATM entered into an agreement with Freed Maxick ABL
Services, Inc. ("Freed Maxick"), a professional services firm that provides
various accounting, auditing and related services to its clients. Pursuant to
this agreement, Freed Maxick agreed to endorse and promote the services provided
by ATM, and ATM agreed to offer and provide services to Freed Maxick's clients,
including asset management and inventory control, inventory liquidation and
disposition, trade finance and marketing (both domestic and international),
recoupment of non-performing receivables on a trade and/or cash basis,
end-to-end solutions through trade negotiations for the recovery of undervalued
or depreciated assets, e-commerce initiatives and other services. Freed Maxick
will receive a share of the net profits derived by ATM from each transaction
with a client of Freed Maxick or any other client introduced to ATM by Freed
Maxick. Although ATM has already had preliminary discussions with a number of
Freed Maxick clients, to date, ATM has not consummated transactions with any
Freed Maxick client or received any revenues from its relationship with Freed
Maxick, and we cannot assure you that it will receive any such revenues.

ATMCENTER.COM WEB SITE AND SOFTWARE

ATM currently uses certain software owned by entrade.com, Inc., a
subsidiary of Entrade Inc., to operate ATMcenter.com and its related web
sites. This software is described in more detail in "Business -Entrade
Inc."

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OUR STOCK ISSUANCE AGREEMENT WITH WARREN ROTHSTEIN

In connection with the formation of ATM Service, Ltd., Warren Rothstein
received 4,000,000 shares of our common stock, valued at $4,000,000, which were
subject to forfeiture. The Stock Issuance Agreement provided that, in each
fiscal quarter commencing with the fiscal quarter ended March 31, 1999, if Mr.
Rothstein provided listings of merchandise for ATMcenter.com with a retail value
of $1,250,000 or more, 200,000 of his shares would be automatically released
from the forfeiture provision of the agreement. Our agreement with Mr. Rothstein
does not specify who determines whether the required listings have been
provided. Mr. Rothstein provided us with evidence of listings on ATMcenter.com
in excess of $1,250,000 in each of the seven fiscal quarters commencing March
31, 1999 and 1,400,000 shares were, therefore, released from the forfeiture
provision. Mr. Rothstein relinquished his rights to the remaining 2,600,000
shares and to his entire equity interest in ATM, in November 2000, in connection
with his resignation as the Chairman of ATM and Intrac.

CORPORATE GOVERNANCE

We own approximately 68% of ATM and 100% of Intrac, and Thomas Settineri
and Gary Levi collectively own the remaining approximately 32% of ATM's capital
stock. The boards of directors and executive officers of the two companies are
identical.

ATM SHAREHOLDERS AGREEMENT

The relationship among WorldWide Web NetworX Corporation, ATM and ATM's
individual shareholders is governed by a shareholders agreement, dated as of
September 30, 2000. The shareholders agreement provides for a five-member ATM
board of directors consisting of three directors appointed by us and one
director each appointed by Settineri and Levi. We have designated Carol C.
Knauff, our Chairman, President and Chief Executive Officer, R. Bruce
Richardson, our Chief Financial Officer, and Glenn Starr as our appointed
directors. Thomas Settineri and Gary Levi are the other two directors.

In addition, the ATM shareholders agreement provides as follows:

o Transfers of ATM Service, Ltd. Shares: No stockholder may encumber
his or its shares or transfer his or its shares without the
unanimous consent of ATM's board of directors, except for transfers
to affiliates or for estate planning purposes. The individual
stockholders have the right to put a portion of their shares to ATM
upon death. The individual stockholders also have tag-along rights
on any sale of stock by us that constitutes more than 50% of the
outstanding stock of ATM. The board of directors of ATM may compel
the stockholders to sell and cooperate with the sale of ATM to a
third party.

o Funding: In July 1999, we loaned $3.5 million to ATM, with interest
payable at the minimum rate permissible under the Internal Revenue
Code, $2.5 million of which was used to fund ATM's operations and $1
million was loaned by ATM to Intrac to fund Intrac's operations. The
principal and accrued interest are due upon the earlier of 10 years,
an initial public offering of the securities of ATM or the receipt
of $15 million in financing for ATM. From June through August 2000,
we loaned ATM an additional $548,000, of which $83,000 was payable
on or before September 16, 2000 and the balance is payable on or
before August 24, 2003, with interest. To date, only $10,000 has
been repaid by ATM with respect to the $83,000 loan that was payable
on or before September 16, 2000. We also made payments on behalf of
ATM and provided ATM with services totaling $165,000 during the
period from December 1998 through

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December 31, 2000, all of which remain unpaid. Our loans and
advances to ATM are secured by ATM's interest in AssetControl.com,
LLC. See "ASSETCONTROL.COM, LLC." These amounts are eliminated in
our consolidated financial statements.

ASSETCONTROL CORPORATION, LLC

On March 10, 2000, ATM joined with Textron Financial Corporation, a
division of Textron, Inc., Entrade Inc. ("Entrade") and Safeguard Scientifics,
Inc. ("Safeguard") to form AssetControl.com, LLC ("AssetControl"), which is a
Delaware limited liability company that was initially owned 47.5% by Textron,
38% by Entrade, 9.5% by ATM and 5% by Safeguard. In October 200, the company
changed its name to AssetControl Corporation, LLC. ATM acquired its interest in
AssetControl in consideration for a contribution of its know-how and ATM did not
contribute any cash to the company. AssetControl provides asset disposition
services for excess industrial equipment, machinery and other assets, either on
its own or through companies with whom it contracts who will share the revenues
derived from the sale of such equipment, machinery and other assets.

When AssetControl was initially formed, ATM and Entrade orally agreed
that, although ATM owned a lesser equity interest in AssetControl than Entrade,
ATM and Entrade would share, on a 50/50 basis, the aggregate amount of any
distributions by AssetControl to Entrade and ATM, subject to an appropriate
adjustment in the event of the failure of either party to pay its share of any
capital call.

The operating agreement of AssetControl provides that each member must
contribute its proportionate share of any capital call upon the members and
that, if any member fails to contribute its share, its interest in AssetControl
will be diluted. In February 2001, AssetControl issued a capital call upon its
members in the amount of $1,430,913 to finance the loss incurred during the
period from March 8, 2000 through December 31, 2000. ATM's share of this capital
call was $134,702. ATM elected not to pay its 9.5% share of the capital call.
Accordingly, ATM's equity interest in AssetControl has been diluted by 20%,
based upon the valuation of the company by its board of managers at $7.5
million in February 2001. Accordingly, ATM now holds a 7.7% equity interest
in AssetControl.

The AssetControl.com web site became operational at the end of April 2000.
However, to date, there have been no distributions by AssetControl and we cannot
assure you that there will be any.

ATM has pledged its interest in AssetControl to us as collateral for the
repayment of the loans and advances that we made to ATM. Even though one of the
loans that we made to ATM is currently in default, we have elected not to
exercise our rights with respect to the collateral for this and our other loans
and advances to ATM at this time.

NEW AMERICA NETWORK, INC. AND REAL QUEST, INC.

We currently own 4% of New America Network, Inc. and 1% of Real Quest,
Inc.

HISTORY AND BUSINESS

On September 23, 1999, we entered into a joint venture with New America
Network, Inc. to form NAI Direct, Inc. ("NAI Direct") and develop NAIdirect.com,
a web site that would permit corporate, governmental and institutional users, as
well as local business operators and private investors, to obtain commercial
real estate services on-line, either directly or through New America Network
member brokers or third parties. New America Network is a global system of real
estate service providers, branded as "New America International" and "NAI," that
provides brokerage, financial and investment services, property/facilities
management and strategic advisory services to the office, industrial and retail
sectors.

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NAI Direct has modified and enhanced a software application called
REALTrac(TM) for use on NAIdirect.com. REALTrac(TM) is a proprietary commercial
real estate transaction management software developed by New America Network for
internal use. NAI Direct will pay New America Network a royalty fee equal to 5%
of NAI Direct's monthly gross revenue for the use of REALTrac(TM). Using
REALTrac(TM), NAIdirect.com will allow users to track transactions with bulletin
board, periodic reporting, contact listing and key document access features. The
transaction management software has been modified for use on NAIdirect.com. NAI
Direct is in the process of incorporating NAI broker information on the web site
and negotiating license agreements with third-party providers of information for
use by the commercial real estate community, including demographic,
environmental and comparable sales data. NAIdirect.com became operational in
June 2000. NAI has agreed to place all of its commercial real estate listings on
NAIdirect.com and to encourage all NAI member brokers to place all of their
local commercial real estate listings on NAIdirect.com. The site also offers a
researched database so that brokers and owners can instantly access potential
tenants, investors or lenders by delivering information to them electronically.
It will also be designed to offer large investment properties via privately
negotiated sales or auction. We anticipate that NAI Direct will receive revenue
from a variety of sources which will include transaction fees, property
marketing and hosting fees, referral fees from providers of related real estate
services, royalty fees from on-line sales of market and demographic data,
premium fees for auction services, and advertising fees.

Our ownership in NAIdirect.com was initially held through two
subsidiaries: Real Quest, Inc. and NAI Direct. In exchange for an 80% ownership
interest in Real Quest, Inc., ("Real Quest") we issued 750,000 shares of our
common stock to New America Network, Inc. and delivered an additional 750,000
shares in escrow to be transferred to New America Network, Inc. upon NAI Direct
earning cumulative revenue of $2 million within 24 months of the launch of the
NAIdirect.com web site. We also provided a $1 million working capital loan to
NAI Direct bearing interest at the minimum rate permissible under the Internal
Revenue Code and due at the earlier of 10 years from the date of issuance or the
occurrence of any of the following events: (1) the issuance by NAI Direct of a
note or other evidence of indebtedness (or the incurrence by NAI Direct in any
other manner of any indebtedness) or of a security or other instrument
evidencing an ownership interest in, or convertible into, or otherwise linked
to, an ownership interest, in NAI Direct, or the sale by NAI Direct of all or a
material part of its assets, whether or not such assets are thereafter leased by
NAI Direct or any affiliate of NAI Direct which, in each case, makes available
to NAI Direct, without material conditions that remain unsatisfied, funds equal
to or in excess of $5,000,000 or (2) a bona fide, underwritten public offering
of securities of NAI Direct, the net proceeds of which to NAI Direct are greater
than $5,000,000. In addition, we agreed to provide up to $4,000,000 in
additional working capital to NAI Direct within 18 months of September 23, 1999
in the form of a loan or otherwise, of which we funded $1,090,000.

In September 2000, we restructured our relationships with NAI Direct, Real
Quest and New America Network, Inc. On that date, we loaned an additional
$250,000 to NAI Direct, which was guaranteed by New America Network. This loan
is convertible into shares of common stock of New America Network, at our
option, at a price equal to the lesser of $5 per share or the then-current
market value. In addition, pursuant to a Stock Purchase Agreement, dated as of
September 25, 2000, we (1) acquired a 4% equity interest in New America Network;
(2) were released from our obligation to provide an additional $2,650,000 in
working capital to NAI Direct; (3) transferred to New America Network the notes
evidencing the approximately $2.1 million in prior loans that we made to NAI
Direct and 79 of our 80 shares in Real Quest; and (4) agreed to cause the
escrowed 750,000 shares of our common stock to be released from escrow and
delivered to New America Network.

CORPORATE GOVERNANCE

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We own 1% of Real Quest and 4% of New America Network, Inc. (which owns
the remaining 99% of Real Quest), and Real Quest owns 80% of NAI Direct. The
remaining 20% of NAI Direct is owned by the executive officers and employees of
NAI Direct and New America Network, including Gerald C. Finn, the Chief
Executive Officer of New America Network, and Jeffrey Finn, the President and
Chief Operating Officer of New America Network. New America Network is seeking
additional financing. Our interest in New America Network may be diluted if it
issues additional stock in order to obtain financing. We are unable to estimate
the extent of any possible dilution at this time.

The September 2000 Stock Purchase Agreement with New America Network also
provides for the following:

o Six Month Lock-Up: For a period of six months commencing September
25, 2000, New America Network may not sell more than 325,000 shares
of our common stock without our prior written consent, which may not
be unreasonably withheld.

o Rights of First Refusal: If New America Network receives an offer to
purchase all or any portion of its Real Quest shares, or if Real
Quest or the other principal shareholders of NAI Direct receive an
offer to purchase all or any portion of their NAI Direct shares,
within the two-year period subsequent to September 25, 2000 and
prior to the registration of any of the shares of such company under
the Securities Act of 1933, which New America Network or Real Quest
or the other principal shareholders of NAI Direct desire to accept,
it or they must first offer the shares to us on the same terms.

o Tag-Along Rights: If Gerald C. Finn and/or Jeffrey Finn, the
majority shareholders of New America Network, receive an offer for
all or any portion of their shares of New America Network, which
they desire to accept, they must give notice of such offer to us and
permit us to include our shares of New America Network, on a pro
rata basis, in the proposed sale on the same terms.

WWWX-JENCOM, LLC AND INTERCOMMERCE CHINA, LLC

We own a 50% equity interest in WWWX-Jencom, LLC ("WWWX-Jencom")(see
"Certain Relationships and Related Transactions-D.H. Blair and JenCom Digital,"
page 70) and a 33-1/3% equity interest in InterCommerce China, LLC
("InterCommerce China"). However, we have written off our investments in these
entities because we have been unable to confirm that our interest in either of
these entities presently has any value.

HISTORY

In February 1999, we entered into an acquisition agreement to purchase
video technology and other projects in various stages of development from JenCom
Digital Technologies, LLC ("JenCom Digital"). In March 1999, we formed
WWWX-Jencom with JenCom Digital and contributed the purchased projects to
WWWX-Jencom to establish a joint venture for the commercialization of JenCom
Digital's technology projects. Our investment with JenCom Digital was a
condition to the Stock Purchase Agreement between us and D.H. Blair Investment
Banking Corp., which served as placement agent in connection with a series of
our private placements.

Under our acquisition agreement with JenCom Digital, we issued 2,000,000
shares of our common stock, valued at $3,000,000, to JenCom Digital in exchange
for various projects in development by JenCom Digital that we contributed to
WWWX-Jencom. In addition, under the terms of the acquisition agreement, in March
1999, we loaned $900,000 to JenCom Digital, without interest, which JenCom

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Digital assigned to WWWX-Jencom. The loan was to be repaid at the earliest of
(1) ten years from March 15, 1999, (2) a third-party investment in WWWX-Jencom
of $10,000,000, or (3) the sale of any asset by WWWX-Jencom having proceeds
exceeding $5,000,000.

In December 1999, we executed an agreement with JenCom Digital, its parent
International Commerce Exchange Systems, Inc. ("ICES") and others in which
JenCom Digital agreed to enter into a new operating agreement which would
provide for sharing management control of WWWX-Jencom with us. In consideration
of this agreement, we agreed to file a registration statement for JenCom
Digital's 2,000,000 shares of our common stock before May 17, 2000, although we
have not yet done so. JenCom Digital received an additional 1,500,000 shares of
our common stock upon the execution and delivery of the operating agreement for
InterCommerce China, LLC, described below.

In connection with our agreement with JenCom Digital, described above, we
agreed with International Commerce Exchange Systems, Inc., Henry Kauftheil,
InterCommerce China, a joint venture between JenCom Digital and other parties,
that we would be issued 33.33% of InterCommerce China's equity.

We have been advised by ICES' General Counsel that WWWX-JenCom has
discontinued the development of its technology products, due to lack of funds,
and that both WWWX-Jencom and InterCommerce China are currently inactive. We
have written off our investment in these companies because we have been unable
to confirm that they presently have any value.

ENTRADE INC.

HISTORY

On February 23, 1999, we entered into a merger agreement with Artra Group
Incorporated, a publicly-traded New York Stock Exchange listed company, in which
we agreed to sell our Entrade subsidiary to Artra. We completed the sale on
September 23, 1999. The transaction resulted in Entrade surviving as the parent
of Artra and succeeding to Artra's New York Stock Exchange listing under the
symbol ETA. As a result of the transaction, on September 23, 1999, we owned 1.8
million shares, or approximately 15%, of Entrade's common stock and received
$1.3 million in cash following the execution of the merger agreement.
Additionally, we received $1.3 million in funding for the operations of Entrade
from Artra for the period from February 28, 1999, through September 23, 1999.
Since that time, the percentage of our ownership interest in Entrade has been
diluted because Entrade has issued stock to other investors and because we sold
225,000 of our Entrade shares. Under the merger agreement, for as long as our
percentage ownership of Entrade common stock is greater than five-percent,
Entrade must use its best efforts to cause our designee, if acceptable to the
Entrade board of directors, to be elected to the Entrade board of directors. On
October 7, 2000, our board of directors designated Carol C. Knauff as our
representative on the Entrade board of directors. However, to date, Ms. Knauff
has not been seated on Entrade's board.

The quoted market value of our Entrade shares was $6,005,000 at September
30, 2000 and subsequently reached a low of $787,500 at December 26, 2000. The
market value of our Entrade shares as of February 21, 2001 was $2,724,750. We
have determined that the decline in the market value of our investment in
Entrade is other than temporary and, accordingly, we have written the investment
down to a new cost basis of $3.8125 per share, its fair market value at
September 30, 2000, which has been reflected as a realized loss in our financial
statements as of September 30, 2000.

Pursuant to the merger agreement, Entrade agreed to cause our Entrade
shares to be registered as promptly as practicable, however, Entrade has failed
to do so. As a result of Entrade's failure to register

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our Entrade shares, we were unable to borrow against these shares prior to
August 2000 in order to raise funds for additional working capital and
acquisitions. Management is still in the process of evaluating its claims
against Entrade as a result of its failure to cause our Entrade shares to be
registered in a timely manner.

Our Entrade shares were pledged to Blair Ventures-Fund I, Inc. ("Fund") as
collateral for our $3.6 million convertible loan, however, on February 5, 2001,
Fund released these shares from its pledge in order to permit us to sell our
Entrade shares subject to the limitations of Rule 144 under the Securities Act.
We intend to sell some of our Entrade shares during the current quarter.

On October 31, 2000, Entrade announced that it intends to focus on asset
disposition through its subsidiary, Nationwide Auction Systems, a 20-year-old
land-based auction company with six permanent facilities throughout the United
States, and Entrade has subsequently closed its only software development
facility located at Waterloo, Canada.

ENTRADE SOFTWARE

entrade.com, Inc. is a subsidiary of Entrade Inc. entrade.com has
historically been a business-to-business e-commerce solutions provider which
owns proprietary e-commerce and online auction technologies and has licensed and
utilized these technologies to create online business communities and virtual
distribution centers for the purchase and sale of corporate assets, including
inventories, products and services.

ATM has a perpetual non-exclusive license to use the Entrade Transactional
Software owned by entrade.com as the operating system underlying the
ATMcenter.com web sites pursuant to a software license agreement, dated
September 23, 1999. In consideration for the license, ATM issued $1,500,000 of
trade credits to entrade.com, which it can use to acquire products and services
from ATM for a combination of cash and trade credits equal to the value of such
products and/or services. As entrade.com purchases products and services from
ATM using its trade credits, the trade credits will be reduced by the amount of
the trade credits utilized in each transaction. To date, entrade.com has not
used any of its trade credits.

Pursuant to the foregoing software licensing agreement, entrade.com agreed
to provide hosting, maintenance and support services for the ATMcenter.com web
sites, however, entrade.com no longer provides these services. We have copies of
the source code and object code for the Entrade Transactional Software and have
made arrangements with Web Instinct, Inc. for the hosting of the ATMcenter.com
web sites and are in the process of making other arrangements for maintenance
and support services as well.

SALE OF ENTRADE INC.

In connection with our sale of Entrade, our then Chairman, President and
Chief Executive Officer, Robert Kohn, entered into an employment agreement with
Artra Group Incorporated which was subsequently assigned to entrade.com. At the
closing of the sale, on September 23, 1999, Mr. Kohn resigned from all of his
positions with us. Mr. Kohn subsequently resigned his position with entrade.com
in May 2000.

ASSETTRADE.COM, INC.

In April 1999, we acquired a 2% ownership interest in the non-voting
common stock of AssetTRADE.com, Inc. ("AssetTRADE") in exchange for 750,000
shares of our common stock valued at $1,125,000. At September 30, 2000 our
shares of AssetTRADE represent approximately 1.2% of

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AssetTRADE, on a fully-diluted basis. Our interest has subsequently been diluted
and is currently less than 1%. AssetTRADE provides traditional off-line and
on-line asset recovery, disposal and marketing for industrial machinery and
equipment.

In September 2000, AssetTRADE reported over $10 million in sales during
its first four months of operation.

ONE WORLD NETWORKS INTEGRATED TECHNOLOGIES, INC.

We own 1,661,090 shares of the common stock of One World Networks
Integrated Technologies, Inc. ("One World"), representing approximately 2.6% of
the issued and outstanding capital stock of One World on a diluted basis. One
World operates a web site, oneworldlive.com, which it uses as a gateway for
consumers to purchase products, find current information on a variety of
subjects and interact directly with celebrities.

VISION TECHNOLOGIES, INC.

We entered into a term sheet, dated March 19, 1999, with Vision
Technologies, Inc. ("Vision") to acquire Vision for stock and cash. We advanced
$650,000 in cash to Vision on March 23, 1999. In addition, JenCom Digital
Technologies contributed $350,000 to Vision on behalf of WWWX-Jencom on April
28, 1999. On July 12, 1999, we agreed with Vision to amend the term sheet so
that we would make an investment in Vision rather than acquire the company, and
we advanced an additional $200,000 to Vision. The amended term sheet terminated
on August 26, 1999. As a result of the termination, Vision had the option to
either return to us the cash we advanced to Vision within 180 days or to convert
that amount into Vision common stock at a conversion rate specified in the term
sheet. As a result of the conversion, we own 301,128 shares of Vision common
stock, representing approximately 3.5% of Vision's total outstanding shares. To
date, Vision has not yet produced or sold any products. See "Item 7. Certain
Relationships and Related Transactions." See "Item 2. Financial
Information-Management's Discussion and Analysis of Financial Condition and
Results of Operation." As stated above, we have written down this investment to
zero because we have been unable to confirm that it has any value.

VIDEONET CORPORATION

In July 1999, we advanced $100,000 to VideoNet Corporation ("VideoNet"), a
company that was developing video conferencing technology. Our investment was
evidenced by a 12% convertible note which we converted, in November 1999, into
104,000 shares of convertible preferred stock, representing approximately 2.4%
of the equity of VideoNet. However, as stated above, we have written down our
investment in VideoNet because to zero we have been unable to confirm that it
presently has any value.

COMPETITION

COMPETITION FACING THE COMPANIES IN WHICH WE OWN INTERESTS

The Internet has produced intense competition for products and services
because it has reduced transaction costs and increased the ability of companies
that offer products and services to market and communicate with potential
customers. As the market for business-to-business e-commerce grows, we expect
that competition will intensify as traditional business competitors move to the
Internet and Internet competitors expand their businesses and market reach.

Some of the companies in which we own interests compete to attract and
retain buyers and sellers. Several companies offer competitive solutions that
compete with one or more of the companies in

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which we own interests. We expect that additional companies will offer competing
solutions on a stand-alone or combined basis in the future. Furthermore, our
competitors may develop Internet products or services that are superior to, or
have greater market acceptance than, the solutions offered by the companies in
which we own interests. If the companies in which we own interests are unable to
compete successfully against their competitors, such companies may fail.

Many of our competitors have greater brand recognition and greater
financial, marketing and other resources than the companies in which we own
interests. This may place the companies in which we own interests at a
disadvantage in responding to their competitors' pricing strategies,
technological advances, advertising campaigns, strategic partnerships and other
initiatives.

There are a number of companies that compete with ATM and Intrac in the
off-line asset remarketing business and with respect to the utilization of trade
credits. These companies include Active International, Tradewell, Inc. and Icon
International, Inc. Most of these companies are asset liquidators who, like ATM
and Intrac, utilize trade credits in full or partial payment for excess
inventories of products or services and then remarket these products or services
for cash. Thereafter, their customers can purchase products or services with
these trade credits or a combination of cash and trade credits, as agreed by the
parties in connection with the purchase and sale of the excess inventories.

To our knowledge, none of ATM and Intrac's major competitors is involved
in new product sales. We believe that, of the major competitors that utilize
trade credits, Active International is the most dominant. Competition in the
asset recovery industry for transactions is intense, however, we believe that
ATM and Intrac compare favorably with competitors based upon their experience,
the breadth of their contacts in the asset recovery industry, their reputation
and relationships, and the quality of the service they provide to customers. We
expect that ATM and Intrac's competition will increase as traditional
competitors take advantage of the Internet and e-commerce by launching web sites
to advertise their products and services, communicate with potential customers
and effect transactions on-line.

As more competitors offer similar services over the Internet, it will be
more difficult for ATM to distinguish itself from its competitors. We believe
that ATM's reputation and relationships will continue to distinguish it from its
competitors, however, price, brand recognition and the appearance, functionality
and ease of use of ATM's web sites may ultimately become more important factors
in obtaining and retaining customers.

In addition, there are numerous companies that have developed or are in
the process of developing auction sites on the Internet to buy and sell products
and merchandise. These companies could compete directly with ATM and Intrac.

COMPETITION IN ATTRACTING COMPANIES

Unless we are unable to raise additional capital, we will not be able to
pursue our business plan. Historically, we have faced competition from other
capital providers such as publicly-traded Internet companies, venture capital
companies and other corporations. Most of these competitors have greater
financial resources and brand name recognition than we do and companies in
search of financing may be more likely to align themselves with a better known
company or investor and one with more financial resources. If we are able to
raise additional capital, these competitors may limit our opportunity to acquire
interests in new companies and, if we are able to raise additional capital but
are unable to acquire interests in attractive companies, our business strategy
may not succeed.

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COMPETITION WITH COMPANIES IN WHICH WE OWN INTERESTS

We may compete with the companies in which we own interests for
Internet-related opportunities. We may also compete with the companies in which
we own interests to acquire interests in business-to-business e-commerce
companies, and the companies in which we own interests may compete with each
other for acquisitions or other business-to-business e-commerce opportunities.
The companies in which we own interests, therefore, may seek to acquire
companies that we would find attractive. While we may join with the companies in
which we own interests on future acquisitions, we have no current contractual
obligations to do so. We do not have any contracts or other understandings with
the companies in which we own interests that would govern the resolution of
these potential conflicts. Such competition may deter companies from entering
into strategic relationships with us and may limit our business opportunities.

ENTRADE INC.

We actively encourage the companies that we have equity interests in to
work together and develop relationships among each other. While we believe that
we benefit from such relationships, we recognize that we may compete with the
companies in which we have equity interests. Historically, we have considered
Entrade, which we sold to Artra Group Incorporated in September 1999, as a
competitor. Entrade owns or has equity interests in a group of
business-to-business Internet companies including entrade.com, utiliparts.com,
AssetTRADE.com, printeralliance.com, pricecontainer.com, TruckCenter.com,
AssetControl.com and TradeTextile.com. Entrade also acquired all of the capital
stock of Public Liquidations Systems, Inc. and Asset Liquidation Group, Inc.,
which engage in business under the name Nationwide Auction Systems. Until
November 2000, Entrade's strategy was similar to ours, in that it planned to
invest in and migrate the traditional off-line business transactions of its
businesses onto the Internet and operated businesses that buy and resell
non-performing and other assets. Entrade made investments in such companies by
exchanging licenses in its transaction technologies for equity interests. In
addition, Entrade's strategy encompassed e-commerce sales, marketing, and
procurement applications. However, on October 31, 2000, Entrade announced that
it intends to focus in the future on asset disposition through its subsidiary,
Nationwide Auction Systems. Accordingly, Entrade may no longer be a potential
competitor.

As a competitor, Entrade has unusual access to and knowledge of our
business including the following:

o Robert Kohn, our former Chief Executive Officer and President
was, until April 2000, Chief Executive Officer and President
of entrade.com and a member of the board of directors of
Entrade.

o A number of our former employees, who were members of our
technical and administrative staff, were, until recently,
employees of entrade.com.

o We use entrade.com's software to operate ATMcenter.com and its
related web sites. We sold this software to Artra Group
Incorporated in September of 1999 as part of the sale of
Entrade.

o Until April 2000, we relied upon the technical staff at
entrade.com to maintain all of our computer systems and, until
November 2000, we also relied on its staff to host, support
and maintain ATMcenter.com's web sites. As a result of the
provision of these services, Entrade and entrade.com had
unlimited access to all our information systems and therefore
all the files and documents that are on our computer systems.

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Subsequent Events

RELEASE OF COLLATERAL

On February 5, 2001, D.H. Blair Investment Banking Corp. ("Blair")
released our 1,575,000 shares of the common stock of Entrade Inc. from its
pledge, until written notice to the contrary, in order to permit us to sell the
shares subject to the limitations of Rule 144 under the Securities Act. We
pledged these shares to Blair as collateral for our $3.6 million loan on
September 27, 2000.

LETTER OF INTENT CONCERNING THE ACQUISITION OF EMARKETPLACES INTERNATIONAL, INC.

On February 12, 2001, we signed a letter of intent (the "Letter of
Intent") with International Commerce Exchange Systems, Inc. ("ICES") and
eMarketplaces, Inc. ("EMI"), Delaware corporations with their principal places
of business located at 18 W. 18th Street, New York, New York. ICES and EMI are
affiliates of (i) JenCom Digital Technologies, LLC, the holder of 2,403,302
shares of our common stock, (ii) Henry Kauftheil, the holder of 265,550 shares
of our common stock and the chairman of both ICES and EMI, and (iii) The
TechDepartment.com, Inc., the holder of 426,075 shares of our common stock.

The Letter of Intent contemplates our purchase of a 100% equity interest
in eMarketplaces International, Inc. ("eMarketplaces"), a Delaware corporation
owned by ICES and EMI with its principal place of business located at 18 W. 18th
Street, New York, New York, in consideration for shares of our common stock
representing 80% of our total issued and outstanding voting shares (the
"Transaction"). Accordingly, if the Transaction is consummated, the interests of
our existing shareholders will be significantly diluted and ICES and EMI, the
shareholders of eMarketplaces, will obtain a controlling interest in our
company.

In connection with the Letter of Intent, we are lending the sum of
$500,000 to eMarketplaces, without interest (the "Loan"). The Loan is guaranteed
by D.H. Blair Investment Banking Corp. ("Blair"). The Loan is payable on March
26, 2001, however, if the Transaction is consummated by March 26, 2001, the Loan
will be forgiven. The Letter of Intent was amended, on February 16, 2001 with
respect to the use of proceeds of the Loan. We will rely primarily upon Blair's
guarantee for the repayment of the Loan in the event that the Transaction is not
consummated. If the Loan is not repaid, we will not be able to continue our
operations beyond approximately early April 2001.

The Letter of Intent also contemplates a change in control of the company.
If the Transaction is consummated, our board of directors will consist of seven
members, four of whom will be designated by ICES and EMI.

The consummation of the Transaction is conditioned upon (i) the
satisfactory completion of each party's financial and legal due diligence
examination of the other, (ii) the approval of each party's board of directors,
the execution of a definitive stock purchase agreement, (iii) the parties'
receipt of a fairness opinion with respect to the Transaction which is
reasonably acceptable to all parties, (iv) the re-structuring of certain of
eMarketplaces' inter-company debt and payables, upon terms acceptable to us, (v)
eMarketplaces' receipt of a capital contribution from ICES in the amount of $1.5
million, (vi) eMarketplaces' balance sheet including $1 million in other cash or
acquired assets at the closing, and (vi) the absence of any material adverse
change in eMarketplaces' financial condition since December 31, 2000.

The Letter of Intent will terminate and expire if any party determines, as
a result of its due diligence, not to proceed with the Transaction, or if we
receive a bona fide written offer from a third party

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for a controlling interest in the company, prior to March 6, 2001, and our board
of directors determines in the exercise of its reasonable business judgment and
fiduciary duties to our stockholders that such offer will maximize the return to
our stockholders to a greater extent than the Transaction, or if the Transaction
has not closed on or before March 26, 2001, for any reason whatsoever, and the
parties do not mutually agree to extend the time to close. If the Letter of
Intent terminates be because of our receipt of an offer that our board
determines will maximize the return to our stockholders to a greater extent than
the Transaction, we have agreed to reimburse ICES and EMI for their actual
out-of-pocket fees and expenses incurred in connection with the Transaction, not
to exceed $50,000.

We will incur certain expenses in connection with the Transaction, even if
the Transaction is not consummated, including the cost of obtaining a fairness
opinion with respect to the Transaction and legal and accounting fees. In
addition, if the Transaction is not consummated and the Loan is not repaid
within 45 days, as agreed, by either eMarketplaces or Blair, our ability to
continue our operations will be impaired.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

Pursuant to the non-exclusive software license agreement between ATM and
entrade.com, dated September 23, 1999, ATM currently uses software owned by
entrade.com, Inc. to operate the ATMcenter.com web sites. Any interruption in
ATM's web site's ability to process transactions could affect ATM's ability to
obtain and retain Internet customers. After Entrade announced that entrade.com
no longer intends to engage in the software development business, we made other
arrangements with a third-party vendor for the hosting of the ATMcenter.com and
related web sites and management intends to make other arrangements for the
maintenance and support of the software as well.

ATM has applied for service mark applications for "ATMcenter.com,"
"Instant Invoice," "Instant P.O." and "Instant Purchase Order." Although these
applications are still pending, ATM intends to abandon its applications for
"Instant Invoice," "Instant P.O." and "Instant Purchase Order."

EMPLOYEES

As of February 21, 2001, after reducing the corporate workforce in late
August and September 2000 in order to reduce expenses:

o WorldWide Web NetworX Corporation had four employees.

o ATM had nine employees, two of whom, Thomas Settineri and Gary
Levi, were shared with Intrac, and three independent
contractors.

o Intrac had two employees, Thomas Settineri and Gary Levi, who
were shared with ATM.

We consider our relationships with our employees to be good. None of our
employees are covered by collective bargaining agreements.

GOVERNMENT REGULATIONS AND LEGAL UNCERTAINTIES

Foreign Laws and Regulations

Because ATM has relationships in Mexico and may enter into relationships
in other countries, ATM may be subject to the laws of those jurisdictions which
pertain to our activities in those jurisdictions. Our activities may include the
buying, selling, shipping, storing and importing and

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exporting of merchandise, the provision of services and transacting business
over the Internet. Additionally, because ATM and Intrac offer and facilitate the
sales of goods and services worldwide, foreign jurisdictions may claim that our
companies are required to comply with their laws. Any future foreign regulation
may have a negative impact on ATM or Intrac's methods of operations or result in
additional costs. We have not received any claims based upon alleged violation
of federal, state or local laws, nor do we have any material costs or expenses
for compliance with such laws.

PROPERTIES

Our corporate headquarters are located at 521 Fellowship Road, Suite 130,
Mt. Laurel, New Jersey. Our lease commenced on July 19, 1999 with a term of 61
months. Our monthly base rent over the term of the lease ranges from
approximately $11,000 to $12,000. We also pay a proportionate share of the
building's operating expenses, and our share is currently approximately $3,200
per month. Our lease covers 11,802 square feet. We are in default under this
lease by virtue of our failure to pay rent due for the months of December 2000
and January 2001 in accordance with the terms of the lease. We occupy only
approximately 1,000 square feet of this facility and are attempting to sublease
the entire space.

We also have a five-year sublease from RDR Associates, Inc. ("RDR") for
offices and the use of a conference room at 888 Seventh Avenue, New York, New
York. The term of the lease commenced on May 1, 1999. We paid our occupancy
rights under the sublease by issuing 50,000 shares of our common stock to RDR.
We currently use this space as our New York City offices.

ATM has a lease for offices at 220 White Plains Road, Tarrytown, New York.
The lease commenced on October 1, 1999 for a term of five years. The lease
covers approximately 8,754 square feet and the monthly base rent over the
remaining term of the lease ranges from approximately $17,326 to $18,055. ATM no
longer uses any of this space and has subleased the entirety of the leased space
for the period from January 1, 2001 through September 30, 2004, for a monthly
base rent of $12,500. ATM will be required to pay the difference between the
rent payable by ATM under the prime lease and the rent payable to ATM under the
sublease.

Intrac has a lease for offices at 424 Madison Avenue, New York, New York.
The lease commenced on October 1, 1997 for a term of five years. The lease
covers 4,130 square feet and the base monthly rent over the remaining term of
the lease ranges from approximately $9,200 to $10,400. This space is currently
used by both ATM and Intrac for their corporate headquarters.

LEGAL PROCEEDINGS

In January 2001, Arab Commerce Bank Ltd. and Lufeng Investments Ltd., the
only two holders of our Series A 6% Cumulative Convertible Debentures, dated
March 22, 1999, in the aggregate principal amount of $125,000, who did not
accept our offer to convert their convertible debentures to our common stock,
filed an action against us in the United States District Court for the Southern
District of New York, at Case No. 01 Civ. 0810, seeking to recover the principal
amount of their debentures, plus interest from March 22, 1999 and liquidated
damages as per the terms of the debentures as a result of our failure to file a
registration statement and to have such registration statement declared
effective in accordance with the terms of the debentures. The debenture holders
are seeking to recover damages in the approximate amount of $230,000,
representing principal, interest and liquidated damages. The Company intends to
pursue all appropriate means of resolving this claim.

On March 22, 1999, we issued 6% Cumulative Convertible Debentures in the
aggregate principal amount of $989,500. During fiscal 2000, holders of $864,500
in principal amount of the debentures converted them into shares of our common
stock. In January 2001, Arab Commerce Bank Ltd. and

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Lufeng Investments Ltd., the two remaining holders of our Series A 6% Cumulative
Convertible Debentures, in the aggregate principal amount of $125,000, filed an
action against us in the United States District Court for the Southern District
of New York (Case No. 01 Civ. 0810). In the complaint, the debenture holders
seek to recover the principal amount of their debentures, plus interest from
March 22, 1999 and liquidated damages as per the terms of the debentures as a
result of our failure to file a registration statement and to have such
registration statement declared effective in accordance with the terms of the
debentures. The debenture holders are seeking to recover damages in the
approximate amount of $230,000, representing principal, interest and liquidated
damages. The Company intends to pursue all appropriate means of resolving this
claim.

Also in January 2001, we received an informal claim from Zakeni Limited,
one of the former holders of our 6% Cumulative Convertible Debentures who
elected to convert its debenture to our common stock in March 2000, for damages
resulting from our failure to deliver a certificate for the shares issuable upon
conversion on a timely basis. The Company believes that the claim of Zakeni
Limited is without merit and, if necessary, will defend vigorously against it.

There are no other legal actions pending which we are required to disclose
in this Form 10-Q.

MARKET FOR OUR COMMON STOCK

Our common stock is currently quoted on the OTC Bulletin Board under the
symbol "WWWX." The following table sets forth the highest and lowest bid prices
for our common stock for each fiscal quarter during the last two years and
subsequent interim periods as reported by the National Quotation Bureau.

At February 21, 2001, there were 1152 record holders of our common stock.

The prices set forth below represent interdealer quotations, without
retail markup, markdown or commission and may not be reflective of actual
transactions.

No cash dividends have been declared on any class of common equity for the
two most recent fiscal years.

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[Download Table]

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HIGH BID LOW BID
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FISCAL 1998

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First Quarter..................
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Second Quarter.................
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Third Quarter.................. 3.0000 1.2500
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Fourth Quarter................. 2.3750 .6875
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FISCAL 1999

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First Quarter.................. 1.3125 .3281
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Second Quarter................. 9.3750 .5313
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Third Quarter.................. 9.2500 3.1875
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Fourth Quarter................. 4.6250 2.5625
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FISCAL 2000

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First Quarter.................. 7.5000 2.1250
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Second Quarter................. 8.1250 3.9375
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Third Quarter.................. 4.7500 .3750
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Fourth Quarter................. .7813 .1875
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FISCAL 2001

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First Quarter.................. .4062 .125
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Second Quarter .1719 .094
(January 1, 2001 February 23, 2001).
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to equity price risks on our ownership interest in the
common stock of Entrade Inc., which is a New York Stock Exchange publicly traded
security denominated in U.S. dollars. During the first quarter of fiscal 2001,
the value of our Entrade stock has fluctuated from a low of $787,500 on December
26, 2000 to a high of $5.3 million on October 2, 2000. During the period from
January 1, 2001 through February 21, 2001, the value of our Entrade stock has
fluctuated from a low of $1,575,000 on January 8-10, 2001 to a high of
$2,992,500 on January 30 and February 6, 2001. A 20% decrease in equity prices
would result in an approximate $1.2 million decrease in the fair value of our
holdings of Entrade stock at December 31, 2000. The value of our holdings may
continue to fluctuate. We intend to sell some of our Entrade shares during the
current quarter. However, to date, we have not attempted to reduce or eliminate
our market exposure on our holdings.

We are also exposed to interest rate risk on our holdings of money market
instruments. Historically, our investment income has not been material to our
financial results, and we do not expect that changes in interest rates will have
a material impact on the results of operations. A 1/2% increase in interest
rates would result in an approximate $25,000 increase in interest income.

We also have issued fixed-rate debt which is convertible into our common
stock at a pre-determined conversion price. Convertible debt has characteristics
that give rise to both interest rate risk and market risk because the fair value
of the convertible security is affected by both the current interest

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rate environment and the underlying price of our common stock. As of December
31, 2000, $864,500 in principal amount of the debt has been converted into
common stock and $125,000 in principal amount remains outstanding. In addition,
we have $3.6 million convertible loan due on September 1, 2001. We anticipate
that the maturity date of this loan will be extended, however, there can be no
assurance that it will be. ATM Service, Ltd. has a $200,000 loan due on February
23, 2001, a $200,000 loan due on March 26, 2001 and a $75,000 loan due on May
16, 2001.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

MANAGEMENT

The following table sets forth the name, age and positions of each of our
executive officers and directors as of February 21, 2001.

[Download Table]

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NAME AGE POSITION
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Carol C. Knauff 52 Chairman, President, Chief Executive
Officer and Director
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R. Bruce Richardson 53 Chief Financial Officer
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Nahum G. Shar 62 Assistant Secretary and Assistant
Treasurer
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G. David Rosenblum 56 General Counsel and Director
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CAROL C. KNAUFF has been our Chairman since August 28, 2000 and our
President and Chief Executive Officer since September 1, 2000. From March 2000
to August 2000, Ms. Knauff was an independent consultant engaged in various
assignments; from December 1998 to March 2000, Ms. Knauff was Vice President,
Consumer Product Management, for AT&T Corporation ("AT&T"); from December 1995
to December 1998, Ms. Knauff was Vice President, Global Consumer Markets, for
AT&T. Ms. Knauff received her bachelor's degree from Penn State University in
1969 and masters degrees in engineering management and business administration,
respectively, from the University of Missouri and Fairleigh Dickinson University
in 1978.

R. BRUCE RICHARDSON has been our Chief Financial Officer since October 1,
2000. From April 1999 to April 2000, Mr. Richardson was Chief Executive Officer
of iOnet Solutions, Inc., a company which he co-founded; from May 1995 to March
1998, he was a Client Partner of AT&T Solutions, a division of AT&T of which he
was also a founder. Mr. Richardson received his bachelor's degree from
Pittsburgh State University in 1970.

NAHUM G. SHAR has been our Assistant Secretary and Assistant Treasurer
since August 28, 2000. Mr. Shar also provides consulting services to both us and
ATM. He is not an employee of either the Company or any of our subsidiaries. Mr.
Shar is also a director of Pentland USA Inc. ("Pentland"), a position that he
has held since November 1998. From 1994 to 1997, Mr. Shar was Chairman and
President of Pentland. Mr. Shar received his degree as a chartered accountant
(CPA) from the University of Capetown, South Africa, in 1967.

G. DAVID ROSENBLUM has been our general counsel since August 28, 2000 and
a member of our Board of Directors since February 6, 2001. Mr. Rosenblum
initially joined the company, on March 6,

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2000, as vice president and general counsel to ATM Service, Ltd. and The Intrac
Group, Ltd., positions which he held until he was appointed as our general
counsel in August 2000. From 1987 until March 3, 2000, Mr. Rosenblum was the
Managing Partner of the Philadelphia law firm of Astor Weiss Kaplan & Rosenblum,
LLP, which he joined as a partner in 1977. Mr. Rosenblum received his bachelor's
degree from The Johns Hopkins University in 1966 and his Juris Doctorate degree
from The University of Pennsylvania Law School in 1969.

NUMBER OF DIRECTORS

Our certificate of incorporation requires that we have not less than three
and no more than five directors, as determined by our stockholders. Carol C.
Knauff joined our Board on August 22, 2000. On December 27, 2000, the Board of
Directors accepted the resignations of Thomas Settineri and Ronald Tobia as
directors of the Company. Mr. Tobia retains the 150,000 options that were
granted to him in consideration for his services as a director. From December
27, 2000 to February 6, 2001, we had only one director. On February 6, 2001, G.
David Rosenblum was appointed as a member of the Board of Directors, which now
consists of two directors. The Board intends to fill the remaining vacancy in
the Board in the very near future. All directors hold office until the next
annual meeting of stockholders and until their successors have been elected and
qualified. Under the terms of the Agency Agreement between us and D.H. Blair
Investment Banking Corp., dated May 26, 1999, D.H. Blair was given the right to
appoint one of our directors, however, to date, D.H. Blair has not exercised
that right. Management expects that these vacancies will be filled as soon as
acceptable candidates can be identified.

We intend to seek stockholder consent to amend the certificate of
incorporation and bylaws in order to give our Board the right to determine the
size of the Board of Directors and to appoint additional outside directors to
the current Board of Directors.

COMMITTEES OF THE BOARD OF DIRECTORS

We have established two committees of our Board of Directors: an audit
committee and a compensation committee. The basic functions of these committees
are summarized below.

COMPENSATION COMMITTEE. The Compensation Committee is authorized to review
and make recommendations to the Board of Directors on all matters regarding the
remuneration of its executive officers, including the administration of the
compensation plans of the Company. Robert Kohn, our former Chairman, Chief
Executive Officer and President, served as the sole member of the compensation
committee from August 12, 1999 until his resignation from all his positions on
September 23, 1999. From December 1999 until his resignation as a member of the
Board of Directors on August 24, 2000, the sole member of this committee was
William Weld. Mr. Weld's position on this committee has not yet been filled,
although the board intends to do so during the current fiscal year. The
Compensation Committee did not hold any meetings during fiscal year 2000 and all
decisions of the Compensation Committee for the fiscal year were relegated to
the full Board of Directors.

AUDIT COMMITTEE. The Audit Committee is responsible for making
recommendations to the Board of Directors as to the selection of the independent
auditors of the Company, maintaining communication between the Board of
Directors and the independent auditors, reviewing the annual audit report
submitted by the independent auditors, and determining the nature and extent of
issues, if any, presented by such audit warranting consideration by the Board of
Directors. Robert Kohn also served as the sole member of this committee from
August 12, 1999 until his resignation from all his positions on September 23,
1999 and, from December 1999 until his resignation as a member of the Board of
Directors on August 24, 2000, the sole member of this committee was William
Weld. Mr. Weld's position on this committee has not yet been filled, although
the board intends to do so during the next year. The Audit Committee

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did not hold any meetings during fiscal year 2000 and all decisions of the Audit
Committee for the fiscal year were relegated to the full Board of Directors.

DIRECTOR COMPENSATION

Directors who are also our employees or employees of our subsidiaries
receive no additional compensation for their services as Directors. Directors
who are not our employees will not receive a fee for attendance at meetings of
the Board of Directors, but they will be reimbursed for their out-of-pocket
expenses in connection with their activities as Directors. Our outside Directors
have also been granted stock options as consideration for their services.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

The table below summarizes information concerning the total compensation
for the fiscal year ended September 30, 2000 for our Chief Executive Officers
and the four most highly compensated other executive officers or employees of
the Company or its subsidiaries (the "Named Persons").

SUMMARY COMPENSATION TABLE

[Enlarge/Download Table]

------------------------------------------------------------------------------------------
BONUS/ LONG-TERM
NAME AND SEVERANCE COMPENSATION
PRINCIPAL POSITION YEAR SALARY OTHER AWARDS
------------------------------------------------------------------------------------------

Warren Rothstein
Interim Chairman, President and
CEO from September 23, 2999 to
April 26, 2000 (1) 2000 $390,048 $ 42,483 N/A
------------------------------------------------------------------------------------------
Gerard T. Drumm
Interim President and CEO from
April 26, 2000 to August 24,
2000 (2) 2000 $108,173 $ 255,760 200,000
------------------------------------------------------------------------------------------
Thomas A. Settineri
Acting President from August 24,
2000 to August 31, 2000;
Director from September 23, 1999
to December 27, 2000 (3) 2000 $375,000 $ 52,829 1,500,000
------------------------------------------------------------------------------------------
Carol C. Knauff
Chairman, President and CEO from
September 1, 2000 to the present
(4) 2000 $ 12,308 $ 0 5,000,000
------------------------------------------------------------------------------------------
Allan M. Cohen
Vice President, General Counsel
and Director from October 1999
to August 24, 2000 (5) 2000 $127,244 $ 87,500 250,000
------------------------------------------------------------------------------------------
John T. Banigan
Executive Vice President and
Chief Financial Officer from
January 2000 to August 24, 2000
(6) 2000 $ 114,558 $ 153,750 250,000
------------------------------------------------------------------------------------------
G. David Rosenblum
General Counsel for the Company
from August 28, 2000 to the
present; Director from February
6, 2001 to the present; Vice
President and General Counsel
for ATM and Intrac from March 6,
2000 to August 28, 2000 (7) 2000 $ 168,711 $ 50,000 500,000
------------------------------------------------------------------------------------------
Gary K. Levi
Secretary/Treasurer of the
Company from August 24, 2000 to
December 29, 2000; President and
COO of ATM and Intrac (8) 2000 $ 204,167 $ 25,897 1,500,000
------------------------------------------------------------------------------------------

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(1) Mr. Rothstein's compensation was paid by ATM as a management fee. ATM also
paid for certain expenses on Mr. Rothstein's behalf during fiscal year
2000, including automobile expenses and insurance.
(2) Mr. Drumm's annual base salary for fiscal year 2000 was $225,000. In
addition, pursuant to his employment contract, Mr. Drumm received a
signing bonus in the amount of $75,000 upon the commencement of his
employment in March 2000, options to purchase 200,000 shares of our common
stock at $5.15 per share, an advance against his annual performance bonus
in the amount of $12,010. Upon the termination of his employment on August
24, 2000, he received a severance payment in the amount of $168,750 and
his options were re-priced at $0.75 per share.
(3) Mr. Settineri's annual base salary for fiscal year 2000 was $400,000,
which was paid by ATM. On August 28, 2000, Mr. Settineri was granted
options to purchase up to 1,500,000 additional shares of our common stock
at $0.75 per share, of which the options with respect to 1,000,000 vested
immediately and the balance will vest if and when the bid price for our
common stock on the open market reaches or exceeds $3.50 per share and
remains at or above such price for a period of 30 consecutive trading
days. ATM also paid for certain expenses on Mr. Settineri's behalf during
fiscal year, including automobile expenses and insurance.
(4) Ms. Knauff's annual base salary for fiscal year 2000 was $200,000.
On August 28, 2000, Ms. Knauff was awarded options to purchase up to
5,000,000 shares of our common stock at $0.40 per share. See
"Employment Agreements and Termination of Employment and Change in
Control Arrangements."
(5) Mr. Cohen's annual base salary for fiscal year 2000 was $175,000. In
addition, Mr. Cohen received a options to purchase 250,000 shares of our
common stock at $2.69 per share. Upon the termination of his employment on
August 24, 2000, he received a severance payment in the amount of $87,500
and his options were re-priced at $0.75 per share. We retained Mr. Cohen
as a consultant to the company for two months following the termination of
his employment and paid him a consulting fee of $16,667 per month.
(6) Mr. Banigan's annual base salary for fiscal year 2000 was $185,000. In
addition, upon the commencement of his employment in February 2000, Mr.
Banigan received a signing bonus in the amount of $15,000 and options to
purchase 250,000 shares of our common stock at $5.65 per share. Upon the
termination of his employment on August 24, 2000, he received a severance
payment in the amount of $138,750 and his options were re-priced at $0.75
per share.
(7) Mr. Rosenblum's annual base salary for fiscal year 2000 was $225,000. On
August 28, 2000, Mr. Rosenblum was appointed as our general counsel and
awarded options to purchase up to 500,000 shares of our common stock at
$0.75 per share. See "Employment Agreements and Termination of Employment
and Change in Control Arrangements." Mr. Rosenblum's compensation also
included reimbursement and/or an allowance for overnight lodging and/or
housing expenses in Tarrytown, New York, during the period from March 2000
through November 2000, and an automobile allowance.
(8) Mr. Levi's annual base salary for fiscal year 2000, which was paid by ATM,
was $200,000. On August 28, 2000, Mr. Levi was granted options to purchase
up to 1,500,000 shares of our common stock at $0.75 per share of which the
options with respect to 1,000,000 shares vested immediately and the
balance will vest if and when the bid price for our common stock on the
open market reaches or exceeds $3.50 per share and remains at or above
such price for a period of 30 consecutive trading days. ATM also paid for
certain expenses on Mr. Levi's behalf during fiscal year 2000, including
automobile expenses and insurance.

STOCK OPTIONS GRANTED FOR LAST FISCAL YEAR

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Set forth below is information on grants of stock options under the 1999
Equity Compensation Plan and 2000 Incentive Option Plan for the fiscal year
ended September 30, 2000 to persons included in the foregoing Summary
Compensation Table.

[Enlarge/Download Table]

-----------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE
UNDERLYING TO EMPLOYEES IN PRICE PER
NAME AND GRANT DATE OPTIONS GRANTED 2000 SHARE EXPIRATION DATE
-----------------------------------------------------------------------------------------------

Allan Cohen 250,000 0% $2.69(1) August 26, 2009
granted August 26, 1999
-----------------------------------------------------------------------------------------------
Gerard T. Drumm 200,000 2% $5.15(1) March 20, 2010
granted March 20, 2000
-----------------------------------------------------------------------------------------------
John T. Banigan 250,000 2% $5.65(1) March 20, 2010
granted March 20, 2000
-----------------------------------------------------------------------------------------------
Carol C. Knauff 5,000,000 47% $0.40 October 10, 2010
granted October 10, 2000
-----------------------------------------------------------------------------------------------
Thomas Settineri 1,500,000 14% $0.75 October 10, 2010
granted October 10, 2000
-----------------------------------------------------------------------------------------------
Gary Levi 1,500,000 14% $0.75 October 10, 2010
granted October 10, 2000
-----------------------------------------------------------------------------------------------
G. David Rosenblum 500,000 5% $0.75 October 10, 2010
granted October 10, 2000
-----------------------------------------------------------------------------------------------

(1) These options were re-priced at $0.75 per share on August 24, 2000 in
connection with the termination of each optionee's employment.
See "Summary of Executive Compensation."

OPTION EXERCISES

No options have been exercised.

PENSION AND RETIREMENT PLANS

We do not have any pension or retirement plans for the benefit of our
employees and no benefits are payable upon retirement to any of our employees.

401K PLAN

We have a defined contribution plan that covers all of our employees.
Participants may contribute 1% to 15% of pre-tax compensation. We may make
discretionary contributions to the plan but have never done so.

1999 EQUITY COMPENSATION PLAN

Our Board of Directors adopted our 1999 Equity Compensation Plan on August
12, 1999, subject to the approval of our stockholders. However, the adoption of
the 1999 Plan has not yet been submitted to our stockholders for approval. The
purpose of our 1999 Equity Compensation Plan was to reward, attract and retain
the best available personnel for positions of substantial responsibility, to
provide an additional incentive to our employees, directors and consultants and
to promote the success of our business. The 1999 Equity Compensation Plan
provided for the issuance to our employees, non-employee directors and advisors
and consultants of shares of common stock pursuant to the grant of incentive
stock options, non-qualified stock options and restricted stock.

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A total of 3,860,000 shares have been reserved under our 1999 Equity
Compensation Plan. A total of 2,330,000 options were granted by our Board of
Directors under the 1999 Plan. However, as of December 31, 2000, only 1,240,000
of the options granted under the 1999 Plan remained outstanding, with the
remainder having terminated under the terms of the 1999 Plan. The 1999 Plan will
be submitted to our stockholders for approval at the next annual stockholders
meeting or by consent of stockholders in lieu of a meeting. Because the 1999
Plan was not approved by the stockholders within twelve months following its
adoption, if the Plan is approved by the stockholders, all of the options that
were granted under the 1999 Plan and remain outstanding will be deemed to be
non-qualified stock options. No additional stock options or restricted shares
will be issued under the 1999 Equity Compensation Plan. The major features of
the 1999 Plan are summarized below. The description provided below is qualified
in its entirety by reference to the actual 1999 Plan, a copy of which was filed
as an Exhibit to the Amended Registration Statement on Form 10 filed with the
SEC on June 12, 2000.

The 1999 Plan contains customary provisions with respect to adjustments
for stock splits and similar transactions. If any stock option granted under the
1999 Plan terminates, expires unexercised, or is cancelled, the shares of Common
Stock that would otherwise have been issuable pursuant thereto will be available
for issuance pursuant to the grant of new stock options.

Options have maximum terms of ten years from the grant date. Options are
not assignable or transferable other than by will or by the laws of inheritance.
Options may be exercised only by the optionee. The optionee has no rights with
respect to shares of Common Stock underlying the options until the options are
exercised and the option price is paid for the purchased shares. The Board of
Directors is authorized to cancel outstanding options in return for the grant of
new options, stock or cash. The Common Stock issuable to an optionee pursuant to
the 1999 Plan are, prior to an initial public offering, subject to a right of
first refusal by the Company and then to the shareholders of the Company. The
1999 Plan terminates on August 12, 2009. If the Company is acquired by merger,
consolidation or asset sale, or there is a hostile change in control, each
option granted under the plan may be accelerated, and all unvested shares issued
thereunder become immediately vested.

2000 INCENTIVE OPTION PLAN

Our Board of Directors adopted our 2000 Incentive Stock Plan on October
10, 2000. The purpose of our 2000 Incentive Stock Plan, which provides for the
grant of incentive stock options, non-qualified stock options and restricted
stock to our employees, non-employee directors and advisors and consultants, is
to reward, attract and retain the best available personnel for positions of
substantial responsibility, to provide an additional incentive to our employees,
directors and consultants and to promote the success of our business.

A total of 12,912,400 shares have been reserved under our 2000 Incentive
Stock Plan. To date, a total of 9,475,000 options have been granted under the
Plan. The Plan will be submitted to the stockholders for approval at the next
annual meeting of the stockholders or by consent of stockholders in lieu of a
meeting. If the Plan is not approved by the stockholders within twelve months
from the date of its adoption, all of the options granted under the 2000 Plan
will be deemed to be non-qualified stock options.

To date, our 2000 Incentive Stock Plan has been administered by our Board
of Directors. However, the Board of Directors intends to appoint one or more
members to its compensation committee to administer the 2000 Plan in the future.
Subject to the provisions of the 2000 Plan, the Board of Directors or the
compensation committee has the authority to determine to whom stock options and
restricted stock awards will be granted and the terms of any such grant,
including the number of shares subject to, the exercise price and vesting
provisions of the award. The option price per share of the

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common stock under the 2000 Plan will be determined by the Board of Directors or
the compensation committee at the time of each grant, provided, however, that
the exercise price per share of any incentive stock option may not be less than
the fair market value of our common stock at the time of the grant of such
option. In addition, if any person possessing more than 10% of the voting power
of all classes of our outstanding capital stock is granted incentive stock
options, the exercise price per share must equal at least 110% of the fair
market value of our common stock on the grant date and the term of the option
may not exceed five years. The major features of the 2000 Plan are summarized
below. The description provided below is qualified in its entirety by reference
to the actual 2000 Plan, a copy of which was filed as an Exhibit to the Annual
Report on Form 10-K filed with the SEC on January 16, 2001.

Payment for the exercise of an option may be made by cash, check or any
other instrument as the compensation committee may accept, including, at the
discretion of the Board of Directors or the compensation committee, unrestricted
shares of our common stock.

EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS

On December 31, 1998, we entered into a Shareholders Agreement with ATM
Services, Ltd. and Warren Rothstein in connection with the formation of ATM,
which was amended by the parties on July 7, 1999. The December 1, 1998
Shareholders Agreement was terminated as of September 30, 2000 in connection
with Mr. Rothstein's resignation as the Chairman of ATM and Intrac and the
relinquishment of his equity interest in ATM. We entered into a new Shareholders
Agreement, effective as of September 30, 2000, with ATM and Thomas Settineri and
Gary Levi, who are currently the only other shareholders of ATM. See "ATM
Shareholders Agreement."

In August 2000, we entered into a three-year employment agreement with
Carol C. Knauff, whereby she agreed to serve as our Chairman, President and
Chief Executive Officer, commencing September 1, 2000. Ms. Knauff's compensation
includes an annual base salary of $200,000, an annual bonus to be determined by
our Board of Directors and an option to purchase up to 5 million shares our
common stock at an exercise price of $0.40 per share. The option vests as
follows: 500,000 shares immediately, 1,000,000 shares at the end of the first 12
months of employment, and the balance at the end of 5 years of employment, or
sooner, based upon the price of our common stock on the open market, in
accordance with the following schedule:

[Download Table]

------------------------------------------
BID PRICE NUMBER OF OPTION
SHARES
------------------------------------------

$1.50 1,000,000
------------------------------------------
$2.25 1,000,000
------------------------------------------
$3.00 1,000,000
------------------------------------------
$4.50 500,000
------------------------------------------

Ms. Knauff has agreed not to compete with us during her employment and for
one year after her termination or the expiration of the employment agreement.

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In November 2000, we entered into a three-year employment agreement with
R. Bruce Richardson, effective as October 1, 2000, whereby he agreed serve as
our Chief Financial Officer. Mr. Richardson's compensation includes an annual
base salary of $150,000, an annual bonus to be determined by the Board of
Directors and options to purchase 500,000 shares of our common stock at an
exercise price of $0.75 per share, which was greater than the closing price of
our common stock on the date of the grant. One-half of the option vested
immediately and the balance will vest at the end of one year of employment.

In February 2000, we entered into a five-year employment agreement with G.
David Rosenblum, whereby he agreed to serve as Vice President and General
Counsel for ATM and Intrac and to perform such other duties and responsibilities
as were assigned to him by our Chairman and President, commencing March 6, 2000.
Mr. Rosenblum's employment contract was terminated by the company on May 4,
2000, however, Mr. Rosenblum's employment as Vice President and General Counsel
for ATM and Intrac continued from that date until August 28, 2000. On August 28,
2000, we reinstated our employment contract with Mr. Rosenblum in full,
retroactive to May 4, 2000, and appointed Mr. Rosenblum as our General Counsel.
Mr. Rosenblum's compensation under his employment agreement includes a signing
bonus of $50,000, an annual base salary of $225,000, which increased to $250,000
effective as of January 1, 2001, an annual bonus of not less than $35,000. On
August 28, 2000, the Board of Directors determined to award Mr. Rosenblum an
option to purchase 500,000 shares of our common stock at an exercise price of
$0.75 per share, which was greater than the closing price of our common stock on
the date of the grant. All of Mr. Rosenblum's options vested immediately upon
the date of the grant. Mr. Rosenblum has agreed not to compete with us during
his employment and for one year after his termination or the expiration of his
employment agreement.

In July 1999, ATM Service, Ltd. and The Intrac Group, Ltd. each entered
into a ten-year employment agreement with Thomas A. Settineri. Under these
employment agreements, ATM and Intrac, each agreed to employ Mr. Settineri as
its President and Chief Executive Officer and to jointly pay him an annual
salary of $400,000. Mr. Settineri may not compete with us or our subsidiaries
while employed by us. In addition, if Mr. Settineri's employment is terminated
before July 23, 2004 by Mr. Settineri with cause, or by ATM or Intrac without
cause, or without cause but with a mutually agreed upon severance package, Mr.
Settineri is restricted from competing in any way with us or our subsidiaries
until July 23, 2004.

In July 1999, ATM Service, Ltd. and The Intrac Group, Ltd. also each
entered into a ten-year employment agreement with Gary K. Levi. Under these
employment agreements, ATM and Intrac, each agreed to employ Mr. Levi as its
Chief Operating Officer and to jointly pay him an annual salary of $200,000. Mr.
Levi may not compete with us or our subsidiaries while employed by us. In
addition, if Mr. Levi's employment is terminated before July 23, 2004 by Mr.
Levi with cause, or by ATM or Intrac without cause, or without cause but with a
mutually agreed upon severance package, Mr. Levi is restricted from competing in
any way with us or our subsidiaries until July 23, 2004.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Robert Kohn, our former Chairman, Chief Executive Officer and President,
served as the sole member of the compensation committee from August 12, 1999
until his resignation from all his positions on September 23, 1999. Mr. Kohn
served as the sole director and Chief Executive Officer of Entrade, one of our
subsidiaries, from February 1999 to September 23, 1999, when Entrade was sold.
Prior to the appointment of Mr. Kohn to the compensation committee, the Board of
Directors set the compensation of our officers including those executive
officers on the Board. During our fiscal year ended September 30, 1999, our
Board of Directors consisted, for the first half of the year, of only two
Directors, Robert Kohn and Bjorn Koritz. Mr. Koritz served as a Director and our
Secretary and General Counsel until he

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resigned all his positions on June 23, 1999. Allan Cohen and Michael Norton were
appointed to the Board of Directors on June 23, 1999 and served until August 24,
2000. Currently there are no persons appointed to the compensation committee and
its functions are being carried out by the full board.

INDEMNIFICATION AND EXCULPATION PROVISIONS

The company was incorporated under Delaware law. Article XI of our By-Laws
provides that each person who was or is made a party or is threatened to be made
a party or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she,
or a person of whom he or she is the legal representative, is or was a director
or officer of the company or is or was serving at the request of the company as
a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the company to the fullest
extent authorized by the Delaware General Corporation Law against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such person in connection therewith. Such indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and
administrators.

In addition, there are indemnification provisions contained in Carol
Knauff's employment agreement with us. The agreement provides that we shall
indemnify Ms. Knauff, to the fullest extent permitted by law, for any action or
inaction while serving as our of our officers and directors and that we shall
cover Ms. Knauff under directors and officers liability insurance with coverage
in an amount not less than $10 million.

We have directors and officers insurance for our directors and officers.
The limitation of liability and indemnification provisions in our By-Laws may
discourage stockholders from bringing a lawsuit against directors for breach of
their fiduciary duty. They may also have the effect of reducing the likelihood
of derivative litigation against directors and officers, even though an action
of this kind, if successful, might otherwise benefit us and our stockholders.
Furthermore, a stockholders' investment may be adversely affected to the extent
we pay the costs of settlement and damage awards against directors and officers
pursuant to these indemnification provisions. However, we believe that these
indemnification provisions are necessary to attract and retain qualified
directors and officers.

Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers or persons controlling our company
pursuant to the foregoing provisions, we have been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT

The following table sets forth information known to us with respect to
beneficial ownership of our common stock as of February 21, 2001 for:

o each person known by us to beneficially own 5% or more of our
outstanding common stock;

o each of our directors and executive officers;

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o each executive officer and employee named in the summary
compensation table; and

o all of our directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the
SEC. In computing the number of shares beneficially owned by a person and the
approximate percentage ownership of that person, shares of common stock subject
to options or warrants held by that person that are currently exercisable or
exercisable within 60 days of February 21, 2001 are deemed outstanding.
Percentage of beneficial ownership is based upon 38,915,596 shares of common
stock outstanding at February 21, 2001 and the shares subject to options or
warrants that are currently exercisable or exercisable within 60 days of
February 21, 2001. To our knowledge, except as set forth in the footnotes to
this table, each person named in the table has sole voting and investment power
with respect to the shares set forth opposite such person's name.

[Download Table]

---------------------------------------------------------------------------
NUMBER OF SHARES PERCENT BENEFICIALLY
BENEFICIALLY OWNED OWNED
---------------------------------------------------------------------------
OFFICERS AND DIRECTORS
---------------------------------------------------------------------------

Carol C. Knauff 500,000(1) 1%
---------------------------------------------------------------------------
R. Bruce Richardson 250,000(1) (7)
---------------------------------------------------------------------------
Nahum G. Shar 300,000(1) (7)
---------------------------------------------------------------------------
Thomas A. Settineri 1,750,000(2) 4%
---------------------------------------------------------------------------
Gary K. Levi 1,250,000(3) 3%
---------------------------------------------------------------------------
G. David Rosenblum 500,000(1) 1%
---------------------------------------------------------------------------

---------------------------------------------------------------------------
ALL DIRECTORS AND EXECUTIVE 4,550,000(4) 8%
OFFICERS AS A GROUP (PERSON)
---------------------------------------------------------------------------

---------------------------------------------------------------------------
FIVE PERCENT
STOCKHOLDERS
---------------------------------------------------------------------------
D.H. Blair Investment 7,264,967(5) 16%
Banking Corp.
44 Wall Street, 2nd Floor
New York, NY 10005
---------------------------------------------------------------------------
JenCom Digital Technologies 2,668,852(6) 6%
LLC
18 W. 18th Street, #1000
New York, NY 10011

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(1) c/o WorldWide Web NetworX Corporation, 521 Fellowship Road, Suite 130, Mt.
Laurel, NJ 08054. Consists entirely of immediately exercisable options for
shares of common stock.
(2) c/o ATM Service, Ltd., 424 Madison Avenue, NY 10017. Includes
750,000 shares of common stock held by Mr. Settineri and immediately
exercisable options for 1,000,000 shares of common stock.
(3) c/o ATM Service, Ltd., 424 Madison Avenue, NY 10017. Includes
250,000 shares of common stock held by Mr. Levi and immediately
exercisable options for 1,000,000 shares of common stock.
(4) Includes 1,000,000 shares of common stock held by Thomas Settineri
and Gary Levi and immediately exercisable options for 3,550,000
shares of common stock held by Thomas Settineri, Gary Levi, Carol C.
Knauff, R. Bruce Richardson, Nahum G. Shar and G. David Rosenblum.
(5) Includes 2,000,000 shares of common stock held by D.H. Blair Investment
Banking Corp. ("D.H. Blair"); immediately exercisable warrants for 214,967
shares of common stock held by D.H. Blair; immediately exercisable
warrants for 250,000 shares of common stock held by VentureTek L.P., a
related party; and an immediately convertible note for 4,800,000 shares
held by Blair Ventures-Fund I, Inc., a related party. Does not include
warrants for 150,000 shares of common stock held by Engex, Inc., a
closed-end mutual fund whose investment advisor is an affiliate of D.H.
Blair; warrants exercisable for 255,000 shares of common stock held by
officers and employees of D.H. Blair; or shares to which D.H. Blair claims
entitlement as a result of our failure to file a registration statement
covering the 2,000,000 shares of common stock purchased by D.H. Blair in
March 1999.
(6) Includes 2,403,302 shares of common stock held by JenCom Digital
Technologies Inc. ("Jencom Digital"), 265,550 shares of common stock held
by Henry Kauftheil, the president of JenCom Digital, and 426,075 shares of
common stock held by The TechDepartment.com, Inc., an affiliate of ICES.
Does not include the 905,073 shares of our common stock that were
transferred by JenCom Digital to other shareholders of JenCom Digital in
May 2000.
(7) Less than 1%.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ROBERT KOHN RELATED-PARTY TRANSACTIONS. This section describes a number of
transactions in which WorldWide Web NetworX Corporation or one of its
subsidiaries was a party and in which Robert Kohn, our former Chairman,
President and Chief Executive Officer, had a direct or indirect material
interest.

ROBERT KOHN'S POSITIONS

Robert Kohn held the following positions, relationships and ownership
interests during the periods indicated:

o Director of WorldWide Web NetworX Corporation from May 8, 1998 to
September 23, 1999 and President and Chief Executive Officer of
WorldWide Web NetworX Corporation from May 18, 1998 to September 23,
1999;

o The holder of more than 5% of the common stock of WorldWide Web
NetworX Corporation from May 1998 to the present;

o A strategic planner of business development for marketing and sales
of PECO Energy Company from February 1996 to March 1, 1999;

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o The President of BarterOne, LLC, from its formation to its
dissolution;

o The owner of an option to acquire a 4.5% membership interest in
BarterOne, LLC which was granted to Mr. Kohn by PECO Energy Company
in exchange for salary and other compensation concessions;

o A 33-1/3% owner of Positive Asset Remarketing, Inc. with a
right to receive 50% of its interest in AssetTRADE.com, Inc.;

o An employee of Artra Group Incorporated from February 23, 1999 to
September 23 1999, at which time his employment agreement was
assigned to Entrade Inc;

o A holder of options exercisable for 1,000,000 shares of Entrade Inc.
common stock at a price of $2.75 per share;

o President and Chief Executive Officer of AssetTRADE.com, Inc. from
December 1998 to May 2000; and brother to Marlene Goss, a principal
of EduNEXT.

OTHER PARTIES

The other parties involved in the transactions described in this section
include the following entities:

o PECO Energy Company: an electric and natural gas service provider in
southeastern Pennsylvania;

o Energy Trading Company: a wholly owned subsidiary of PECO Energy;

o BarterOne, LLC: a limited liability company which was incorporated
in Delaware in 1997 as a joint venture between Energy Trading
Company and Global Trade Group to serve as PECO Energy's Internet
development unit. BarterOne did business as entrade.com and was
dissolved in 1999;

o Positive Asset Remarketing, Inc.: a company providing asset recovery
services to global customers;

o entrade.com, Inc.: a subsidiary of Entrade, which we sold to Artra
Group Incorporated in a transaction which closed on September 23,
1999; and

o AssetTRADE.com, Inc.: a provider of traditional off-line asset
recovery, disposal and marketing with Internet-based asset recovery,
inventory management and on-line auctions for large industrial and
commercial organizations.

TRANSACTIONS BEFORE THE SALE OF ENTRADE

WORLDWIDE WEB NETWORX CORPORATION PURCHASED 51% OF BARTERONE FROM ENERGY
TRADING COMPANY

In December 1998, we acquired from Energy Trading Company, its 51%
membership interest in BarterOne, LLC for consideration of $480,000 and 416,666
shares of our common stock. As a result of the September 23, 1999 closing of our
sale of Entrade to Artra, and pursuant to the acquisition agreement,

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PECO Energy Company returned its certificate representing 416,666 of our shares
and we issued to PECO a certificate representing 73,450 of our shares valued at
$1.00 per share or $73,450 in the aggregate. To enable us to acquire the 51%
membership interest of Energy Trading Company in BarterOne, Mr. Kohn returned
his option to purchase 4.5% of BarterOne. As consideration for the return of
this option, we agreed to issue to Mr. Kohn 475,000 shares of our common stock
valued at $1.00 per share or $475,000 in the aggregate.

WORLDWIDE WEB NETWORX CORPORATION PURCHASED ORBIT SYSTEM AND ASSETTRADE.COM
INTEREST FROM POSITIVE ASSET REMARKETING

In January 1999, we purchased, for 3,500,000 shares of our common stock
valued at $1.00 per share or $3,500,000 in the aggregate, assets from Positive
Asset Remarketing including all the rights of Positive Asset Remarketing under a
license from BarterOne to the ORBIT System Software and 25% of AssetTRADE.com,
Inc.'s common stock.

WORLDWIDE WEB NETWORX CORPORATION PURCHASED ATM SOFTWARE/METHODOLOGIES FROM
POSITIVE ASSET REMARKETING

In February 1999, we purchased, for 3,500,000 shares of our common stock,
valued at $1.50 per share or $5,250,000 in the aggregate, and the sum of
$750,000 cash, all of Positive Asset Remarketing's rights to the ATM System
which included proprietary banking and trade operations that establish on-line
electronic trading and commerce functions.

WORLDWIDE WEB NETWORX CORPORATION SALE OF ENTRADE INC. TO ARTRA GROUP
INCORPORATED

In February 1999, we entered into a merger agreement with Artra for the
sale of our Entrade Inc. subsidiary. Our Entrade subsidiary contained the
following assets:

o our 25% interest in the Class A voting shares of AssetTRADE.com,
Inc.;

o our 100% membership interest in BarterOne, LLC;

o a non-customized version of the ORBIT System;

o a new entrade.com transaction software that was developed by
entrade.com; and

o other assets of our subsidiary Entrade

In connection with this transaction, we received the following
consideration:

o $800,000 in cash;

o a $500,000 promissory note which has since been paid;

o 1,800,000 shares of the outstanding equity securities of Entrade;
and

o $1,302,000 in funding of Entrade's operations from the date of the
merger agreement through its consummation.

In connection with the sale of our Entrade subsidiary to Artra, on
February 23, 1999, the following person entered into agreements with Artra or an
entity affiliated with Artra:

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Robert D. Kohn entered into a three-year employment agreement with Artra,
at an annual salary of $165,000. He also received an option to purchase
1,000,000 shares of Artra stock at an exercise price of $2.75 per share. Mr.
Kohn also agreed during the term of the employment agreement and for an
additional period of one year after termination or expiration, unless terminated
because of a change in business purpose, that neither he nor any corporation or
entity in which he may be interested will at anytime engage in any competitive
business or solicit, hire or contract for services or employ any of the
executives of Artra.

Robert D. Kohn entered into a non-competition agreement with the new
Entrade or its successor for a four-year term after the closing of the sale of
Entrade to Artra.

Robert D. Kohn entered into a non-qualified stock option agreement whereby
Artra granted Mr. Kohn an option to purchase any part or all of 1,000,000 shares
of Artra's common stock at an exercise price of $2.75 per share subject to
vesting as follows: one-third on December 1, 1999, one-third on February 18,
2000 and one-third on February 18, 2001.

TRANSACTIONS AFTER THE SALE OF ENTRADE

ENTRADE.COM SOFTWARE LICENSE

In September 1999, our subsidiary, ATM Service, Ltd. licensed from
entrade.com, Inc., pursuant to the non-exclusive software license agreement,
dated September 23, 1999, the entrade.com software which we sold in connection
with our sale of our Entrade subsidiary. ATM Service, Ltd. paid a one-time
licensing fee consisting of $1,500,000 in trade credits to entrade.com. Pursuant
to the license agreement, entrade.com also agreed to host ATM's web sites and to
maintain and support the software, however, entrade.com no longer provides these
services. We have copies of the source code and the object code for this
software, and we have made other arrangements for hosting the ATMcenter.com web
sites in December 2000 and intend to make other arrangements for maintenance and
support as well.

EDUNEXT

We entered into an agreement with Marlene A. Goss and Fern Entrekin dated
as of June 13, 1998. Ms. Goss is the sister of Robert Kohn. Ms. Goss and Ms.
Entrekin developed an educational program to provide solutions to schools to
build learning communities. The agreement contemplated the formation of a
subsidiary of the Company, to be named EduNEXT, and the development of related
web sites.

We agreed to acquire the educational program in exchange for the
following:

o $50,000 of our stock, at $2.50 per share, to be paid as follows:
10,000 shares to be delivered upon the execution of the agreement
and an additional 10,000 shares to be delivered one year from the
execution of the agreement; and

o $53,500 in working capital with $15,000 to be paid immediately upon
execution of the agreement and weekly payments totaling $38,500 for
the remainder of the $53,500.

We issued 20,000 shares, valued at $20,000 or $1.00 per share, and paid
$31,500 to Ms. Goss pursuant to this agreement. The parties subsequently
determined not to proceed with this transaction.

VISION TECHNOLOGIES

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In April and August 1999, we advanced $850,000 directly and $350,000
through WWWX-Jencom, LLC in Vision Technologies, Inc. At the time of these
advances, Mr. Bjorn Koritz, our then Vice President, General Counsel, Secretary
and Director, was also a Director of Vision, its General Counsel and a holder of
10% of Vision's common stock.

D.H. BLAIR AND JENCOM

As a condition to a stock purchase agreement with D.H. Blair Investment
Banking Corp., dated March 4, 1999, to purchase 2,000,000 shares of our common
stock, D.H. Blair required that we invest in and execute a definitive agreement
with JenCom Digital Technologies, LLC to acquire a 50% interest in technology
assets of JenCom, described in "Our Business--WWWX-Jencom, LLC and InterCommerce
China, LLC--JenCom Products," which resulted in our current ownership interest
in WWWX-Jencom, LLC. Affiliates of D.H. Blair own interests in International
Commerce Exchange Systems, Inc., an indirect parent of JenCom Digital
Technologies, LLC, and a member of InterCommerce China, LLC.

INTERCOMMERCE CHINA, LLC

Pursuant to the operating agreement of InterCommerce China, LLC, eight
individuals, including Warren Rothstein and Allan M. Cohen, each have the option
to purchase a 0.625% interest in InterCommerce China. The option becomes
exercisable upon the public issuance of any class of securities of InterCommerce
China, at an exercise price equal to 30% of the fair market value of the option
interest as of the date of the operating agreement.

RELATIONSHIPS WITH AND AMONG ENTRADE, ENTRADE.COM, ATM SERVICE, LTD. AND THE
INTRAC GROUP LTD.

entrade.com provided technical consulting services totaling $83,000 to ATM
for fiscal 2000. At September 30, 2000, $62,000 was due to entrade.com from ATM.

Entrade provided various services to us during fiscal 2000 totaling
$27,641. At September 30, 2000, we owed Entrade the sum of $11,969 for these
services, subject to various offsets.

In addition to the $3,943,000 that we loaned to ATM, of which $10,000 was
repaid in August 2000, we have provided services and made payments on behalf of
ATM totaling $371,000 during the period from July 23, 1999 through December 31,
2000.

ATM and Intrac made payments on behalf of the other during fiscal 2000. At
September 30, 2000, The net amount due from Intrac to ATM was $879,000 and
$1,058,000 at September 30, 2000 and 1999, respectively. These advances are
eliminated in our consolidated financial statements.

The following of our officers and directors have or have had the following
management positions with, and economic interests in, ATM and Intrac:

Thomas Settineri, who was a director of the Company during the period from
September 23, 2000 to December 27, 2000, has also been a director and President
and Chief Executive Officer of each of ATM and Intrac since July 1999 and the
Chairman and Chief Executive Officer of ATM and Intrac since October 2000. Since
July 1999, Mr. Settineri has beneficially owned from 18% to approximately 22% of
the outstanding equity of ATM.

Gary Levi, who was Secretary and Treasurer of the Company during the
period from August 28, 2000 to December 29, 2000, has also been a director and
Chief Operating Officer of each of ATM and

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Intrac since July 1999 and the President and Chief Operating Officer of ATM and
Intrac since October 2000. Since July 1999, Mr. Levi has beneficially owned from
6% to approximately 7% of the outstanding equity of ATM.

NAI DIRECT, INC.

GUARANTEE OF NAI DIRECT EQUIPMENT LEASE

In March 2000, we guaranteed the obligations of NAI Direct under a lease
of computer equipment and network software which requires monthly payments
totaling $100,000 over a two-year term with an option to purchase at lease end.
In December 2000, we were notified of NAI Direct's default under this lease and
a demand for payment was made pursuant to our guarantee. NAI Direct has given us
their assurances that it will satisfy its obligations under the equipment lease.

NEW AMERICA NETWORK, INC. AND GERALD C. FINN, CHAIRMAN AND CHIEF EXECUTIVE
OFFICER OF NEW AMERICA NETWORK, INC.

New America Network, Inc. ("NAI") has provided various services to NAI
Direct, Inc. ("NAI Direct"), including rental space and shared personnel, and
has payments on behalf of NAI Direct, totaling $588,000 for the period from
acquisition through September 27, 2000, at which time $239,000 remained due from
NAI Direct to NAI.

NAI Direct sold its $50,000 investment in Sidewalk Associates, LLC to
Gerald C. Finn.

RELATIONSHIP BETWEEN WARREN ROTHSTEIN, D&W ENTERPRISES, INC, AND ATM SERVICE,
LTD.

For the period from July 23, 1999 to October 19, 2000, we used the
services of D&W Enterprises, Inc. ("D&W") to manage our ATM Service, Ltd.
operations. D&W is 100%-owned by Deborah and Warren Rothstein, our former
interim chairman, president ands chief executive officer and former chairman of
ATM Service, Ltd. and The Intrac Group, Ltd. During the fiscal years ended
September 30, 2000 and 1999, ATM paid $925,000 and $183,000, respectively, for
the services rendered which represented the full cost incurred by D&W for the
services rendered. ATM also paid commissions totaling $138,000 and $0,
respectively, to D&W during the years ended September 30, 2000 and 1999. ATM
reimbursed D&W for expenses paid by D&W on behalf of ATM totaling $60,000 and
$0, respectively, to D&W during the years ended September 30, 2000 and 1999. D&W
assigned its rental lease for office space at 220 White Plains Road, Tarrytown,
New York, to ATM, at which time ATM reimbursed D&W $22,000 for the lease
security deposit. D&W is subleasing office space from ATM for $4,000 per month
for the period from January 1, 2001 to June 30, 2001.

RELATIONSHIP BETWEEN EVELYN COHEN AND ALLAN COHEN

Evelyn Cohen, our director of financial reporting and control from March
6, 2000 through January 2001, is the sister of Allan Cohen, who was one of our
directors from July 23, 1999 until August 24, 2000, our vice president and
general counsel from October 1999 until August 24, 2000, and secretary and
general counsel to our majority-owned subsidiary, ATM Service, Ltd., from July
23, 1999 until March 6, 2000. Ms. Cohen received compensation of $208,000 for
the period from March 6, 2000 to December 31, 2000.

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DESCRIPTION OF CAPITAL STOCK

COMMON STOCK

Holders of our common stock are entitled to one vote for each share on all
matters voted upon by our stockholders, including the election of directors and
do not have cumulative voting rights. Subject to the rights of holders of any
then outstanding shares of our preferred stock, our common stockholders are
entitled to any dividends that may be declared by our board of directors.
Holders of our common stock are entitled to share ratably in our net assets upon
our dissolution or liquidation after payment or provision for all liabilities
and any preferential liquidation rights of our preferred stock then outstanding.
Holders of our common stock have no preemptive rights to purchase shares of our
stock. The shares of our common stock are not subject to any redemption
provisions and are not convertible into any other shares of our capital stock.
All outstanding shares of our common stock are, and the shares of common stock
to be issued in the offering will be, upon payment therefor, fully paid and
nonassessable. The rights, preferences and privileges of holders of our common
stock will be subject to those of the holders of any shares of our preferred
stock we may issue in the future.

PREFERRED STOCK

Our board of directors may, from time to time, authorize the issuance of
one or more classes or series of preferred stock without stockholder approval.
Subject to the provisions of our certificate of incorporation and limitations
prescribed by law, our board of directors is authorized to adopt resolutions to
issue shares, establish the number of shares, change the number of shares
constituting any series, and provide or change the voting powers, designations,
preferences and relative rights, qualifications, limitations or restrictions on
shares of our preferred stock, including dividend rights, terms of redemption,
conversion rights and liquidation preferences, in each case without any action
or vote by our stockholders.

One of the effects of undesignated preferred stock may be to enable our
board of directors to discourage an attempt to obtain control of our company by
means of a tender offer, proxy contest, merger or otherwise. The issuance of
preferred stock may adversely affect the rights of our common stockholders by,
among other things:

o restricting dividends on the common stock;

o diluting the voting power of the common stock;

o impairing the liquidation rights of the common stock; or

o delaying or preventing a change in control without further action by
the stockholders.

WARRANTS AND OPTIONS

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As of February 21, 2000, we had outstanding options and warrants to
purchase an aggregate of 13,865,467 shares of our common stock at an average
weighted exercise price of $0.80 per share. Such warrants and options expire on
various dates from August 26, 2009 to October 10, 2010.

EFFECTS OF AUTHORIZED BUT UNISSUED STOCK

As of February 21, 2001, there will be 61,084,417 authorized but unissued
shares of our common stock and 10,000,000 shares of preferred stock available
for our future issuance without stockholder approval. Of the shares of common
stock available for future issuance, 3,427,400 shares have been reserved for
issuance under our 2000 Incentive Stock Plan.

Shares of common stock and preferred stock available for future issuance
may be utilized for a variety of corporate purposes, including to facilitate
acquisitions or future public offerings to raise additional capital.

ANTI-TAKEOVER CONSIDERATIONS AND SPECIAL PROVISIONS OF THE CERTIFICATE OF
INCORPORATION, BYLAWS AND DELAWARE LAW

CERTIFICATE OF INCORPORATION AND BYLAWS. A number of provisions of our
certificate of incorporation and bylaws concern matters of corporate governance
and the rights of our stockholders. Provisions such as those that grant our
board of directors the ability to issue shares of preferred stock and to set the
voting rights, preferences and other terms thereof, may have an anti-takeover
effect and may discourage takeover attempts not first approved by our board of
directors, including takeovers which may be considered by some stockholders to
be in their best interests. To the extent takeover attempts are discouraged,
temporary fluctuations in the market price of our common stock, which may result
from actual or rumored takeover attempts, may be inhibited. Such provisions also
could delay or frustrate the removal of incumbent directors or the assumption of
control by stockholders, even if such removal or assumption would be beneficial
to our stockholders. These provisions also could discourage or make more
difficult a merger, tender offer or proxy contest, even if they could be
favorable to the interests of stockholders, and could potentially depress the
market price of our common stock. Our board of directors believes that these
provisions are appropriate to protect our interests and the interests of our
stockholders.

AMENDMENT OF CHARTER PROVISIONS. The amendment of any of the above
provisions would require approval by holders of at least 80% of our outstanding
common stock.

REQUIREMENTS FOR ADVANCE NOTIFICATION OF STOCKHOLDER NOMINATIONS AND
PROPOSALS. Our bylaws establish advance notice procedures with respect to
stockholder proposals and the nomination of candidates for election as
directors, other than nominations made by or at the direction of our board of
directors or a committee of our board of directors.

MEETINGS OF STOCKHOLDERS. Our bylaws provide that annual meetings of our
stockholders may take place at the time and place established by our board of
directors and stated in the notice of meeting. A special meeting of our
stockholders may be called by the board of directors.

AMENDMENT OF THE BYLAWS. Our bylaws may be altered, amended, repealed or
replaced by a majority of our board of directors.

THE DELAWARE BUSINESS COMBINATION ACT. As a corporation organized under
the laws of the State of Delaware with less than 2,000 stockholders of record,
we are not subject to Section 203 of the General Corporation Law of the State of
Delaware. Section 203 imposes a three-year moratorium on business combinations
between a Delaware corporation and an "interested stockholder," in general, a
stockholder

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owning 15% or more of a corporation's outstanding voting stock, or an affiliate
or associate thereof, unless:

o before the interested stockholder becomes an interested stockholder,
the board of directors of the corporation approved either the
business combination or the transaction resulting in the interested
stockholder becoming an interested stockholder;

o upon completion of the transaction resulting in the interested
stockholder becoming an interested stockholder, the interested
stockholder owned 85% of the voting stock outstanding at the time
the transaction commenced, excluding from the calculation of shares
outstanding those shares beneficially owned by directors who are
also officers and certain employee benefit plans; or

o on or after the interested stockholder becomes an interested
stockholder, the business combination is approved by the board of
directors and the holders of at least 66 2/3% of the outstanding
shares other than those shares beneficially owned by the interested
stockholder at a meeting of stockholders.

The Delaware Business Combination Act defines the term "business
combination" to encompass a wide variety of transactions with, or caused by, an
interested stockholder in which the interested stockholder receives or could
receive a benefit on other than a proportional basis with other stockholders.
These transactions include mergers, some asset sales, some issuances of
additional shares to the interested stockholder, transactions with us which
increase the proportionate interest of the interested stockholder or
transactions in which the interested stockholder receives some other benefits.

By a provision in its original certificate of incorporation or an
amendment thereto or to its bylaws adopted by a majority of the shares entitled
to vote thereon, a corporation may elect not to be governed by the Delaware
Business Combination Act, provided that any amendment to the certificate of
incorporation will not become effective until 12 months after its adoption. We
have not made this election in our certificate of incorporation.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is American Stock
Transfer Trust Co., 40 Wall Street, New York, New York 10005.

SHARES ELIGIBLE FOR FUTURE SALE

Future sales of a substantial number of shares of our common stock in the
public market could adversely affect trading prices prevailing from time to
time. As of February 21, 2001, principal stockholders and all executive officers
and directors held 14,483,819 shares, representing 30% of the outstanding shares
of our common stock. Upon the consummation of this offering, we will have
38,915,596 shares of our common stock outstanding. Of these shares, all shares
sold pursuant to this registration statement, other than shares, if any,
purchased by our affiliates, will be freely tradable. The shares purchased by
our affiliates will be "restricted securities" as that term is defined in Rule
144 under the Securities Act. All of our issued and outstanding shares of common
stock are eligible for sale in 2001 pursuant to Rule 144. Restricted shares may
be sold in the public market only if such sale is registered under the
Securities Act or if such sale qualifies for an exemption from registration,
such as the one provided by Rule 144. Sales of the restricted shares in the open
market, or the availability of such shares for sale, could adversely affect the
trading price of our common stock.

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Subject to the provisions of Rule 144 and 144(k), 1,400,000 additional
shares will be available for sale in the public market as following under the
following lock-up agreement with New America Network, Inc.:

Our September 2000 Stock Purchase Agreement with New America Network
provides that, during the six month period from September 25, 2000 through March
24, 2001, New America Network may not sell more than 325,000 of its 1,725,000
shares of our common stock without our prior written consent, which may not be
unreasonably withheld.

REGISTRATION RIGHTS AGREEMENTS

The following parties have the right to demand that we register our securities
that they hold:

HOLDERS OF OUR SERIES A 6% CONVERTIBLE DEBENTURES: We agreed to file a
registration statement covering the shares of our common stock issuable upon the
conversion of our Series A 6% Convertible Debentures by May 3, 1999 and to use
reasonable best efforts to have the registration statement declared effective
within 90 days thereafter. We did not file the registration statement by May 3,
1999, and, if our failure to do so resulted from our failure to exercise
reasonable diligence, we must pay a penalty to each of the two holders who have
not converted their debentures to common stock in an amount equal to 2% of the
face value of each debenture for each month that the filing of the registration
statement was delayed past May 3, 1999. These two outstanding debentures, which
matured on March 22, 2000, total $125,000 in principal amount. If this
registration statement does not become effective within 90 days of its filing
date, we may be subject to an additional penalty in an amount equal to 2% of the
face value of each of these two debentures for each month thereafter that this
registration statement is not effective. In March 2000, the holders of all of
our other Series A Convertible Debentures, totaling $865,000 in principal amount
and representing 87.5% of the total principal amount issued, elected to convert
their debentures into 705,014 shares of our common stock in full satisfaction of
our obligations to those holders. We agreed to file registration statement
covering these 705,014 shares within 60 days of the effectiveness of our
registration statement on Form 10, which became effective on June 12, 2000,
although we had the right to defer our registration obligation, under certain
circumstances, for a period of up to 90 days. We did not file the registration
statement within 60 days of June 12, 2000. The up to 560,000 shares that are
issuable upon conversion of the two outstanding debentures and the 705,014
shares that were issued upon the conversion of all of the other debentures are
covered by this registration statement.

STOCKHOLDERS FROM PRIVATE PLACEMENT OFFERINGS: We agreed with the holders of
7,404,667 shares of our common stock acquired in a series of three private
placement transactions, on July 23, 1999, August 25, 1999 and September 23,
1999, to file a registration statement covering these shares by May 23, 2000 and
to use our best efforts to have the registration statement declared effective by
July 23, 2000. We did not file a registration statement by May 23, 2000. As of
February 21, 2001, approximately 5,964,522 of these shares were still held by
these stockholders. These shares are covered by this registration statement.

D.H. BLAIR INVESTMENT BANKING CORP.: We agreed with D.H. Blair Investment
Banking Corp., the holder of 2,000,000 shares of our common stock and warrants
convertible into 940,467 shares of our common stock, at $1.80 per share, to file
a registration statement covering its 2,000,000 shares by October 4, 1999 and to
use our best efforts to cause such registration statement to become effective as
soon as practicable thereafter. We further agreed that, if the registration
statement was not declared effective by February 4, 2000, we would issue
additional shares of our common stock to D.H. Blair, without any additional
consideration, pursuant to the formula contained in the Stock Purchase
Agreement, dated March 4, 1999, whereby D.H. Blair acquired these shares. We did
not file the registration statement

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by October 4, 1999. As a result, D.H. Blair has claimed that it is entitled to
(1) 200,000 shares for each month the effectiveness of the registration
statement is delayed beyond February 4, 2000, plus (2) such number of shares
equal to (A) $3,000,000 multiplied by (B) the quotient of (x) the closing bid
price on the seven month anniversary of the closing less the closing bid price
of the common stock on the date such registration statement is declared
effective divided by (y) $1.50. D.H. Blair also has the right to include its
2,000,000 shares in any registration statement that we file and D.H. Blair has
exercised its right to include these shares in this registration statement. The
2,000,000 shares issued to D. H. Blair are covered by this registration
statement.

D.H. BLAIR AND ITS TRANSFEREES: We agreed with D.H. Blair and its transferees
that, until March 4, 2002, upon notice by either D.H. Blair or holders
beneficially owning at least 50% of the warrants that we issued to D.H. Blair
and the 940,467 shares issued upon exercise of those warrants, we would file a
registration statement covering the resale of such shares within 20 days of our
receipt of such notice and use our best efforts to cause such registration
statement to become effective as soon as practicable thereafter. Our obligation
is limited to two registration statements. D.H. Blair and its transferees also
have the right to include all or any portion of the shares issuable upon
exercise of the warrants in any registration statement that we file. We also
agreed, commencing December 4, 1999, to (1) make and keep public information (as
such term is defined under Rule 144) available regarding the Company, and (2)
file with the SEC all reports required under the Securities Exchange Act of
1934. D. H. Blair has transferred warrants for 725,500 shares to various
transferees and the registration rights with respect to such shares were
transferred to these transferees. D.H. Blair and transferees have exercised
their right to include the shares issuable upon exercise of the warrants in this
registration statement. These 940,467 shares are covered by this registration
statement.

BLAIR VENTURES-FUND I, INC.: Blair Ventures-Fund I, Inc. (the "Fund"), the
holder of the $3,600,000 convertible promissory note that we executed and
delivered in connection with the loan that we received in August 2000, has the
right to convert all or any part of the outstanding principal balance of the
loan and accrued and unpaid interest into our common stock at the rate of $0.75
per share, in accordance with the provisions of the note. We agreed that, upon
request, we would use commercially reasonable efforts to effect the registration
of the common stock issued or issuable pursuant to the exercise of the Fund's
conversion rights within 90 days after receipt of such request. The Fund also
has the right to include all or any portion of the shares issuable upon the
conversion of the note in any registration statement filed by the Company. All
of the shares issuable upon conversion of the note are covered by this
registration statement.

OPTIONHOLDERS: We agreed to use commercially reasonable efforts to register on
Form S-8, within 120 days of August 22, 2000, the shares of our common stock
issuable upon exercise of the options granted to the following former employees
under our 1999 Equity Compensation Plan: John T. Banigan (250,000 shares), Allan
M. Cohen (250,000 shares), Evelyn Cohen (225,000 shares), Gerard T. Drumm
(200,000 shares), Michael Norton (90,000 shares) and Michael Metzger (75,000
shares). We did not register these shares within 120 days of August 22, 2000. We
also agreed to use commercially reasonable efforts to register on Form S-8 the
shares of our common stock issuable upon exercise of the options granted to the
following employees and consultant under our 2000 Incentive Stock Plan: Carol C.
Knauff (5,000,000 shares), R. Bruce Richardson (500,000 shares), G. David
Rosenblum (500,000 shares) and Nahum G. Shar (300,000 shares). None of these
shares issuable upon the exercise of any of the options granted under either the
1999 Plan or the 2000 Plan are covered by this registration statement.

CONSULTANTS: We issued a warrant for 100,000 shares of our common stock,
exercisable until April 1, 2003 at an exercise price of $2.25 per share, to each
of Ralph Isham and Arnold Kling, in April 2000, as consideration for consulting
services provided to us by GTI Venture Partners LLC. Messrs. Isham and Kling
each have unlimited rights to include the shares issuable upon the exercise of
these warrants in any

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registrations statements that we file on Form S-1 or SB-2 and Messrs. Isham and
Kling have each exercised their right to include all of their shares in this
registration statement. These 200,000 shares are covered by this registration
statement.

JENCOM DIGITAL TECHNOLOGIES, LLC AND ITS TRANSFEREES: We agreed with JenCom,
as the holder of 4,000,000 shares of our common stock, to file a registration
statement covering these shares by May 17, 2000. We did not file the
registration statement by May 17, 2000. JenCom and its transferees currently
own 3.5 million shares of our common stock. These 3.5 million shares are
included in the shares covered by this registration statement.

THOMAS SETTINERI AND GARY LEVI: We issued 1,000,000 shares of our common
stock to Thomas Settineri and Gary Levi in connection with our acquisition
of The Intrac Group. Messrs. Settineri and Levi have unlimited piggyback
registration rights with respect to their shares. Messrs. Settineri and
Levi have exercised their right to include all of these shares in this
registration statement. These 1,000,000 shares are covered by this
registration statement.

GOLDPLATE HOLDINGS: We issued 198,950 shares of our common stock with
unlimited piggy-back registration rights to Alexander, Wescott & Co. as
consideration for its services as our placement agent for an offering of
our Series A 6% Convertible Debentures and as a settlement for any
claims. Alexander, Wescott & Co. subsequently transferred these shares to
Goldplate Holdings. Goldplate Holdings has exercised its right to include
all of these shares in this registration statement. These 198,950 shares
are covered by this registration statement.

MICHELLE KRAMISH KAIN: We issued to Michelle Kramish Kain 150,000 shares of
common stock. Ms. Kain has unlimited piggy-back registration rights for these
shares and has exercised her right to include all of these shares in this
registration statement. Ms. Kain currently owns 95,000 shares. These 95,000
shares are covered by this registration statement.

NEW AMERICA NETWORK, INC.: We issued 1,500,000 shares of our common stock
to New America Network, Inc. in connection with our joint venture, NAI
Direct, Inc. New American Network, Inc. has unlimited piggy-back
registration rights for any registration statements filed after January 1,
2000 and has exercised its right to include all of these shares in this
registration statement. These 1,500,000 shares are covered by this
registration statement.

RULE 144

In general, under Rule 144 as currently in effect, a person, or persons
whose shares are aggregated, who has beneficially owned restricted shares for at
least one year following the later of the date of the acquisition of such shares
from the issuer or an affiliate of the issuer would be entitled to sell within
any three-month period a number of shares that does not exceed the greater of:

o 1% of the number of shares of our common stock then outstanding,
approximately 389,155 shares immediately after this offering; or

o the average weekly trading volume of our common stock during the
four calendar weeks preceding the filing of a Form 144 with respect
to such sale.

Sales under Rule 144 are subject to certain manner of sale provisions and
notice requirements and the availability of current public information about us.

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RULE 144(K)

Under Rule 144(k), a person who is not deemed to have been an affiliate of
us at any time during the 90 days preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years following the later
of the date of the acquisition of such shares from the issuer or an affiliate of
the issuer, is entitled to sell such shares without complying with the manner of
sale, public information, volume limitation or notice provisions of Rule 144.

LEGAL MATTERS

The validity of the shares of common stock offered by this prospectus will
be passed upon for our company by G. David Rosenblum, Esquire, our General
Counsel.

EXPERTS

Our audited consolidated financial statements for the fiscal year ended
September 30, 2000, appearing in this prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent accountants, as set forth in
their report on our audited consolidated financial statements appearing
elsewhere in this prospectus and Registration Statement, and are included in
reliance upon their report given upon the authority of Ernst & Young LLP as
experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

WorldWide Web NetworX Corporation

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000:

Reports of Independent Auditors......................................F-2

Consolidated Balance Sheets..........................................F-4

Consolidated Statements of Operations................................F-5

Consolidated Statements of Stockholders' Equity......................F-6

Consolidated Statements of Cash Flows................................F-7

Notes to Consolidated Financial Statements....................F-8 - F-35

FOR THE THREE MONTH PERIOD ENDED DECEMBER 31, 2000:

Consolidated Balance Sheets.........................................F-35

Consolidated Statements of Operations...............................F-35

Consolidated Statements of Comprehensive Income.....................F-38

Consolidated Statements of Cash Flows...............................F-39

Notes to Consolidated Financial Statements...................F-40 - F-46

F-1

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REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders
WorldWide Web NetworX Corporation

We have audited the accompanying consolidated balance sheets of WorldWide Web
NetworX Corporation as of September 30, 2000 and 1999, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of WorldWide Web
NetworX Corporation as of September 30, 2000 and 1999, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that WorldWide
Web NetworX Corporation will continue as a going concern. As more fully
described in Note 2, the Company has incurred recurring operating losses and has
a working capital deficiency. In addition, the Company currently does not
anticipate having the ability to meet its working capital needs or to satisfy
its convertible promissory note upon maturity with a cash payment during the
fiscal year ending September 30, 2001. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.

/s/ Ernst & Young, LLP

Philadelphia, Pennsylvania
December 15, 2000

F-2

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REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
WorldWide Web NetworX Corporation
Cherry Hill, New Jersey

We have audited the accompanying consolidated statements of operations, changes
in stockholders' equity, and cash flows of WorldWide Web NetworX Corporation and
subsidiary for the year ended September 30, 1998. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these 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 financial statements enumerated above present fairly, in all
material respects, the consolidated results of operations and cash flows of
WorldWide Web NetworX Corporation and subsidiary for the year ended September
30, 1998, in conformity with generally accepted accounting principles.

/s/ Richard A. Eisner & Company, LLP

New York, New York
April 13, 1999

F-3

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WORLDWIDE WEB NETWORX CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

[Enlarge/Download Table]

September 30
2000 1999
-------- --------

Assets
Current assets:
Cash and cash equivalents ........................................ $ 2,271 $ 7,234
Investments ...................................................... 6,005 29,475
Accounts receivable (net of allowance for doubtful accounts of $0
and $19, respectively) ......................................... 1,587 858
Inventory ........................................................ 644 --
Prepaid expenses ................................................. 700 143
-------- --------
Total current assets ................................................ 11,207 37,710
Property and equipment, net ......................................... 319 295
Investments in and advances to Affiliated Companies ................. 3,319 2,744
Intangible assets (net of accumulated amortization of $0 and $109,
respectively) .................................................... -- 4,884
Deferred financing costs (net of accumulated amortization of $17 and
$155, respectively) .............................................. 183 139
Other assets ........................................................ 679 49
Deferred income taxes ............................................... -- 1,690
-------- --------
Total assets ........................................................ $ 15,707 $ 47,511
======== ========

Liabilities and stockholders' equity Current liabilities:
Accrued expenses ................................................. $ 629 $ 1,157
Accounts payable ................................................. 3,505 1,530
Convertible promissory note ...................................... 3,600 --
Deferred revenue ................................................. 3,117 470
Current portion of capital lease obligation ...................... 39 37
Convertible debentures ........................................... 125 990
Deferred income taxes ............................................ -- 8,813
-------- --------
Total current liabilities ........................................... 11,015 12,997

Capital lease obligation, net of current portion .................... -- 39

Stockholders' equity:
Preferred stock-authorized 10,000,000 shares, $.01 par value, none
issued ......................................................... -- --
Common stock-authorized 100,000,000 shares, $.001 par value;
41,515,583, and 38,455,569 shares issued and outstanding,
respectively ................................................... 42 39
Additional paid-in capital ....................................... 42,938 36,443
Retained (deficit) earnings ...................................... (35,688) 1,393
Unearned stock compensation ...................................... (2,600) (3,400)
-------- --------
Total stockholders' equity .......................................... 4,692 34,475
-------- --------
Total liabilities and stockholders' equity .......................... $ 15,707 $ 47,511
======== ========

SEE ACCOMPANYING NOTES.

F-4

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WORLDWIDE WEB NETWORX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

[Enlarge/Download Table]

YEAR ENDED SEPTEMBER 30
2000 1999 1998
------------ ------------ ------------

Revenues:
Media sales ................................ $ 4,063 $ 465 $ --
Cost recovery .............................. 2,304 30 --
Asset management ........................... 198 82 --
Consulting ................................. 116 762 50
Management services ........................ 91 -- --
------------ ------------ ------------
Total revenues ................................ 6,772 1,339 50
Operating expenses:
Cost of revenues:
Media .................................... 4,202 442 --
Cost recovery ............................ 1,902 30 --
Consulting ............................... 65 320 36
Management services ...................... 60 -- --
------------ ------------ ------------
Total cost of revenues ........................ 6,229 792 36
------------ ------------ ------------
Gross profit .................................. 543 547 14
Selling, general and administrative ........... 14,254 5,280 140
Impairment of intangible asset ................ 3,901 5,583 --
Depreciation and amortization ................. 1,479 597 13
Write-off of purchased research and development -- 3,036 --
------------ ------------ ------------
Loss from operations .......................... (19,091) (13,949) (139)

Other (expenses) income:
Impairment of investments .................. (19,786) -- --
Impairment of investment in and advances to
Affiliated Companies ..................... (2,350) (1,106) --
Loss on sale of short-term investments ..... (2,328) -- --
Equity loss ................................ (364) (1,578) --
Amortization of debt issuance costs ........ (156) (155) (80)
Interest expense ........................... (67) (219) (10)
Interest income ............................ 193 56 10
Gain on sale of subsidiary ................. -- 25,426 --
------------ ------------ ------------
Total other (expenses) income ................. (24,853) 22,424 (80)

(Loss) income before income taxes ............. (43,944) 8,475 (219)
Income tax (benefit) expense .................. (6,863) 6,863 --
------------ ------------ ------------
Net (loss) income ............................. $ (37,081) $ 1,612 $ (219)
============ ============ ============

Net (loss) income per share:
Basic ...................................... $ (0.97) $ 0.07 $ (0.03)
Diluted .................................... $ (0.97) $ 0.07 $ (0.03)
============ ============ ============

Weighted average shares outstanding:
Basic ...................................... 38,368,672 21,906,553 8,602,000
Diluted .................................... 38,368,672 22,418,294 8,602,000
============ ============ ============

SEE ACCOMPANYING NOTES.

F-5

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WORLDWIDE WEB NETWORX CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
(IN THOUSANDS, EXCEPT SHARES)

[Enlarge/Download Table]

Common Additional Retained Unearned Total
Common Stock Paid-In (Deficit) Subscription Stock Stockholders'
Shares Amount Capital Earnings Receivable Compensation Equity
---------- ---------- ---------- ---------- ---------- ------------ -------------

Balance at October 1, 1997 6,000,000 $ 6 $ 54 $ -- $ (5) $ -- $ 55
Issuance of common stock for:
Recapitalization with Instra 2,100,000 2 (2) -- -- -- --
Sale of convertible notes 502,500 1 250 -- -- -- 251
Conversion of debt 502,500 -- 342 -- -- -- 342
Cash, net of issuance costs of $16 1,381,000 2 472 -- -- -- 474
Services rendered 132,500 -- 20 -- -- -- 20
Net loss -- -- -- (219) -- -- (219)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at September 30, 1998 10,618,500 11 1,136 (219) (5) -- 923
Issuance of common stock for:
Services rendered 4,408,950 4 4,609 -- -- (4,000) 613
Acquisition of ownership interests in --
Affiliated Companies 10,523,450 11 12,762 -- -- 12,773
Purchase of technology 3,500,000 4 5,246 -- -- -- 5,250
Cash, net of issuance costs of $1,864 9,404,669 9 12,234 -- -- -- 12,243
Warrants issued in connection with
services rendered -- -- 256 -- -- -- 256
Stock compensation -- -- 200 -- -- 600 800
Receipt of subscription receivable -- -- -- -- 5 -- 5
Net income -- -- -- 1,612 -- -- 1,612
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at September 30, 1999 38,455,569 39 36,443 1,393 -- (3,400) 34,475

Issuance of common stock for:
Services rendered 55,000 -- 83 -- -- -- 83
Acquisition of ownership interests in --
Affiliated Companies 2,250,000 2 2,810 -- -- 2,812
Conversion of debt 705,014 1 1,058 -- -- -- 1,059
Lease agreement 50,000 -- 75 -- -- -- 75
Warrants and options issued in --
connection with services rendered or -- -- 2,219 -- -- 2,219
to be rendered
Stock compensation -- -- 250 -- -- 800 1,050
Net loss -- -- -- (37,081) -- -- (37,081)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance as of September 30, 2000 41,515,583 $ 42 $ 42,938 $ (35,688) $ -- $ (2,600) $ 4,692
========== ========== ========== ========== ========== ========== ==========

SEE ACCOMPANYING NOTES.

F-6

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WORLDWIDE WEB NETWORX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

[Enlarge/Download Table]

YEAR ENDED SEPTEMBER 30
2000 1999 1998
-------- -------- --------

Cash flows from operating activities
Net (loss) income $(37,081) $ 1,612 $ (219)
Adjustments to reconcile net (loss) income to net cash
used in operating activities:
Impairment of investments 19,786 -- --
Deferred income taxes (6,863) 6,863 --
Impairment of advances to Affiliated Companies 2,350 1,106 --
Impairment of intangible asset 3,901 -- --
Loss on sale of investments 2,328 -- --
Stock compensation 1,789 1,216 20
Amortization 1,355 583 10
Equity loss 364 1,578 --
Amortization of debt issuance costs 156 155 --
Depreciation 124 14 3
Gain on sale of subsidiary -- (25,426) --
Impairment of intangible asset -- 5,583 --
Purchased research and development -- 3,036 --
Amortization of debt discount -- -- 80
Changes in operating assets and liabilities, net
of acquisitions:
Accounts receivable (759) 1,008 (49)
Inventory (644) -- --
Prepaid expenses (45) (143) --
Accounts payable 2,557 (600) 20
Accrued expenses 102 (419) 40
Deferred revenue 1,247 470 --
-------- -------- --------
Net cash used in operating activities (9,333) (3,364) (95)

Cash flows from investing activities
Proceeds from sale of short-term investments 1,356 -- --
Advances to Affiliated Companies -- (1,850) --
Purchase of property and equipment (314) (206) (30)
Acquisitions of ownership interests in Affiliated -- (2,985) --
Companies, net of cash acquired
Proceeds from sale of subsidiary -- 2,602 --
Acquisition of technology -- (750) --
(Increase) decrease in other assets (35) 70 (115)
-------- -------- --------
Net cash provided by investing activities 1,007 (3,119) (145)

Cash flows from financing activities
Proceeds from issuance of convertible debt 3,600 990 503
Debt issuance costs incurred (200) (129) --
Payment of capital lease obligation (37) -- --
Payments on line of credit -- (179) --
Net proceeds from issuance of common stock -- 12,243 484
-------- -------- --------
Net cash provided by financing activities 3,363 12,925 987
-------- -------- --------
Net (decrease) increase in cash and cash equivalents (4,963) 6,442 747
Cash and cash equivalents at beginning of year 7,234 792 45
-------- -------- --------
Cash and cash equivalents at end of year $ 2,271 $ 7,234 $ 792
======== ======== ========

Noncash transactions
Capital lease obligation incurred $ -- $ 76 $ --
Exchange of convertible notes and interest for common 1,059 -- 342
stock
Receipt of stock for sale of subsidiary -- 29,475 --
Exchange of consolidated investment for cost basis 227 -- --
investment
Recognition of acquired Intrac liabilities 1,400 -- --

Issuance of Common Stock for:
Acquisition of ownership interests in Affiliated 2,812 12,773 --
Companies
Acquisition of technology -- 5,250 --
Lease agreement 75 -- --

SEE ACCOMPANYING NOTES.

F-7

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WORLDWIDE WEB NETWORX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000

1. ORGANIZATION AND BUSINESS

WorldWide Web NetworX Corporation (the "Company") is a holding company engaged
in business-to-business, or "B2B," e-commerce through a network of companies.
The Company defines e-commerce as conducting or facilitating business
transactions over the Internet. As of September 30, 2000, the Company owned
interests in eleven companies, which are referred to in these financial
statements as "Affiliated Companies." The Company enters into relationships,
including joint ventures, strategic relationships and acquisitions, with
off-line companies that have established distribution channels and fulfillment
capability and provides e-commerce technology, consulting, marketing and
business development services to the Affiliated Companies. The Company's goal is
to expand the markets, services and products and to improve the efficiencies of
these businesses.

In May 1998, Instra Corp. ("Instra"), a publicly traded Delaware corporation
with minimal business operations, exchanged 6,000,000 shares of Instra common
stock for all the outstanding shares of Keiretsu Corporation ("Keiretsu").
Keiretsu was incorporated in Nevada on September 26, 1997 and did not commence
operations until after the share exchange. Instra had 25,219,990 shares of
common stock outstanding prior to the share exchange. As a condition of the
share exchange, 14,719,990 shares of Instra common stock were canceled and the
remaining outstanding shares were reduced to 2,100,000 at the rate of one share
for each five shares outstanding as a result of a reverse stock split. As a
result of the transaction, Keiretsu became a wholly owned subsidiary of Instra
and the former Keiretsu stockholders became the owners of 74.1% of the
outstanding Instra common stock. The transaction was treated as a
recapitalization to which retroactive effect has been given in the accompanying
financial statements. In conjunction with the merger, Instra changed its name to
WorldWide Web NetworX Corporation.

2. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has incurred recurring
operating losses and has a working capital deficiency. In addition, without
additional funding, the Company does not anticipate having the ability to meet
its working capital needs for fiscal 2001 or to satisfy its convertible
promissory note upon maturity with a cash payment during the fiscal year ending
September 30, 2001. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans implemented thus far,
as well as actions initiated that will continue into fiscal 2001, include
restructuring its investment in NAI Direct, Inc. resulting in a release of its
$2.7 million obligation to fund the operations of NAI Direct, Inc., and reducing
expenses of the Company and its consolidated subsidiaries, ATM Service, Ltd. and
The Intrac Group, Ltd. Management also anticipates extending the maturity date
of the convertible promissory note. Management is seeking additional sources of
debt and equity financing to fund its future working capital needs. However,
there can be no assurance that the Company will be successful in obtaining the
necessary funding. The financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from the
outcome of this uncertainty.

F-8

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WORLDWIDE WEB NETWORX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company, its
wholly owned subsidiary, The Intrac Group, Ltd. and its majority owned and
controlled subsidiary, ATM Service, Ltd. Additionally, the details of the
results of operations of Real Quest, Inc. have been included in the consolidated
financial statements through September 27, 2000, at which time the Company
restructured its investment and began accounting for the investment under the
cost method (Note 5). The various interests that the Company acquires in its
Affiliated Companies are accounted for under three methods: consolidation,
equity method and cost method. The applicable accounting method is generally
determined based on the Company's voting interest in an Affiliated Company
unless significant minority rights are present.

CONSOLIDATION

Affiliated Companies in which the Company directly or indirectly owns more than
50% of the outstanding voting securities are generally accounted for under the
consolidation method of accounting. Under this method, an Affiliated Company's
results of operations are reflected within the Company's statement of
operations. All significant intercompany accounts and transactions are
eliminated.

EQUITY METHOD

Affiliated Companies whose results are not consolidated, but over whom the
Company exercises significant influence, are accounted for under the equity
method of accounting. Whether or not the Company exercises significant influence
with respect to an Affiliated Company depends on an evaluation of several
factors including, among others, representation on the Affiliated Company's
Board of Directors and ownership level, which is generally a 20% to 50% interest
in the voting securities of the Affiliated Company, including voting rights
associated with the Company's holdings in common, preferred and other
convertible instruments in the Affiliated Company. Under the equity method of
accounting, an Affiliated Company's results of operations are not included in
detail within the Company's statement of operations; however, the Company's
share of the earnings or losses of the Affiliated Company is reflected in the
caption "Equity loss" in the statement of operations.

COST METHOD

Affiliated Companies not accounted for under the consolidation or the equity
method of accounting are accounted for under the cost method of accounting.
Under this method, the Company's share of the earnings or losses of such
companies is not included in the consolidated statement of operations. However,
cost-method impairment charges are recognized in the consolidated statement of
operations and deducted from the carrying value in the consolidated balance
sheet, while the new cost basis is not increased if circumstances suggest that
the value of the Affiliated Company has subsequently recovered.

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WORLDWIDE WEB NETWORX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company records its ownership interest in debt securities of Affiliated
Companies accounted for under the cost method at cost. The Company records its
ownership interest in equity securities of Affiliated Companies accounted for
under the cost method at cost, unless these securities have readily determinable
fair values based on quoted market prices, in which case these interests would
be recorded at fair value. In addition to the Company's investments in voting
and non-voting equity and debt securities, it periodically makes advances to its
Affiliated Companies in the form of promissory notes which are accounted for in
accordance with Statement of Financial Accounting Standards No. 114, ACCOUNTING
BY CREDITORS FOR IMPAIRMENT OF A LOAN ("SFAS 114").

The Company continually evaluates the carrying value of its ownership interests
in and advances to each of its Affiliated Companies for possible impairment
based on achievement of business plan objectives and milestones, the value of
each ownership interest in the Affiliated Company relative to carrying value,
the financial condition and prospects of the Affiliated Company, and other
relevant factors. The business plan objectives and milestones the Company
considers include, among others, those related to financial performance such as
achievement of planned financial results or completion of capital raising
activities, and those that are not primarily financial in nature such as the
launching of a web site or the hiring of key employees. The fair value of the
Company's ownership interests in and advances to privately held Affiliated
Companies is generally determined based on the value at which independent third
parties have or have committed to invest in its Affiliated Companies.

REVENUE RECOGNITION

The Company principally derives its revenue by providing inventory liquidation
and asset recovery services and from the purchase and resale of advertising
media, merchandise or business services through its consolidated Affiliated
Companies, ATM Service, Ltd. ("ATM Ltd.") and The Intrac Group, Ltd. ("Intrac").
For the year ended September 30, 2000, the Company derived approximately 89% of
its revenue from customers in the United States. Approximately 11% of total of
revenues were derived from foreign customers located primarily in Israel and
Mexico. All revenues were transacted in U.S. dollars. The Company plans to
expand its operations throughout the world. For the year ended September 30,
2000, 4 customers for whom the Company provided these services each accounted
for 10% or more of the Company's total revenues. These 4 customers combined
provided 65% of the Company's total revenues for the year ended September 30,
2000. For the year ended September 30, 1999, no customer for whom the Company
provided these services represented 10% or more of the Company's total revenues.

The Company will contract with a customer to sell for the customer large blocks
of assets or inventory under asset management, liquidation, or cost recovery
agreements. In an asset management agreement, the Company acts as an agent and
sells the assets for cash receiving a commission based on a percentage of the
proceeds of the sale. The Company records the commission received as revenue
when the asset is shipped.

Under both liquidation and cost-recovery agreements, the Company takes title to
the assets and assumes the risk of loss. The Company is not required, by either
type of agreement, to make any cash payments to the customer for the assets
purchased until such time as the Company sells the assets. These payments
pertain to the portion of assets actually sold. The ultimate cost to the Company
is a contracted percent of the amount the Company sells the inventory for, which
is uncertain until a sale occurs. Accordingly, the Company generally does not
record inventory for any assets purchased under these agreements. When the
Company can determine the cost of the inventory acquired, an estimate of the
selling price for the goods, and that the sale of the assets is reasonably
assured, inventory is recorded. Shipping, handling, and warehousing costs are
included in costs of revenues in the statement of operations.

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WORLDWIDE WEB NETWORX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenues associated with asset management and cost recovery services are equal
to the gross cash received from the sale, because the Company assumes the risk
of loss, and are recognized when the inventory sold is shipped. However, if the
transactions involve the issuance of trade credits, the Company will defer a
portion of the revenues and expenses attributable to cash received and paid
under asset management and cost-recovery agreements to reflect the outstanding
commitment applicable to the future redemption of the trade credits as discussed
below.

The transactions conducted under asset management and cost recovery agreements
can also be settled, in part, in credits to purchase advertising media,
merchandise, or business services ("trade credits"). Trade credits issued to
customers represent the difference between the contracted value of the inventory
as negotiated with the customer and the cash paid to the customer upon the sale
of the inventory. Trade credits are not redeemable by customers for cash. The
contracted value of the inventory is mutually agreed upon by the Company and the
customer at the time an agreement is reached and is usually in excess of the
cash liquidation value. Generally, the Company is not required to remit cash or
any other form of payment other than trade credits for the difference between
the contracted value and the cash paid for the inventory. Certain liquidation
and cost recovery agreements are transacted exclusively in trade credits.

The Company issues two types of trade credits, "combination trade credits" and
"straight trade credits." Under a combination trade credit arrangement, the
customer purchases goods and services from the Company and pays for the goods
and services in both cash and the redemption of trade credits. The ratio of cash
to combination trade credits that make up the total purchase price to be used in
purchases from the Company is determined on a transaction-by-transaction basis.

To redeem combination trade credits, a customer must contact the Company and
request that the Company provide advertising media, merchandise or business
services. The Company will attempt to purchase the requested products for cash
or with a combination of cash and trade credits. The Company has no liability or
obligation to the customer if it is unable to obtain any of the items requested
that are not already within the Company's inventory of services or that it
cannot reasonably obtain. The Company's inventory of services is minimal at any
given time. The Company relies on its ability to readily obtain these services
from its vendors to satisfy its obligations. The obligation to redeem
combination trade credits represents a best efforts obligation of the Company.
The face value of combination trade credits have neither any recordable
obligation nor do they represent a fixed and determinable liability. However, as
noted above, the Company defers a portion of its revenues and expenses
attributed to the cash received and paid under the asset management and cost
recovery agreements to reflect the Company's cost to redeem the trade credits.
When the Company redeems combination trade credits, it recognizes revenue equal
to the cash received from the customer for the goods and services plus, if
applicable, the pro rata portion of the deferred revenues and expenses relating
to the liquidation of the assets that gave rise to the trade credits.

The Company may also issue straight trade credits to its customers. These
credits are issued as an additional incentive to its customers to enter into
asset management and cost recovery agreements. Straight trade credits are
typically issued in conjunction with combination trade credits and similar to
combination trade credits are issued for the purchase of advertising media,
merchandise or business services. However, unlike combination trade credits,
straight trade credits allow the customer to acquire goods and services without
the use of cash. Additionally, the customer and the Company pre-negotiate the
types of media, merchandise or business services for which the straight trade
credits will be redeemed. When the customer redeems straight trade credits, the
Company recognizes revenue equal to the pro rata portion of the deferred revenue
relating to the liquidation of the assets that gave rise to the trade credits.
Cost of revenue is recognized for the cash paid by the Company for the goods and
services purchased on behalf of the customer.

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WORLDWIDE WEB NETWORX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Deferred revenue from asset management, liquidation, cost-recovery, and media
buying services was $3,117,000 and $470,000 at September 30, 2000 and 1999,
respectively.

Unredeemed trade credits totaled $11,708,000 at September 30, 2000. Trade
credits are generally redeemable within periods ranging from 2 to 5 years.
However, in certain transactions there are no specified expiration dates
established for the trade credits. Trade credits redeemable for the next four
years are as follows: $137,000 in 2000, $1,337,000 in 2001, $1,545,000 in 2002,
and $4,514,000 in 2003. Trade credits totaling $4,175,000 have no specified
expiration date.

The Company also generated revenue by providing consulting services throughout
North America during the years ended September 30, 2000 and 1999. Less than 1%
of consulting revenues were derived from foreign customers, outside of the
United States, located principally in Canada. Consulting revenues are recognized
in the period in which the consulting services are performed. The Company
derived 36% of its total revenues for the year ended September 30, 1999 from one
customer to whom it provided consulting services. Of the total consulting
revenues for the year ended September 30, 1999, $529,000 was attributable to
Entrade which was sold in September 1999 (Note 10). For the year ended September
30, 2000, 1.7% of total revenues were derived from consulting services.

CASH EQUIVALENTS

The Company considers as cash equivalents all highly liquid investments with a
maturity of three months or less when purchased.

INVESTMENTS

The Company classifies its investment in Entrade Inc. as available for sale.
Such investments are recorded at fair value based on quoted market prices, with
unrealized gains and losses, if considered to be temporary, recorded as other
comprehensive income or loss until realized. The cost of short-term investments
sold is based on the average cost method.

INVENTORY

Inventories are valued at the lower of cost or market using the first in - first
out (FIFO) costing method. Inventory consists of merchandise received in
exchange for media trade credits and is held for resale to third parties.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the related assets which
average from three to five years. Depreciation of equipment under capital leases
is included in depreciation expense for all periods presented.

SOFTWARE DEVELOPMENT COSTS

Costs incurred in the research and development of new software products and
enhancements to existing software products are expensed as incurred until
technological feasibility has been established. After technological feasibility
is established, any additional development costs are capitalized in accordance
with Statement of Financial Accounting Standards No. 86, ACCOUNTING FOR THE
COSTS OF COMPUTER SOFTWARE TO BE SOLD, LEASED, OR OTHERWISE MARKETED ("SFAS
86"). Capitalization ceases when the product is available for general release to
customers.

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WORLDWIDE WEB NETWORX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Amortization of such capitalized costs is the greater of the amount computed
using (i) the ratio that current gross revenues for a product bear to the total
of current and anticipated future gross revenues of that product or (ii) the
straight-line method over the remaining estimated economic life of the product,
including the period being reported on. Amortization begins when the product is
available for general release to customers. During 1999, the Company recognized
research and development expenses totaling $3,036,000 for proprietary internet
software technologies, which were not technologically feasible at the date they
were purchased. These technologies were purchased from JenCom Digital
Technologies, Inc. and contributed to WWWX-Jencom, LLC (Note 5).

The Company performs an ongoing review of the recoverability of its capitalized
software costs. At the time a determination is made that capitalized amounts are
not recoverable based on the estimated cash flows to be generated from the
applicable software, any remaining capitalized amounts are written off. As of
September 30, 2000, the Company does not have any capitalized software costs.

INTERNAL USE SOFTWARE

Effective for fiscal years beginning after December 15, 1998, the American
Institute of Certified Public Accountants ("AICPA") issued Statement of Position
98-1 ("SOP 98-1"), ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED OR
OBTAINED FOR INTERNAL USE." SOP 98-1 requires all costs related to the
development or purchase of internal use software, other than those incurred
during the application development stage, to be expensed as incurred. Costs
incurred during the application development stage are required to be capitalized
and amortized over the estimated useful life of the software. The Company
adopted SOP 98-1 on October 1, 1998 and capitalized $6,000,000 of software
obtained for internal use (Note 5). Capitalized software costs are amortized on
a straight-line basis over three years. Amortization related to the capitalized
software was $417,000 for the year ended September 30, 1999. In September 1999,
the Company determined that it would not use the software it capitalized and
there was no identified market for its sale to others. Accordingly, the
unamortized balance of this software of $5,583,000 was written off at September
30, 1999. Historically, the Company expensed all costs incurred for web-site
development and no such costs have been incurred during the year ended September
30, 2000.

INTANGIBLE ASSETS

Intangible assets consist of goodwill attributable to businesses acquired.
Goodwill represents the excess of the cost of businesses acquired over the fair
value of the related net assets at the date of acquisition. Goodwill was
amortized using the straight-line method over their expected useful lives of 3
to 5 years.

LONG-LIVED ASSETS

Worldwide Web Networx Corp · S-1 · On 2/26/01

Filed On 2/26/01 12:17pm ET · SEC File 333-56176 · Accession Number 912057-1-6613

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