As filed with the Securities and Exchange Commission on June 11, 1999

Registration Statement No. 333-77917

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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933

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VOYAGER.NET, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware 7389 38-3431501
(State or Other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction Classification Code Number) Identification No.)
of Incorporation or
Organization)

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4660 S. Hagadorn Road, Suite 320
East Lansing, MI 48823
(517) 324-8940
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive office)

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Christopher P. Torto
President and Chief Executive Officer
Voyager.net, Inc.
4660 S. Hagadorn Road, Suite 320
East Lansing, MI 48823
(517) 324-8940
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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Copies to:

David F. Dietz, P.C. Mark G. Borden, Esq.
John B. Steele, Esq. Thomas L. Barrette, Jr., Esq.
Goodwin, Procter & Hoar LLP Hale and Dorr LLP
Exchange Place 60 State Street
Boston, Massachusetts 02109-2881 Boston, Massachusetts 02109
(617) 570-1000 (617) 526-6000

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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.

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, 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. [_]

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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 or until the registration statement
shall become effective on such date as the SEC, acting pursuant to Section
8(a), may determine.

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+We will amend and complete the information in this prospectus. Although we +
+are permitted by U.S. federal securities law to offer these securities using +
+this prospectus, we may not sell them or accept your offer to buy them until +
+the documentation filed with the SEC relating to these securities has been +
+declared effective by the SEC. This prospectus is not an offer to sell these +
+securities or our solicitation of your offer to buy these securities in any +
+jurisdiction where that would not be permitted or legal. +
+ +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION -- JUNE 11, 1999

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- --------------------------------------------------------------------------------
Prospectus

, 1999

Voyager.net, Inc.

Shares of Common Stock

[LOGO]

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

Voyager.net, Inc.: The Offering:

. We are the largest . Voyager.net is
Internet service offering of the
provider focused shares and selling
on the Midwestern stockholders are
United States. offering of the
shares.

. Voyager.net, Inc.
4660 South . The underwriters
Hagadorn Road have an option to
Suite 320 purchase an
East Lansing, additional shares
Michigan 48823 from Voyager.net
(517) 324-8940 and existing
stockholders to
cover the
underwriter's
over-allotment
options.

Proposed symbol &
market:

. VOYN/Nasdaq
National Market

. This is our
initial public
offering, and no
public market
currently exists
for our shares.

. We plan to use the
proceeds from this
offering to repay
our senior bank
debt, to redeem
our outstanding
preferred stock
and subordinated
notes, and for
general corporate
purposes,
including
potential
acquisitions and
capital
expenditures.

. Closing: ,
1999.

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

Per Share Total
---------------------------------------------------

Public offering price: $ $
Underwriting fees: $ $
Proceeds to Voyager.net: $ $
Proceeds to selling stockholders: $ $
---------------------------------------------------

This investment involves risk. See "Risk Factors" beginning on Page 9.

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Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
- --------------------------------------------------------------------------------

Donaldson, Lufkin & Jenrette

First Union Capital Markets Corp.

CIBC World Markets

Facilitator of Internet distribution.

DLJdirect Inc.

[GRAPHIC DESCRIPTION]

An outline of a map showing the States of Wisconsin, Illinois, Michigan,
Indiana and Ohio will be centered. Superimposed on the map of these five states
will be the d/b/a names of EXEC-PC, Freeway, Voyager, Netlink, exchangeNet,
Infinite Systems and Hoosier On-Line, and their respective logos, pointing to
the markets where each provides Internet access services.

Above the map will be the name Voyager.net and to the left of the name will
be Voyager.net's logo. Voyager.net's company philosophy, the services it
provides, its customer service approach and its network are described in
paragraphs surrounding the five state map. Voyager.net's Web address is included
below the map to the right.

TABLE OF CONTENTS

Page

Prospectus Summary.......... 1
Risk Factors................ 9
Use of Proceeds............. 20
Dividend Policy............. 20
Capitalization.............. 21
Dilution.................... 22
Selected Consolidated
Financial and Other Data .. 23
Management's Discussion and
Analysis of Financial
Condition and Results of
Operations................. 25
Business.................... 39
Management.................. 55

Page

Certain Transactions with
Related Parties............ 66
Principal and Selling
Stockholders............... 69
Description of Capital
Stock...................... 71
Shares Eligible For Future
Sale....................... 75
Underwriting................ 77
Legal Matters............... 79
Experts..................... 79
Change in Independent
Accountants................ 80
Where You Can Find More
Information................ 80
Index to Financial
Statements................. F-1

PROSPECTUS SUMMARY

This is only a summary and may not contain all of the information that you
should consider before investing in our common stock. You should read the
entire prospectus carefully, including the "Risk Factors" section and our
consolidated financial statements and the notes to those financial statements
included elsewhere in this prospectus.

Voyager.net, Inc.

Voyager.net is the largest Internet service provider focused on the
Midwestern United States. At May 31, 1999, we had approximately 221,000
subscribers. We operate the largest dial-up Internet network in the Midwest in
terms of geographic coverage, with approximately 150 Voyager.net-owned points
of presence in Michigan, Wisconsin, Ohio, Illinois, Indiana and Minnesota.
Points of presence, or POPs, are facilities located in a particular market
which allow our subscribers to access the Internet through a local telephone
call.

We serve residential and business customers in markets within our target
region which we believe have been historically under-served by the larger,
national providers of Internet service. Our primary service offering is
Internet access to residential and business subscribers. Residential
subscribers use our dial-up service, which allows them to access the Internet
using standard modems in computers. Our business subscribers use either our
dial-up service or our dedicated service, which allows them to have continuous
access to the Internet using traditional telecommunications lines. We offer a
variety of additional Internet services such as maintaining customer Web sites
on our servers, known as Web hosting, and providing telecommunications
facilities for customer-owned Web servers and related equipment, known as co-
location, as well as electronic commerce. In addition, we offer enhanced
communications services such as broadband Internet access services using
digital subscriber lines, which provide high-speed communications over
traditional telephone lines, and modems integrated with cable television
services, or cable modems, and the resale of long distance voice services
bundled with our Internet access products.

The business model that we have developed has resulted in substantial
revenue growth, reduced costs for acquiring new customers and significant
EBITDA while maintaining high customer satisfaction. We define EBITDA as
earnings before interest, taxes, depreciation, amortization and non-recurring,
non-cash compensation charges. EBITDA is not a measure of financial performance
under generally accepted accounting principles and should not be construed as a
substitute for net income or cash flows from operating activities. Our
subscriber base has increased from approximately 17,000 subscribers as of
December 31, 1997 to approximately 188,000 subscribers as of March 31, 1999,
including approximately 5,000 Web hosting customers and approximately 900
dedicated access subscribers. For the three months ended March 31, 1999 our pro
forma revenues, EBITDA and cash flows from operating activities were $9.7
million, $2.7 million, and $4.0 million, respectively, representing EBITDA as a
percentage of revenues of 27.8%. We believe that our business model is scalable
and can be sustained at any level. Our business model is based on the following
key principles:

. We focus on the Midwestern United States. Our regional focus on markets
within the Midwest enables us to conduct highly targeted sales and
marketing

programs, cultivate local brand-name recognition and generate a
significant number of word-of-mouth referrals. As a result, we believe
that our costs to acquire new customers are significantly less than
those of our competitors. Our regional operations also provide us with
a competitive advantage over national Internet service providers
operating in our markets due to our ability to provide broader dial-in
capability using local telephone calls within our region.

. We deliver superior customer care and service. Over 60% of our employees
are dedicated to providing customer and technical support from our two
network operating centers. This customer-oriented operating focus has
allowed us to achieve high customer satisfaction and customer retention
rates which are significantly greater than industry averages. We have
also developed a proprietary Web-based customer care and billing system
which is user-friendly and enables subscribers to sign-up for our
services immediately. Despite our regional focus, we ranked 10th among
national and regional Internet service providers in a recent survey
conducted by PC World Magazine in terms of access speed and
reliability, customer satisfaction and product offerings.

.We own and manage our network equipment. We believe that we are the only
large regional or national consumer-focused Internet service provider
that owns and operates 100% of its network equipment and customer care
operations. Since we own the network equipment at each of our points of
presence, rather than lease services from national carriers, we have
much greater control over the utilization, efficiency, scalability and
quality of our network. This enables us to reduce our telecommunication
cost per customer, the single largest expense for an Internet service
provider.

.We efficiently integrate acquired businesses. Our integration model
generates significant cost savings and economies of scale within a
short time after completing an acquisition while offering improved
performance and a broader range of Internet services to our newly
acquired customers. We typically realize significant cost savings by
transferring network traffic from the acquired Internet service
provider's customers to our regional network and eliminating duplicated
network infrastructure. We also consolidate many operations after an
acquisition, such as sales and marketing, network operations, customer
support, billing and accounting and human resources, into our
operations. In addition, we use our significant purchasing power to re-
negotiate more favorable pricing on telecommunication access lines,
equipment purchases and other vendor services.

Our Market Opportunity

We believe we are well-positioned to capitalize on the significant market
opportunity to provide Internet products and services to our target market:
residential and business customers in the Midwest. For example, International
Data Corporation estimates that:

. the number of U.S. users accessing the World Wide Web will increase
from 51.6 million at the end of 1998 to 135.9 million in 2002;

. the percentage of U.S. households with Internet access will increase
from 29.5% at the end of 1998 to 64.0% at the end of 2002;

. revenues from U.S. consumer Internet access services will increase from
$4.7 billion in 1998 to $10.6 billion in 2002;

. the percentage of U.S. households with broadband Internet access will
grow from 1.0% at the end of 1998 to 13.2% at the end of 2002; and

. revenues from U.S. corporate Internet access services will increase from
$2.9 billion in 1998 to $10.1 billion in 2002.

The rapid expansion of the Internet and its use has resulted in a highly
fragmented Internet service provider market, with over 4,850 providers in the
United States at the end of 1998 according to Boardwatch Magazine. While
approximately 180 of these entities are national service providers, the vast
majority of them are small, local operators with fewer than 10,000 customers
each.

We believe our target markets in the Midwest have been under-served by both
large national providers and by small local providers. Many of the national on-
line service providers do not maintain the same level of marketing presence,
network accessibility and quality of service in small markets within the
Midwest as they do in larger markets. In many of our markets, customers of
national on-line service providers are required to access the Internet through
a long-distance phone call, which can be more expensive for subscribers.
Currently, approximately 98% of our dial-up subscribers can access our network
through a local phone call. While smaller Internet service providers may have a
stronger local presence in certain markets than larger providers, they
typically do not provide a full range of Internet services and lack the
resources to provide high quality, reliable Internet access service, customer
support, and 24 hour per day, seven days per week network monitoring. We
anticipate that a significant number of these local operators, which typically
are not profitable and have limited financial resources to expand their
operations, will make attractive acquisition candidates for us in the future.
We believe that our strong regional presence, high quality Internet products
and services, emphasis on customer care, experienced management team and
financial resources position us to compete effectively in our target markets
against both large and small Internet service providers.

Our Growth Strategy

Our strategy is to capitalize on the substantial growth of the Internet and
be the dominant Internet service provider in the Midwest. We plan to grow our
business through both internal growth initiatives as well as through strategic
acquisitions, as follows:

. maintain our superior customer care and service in order to increase
customer referrals and customer retention;

. continue to invest in our network to provide our subscribers with the
most reliable, high quality, high speed Internet access services at
lower costs;

. continue our highly focused sales and marketing efforts and use of
strategic reseller agreements;

. offer enhanced communications services such as digital subscriber lines,
or DSL, Internet access through the integration with cable television
systems, or cable modems, and the resale of bundled voice and data
services at competitive rates; and

. continue to acquire and integrate local and regional Internet service
providers to increase network utilization and enter new markets.

Our History

Voyager Information Networks, Inc., our wholly-owned operating subsidiary,
was incorporated in 1994 in the State of Michigan and began offering Internet
access services to residential and business customers in 1995. We incorporated
in 1998 in the State of Delaware under the name Voyager Holdings, Inc. We
changed our name to Voyager.net, Inc. on April 29, 1999. Our principal
executive office is located at 4660 South Hagadorn Road, Suite 320, East
Lansing, Michigan 48823. Our telephone number is (517) 324-8940. Our primary
Web page is at http://www.voyager.net. The information on all of our Web sites
is not a part of this prospectus.

Recent Developments

In order to provide greater flexibility in pursuing our growth strategy, we
recently amended our revolving senior credit facility with a syndicate of banks
managed by Fleet National Bank to provide for up to $70.0 million of credit.
The credit facility matures on March 31, 2005. The credit facility is to be
used to fund working capital and permitted acquisitions. Our obligations under
the senior bank debt agreements are secured by all of our assets.

We recently completed the following acquisitions:

. In April, we acquired approximately 5,900 dial-up consumer and Web
hosting subscribers in the greater Chicago, Illinois area from StarNet,
Inc., a Chicago-based Internet service provider;

. In May, we acquired all of the outstanding capital stock of GDR
Enterprises, Inc., a Dayton, Ohio-based provider of Internet services
with approximately 20,000 dial-up, dedicated and Web hosting
subscribers in southern Ohio and parts of Kentucky; and

. In June, we acquired approximately 5,500 dial-up, dedicated and Web
hosting subscribers in the Minneapolis, Minnesota area from Edgeware,
Inc., d/b/a PCLink.com, located in Wayzata, Minnesota.

The Offering

Common stock offered:

By Voyager.net ..................... shares
By the selling stockholders ........ shares
------------
Total .......................... shares

Common stock to be outstanding
after this offering................ shares

Estimated net proceeds to Voyager.net... $

Use of Proceeds ........................

To repay our senior bank debt,
to redeem our outstanding
preferred stock and
subordinated notes and for
general corporate purposes,
including potential
acquisitions and capital
expenditures. See "Use of
Proceeds."

Proposed Nasdaq National Market
symbol ............................ VOYN

The number of shares of our common stock that will be outstanding after this
offering is based on the number outstanding as of March 31, 1999. It excludes:

. shares of common stock issuable pursuant to the over-allotment
option granted to the underwriters;

. shares of common stock issuable upon exercise of stock options
outstanding as of March 31, 1999, with a weighted average exercise
price of $ per share, of which options to purchase shares were then
exercisable; and

. shares of common stock available for future grant under our stock
option plan as of March 31, 1999.

See "Management--Executive Compensation" and "Management--1998 Stock Option
and Incentive Plan."

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

The name Voyager.net and our logo are names and marks which belong to us. We
have a registered trademark for the name VoyagerLink and have registrations for
other names and marks used in this prospectus. This prospectus also contains
the trademarks and trade names of other entities which are the property of
their respective owners.

Unless otherwise stated in this prospectus, the information contained in
this prospectus assumes that the underwriters' over-allotment option is not
exercised and that we have completed a -for-one stock split of our common
stock effected as a dividend which is expected to occur prior to the
consummation of this offering. Unless the context otherwise requires, all
references to Voyager.net includes all of our wholly-owned subsidiaries.

Summary Consolidated Financial and Other Data
(In thousands, except per share and other data)

You should read the following summary consolidated historical financial and
other data along with the sections entitled "Use of Proceeds," "Selected
Consolidated Financial and Operating Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements and notes and other financial and operating data included
elsewhere in this prospectus.

This summary consolidated historical financial and other data includes a
presentation of EBITDA. EBITDA represents earnings before interest, taxes,
depreciation, amortization and non-recurring, non-cash compensation charges.
EBITDA is provided because it is a measure commonly used by investors to
analyze and compare companies on the basis of operating performance. EBITDA is
not a measurement of financial performance under generally accepted accounting
principles and should not be construed as a substitute for operating income,
net income or cash flows from operating activities for purposes of analyzing
our operating performance, financial position and cash flows. EBITDA, as
calculated by Voyager.net, is not necessarily comparable with similarly titled
measures for other companies.

Three Months Ended March
Years Ended December 31, 31,
----------------------------------------------- ---------------------------
Pro Pro
Forma Forma
1995 1996 1997 1998 1998 (1) 1998 1999 1999 (1)

Consolidated Statement
of Operations Data:
Revenue................. $ 202 $ 1,707 $ 3,454 $ 10,722 $ 25,743 $ 1,135 $ 8,519 $ 9,661
Operating expenses...... 893 3,215 4,212 13,271 36,583 1,032 9,749 11,484
------ ------- ------- -------- -------- ------- -------- -------
Income (loss) from
operations............. (691) (1,508) (758) (2,549) (10,840) 103 (1,230) (1,823)
Other income (expense).. 17 10 (62) (912) (3,618) (39) (771) (1,012)
------ ------- ------- -------- -------- ------- -------- -------
Net income (loss)....... (674) (1,498) (820) (3,461) (14,458) 64 (2,001) (2,835)
Preferred stock
dividends.............. -- -- (74) (348) (348) (50) (166) (166)
------ ------- ------- -------- -------- ------- -------- -------
Net income (loss)
applicable to common
stockholders........... $ (674) $(1,498) $ (894) $ (3,809) $(14,806) $ 14 $ (2,167) $(3,001)
====== ======= ======= ======== ======== ======= ======== =======
Per Share Data:
Basic and diluted net
loss per share
applicable to common
stockholders........... $(0.09) $ (0.35) $ (0.12) $ (0.27) $ (1.04) $ 0.00 $ (0.12) $ (0.16)
Weighted average common
shares outstanding..... 7,231 4,316 7,160 14,238 14,238 12,096 18,539 18,539
Other Financial Data:
EBITDA (as defined)..... $ (563) $(1,088) $ (364) $ 1,721 $ 5,630 $ 229 $ 2,297 $ 2,684
EBITDA margin........... (278.7)% (63.7)% (10.5)% 16.1% 21.9% 20.2% 27.0% 27.8%
Capital expenditures.... 411 759 661 1,514 1,743 171 1,321 1,406
Other Data:
Subscribers at end of
period (approximate)... 3,000 10,000 17,000 142,000 160,000 19,000 188,000 208,000
POPs.................... 5 25 32 138 158 35 146 166

Cash Flow Data:
Cash flow provided by
(used in):
Operating activities.... $ (538) $ (877) $ (398) $ 2,702 $ 7,292 $ 215 $ 3,432 $ 3,957
Investing activities.... (408) (759) (574) (34,336) (35,192) (171) (10,692) (10,778)
Financing activities.... 1,980 583 1,488 33,466 30,753 34 9,336 (6,821)

As of March 31, 1999
-------------------------------------
Pro forma As
Actual (unaudited) (1) Adjusted (2)

Consolidated Balance Sheet Data:
Cash and cash equivalents............... $ 4,427 $5,701
Working capital......................... (6,269) (7,232)
Total assets............................ 52,459 63,310
Total long-term debt, notes payable and
capital leases, including current
maturities............................. 43,062 52,261
Total stockholders' equity (deficit).... (725) (1,498)

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

(1) The summary pro forma financial and other data gives effect to the
acquisition of Freeway, Inc., EXEC-PC, Inc., NetLink Systems, L.L.C. and
GDR Enterprises, Inc. as if the acquisition of each of these businesses was
completed as of January 1, 1998. The historical financial data of
Voyager.net, Inc. and the pre-acquisition results of operations of Freeway,
Inc., EXEC-PC, Inc., NetLink Systems, L.L.C. and GDR Enterprises, Inc. were
combined with certain pro forma adjustments to calculate the summary pro
forma financial data for 1998. Additionally, the historical financial data
of Voyager.net, Inc. and the pre-acquisition results of operations of GDR
Enterprises, Inc. were combined with certain pro forma adjustments to
calculate the summary pro forma financial data for March 31, 1999.

(2) Gives effect to the sale of the shares of common stock being offered in
this prospectus and the receipt and application of the net proceeds from
this offering as discussed in this prospectus.

RISK FACTORS

You should carefully consider the following factors and all other
information contained in this prospectus before purchasing our common stock. If
any of the events described in the risk factors below actually occur, our
business could be adversely affected. In that case, the trading price of our
common stock could decline, and you could lose all or part of the money you
paid to buy our common stock.

This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in the forward-looking statements as a result of specific factors,
including the risks described below and elsewhere in this prospectus.

Our recent substantial growth and planned future growth could strain our
managerial, operational and financial resources

We have expanded our operations rapidly during the past eighteen months and
intend to continue to aggressively pursue existing and potential market
opportunities. Much of this growth is attributable to several recent
acquisitions, including the acquisition of substantially all of the assets of
EXEC-PC, Inc., which was double our size at the time of acquisition. Our rapid
growth has placed, and is expected to continue to place, a strain on our
managerial, operational and financial resources. In order to manage our growth,
we must improve our operational systems, procedures and controls on a timely
basis, retain key employees and maintain our customer relationships. Also, if
the demands placed on our network resources by our growing subscriber base
outpace our growth and operating plans, the quality and reliability of our
service may decline, our relationships with our customers may be harmed and, as
a result, our business may suffer.

Our growth strategy and acquisitions may not be successful

Our growth strategy is largely dependent upon acquiring the business and
assets of Internet service providers within the Midwest. We may not be
successful, however, in locating or acquiring additional businesses in the
future. We also may encounter substantial competition from other Internet
service providers and telecommunications providers which are seeking to
consolidate operations within our region. Some of these competitors may have a
larger subscriber base and greater financial resources. Our inability to
continue acquiring these businesses on favorable terms in the future could have
an adverse effect on our business, financial condition and results of
operations.

Our business could be adversely affected if we fail to integrate our
acquisitions successfully

Our continued success as a regional Internet service provider will depend in
large part on our ability to successfully integrate the operations and
management of the Internet service provider businesses that we have acquired
and will acquire in the future. A significant component of our growth is
attributable to our acquisitions, particularly the EXEC-PC acquisition. Failure
to successfully integrate EXEC-PC and the other businesses

we have acquired or will acquire in the future may result in significant
operating inefficiencies, which may hurt our operating results. In addition, to
integrate these acquired businesses, we may have to expend substantially more
managerial, operating, financial and other resources than we have planned,
which would have an adverse effect on our results of business, financial
condition and results of operations. Any future acquisition could result in the
use of significant amounts of cash, potentially dilutive issuances of equity
securities, or the incurrence of debt or amortization expenses related to
goodwill and other intangible assets, any of which could adversely affect our
business, operating results and financial condition. In addition, acquisitions
involve numerous risks, including:

.difficulties in the assimilation of the operations, technologies, products
and personnel of the acquired company;

.the diversion of management's attention from other business concerns;

.risks of entering markets in which we have no or limited prior experience;
and

.the potential loss of key employees of the acquired company.

We have a limited operating history at our current scale and may face
difficulties encountered by companies operating in new and rapidly evolving
markets

We were incorporated in June 1994 and began offering Internet access to the
public in December 1995. Only recently have we grown significantly, primarily
as a result of our acquisitions. As a result, we have only operated at this
size for a limited time. When making your investment decision and evaluating
our business and prospects, you should consider the risks and difficulties we
may encounter in the new and rapidly evolving Internet service provider market,
especially given our limited operating history at this size. These risks
include our ability to:

.expand our subscriber base and increase subscriber revenues;

.compete favorably in a highly competitive market;

.attract and retain qualified employees;

.develop strategic relationships;

.introduce new products and services; and

.continue to develop and upgrade our network systems and infrastructure.

We cannot be certain that we will successfully address any of these risks.

We have a history of operating losses and expect future losses

We incurred net losses of approximately $1.5 million, $0.8 million and $3.5
million in the fiscal years ended December 31, 1996, 1997 and 1998,
respectively. Although we have grown our revenues substantially in recent
periods, we cannot assure you that we will be able to sustain these growth
rates or avoid future net losses. We expect to continue to make significant
operating and capital expenditures and, as a result, we will need to generate
significant revenues to achieve and maintain profitability. If we do achieve
profitability, we cannot be certain that we will be able to sustain our
profitability in future periods.

Our annual and quarterly operating results are subject to significant
fluctuations and, as a result, period-to-period comparisons of our results of
operations are not necessarily meaningful and should not be relied upon as
indicators of future performance

We have experienced significant fluctuations in our results of operations on
a quarterly and annual basis. We expect to continue to experience significant
fluctuations in our future quarterly and annual results of operations due to a
variety of factors, many of which are outside of our control, including:

.demand for and market acceptance of our services;

.customer retention;

.the timing and magnitude of capital expenditures, including costs relating
to the expansion of operations and network infrastructure;

.introductions of new services or enhancements by us and our competitors;

.increased competition in our markets within the Midwest;

.growth of Internet use and establishment of Internet operations by
mainstream enterprises;

.changes in our and our competitors' pricing policies; and

.general economic conditions affecting our industry.

We face intense competition in our business from other Internet service
providers and telecommunications providers

We face intense competition in conducting our business, and we expect the
competition to intensify as the Internet becomes more popular in the future.
Our competitors include national, regional and local Internet service
providers, telecommunications companies, competitive local exchange carriers
and cable television operators. Some of these competitors have much larger
subscriber bases than ours and in some cases greater financial, technical and
marketing resources. Furthermore, a number of our competitors offer a broader
variety of access and data services, including Internet access through high
speed digital subscriber lines and cable modems, and may have done so for
longer periods of time. Every local market within the region in which we
participate or intend to participate is served by multiple Internet access
providers of various type. As a result of increased competition in our
industry, we expect to encounter significant pricing pressure. We cannot be
certain that we will be able to offset the effects of any required price
reductions through an increase in the number of our subscribers, higher
revenues from our enhanced business services, cost reductions or otherwise, or
that we will have the resources to continue to compete successfully. You should
read "Business--Competition" for a more complete discussion on the competitive
factors and competitors in our industry.

We face the uncertainty of customer retention

We believe that our long-term success depends largely on our ability to
retain our existing customers while continuing to attract new customers. We
continue to invest significant resources in our network infrastructure and
customer and technical support

capabilities to provide high levels of customer care. We cannot be certain that
these investments will maintain or improve our customer retention rate. We
believe that intense competition from our competitors, some of which offer free
hours of service or other enticements for new customers, has caused, and may
continue to cause, some of our customers to switch to our competitors'
services. We are also susceptible to losing customers that we acquire through
our acquisitions due to the customers' lack of familiarity with Voyager.net and
the billing and network difficulties which sometimes occur after an
acquisition. In addition, some new subscribers use the Internet only as a
novelty and do not become consistent users of Internet services and, therefore,
may be more likely to discontinue their service. These factors may adversely
affect our subscriber retention rates, which would have an adverse effect on
our business and operating results.

If we are unable to obtain the additional capital required to continue to grow
our business, we may be required to modify our growth and operating plans

Our ability to grow depends significantly on our ability to expand our
operations through internal growth and by acquiring other Internet service
providers, which require significant capital resources. We anticipate that our
cash requirements for 1999 will include disbursements for some or all of the
following purposes:

.potential acquisitions;

.expansion of our network infrastructure;

.development of enhanced services offerings;

.interest expense and repayment of senior indebtedness; and

.working capital and general corporate purposes.

If the proceeds from this offering, after these and other expenditures, are
not sufficient to meet our cash requirements, we will need to seek additional
capital from public or private equity and debt sources to fund our growth and
operating plans and respond to other contingencies, which may include:

.increases in our growth rate;

.shortfalls in anticipated revenues or increases in expenses;

.the development of new products and services; or

.the expansion of our customer care operations, including the recruitment
of additional customer care and support personnel.

We cannot be certain that we will be able to raise additional capital in the
future on terms acceptable to us or at all. If alternative sources of financing
are insufficient or unavailable, we may be required to modify our growth and
operating plans in accordance with the extent of available financing.

Our ability to provide access services to our customers would be interrupted if
our third-party suppliers and telecommunications carriers discontinue doing
business with us and we were unable to find adequate replacements

We depend on third-party suppliers of hardware components and
telecommunications carriers to provide equipment and telecommunications
services

in a reliable and secure manner. We currently acquire hardware components used
in our network system from a few primary sources, including high performance
routers and servers manufactured by Cisco Systems, Inc. and modems manufactured
by Lucent Technologies, Inc. and 3Com Corporation. We currently rely on several
local telephone companies, such as Ameritech Corporation, GTE Corporation and
MCI WorldCom, to lease to us data communications capacity via local
telecommunications lines and leased long-distance lines. We also have
relationships with competitive local exchange carriers such as Brooks Fiber
(MCI WorldCom) and Phone Michigan (Mcleod). Our suppliers and
telecommunications carriers also sell or lease products and services to our
competitors and may be, or may become, our competitors. Expansion of our
network infrastructure and other competitors' needs will continue to place a
significant demand on our suppliers and telecommunications carriers. We cannot
be certain that our suppliers and telecommunications carriers will continue to
sell or lease their products and services to us at commercially reasonable
prices or at all. Difficulties in developing alternative sources of supply, if
required, could adversely affect our business, financial condition and
operating results. Moreover, failure of our telecommunications providers to
promptly provide the data communications capacity required by us could cause
interruptions in our ability to provide access services to our customers, which
may adversely affect our business, financial condition and operating results.

If we are unable to continue to upgrade our network infrastructure to meet
additional demand and changing subscriber requirements, our business and
financial results could be adversely affected

Our network infrastructure is composed of a complex system of routers,
switches, transmission lines and other hardware used to provide Internet access
and other services. The future success of our business will depend on the
capacity, reliability and security of this network infrastructure. We will have
to continue to upgrade and adapt our network infrastructure as the number of
customers and the amount and type of information they wish to transmit over the
Internet increases. This development of our network infrastructure will require
substantial financial, operational and managerial resources. We cannot be
certain that we will be able to upgrade or adapt our network infrastructure to
meet additional demand or changing customer requirements on a timely basis and
at a commercially reasonable cost, or at all. If we fail to upgrade our network
infrastructure on a timely basis or adapt it to an expanding customer base,
changing customer requirements or evolving industry standards, our business
could be adversely affected.

Disruptions of our services due to system failure could result in subscriber
cancellations which may adversely affect our business and financial results

A significant portion of our computer equipment, including critical
equipment dedicated to our Internet access services, is presently located at
two network operating centers: one in East Lansing, Michigan and the other in
New Berlin, Wisconsin. The occurrence of a natural disaster, the failure of one
of our systems or the occurrence of other unanticipated problems at our network
operating centers or at one of our points of

presence could cause interruptions in our services. Extensive or multiple
interruptions in providing customers with Internet access and other services
are a primary reason for customer decisions to cancel the use of Internet
access services. Accordingly, any disruption of our services due to system
failure could have an adverse effect on our business and financial results.

We must adapt to technology trends and evolving industry standards to remain
competitive

The Internet market is characterized by rapid changes due to technological
innovation, evolving industry standards, changes in customer needs and frequent
new service and product introductions. New services and products based on new
technologies or new industry standards expose us to risks of equipment
obsolescence. We will need to use leading technologies effectively, continue to
develop our technical expertise and enhance our existing services on a timely
basis to compete successfully in the Internet access industry. We cannot be
certain that we will be successful in these efforts.

We are also at risk due to fundamental changes in the way that Internet
access may be delivered in the future. Currently, Internet access services are
accessed primarily by computers connected by telephone lines. Recently, several
companies, including Voyager.net through our relationship with Millennium
Digital Media Systems, L.L.C., began offering continuous, high speed Internet
access through the use of cable television systems and cable modems. These
cable modems have the ability to transmit data at substantially faster speeds
than the modems currently used by our customers over phone lines. As the
Internet becomes accessible by broad segments of the U.S. population through
these cable modems and other consumer electronic devices, such as Web-TV, or as
customer requirements change the means by which Internet access is provided, we
will have to modify our technologies to accommodate these developments and
remain competitive. Our continued development and implementation of these
technological advances may require substantial time and expense, and we cannot
be certain that we will succeed in adapting our Internet access services
business to alternative access devices and conduits. Our failure to respond in
a timely and effective manner to these and other new and evolving technologies
could have a negative impact on our business, financial condition and operating
results.

If Internet usage does not continue to grow, we may not be able to continue our
business plan

Widespread use of the Internet is a relatively recent phenomenon. Our future
success depends on continued growth in the use of the Internet and the
continued development of the Internet as a viable commercial medium. We cannot
be certain that Internet usage will continue to grow at or above its historical
rates or that extensive Internet content will continue to be developed or
accessible for free or at nominal cost to users. If Internet use does not
continue to grow or users do not accept our products and services, our
business, financial condition and operating results could be adversely
affected.

State and federal government regulation could require us to change our business

We provide Internet access and other services, in part, using
telecommunications services provided by carriers that are subject to the
jurisdiction of state and federal regulators. Due to the increasing popularity
and use of the Internet, state and federal regulators may adopt additional laws
and regulations relating to content, user privacy, pricing, copyright
infringement and other matters. We cannot predict the impact, if any, that
future regulation or regulatory changes may have on our business. You should
read "Business--Government Regulation" for a more detailed discussion of the
government regulation to which we may be subject.

We will be subject to additional government regulation relating to our
competitive local exchange carrier status

One of our subsidiaries, EriNet Telecom, Inc., is authorized as a
competitive local exchange carrier, or CLEC, with the State of Ohio and we may
in the future seek CLEC status in other states within our operating region. To
the extent we conduct business as a CLEC, the telecommunications services that
we provide will be subject to federal, state and local regulation, which may
include tariff and price listing requirements and state certification
proceedings. We could incur substantial legal and administrative expenses if a
third party challenged our filed tariffs or our status as a competitive local
exchange carrier. In addition, some state statutes include provisions requiring
competitive local exchange carriers to obtain additional approval in the event
of certain changes in the ownership of the outstanding voting securities of
CLECs. In connection with our acquisition of GDR Enterprises, Inc. we have
filed a petition for approval of change in ownership of EriNet Telecom which
approval we anticipate will be obtained prior to consummation of this offering.
We cannot assure you that this approval will be granted at such time or at all.
You should read "Business--Government Regulation" for a more detailed
discussion of the regulations to which we will be subject as a result of our
status as a competitive local exchange carrier.

We face potential liability for material transmitted through our network or
retrieved through our services

The law relating to the liability of Internet services providers for
information carried on or disseminated through their networks is unsettled. In
addition, the Federal Telecommunications Act of 1996 imposes fines on any
entity that knowingly permits any telecommunications facility under its control
to be used to make obscene or indecent material available to minors via an
interactive computer service. We cannot predict whether any claim under the
federal statute, similar state statutes or common law will be asserted against
us, or if asserted, whether it will be successful. As the law in this area
develops, we may be required to expend substantial resources or discontinue
certain services to reduce our exposure to the potential imposition of
liability. Any costs that we incur as a result of contesting any asserted
claims or the consequent imposition of liability could adversely affect our
business and operating results.

In addition, because our users may download materials and subsequently
distribute them to others, persons may potentially make claims against us for
defamation, negligence, copyright or trademark infringement, personal injury or
other claims based on the nature, content, publication and distribution of such
materials. We also could be exposed to liability with respect to the offering
of third-party content that may be accessible through our services. It is also
possible that if any third-party content provided through our services contains
errors, third parties who access this material could make claims against us for
losses incurred in reliance on this information. We also offer e-mail services,
which expose us to other potential risks, such as liabilities or claims
resulting from unsolicited e-mail, lost or misdirected messages, illegal or
fraudulent use of e-mail or interruptions or delays in e-mail service. These
claims, whether with or without merit, likely would divert management's time
and attention, may result in negative publicity and could result in significant
costs to investigate and defend.

We are subject to risks associated with year 2000 compliance

Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field. These date code fields
will need to accept four digit entries to distinguish 21st century dates from
20th century dates. Confusion of dates may bring about system failures or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices or engage
in similar business activities. As a result, many companies' software and
computer systems need to be upgraded or replaced in order to comply with such
"year 2000" requirements.

We rely on third party telecommunications and information systems equipment
and software that may not be year 2000 compliant to provide our services. We
are in the early stages of conducting an audit of our own systems and of our
third-party suppliers as to the year 2000 compliance of their systems. Based
upon the results of this assessment, we have developed and implemented a
remediation plan with respect to third-party software, computer technology and
services that may fail to be year 2000 compliant. At this time, the expenses
associated with this assessment and remediation plan cannot be determined. We
presently believe that the most reasonably likely worst case scenario related
to the year 2000 issue is associated with third-party services and products,
specifically our network, telecommunications lines and equipment. The
disruption to or failure of our internal computer systems or of third-party
equipment or software to operate without year 2000 complications could result
in the interruption or failure of our services, could require us to incur
significant unanticipated expenses to remedy any problems, could expose us to
claims for losses incurred by our users due to year 2000 complications and
could cause customers to seek alternative Internet service providers. The
defense of any claims, whether with or without merit, could require us to incur
substantial costs and would divert management's time and attention, which could
have an adverse effect on our business and operating results. In addition, we
are subject to external forces that might generally affect industry and
commerce, such as utility company year 2000 compliance failures and related
service interruptions. You should read "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Year 2000 Compliance."

Our success is dependent upon our senior management team

Our success will depend in large part on the continued availability of our
senior management team. The loss of the services of any of the members of our
senior management team could have an adverse effect on our business, financial
condition and results of operations. We maintain a key man life insurance
policy on each of our executive officers, however the proceeds from insurance
policies are not an adequate replacement for these individuals' services.
Although we have entered into employment agreements and noncompetition
agreements with each of our executive officers, we cannot assure you that these
agreements will be enforceable or that we will enjoy the continued service of
our senior management. You should read "Management--Employment Agreements" for
a more detailed description of our arrangements with senior management.

There has been no prior public market for our common stock

Before this offering, there has been no public market for our common stock.
We have applied to the Nasdaq National Market to list our common stock, but we
cannot offer any assurance that an active trading market for these shares will
develop or continue or how liquid that market might become following this
offering, or that purchasers in this offering will be able to resell their
shares at prices equal to or greater than the initial public offering price.
The initial public offering price will be determined through negotiations
between us and the underwriters and may not be indicative of the market price
for these shares following this offering. You should read "Underwriting" for a
discussion of the factors to be considered in determining the initial public
offering price.

The market price of our shares of common stock may experience extreme price and
volume fluctuations

The stock market has, from time to time, experienced extreme price and
volume fluctuations. Many factors may adversely affect the market price for our
common stock following this offering, including:

.the demand for our common stock;

.the number of market makers for our common stock;

.investor perception of the Internet, the Internet industry generally and
the Internet service provider industry in particular;

.general technology or economic trends;

.revenues and operating results failing to meet or surpass the expectations
of securities analysts or investors in any quarter; and

.changes in securities analysts' estimates or general market conditions.

In the past, companies that have experienced volatility in the market price
of their stock have been the object of securities class action litigation. If
we become the object of securities class action litigation, it could result in
substantial costs and a diversion of our management's attention and resources
and have an adverse effect on our business, financial condition and results of
operations.

Our existing stockholders will control all matters requiring a stockholder vote
and, as a result, could prevent or delay a change in control

Upon the closing of this offering, our existing directors, officers and
stockholders will beneficially own approximately % of our outstanding common
stock. In particular, Media/Communications Partners II Limited Partnership and
Media/Communications Investors Limited Partnership will retain approximately %
of our outstanding stock in the aggregate. If all of these stockholders were to
vote their shares of common stock together as a group, these stockholders would
have the ability to exert significant influence over our board of directors and
its policies. Control by existing stockholders could have the effect of
delaying, deferring or preventing a change in control because these
stockholders will be in a position to control the outcome of all stockholder
votes, including votes concerning director elections, by-law amendments and
possible mergers, corporate control contests and other significant corporate
transactions. See "Principal and Selling Stockholders."

Provisions of Delaware law and of our charter and by-laws may make a takeover
more difficult

Provisions in our certificate of incorporation and by-laws, as amended and
restated, and in the Delaware corporate law may make it difficult and expensive
for a third party to pursue a tender offer, change in control or takeover
attempt which is opposed by our management. Stockholders who might desire to
participate in such a transaction may not have an opportunity to do so, and the
ability of stockholders to change our management could be substantially impeded
by these anti-takeover provisions. We also will have a staggered board of
directors that has the right under our charter documents to issue preferred
stock without further stockholder approval, which could adversely affect the
holders of our common stock and the potential for a tender offer or change in
control. See "Description of Capital Stock."

The estimated initial public offering price is significantly higher than the
book value of our common stock and you will experience immediate and
substantial dilution in the value of your investment

As a purchaser of our common stock in this offering, you will experience
immediate and substantial dilution of $ per share in the net tangible book
value of the common stock from the initial public offering price. To the extent
outstanding options to purchase common stock are exercised, you will experience
further dilution. See "Dilution."

The future sale of shares of our common stock could adversely affect the market
price of our common stock

Substantial sales of our common stock in the public market following this
offering, or the perception by the market that such sales could occur, could
lower the market price of our common stock or make it difficult for us to raise
additional equity capital in the future. The shares of common stock which are
being sold in this offering will generally be freely tradeable without
restriction, and:

. the remaining shares of common stock outstanding will be "restricted
securities" as defined in Rule 144 under the Securities Act, and may be
sold in the future without registration under the Securities Act
subject to compliance with the provisions of Rule 144 or any other
applicable exemption under the Securities Act; and

. existing stockholders have registration rights requiring us to register
up to shares of common stock for sale under the Securities Act.

Upon expiration of lock-up agreements entered into with the underwriters,
180 days after the date of this prospectus, shares of common stock, and
shares of common stock issuable as a result of the exercise of vested options,
will be eligible for resale in accordance with the provisions of the Securities
Act.

You should read "Shares Eligible for Future Sale" for a more detailed
description of these risks.

Covenants in our debt agreements may restrict our business

Our existing senior bank debt agreements contain a number of significant
covenants. These covenants limit our ability to, among other things, borrow
additional money, create liens, make some types of investments, issue
additional equity securities, declare and pay dividends and sell significant
assets. They also require us to meet certain financial tests. Our ability to
meet those financial tests may be affected by events beyond our control. If we
are unable to meet our debt service obligations or comply with these covenants,
we will be in default under these agreements. A default, if not waived, could
result in acceleration of our repayment obligations, which would have a
significantly adverse effect on our financial condition. You should read
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" for a more detailed description of
our debt agreements.

We do not intend to pay dividends

We have never declared nor paid any cash dividends on shares of our common
stock. We currently intend to retain our earnings for future growth and,
therefore, do not anticipate paying any dividends in the foreseeable future. In
addition, under the terms of our senior bank debt agreements, we are prohibited
from paying any cash dividends to our stockholders. See "Dividend Policy."

USE OF PROCEEDS

We estimate that our net proceeds from the sale of our common stock will be
approximately $ million, at an assumed initial offering price of $ per
share and after deducting the estimated underwriting discounts and commissions
and offering expenses payable by us in connection with this offering. If the
underwriters' over-allotment option is exercised in full, we estimate that our
net proceeds will be approximately $ million. We expect to use all of these
estimated net proceeds as follows:

.to repay approximately $ million of senior bank debt under our senior
credit facility with a number of lending institutions, including
accrued and unpaid interest, which senior bank debt bears interest at a
variable rate, currently set at 8.0% per annum, and matures on March
31, 2005;

.to redeem all 82,748 outstanding shares of series A preferred stock in the
aggregate face amount of approximately $8.3 million, plus cumulative
undeclared dividends;

.to repay approximately $ million of subordinated notes owed to Horizon
Cable I Limited Partnership, including accrued and unpaid interest,
which notes bear interest at a rate of 8.0% compounded annually; and

.for general corporate purposes, including potential acquisitions and
capital expenditures.

Except for repayment of the outstanding bank debt and subordinated notes and
the redemption of the shares of outstanding series A preferred stock, the net
proceeds will be invested in government securities and other short-term,
government-grade investment securities until allocated for specific use. We
will receive no proceeds from the sale of common stock in this offering by the
selling stockholders.

We used the borrowings under our senior credit facility and the proceeds
that we received from the issuance of the series A preferred stock and
subordinated notes primarily to finance our consummated acquisitions as well as
for general corporate purposes. The shares of series A preferred stock and,
indirectly through Horizon, the subordinated notes are held by
Media/Communications Partners II Limited Partnership, Media/Communications
Investors Limited Partnership and Messrs. Friedly, Baird and Heinze, each a
Voyager.net stockholder.

DIVIDEND POLICY

We have never declared nor paid any dividends on our common stock. Under the
terms of our senior bank debt agreements, we are prohibited from paying any
dividends to our stockholders other than dividends payable in shares of common
stock to our stockholders. In addition, we currently intend to retain our
earnings for future growth and, therefore, do not anticipate paying cash
dividends in the foreseeable future.

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 1999:

.on an actual basis;

.on a pro forma basis to give effect to the acquisition of GDR Enterprises,
Inc.; and

.on an as adjusted basis to give effect to our receipt of the estimated net
proceeds from the sale of the shares of common stock offered by
Voyager.net at an assumed initial public offering price of $ per
share, after deduction of underwriting discounts and estimated expenses
payable in connection with the offering, and the use of the net
proceeds as described in "Use of Proceeds."

You should read this table in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our financial
statements and the notes to those statements included elsewhere in this
prospectus.

The table below excludes shares of common stock issuable upon exercise of
outstanding stock options at a weighted average exercise price of $ per share
and additional shares of common stock available for future grant under our
1998 Stock Option and Incentive Plan as of March 31, 1999. See "Management--
Executive Compensation" and "Management--1998 Stock Option and Incentive Plan."

As of March 31, 1999
--------------------------------
Pro Forma
Actual (unaudited) As Adjusted
(in thousands)

Cash and cash equivalents..................... $ 4,427 $ 5,701 $
======= ======= ====
Current portion of long-term debt:
Capital leases.............................. $ 392 $ 392
Notes payable, related party................ 2,297 2,297
------- ------- ----
Total current portion of long-term debt..... 2,689 2,689
------- ------- ----
Long-term debt:
Obligations under capital leases............ 973 973
Long-term debt.............................. 39,400 48,600
------- ------- ----
Total long-term debt.......................... $40,373 $49,573 $
------- ------- ----
Stockholders' equity (deficit):
Series A preferred stock, $0.01 par value
per share: 100,000 shares authorized;
82,748 shares issued and
outstanding actual (includes 6,667 shares
subject to purchase at March 31, 1999 that
were purchased on May 3, 1999); shares,
as adjusted................................ 8,275 8,275
Common stock, $0.0001 par value per share:
25,000,000 shares authorized; 18,916,380
shares issued and outstanding actual,
shares, as adjusted..................... 2 3
Additional paid-in capital.................. 6,413 6,462
Receivable for preferred and common stock..... (6,667) (6,667)
Accumulated deficit........................... (8,748) (9,571)
------- ------- ----
Total stockholders' equity (deficit)........ (725) (1,498)
------- ------- ----
Total capitalization...................... $42,337 $50,764 $
======= ======= ====

DILUTION

As of March 31, 1999, we had a pro forma net tangible book value of
($34,576,995) or ($1.87) per share. Pro forma net tangible book value per share
is equal to our total tangible assets less total liabilities, divided by the
number of shares of our outstanding common stock. Without taking into account
any other changes in net tangible book value after March 31, 1999, other than
to give effect to our receipt of the estimated net proceeds from the sale of
the shares of common stock offered hereby at an assumed initial public
offering price of $ per share, our pro forma net tangible book value as of
March 31, 1999 would have been $ , or $ per share. This represents an
immediate increase in pro forma net tangible book value of $ per share to our
existing stockholders and an immediate dilution of $ per share to new
investors. If the initial public offering price is higher or lower than $ per
share, the dilution to new stockholders will be lower or higher, respectively.
The following table illustrates this per share dilution:

Assumed initial public offering price per share................... $
Pro forma net tangible book value per share before this
offering....................................................... $
Increase per share attributable to new investors................
Pro forma net tangible book value per share after this offering... $
----
Dilution per share to new investors............................... $
====

Assuming the underwriters exercise their right to purchase additional
shares from us, the pro forma net tangible book value per share as of March 31,
1999 would have been $ , representing an immediate increase in net tangible
book value per share of $ to our existing stockholders and an immediate
dilution in net tangible book value per share of $ to new investors.

The following table summarizes, on a pro forma basis as of March 31, 1999,
the difference between existing stockholders and new investors with respect to
the number of shares of common stock purchased, the total consideration paid
and the average price per share paid:

Shares Purchased Total Consideration
------------------- --------------------- Average Price
Number Percent Amount Percent Per Share

Existing stockholders... % $ % $
New investors...........
--------- ----------
Total................. 100.0% $ 100.0%
========= ==========

The foregoing table excludes:

. shares to be issued pursuant to the underwriters' over-allotment
option;

.shares of common stock subject to outstanding options at March 31, 1999 at
a weighted average exercise price of $ per share; and

.an aggregate of shares available for future grant under our 1998 Stock
Option and Incentive Plan as of March 31, 1999.

To the extent these options are exercised and the underlying shares are
granted, there will be further dilution to new investors. See "Management" and
the notes to our financial statements included elsewhere in this prospectus.

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(In thousands, except per share and other data)

The following tables sets forth selected consolidated financial information
and other data for Voyager.net. The selected consolidated results of operations
and the selected historical consolidated balance sheet data for the years ended
December 31, 1995, 1996, 1997, and 1998 have been derived from the audited
consolidated financial statements of Voyager.net. The selected consolidated
financial information and other data as of March 31, 1999 and for the three
months ended March 31, 1998 and 1999 are unaudited; however, in the opinion of
our management the unaudited data includes all adjustments (consisting of
normal recurring adjustments) necessary for a fair presentation of the
information. The results of operations for the three months ended March 31,
1999 are not necessarily indicative of the results to be expected for the year
ending December 31, 1999 or any other future period. The pro forma information
and other data for the year ended December 31, 1998 and the three months ended
March 31, 1999 are unaudited. The pro forma information and other data is not
necessarily indicative of the results of operations that would actually have
occurred if the acquired business transactions included therein had been
consummated as of January 1, 1998. For all periods presented, the related
financial information has been presented using consistent methods of
accounting.

You should read the following selected historical consolidated financial
statements and other data in conjunction with our consolidated financial
statements and notes thereto and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

The selected consolidated financial data as of and for the year ended
December 31, 1994 are not presented since we had just begun operations. As of
December 31, 1994, total assets were approximately $140,000 and total revenue
for the year then ended was approximately $20,000.

The selected consolidated financial and other data includes a presentation
of EBITDA. As used in this prospectus, EBITDA represents earnings before
interest, taxes, depreciation, amortization and non-recurring, non-cash
compensation charges. EBITDA is provided because it is a measure commonly used
by investors to analyze and compare companies on the basis of operating
performance. EBITDA is not a measurement of financial performance under
generally accepted accounting principles, and should not be construed as a
substitute for operating income, net income or cash flows from operating
activities for purposes of analyzing our operating performance, financial
position and cash flows. EBITDA, as calculated by Voyager.net, is not
necessarily comparable with similarly titled measures for other companies.

Years Ended December 31, Three Months Ended March 31,
---------------------------------------------- ---------------------------------
Pro Pro
Forma Forma
1995 1996 1997 1998 1998 (1) 1998 1999 1999 (1)

Consolidated Statement
of Operations Data:
Revenues:
Internet access
service............... $ 202 $ 1,707 $ 3,440 $10,589 $ 25,593 $ 1,132 $ 8,405 $ 9,547
Other.................. -- -- 14 133 150 3 114 114
------ ------- ------- ------- -------- -------- --------- ----------
Total revenue.......... 202 1,707 3,454 10,722 25,743 1,135 8,519 9,661
------ ------- ------- ------- -------- -------- --------- ----------
Operating expenses:
Internet access service
costs................. 143 1,002 1,318 3,608 9,620 370 2,790 3,108
Sales and marketing.... 101 638 1,038 1,987 2,923 181 969 1,053
General and
administrative........ 521 1,155 1,462 3,406 7,570 355 2,463 2,816
Depreciation and
amortization.......... 128 420 394 3,862 16,062 126 3,527 4,507
Compensation charge for
issuance of common
stock and stock op-
tions................. -- -- -- 408 408 -- -- --
------ ------- ------- ------- -------- -------- --------- ----------
Total operating
expenses.............. 893 3,215 4,212 13,271 36,583 1,032 9,749 11,484
------ ------- ------- ------- -------- -------- --------- ----------
Income (loss) from
operations ............ (691) (1,508) (758) (2,549) (10,840) 103 (1,230) (1,823)
Other income (expense).. 17 10 (62) (912) (3,618) (39) (771) (1,012)
------ ------- ------- ------- -------- -------- --------- ----------
Net income (loss)....... $ (674) $(1,498) $ (820) $(3,461) $(14,458) $ 64 $ (2,001) $ (2,835)
Preferred stock
dividends.............. -- -- (74) (348) (348) (50) (166) (166)
------ ------- ------- ------- -------- -------- --------- ----------
Net income (loss)
applicable to common
stockholders........... $ (674) $(1,498) $ (894) $(3,809) $(14,806) $ 14 $ (2,167) $ (3,001)
====== ======= ======= ======= ======== ======== ========= ==========
Per Share Data:
Basic and diluted net
loss per share
applicable to common
stockholders........... $(0.09) $ (0.35) $ (0.12) $ (0.27) $ (1.04) $ 0.00 $ (0.12) $ (0.16)
====== ======= ======= ======= ======== ======== ========= ==========
Weighted average common
shares
outstanding............ 7,231 4,316 7,160 14,238 14,238 12,096 18,539 18,539
Other Financial Data:
EBITDA (as defined)..... $ (563) $(1,088) $ (364) $ 1,721 $ 5,630 $ 229 $ 2,297 $ 2,684
EBITDA margin........... (278.7)% (63.7)% (10.5)% 16 .1% 21.9% 20.2% 27.0% 27.8%
Capital expenditures.... 411 759 661 1,514 1,743 171 1,321 1,406

Other Data:
Subscribers at end of
period
(approximate).......... 3,000 10,000 17,000 142,000 160,000 19,000 188,000 208,000
POPs.................... 5 25 32 138 158 35 146 166

Consolidated Balance
Sheet Data:
Cash and cash
equivalents............ $1,055 $ 3 $ 519 $ 2,350 $ 4,121 $ 597 $ 4,427 $ 5,701
Working capital......... 917 (275) (1,785) (6,242) (7,243) (1,902) (6,269) (7,232)
Total assets............ 1,603 1,186 2,101 41,725 45,014 2,297 52,459 63,310
Total long-term debt,
notes payable and capi-
tal leases, including
current maturities..... 73 871 2,155 33,308 34,307 2,189 43,062 52,261
Total stockholders'
equity (deficit)....... 1,350 (148) (539) 1,276 1,324 (475) (725) (1,498)

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

(1) The selected pro forma financial and other data gives effect to the
acquisition of Freeway, Inc., EXEC-PC, Inc., NetLink Systems, L.L.C. and
GDR Enterprises, Inc. as if the acquisition of each of these businesses was
completed as of January 1, 1998. The historical financial data of
Voyager.net, Inc. and the pre-acquisition results of operations of Freeway,
Inc., EXEC-PC, Inc., NetLink Systems, L.L.C. and GDR Enterprises, Inc. were
combined with certain pro forma adjustments to calculate the summary pro
forma financial data for 1998. Additionally, the historical financial data
of Voyager.net, Inc. and the pre-acquisition results of operations of GDR
Enterprises, Inc. were combined with certain pro forma adjustments to
calculate the summary pro forma financial data for March 31, 1999.

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

Read the following discussion together with the financial statements and
related notes included elsewhere in this prospectus. The results discussed
below are not necessarily indicative of the results to be expected in any
future periods. This discussion contains forward-looking statements based on
current expectations and which involve risks and uncertainties. Actual results
and the timing of certain events may differ significantly from those projected
in such forward-looking statements due to a number of factors, including those
set forth herein, in the section entitled "Risk Factors" and elsewhere in this
prospectus.

General

We are the largest Internet service provider focused on the Midwestern
United States. We incorporated in June 1994 and began offering Internet access
to residential and business customers in Michigan in 1995. From 1995 to 1997,
we focused on building our network infrastructure in Michigan as well as
developing the core competencies to grow our business. We funded the initial
build-out of our network and development of our operations primarily through an
aggregate $2.5 million in debt and equity capital from Horizon Cable I Limited
Partnership, Media/Communications Partners II Limited Partnership and
Media/Communications Investors Limited Partnership. In 1998, we began pursuing
an acquisition program focused on acquiring regional and local Internet service
providers throughout the Midwest. This program allowed us to expand into new
markets as well as to increase the utilization of Voyager.net-owned points of
presence network infrastructure and operations. During 1998, we acquired seven
Internet service providers in the Midwest with approximately 100,000
subscribers, including the acquisition of EXEC-PC, Inc., a consumer-based
Internet service provider located in Milwaukee, Wisconsin with 80,000
subscribers. We funded these acquisitions primarily with $4.8 million of equity
capital raised from private equity investors and through a $40.0 million
revolving credit facility with a group of banks led by Fleet National Bank. The
credit facility was increased to $70.0 million on April 13, 1999. Thus far in
1999, we have acquired an additional six Internet service providers with
approximately 60,000 subscribers in the aggregate. We currently operate the
largest dial-up Internet network in the Midwest in terms of geographic
coverage, with approximately 150 Voyager.net-owned points of presence in
Michigan, Wisconsin, Ohio, Illinois, Indiana and Minnesota. Through a
combination of internal growth and acquisitions, we have increased our
subscriber base from approximately 17,000 subscribers at the end of December
1997 to approximately 188,000 subscribers as of March 31, 1999, including
approximately 5,000 Web hosting subscribers and approximately 900 dedicated
access subscribers.

Revenues and Expenses

Our revenues are generally composed of:

.dial-up Internet access services, or services which allow customers to
access the Internet through a local telephone call using standard
modems in computers;

.dedicated Internet access services, or continuous connection to the
Internet using dedicated, high-speed access lines; and

.additional Web and communications services, such as Web hosting, or
maintaining customer Web sites on our servers and computers, co-
location, or providing telecommunications facilities for customer owned
Web servers and equipment, electronic commerce, and other broadband
voice and data services.

Dial-up Internet access service revenues consist of monthly, quarterly,
semi-annual and annual prepaid subscriptions for Internet access services. We
offer dial-up Internet access to residential and small- and medium-sized
business customers. Advance collections relating to prepaid subscriptions for
future access services are recorded as deferred revenue when collected and
revenue is recognized ratably over the term of the prepaid subscription.
Subscribers may cancel their subscriptions at any time, in which case we charge
the subscribers for their subscription to the date of cancellation and refund
any remaining amounts prepaid. Cash received from prepaid subscribers is
classified as deferred revenue when received, and no cash reserves are
maintained for potential refund obligations. A majority of our residential
subscribers pay their monthly fee automatically by a pre-authorized monthly
charge to their credit card.

Dedicated Internet access services revenues are offered on a monthly,
yearly, three-year and five-year subscription basis. We offer dedicated
Internet access services using leased dedicated telecommunication lines
primarily to business customers, with Internet access using digital subscriber
lines and cable modems offered to both residential and business customers. The
revenue recognition policies and customer cancellation practices described for
the dial-up Internet access services also apply to the dedicated access
services.

We also provide a wide range of Web services such as Web hosting, co-
location, registering customer domain names and Internet addresses, and
electronic commerce. We derive recurring revenue from Web site hosting
primarily on a fixed-rate monthly basis. We charge our co-location customers
monthly fees based on the physical use of our facilities. Other services such
as domain name and Internet address registration, e-commerce services and other
consulting services are typically offered at a fixed-rate basis or time plus
materials basis. We also provide long distance voice services offered through a
reseller relationship with IXC Communications Services, Inc. Revenue from long-
distance service is recognized as used by the customer. Payments from customers
for prepaid calling card services are recorded as deferred revenue when
collected and revenue is recognized as the prepaid subscription is used.

The average monthly rate at which we experienced customer cancellations and
non-renewals of subscriptions, or churn rate, was 2.6% and 2.1% for the year
ended December 31, 1998 and the three months ended March 31, 1999,
respectively. We calculate our churn rate by dividing (1) the number of
subscriber cancellations and non-renewals during the month (excluding
cancellations made by new customers during the first 30 days of service) by (2)
the average number of subscribers during the month. We devote

substantial resources to maintain high quality customer care, and we are
continually upgrading and expanding our network infrastructure to ensure high
levels of customer satisfaction. We believe that our emphasis and focus on
customer care has resulted in one of the lowest churn rates in the industry,
and we expect to maintain or improve this rate by ensuring that customer
support and care are always high priorities for all of our employees.

Our operating costs and expenses include the following:

.internet access service cost;

.sales and marketing expenses;

.general and administrative expenses; and

.depreciation and amortization expenses.

Internet access service costs includes costs for providing local telephone
lines into each Voyager.net-owned point of presence, costs associated with
leased lines connecting each point of presence to our two network operation
centers, costs for our connections from our network operating centers to the
Internet, billing and bad debt expense and other technical related expenses.
Telecommunication costs include the costs of data circuits, dial-in line
expenses and connectivity fees. Billing costs include credit card processing
fees, banking fees and customer billing expenses. Internet access service costs
for Web hosting consists primarily of telecommunication costs. Internet access
service costs for other non-recurring value added services consists of
licensing fees and cost of labor and overhead performing the service. Internet
access service costs for reselling of long distance services consists of third-
party wholesale costs of the products resold. Other technical related expenses
primarily consist of maintenance contracts and domain name registration costs.
As we execute our acquisition strategy in the future, we expect increased
Internet access service costs on an absolute dollar basis, but lower Internet
access service costs on a percentage basis as a result of continued revenue
growth, reduction of redundant costs, consolidation of operations and re-
negotiation of pricing on telecommunication, equipment and other vendor
contracts.

Sales and marketing costs consist of salaries and commissions for sales,
marketing and business support personnel, advertising and promotion expenses
and commissions for value added resellers. Since 1998, we have expanded our
marketing and sales efforts as we have expanded our geographic coverage,
increased our subscriber base, acquired additional businesses and introduced
new products and services. We expect increases in the absolute spending for
sales and marketing, but we expect these costs to be more than offset by the
increase in customer revenues that will be achieved. We do not defer any costs
associated with obtaining or retaining customers or entering new markets.

General and administrative expenses consist of compensation costs for
business development, finance, accounting and billing, customer and technical
support and administration personnel and occupancy costs. Since January 1998,
we have hired several members of our senior management. We are currently
seeking to hire additional personnel to support our growth. We expect increases
in general and administrative expenses on an

absolute dollar basis as we continue to execute our acquisition strategy and
expand our operations, but we expect these costs to be more than offset by the
increase in customer revenues that will be achieved. On a monthly per customer
basis and as a percentage of revenue, we expect our general and administrative
expenses to decrease over time.

Depreciation expense is recognized over the estimated useful lives of our
property and equipment ranging from three to ten years on a straight-line
basis. Capital investment typically consists of networking equipment such as
routers, servers, and various internal network components, telecommunications
gear such as access modems, computer equipment and general office equipment
with a useful life in excess of one year. Equipment acquired under a capital
lease is depreciated over the related lease term or the estimated productive
useful life, depending on the criteria met in determining their qualification
as a capital lease. Amortization expense generally consists of the costs
associated with acquiring our customer base, which is amortized using the
straight-line method over three years. Additional amortization expenses consist
of bank debt financing fees and miscellaneous costs associated with the
development of other assets such as our proprietary customer care and billing
system.

We have historically not paid any income taxes due to our net losses. As of
December 31, 1998, we had deferred tax assets for federal income tax purposes
of approximately $1.5 million, which are primarily related to net operating
loss carryforwards. These deferred tax assets have been offset by recognition
of corresponding valuation allowances. These deferred tax assets expire in the
years 2013 and 2018.

We have historically experienced negative cash flow from operations and have
incurred net losses as a result of our efforts to build our network
infrastructure, develop our management team, provide quality customer care
programs and acquisition-related spending. We had net losses of $1.5 million,
$0.8 million and $3.5 million for the years ended December 31, 1996, 1997 and
1998, respectively, and net income of $64,000 and net loss of $2.0 million for
the three months ended March 31, 1998 and 1999, respectively. At March 31,
1999, we had an accumulated deficit of $8.7 million.

We intend to capitalize on our successful business model to expand our
geographic operations and increase our subscriber base through continued
internal growth as well as through strategic acquisitions. As a result, we
expect that our Internet access service costs, sales and marketing, general and
administrative, and depreciation and amortization costs will increase on an
absolute dollar basis. However, we expect continued growth in our revenues to
result in increased operating cash flow and EBITDA, both in terms of absolute
results and as a percentage of revenues. Our revenues, cash flows from
operations and EBITDA were $8.5 million, $3.4 million and $2.3 million,
respectively, for the three months ended March 31, 1999, representing an EBITDA
margin of 27.0%, compared to revenues, cash flows from operations and EBITDA of
$1.1 million, $215,000 and $229,000, respectively, for the three months ended
March 31, 1998, representing an EBITDA margin of 20.2%. Our ability to generate
positive cash flow from operations and achieve profitability is dependent upon
our ability to continue to grow our revenue base and achieve operating
efficiencies.

As used in this prospectus, EBITDA represents earnings before interest,
taxes, depreciation, amortization and non-recurring, non-cash compensation
charges. EBITDA is provided because it is a measure commonly used by investors
to analyze and compare companies on the basis of operating performance. EBITDA
is not a measurement of financial performance under generally accepted
accounting principles, and should not be construed as as substitute for
operating income, net income or cash flows from operating activities for
purposes of analyzing our operating performance, financial position and cash
flows. EBITDA, as calculated by Voyager.net, is not necessarily comparable with
similarly titled measures for other companies.

Acquisitions

Our acquisition strategy is designed to leverage our existing network and
administrative operations to allow us to enter new markets within the Midwest,
as well as to expand our presence in existing markets, and to realize economies
of scale. Since July 1, 1998 we have acquired 13 Internet service provider
businesses in the Midwest totaling approximately 160,000 subscribers. Below is
a summary of our completed acquisitions, with the number of customers acquired
calculated at the respective date of acquisition:

Number of
Company Date Location Customers

CDL Corp. 7/1/98 Monroe, MI 550
Internet-Michigan, Inc. 7/1/98 Hastings, MI 1,000
Freeway, Inc. 7/31/98 Petoskey, MI 10,000
EXEC-PC, Inc. 9/23/98 Milwaukee, WI 80,000
Netimation, Inc. 10/2/98 East Lansing, MI 500
NetLink Systems, L.L.C. 10/2/98 Kalamazoo, MI 7,500
Add, Inc. 11/20/98 Waupaca, WI 500
Hoosier On-Line Systems, Inc. 1/15/99 Seymour, IN 8,000
Infinite Systems, Ltd. 2/24/99 Columbus, OH 12,500
Exchange Network Services, Inc. 3/10/99 Cleveland, OH 8,000
StarNet, Inc. 4/23/99 Chicago, IL 5,900
GDR Enterprises, Inc. 5/7/99 Dayton, OH 20,000
PCLink.com 6/4/99 Wayzata, MN 5,500

Our acquisition activity has primarily been financed with $4.8 million of
equity capital from private equity investors and loans from a $40.0 million
revolving credit facility with a group of banks managed by Fleet National Bank.
We increased the overall capacity of our credit facility to $70.0 million on
April 13, 1999.

Voyager.net is currently in various levels of acquisition discussions with a
number of Internet service providers in targeted markets in the Midwest.
However, we cannot assure you that we will successfully complete any of the
acquisitions we are currently evaluating.

Results of Operations

The following table sets forth certain consolidated statement of operations
data for the years ended December 31, 1996, 1997 and 1998 and the three months
ended March 31, 1998 and 1999 as a percentage of revenue. This information
should be read with our consolidated financial statements and notes included
elsewhere in this prospectus.

Three Months
Year Ended December 31, Ended March 31,
--------------------------- ----------------
1996 1997 1998 1998 1999
(unaudited)

Revenue:
Internet access service..... 100.0% 99.6% 98.8% 99.7% 98.7%
Other....................... -- 0.4 1.2 0.3 1.3
------- ------- ------- ------- -------
Total revenues............ 100.0 100.0 100.0 100.0 100.0
------- ------- ------- ------- -------
Operating expenses:
Internet access service
costs...................... 58.7 38.2 33.6 32.6 32.7
Sales and marketing......... 37.4 30.0 18.5 15.9 11.4
General and administrative.. 67.6 42.3 31.8 31.3 28.9
Depreciation and
amortization............... 24.6 11.4 36.0 11.1 41.4
Compensation charge for
issuance of common stock
and stock options.......... -- -- 3.8 -- --
------- ------- ------- ------- -------
Total operating expenses.. 188.3 121.9 123.7 90.9 114.4
------- ------- ------- ------- -------
Other income (expense), net... 0.6 (1.8) (8.5) (3.4) (9.1)
------- ------- ------- ------- -------
Net income (loss)......... (87.7)% (23.7)% (32.2)% 5.7% (23.5)%
======= ======= ======= ======= =======
EBITDA Margin............. (63.7)% (10.5)% 16.1% 20.2% 27.0%
======= ======= ======= ======= =======

Three Months Ended March 31, 1999 Compared to March 31, 1998

Revenues. Total consolidated revenues increased from $1.1 million for the
three months ended March 31, 1998 to $8.5 million for the three months ended
March 31, 1999, representing an increase of 650.6%. The revenue growth was
primarily driven by the increase in our customer base from approximately 19,000
at March 31, 1998 to approximately 188,000 at March 31, 1999. The growth in
customers was primarily the result of our acquisitions. We also experienced
strong internal growth from our effort to provide high quality customer and
technical service and support, geographic expansion in our coverage areas and
low churn rates. In addition, we introduced several new service offerings, such
as DSL and long distance telephone service, which generated additional revenue
from our customer base.

Internet access service costs. Internet access service costs increased from
$370,000 for the three months ended March 31, 1998 to $2.8 million for the
three months ended March 31, 1999. Internet access service costs as a percent
of revenue remained relatively constant at approximately 33.0% due to improved
telecommunication contracts and economies of scale. The increase in absolute
spending for the three months ended March 31, 1999 was driven by a significant
increase in customers and their associated network expenses and an increase in
billing costs. We expect to improve our gross margins in the future as we more
fully integrate our acquired companies and leverage our existing network and
back office infrastructure over a larger customer base.

Sales and marketing. Sales and marketing expense increased from $181,000 for
the three months ended March 31, 1998 to $1.0 million for the three months
ended March 31, 1999. The increase in spending was attributable to the growth
in our customer base and support functions and the expansion of our geographic
coverage area. As a percentage of revenue, sales and marketing costs decreased
from 15.9% for the three months ended

March 31, 1998 to 11.4% for the three months ended March 31, 1999. The
improvement in sales and marketing expenses as a percentage of revenues
reflects lower customer acquisition costs from our effective customer care and
referral programs spread over a larger revenue base.

General and administrative. General and administrative expenses increased
from $355,000 for the three months ended March 31, 1998 to $2.5 million for the
three months ended March 31, 1999. The absolute increase in spending was due to
the growth of our business and the administrative functions necessary to
support our growth. As a percentage of revenue, general and administrative
costs decreased from 31.3% for the three months ended March 31, 1998 to 28.9%
for the three months ended March 31, 1999. The improvement on a percentage
basis represents leveraging of resources across an increased customer base.

Depreciation and amortization. Depreciation and amortization expense
increased from $126,000 for the three months ended March 31, 1998 to $3.5
million for the three months ended March 31, 1999. This increase was a result
of the amortization of intangible assets related to acquiring our customer base
since March 31, 1998, as well as increased capital spending for expanded
network operations and infrastructure.

Other income (expense), net. Other expenses, net increased from $39,000 for
the three months ended March 31, 1998 to $0.8 million for the three months
ended March 31, 1999. This increase is the result of the higher average balance
on our $40.0 million line-of-credit which was used to fund acquisitions
completed during 1998.

Net income (loss). As a result of the above, we reported net income of
$64,000, or less than $0.01 per share applicable to common stockholders, for
the three months ended March 31, 1998 as compared to net loss of $2.0 million,
or $0.12 per share applicable to common stockholders, for the three months
ended March 31, 1999.

EBITDA. EBITDA increased from $229,000 for the three months ended March 31,
1998 to $2.3 million for the three months ended March 31, 1999. As a percentage
of revenues, EBITDA increased from 20.2% for the three months ended March 31,
1998 to 27.0% for the three months ended March 31, 1999.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Revenues. Total consolidated revenues increased from $3.5 million for the
year ended December 31, 1997 to $10.7 million for the year ended December 31,
1998, representing an increase of 210.4%. The revenue growth was primarily
driven by the increase in our customer base from approximately 17,000 at
December 31, 1997 to approximately 142,000 at December 31, 1998. The growth in
customers was primarily a result of the seven acquisitions during 1998, which
added approximately 100,000 subscribers to our customer base.

Internet access service costs. Internet access service costs increased from
$1.3 million for the year ended December 31, 1997 to $3.6 million for the year
ended December 31, 1998. Internet access service costs as a percent of revenue
decreased from

38.2% for the year ended December 31, 1997 to 33.6% for the year ended December
31, 1998 due to improved telecommunication contracts and economies of scale.
The increase in absolute spending for the year ended December 31, 1998 was
driven by a significant increase in customers and their associated network
expenses and an increase in billing costs.

Sales and marketing. Sales and marketing expense increased from $1.0 million
for the year ended December 31, 1997 to $2.0 million for the year ended
December 31, 1998. The increase in absolute spending was a result of the rapid
growth of our operations and the acquisitions completed during 1998. As a
percentage of revenue, sales and marketing costs decreased from 30.0% for the
year ended December 31, 1997 to 18.5% for the year ended December 31, 1998. The
improvement of sales and marketing expenses as a percentage of revenues
reflects the efficiencies of our marketing programs over a larger customer
base.

General and administrative. General and administrative expenses increased
from $1.5 million for the year ended December 31, 1997 to $3.4 million for the
year ended December 31, 1998. The absolute increase in spending was due to the
increase in support functions and basic infrastructure necessary to support the
expansion of our business and the acquisition activity. As a percentage of
revenue, general and administrative expenses decreased from 42.3% for the year
ended December 31, 1997 to 31.8% for the year ended December 31, 1998. The
improvement on a percentage basis represents efficiencies achieved through the
integration of acquired businesses and leveraging resources across an increased
customer base.

Depreciation and amortization. Depreciation and amortization expense
increased from $394,000 for the year ended December 31, 1997 to $3.9 million
for the year ended December 31, 1998. This increase was a result of the
amortization of intangible assets related to acquiring our customer base since
December 31, 1997, as well as increased capital spending for expanded network
operations and infrastructure.

Compensation charge for issuance of common stock and stock options. We
incurred a charge of $408,000 for the year ended December 31, 1998 related to
the issuance of common stock and stock options during the year ended December
31, 1998. The amount of this charge was based on the issuance and grant of
common stock and options at purchase and exercise prices below fair market
value. We believe these charges to be non-recurring in nature. However, upon
the closing of this offering the vesting provisions of some issued and
outstanding stock options and restricted common stock will accelerate, which
acceleration will result in additional compensation expense of approximately
$38,000 from April 1, 1999 through the anticipated closing date of this
offering.

Other income (expense), net. Other expenses, net increased from $62,000 for
the year ended December 31, 1997 to $0.9 million for the year ended December
31, 1998. This increase is the result of the higher average balance on our $40
million line-of-credit which was used to fund acquisitions completed during
1998.

Net income (loss). As a result of the above, we reported a net loss of $0.8
million, or $0.12 per share applicable to common stockholders, for the year
ended December 31,

1997 as compared to a net loss of $3.5 million, or $0.27 per share applicable
to common stockholders, for the year ended December 31, 1998.

EBITDA. EBITDA increased from ($364,000) for the year ended December 31,
1997 to $1.7 million for the year ended December 31, 1998. As a percentage of
revenues, EBITDA increased from (10.5%) for the year ended December 31, 1997 to
16.1% for the year ended December 31, 1998.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues. Total consolidated revenues increased from $1.7 million for the
year ended December 31, 1996 to $3.5 million for the year ended December 31,
1997, representing an increase of 102.5%. The revenue growth was primarily
driven by the increase in our customer base from approximately 10,000 at
December 31, 1996 to approximately 17,000 at December 31, 1997. The growth in
customers was the result of the development of our core Internet access service
business.

Internet access service costs. Internet access service costs increased from
$1.0 million for the year ended December 31, 1996 to $1.3 million for the year
ended December 31, 1997. Internet access service costs as a percent of revenue
decreased from 58.7% for the year ended December 31, 1996 to 38.2% for the year
ended December 31, 1997 due to economies of scale in the increased size of our
operations. The increase in absolute spending for the year ended December 31,
1997 was driven by a significant increase in customers and their associated
network expenses and an increase in billing costs due to rapid customer growth.

Sales and marketing. Sales and marketing expense increased from $0.6 million
for the year ended December 31, 1996 to $1.0 million for the year ended
December 31, 1997. The increase in sales and marketing on an absolute basis was
the result of the subscriber growth during 1997. As a percentage of revenue,
sales and marketing costs decreased from 37.4% for the year ended December 31,
1996 to 30.0% for the year ended December 31, 1997.

General and administrative. General and administrative expenses increased
from $1.2 million for the year ended December 31, 1996 to $1.5 million for the
year ended December 31, 1997. The absolute increase in spending was due to the
increase in administrative functions to support our growing subscriber base. As
a percentage of revenue, general and administrative costs decreased from 67.6%
for the year ended December 31, 1996 to 42.3% for the year ended December 31,
1997.

Depreciation and amortization. Depreciation and amortization expense
decreased from $420,000 for the year ended December 31, 1996 to $394,000 for
the year ended December 31, 1997.

Other income (expense), net. Other income, net decreased from $10,000 for
the year ended December 31, 1996 to ($62,000) for the year ended December 31,
1997.

Net income (loss). As a result of the above, we reported a net loss of $1.5
million, or $0.35 per share applicable to common stockholders, for the year
ended December 31, 1996 as compared to a net loss of $0.8 million, or $0.12 per
share applicable to common stockholders, for the year ended December 31, 1997.

EBITDA. EBITDA increased from ($1.1) million for the year ended December 31,
1996 to ($364,000) for the year ended December 31, 1997. As a percentage of
revenues, EBITDA increased from (63.7%) for the year ended December 31, 1996 to
(10.5%) for the year ended December 31, 1997.

Quarterly Results of Operations

The following tables set forth the statement of operations data for the
periods indicated. This information has been derived from our unaudited
consolidated financial statements, which in management's opinion has been
prepared on substantially the same basis as the audited financial statements
and includes all adjustments, consisting only of normal recurring adjustments
necessary for a fair presentation of the financial condition and results of
operations for these periods. The operating results for any quarter are not
necessarily indicative of results for any future period.

Three Months Ended
--------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
1998 1998 1998 1998 1999
(In thousands, except per share and subscriber data)

Revenue:
Internet access
service.............. $ 1,132 $ 1,222 $ 2,042 $ 6,193 $ 8,405
Other................. 3 -- 4 126 114
------- ------- ------- ------- -------
Total revenues...... 1,135 1,222 2,046 6,319 8,519
Operating expenses:
Internet access
service costs........ 370 429 818 1,991 2,790
Sales and marketing... 181 224 390 1,192 969
General and
administrative....... 355 466 657 1,928 2,463
Depreciation and
amortization......... 126 143 345 3,248 3,527
Compensation charge
for issuance of
common stock and
stock options........ -- -- 408 -- --
------- ------- ------- ------- -------
Total operating
expenses........... 1,032 1,262 2,618 8,359 9,749
------- ------- ------- ------- -------
Income (loss) from
operations............. 103 (40) (572) (2,040) (1,230)
Other income (expense),
net.................... (39) (38) (96) (739) (771)
------- ------- ------- ------- -------
Net income (loss)....... $ 64 $ (78) $ (668) $(2,779) $(2,001)
Preferred stock
dividends.............. (51) (51) (80) (166) (166)
------- ------- ------- ------- -------
Net income (loss)
applicable to common
stockholders........... $ 13 $ (129) $ (748) $(2,945) $(2,167)
======= ======= ======= ======= =======
Basic earnings net
(loss) per share
applicable to common
stockholders........... $ 0.00 $ (0.01) $ (0.05) $ (0.16) $ (0.12)
Weighted average common
shares outstanding..... 12,096 12,114 14,722 17,912 18,539
EBITDA (as defined)..... 229 103 180 1,209 2,297

Subscribers
(approximate).......... 19,000 20,000 118,000 142,000 188,000

Our quarterly operating results have fluctuated and will continue to
fluctuate from period-to-period depending upon certain factors. Factors that
may contribute to the variability of operating results include: the growth rate
of new customers, retention of

existing customers, the timing of the expansion of our operations, the payment
of interest related to the fully utilized revolving credit facility, the
introduction of new and enhanced services by us, competitive pricing
pressures, changes in our ability to negotiate favorable rates for the use of
its network infrastructure, customer demand for Internet services and
increased costs for retaining employees.

In view of the significant growth of our operations, management believes
that period-to-period comparisons of its financial results should not be
relied upon as an indication of future performance and that we may experience
in the future significant period-to-period fluctuations in operating results.
We expect to focus in the near term on building and increasing our revenue
base, which will require additional expenses for personnel, marketing, and
network infrastructure that may adversely impact short term operating results.
As a result, there can be no assurance that we will be profitable on a
quarterly basis in the future and management believes that it will incur
losses in at least the near term.

Liquidity and Capital Resources

Our principal capital and liquidity needs historically have related to
funding the cash portion of our acquisitions, our sales and marketing
activities, the development and expansion of our network infrastructure, the
establishment of our customer service and support operations and general
working capital needs. The capital needs of our company were initially met in
1996 and 1997 by loan advances from Horizon Cable I Limited Partnership and
private placements of our securities to our principal stockholders, as further
described below. As we grew our operations during 1998, we received capital
from other sources, including cash provided by operating activities, proceeds
from the issuance of debt and notes payable and through private placements of
our securities, as further described below.

Net cash provided by operating activities was $2.7 million in 1998,
compared to net cash used in operating activities of $398,000 in 1997. The
primary sources of cash from operating activities in 1998 were increases in
deferred revenue of $1.2 million, increases in accounts payable and accrued
expenses of $1.3 million, and $3.9 million in depreciation and amortization.
These sources were partially offset by a $3.5 million net loss and increased
accounts receivable of $0.5 million.

Net cash used in investing activities was $34.3 million in 1998, compared
to net cash used in investing activities of $0.6 million in 1997. Cash used in
investing activities in 1998 consisted of $32.9 million to acquire seven
Internet service provider businesses and $1.5 million for the purchase of
capital equipment. Cash used in investing activities in 1997 primarily relates
to the purchase of capital equipment.

Net cash provided by financing activities was $33.5 million in 1998,
compared to cash provided in financing activities of $1.5 million in 1997. The
primary sources of cash from financing activities in 1998 were net borrowings
of $30.0 million under our revolving credit facility, net proceeds of $2.8
million from the issuance of notes payable and net proceeds of $2.1 million
from the issuance of series A preferred stock, partially offset by a payment
of $1.3 million for bank financing fees.

In September 1998, we entered into a $40.0 million revolving credit facility
with a bank group led by Fleet National Bank. At March 31, 1999, $39.4 million
was outstanding. On April 13, 1999, we increased our availability under our
credit facility to $70.0 million on similar terms and conditions. Interest is
payable quarterly with the first payment on December 31, 1998. The bank
agreements allow us to elect an interest rate as of any borrowing date of
either the (1) prime rate or (2) LIBOR, plus a margin ranging from 1.5% to 3.5%
depending upon our funded debt to EBITDA ratio. The elected rate as of March
31, 1999 was approximately 8.0%. Automatic and permanent reductions of the
maximum commitments begin September 30, 2000 and continue until maturity.

In September 1998, we issued series A preferred stock and common stock for
gross proceeds of approximately $0.5 million to private investors and
cancellation of outstanding promissory notes. In July 1998, $4.3 million was
raised through the issuance of preferred stock, common stock and promissory
notes to private investors. In 1997, we raised $0.5 million from the issuance
of series A preferred stock to private investors.

As of March 31, 1999, our principal sources of liquidity consisted of $4.4
million of cash and cash equivalents, and approximately $0.6 million of
available credit under our revolving credit facility. In the opinion of
management, we will be able to finance our business as currently conducted and
as currently planned from operating cash flow, current working capital,
available borrowing capacity under our line-of-credit and the net proceeds of
this offering for a period of at least the next twelve months.

Year 2000 Compliance

Introduction. The term "year 2000 issue" is generally used to describe the
various computer and other problems that may result from the improper
processing of dates and date-sensitive calculations as the year 2000 approaches
and is reached. These problems arise from hardware and software unable to
distinguish dates in the "2000s" from dates in the "1900s" and from other
sources such as the use of special codes and conventions in software that use a
date field. These problems could result in a system failure of miscalculations
causing disruptions of operations, including among other things, a temporary
inability to process transactions, send invoices or engage in other normal
business activities. The year 2000 issue may pose additional problems due to
the fact the year 2000 is a leap year and some computers and programs may fail
to recognize the extra day.

Our State of Readiness. We have undertaken an assessment of our
vulnerability to the year 2000 issue with respect to our software, equipment,
and other information systems. We based this assessment upon a review of our
network and software, communications with our software vendors,
telecommunications providers and third-party suppliers. To date, we have not
experienced any problems with year 2000 issues with either third-party or
internal systems. Our year 2000 readiness program is supervised by our
executive committee and we review our year 2000 program on a monthly basis.

Our overall year 2000 readiness program consists of the following steps:

. developing a complete inventory of our hardware and software and
assessing whether each specific piece of equipment or software is year
2000 compliant;

. contacting all of our major equipment vendors to ensure that the
equipment or software purchase has been tested and verified as year 2000
compliant;

. testing all of our internal equipment and software to insure that it is
year 2000 compliant;

. upgrading, repairing, or replacing all internal or purchase equipment or
software to ensure that it is year 2000 compliant; and

. developing contingency plans to address potential year 2000 problems
which are not directly in our control or have not previously been tested
or repaired.

Specific areas in our year 2000 program which have been completed:

. upgrading our internal customer care system which includes our billing,
technical support, and customer support modules and which is now year
2000 compliant;

. contacting our major equipment providers, including Oracle, Cisco,
Gateway, 3Com, and Sun Microsystems, and receiving disclosure statements
that all of the equipment or software purchased from these vendors is
year 2000 compliant; and

. replacing all modems, servers and other telecommunications equipment
which had been tested and reviewed as non-year 2000 compliant.

Contingency Plans for Year 2000 problems. For the equipment and software
which is directly in our control, we have started the development of various
contingency plans for year 2000 problems. We do rely, however, on equipment
purchased by third-party vendors, over which we have no control. We have and
will continue to take the necessary steps in order to assure that the equipment
purchased from third-party vendors is year 2000 compliant. We expect to
complete all of our year 2000 testing by October 1, 1999.

Cost to Address Year 2000 Issues. Our historical costs to assess our year
2000 readiness have been negligible. We are not currently able to estimate the
final aggregate cost of addressing the year 2000 issue because funds may be
required as a result of future findings. We do not expect these costs to have
an adverse effect on our business and financial results.

Risks Presented by Year 2000 Issues. We are still in the process of
evaluating potential disruptions or complications that might result from year
2000-related problems. Our failure to correct a material year 2000 problem
could result in a complete failure or degradation of the performance of our
network or other systems, including the disruption of operations and normal
business activities. Presently, however, we believe that the most reasonably
likely worst case scenario related to the year 2000 issue is associated with
third-party services and products. Specifically, Voyager.net is heavily
dependent on a significant number of third-party vendors to provide both
network services, telecommunications lines and equipment. A significant year
2000-related disruption of the services provided to us by third-party vendors
could cause customers to consider seeking

alternate Internet access providers or cause an unmanageable burden on customer
service and technical support, which in turn could materially and adversely
affect our results of operations, liquidity and financial condition. We are not
presently aware of any vendor-related year 2000 issue that is likely to result
in such a disruption. Furthermore, Voyager.net's business depends on the
continued operation of, and widespread access to, the Internet. To the extent
the year 2000 issue disrupts the normal operation of the Internet, our results
of operations, liquidity and financial condition could be materially and
adversely affected. Although there is inherent uncertainty in the year 2000
issue, we expect that as we progress with our year 2000 readiness plan, the
level of uncertainty about the impact of the year 2000 issue on us will be
reduced and we should be better positioned to identify the nature and extent of
material risk to us as a result of any year 2000 disruptions.

Forward-Looking Statements

This prospectus contains forward-looking statements that involve substantial
risks and uncertainties. You can identify these statements by forward-looking
words such as "may," "will," "expect," "anticipate," "believe," "estimate" and
"continue" or similar words. You should read statements that contain these
words carefully because they discuss our future expectations, contain
projections of our future results of operations or of our financial condition
or state other "forward-looking" information. We believe that it is important
to communicate our future expectations to our investors. However, there may be
events in the future that we are not able to accurately predict or control. The
factors listed in the sections captioned "Risk Factors" as well as any
cautionary language in this prospectus, provide examples of risks,
uncertainties and events that may cause our actual results to differ materially
from the expectations we describe in our forward-looking statements. Before you
invest in our common stock, you should be aware that the occurrence of the
events described in the "Risk Factors" section and elsewhere in this prospectus
could have a material adverse effect on our business, operating results and
financial condition.

BUSINESS

Overview

Voyager.net is the largest Internet service provider focused on the
Midwestern United States. We serve residential and business customers in
markets within our target region which we believe have been historically under-
served by the larger, national Internet service providers. Our primary service
offering is Internet access to residential and business subscribers. We also
offer a variety of additional Internet services such as maintaining customer
Web sites on our servers, known as Web-hosting, and providing telecommunication
facilities for customer-owned Web servers and related equipment, known as co-
location, and electronic commerce. In addition, we offer enhanced
communications services such as broadband Internet access services using high
speed digital service technology through traditional copper telephone lines,
known as digital subscriber lines, or DSL, and modems integrated with cable
television services, or cable modems, and the resale of long distance voice
services bundled with our Internet access products. We operate the largest
dial-up Internet network in the Midwest in terms of geographic coverage, with
approximately 150 Voyager.net-owned points of presence in Michigan, Wisconsin,
Ohio, Illinois, Indiana and Minnesota.

Industry Background

The Internet has rapidly developed into an integral business and personal
communications tool. Consumers and businesses are demanding solutions which
provide them with the ability to access and utilize the Internet in a fast,
secure and reliable manner. Factors driving the growth in the number of
Internet users and Web sites include the large and growing installed base of
low-cost personal computers, advances in the performance and speed of personal
computers and modems, improvements in network infrastructure, easier access to
the Internet and the increasing importance of the Internet as a communications
and commercial medium. International Data Corporation, estimates that the
number of Internet users in the United States is expected to increase 27.4%
annually from 51.6 million in 1998 to 135.9 million in 2002.

U.S. consumers account for the highest concentration of global Internet
users. According to International Data Corporation, the number of household on-
line subscriptions is expected to increase from 29.8 million in 1998 to 67.6
million in 2002. This implies that the on-line penetration rate for U.S.
households will rise from 29.5% in 1998 to 64.0% by 2002. Industry experts
expect a substantial share of the residential growth to be derived from the
small office and home office market. This segment represents heavy users of
personal computers and communications services, resulting in high Internet
access service needs. According to International Data Corporation, residential
Internet access service revenues will more than double from $4.7 billion in
1998 to $10.6 billion in 2002.

Businesses have also rapidly established corporate Internet sites and
connectivity as a means to expand customer reach and improve communications
efficiency. Many businesses are utilizing the Internet as a lower cost
alternative to certain traditional telecommunications services. The Strategis
Group estimates that the penetration of U.S. businesses connected to the
Internet will rise from 66% in 1998 to nearly 80% in 2003, resulting in 4.1
million businesses being connected to the Internet by 2003. The number of
individual U.S.

corporate users is expected to increase from 34.9 million users in 1998 to 50.3
million users in 2003. According to International Data Corporation, U.S.
corporate Internet access service revenues are expected to more than triple
from $2.9 billion in 1998 to $10.1 billion in 2002.

The Internet service provider market is highly fragmented. As of the end of
1998, there were over 4,850 providers in the U.S., according to Boardwatch
Magazine. These Internet service providers vary widely in their geographic
coverage, customer focus and the nature and the quality of their services. The
Internet service provider market is generally segmented into three broad
categories:

.national providers are typically full-service providers that offer a
broad range of Internet access and other services to businesses;

.regional providers which include the regional telephone operators,
competitive local exchange carriers and Internet access providers,
such as Voyager.net; and

.local providers which are typically closely-held start-ups or small
companies serving a single market.

The vast majority of Internet service providers are small, local operations
with fewer than 10,000 customers each. According to Boardwatch Magazine, there
are approximately 40 national backbone providers and there are approximately
180 national dial-up providers.

Despite the growth in the Internet service provider industry, very few
Internet service providers are profitable. In addition, the dramatic growth of
Internet usage and dependency has prompted customers to demand from their
providers more enhanced technology and services and reliable, high speed,
quality Internet access. Thus, Internet service providers will be faced with
expending significant capital resources to attract and retain subscribers. As a
result, the industry is expected to undergo substantial consolidation over the
next few years, particularly among the local providers, who typically lack the
financial resources necessary to continue to compete. We believe that the
anticipated growth in Internet use and the significant number of under-
capitalized local providers within our region meeting our acquisition criteria
provides us with an excellent opportunity to extend our scalable business model
and become one of the largest Internet service providers in the U.S.

The Voyager.net Solution

The business model that we have developed has resulted in substantial
revenue growth, reduced customer acquisition costs and significant EBITDA while
maintaining high customer satisfaction. Our business model is based on the
following key principles:

.we control our costs of acquiring new customers by focusing on markets in
the Midwestern United States, thereby reducing the need for more
expensive, broad-based marketing campaigns;

.we focus on delivering high quality products and services and superior
customer care which we believe results in significant word of mouth
referrals and customer retention greater than industry average;

.we own and manage 100% of our network equipment and customer care
operations which significantly reduces our telecommunication costs and
provides us with greater control over our network utilization,
efficiency, scalability and quality; and

.we realize significant cost savings and economies of scale from our
acquired businesses by eliminating duplicated network infrastructure
and consolidating sales and marketing, network operations, customer
support and back office operations.

The success of our business model is evidenced by a recent survey conducted
by PC World Magazine in which we ranked 10th among national and regional
Internet service providers in the U.S. in terms of access speed and
reliability, customer satisfaction and product offerings.

Our Growth Strategy

Our overall strategy is to continue as the dominant Internet access
provider to residential and business customers in the Midwest. We intend to
continue to capitalize on our scalable business model and strong regional
presence by executing a regional growth strategy through internal growth and
strategic acquisitions.

Internal Growth Strategy. The key principles of our internal growth strategy
are as follows:

. Maintain our superior customer care and service in order to increase
customer referrals and customer retention. Customer care is at the heart
of running an Internet service provider. In general, the Internet service
provider industry has struggled to provide a consistent quality of
service. Busy signals and inattentive customer support staff represent the
principal causes for subscriber cancellations. We believe that we are
well-positioned with established systems, procedures and a core management
team and staff to manage significant growth without sacrificing quality.
We have staffed our two large call centers located in East Lansing,
Michigan and New Berlin, Wisconsin with more than 170 employees, or more
than 60% of all our employees. We have complemented our customer service
support by developing a proprietary, customer care and billing solution
designed with several Internet functions. We believe this system gives us
a competitive advantage versus other Internet service providers and offers
the following benefits:

.easy internal use from any computer connected to the Internet;

.beginning to end customer service tracking including automated service
rendering and tracking of marketing channels;

.complete technical support history by account;

.real-time third-party account creation (order fulfillment);

.automated billing and creation of new service plans (including usage
based billing);

.tracking of usage and creation of usage reports;

.automated marketing reports and information on subscriber churn; and

.third-party accessibility and controllable levels of customer
interactivity.

As a result of these customer care initiatives, our customer support
telephone hold times are consistently close to two minutes, and our average
monthly customer churn is 2.6%, each of which is significantly less than
the industry average.

. Continue to invest in our network to provide our subscribers with the most
reliable, high quality, high speed Internet access services at lower costs.
We believe that continually improving our network capacity and speed
increases our customers' satisfaction and decreases subscriber churn and
our cost of acquiring new subscribers. The number of subscribers per phone
line, or contention ratio, is a critical factor in the Internet service
provider business, since overloading and significant busy signals are the
primary causes of subscriber churn. Our goal is to have zero busy signals.
Our network capacity includes approximately 150 points of presence and
approximately 21,000 phone lines equipped with dial-in digital modems for
our customers. As a result, our average ratio of subscribers to dial-in
modems, or contention ratio, is approximately 9:1, significantly better
than the industry average of approximately 13:1. More importantly, we focus
on utilization ratios at each of our points of presence to ensure that each
dial-in location maintains sufficient phone lines. We also recently
upgraded the speed, capacity and reliability of our telecommunications
infrastructure by leasing lines from multiple incumbent local exchange
carriers and competitive local exchange carriers. We connect our points of
presence to our two main network operating centers in East Lansing,
Michigan and New Berlin, Wisconsin using high speed leased line
connections, and from there we have multiple high-speed connections to the
Internet. Since we own and manage 100% of all network equipment at our
points of presence, rather than lease the equipment from national carriers,
we are able to more efficiently load our customers on to each point of
presence and reduce our telecommunication cost per customer, the single
largest expense for an Internet service provider.

. Continue our highly focused sales and marketing efforts and use of
strategic reseller arrangements. We market our services through a
combination of local, direct advertising and word-of-mouth referrals.
Because we currently focus exclusively on markets in contiguous states in
the Midwest, including numerous small- to medium-sized markets, we can
avoid broad-based and expensive advertising campaigns and have lower costs
of acquiring new customers than most of our competitors. Our attention to
customer care has fostered brand names within our region leading to
significant customer-to-customer referrals, which account for over 70% of
all new sales. We also benefit from the ease of use of our customer
application and support system. Our customer sign-up process is customer-
friendly and is easily accomplished through our Web site or by calling our
customer support personnel, and, unlike many service providers' sign-up
procedures, a Voyager.net user can be on-line in a matter of minutes. In
addition, we have entered into strategic reseller agreements with several
companies to further market our services within local communities.

. Offer enhanced communications services such as digital subscriber lines,
Internet access through the integration with cable television systems,
cable modems, and the resale bundled voice and data services at competitive
rates. We presently offer a broad range of Internet services to residential
and business customers such as dial-up and dedicated access, Web hosting,
Web server co-location, domain name registration and various e-commerce
services. We believe, however, that consumer users, businesses and
residential users, including home office

users, are increasingly seeking high-speed, high-capacity Internet access
and a single source for their Internet and telecommunications needs. To
meet these demands, we have begun offering more enhanced services to our
subscribers, such as:

.expanded high speed Internet access through digital subscriber lines and
cable modems;

.bundled voice and data telecommunications services; and

.branded Web-TV services for Internet access without a computer.

As part of our goal to offer our subscribers these enhanced services,
we recently acquired EriNet Telecom, Inc., which is authorized by the State
of Ohio as a competitive local exchange carrier. As a competitive local
exchange carrier, we will gain access to wholesale telecommunication rates
and related network elements and be able to offer a comprehensive package
of bundled voice and data telecommunications services to our subscribers.
We believe that providing enhanced service product offerings will satisfy
this emerging customer trend of desiring a single source vendor for all
telecommunications services, adding to our competitive strengths and
further entrenching us with an expanding customer base. We anticipate
filing for status as a competitive local exchange carrier in other states
within our region in the future.

External Growth Strategy.

Our external growth strategy is to continue to acquire and integrate local
and regional Internet service providers to increase network utilization and
enter new markets. The key elements of our acquisition strategy are as
follows:

. Identify suitable acquisition candidates. Our management conducts an
extensive review of Internet service providers within our target universe
to identify promising potential acquisition candidates. Desired target
characteristics include:

. high customer growth and customer retention rates;

. compatibility of product/service mix;

. cash flow positive operations;

. dominant local market presence;

. identifiable scale efficiencies; and

. expanded contiguous market reach within the Midwest or increased
utilization of existing points of presence.

Using this criteria, during the past 12 months our acquisition team has
successfully identified and consummated the purchase of 13 Internet service
provider businesses, representing approximately 160,000 subscribers. These
acquisitions have helped us become one of the 20 largest Internet service
providers in the U.S. in terms of subscribers.

We believe that consolidation in the Internet service provider industry
will continue and that significant opportunities exist for future growth
through the acquisition of Internet service providers within our region. We
have currently

identified approximately 50 additional companies in the Midwest with
between 5,000 and 20,000 subscribers, representing approximately 500,000
potential subscribers, which meet our acquisition criteria. We believe that
our regional focus, experienced management team and proven integration plan
provides us with a competitive advantage over national Internet service
providers and other consolidators and allows us to more efficiently
integrate the acquired businesses. By acquiring businesses within one
region, we also are able to leverage our existing network and
administrative operations while gaining a foothold in markets within the
region, thereby achieving significant economies of scale.

. Manage the acquisition process. Our acquisition team is an important element
of this acquisition strategy. We have a dedicated acquisition team whose
responsibility is to manage the acquisition process, including the
identification, selection and integration of the acquired business. Our
acquisition team is continually evaluating acquisition opportunities, and
has developed strong relationships with Midwest Internet service provider
operators and mergers and acquisitions professionals. Our acquisition team
also works closely with our sales and marketing, network engineering and
executive management teams to identify potential cost savings and synergies
for each acquisition candidate and to develop a detailed acquisition and
integration plan.

. Integrate the acquired businesses. We also have developed a detailed
integration plan for our acquired companies which focuses on reducing
redundant costs and consolidating operations within a short time after
closing. The first step of our integration process is to assume control of
all the financial operations as of the date of acquisition to ensure strict
financial controls over cash and financial reporting. We also centralize all
of the accounting and related financial functions at our main office in East
Lansing and incorporate the acquired subscriber accounts into our customer
care and billing system to take advantage of the functionality and
scalability of our systems. Once the acquired company's systems are
transferred, we then consolidate all of the customer support and network
operations into our two call centers in East Lansing, Michigan and New
Berlin, Wisconsin, thus eliminating various offices, personnel and their
related costs. The final component of our integration process is to
capitalize on our scale economies. We eliminate duplicate network costs and
connections to the Internet, thereby significantly reducing costs. We also
realize cost savings by re-negotiating more favorable pricing on
telecommunication lines and equipment purchases. Our scale allows us to
demand better pricing from other third-party vendors as well. Our successful
integration of the acquired companies and the realization of the scale
economies relating to our acquisitions has contributed to the increase in
our EBITDA margins since 1998.

Voyager.net Service Offerings

Internet Access Services. We offer a full range of dial-up Internet access
services to residential subscribers and dedicated and dial-up Internet access
to business customers. By

selecting between the various types of access services and pricing plans
available, subscribers can select services that fit their specific needs.

. Dial-up access. Our residential access services are designed to provide
our subscribers with reliable Internet access through standard dial-up
modems. Our dial-up Internet access service includes:

.local access numbers;

.personal Web space;

.multiple e-mail accounts;

.toll-free customer support;

.light usage plans; and

.Internet chat and news groups.

The price plans for our dial-up access services range from $9.95 to
$19.95 per month. We also offer prepaid plans for quarterly, semi-annual
and annual access. A majority of our residential subscribers pay their
monthly fee automatically by a pre-authorized monthly charge to their
credit card.

. Dedicated access. We offer continuous connections to both business and
residential subscribers at a range of speeds using traditional
telecommunications lines, integrated services digital network lines and
frame relay communications services for those customers requiring greater
speed and reliability. The price plans for dedicated access services range
from $30 to $1,000 per month.

. Cable modems. Through a reseller arrangement with Millennium Digital Media
Systems, L.L.C., we offer broadband Internet access in certain locations
through the use of modems integrated with cable television systems and
provide the technical and billing support to this fast-growing segment of
the Internet access business. The retail price for the cable modem service
is $49.90 per month for residential customers and $79.95 per month for
business customers, including the modem for 500 Kilobits per second, or
kbps, two-way access.

. Digital subscriber lines. Through various reseller arrangements with
competitive local exchange carriers, we offer high-speed Internet access
using digital service technology through traditional telephone lines,
known as digital subscriber lines or DSL, to both residential and business
customers in selective areas. The retail price for this service ranges
from $90 to $225 per month depending upon the speed of the service. We
currently offer DSL Internet access at speeds of 384 Kbps, 768 Kbps, and
1.5 megabits per second.

. Set-top television access. We have begun offering in certain markets
Internet access via alternative mediums, such as set-top television boxes
that seek to provide customers with basic Internet and connectivity
service that complements traditional computer-based access.

Web Services. Our Web services help organizations and individuals implement
their Web site goals. We offer various Web hosting and other services that
enable customers to establish a Web site presence without maintaining their
own Web servers and high speed connectivity to the Internet.

. Web hosting. Our Web hosting service, or maintaining customer-owned Web
servers and related equipment on our servers, includes state-of-the-art Web
servers, high speed connections to the Internet at our network operations
centers, registering the customer's domain name and Internet address, Web
page design, development, maintenance and traffic reporting and consulting
services. We currently have over 5,000 Web hosting subscribers. The price
plans for our Web services range from $25 to $100 per month.

. Co-location. We offer co-location services, providing telecommunications
facilities for customer-owned Web servers, for customers who prefer to own
and have physical access to their servers but require the reliability,
security and performance of our on-site facilities. Our co-location
customers house their equipment at our secure network operating centers and
receive direct high speed connections to the Internet.

. E-commerce. We recently introduced our electronic commerce solution for
business customers through an agreement with INEX, which allows businesses
to create and operate an on-line "storefront" within minutes and sell
merchandise over the Internet. Our e-commerce services include secure on-
line payment processing services, technical support and additional e-mail
accounts.

. Local content. We offer our subscribers customized, local, community-
specific content, such as weather, sports and news, through relationships
with national providers of local content, such as Snap.com! and Planet
Direct as well as various local providers.

Other Services and Offerings. We also offer other enhanced communications
services to meet the one-stop shopping demands of residential and business
customers.

. Virtual private networks. Our custom virtual private networks solutions
enable our customers to deploy tailored, Internet protocol-based mission-
critical business applications for internal enterprise, business-to-
business and business-to-customer data communications on our network while
also affording high-speed access to the Internet. We offer our customers a
secure network on which to communicate and access information between an
organization's geographically dispersed locations, collaborate with
external groups or individuals, including customers, suppliers, and other
business partners and use the Web to access information on the Internet and
communicate with other Web users.

. Long distance and other telecommunications. We currently resell long
distance telecommunications services provided by IXC Communications
Services, Inc. as well as an 800 service, calling cards and prepaid cards
to our Internet customers through our VoyagerLink operations. We currently
offer this interstate and intrastate long-distance service to our customers
at 9 cents per minute, with no set-up or monthly charges. We also have
begun offering bundled voice and data services to customers who seek
Internet access and telecommunications services from a single service. We
also recently acquired a business which is licensed as a competitive local
exchange carrier in the State of Ohio, and we plan to file applications for
authorization in other states within our region.

Sales and Marketing

Marketing. Our marketing philosophy is based on the belief that a consumer's
selection of an Internet service provider is often strongly influenced by a
personal referral.

Accordingly, we believe that the high customer satisfaction of our subscriber
base has led to significant word-of-mouth referrals. Our referral incentive
program awards subscribers one month of free service for every customer which
joins us from their recommendation. As a result, over 70% of our new sign-ups
come from existing subscriber referrals. Our proprietary customer care and
billing system automatically tracks and credits the subscriber's account, thus
providing us with valuable marketing information and flexibility with this
program. We also market our services through strategic relationships with value
added resellers in the local communities, such as computer stores, trade
associations, unions, Web development companies, local area network
administrators and other retail stores which represent and promote us on a
commission basis. These relationships are a significant source of new
customers. In addition, we offer free Internet training classes within our
markets to cultivate interest in the Internet and increase brand recognition.
We do not use mass marketing media as a major source of acquiring new
customers, but instead believe that by providing superior customer service and
developing strong relationships within local communities, particularly in
small- and medium-sized markets, we can continue to grow organically at rates
greater than the industry average with very low costs for acquiring new
customers.

Web-based Marketing. We maintain a Web site (www.voyager.net) that provides
Internet users with the opportunity to learn about us and enroll in one of our
Internet access service plans. Upon viewing information on our services,
potential customers can either subscribe online or contact a customer support
employee for enrollment. Customers who sign-up on-line or through our 800
number have their accounts created instantly and are thus able to use their
accounts within minutes of account activation.

Free CDs and Diskettes. Upon the request of prospective customers, we
distribute free software via CD and diskettes that contain both the Netscape
browser software for Win95, Windows 3.1 and Macintosh as well as Microsoft's
Internet Explorer 4.0. The software is configured to facilitate installation
and connection to a point of presence. Individuals receiving the CD or
diskettes have the opportunity to obtain the free browser software contained on
the CD by opening an account with us, either online or via a toll-free
telephone number. New customers can be on-line in a matter of minutes after
opening an account on-line or by calling our toll-free telephone number.

Business Sales and Support. We have a business sales and support team
dedicated to selling and providing customized support to our growing small- and
medium-sized business customers. Our business teams include well-trained
support personnel located throughout our target region. This strong local
presence allows us to meet face-to-face with our business customers to evaluate
their needs and respond with customized solutions. Our locally-based sales and
support teams are supported by additional network engineers at our headquarters
for trouble-shooting on specific problems.

Customer Service and Technical Support

We believe that customer care and support has been critical in our success
in retaining and attracting subscribers. We provide our customer service and
technical support through our two large call centers located in East Lansing,
Michigan and New Berlin, Wisconsin.

We provide 100% of our customer care internally, and do not outsource any
customer operations to third party providers. We have staffed these call
centers with over 170 employees, or more than 60% of our workforce. These two
centers are fully-integrated so that both centers can handle calls from
subscribers located anywhere within our region. This interoperability allows us
to more efficiently handle support calls, thereby reducing telephone hold
times. We recently upgraded our phone system that intelligently routes calls,
tracks important call-in data, automatically answers certain questions and
moves customers quickly through the call-in process. Our comprehensive staff
training program and incentive compensation program linked to customer
satisfaction has led to significant improvements in the time required to move
our subscribers through the various calling queues. In addition to using our
call centers, subscribers can also e-mail questions directly to our technical
support staff, as well as find solutions on-line through the use of the
tutorials found at our Web site. Our free Internet training and educational
classes within our markets also allow our customers and potential subscribers
to ask questions about the Internet and our services.

Network and Technology

We operate the largest dial-up Internet network in the Midwest in terms of
geographic coverage, with approximately 150 Voyager.net-owned points of
presence in Michigan, Indiana, Illinois, Minnesota, Ohio and Wisconsin.

Network Infrastructure. Our network infrastructure and related systems are
designed to provide fast, reliable, high quality Internet access services,
including dedicated access. We designed and built our network to specifically
service Internet (data) traffic. The network is comprised primarily of the
latest Cisco Systems' routing and switching equipment, which provides a common
platform for increased flexibility and maintenance while allowing for the use
of advanced routing protocols to quickly and dependably deliver customer
traffic. Our network points of presence are linked by high speed capacity
connections. In addition, we have two network operating centers to oversee
traffic flows and general network operations, as opposed to a single network
operating center as found in many national networks, which helps create
redundancy and ensures a secure and reliable network. We are continuously
improving our network infrastructure and connectivity costs through our
relationships with incumbent local exchange carriers such as Ameritech
Corporation and GTE Corporation as well as with competitive local exchange
carriers such as Brooks Fiber (MCI WorldCom), Phone Michigan (McLeod), Time
Warner, Coast to Coast and Focal Communications.

Our points of presence are linked to regional network points, or hubs, which
for us happen to be the two network operating centers. These network points are
linked to the Internet by fiber optic connections and employ asynchronous
transfer mode, or ATM, frame relay and other methods of handling traffic
efficiently. Interlinked network points allow Internet users to access sites
located on other network points. In the event that one of our subscribers
wishes to access a Web site that is located on another service provider's
network, data is directed to a network access point where information sharing
is conducted under arrangements known as peering. The flow of information
across a network access

point allows information to be downloaded from one service provider's network
to a subscriber on another service provider's network.

Points of Presence. Our approximately 150 dial-in points of presence
primarily utilize digital access servers manufactured by 3Com Corporation and
Lucent Technologies, Inc. These servers allow for a variety of customer
connections from standard dial-up to traditional telecommunications lines,
including integrated digital services network. Our entire network has been
reconfigured to include redundant data circuits which will automatically route
customer traffic in the event of a failure. Our network topology offers high
levels of performance and security. Through various relationships with
competitive local exchange carriers, we have been able to reduce the overall
number of points of presence by consolidating several of them into "SuperPOPs"
with expanded calling areas. The SuperPOP allows us to consolidate our
equipment into one large modem bank and eliminate various telecommunication
links from our points of presence back to the network operating center, thereby
creating enhanced network reliability and reducing telecommunication costs. We
have aggressively worked with our providers to create additional SuperPOPs and
we will continue to explore opportunities to create additional SuperPOPs in the
future.

Network Operation Centers. We have two main network operation centers, or
hubs, in East Lansing, Michigan and New Berlin, Wisconsin. These two hubs house
all of our internal network equipment (servers, routers, mail, hosting, disk
arrays, etc.) as well as our main routing equipment and connection to the
Internet. The two hubs have recently been interconnected to provide redundancy
and to insure the highest quality network. The hubs are monitored on a 24 hours
per day, seven days per week basis in order to provide the highest level of
network performance.

Peering Relationships. Peering is the act of exchanging data across
networks, typically at specific, discrete locations. By allowing separate
networks to exchange data, users on a particular Internet service provider's
network are able to access information and communicate with users on another
provider's network. Many formal peering points exist where several dozen
Internet service providers and other providers exchange data, including network
access points. Internet service providers can also run connections to peer with
several different providers (known as multihoming). Multihoming allows an
Internet service provider to provide better service, as inbound and outbound
data can go over different routes if a particular network is overloaded. We
have multihoming relationships at multiple points with several different
organizations, including Verio, Inc. in Ann Arbor, Michigan, NAP.net in
Chicago, and MCI and Savvis in Kalamazoo, Michigan, thereby building in network
redundancy that allows for better connectivity for its customers.

Integrating Acquired Networks. As we continue to play a leading role in
consolidating the Internet service provider industry, one of our most important
tasks is to configure the acquired equipment and network into our regional
Internet-based network. We will continue to gain scale economies by eliminating
redundant and expensive Internet connectivity and better utilizing our current
infrastructure. Our integration plan calls for

connecting the acquired points of presence directly to our network at the most
cost effective point and eliminating duplicate Internet telecommunication
costs. We typically connect within three to six months after the acquisition so
as to allow for a prompt yet smooth integration of the acquired networks and to
reduce service disruptions.

Competition

The Internet services market is extremely competitive and highly fragmented.
We face competition from numerous types of providers in our five state region
and anticipate that competition will only intensify in the future as the
Internet service provider industry consolidates. We believe that the primary
competitive factors determining success as an Internet service provider are:

.accessibility and performance of service;

.quality customer support;

.price;

.access speed;

.brand awareness;

.ease of use; and

.scope of geographic coverage.

We believe that we have competed favorably based on these factors,
particularly due to:

.regionally focused operating strategy;

.superior customer care and service;

.high performance of Voyager.net-owned network facilities; and

.competitive, multi-tiered pricing policy.

Our current competitors include many large companies that have substantially
greater market presence, brand name recognition and financial resources than
us. Some of our local or regional competitors may also enjoy greater
recognition within a particular community. We currently compete, or expect to
compete, with the following types of companies:

. established on-line information service providers, which provide basic
Internet access as well as proprietary information not available
through public Internet access, such as America Online, Inc.;

. national Internet service providers, including EarthLink Network, Inc.
and MindSpring Enterprises, Inc.;

. numerous regional and local Internet service providers, some of which
have significant market share in their particular market area;

. providers of Web hosting, co-location and other Internet-based
business services, such as Verio, Inc.;

. computer hardware and software and other technology companies that
provide Internet connectivity with their products, including IBM and
Microsoft Corporation;

. national long distance carriers such as AT&T Corporation, MCI WorldCom
and Sprint Corporation;

. regional Bell operating companies and local telephone companies;

. cable operators, including Tele-Communications, Inc. and Time Warner
Cable; and

. nonprofit or educational Internet service providers.

Many of the major cable companies and some other Internet access providers
have begun to offer or are exploring the possibility of offering Internet
connectivity through the use of cable modems. Cable companies, however, are
faced with large-scale upgrades of their existing plant equipment and
infrastructure in order to support connections to the Internet backbone via
high-speed cable access devices. We believe that there is a trend toward
horizontal integration through acquisitions or joint ventures between cable
companies and telecommunications carriers. The acquisition of
TeleCommunications, Inc. by AT&T Corporation is indicative of this trend. Other
alternative service companies have also announced plans to enter the Internet
connectivity market with various wireless terrestrial and satellite-based
service technologies. In addition, several competitive local exchange carriers
and other Internet access providers have launched national or regional digital
subscriber line programs providing high speed Internet access using the
existing copper telephone infrastructure. Several of these competitive local
exchange carriers have announced strategic alliances with local Internet
service providers to provide broadband Internet access. We also believe that
manufacturers of computer hardware and software products, media and
telecommunications companies and others will continue to enter the Internet
services market, which will intensify competition. Any of these developments
could materially and adversely affect our business, operating results and
financial condition.

Government Regulation

The Federal Communications Commission exercises jurisdiction over all
facilities of, and services offered by, telecommunications carriers to the
extent that they involve the provision, origination or termination of
jurisdictional interstate or international communications. Some state
regulatory commissions retain jurisdiction over the same facilities and
services to the extent they involve origination or termination of
jurisdictional intrastate communications. In addition, as a result of the
passage of the Telecommunications Act of 1996, state and federal regulators
share responsibility for implementing and enforcing the domestic pro-
competitive policies of the Act. In particular, state regulatory commissions
have substantial oversight over the provision of interconnection and non-
discriminatory network access by incumbent local exchange carriers. Municipal
authorities generally have some jurisdiction over access to rights of way,
franchises, zoning and other matters of local concern.

Internet operations are currently not subject to direct regulation by the
Federal Communications Commission or any other governmental agency (other than
regulations applicable to businesses generally). Due to the increasingly
widespread use of the Internet, however, it is possible that additional laws
and regulations may be adopted.

The Federal Communication Commission continues to review its regulatory
position on the usage of the basic network and communications facilities by
Internet service providers. Even though the Federal Communications Commission
determined in April 1998 that Internet service providers should not be treated
as telecommunications carriers and therefore not regulated, it is expected that
future Internet service provider regulatory status will continue to be
uncertain. Indeed, in that report, the Federal Communications Commission
concluded that certain services offered over the Internet, such as phone-to-
phone Internet protocol telephony, may be functionally indistinguishable from
traditional telecommunications service offerings and their non-regulated status
may have to be re-examined. Although the Federal Communications Commission has
thus far decided not to allow local telephone companies to impose per minute
access charges on Internet service providers, and that decision has been upheld
by the reviewing court, further regulatory and legislative consideration of
this issue is likely.

To the extent that an end user's call to an Internet access provider is
local rather than long distance, the local telephone company that serves the
Internet service provider may be entitled to reciprocal compensation from the
end user's local telephone company. Reciprocal compensation is a reimbursement
from one local telephone company to a second one for handling calls that
originate with the first local telephone company and terminate with the second
one. To the extent that a call from an end user to an Internet service provider
is considered intrastate, the local telephone company serving an Internet
service provider would be entitled to reciprocal compensation. This payment of
reciprocal compensation reduces the local telephone company's costs and
ultimately reduces the Internet service provider's costs. The Federal
Communications Commission recently determined that most, but not all, traffic
to an Internet access provider is interstate in nature rather than local. This
determination could potentially eliminate the payment of reciprocal
compensation to the local telephone company, which ultimately may increase our
Internet access service costs. The Federal Communications Commission has yet to
rule on the specific issue of reciprocal compensation and Internet service
provider traffic and has currently left individual state regulators to
determine whether reciprocal compensation should be paid, which may also affect
our costs. In recent months, several state regulatory authorities have
determined that reciprocal compensation is not required to be paid.

One of our subsidiaries, EriNet Telecom, Inc., is authorized as a
competitive local exchange carrier with the State of Ohio and we anticipate
that we will seek competitive local exchange carrier status in other states in
the future. To the extent we conduct business as a competitive local exchange
carrier, the telecommunications services that we provide will be subject to
federal, state and local regulation, which may include tariff and price listing
requirements and state certification proceedings. State regulatory authorities
exercise jurisdiction over intrastate services. Local authorities may also have
regulatory power over certain aspects of our competitive local exchange carrier
operations. In addition, pursuant to the Telecommunications Act of 1996, the
Federal Communications Commission is required to establish a subsidy mechanism
for universal telephone service to which our competitive local exchange carrier
services will be required to contribute

based on telecommunications revenues. The Act also requires competitive local
exchange carriers to make their services available for resale by other
carriers, to interconnect their networks and ensure they interoperate and
provide non-discriminatory rights-of-way, offer reciprocal compensation for
termination of locate traffic, and provide dialing parity and local telephone
number portability. The Act also further reserves the right for individual
states to impose additional state regulations, including subsidies, which are
consistent with the Act. We are unable to predict how the State of Ohio and the
other states in which we become certified as a competitive local exchange
carrier in the future, if any, will regulate our services.

By providing interstate, intrastate and international services as a
competitive local exchange carrier, we would generally be subject to tariff or
price list filing requirements pursuant to which we would be required to
publicly disclose, or in some instances obtain approval of, the terms,
conditions and prices for telecommunications services prior to or soon after
offering such services. In addition, individual states in which we may conduct
activities as a competitive local exchange carrier may subject us to state
certification proceedings and intrastate and local tariff regulations. These
certifications generally require a showing that the carrier has adequate
financial, managerial and technical resources to offer the proposed services
consistent with the public interest. While unusual, challenges to these tariffs
and certification proceedings by third parties could cause us to incur
substantial legal and administrative expenses. Many states also impose
additional regulatory requirements, such as minimum service quality reporting
and customer service requirements and uniform local exchange carrier accounting
requirements. In addition, some state statutes provide that changes in the
ownership of a competitive local exchange carrier's outstanding voting
securities may require prior approval of the state public utility commission.
In fact, certain jurisdictions may require an investor who acquires as little
as 10% of a competitive local exchange carrier's voting securities to obtain
prior approval for such acquisition because such ownership interest might be
deemed to constitute an indirect controlling interest in the carrier. We have
filed a petition for approval of the change in ownership of EriNet Telecom and
anticipate that the approval will be granted prior to consummation of this
offering. See "Risk Factors--State and Federal Government Regulation Could
Require Us to Change Our Business."

Intellectual Property

We have developed and acquired certain proprietary rights for which we have
sought and will continue to seek federal, state and local protection. We rely
on a combination of copyright, trademark and trade secret laws to protect our
proprietary rights, particularly related to our names and logos. "Voyager.net"
and our associated logo are names and marks which belong to Voyager.net. In
addition, we have registered VoyagerLink and several other names, marks and
logos, and have additional registrations pending for names and marks, under
which we do business at local levels within our region. An integral part of our
successful business strategy is our proprietary Web-based customer care and
billing system. We are exploring whether to seek patent protection with respect
to this customer care system and will act accordingly. We have each of our
employees sign an inventions agreement pursuant to which they agree that any
intellectual property rights developed

while in our employment belong to Voyager.net. We cannot assure you that the
steps taken by us to protect our proprietary rights will be adequate to prevent
misappropriation of our technology or that third parties, including
competitors, will not independently develop technologies that are substantially
equivalent or superior to our proprietary technology.

In connection with the delivery of our access and other services, we rely on
the use of products of software manufacturers that we bundle in our software
for users with personal computers operating on the Windows or Macintosh
platforms. While certain of the applications included in our start-up kit for
access services subscribers are shareware that we have obtained permission to
distribute or that are otherwise in the public domain and freely distributable,
certain other applications included in the start-up kit have been licensed
where necessary. We currently intend to maintain or negotiate renewals of all
existing software licenses and authorizations as necessary, although we cannot
be certain that such renewals will be available to us on acceptable terms, if
at all. We may also enter into licensing arrangements in the future for other
applications.

Employees

As of March 31, 1999, we had 278 employees, including 235 full-time
employees and 43 regular part-time employees. We are not a party to any
collective bargaining agreements covering any of our employees, have never
experienced any material labor disruption and are unaware of any current
efforts or plans to organize our employees. We consider our relationships with
our employees to be good.

Facilities

We lease each of our office locations. Our leases cover in the aggregate
approximately 55,000 square feet of space. We have two primary lease locations
which serve as our network operating centers: East Lansing, Michigan, which is
also our corporate headquarters, with approximately 17,000 square feet, which
lease expires in 2007; and New Berlin, Wisconsin, where we lease space at four
locations covering in the aggregate approximately 25,000 square feet under
long-term leases. We also lease space, typically less than 50 square feet per
location, to house our network equipment at each of our points of presence. We
do not own any real estate. We believe that our current facilities are suitable
and adequate for our business and, upon expiration of our leases, we do not
anticipate any significant difficulty in obtaining renewals or alternative
space in our desired markets.

Legal Proceedings

We have been, from time to time, involved in various litigation matters
arising in the ordinary course of business. We are not involved currently in
any pending legal proceedings that either individually or taken as a whole,
will have a material adverse effect on our business, financial condition and
results of operations.

MANAGEMENT

Executive Officers, Key Employees and Directors

Our executive officers, key employees and directors, their positions and
their ages as of March 31, 1999, are set forth below. The compensation
committee of the board of directors is comprised of the entire board, and the
audit committee is comprised of Messrs. Dietz, Friedly and Hayes.

Name Age Position
---- --- --------

Christopher Torto......... 34 President, Chief Executive Officer and Vice
Chairman of the Board of Directors
Dennis Stepaniak.......... 41 Chief Financial Officer, Senior Vice President
and Treasurer
Osvaldo deFaria........... 35 Chief Operating Officer
Christopher Michaels...... 32 Chief Technology Officer
Michael Williams.......... 35 Vice President--Sales
David Shires.............. 36 Vice President--Business Development
Joan Holda................ 43 Vice President--Human Resources
Glenn Friedly............. 50 Chairman of the Board of Directors
John Hayes................ 35 Director
Christopher Gaffney....... 36 Director
David Dietz............... 49 Director and Secretary

Christopher Torto. Mr. Torto has served as Chief Executive Officer since
February 1998, and has served as President and Vice Chairman of the board of
directors since March 1999. From December 1996 to January 1998, Mr. Torto was
the President and Chief Executive Officer of Horizon Cablevision do Brasil, a
start-up cable television venture in Brazil. From 1992 to 1996, Mr. Torto
served as General Manager of GTECH do Brasil, a Brazilian subsidiary of GTECH
Corporation. Mr. Torto received his Bachelor of Science degree in Finance from
the University of Maine and a Master of Business Administration degree from the
Harvard Graduate School of Business Administration.

Dennis Stepaniak. Mr. Stepaniak has been Senior Vice President, Chief
Financial Officer and Treasurer since March 1999. From 1995 to February 1999 he
served as Vice President of Finance and Chief Financial Officer for UMI, Inc.,
a database publishing company and wholly owned subsidiary of Bell & Howell
Corporation. From 1984 to 1995, he held various financial positions with UMI,
including Controller, Director of Financial Planning, and financial analyst.
Mr. Stepaniak received a degree in Finance and Economics from Alma College and
a Master of Business Administration degree from Eastern Michigan University.

Osvaldo deFaria. Mr. deFaria has served as Chief Operating Officer since
January 1999. Prior to that, Mr. deFaria spent 13 years at AT&T Corporation in
various management positions including General Manager of Internet Telephony,
Director of Consumer Marketing, Consumer Marketing Director of AT&T of Puerto
Rico, and various other sales and marketing positions. Mr. deFaria received his
Bachelor of Science degree in Business Administration from the University of
Maine and a Master of Business Administration degree from Fairleigh Dickinson
University. Mr. deFaria has also attended Harvard Business School's executive
education program.

Christopher Michaels. Mr. Michaels has served as Chief Technology Officer
since February 1999. From October 1998 to February 1999, Mr. Michaels served as
Vice President of Technical Operations. Mr. Michaels was the co-founder of
NetLink Systems, L.L.C., a regional Internet service provider based in
Kalamazoo, Michigan, and served as President from May 1995 to October 1998.
From June 1991 to May 1995, Mr. Michaels was a senior research engineer at
Automotive Diagnostics, an automotive test equipment company. Mr. Michaels
received Bachelor of Science degrees in Mathematics, Physics and Computer
Science from Western Michigan University.

Michael Williams. Mr. Williams has served as Vice President-Sales since
January 1999. From January 1998 to January 1999, Mr. Williams served in various
senior management positions at Voyager.net. From October 1997 to January 1998,
Mr. Williams was the Chief Financial Officer of Horizon Cablevision. From March
1994 to September 1997, he served as the Director of Finance for the Great
Lakes area of Nextel Communications, where he was responsible for the financial
management of wireless communications deployment, accounting functions and
financial planning and analysis. Mr. Williams received his Bachelor of Science
degree in Economics from the University of Wisconsin--Madison.

David Shires. Mr. Shires has served as Vice President-Business Development
since October 1998, and is responsible for leading all of the acquisition
efforts of Voyager.net. Mr. Shires was a co-founder of NetLink Systems, L.L.C.,
a regional Internet service provider based in Kalamazoo, Michigan, and served
as Vice President from May 1995 to October 1998. From October 1992 to April
1995, he was a software engineer at Automotive Diagnostics, an automotive test
equipment company. Mr. Shires received his Bachelor's degree in Robotic
Engineering from Lake Superior State College and a Master of Business
Administration from Western Michigan University.

Joan Holda. Ms. Holda has served as Vice President-Human Resources since
July 1998. From 1986 to June 1998, she served as Director of Training and Human
Resources at Quality Dairy Company, a 700-employee retail and manufacturing
facility. Ms. Holda received a Bachelor of Science degree in Merchandising and
Management and a Masters in Labor and Industrial Relations from Michigan State
University. She received her certification as a Senior Professional in Human
Resources in 1997.

Glenn Friedly. Mr. Friedly is founder and Chairman of the Board of
Voyager.net. From 1983 to April 1999, Mr. Friedly was President of Horizon
Cablevision, a leading cable operator in Michigan. From 1972 to 1980, Mr.
Friedly worked for the State of Michigan, including as Executive Assistant to
Governor William G. Milliken. Mr. Friedly is the past President of the Michigan
Cable Television Association and has served on boards of the National Cable
Television Cooperative Association and on the Small Cable Business Association.
Mr. Friedly has been a member of the Michigan State Bar since 1980.

John Hayes. Mr. Hayes has served as director of Voyager.net since July 1995.
Mr. Hayes is a managing partner of Great Hill Partners, L.L.C., a private
equity firm. Mr. Hayes has been associated with Media/Communications Partners,
a private equity firm, since 1989 and has served as a partner since 1993. Mr.
Hayes serves as Chairman of

Horizon Telecom International, L.L.C., a cable television operator focused on
developing cable television systems in Brazil, and of Amstar Entertainment,
L.L.C., a movie theater developer. Mr. Hayes also serves as a director of
Language for Industry Worldwide, Inc., a consolidator of business translation
services companies, and Teltrust, Inc., a telecommunications services provider.

Christopher Gaffney. Mr. Gaffney has served as a director of Voyager.net
since December 1998. Mr. Gaffney is a managing partner of Great Hill Partners,
L.L.C., a private equity firm. Mr. Gaffney has been associated with
Media/Communications Partners, a private equity firm, since 1986 and has served
as a partner since 1992. Mr. Gaffney also serves as Chairman of the Board of
Adams Trade Press, Inc., a business-to-business publishing company, and also as
a director of Medical World Communications, Inc., a provider of professional
continuing education programs and supplemental educational materials, Marks-
Ferber Communications, Inc., a community newspaper publisher, Sunburst
Communications Radio L.L.C., a radio broadcaster, Tarver Holdings, Inc., a
computer services company, and several other privately held companies.

David Dietz. Mr. Dietz has served as a director and the Secretary of
Voyager.net since March 1999. Mr. Dietz, or a professional corporation owned by
Mr. Dietz, has been a partner of Goodwin, Procter & Hoar LLP and its
predecessor firm since 1984. Mr. Dietz is also a director of High Liner Foods
(USA), Incorporated and The Andover Companies, as well as several other
privately held companies.

Board Composition

The number of our directors is currently fixed at five. Following this
offering, our board of directors will be divided into three classes, each of
whose members will serve for a staggered three-year term. Our board of
directors will consist of two Class I directors, Christopher Torto and David
Dietz, one Class II director, Christopher Gaffney, and two Class III directors,
John Hayes and Glenn Friedly. At each annual meeting of stockholders, a class
of directors will be elected for a three-year term to succeed the directors of
the same class whose terms are then expiring. The terms of the Class I
directors, Class II directors and Class III directors expire upon the election
and qualification of successor director at the annual meeting of stockholders
to be held during the calendar year 2000, 2001 and 2002, respectively.

Each officer serves under his employment agreement with us and at the
discretion of our board of directors. See "--Employment Agreements." There are
no family relationships among any of our directors or executive officers.

Committees of the Board of Directors

Audit Committee. The audit committee is responsible for recommending to the
board of directors the engagement of our outside auditors and reviewing our
accounting controls and the results and scope of audits and other services
provided by our auditors. The members of the audit committee are John Hayes,
David Dietz and Glenn Friedly.

Option Committee. Under our 1998 Stock Option and Incentive Plan, the board
of directors may designate a committee of two independent directors to
administer the 1998 Stock Option and Incentive Plan. The 1998 Stock Option and
Incentive Plan is currently administered by the full board of directors. The
directors have, however, appointed a committee, consisting of Messrs. Friedly,
Hayes and Torto, having the authority to grant up to 50,000 plan awards to any
one individual, and 100,000 plan awards in the aggregate, in any one fiscal
year under the 1998 Stock Option and Incentive Plan. See "--1998 Stock Option
and Incentive Plan."

Compensation Committee. The compensation committee is responsible for
reviewing and approving the amount and type of consideration to be paid to
senior management. The members of the compensation committee is currently
comprised of the entire board of directors.

Other Committees. The board of directors may, in its discretion, establish,
from time to time, other committees to facilitate the management of our
business.

Director Compensation

Directors who are employees receive no additional compensation for their
services as directors. Non-employee directors do not currently receive a fee
for their service as directors, although the board of directors may in the
future determine to pay such a fee. Non-employee directors are also eligible to
participate in the 1998 Stock Option and Incentive Plan at the discretion of
the full board of directors.

Executive Compensation

The following table sets forth in summary form the compensation that was
paid to our Chief Executive Officer and the other most highly compensated
executive officers whose aggregate compensation exceeded $100,000 in the year
ended December 31, 1998 (the "Named Executive Officers"). No other executive
officer currently employed by us earned total compensation in excess of
$100,000 in 1998. Mr. Torto, our president and chief executive officer,
commenced employment with us in February 1998. His current annual salary is
$225,000 and he is eligible to receive an annual bonus equal to 40% of his
annual base salary. Mr. Williams, our vice president-sales, commenced
employment with us in January 1999. His current annual salary is $120,000 and
he is eligible to receive an annual bonus equal to 20% of his annual base
salary.

Summary Compensation Table

Annual Compensation Long-Term Compensation
------------------------------ ---------------------------------------
Number
of Securities
Other Underlying Restricted All
Annual Options Stock Other
Name Salary Bonus Compensation Granted Awards Compensation

Christopher P. Torto.... $ 59,900 $100,000 $ -- -- $279,300(2) $1,735(3)
President and Chief
Executive Officer
Michael Williams........ 118,000 23,350 -- (1) -- 3,350(4)
Vice President--Sales

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

(1) Does not include options to purchase shares of common stock which were
cancelled pursuant to an agreement with Mr. Williams.

(2) Represents the fair value of shares of restricted common stock
purchased by Mr. Torto in 1998 based on an appraisal of the underlying
common stock, performed by an independent valuation firm less the aggregate
purchase price for such shares of common stock paid by Mr. Torto. Prior to
this offering, there was no public market for our common stock and,
therefore, we did not have a fair market value of our common stock as of
December 31, 1998. Of the shares of restricted common stock purchased
by Mr. Torto, shares of restricted common stock are fully vested and
shares vest on December 31, 1999. Vesting of these shares of common
stock will be accelerated upon closing of this offering.

(3) Includes the cost of term life insurance which was paid by Voyager.net.

(4) Includes a matching contribution under our 401(k) plan and the cost of term
life insurance which was paid by Voyager.net.

Option Grants in Last Fiscal Year

The following table sets forth information regarding stock options granted
during 1998 to our Named Executive Officers. The exercise price per share of
each option is equal to the fair market value of the common stock as of the
grant date as determined by the board of directors. During 1998, we granted
options to purchase an aggregate shares of common stock to employees.

The amounts shown as potential realizable value illustrate what might be
realized upon exercise immediately prior to expiration of the option term using
the 5% and 10% appreciation rates compounded annually as established in
regulations of the SEC. The potential realizable value of the options to Mr.
Williams using an assumed initial public offering price of $ per share is $
at an assumed 5% appreciation rate and $ at an assumed 10% appreciation rate.
The potential realizable value is not intended to predict future appreciation
of the price of our common stock. Mr. Williams exercised his option to purchase
all shares of common stock in May 1999.

Option Grants In Last Fiscal Year

Individual Grants
-----------------------------------------------
Potential
Realizable
Value at
Assumed
Annual
Rates of
Stock Price
Number of Percent of Total Appreciation
Securities Options for Option
Underlying Granted to Exercise Term
Options Employees in or Base Expiration -------------
Name Granted Fiscal Year Price Date 5% 10%

Christopher Torto....... -- -- $ -- --
Michael Williams........ 80.65% $ 9/23/98

Option Exercises and Fiscal Year-End Option Values

The following table sets forth information concerning the number and value
of unexercised options to purchase common stock held by the Named Executive
Officers. There was no public trading market for our common stock as of
December 31, 1998. Accordingly, the values of the unexercised in-the-money
options have been calculated on the basis of an assumed initial public offering
price of $ per share, less the applicable exercise price multiplied by the
number of shares acquired on exercise. Neither of the Named Executive Officers
exercised any stock options in 1998, but Mr. Williams exercised his option to
purchase all shares of common stock in May 1999.

Fiscal Year and Fiscal Year-End Option Values

Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year- In-The-Money Options
End at Fiscal Year-End
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable

Christopher Torto........... -- -- $ -- $ --
Michael Williams............

1998 Stock Option and Incentive Plan

Our board of directors and stockholders adopted the 1998 Stock Option and
Incentive Plan in September 1998. In April 1999, the 1998 Stock Option Plan
was amended to increase the number of shares of common stock and other awards
available under the plan. In June 1999, the plan was amended and restated by
the board of directors and our stockholders. The 1998 Stock Option and
Incentive Plan permits us to:

.grant incentive stock options;

.grant non-qualified stock options;

.grant stock appreciation rights;

.issue or sell common stock with vesting or other restrictions, or without
restrictions;

.grant rights to receive common stock in the future with or without
vesting;

.grant common stock upon the attainment of specified performance goals;
and

.grant dividend rights in respect of common stock.

These grants may be made to our officers, employees, directors,
consultants, advisors and other key persons of Voyager.net. The 1998 Stock
Option and Incentive Plan allows for the issuance of up to shares of common
stock and other awards.

Of the shares reserved for issuance under the 1998 Stock Option and
Incentive Plan:

. an aggregate of shares of restricted common stock were sold to Mr.
Torto on September 23, 1998 and October 2, 1998 at a per share
purchase price of $ , all of which shares of common stock will be
fully vested upon the closing of this offering;

. an aggregate of shares of restricted common stock were sold to Mr.
Shires on October 2, 1998 at a per share purchase price of $ , all of
which shares of common stock will be fully vested upon the closing of
this offering;

. an aggregate of shares of restricted common stock were sold to Mr.
Michaels on October 2, 1998 at a per share purchase price of $ , all
of which shares of common stock will be fully vested upon the closing
of this offering;

. an aggregate of shares of restricted common stock were sold to Mr.
deFaria on January 11, 1999 at a per share purchase price of $ , all
of which shares of common stock will be fully vested upon the closing
of this offering;

. an aggregate of shares of restricted common stock were sold to Mr.
Friedly on January 11, 1999 at a per share purchase price of $ , all
of which shares of common stock will be fully vested upon the closing
of this offering;

. shares are subject to outstanding options to purchase common stock
granted on September 23, 1998 to Mr. Williams, with a per share
exercise price of $ , all of which options were exercised by
Mr. Williams in May 1999;

. shares are subject to outstanding options to purchase common stock
granted on September 23, 1998 to several of our other key employees,
with a per share exercise price of $ , all of which options are fully
vested; and

. shares are subject to outstanding options to purchase common stock
granted on January 1, 1999 to several of our key employees, with a per
share exercise price of $ , which options vest in four equal
installments on the next four anniversaries of the grant date.

Upon consummation of this offering, we will grant options to purchase an
aggregate shares of common stock to our employees. The exercise price for
these options will be the initial public offering price of the common stock.
All of these options will vest in four equal annual installments on each of the
first four anniversaries of the date of this offering. Messrs. Friedly,
deFaria, Michaels and Stepaniak will be granted options to purchase , ,
and shares of common stock, respectively.

The 1998 Stock Option and Incentive Plan is administered by our board of
directors or a committee designated by our board of directors consisting solely
of two or more independent directors. Subject to the provisions of the 1998
Stock Option and Incentive Plan, the board or the committee may select the
individuals eligible to receive awards, determine the terms and conditions of
the awards granted, accelerate the vesting schedule of any award and generally
administer and interpret the plan.

The exercise price of options granted under the 1998 Stock Option and
Incentive Plan is determined by the committee. Under present law, incentive
stock options and options intended to qualify as performance-based compensation
under Section 162(m) of the Internal Revenue Code of 1986 may not be granted at
an exercise price less than the fair market value of the common stock on the
date of grant, or less than 110% of the fair market value in the case of
incentive stock options granted to optionees holding more than 10% of the
voting power. Non-qualified stock options may be granted at prices which are
less than the fair market value of the underlying shares on the date granted.
Options are typically subject to vesting schedules, terminate ten years from
the date of grant and may be exercised for specified periods after to the
termination of the optionee's employment or other service relationship with us.
Upon the exercise of options, the option exercise price must be paid in full
either in cash or by certified or bank check or other instrument acceptable to
the committee or, in the sole discretion of the committee, by delivery of
shares of common stock that have been owned by the optionee free of
restrictions for at least six months. The exercise price may also be delivered
to us (a) by the optionee in the form of a promissory note if the loan of these
funds to the optionee has been authorized by the board of directors and the
optionee pays so much of the exercise price as represents the par value of the
common stock acquired in a form other than a promissory note and (b) by a
broker under irrevocable instructions to the broker selling the underlying
shares from the optionee.

In the event of a merger, reorganization or consolidation, the sale of all
or substantially all of our assets or all of our outstanding capital stock or a
liquidation or other similar transaction, all outstanding awards issued under
the 1998 Stock Option and

Incentive Plan provides for whether unvested awards will become fully vested
and exercisable upon the closing of the transaction. The 1998 Stock Option and
Incentive Plan and all awards issued under the plan will terminate upon any of
the transactions described above, unless Voyager.net and the other parties to
the transactions have agreed otherwise. All participants under the 1998 Stock
Option and Incentive Plan will be permitted to exercise for a period of 30 days
before any termination all awards held by them which are then exercisable or
will become exercisable upon the closing of the transaction.

Employment Agreements

We have entered into the following agreements with our senior management:

. In February 1998, we entered into (i) an employment agreement and (ii)
an agreement regarding inventions, non-competition and confidentiality
with Christopher Torto. The employment agreement, which was amended in
April 1999, provides for:

. an annual base salary of $225,000;

. an annual bonus of 40% of base salary;

. an employment term ending on April 30, 2002 with potential one-
year renewals thereafter, subject to earlier termination by either
party;

. the continuation of base salary and benefit payments for one year
after termination of employment in the event we elect to terminate
Mr. Torto without cause (as defined in the agreement) or Mr. Torto
terminates employment as a result of a default by us under the
agreement; and

. Mr. Torto's non-competition agreement prohibits him from competing
with us until the first anniversary of the date of his termination
of employment with us.

. In January 1998, we entered into (i) an employment agreement and (ii)
an agreement regarding inventions, non-competition and confidentiality
with Michael Williams. The employment agreement provides for:

. an annual base salary of $120,000;

. an annual bonus of 20% of base salary;

. an at-will employment term;

. the continuation of base salary and benefit payments for one year
after termination of employment in the event we elect to terminate
Mr. Williams without cause (as defined in the agreement); and

. Mr. Williams' non-competition agreement prohibits him from
competing with us until the three month anniversary of the date of
his termination of employment with us.

. In October 1998, we entered into (i) an employment agreement and (ii)
an employee non-competition agreement with David Shires. The
employment agreement provides for:

. an annual base salary of $90,000;

. an annual bonus of 20% of base salary;

. an employment term ending on October 2, 2000, with potential one-
year renewals thereafter, subject to earlier termination by either
party;

. the continuation of base salary and benefit payments for up to one
year after termination of employment in the event we elect to
terminate Mr. Shires without cause (as defined in the agreement)
or if Mr. Shires terminates employment as a result of a default by
us under his agreement; and

. Mr. Shires' non-competition agreement prohibits him from competing
with us until the first anniversary of the date of his termination
of employment with us.

. In October 1998, we entered into (i) an employment agreement and (ii)
an employee non-competition agreement with Christopher Michaels. In
April 1999, we amended each of those agreements. The employment
agreement provides for:

.an annual base salary of $190,000;

.an annual bonus of 40% of base salary;

.an employment term ending on October 2, 2000, with potential one-year
renewals thereafter, subject to earlier termination by either
party;

.the continuation of base salary and benefit payments for one year
after termination of employment in the event we elect to terminate
Mr. Michaels without cause (as defined in the agreement) or if Mr.
Michaels terminates employment as a result of a default by us
under his agreement; and

. Mr. Michaels' non-competition agreement prohibits him from
competing with us until the first anniversary of the date of his
termination of employment with us.

. In November 1998, we entered into (i) an employment agreement and (ii)
an agreement regarding inventions, non-competition and confidentiality
with Osvaldo deFaria, effective January 1999. The employment agreement
provides for:

.an annual base salary of $200,000;

.an annual bonus of 40% of base salary;

.an employment term ending on January 11, 2002, with potential one-
year renewals thereafter, subject to earlier termination by either
party;

.the continuation of base salary and benefit payments for one year
after termination of employment in the event we elect to terminate
Mr. deFaria without cause (as defined in the agreement) or Mr.
deFaria terminates employment as a result of a default by us under
the agreement; and

. Mr. deFaria's non-competition agreement prohibits him from
competing with us until the first anniversary of the date of his
termination of employment with us.

. In March 1999, we entered into (i) an employment agreement and (ii) an
agreement regarding inventions, non-competition and confidentiality
with Dennis Stepaniak. The employment agreement provides for:

.an annual base salary of $190,000;

.annual bonus of 40% of annual base salary;

.an employment term ending on March 18, 2003, with potential one-year
renewals thereafter, subject to earlier termination by either
party;

.the continuation of base salary and benefit payments for one year
after termination of employment in the event we elect to terminate
Mr. Stepaniak without cause (as defined in the agreement) or Mr.
Stepaniak terminates employment as a result of a default by us
under the agreement; and

. Mr. Stepaniak's non-competition agreement prohibits him from
competing with us until the first anniversary of the date of his
termination of employment with us.

Compensation Committee Interlocks and Insider Participation

Our compensation committee is comprised of our entire board of directors.
The compensation committee reviews and makes recommendations to our board of
directors regarding compensation of senior management and other key employees
other than Mr. Torto. The members of the compensation committee other than Mr.
Torto review and recommend all executive compensation arrangements with respect
to Mr. Torto.

CERTAIN TRANSACTIONS WITH RELATED PARTIES

In August 1997, Voyager Information Networks, Inc. sold an aggregate
shares of common stock and an aggregate 25,000 shares of series A preferred
stock to Media/Communications Partners II Limited Partnership and
Media/Communications Investors Limited Partnership for aggregate consideration
of $500,000 and exchange of 2,696 shares of existing shares of series A
convertible participating preferred stock. In connection with the sale and
purchase, the investors also received an option to purchase an additional
shares of common stock and 15,000 shares of series A preferred stock for
aggregate consideration of $1.5 million. The investors also received voting
rights, registration rights and participation rights which were superseded by
the rights given in the September 1998 stock purchase agreement. The purchase
price of the securities was the fair market value as determined by the parties
at the time of sale, and the transaction was accounted for on a cost basis.

In July 1998, pursuant to the exercise by the investors of the option
referenced above, we sold an aggregate shares of common stock and an
aggregate 15,000 shares of series A preferred stock to Media/Communications
Partners II Limited Partnership and Media/Communications Investors Limited
Partnership for aggregate consideration of $1.5 million. In connection with
this sale, we also issued demand promissory notes in the original principal
amount of $2.8 million in the aggregate to these investors. We used the
proceeds from this transaction to finance the acquisition of the assets of
Freeway, Inc. The purchase price of the securities was determined by the
parties in August 1997 and the transaction was accounted for on a cost basis.

In September 1998, Voyager.net entered into a series of transactions,
including:

. Entering into a stock exchange agreement with Voyager Information
Networks, Inc. and all of its stockholders whereby we exchanged an
aggregate shares of common stock and an aggregate 42,424 shares of
series A preferred stock for all of the outstanding capital stock of
Voyager. In connection with the exchange, each option holder exchanged
his existing Voyager option for an option to purchase shares of
Voyager.net common stock. We consummated the stock exchange solely to
effect a reincorporation under the laws of the State of Delaware. The
stock exchange was intended to be a tax-free reorganization and was
accounted for as if it was a pooling of interests.

. Entering into a stock purchase agreement with Media/Communications
Partners II Limited Partnership, Media/Communications Investors
Limited Partnership, Glenn Friedly, Alan Baird and Michael Heinze
whereby we sold an aggregate shares of common stock and an
aggregate 33,657 shares of series A preferred stock to the investors
at an aggregate purchase price of $0.5 million in cash and
cancellation of promissory notes in the principal amount of $2.8
million, plus accrued interest of $32,524. Under the stock purchase
agreement, certain investors received demand and "piggyback"
registration rights, participation rights with respect to our future
equity issuances and the right to nominate two individuals to our
board of directors. Mr. Hayes and Mr. Gaffney, who are

associated with Great Hill Partners, L.L.C., are members of our Board
of Directors. Upon the closing of this offering, the participation
rights and the nomination rights of the investors will terminate in
accordance with their terms. We intend to use part of the proceeds
that we receive from this offering to redeem all 76,081 shares of our
series A preferred stock held by the investors, plus accrued dividends
thereon, which as of May 31, 1999 was approximately $8.0 million in
the aggregate.

. Entering into a stockholders' agreement with each of our stockholders,
whereby the stockholders agreed to certain restrictions on the
transferability of their shares of common stock. Upon the closing of
this offering, the stockholders' agreement will terminate in
accordance with its terms.

. Issuing an amended and restated promissory note in favor of Horizon
Cable I Limited Partnership in the principal amount of approximately
$2.1 million. Messrs. Friedly, Baird and Heinze are principals and
executive officers of Horizon Cable, and Media/Communications Partners
II Limited Partnership and Media/Communications Investors Limited
Partnership are investors in Horizon Cable. We will use part of the
proceeds that are received from this offering to repay the principal
and interest under the note, which as of May 31, 1999 was
approximately $2.4 million in the aggregate.

In January 1999, we sold shares of restricted common stock to Mr.
deFaria, our Chief Operating Officer. In connection with this sale, Mr. deFaria
issued a promissory note to us in the principal amount of $1.8 million with
interest accruing thereon at 5% annually. The note matures and all principal
and interest is due on January 11, 2003. The note is secured by a pledge of
shares of common stock and is a recourse obligation of Mr. deFaria in the
amount of 25% of the outstanding principal and 100% of the accrued interest.

In January 1999, we sold shares of restricted common stock to Mr.
Friedly, the Chairman of the Board of Directors and one of our principal
stockholders. In connection with this sale, Mr. Friedly issued a promissory
note to us in the principal amount of $4.2 million with interest accruing
thereon at 5% annually. The note matures and all principal and interest is due
on January 11, 2003. The note is secured by a pledge of shares of common
stock and is a recourse obligation of Mr. Friedly in the amount of 25% of the
outstanding principal and 100% of the accrued interest.

In April 1999, Media/Communications Partners II Limited Partnership and
Media/Communications Investors Limited Partnership agreed to purchase
unspecified equity securities of Voyager.net for an aggregate purchase price of
$5 million. The type of equity securities and the per share price of the
securities to be issued to the investors is to be determined by Voyager.net and
the investors at the time of purchase and sale. The investors have until
November 1, 1999 to purchase these shares. The commitment to purchase the
securities, and the obligations of the parties thereunder, terminates upon the
closing of this offering.

In 1998, we entered into a consulting arrangement with Mr. Friedly, pursuant
to which Mr. Friedly receives $75,000 per year.

In 1998, we entered into a reseller agreement with Horizon Cablevision, Inc.
relating to the reselling of Internet access services using cable modems on
Horizon's cable television systems. Mr. Friedly is the President, and Messrs.
Friedly, Baird and Heinze are principals, of Horizon. This agreement has been
terminated.

In March 1999, we entered into a software license agreement with Horizon
Telecom International, L.L.C., whereby we granted Horizon Telecom International
a non-exclusive license to use our customer care and billing software for
$1.00. Messrs. Friedly and Torto, as well as investment funds managed by Great
Hill Partners, L.L.C., of which Messrs. Hayes and Gaffney are managing
partners, are investors in Horizon Telecom International, Mr. Friedly has
agreed to serve as the vice chairman of Horizon Telecom International and Mr.
Torto has agreed to serve as a director of Horizon Telecom International.

In April 1999, we made a loan of $500,000 to Mr. Torto, our President and
Chief Executive Officer, which is payable over three years and accrues interest
at 5% per year. The loan is unsecured and we have full recourse against Mr.
Torto.

In May 1999, we sold an aggregate 6,667 shares of series A preferred stock
to Messrs. Friedly, Baird and Heinze pursuant to the exercise of an option to
purchase shares of series A preferred stock in the stock purchase agreement,
for an aggregate purchase price of approximately $667,000. We intend to use
part of the proceeds that we receive from this offering to redeem all 6,667
shares of series A preferred stock, plus accrued dividends thereon, which as of
May 31, 1999, was approximately $0.7 million in the aggregate.

In June 1999, we made a loan of $5,000,000 to Mr. Torto, our President and
Chief Executive Officer, which is payable over four years and accrues interest
at 5% per year. The loan is secured by a pledge of shares of common stock
and is a recourse obligation of Mr. Torto in the amount of 25% of the
outstanding principal of and 100% of the accrued interest on the loan.

Since January 1998, we have retained Goodwin, Procter & Hoar LLP for certain
legal services. Mr. Dietz, a director and secretary of Voyager.net, is the sole
shareholder of David F. Dietz, P.C., which is a partner in Goodwin, Procter &
Hoar LLP.

We believe that, with the exception of the software license, all of the
transactions identified above were conducted on terms no less favorable to
Voyager.net than could have been obtained from unaffiliated third parties. We
have adopted an insider trading policy in connection with this offering. In the
future, all transactions between any of our officers and directors and us will
be reviewed by the board of directors or the audit committee on an ongoing
basis and will be on terms no less favorable to us than could be obtained from
unaffiliated third parties.

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of common stock as of March 31, 1999 and as adjusted to reflect the
sale of the common stock offered hereby, by:

.all persons known by us to own beneficially 5% or more of the common
stock;

.each of our directors;

.the Chief Executive Officer and the other Named Executive Officers;

.each of the selling stockholders; and

.all directors and Named Executive Officers as a group.

Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares of common stock beneficially owned
by the stockholder. The address of Media/Communications Partners is 75 State
Street, Suite 2500, Boston, MA 02109. The address of Messrs. Hayes and Gaffney
is c/o Great Hill Partners, L.L.C., One Liberty Square, Boston, MA 02109. The
address of Mr. Dietz is c/o Goodwin, Procter & Hoar LLP, Exchange Place,
Boston, MA 02109. The address of all other listed stockholders is c/o
Voyager.net, Inc., 4660 South Hagadorn Road, Suite 320, East Lansing, MI 48823.

The number of shares beneficially owned by each stockholder is determined
under rules issued by the Securities and Exchange Commission. The information
is not necessarily indicative of beneficial ownership for any other purpose.
Under these rules, beneficial ownership includes any shares as to which the
individual or entity has sole or shared voting power or investment power and
any shares as to which the individual or entity has the right to acquire
beneficial ownership within 60 days after March 31, 1999 through the exercise
of any stock option or other right. As of March 31, 1999, a total of shares
of common stock were either outstanding or subject to options, warrants or
other convertible securities that are exercisable or that will become
exercisable within 60 days of the estimated effective date of this offering.
The inclusion in this prospectus of such shares, however, does not constitute
an admission that the named stockholder is a direct or indirect beneficial
owner of such shares. The applicable percentage of "beneficial ownership" after
the offering is based upon shares of common stock outstanding.

Shares Owned
Shares Owned After the Offering
Prior to the Offering (1)
------------------------ Shares ---------------------
Name of Beneficial Owners Number Percent Offered Number Percent
- ------------------------- ---------- ----------- ------- --------- ---------

Entities affiliated with
Media/Communications
Partners (2)........... % %
Glenn R. Friedly (3)....
Alan R. Baird (4).......
Christopher P. Torto
(5)....................
Michael Williams........
John G. Hayes (5).......
Christopher Gaffney
(6)....................
David F. Dietz (7)......
All executive officers
and directors, as a
group (8 persons (8))..

- -----------------------
* Represents less than 1% of the outstanding shares of common stock
(1) Assumes the underwriters do not elect to exercise the over-allotment option
to purchase an additional shares of common stock.
(2) Represents shares of common stock owned by investment funds affiliated with
Media/Communications Partners which are managed by Great Hill Partners,
L.L.C., of which Mr. Hayes and Mr. Gaffney are managing partners,
including:
. shares of common stock owned by Media/Communications Partners II
Limited Partnership; and
. shares of common stock owned by Media/Communications Investors
Limited Partnership.

(3) Includes shares of common stock held by Apache Limited Partnership,
of which Mr. Friedly serves as managing general partner and the limited
partner of which is the Robert Taylor Friedly Trust. Mr. Friedly disclaims
beneficial ownership of the shares held by the limited partnership.

(4) Includes shares of common stock held by Stonehenge Limited
Partnership, of which Mr. Baird serves as managing general partner and the
limited partners of which are the Justin Baird Irrevocable Trust, the
Morgan Baird Irrevocable Trust and the Lauren Baird Irrevocable Trust. Mr.
Baird disclaims beneficial ownership of the shares held by the limited
partnership.

(5) Represents shares of restricted common stock held by Mr. Torto, all of
which shares will be vested upon consummation of this offering.

(6) Includes (i) shares of common stock held by Media/Communications
Partners II Limited Partnership and (ii) shares of common stock held by
Media/Communications Investors Limited Partnership. Messrs. Gaffney and
Hayes are members of the general partner of each of these funds. Each of
Messrs. Gaffney and Hayes disclaims beneficial ownership of shares held by
these funds, except to the extent of their respective pecuniary interest
therein.

(7) Includes shares of common stock which is held by Media/Communications
Investors Limited Partnership of which Mr. Dietz is a limited partner. Mr.
Dietz disclaims beneficial ownership of these shares of common stock except
to the extent of his pecuniary interest therein.

(8) Includes shares of common stock which may be acquired upon exercise of
stock options that are currently exercisable.

DESCRIPTION OF CAPITAL STOCK

Authorized and Outstanding Capital Stock

There are currently shares of common stock and 82,748 shares of series A
preferred stock issued and outstanding. At and subject to the closing of this
offering, all of the outstanding shares of series A preferred stock will be
redeemed by Voyager.net.

Following the offering, our authorized capital stock will consist of
shares of common stock, of which will be issued and outstanding; and
5,000,000 shares of undesignated preferred stock authorized and issuable in one
or more series designated by our board of directors, of which no shares will be
issued and outstanding.

Common Stock

Voting Rights. The holders of our common stock have one vote per share.
Holders of our common stock are not entitled to vote cumulatively for the
election of directors. Generally, all matters to be voted on by stockholders
must be approved by a majority, or, in the case of election of directors, by a
plurality, of the votes entitled to be cast at a meeting at which a quorum is
present by all shares of common stock present in person or represented by
proxy, voting together as a single class, subject to any voting rights granted
to holders of any then outstanding preferred stock. Except as otherwise
provided by law, amendments to our certificate of incorporation, which will be
effective upon consummation of this offering must be approved by a majority of
the voting power of the common stock.

Dividends. Holders of common stock will share ratably in any dividends
declared by our board of directors, subject to the preferential rights of any
preferred stock then outstanding. Dividends consisting of shares of common
stock may be paid to holders of shares of common stock.

Other Rights. In the event of any merger or consolidation of Voyager.net
with or into another company as a result of which shares of common stock are
converted into or exchangeable for shares of stock, other securities or
property, including cash, all holders of common stock will be entitled to
receive the same kind and amount, on a per share of common stock basis, of such
shares of stock and other securities and property, including cash. On
liquidation, dissolution or winding up of Voyager.net, all holders of common
stock are entitled to share ratably in any assets available for distribution to
holders of shares of common stock. No shares of common stock are subject to
redemption or have preemptive rights to purchase additional shares of common
stock.

Preferred Stock

Our certificate of incorporation provides that shares of preferred stock may
be issued from time to time in one or more series. Our board of directors is
authorized to fix the voting rights, if any, designations, powers, preferences,
qualifications, limitations and restrictions thereof, applicable to the shares
of each series. Our board of directors may, without stockholder approval, issue
preferred stock with voting and other rights that could

adversely affect the voting power and other rights of the holders of the common
stock and could have anti-takeover effects. We have no present plans to issue
any shares of preferred stock. The ability of our board of directors to issue
preferred stock without stockholder approval could have the effect of delaying,
deferring or preventing a change of control of Voyager.net or the removal of
existing management.

Registration Rights

Under the terms of the stock purchase agreement entered into on September
23, 1998, Media/Communications Partners II Limited Partnership and
Media/Communications Investors Limited Partnership, who in the aggregate hold
% of the outstanding shares of common stock as of this offering, may demand
that we file a registration statement for the registration of all or any
portion of their shares under the Securities Act. We are not required to effect
more one of these demand registrations.

After the closing of this offering, those stockholders also will be entitled
to unlimited piggyback registration rights in connection with any registration
by us of securities for our own account or the account of other stockholders.
If we propose to register any shares of common stock under the Securities Act,
we are required to give those stockholders notice of the registration and to
include their shares in the registration statement. At any time after we become
eligible to file a registration statement on Form S-3, these stockholders may
require us to file an unlimited number of registration statements on Form S-3
under the Securities Act with respect to their shares of common stock, so long
as the aggregate dollar amount of the shares of common stock to be registered
exceeds $250,000.

The registration rights of these stockholders will terminate when the shares
held by them may be sold under Rule 144 under the Securities Act. We are
generally required to bear all of the expenses of all demand and piggyback
registrations, except underwriting discounts and commissions. We also have
agreed to indemnify those stockholders under the terms of the stock purchase
agreement.

Indemnification Matters

Our certificate of incorporation contains a provision permitted by Delaware
law that generally eliminates the personal liability of directors for monetary
damages for breaches of their fiduciary duty, including breaches involving
negligence or gross negligence in business combinations, unless the director
has breached his or her duty of loyalty, failed to act in good faith, engaged
in intentional misconduct or a knowing violation of law, paid a dividend or
approved a stock repurchase in violation of the Delaware General Corporation
Law or obtained in improper personal benefit. This provision does not alter a
director's liability under the federal securities laws and does not affect the
availability of equitable remedies, such as an injunction or rescission, for
breach of fiduciary duty. Our by-laws provide that directors and officers shall
be, and in the discretion of our board of directors, non-officer employees may
be, indemnified by Voyager.net to the fullest extent authorized by Delaware
law, as it now exists or may in the future be amended, against all expenses and
liabilities reasonably incurred in connection with service for or on behalf of
Voyager.net. Our by-laws also provide for the advancement of expenses to
directors and,

in the discretion of our Board of Directors, officers and non-officer
employees. Our by-laws also provide that the right of directors and officers to
indemnification shall be a contract right and shall not be exclusive of any
other right now possessed or hereafter acquired under any by-law, agreement,
vote of stockholders or otherwise. We also have directors' and officers'
insurance against certain liabilities and have entered into indemnification
agreements with each of our directors.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling Voyager.net as
described above, we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. At present, there is no
pending material litigation or proceeding involving any director, officer,
employee or agent of Voyager.net in which indemnification will be required or
permitted.

Amendment of the Certificate of Incorporation

Any amendment to our certificate of incorporation must first be approved by
a majority of our board of directors and thereafter approved by a majority, and
in some instances, 66 2/3%, of the total votes eligible to be cast by holders
of voting stock with respect to such amendment.

By-law Provisions

Our by-laws provide that a special meeting of stockholders may be called
only by the President or our board of directors unless otherwise required by
law. Our by-laws provide that only those matters included in the notice of the
special meeting may be considered or acted upon at that special meeting unless
otherwise provided by law. In addition, our by-laws include advance notice and
informational requirements and time limitations on any director nomination or
any new proposal which a stockholder wishes to make at an annual meeting of
stockholders.

Ability to Adopt Stockholder Rights Plan

Our board of directors may in the future resolve to issue shares of
preferred stock or rights to acquire such shares to implement a stockholder
rights plan. A stockholder rights plan typically creates voting or other
impediments to discourage persons seeking to gain control of Voyager.net by
means of a merger, tender offer, proxy contest or otherwise if our board of
directors determines that such change in control is not in the best interests
of Voyager.net and our stockholders. Our board of directors has no present
intention of adopting a stockholder rights plan and is not aware of any attempt
to effect a change of control of Voyager.net.

Statutory Business Combination Provision

Following the offering, we will be subject to Section 203 of the Delaware
General Corporation Law, which prohibits a publicly held Delaware corporation
from consummating a "business combination," except under certain circumstances,
with an

"interested stockholder" for a period of three years after the date such person
became an "interested stockholder" unless:

. before such person became an interested stockholder, the board of
directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved
the business combination;

. upon the closing of the transaction that resulted in the interested
stockholder's becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding shares
held by directors who are also officers of the corporation and shares
held by employee stock plans; or

. following the transaction in which such person became an interested
stockholder, the business combination is approved by the board of
directors of the corporation and authorized at a meeting of
stockholders by the affirmative vote of the holders of 66 2/3% of the
outstanding voting stock of the corporation not owned by the
interested stockholder.

The term "interested stockholder" generally is defined as a person who,
together with affiliates and associates, owns, or, within the prior three
years, owned, 15% or more of a corporation's outstanding voting stock. The term
"business combination" includes mergers, asset sales and other similar
transactions resulting in a financial benefit to an interested stockholder.
Section 203 makes it more difficult for an "interested stockholder" to effect
various business combinations with a corporation for a three-year period. A
Delaware corporation may "opt out" of Section 203 with an express provision in
its original certificate of incorporation or an express provision in its
certificate of incorporation or by-laws resulting from an amendment approved by
holders of at least a majority of the outstanding voting stock. Neither our
certificate of incorporation nor our by-laws contains any such exclusion.

Trading on the Nasdaq National Market System

We have applied to have our common stock approved for quotation on the
Nasdaq National Market under the symbol "VOYN."

Transfer Agent and Registrar

The transfer agent and registrar for our common stock will be State Street
Bank and Trust Company.

SHARES ELIGIBLE FOR FUTURE SALE

Before this offering, there has been no public market for our common stock,
and no prediction can be made as to the effect, if any, that sales of common
stock or the availability of common stock for sale will have on the market
price of our common stock prevailing from time to time. Nonetheless,
substantial sales of common stock in the public market following this offering,
or the perception that such sales could occur, could lower the market price of
our common stock or make it difficult for us to raise additional equity capital
in the future.

Following this offering, there will be shares of our common stock
outstanding. Of these shares, the shares which are being sold in this
offering generally will be freely transferable without restriction or further
registration under the Securities Act, except that any shares held by our
"affiliates" as is defined in Rule 144 under the Securities Act may be sold
only in compliance with the limitations described below. The remaining
shares of common stock which will be outstanding after the offering will be
"restricted securities" as defined in Rule 144, and may be sold in the future
without registration under the Securities Act subject to compliance with the
provisions of Rule 144 or any other applicable exemption under the Securities
Act. In connection with this offering, our existing officers, directors,
stockholders and optionholders, who hold all of the currently outstanding
shares of common stock and will own an aggregate of shares of common stock
after this offering, have agreed with the underwriters that, subject to
exceptions, they will not sell or dispose of any of their shares for 180 days
after the date of this prospectus. Donaldson, Lufkin & Jenrette Securities
Corporation may, in its sole discretion and at any time without notice, release
all or any portion of the shares subject to such restrictions. Subject to these
lock-up agreements, the shares of common stock outstanding upon the closing of
the offering will be available for sale in the public market as follows:

Approximate
Number of Shares Description
---------------- -------------------------------------------------------------

After the date of this prospectus, freely tradeable shares
sold in the offering.

After 180 days from the date of this prospectus, the lock-up
is released and these shares are saleable under Rule 144
(subject, in some cases, to volume limitations), Rule 144(k),
or under a registration statement to register for resale
shares of common stock issued upon the exercise of stock
options.

In general, under Rule 144, as currently in effect, a person or persons
whose shares are required to be aggregated, including an affiliate of ours, and
who has beneficially owned shares for at least one year is entitled to sell,
within any three-month period commencing 90 days after the date of this
prospectus, a number of shares that does not exceed the greater of 1% of the
then outstanding shares of common stock, which is expected to be approximately
shares upon the completion of this offering, or the average weekly trading
volume of the common stock during the calendar weeks preceding the date on
which notice of such sale is filed, subject to certain restrictions. In
addition, a person who is not deemed to have been an affiliate of ours 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 would be entitled to sell such shares under Rule 144(k) without
regard to the requirements described above. To the extent that shares were
acquired from an affiliate of ours, such person's holding period for the
purpose of effecting a sale under Rule 144 commences on the date of transfer
from the affiliate.

We have agreed not to sell or otherwise dispose of any shares of common
stock during the 180-day period following the date of this prospectus, except
we may issue, and grant options to purchase, shares of common stock under the
1998 Stock Option and Incentive Plan. See "Risk Factors--The future sale of
shares of our common stock could adversely affect the market price of our
common stock."

Following the offering, under specified circumstances and subject to
customary conditions, Media/Communications Partners II Limited Partnership and
Media/Communications Investors Limited Partnership will have the right with
respect to shares of common stock, subject to the 180-day lock-up
arrangement described above, to require us to register their shares of common
stock under the Securities Act, and they will have rights to participate in any
future registration of securities by us.

UNDERWRITING

Subject to the terms and conditions contained in the underwriting agreement,
the underwriters named below, who are represented by Donaldson, Lufkin &
Jenrette Securities Corporation, First Union Capital Markets Corp. and CIBC
World Markets Corp., have severally agreed to purchase from us and the selling
stockholders the number of shares of common stock opposite their respective
names below.

Number of Shares
----------------

Underwriters:
Donaldson, Lufkin & Jenrette Securities Corporation............
First Union Capital Markets Corp. .............................
CIBC World Markets Corp........................................
DLJdirect Inc..................................................
---
Total......................................................
===

The underwriting agreement provides that the obligations of the several
underwriters to purchase and accept delivery of shares included in this
offering are subject to approval of certain legal matters and to certain other
conditions. The underwriters are obligated to purchase and accept delivery of
all the shares, other than those shares covered by the over-allotment option
described below, if they purchase any of the shares.

The underwriters propose to initially offer some of the shares directly to
the public at the initial public offering price on the cover page of this
prospectus and some of the shares to certain dealers at the initial public
offering price less a concession not in excess of $ per share. The
underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per share on sales to other dealers. After the initial public
offering of the shares to the public, the representatives may change the public
offering price and such concessions. The underwriters do not intend to confirm
sales to any account over which they exercise discretionary authority.

DLJdirect Inc., an affiliate of Donaldson, Lufkin & Jenrette Securities
Corporation and a member of the selling group, is facilitating the distribution
of the shares sold in the offering over the Internet. The underwriters have
agreed to allocate a limited number of shares to DLJdirect Inc. for sale to its
brokerage account holders.

The following table shows the underwriting fees we will pay to the
underwriters in connection with this offering. These amounts are shown assuming
both no exercise and full exercise of the underwriters' option to purchase
additional shares of our common stock.

Paid by
Voyager.net
-----------------
No Full
Exercise Exercise
-------- --------

Per share..................................................... $ $
Total......................................................... $ $

We will pay all of the offering expenses, estimated to be $ .

Voyager.net and the selling stockholders have granted to the underwriters an
option, exercisable for 30 days after the date of this prospectus, to purchase
up to additional shares at the initial public offering price less the
underwriting fees. The underwriters may exercise such option only to cover
over-allotments, if any, made in connection with this offering. To the extent
that the underwriters exercise this option, each underwriter will become
obligated, subject to certain conditions, to purchase a number of additional
shares approximately proportionate to that underwriter's initial purchase
commitment.

Voyager.net and the selling stockholders have severally agreed to indemnify
the underwriters against certain civil liabilities, including liabilities under
the Securities Act, or to contribute to payments that the underwriters may be
required to make in respect any of those liabilities.

We, our executive officers and directors, and substantially all of our
stockholders have agreed, for a period of 180 days from the date of this
prospectus, not to, without the prior written consent of Donaldson, Lufkin &
Jenrette:

. offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any shares of our common stock or any
securities convertible into or exercisable or exchangeable for our
common stock; or

. enter into any swap or other arrangement that transfer all or a
portion of the economic consequences associated with the ownership of
any common stock, regardless of whether any of the transactions
described in these clauses are to be settled by the delivery of common
stock, or such other securities, in cash or otherwise.

In addition, during this period, we have agreed not to file any registration
statement with respect to, and each of our executive officers and directors and
a significant majority of our stockholders have agreed not to make any demand
for, or exercise any right with respect to, the registration of any shares of
common stock or any securites convertible into or exercisable or exchangeable
for common stock (other than a registration statement registering options or
shares granted under a stock option plan) without the prior written consent of
Donaldson, Lufkin & Jenrette.

Prior to this offering, there was no established trading market for our
common stock. The initial public offering price for our common stock will be
determined by negotiation among us and the representatives of the underwriters.
The factors to be considered in determining the initial public offering price
include the history of and the prospects for the industry in which we compete,
the ability of our management, our past and present operations, our prospects
for future earnings, the general condition of the securities markets at the
time of this offering and the recent market prices of securities of generally
comparable companies.

Persons who receive this prospectus are advised to inform themselves about
and to observe any restrictions relating to the offering of our common stock
and the distribution of this prospectus. This prospectus is not an offer to
sell or a solicitation of an offer to buy any shares of our common stock
included in this offering in any jurisdiction where that would not be permitted
or legal.

In connection with this offering, certain underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of our
common stock. Specifically, the underwriters may overallot this offering,
creating a syndicate short position. In addition, the underwriters may bid for
and purchase shares of our common stock in the open market to cover syndicate
short positions or to stabilize the price of our common stock. These activities
may stabilize or maintain the market price of our common stock above
independent market levels. The underwriters are not required to engage in these
activities and may end any of these activities at any time.

The underwriters have reserved for sale up to shares of common stock
for sale at the initial public offering price to persons, at our request,
associated with Voyager.net. The number of shares available for sale to the
general public will be reduced to the extent any reserved shares are purchased.
Any reserved shares not so purchased will be offered by the underwriters on the
same basis as the other shares offered hereby.

We have applied for quotation of our common stock on the Nasdaq National
Market under the symbol "VOYN".

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for Voyager.net by Goodwin, Procter & Hoar LLP, Boston, Massachusetts.
David Dietz, a director and the secretary of Voyager.net, is the sole owner of
David F. Dietz, P.C., a partner of Goodwin, Procter & Hoar LLP and its
predecessor firm. Mr. Dietz is also a limited partner with a pecuniary interest
in Media/Communications Investor Limited Partnership, one of the selling
stockholders in this offering. Various legal matters related to the sale of the
common stock offered hereby will be passed upon for the underwriters by Hale
and Dorr LLP, Boston, Massachusetts.

EXPERTS

Our audited financial statements as of December 31, 1997 and 1998, and for
each of the three years in the period ended December 31, 1998 included in this
prospectus have been audited by PricewaterhouseCoopers LLP, independent
accountants, as stated in their reports appearing in this prospectus, and have
been so included in reliance upon their authority as experts in accounting and
auditing.

CHANGE IN INDEPENDENT ACCOUNTANTS

In July 1998,Voyager.net engaged PricewaterhouseCoopers LLP as its
independent public accountants, to replace Plante & Moran. The decision was
made by Voyager.net's board of directors and was not due to any disagreement
with Plante & Moran. During the fiscal years ended December 31, 1996 and
December 1997, Voyager.net had no disagreements with Plante & Moran on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Plante & Moran, would have caused them to make reference
thereto in their report on our financial statements. The reports of Plante &
Moran on our financial statements for the fiscal years ended December 31, 1996
and December 31, 1997 (the last fiscal year audited by Plante & Moran) did not
contain any adverse opinion, disclaimer of opinion or qualification or
modification as to uncertainty, audit scope or accounting principles.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission, or SEC, a
registration statement on Form S-1 (including the exhibits and schedules
thereto) under the Securities Act and the rules and regulations thereunder, for
the registration of the common stock offered hereby. This prospectus is part of
the registration statement. This prospectus does not contain all the
information included in the registration statement because we have omitted
certain parts of the registration statement as permitted by the SEC rules and
regulations. For further information about us and our common stock, you should
refer to the registration statement. Statements contained in this prospectus
concerning the contents of any contract or any other document are complete with
respect to the material provisions of such contract; reference is made in each
instance to the copy of such contract or any other document filed as an exhibit
to the registration statement. Where the contract or other document is an
exhibit to the registration statement, each statement is qualified by the
provisions of that exhibit.

The registration statement can be inspected and copied at the public
reference facility maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You may call the SEC at 1-
800-SEC-0330 for further information about the operation of the public
reference rooms. Copies of all or any portion of the registration statement can
be obtained from the Public Reference Section of the SEC, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, the
registration statement is publicly available through the SEC's site on the
Internet's World Wide Web, located at http://www.sec.gov.

We will also file annual, quarterly and current reports, proxy statements
and other information with the SEC. You can also request copies of these
documents, for a copying fee, by writing to the SEC. We intend to furnish to
our stockholders annual reports containing audited financial statements for
each fiscal year.

VOYAGER.NET, INC.

INDEX TO FINANCIAL STATEMENTS

Pages

Voyager.net, Inc. - Consolidated Financial Statements:
Report of Independent Accountants...................................... F-2
Consolidated Balance Sheets as of December 31, 1997 and 1998 and March
31, 1999.............................................................. F-3
Consolidated Statements of Operations for the Years Ended December 31,
1996, 1997 and 1998 and for the Quarter Ended March 31, 1999.......... F-4
Consolidated Statements of Stockholders' Equity (Deficit) for the Years
Ended December 31, 1996, 1997 and 1998 and the Quarter Ended March 31,
1999.................................................................. F-5
Consolidated Statements of Cash Flows for the Years Ended December 31,
1996, 1997 and 1998 and the Quarter Ended March 31, 1999.............. F-6
Notes to Consolidated Financial Statements............................. F-7

Pro Forma Condensed Consolidated Financial Statements (Unaudited):
Pro Forma Condensed Consolidated Statements of Operations for the Year
Ended December 31, 1998 (Unaudited)................................... F-18
Pro Forma Condensed Consolidated Statements of Operations for the three
months ended March 31, 1999 (Unaudited)............................... F-20
Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1999.... F-22
Notes to Pro Forma Condensed Consolidated Financial Statements
(Unaudited)........................................................... F-23

Freeway, Inc. - Financial Statements:
Report of Independent Accountants...................................... F-24
Balance Sheets as of December 31, 1997 and July 31, 1998............... F-25
Statements of Income for the Year Ended December 31, 1997 and for the
Seven Months Ended July 31, 1998...................................... F-26
Statements of Stockholders' Equity for the Year Ended December 31, 1997
and for the Seven Months Ended July 31, 1998.......................... F-27
Statements of Cash Flows for the Year Ended December 31, 1997 and for
the Seven Months Ended July 31, 1998.................................. F-28
Notes to Financial Statements.......................................... F-29

EXEC-PC, Inc. - Financial Statements:
Report of Independent Accountants...................................... F-31
Balance Sheets as of December 31, 1997 and September 22, 1998.......... F-32
Statements of Income for the Year Ended December 31, 1997 and for the
Period From January 1, 1998 through September 22, 1998................ F-33
Statements of Stockholders' Deficit for the Year Ended December 31,
1997 and for the Period From January 1, 1998 through September 22,
1998.................................................................. F-34
Statements of Cash Flows for the Year Ended December 31, 1997 and for
the Period From January 1, 1998 through September 22, 1998............ F-35
Notes to Financial Statements.......................................... F-36

NetLink Systems, L.L.C. - Financial Statements:
Report of Independent Accountants...................................... F-40
Balance Sheets as of December 31, 1997 and September 30, 1998.......... F-41
Statement of Income and Members' Equity for the Year Ended December 31,
1997 and the Nine Months Ended September 30, 1998..................... F-42
Statement of Cash Flows for the Year Ended December 31, 1997 and the
Nine Months Ended September 30, 1998.................................. F-43
Notes to Financial Statements.......................................... F-44

GDR Enterprises, Inc. - Financial Statements:
Report of Independent Accountants...................................... F-46
Consolidated Balance Sheets as of December 31, 1998 and March 31, 1998
and 1999.............................................................. F-47
Consolidated Statements of Income for the Year Ended December 31, 1998
and the Quarters Ended March 31, 1998 and 1999........................ F-48
Consolidated Statements of Stockholder's Equity (Deficit) for the Year
Ended December 31, 1998 and the Quarters Ended March 31, 1998 and
1999.................................................................. F-49
Consolidated Statements of Cash Flows for the Year Ended December 31,
1998 and the Quarters Ended March 31, 1998 and 1999................... F-50
Notes to the Consolidated Financial Statements......................... F-51

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and the Stockholders of Voyager.net, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows, present fairly, in all material respects, the financial position of
Voyager.net, Inc. (the "Company") and subsidiaries at December 31, 1997 and
1998, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles. 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 of these statements in accordance with generally accepted auditing
standards, which 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, 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 expressed above.

PricewaterhouseCoopers LLP

Grand Rapids, Michigan

March 5, 1999, except for Note 17, for which the date is June 10, 1999

F-2

VOYAGER.NET, INC.

CONSOLIDATED BALANCE SHEETS

December 31, March 31,
------------------------ 1999
1997 1998 (unaudited)

Assets
Current assets:
Cash and cash equivalents.............. $ 518,791 $ 2,350,292 $ 4,426,518
Accounts receivable, less allowance for
doubtful
accounts of $40,000, $99,000 and
$134,000 in 1997, 1998 and 1999,
respectively.......................... 196,955 950,381 1,812,496
Prepaid and other assets............... 24,969 154,059 303,204
----------- ----------- -----------
Total current assets................. 740,715 3,454,732 6,542,218
Property and equipment, net............. 1,256,753 9,528,372 12,064,932
Intangible assets, net.................. 103,529 28,741,650 33,852,138
----------- ----------- -----------
Total assets......................... $ 2,100,997 $41,724,754 $52,459,288
=========== =========== ===========

Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
Current portion of obligations under
capital leases........................ $ 43,978 $ 303,562 $ 391,667
Notes payable, related party........... 1,996,014 2,252,713 2,296,525
Accounts payable....................... 125,620 659,351 1,620,772
Other liabilities...................... 165,779 855,727 1,128,370
Deferred revenue....................... 194,273 5,625,627 7,373,988
----------- ----------- -----------
Total current liabilities............ 2,525,664 9,696,980 12,811,322
Commitments and contingencies........... -- -- --
Obligations under capital leases........ 114,646 751,613 972,823
Long-term debt.......................... -- 30,000,000 39,400,000
Stockholders' equity (deficit):
Preferred stock, Series A, 8%
cumulative, non-
voting, $.01 par value, $100
redemption value:
authorized 40,000 shares in 1997, and
100,000 shares in 1998 and 1999;
issued and outstanding, 25,000 shares
in 1997 and 82,748 shares in 1998 and
1999 (includes 6,667 shares subject to
purchase that have not been issued)... 2,500,000 8,274,819 8,274,819
Common stock, $.0001 par value:
authorized 60,000,000 shares in 1997
and 25,000,000 shares in 1998 and
1999; issued and outstanding,
11,994,320 shares in 1997 and
17,916,380 in 1998 and 18,916,380 in
1999.................................. 1,200 1,792 1,892
Additional paid-in capital.............. 3,292 413,168 6,413,068
Receivable for preferred and common
stock.................................. -- (666,700) (6,666,700)
Accumulated deficit..................... (3,043,805) (6,746,918) (8,747,936)
----------- ----------- -----------
Total stockholders' equity
(deficit)........................... (539,313) 1,276,161 (724,857)
Total liabilities and stockholders'
equity.............................. $ 2,100,997 $41,724,754 $52,459,288
=========== =========== ===========

The accompanying notes are an integral part of the consolidated financial
statements.

F-3

VOYAGER.NET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended
Years Ended December 31, March 31,
------------------------------------ ------------------------
1996 1997 1998 1998 1999
(unaudited)

Revenue:
Internet access
service............... $ 1,707,499 $3,440,212 $10,588,963 $ 1,131,774 $ 8,405,202
Other.................. -- 14,063 133,199 3,470 114,024
----------- ---------- ----------- ----------- -----------
Total revenue........... 1,707,499 3,454,275 10,722,162 1,135,244 8,519,226
----------- ---------- ----------- ----------- -----------
Operating expenses:
Internet access service
costs................. 1,002,431 1,318,163 3,607,665 370,353 2,789,676
Sales and marketing.... 638,446 1,038,459 1,987,113 180,582 969,031
General and
administrative........ 1,154,815 1,461,720 3,405,870 355,438 2,463,200
Depreciation and
amortization.......... 420,315 394,385 3,862,041 126,005 3,526,824
Compensation charge for
issuance of common
stock and stock
options............... -- -- 408,407 -- --
----------- ---------- ----------- ----------- -----------
Total operating ex-
penses................. 3,216,007 4,212,727 13,271,096 1,032,378 9,748,731
----------- ---------- ----------- ----------- -----------
Income (loss) from oper-
ations before other
income (expense)....... (1,508,508) (758,452) (2,548,934) 102,866 (1,229,505)
Other income (expense):
Interest income........ 17,298 11,312 30,987 5,792 26,773
Interest expense....... (7,010) (72,932) (942,766) (44,833) (798,286)
----------- ---------- ----------- ----------- -----------
Total other income (ex-
pense)................. 10,288 (61,620) (911,779) (39,041) (771,513)
----------- ---------- ----------- ----------- -----------
Net income (loss)....... (1,498,220) (820,072) (3,460,713) 63,825 (2,001,018)
Preferred stock divi-
dends.................. -- (73,456) (348,494) (50,000) (165,496)
----------- ---------- ----------- ----------- -----------
Net income (loss) appli-
cable to common
stockholders........... $(1,498,220) $ (893,528) $(3,809,207) $ 13,825 $(2,166,514)
=========== ========== =========== =========== ===========
Per Share Data:
Basic and diluted net
loss per share applica-
ble to common stock-
holders................ $ (0.35) $ (0.12) $ (0.27) $ 0.00 $ (0.12)
=========== ========== =========== =========== ===========
Weighted average common
shares outstanding:
Basic and diluted....... 4,316,000 7,160,080 14,238,296 12,095,704 18,538,602
=========== ========== =========== =========== ===========

The accompanying notes are an integral part of the consolidated financial
statements.

F-4

VOYAGER.NET, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

Receivable
For Total
Preferred Stock Common Stock Additional Preferred Stockholders'
----------------- ------------------ Paid-in and Common Accumulated Equity
Shares Amount Shares Amount Capital Stock Deficit (Deficit)

Balance at January 1,
1996.................... 20,000 $2,000,000 4,316,000 $ 432 $ 44,374 $ (695,076) $ 1,349,730
Net loss................ -- -- -- -- -- (1,498,220) (1,498,220)
------ ---------- ---------- ------ ---------- ----------- -----------
Balance at December 31,
1996................... 20,000 2,000,000 4,316,000 432 44,374 (2,193,296) (148,490)
Redemption of common
stock................... -- -- (1,888,000) (189) (44,374) (30,437) (75,000)
Issuance of common
stock................... -- -- 9,566,320 957 3,292 -- 4,249
Issuance of preferred
stock................... 5,000 500,000 -- -- -- -- 500,000
Net loss................ -- -- -- -- -- (820,072) (820,072)
------ ---------- ---------- ------ ---------- ----------- -----------
Balance at December 31,
1997................... 25,000 2,500,000 11,994,320 1,200 3,292 (3,043,805) (539,313)
Conversion of notes pay-
able to preferred stock
and
issuance of preferred
and common stock........ 40,324 4,032,419 360,000 36 144 $ (666,700) -- 3,365,899
Issuance of preferred
and common stock........ 15,000 1,500,000 3,762,060 376 1,505 -- -- 1,501,881
Conversion of preferred
dividends to preferred
stock................... 2,424 242,400 -- -- -- -- (242,400) --
Issuance of common stock
and options............. -- -- 1,800,000 180 408,227 -- -- 408,407
Net loss................ -- -- -- -- -- -- (3,460,713) (3,460,713)
------ ---------- ---------- ------ ---------- ----------- ----------- -----------
Balance at December 31,
1998................... 82,748 8,274,819 17,916,380 1,792 413,168 (666,700) (6,746,918) 1,276,161
Issuance of common
stock................... 1,000,000 100 5,999,900 (6,000,000) -- --
Net loss................ -- -- -- -- -- -- (2,001,018) (2,001,018)
------ ---------- ---------- ------ ---------- ----------- ----------- -----------
Balance at March 31,
1999 (unaudited)....... 82,748 $8,274,819 18,916,380 $1,892 $6,413,068 $(6,666,700) $(8,747,936) $ (724,857)
====== ========== ========== ====== ========== =========== =========== ===========

The accompanying notes are an integral part of the consolidated financial
statements.

F-5

VOYAGER.NET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended
Years Ended December 31, March 31,
------------------------------------ -----------------------
1996 1997 1998 1998 1999
(unaudited)

Cash flows from
operating activities
Net income (loss)...... $(1,498,220) $ (820,072) $(3,460,713) $ 63,825 $ (2,001,018)
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization.......... 420,315 394,385 3,862,041 126,005 3,526,824
(Gain) loss on sale of
equipment............. -- (7,071) 5,952 -- --
Compensation charge for
issuance of common
stock shares and
options............... -- -- 408,407 -- --
Changes in assets and
liabilities excluding
effects of business
combinations:
Accounts receivable... (131,048) (28,199) (513,909) 9,815 (475,909)
Prepaids and other
assets............... 48,842 (24,251) (104,990) (83,400) (47,308)
Accounts payable...... 188,898 (237,551) 512,591 36,944 961,421
Accrued expenses...... 92,675 137,486 831,577 (35,422) 302,869
Deferred revenue...... 1,902 187,203 1,160,698 97,005 1,165,556
----------- ---------- ----------- --------- ------------
Net cash provided by
(used in) operating
activities............. (876,636) (398,070) 2,701,654 214,772 3,432,435
Cash flows from
investing activities
Business acquisition
costs, net of cash
acquired.............. -- -- (32,850,289) -- (9,371,427)
Purchase of property
and equipment......... (759,119) (661,312) (1,514,323) (170,840) (1,320,563)
Proceeds from the sale
of equipment.......... -- 87,282 28,248 -- --
----------- ---------- ----------- --------- ------------
Net cash used in invest-
ing activities......... (759,119) (574,030) (34,336,364) (170,840) (10,691,990)
Cash flows from
financing activities
Payments on capital
leases................ (20,373) (54,216) (54,565) (15,938) (64,219)
Advances from related
party................. 603,806 1,127,777 4,047 49,921 --
Payment to related
party................. -- (15,000) (25,521) -- --
Payment of bank
financing fees........ -- -- (1,325,530) -- --
Proceeds from issuance
of debt............... -- -- 30,000,000 -- 9,400,000
Proceeds from notes
payable issuance...... -- -- 2,800,000 -- --
Proceeds from common
stock issuance........ -- 4,249 2,061 -- --
Proceeds from preferred
stock issuance........ -- 500,000 2,065,719 -- --
Redemption of common
stock................. -- (75,000) -- -- --
----------- ---------- ----------- --------- ------------
Net cash provided by fi-
nancing activities..... 583,433 1,487,810 33,466,211 33,983 9,335,781
----------- ---------- ----------- --------- ------------
Net increase (decrease)
in cash and cash
equivalents............ (1,052,322) 515,710 1,831,501 77,915 2,076,226
Cash and cash
equivalents at
beginning of period.... 1,055,403 3,081 518,791 518,791 2,350,292
----------- ---------- ----------- --------- ------------
Cash and cash
equivalents at end of
period................. $ 3,081 $ 518,791 $ 2,350,292 $ 596,706 $ 4,426,518
=========== ========== =========== ========= ============

The accompanying notes are an integral part of the consolidated financial
statements.

F-6

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies:

Organization and Basis of Presentation

Voyager.net, Inc. (the "Company") owns 100% of Voyager Information Networks,
Inc., which was incorporated in the State of Michigan in 1994. Voyager.net was
incorporated in 1998 in the State of Delaware under the name Voyager Holdings,
Inc. The Company's name was changed to Voyager.net, Inc. on April 29, 1999. The
Company provides full service access to the Internet for corporate and
residential users in Michigan, Illinois, Indiana, Minnesota, Ohio and
Wisconsin.

Revenue Recognition

The Company recognizes revenue for dial-up Internet access services,
dedicated Internet access services and value-added Web services when the
services are provided. Dial-up and dedicated Internet access service plans
range from one month to one year. Value-added Web services are sold on a
monthly basis. Advance collections relating to future access services are
recorded as deferred revenue and recognized as revenue when earned.

Cash Equivalents

The Company considers all highly liquid investments purchased with an
initial maturity of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost and depreciated over their
estimated useful lives using the straight-line method. Equipment acquired under
capital leases is depreciated over the related lease terms or the estimated
productive useful lives, depending on the criteria met in determining the
qualification as a capital lease. Costs of repair and maintenance are charged
to expense as incurred.

Intangible Assets

Intangible assets consist primarily of the cost of the acquired customer
base. The acquired customer base is amortized using the straight-line method
over 3 years based on the estimated customer churn rate. Bank financing fees,
included in intangible assets, are being amortized on a straight-line basis
over the term of the related debt. Other intangible assets are amortized over a
10 year period. Impairments, if any, are measured based upon discounted cash
flow analyses and are recognized in operating results in the period in which
the impairment in value is determined.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense of
approximately $151,000, $372,000 and $185,000 was charged to operations in
1996, 1997 and 1998, respectively.

F-7

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Financial Instruments

The Company's financial instruments, as defined by SFAS No. 107 Disclosures
About Fair Value of Financial Instruments, consist of cash, notes payable and
long-term debt. The Company's estimate of the fair value of these financial
instruments approximates their carrying amounts at December 31, 1997 and 1998.

Use of Estimates

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

Income Taxes

A current tax liability or asset is recognized for the estimated taxes
payable or refundable on tax returns for the year. Deferred tax liabilities or
assets are recognized for the estimated future tax effects of temporary
differences between financial and tax accounting.

Interim Financial Information

The consolidated financial statements of the Company as of March 31, 1999
and for the three months ended March 31, 1999 and 1998 are unaudited. All
adjustments (consisting only of normal recurring adjustments) have been made,
which in the opinion of management, are necessary for a fair presentation.
Results of operations for the three months ended March 31, 1999 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999 or for any other future period.

2. Business Combinations:

In 1998, the Company acquired certain assets used in connection with the
Internet access service business of seven entities as described below:

July 1, 1998, the Company purchased assets from CDL Corp. for
approximately $69,000, of which approximately $55,500 was remitted to CDL
Corp. and the remainder was deposited in an escrow account. Approximately
$68,000 was allocated to the acquired customer base cost as a result of
this transaction.

July 1, 1998, the Company purchased assets from Internet-Michigan, Inc.
for approximately $203,000. Approximately $202,000 was allocated to the
acquired customer base cost as a result of this transaction.

July 31, 1998, the Company purchased assets from Freeway, Inc. for
approximately $3,991,000, of which approximately $3,586,000 was remitted to
Freeway, Inc. and the remainder was deposited in an escrow account.
Approximately $3,074,000 was allocated to the acquired customer base cost
as a result of this transaction.

F-8

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

September 23, 1998, the Company purchased assets from EXEC-PC, Inc. for
approximately $23,983,000, of which $22,733,000 was paid to EXEC-PC, Inc.,
including approximately $3,827,000 for payment of certain liabilities with
the remainder deposited in an escrow account. Approximately $21,992,000 was
allocated to the acquired customer base cost as a result of this
transaction.

October 2, 1998, the Company purchased assets from Netimation, Inc. for
approximately $258,000 of which $233,000 was remitted to Netimation, Inc.,
including approximately $6,000 for payment of certain liabilities with the
remainder deposited in an escrow account. Approximately $260,000 was
allocated to the acquired customer base cost as a result of this
transaction.

October 2, 1998, the Company purchased assets from NetLink Systems,
L.L.C. for approximately $3,363,000, of which approximately $3,003,000 was
remitted to NetLink Systems, L.L.C. and the remainder was deposited in an
escrow account. Approximately $3,197,000 was allocated to the acquired
customer base cost as a result of this transaction.

November 20, 1998, the Company purchased assets from Add, Inc. for
approximately $41,000, of which approximately $6,800 was remitted to Add,
Inc. and the remainder is payable over five months. Approximately $6,000
was allocated to the acquired customer base cost as a result of this
transaction.

The above acquisitions were accounted for as purchases and, accordingly, the
purchase prices were allocated to assets acquired and liabilities assumed based
upon their estimated fair values at the dates of acquisition. For each
individual acquisition listed above, the amounts allocated to the acquired
customer base excludes broker commissions and legal fees aggregating 1,235,000.
Such amounts have been added to the total customer base being amortized over
three years. For those businesses acquired, the results of operations are
included in the Company's consolidated statement of operations from the dates
of acquisitions.

The unaudited pro forma combined historical results, as if the Freeway,
Inc., EXEC-PC, Inc. and NetLink Systems, L.L.C. had been acquired at the
beginning of fiscal 1997 and 1998, respectively, are included in the table
below. The pro forma combined historical results for CDL Corp., Internet-
Michigan, Inc., Netimation, Inc. and Add, Inc. were not deemed to be material
and are not included for 1997 and 1998. Additionally, the unaudited pro forma
combined historical results of Hoosier On-Line Services, Inc., Infinite
Systems, Ltd., and Exchange Network Services, Inc. are included in the three
months ended March 31, 1999 as if they had been acquired January 1, 1999. The
unaudited pro forma combined historical results of GDR Enterprises, Inc., which
was acquired on May 7, 1999, are included for the year ended December 31, 1998
and for the three months ended March 31, 1999 as if it had been acquired on
January 1, 1998.

F-9

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(in thousands except per share data)
Three Months
Years Ended December 31, Ended
-------------------------- March 31,
1997 1998 1999
(unaudited) (unaudited)

Revenue............................. $ 14,120 $ 25,743 $10,510
Net loss............................ $ (12,590) $ (14,458) $(2,829)
Basic loss per share................ $ (1.76) $ (1.04) $ (0.15)

The pro forma results above include amortization of intangibles and interest
expense on debt assumed issued to finance the acquisitions. The pro forma
results are not necessarily indicative of what actually would have occurred if
the acquisitions had been completed as of the beginning of each of the fiscal
periods presented, nor are they necessarily indicative of future consolidated
results.

3. Property and Equipment:

Cost of property and equipment and depreciable lives are summarized as
follows:

Depreciable
1997 1998 Life-Years

Computer equipment........ $1,551,099 $8,461,789 5
Office equipment.......... 25,052 230,009 7
Furniture and fixtures.... 76,238 96,559 5-7
Software.................. 157,260 389,863 3-5
Equipment acquired under
capital lease............ 251,355 1,178,525 5
Vehicles.................. -- 32,807 5
Building improvements..... -- 860,526 7-10
---------- ----------
2,061,004 11,250,078
Less accumulated
depreciation............ (804,251) (1,721,706)
---------- ----------
Property and equipment,
net.................... $1,256,753 $9,528,372
========== ==========

Depreciation expense of approximately $238,000, $393,000 and $842,000 was
charged to operations in 1996, 1997 and 1998, respectively.

4. Intangible Assets:

Intangible assets consist of the following:

Years Ended December Three Months
31, Ended
--------------------- March 31,
1997 1998 1999
(unaudited)

Acquired customer base.................. $ 25,775 $30,127,837 $37,897,134
Bank financing fees..................... -- 1,348,182 1,348,182
Other................................... 108,124 237,658 286,980
-------- ----------- -----------
133,899 31,713,677 39,532,296
Less accumulated amortization........... (30,370) (2,972,027) (5,680,158)
-------- ----------- -----------
Intangible assets, net.................. $103,529 $28,741,650 $33,852,138
======== =========== ===========

F-10

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

5. Capital Leases:

The Company leases computer equipment under capital leases expiring in
various years through the year 2002. The assets under capital leases are
recorded at the lower of the present value of the minimum lease payments or the
fair value of the asset. The net book value of these assets as of December 31,
1998 is $982,822. Depreciation of assets under capital leases is included in
depreciation expense.

Future minimum lease payments under capital leases as of December 31, 1998
are as follows:

1999............................................................. $ 395,315
2000............................................................. 380,723
2001............................................................. 349,608
2002............................................................. 123,907
----------
Total minimum lease payments..................................... 1,249,553
Less amount representing interest................................ (194,378)
----------
Present value of net minimum lease payments...................... $1,055,175
==========

6. Related Party Transactions:

The notes payable, related party, represent principal and interest payable
on demand to Horizon Cable I Limited Partnership, an entity under common
management. Interest on the notes is at rates of 10.5 percent in 1997 and of
8.0 and 8.5 percent in 1998. Interest has not been paid through December 31,
1998 on these notes.

On July 31, 1998, the Company's majority stockholder issued $2,800,000 in
notes payable at interest of 8 percent per annum. These notes, along with
$32,526 of accrued interest and cash in the amount of $533,333, were converted
into 33,657 shares of preferred stock for $100 per share and 360,000 shares of
common stock for $1,881.

7. Other Liabilities:

Other liabilities consist of the following:

1997 1998

Accrued payroll and related expenses...................... $ 94,129 $272,654
Accrued expenses.......................................... -- 465,732
Other..................................................... 71,650 117,341
-------- --------
$165,779 $855,727
======== ========

8. Debt:

In 1998, the Company entered into a $40,000,000 revolving credit facility
with a bank group which matures September 30, 2004. At December 31, 1998,
$30,000,000 was outstanding under the credit facility. Interest is payable
quarterly beginning December 31, 1998 through maturity. The revolving credit
facility agreement allows the Company to

F-11

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

elect an interest rate as of any borrowing date based on either the (1) prime
rate, or (2) LIBOR, plus a margin ranging from 1.5% to 3.5% depending upon
funded debt to EBITDA. The elected rate as of December 31, 1998 is
approximately 8.5%. Commitment fees on the unused credit facility are 0.5%.
Automatic and permanent reductions of the maximum commitments begin September
30, 2000 and continue until maturity. Based on the balance as of December 31,
1998, the scheduled permanent reductions of long-term debt are as follows:

Year

1999.................................. $ --
2000.................................. 1,000,000
2001.................................. 4,000,000
2002.................................. 8,000,000
2003.................................. 12,000,000
Thereafter............................ 5,000,000
-----------
$30,000,000
===========

The revolving credit facility is collateralized by all of the Company's
tangible and intangible personal property and fixtures as well as substantially
all of the issued and outstanding equity securities of the Company.

The revolving credit facility is subject to an agreement that contains,
among other provisions, certain financial covenants. These financial covenants
include maintenance of a minimum fixed charges ratio, a total interest coverage
ratio, and a leverage ratio.

Additional Financing (Unaudited)

On April 13, 1999, the Company increased its revolving available credit
facility with its bank group to $70,000,000. The credit facility matures on
March 31, 2005.

9. Income Taxes:

The Company's effective tax rate varies from the statutory rate as follows:

1997 1998

Statutory rate................................................. 35.0% 35.0%
Effect of graduated tax rate................................... (1.0) (1.0)
Change in valuation allowance.................................. (34.0) (34.0)
----- -----
0.0% 0.0%
===== =====

Based on the Company's current financial status, realization of the
Company's deferred tax assets does not meet the "more likely than not" criteria
under SFAS No. 109 and accordingly a valuation allowance for the entire
deferred tax asset amount has been recorded. The components of the net deferred
tax asset (liability) and the related valuation allowance are as follows:

F-12

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

1997 1998

Net operating loss carryforward.................... $ 1,055,000 $ 1,462,000
Intangible assets.................................. -- 755,000
Other.............................................. 18,000 13,000
----------- -----------
Deferred tax assets................................ 1,073,000 2,230,000
----------- -----------
Valuation allowance................................ (1,073,000) (2,230,000)
----------- -----------
Net deferred tax assets............................ $ -- $ --
=========== ===========

Deferred tax assets, primarily attributable to net operating loss ("NOL")
carryforwards, expiring in years 2013 through 2018, totaled $3,102,000 and
$4,300,000 at December 31, 1997 and 1998, respectively.

10. Retirement Savings Plan:

In 1997, the Company established a retirement savings 401(k) plan for all
employees. The Company can make discretionary matching contributions to the
plan. Contributions to the plan totaled $7,300 and $14,789 in 1997 and 1998,
respectively.

11. Equity Transactions:

On September 23, 1998, the Company issued 33,657 shares of preferred stock
at $100 per share and 360,000 shares of common stock in exchange for $2,800,000
notes payable to its majority stockholders along with $32,566 in accrued
interest and $533,513 in cash. Also, the Company agreed to the sale of 6,667
shares of preferred stock at $100 per share to certain investors for which
payment on such shares in the amount of $666,700 is due by May 7, 1999. If
payment is not received for such shares, the majority stockholder has the
option to purchase these shares. Also on September 23, 1998, the Company
converted accumulated preferred stock dividends in the amount of $242,400
through September 23, 1998 into 2,424 shares of preferred stock at $100 per
share.

On July 6, 1998, the Board of Directors authorized a 20-for-1 stock split on
the common stock, and on August 22, 1997, the Board of Directors authorized a
100-for-1 stock split on the common stock. The stock splits were applied
retroactively and, accordingly, all share data has been restated to reflect
these splits.

In the event of liquidation of the Company, the holders of outstanding
Series A Preferred Stock shall be entitled to receive a distribution of $100
per share plus all accumulated and unpaid dividends. Dividends accumulated and
unpaid related to the preferred stock as of December 31, 1998 were
approximately $180,000.

Additional Equity Transactions (Unaudited):

On January 11, 1999, the Company issued to members of management 1,000,000
shares of common stock at $6.00 per share in exchange for promissory notes
payable in the aggregate amount of $6,000,000 which notes are due January 11,
2003 and have an

F-13

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

interest rate of 5% per annum compounded annually. The per share price was
based on an appraisal performed by an independent valuation firm.

12. Stock-Based Compensation Plan:

During the year, the 1998 Stock Option and Incentive Plan the ("Plan") was
established. The Plan provides for the ability to issue Stock Options (either
Incentive Stock Options or Non-Qualified Stock Options), Stock Appreciation
Rights, Restricted Stock Awards, Deferred Stock Awards, Unrestricted Stock
Awards, Performance Share Awards and Dividend Equivalent Rights. As of December
31, 1998, there were 3,884,000 shares of common stock authorized for issuance
under the Plan. At December 31, 1998, 1,464,000 shares are available for
issuance under the Plan.

The Plan provides for the granting of options to officers, employees,
consultants, members of the Board of Directors and other key persons for
purchase of the Company's common shares. The Plan is administered by the Board
of Directors. No option can be for a term of more than ten years from the grant
date. The option price and the vesting provisions are determined by the Board
of Directors at the time of the grant.

Stock option activity under the Plan during the year ended December 31, 1998
is as follows:

Weighted-
Number Average
Of Exercise
Options Price

Outstanding at December 31, 1997........................... -- --
Granted.................................................... 620,000 $.0005
Exercised, forfeited and expired........................... -- --
------- ------
Outstanding at December 31, 1998........................... 620,000 $.0005
======= ======
Exercisable at December 31, 1998........................... 470,000 $.0005
======= ======

On September 23, 1998, the Company granted 620,000 options to purchase
common stock to certain members of management. At the grant date, 470,000
options were fully vested; the remaining 150,000 options become fully vested on
January 15, 1999. The fair value at the date of grant was $.20 per share based
on an appraisal performed by an independent valuation firm of the underlying
common stock. The weighted-average remaining contractual life of the options
outstanding at December 31, 1998 is in approximately 10 years. The Company
applies Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations, in accounting for its stock
options issued to employees. Accordingly, the Company recorded compensation
cost of approximately $120,000 for the year ended December 31, 1998.

Under Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123), compensation cost is measured at the
grant date based on the value of the award and is recognized over the service
(or vesting) period. Under

F-14

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

SFAS 123, the Company's net loss and loss per share for the year ended
December 31, 1998, would have been adjusted to the pro forma amounts indicated
in the following table:

Net loss applicable to common
stockholders:
As reported........................... $3,809,207
Pro forma............................. $3,909,240
Loss per share:
As reported:
Basic and diluted.................... $ .27
Pro forma:
Basic and diluted.................... $ .28

The fair value of each option granted was estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions:
risk free rate of 4.6 percent; no expected dividend; expected life of 4 years
and volatility assumption of 75%.

On September 23, 1998, the Company issued 1,800,000 shares of restricted
common stock to certain members of management for a nominal amount; 400,000 of
which are subject to certain vesting provisions through October 2002. The fair
value at the issuance date was $.20 per share based on an appraisal performed
by an independent valuation firm. Accordingly, the Company recorded
compensation expense of approximately $288,000 for the year ended December 31,
1998. Deferred compensation as of December 31, 1998 was approximately $55,000.

13. Earnings Per Share:

The following table sets forth the computation of basic and diluted
earnings per share:

Three Months Ended
Years Ended December 31, March 31,
------------------------------------ ------------------------
1996 1997 1998 1998 1999

Net income (loss)....... $(1,498,220) $ (820,072) $(3,460,713) $ 63,825 $(2,001,018)
Less: Preferred stock
dividends.............. -- (73,456) (348,494) (50,000) (165,496)
----------- ---------- ----------- ----------- -----------
Net income (loss)
applicable to common
stockholders........... (1,498,220) (893,528) (3,809,207) 13,825 (2,166,514)
----------- ---------- ----------- ----------- -----------
Basic weighted average
shares................. 4,316,000 7,160,080 14,238,296 12,095,704 18,538,602
----------- ---------- ----------- ----------- -----------
Basic loss per share.... $ (.35) $ (.12) $ (.27) $ -- $ (.12)
=========== ========== =========== =========== ===========

The impact of dilutive shares is not significant.

F-15

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

14. Supplemental Disclosure of Cash Flow Information:

The following is the supplemental cash flow information for all periods
presented:

Three Months Ended
Years Ended December 31, March 31,
---------------------------- -------------------
1996 1997 1998 1998 1999
(unaudited)

Cash paid during the
period for interest..... $7,010 $ 7,604 $ 632,027 $59,981 $ 1,097,716
Noncash financing and
investing activities:
In connection with the
acquisitions described
in Notes 2 and 17, lia-
bilities were assumed
as
follows:
Fair value of assets
acquired............... $ 37,890,628 $ 9,967,818
Business acquisition
costs, net of cash
acquired............... (32,850,289) (9,371,427)
------------ -----------
Liabilities assumed...... $ 5,040,339 $ 596,391
============ ===========
Acquisition of equipment
through capital lease... -- $159,974 $ 951,117 -- $ 373,534
Conversion of note pay-
able and accumulated
dividends to preferred
stock................... -- -- $ 3,042,400 -- --
Issuance of compensatory
common stock and
options................. -- -- $ 408,407 -- --
Issuance of common stock
in exchange for
promissory notes........ -- -- -- -- $ 6,000,000

15. Commitments and Contingencies:

The Company leases office facilities under operating lease agreements that
expire in the years 2000, 2006 and 2007. The following is a schedule of future
minimum rental payments under these leases:

1999................................... $ 318,390
2000................................... 236,052
2001................................... 212,715
2002................................... 219,106
2003................................... 225,681
Thereafter............................. 1,101,424
----------
$2,313,368
==========

In addition to these office leases, the Company also leases point of
presence locations under lease terms of less than one year.

Rent expense under all operating leases of approximately $52,000, $103,000
and $190,000 was charged to operations in 1996, 1997 and 1998, respectively.

16. Segment Reporting:

In June 1997, the FASB issued SFAS No. 131 "Disclosures about Segments of
an Enterprise and Related Information," which requires certain information to
be reported about operating segments consistent with management's internal
view of the Company.

The Company has a single operating segment, Internet access services. The
Company has no organizational structure dictated by product lines, geography
or customer type.

F-16

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Sales are derived from one service line, Internet access service, and are
residential and business customers in the Midwestern United States. The Company
evaluates performance based on profit or loss from operations before interest,
income taxes, depreciation and amortization.

17. Subsequent Events:

Acquisitions:

On January 15, 1999, the Company purchased assets of Hoosier On-Line
Systems, Inc. for approximately $2,347,000, of which approximately $2,197,000
was remitted to Hoosier On-Line Systems, Inc. and the remainder was deposited
in an escrow account. Approximately $2,030,000 was allocated to the acquired
customer base cost as a result of this transaction.

On February 24, 1999, the Company purchased assets of Infinite Systems, Ltd.
for approximately $3,100,000, of which approximately $2,766,000 was remitted to
Infinite Systems, Ltd. and the remainder was deposited in an escrow account.
Approximately $2,538,000 was allocated to the acquired customer base cost as a
result of this transaction.

On March 10, 1999, the Company purchased assets of Exchange Network
Services, Inc. for approximately $3,250,000, of which approximately $3,005,000
was remitted to Exchange Network Services, Inc. and the remainder was deposited
in an escrow account. Approximately $2,803,000 was allocated to the acquired
customer base cost as a result of this transaction.

On April 23, 1999, the Company acquired certain subscribers of StarNet, Inc.
for approximately $1,835,000, of which $1,635,000 was remitted to StarNet, Inc.
and the remainder was deposited in an escrow account. Approximately $2,000,000
was allocated to the acquired customer base cost as a result of this
transaction.

On May 7, 1999, the Company purchased the stock of GDR Enterprises, Inc. for
approximately $9,075,000, of which approximately $8,275,000 was remitted to GDR
Enterprises, Inc. and the remainder was deposited in an escrow account.
Approximately $9,018,000 was allocated to the acquired customer base cost as a
result of the transaction.

On June 4, 1999, the Company purchased assets of PCLink.com for
approximately $1.9 million.

Employee Stock Option Plan (Unaudited):

Concurrent with the Company's initial public offering of securities, the
Company anticipates that it will grant to employees options to purchase common
stock under its stock option plan. Options will be granted at the initial
public offering price and will be granted based on a formula of years of
service, level of compensation and other factors.

F-17

VOYAGER.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

On May 3, 1999, the Company received $666,700 for its preferred stock
subscription.

On June 10, 1999, the Board of Directors authorized a loan in the amount of
$5,000,000 to Mr. Torto, Chief Executive Officer, payable over four years at
interest of 5 percent per year compounded annually.

F-18

VOYAGER.NET, INC.

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

During the period from July 1, 1998 through December 31, 1998, Voyager.net
(the "Company") completed seven business acquisitions and from January 1, 1999
through June 4, 1999 Voyager.net completed an additional six business
acquisitions as follows:

Company Date
------- --------

CDL Corp. 7/1/98
Internet-Michigan, Inc. 7/1/98
Freeway, Inc. 7/31/98
EXEC-PC, Inc. 9/23/98
Netimation, Inc. 10/2/98
NetLink Systems, L.L.C. 10/2/98
Add, Inc. 11/20/98
Hoosier On-Line Systems, Inc. 1/15/99
Infinite Systems, Ltd. 2/26/99
Exchange Network Services, Inc. 3/10/99
StarNet, Inc. 4/23/99
GDR Enterprises, Inc. 5/7/99
PCLink.com 6/4/99

These acquisitions were accounted for using the purchase method of
accounting. Accordingly, the purchase prices were allocated to assets acquired
and liabilities assumed based upon their estimated fair values at the dates of
acquisitions.

Condensed pro forma financial statements are required for the companies and
the periods presented herein and include Freeway, Inc., EXEC-PC, Inc., NetLink
Systems L.L.C., and GDR Enterprises, Inc. The unaudited pro forma condensed
consolidated statement of operations for the year ended December 31, 1998
assumes, that for the acquired entities presented, that the acquisitions in
1998 and 1999 had occurred on January 1, 1998. The unaudited pro forma
condensed consolidated balance sheet as of March 31, 1999 assumes that the
acquisition of GDR Enterprises, Inc. that occurred on May 7, 1999 had occurred
as of March 31, 1999. The unaudited pro forma condensed consolidated statement
of operations is not necessarily indicative of the results of operations that
would actually have occurred if the transactions had been consummated as of
January 1, 1998 and is not intended to indicate the expected results for any
future period. Also, the unaudited pro forma condensed consolidated balance
sheet at March 31, 1999 is not intended to present the financial position as of
March 31, 1999. These statements should be read in conjunction with the
historical consolidated financial statements and related notes of Voyager.net,
and certain acquired businesses, included herein.

F-19

VOYAGER.NET, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
For the year ended December 31, 1998

Pre-acquisition Results
-----------------------------------------------
NetLink GDR
Voyager.net, Freeway, ExecPC, Systems, Enterprises,
Inc. Inc. Inc. L.L.C. Inc. Adjustments Total

Revenue:
Internet access
service............... $10,588,963 $1,049,380 $8,652,989 $1,441,020 $3,860,368 $ 25,592,720
Other.................. 133,199 -- 15,855 1,080 -- 150,134
----------- ---------- ---------- ---------- ---------- ------------
Total revenue......... 10,722,162 1,049,380 8,668,844 1,442,100 3,860,368 25,742,854
----------- ---------- ---------- ---------- ---------- ------------
Internet access service
costs.................. 3,607,665 411,816 3,493,066 853,582 1,253,554 9,619,683
Sales and marketing..... 1,987,113 155,947 574,078 69,645 136,221 2,923,004
General and
administrative......... 3,405,870 286,498 1,773,757 364,591 1,739,115 7,569,831
Depreciation and
amortization........... 3,862,041 56,744 1,151,960 73,808 651,771 $ 10,265,389 16,061,713
Compensation charge for
issuance of common
stock and options...... 408,407 -- -- -- -- -- 408,407
----------- ---------- ---------- ---------- ---------- ------------ ------------
Total operating
expenses............... 13,271,096 911,005 6,992,861 1,361,626 3,780,661 10,265,389 36,582,638
----------- ---------- ---------- ---------- ---------- ------------ ------------
Total operating income
(loss)................. (2,548,934) 138,375 1,675,983 80,474 79,707 (10,265,389) (10,839,784)
Other income (expense).. (911,779) (41,626) (12,073) (41,719) (2,610,432) (3,617,629)
----------- ---------- ---------- ---------- ---------- ------------ ------------
Net income (loss)....... (3,460,713) 138,375 1,634,357 68,401 37,988 (12,875,821) (14,457,413)
Preferred stock
dividends.............. (348,494) -- -- -- -- -- (348,494)
----------- ---------- ---------- ---------- ---------- ------------ ------------
Net income (loss)
applicable to common
stockholders........... $(3,809,207) $ 138,375 $1,634,357 $ 68,401 $ 37,988 $(12,875,821) $(14,805,907)
=========== ========== ========== ========== ========== ============ ============
EBITDA (1).............. $ 1,721,514 $ 195,119 $2,827,943 $ 154,282 $ 731,478 -- $ 5,630,336
=========== ========== ========== ========== ========== ============ ============
Basic and diluted
earnings per share..... $ (1.04)
============
Basic weighted average
shares (in thousands).. 14,238,296
============

(1) EBITDA represents earnings before interest, taxes, and depreciation, and
amortization and non-recurring, non-cash compensation charges. EBITDA is
provided because it is a measure commonly used by investors to analyze and
compare companies on the basis of operating performance. EBITDA is not a
measurement of financial performance under generally accepted accounting
principles and should not be construed as a substitute for operating
income, net income or cash flows from operating activities for purposes of
analyzing our operating performance, financial position and cash flows.
EBITDA, as calculated by Voyager.net, is not necessarily comparable with
similarly titled measures for other companies.

F-20

VOYAGER.NET, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

For the three months ended March 31, 1999

Pre-acquisition
Results
----------------
Voyager.net, GDR Enterprises,
Inc. Inc. Adjustments Total

Revenue:
Internet access
service.............. $ 8,405,202 $1,141,331 $ 9,546,533
Other................. 114,024 114,024
----------- ---------- -----------
Total revenue....... 8,519,226 1,141,331 9,660,557
----------- ---------- -----------
Internet access service
costs.................. 2,789,676 318,029 3,107,705
Sales and marketing..... 969,031 83,782 1,052,813
General and
administrative......... 2,463,200 353,138 2,816,338
Depreciation and
amortization........... 3,526,824 228,864 $ 751,508 4,507,196
----------- ---------- --------- -----------
Total operating
expenses............... 9,748,731 983,813 751,508 11,484,052
----------- ---------- --------- -----------
Total operating income
(loss)................. (1,229,505) 157,518 (751,508) (1,823,495)
Other income (expense).. (771,513) (44,684) (195,500) (1,011,697)
----------- ---------- --------- -----------
Net income (loss)....... (2,001,018) 112,834 (947,008) (2,835,192)
Preferred stock
dividends.............. (165,496) (165,496)
----------- ---------- --------- -----------
Net income (loss)
applicable to common
stockholders........... $(2,166,514) $ 112,834 $(947,008) $(3,000,688)
=========== ========== ========= ===========
EBITDA(1)............... $ 2,297,319 $ 386,382 $ -- $ 2,683,701
=========== ========== ========= ===========
Basic and diluted
earnings per share..... $ (0.16)
===========
Basic and diluted
weighted average shares
(in thousands)......... 18,538,602
===========

F-21

VOYAGER.NET, INC.

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(UNAUDITED)

As of March 31, 1999

Pre-acquisition
Results
----------------
Voyager.net, GDR Enterprises,
Inc. Inc. Adjustments Total

Assets
Current Assets:
Cash and cash
equivalents.......... $ 4,426,518 $1,995,158 $ (720,200) $ 5,701,476
Accounts receivable,
net.................. 1,812,496 1,812,496
Prepaid and other
assets............... 303,204 303,204
----------- ---------- ---------- -----------
Total current
assets............. 6,542,218 1,995,158 (720,200) 7,817,176
Property and equipment,
net.................... 12,064,932 1,278,068 13,343,000
Note receivable, related
party.................. 169,422 (169,422)
Intangible assets, net.. 33,852,138 31,235 8,266,593 42,149,966
----------- ---------- ---------- -----------
Total assets........ $52,459,288 $3,473,883 $7,376,971 $63,310,142
=========== ========== ========== ===========
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Notes payable and
current portion of
obligations under
capital leases....... $ 2,688,192 $ 643,679 $ (643,679) $ 2,688,192
Accounts payable and
other liabilities.... 2,749,142 363,688 3,112,830
Deferred revenue...... 7,373,988 1,874,555 9,248,543
----------- ---------- ---------- -----------
Total current
liabilities........ 12,811,322 2,881,922 (643,679) 15,049,565
----------- ---------- ---------- -----------
Long term debt and
obligations under
capital leases, less
current portion........ 40,372,823 245,943 8,954,057 49,572,823
Deferred revenue, less
current portion........ 185,396 185,396
Stockholders' equity
(deficit):
Preferred Stock....... 8,274,819 8,274,819
Common stock and
additional paid-in
capital.............. 6,414,960 50,500 6,465,460
Receivable for
preferred and common
stock................ (6,666,700) (6,666,700)
Retained earnings
(deficit)............ (8,747,936) 110,122 (933,407) (9,571,221)
----------- ---------- ---------- -----------
Total stockholders'
equity (deficit)... (724,857) 160,622 (933,407) (1,497,642)
----------- ---------- ---------- -----------
Total liabilities
and stockholders'
equity............. $52,459,288 $3,473,883 $7,376,971 $63,310,142
=========== ========== ========== ===========

F-22

VOYAGER.NET, INC.

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A.Acquired customer bases for the required reported entities, in the amount of
39.2 million are amortized over a three-year period beginning January 1,
1998 as if the acquisitions had occurred on that date. Additional
amortization expense for the year ended December 31, 1998 of approximately
$10.3 million would have been recorded if these acquisitions had occurred
on January 1, 1998. The historical results of GDR Enterprises, Inc. are
included for the three months ended March 31, 1999 and adjusted for
approximately $750,000 of additional amortization expense.

B.Voyager.net utilized $30,000,000 of its revolving credit facility to complete
the acquisitions in 1998. On April 13, 1999, the Company increased its
revolving credit facility to $70,000,000. Additional interest expense on
the related debt for the required reported entities would have been
approximately $2.6 million and $196,000 for the year ended December 31,
1998 and March 31, 1999, respectively. The assumed interest rate was 8.5%
for all periods presented.

C. The GDR Enterprises, Inc. note receivable, related party and obligations
under capital leases were received and paid, respectively, at the date of
acquisition. These transactions were treated as if received and paid,
respectively, on March 31, 1999.

F-23

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and the Stockholders of
Voyager.net, Inc.:

In our opinion, the accompanying balance sheets and the related statements
of operations, stockholder's (deficit) equity and cash flows, present fairly,
in all material respects, the financial position of Freeway, Inc. (the
"Company") at December 31, 1997 and at July 31, 1998, and the results of its
operations and its cash flows for the year ended December 31, 1997 and for the
seven months ended July 31, 1998, in conformity with generally accepted
accounting principles. 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 of these
financial statements in accordance with generally accepted auditing standards
which 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Grand Rapids, Michigan
April 28, 1999

F-24

FREEWAY, INC.

BALANCE SHEETS

December 31, July 31,
Assets 1997 1998

Current assets:
Cash and cash equivalents............................... $ 329 $ 9,585
Accounts receivable, less allowance for doubtful
accounts of $11,000 and $35,000 in 1997 and 1998,
respectively........................................... 194,216 212,134
Prepaid and other assets................................ 900 2,100
-------- --------
Total current assets..................................... 195,445 223,819
Computer equipment, net.................................. 245,242 321,058
-------- --------
Total assets............................................. $440,687 $544,877
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Cash overdraft.......................................... $ 24,956 $ --
Accounts payable........................................ 25,034 13,774
Accrued payroll and related expenses.................... 16,161 21,209
Deferred revenue........................................ 20,522 17,505
Stockholder loans....................................... 190,965 190,965
-------- --------
Total current liabilities................................ 277,638 243,453
Stockholders' equity:
Common stock............................................ 1,000 1,000
Retained earnings....................................... 162,049 300,424
-------- --------
Total stockholders' equity............................... 163,049 301,424
-------- --------
Total liabilities and stockholders' equity............... $440,687 $544,877
======== ========

The accompanying notes are an integral part of the financial statements.

F-25

FREEWAY, INC.

STATEMENTS OF INCOME

Seven
months
Year ended ended
December 31, July 31,
1997 1998

Revenue, Internet access service....................... $1,163,019 $1,049,380
---------- ----------
Operating expenses:
Internet access service costs......................... 523,566 411,816
Sales and marketing................................... 153,542 155,947
General and administrative............................ 302,435 286,498
Depreciation and amortization......................... 75,982 56,744
---------- ----------
Total operating expenses............................... 1,055,525 911,005
---------- ----------
Income from operations before interest expense......... 107,494 138,375
---------- ----------
Interest expense....................................... 630 --
---------- ----------
Net income............................................. $ 106,864 $ 138,375
========== ==========

The accompanying notes are an integral part of the financial statements.

F-26

FREEWAY, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

Common Stock
------------- Retained
Shares Amount Earnings Total

Balances at January 1, 1997.................... 1,000 $1,000 $ 55,185 $ 56,185
Net income.................................... 106,864 106,864
----- ------ -------- --------
Balances at December 31, 1997.................. 1,000 1,000 162,049 163,049
Net income.................................... 138,375 138,375
----- ------ -------- --------
Balances at July 31, 1998...................... 1,000 $1,000 $300,424 $301,424
===== ====== ======== ========

The accompanying notes are an integral part of the financial statements.

F-27

FREEWAY, INC.

STATEMENTS OF CASH FLOWS

Seven
Months
Year ended ended
December 31, July 31,
1997 1998

Cash flows from operating activities
Net income............................................ $ 106,864 $ 138,375
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization........................ 75,982 56,744
Changes in assets and liabilities
Accounts receivable................................. (77,035) (17,918)
Prepaids and other assets........................... 50 (1,200)
Accounts payable.................................... (24,251) (11,260)
Accrued expenses.................................... (781) 5,048
Deferred revenue.................................... 8,059 (3,017)
--------- ---------
Net cash provided by operating activities.............. 88,888 166,772
Cash flows from investing activities
Purchase of property and equipment.................... (200,656) (132,560)
--------- ---------
Net cash used in investing activities.................. (200,656) (132,560)
Cash flows from financing activities
Proceeds from stockholder loans....................... 62,378 --
Cash overdraft, net................................... 24,956 (24,956)
--------- ---------
Net cash provided by (used in) financing activities.... 87,334 (24,956)
--------- ---------
Net (decrease) increase in cash and cash equivalents... (24,434) 9,256
Cash and cash equivalents at beginning of period....... 24,763 329
--------- ---------
Cash and cash equivalents at end of period............. $ 329 $ 9,585
========= =========
Supplemental disclosure of cash flow information
Interest paid.......................................... $ 630 $ --
========= =========

The accompanying notes are an integral part of the financial statements.

F-28

FREEWAY, INC.

NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies:

Organization and Basis of Presentation

Freeway, Inc. (the "Company") provides full service access to the Internet
for corporate and individual users in Michigan.

Revenue Recognition
The Company recognizes revenue when Internet access services are provided.
Advance collections relating to future access services are recorded as deferred
revenue and recognized as revenue when earned.

Cash Equivalents
The Company considers all highly liquid investments purchased with an initial
maturity of three months or less to be cash equivalents.

Property and Equipment
Property and equipment are stated at cost and depreciated over their
estimated useful lives using the straight-line method. Costs of repair and
maintenance are charged to expense as incurred.

Advertising Costs
Advertising costs are expensed as incurred. Advertising expense of
approximately $13,000, $34,000, and $26,000 was charged to operations in 1996,
1997 and 1998, respectively.

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

Income Taxes
The Company is taxed as an S-Corporation. Accordingly, the stockholders of
the Company are subject to federal income taxes rather than the Company.

2. Property and Equipment:

Cost of property and equipment and depreciable lives are summarized as
follows:

Depreciable
1997 1998 Life-Years

Computer equipment......................... $ 357,036 $ 489,595 5
Less accumulated depreciation............. (111,794) (168,537)
--------- ---------
Computer equipment, net.................. $ 245,242 $ 321,058
========= =========

F-29

FREEWAY, INC.

NOTES TO FINANCIAL STATEMENTS--(continued)

Depreciation expense of approximately $76,000 and $57,000 was charged to
operations in 1997 and 1998, respectively.

3. Operating Leases:

The Company also leases point of presence locations under lease terms of
less than one year.

Rent expense under all operating leases of approximately $10,000 and $8,000
was charged to operations in 1997 and 1998, respectively.

4. Stockholder loans:

The stockholder loans are interest free and payable upon demand.

F-30

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and the Stockholders of
Voyager.net, Inc.:

In our opinion, the accompanying balance sheets and the related statements
of operations, stockholder's equity (deficit) and cash flows, present fairly,
in all material respects, the financial position of EXEC-PC, Inc. (the
"Company") at December 31, 1997 and September 22, 1998 and the results of its
operations and its cash flows for the year ended December 31, 1997 and for the
period ended September 22, 1998, in conformity with generally accepted
accounting principles. 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 of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audits 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Grand Rapids, Michigan
April 28, 1999

F-31

EXEC-PC, INC.

BALANCE SHEETS

December 31, September 22,
1997 1998

Assets
Current assets:
Cash............................................... $ 248,268 $ 461,924
Accounts receivable, less allowance for doubtful
accounts of $37,900 and $53,900 in 1997 and 1998,
respectively...................................... 63,400 52,022
Prepaid and other assets........................... 7,460 50,351
----------- ----------
Total current assets.............................. 319,128 564,297
Property and equipment, net......................... 2,464,138 3,925,550
Intangible assets, net.............................. 355,158 327,358
----------- ----------
Total assets........................................ $ 3,138,424 $4,817,205
=========== ==========
Liabilities and Stockholder's Deficit
Current liabilities:
Current portion of obligations under capital
leases............................................ $ 1,083,144 $1,238,844
Note payable, bank................................. 295,000 145,000
Accounts payable................................... 257,980 305,951
Accrued payroll and related expenses............... 165,100 132,606
Deferred revenue................................... 3,353,920 3,353,387
----------- ----------
Total current liabilities........................... 5,155,144 5,175,788
Obligations under capital leases.................... 253,483 1,414,602
Long-term debt...................................... 212,418 117,177
Stockholder's deficit:
Common stock....................................... 100 100
Paid-in capital.................................... 169,783 169,783
Accumulated deficit................................ (2,652,504) (2,060,245)
----------- ----------
Total stockholder's deficit......................... (2,482,621) (1,890,362)
----------- ----------
Total liabilities and stockholder's deficit......... $ 3,138,424 $4,817,205
=========== ==========

The accompanying notes are an integral part of the financial statements.

F-32

EXEC-PC, INC.

STATEMENTS OF INCOME

Year ended Period ended
December 31, September 22,
1997 1998

Revenue:
Internet access service........................... $8,029,414 $8,652,989
Other............................................. 73,740 15,855
---------- ----------
Total revenue.................................... 8,103,154 8,668,844
---------- ----------
Operating expenses:
Internet access service costs..................... 2,846,798 3,493,066
Sales and marketing............................... 660,898 574,078
General and administrative........................ 2,676,032 1,773,757
Depreciation and amortization..................... 1,274,787 1,151,960
---------- ----------
Total operating expenses......................... 7,458,515 6,992,861
---------- ----------
Income from operations before other income
(expense)......................................... 644,639 1,675,983
---------- ----------
Other income (expense):
Interest income................................... 1,910 95
Interest expense.................................. (80,309) (71,742)
Gain (loss) on sale of assets..................... (222,458) 30,021
---------- ----------
Total other (expense).............................. (300,857) (41,626)
---------- ----------
Net income......................................... $ 343,782 $1,634,357
========== ==========

The accompanying notes are an integral part of the financial statements.

F-33

EXEC-PC, INC.

STATEMENTS OF STOCKHOLDER'S DEFICIT

Common Stock
------------- Paid-in Accumulated
Shares Amount Capital Deficit Total

Balance at December 31,
1996........................ 100 $100 $169,783 $(2,195,786) $(2,025,903)
Dividends................... -- -- -- (800,500) (800,500)
Net income.................. -- -- -- 343,782 343,782
--- ---- -------- ----------- -----------
Balance at December 31,
1997........................ 100 100 169,783 (2,652,504) (2,482,621)
Dividends................... -- -- -- (1,042,098) (1,042,098)
Net income.................. -- -- -- 1,634,357 1,634,357
--- ---- -------- ----------- -----------
Balance at September 22,
1998........................ 100 $100 $169,783 $(2,060,245) $(1,890,362)
=== ==== ======== =========== ===========

The accompanying notes are an integral part of the financial statements.

F-34

EXEC-PC, INC.

STATEMENTS OF CASH FLOWS

Year ended Period ended
December 31, September 22,
1997 1998

Cash flows from operating activities
Net income........................................ $ 343,782 $ 1,634,357
Adjustments to reconcile net loss to net cash
Provided by operating activities:
Depreciation and amortization.................... 1,274,787 1,151,960
(Gain) loss on (sale) disposal of equipment...... 222,458 (30,021)
Changes in assets and liabilities:
Accounts receivable............................. 30,400 11,378
Prepaids and other assets....................... 12,435 (42,891)
Accounts payable................................ 64,495 47,971
Accrued expenses................................ 75,133 (32,494)
Deferred revenue................................ 697,801 (533)
----------- -----------
Net cash provided by operating activities.......... 2,721,291 2,739,727
Cash flows from investing activities
Purchase of property and equipment................ (1,143,349) (465,299)
Proceeds from the sale of equipment............... 58,960 --
Payment for purchase of a business................ (370,600) --
----------- -----------
Net cash used in investing activities.............. (1,454,989) (465,299)
Cash flows from financing activities
Payments on capital leases........................ (347,107) (773,433)
Advances from related party....................... 431,963 --
Payments to related party......................... (431,963) --
Payment on notes payable.......................... (249,819) (245,241)
Proceeds from notes payable issuance.............. 300,000 --
Dividends......................................... (800,500) (1,042,098)
----------- -----------
Net cash used in financing activities.............. (1,097,426) (2,060,772)
----------- -----------
Net increase in cash and cash equivalents.......... 168,876 213,656
Cash and cash equivalents at beginning of period... 79,392 248,268
----------- -----------
Cash and cash equivalents at end of period......... $ 248,268 $ 461,924
=========== ===========
Supplemental disclosure of cash flow information
Interest paid...................................... $ 80,309 $ 71,742
=========== ===========

The accompanying notes are an integral part of the financial statements.

F-35

EXEC-PC, INC.

NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies:

Organization and Basis of Presentation

EXEC-PC, Inc. (the "Company") provides full service access to the Internet
for corporate and individual users in Illinois and Wisconsin.

Revenue Recognition

The Company recognizes revenue when internet access services are provided.
Advance collections relating to future access services are recorded as deferred
revenue and recognized as revenue when earned.

Property and Equipment

Property and equipment are stated at cost and depreciated over their
estimated useful lives using the straight-line method. Equipment acquired under
capital leases are depreciated over their related lease terms or their
estimated productive useful lives, depending on the criteria met in determining
their qualification as a capital lease. Costs of repair and maintenance are
charged to expense as incurred.

Advertising Costs

Advertising costs are expensed as incurred.

Use of Estimates

Intangible Assets

Goodwill, representing the excess cost over net assets of an acquired
company, is amortized using the straight-line method over 10 years. The
carrying value of goodwill will be periodically reviewed to determine if an
impairment has occurred.

F-36

EXEC-PC, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

2. Property and Equipment:

Cost of property and equipment and depreciable lives are summarized as
follows:

Depreciable
1997 1998 Life-Years

Computer equipment................... $ 862,695 $ 865,782 3
Office equipment..................... 105,903 144,969 5-7
Furniture and fixtures............... 113,974 124,873 7
Software............................. 97,729 99,183 3
Equipment acquired under capital
lease............................... 1,710,400 3,800,652 3-5
Vehicles............................. 21,882 24,094 5
Building improvements................ 811,444 882,768 7
----------- -----------
3,724,027 5,942,321
Less accumulated depreciation....... (1,259,889) (2,016,771)
----------- -----------
Property and equipment, net........ $ 2,464,138 $ 3,925,550
=========== ===========

Depreciation expense of approximately $1,259,000 and $1,124,000 was charged
to operations in 1997 and 1998, respectively.

3. Intangible Assets:

Intangible assets consist of the following:

1997 1998

Goodwill................................................. $370,600 $370,600
Less accumulated amortization............................ (15,442) (43,242)
-------- --------
Intangible assets, net.................................. $355,158 $327,358
======== ========

4. Capital Leases:

The Company leases computer equipment under capital leases expiring in
various years through the year 2001. The assets under capital leases are
recorded at the lower of the present value of the minimum lease payments or the
fair value of the asset. The net book value of these assets as of September 22,
1998 is $3,084,907. Depreciation of assets under capital leases is included in
depreciation expense.

Future minimum lease payments under capital leases as of September 22, 1998
are as follows:

1999............................................................ $ 1,329,600
2000............................................................ 1,131,942
2001............................................................ 391,552
2002............................................................ 4,506
-----------
Total minimum lease payments.................................... 2,857,600
Less amount representing interest............................... (204,154)
-----------
Present value of net minimum lease payments..................... 2,653,446
Less current maturities......................................... (1,238,844)
-----------
Long-term portion............................................... $ 1,414,602
===========

F-37

EXEC-PC, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

The Company also leases office facilities under operating lease agreements
that expire in the years 2006 and 2007. The following is a schedule of future
minimum rental payments under these leases as of September 22, 1998:

1999.............................................................. $ 199,050
2000.............................................................. 205,021
2001.............................................................. 211,172
2002.............................................................. 217,507
2003.............................................................. 224,033
Thereafter........................................................ 932,125
----------
$1,988,908
==========

In addition to these office leases, the Company also leases point of
presence locations under lease terms of less than one year.

Rent expense under the above operating leases was approximately $203,000 and
$165,000 was charged to operations in 1997 and 1998, respectively.

5. Long-Term Debt:

Long-term debt consists of the following:

1997 1998

Note payable to bank, original amount $446,635 due in
monthly principal and interest payments of $14,171
through May 1, 2000, interest due monthly at 8.6% per
annum on the unpaid principal balance................ $ 357,418 $ 262,177
Note payable, StarNet, Inc. (Five Star Telecom),
original amount $300,000, due in monthly principal
payments of $30,000 through May 31, 1998, non-
interest bearing..................................... 150,000 --
--------- ---------
507,418 262,177
Less current maturities............................... (295,000) (145,000)
--------- ---------
Long-term debt........................................ $ 212,418 $ 117,177
========= =========

Maturities of principal payments of long-term debt are as follows:

1999................................................................ $145,000
2000................................................................ 117,177
--------
$262,177
========

6. Related Party Transactions:

In 1997, the Company borrowed a total of approximately $432,000 from an
officer of the Company at an interest rate of ten percent. The entire amount
borrowed was repaid by December 31, 1997. Interest expense on the note payable
in 1997 was approximately $13,000.

F-38

EXEC-PC, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

7. Acquisition:

During 1997, the Company acquired StarNet, Inc. for $370,600. The
transaction was accounted as a purchase and goodwill in the amount of $370,600
was recognized. The purchase price consisted of cash in the amount of $70,600
and a $300,000 note payable (see Note 5).

F-39

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and the Stockholders of
Voyager.net, Inc.:

In our opinion, the accompanying balance sheets and the related statements
of operations, stockholder's equity (deficit) and cash flows, present fairly,
in all material respects, the financial position of NetLink Systems, L.L.C.
(the "Company") at December 31, 1997 and September 30, 1998 and the results of
its operations and its cash flows for the year ended December 31, 1997 and the
nine months ended September 30, 1998, in conformity with generally accepted
accounting principles. 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 of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Grand Rapids, Michigan
April 28, 1999

F-40

NETLINK SYSTEMS, L.L.C.

BALANCE SHEETS

December 31, September 30,
1997 1998

Assets
Current assets:
Cash............................................... $ 55,407 $ 26,070
Accounts receivable, less allowance for doubtful
accounts of $10,000 and $45,000 in 1997 and 1998,
respectively...................................... 28,528 66,547
Prepaid and other assets........................... 4,500 3,300
-------- --------
Total current assets................................ 88,435 95,917
Property and equipment, net......................... 383,577 338,711
-------- --------
Total assets........................................ $472,012 $434,628
======== ========
Liabilities and Members' Equity
Current liabilities:
Line of credit..................................... $149,237 $167,747
Current portion of note payable.................... 1,586 10,587
Accounts payable................................... 102,697 72,554
Other liabilities.................................. 25,591 23,138
Deferred revenue................................... -- 119,166
-------- --------
Total current liabilities........................... 279,111 393,192
Note payable........................................ 26,691 --
Members' equity..................................... 166,210 41,436
-------- --------
Total liabilities and members' equity............... $472,012 $434,628
======== ========

The accompanying notes are an integral part of the financial statements.

F-41

NETLINK SYSTEMS, L.L.C.

STATEMENTS OF INCOME AND MEMBERS' EQUITY

Nine months
Year ended ended
December 31, September 30,
1997 1998

Revenue:
Internet access service........................... $1,399,514 $1,441,020
Other............................................. 258 1,080
---------- ----------
Total revenue...................................... 1,399,772 1,442,100
---------- ----------
Operating expenses:
Internet access service costs..................... 702,888 853,582
Sales and marketing............................... 34,990 69,645
General and administrative........................ 260,516 364,591
Depreciation and amortization..................... 41,540 73,808
---------- ----------
Total operating expenses........................... 1,039,934 1,361,626
---------- ----------
Income from operations before other income
(expense)......................................... 359,838 80,474
---------- ----------
Other income (expense):
Interest income................................... 296 758
Interest expense.................................. (9,422) (12,831)
---------- ----------
Total other income (expense)....................... (9,126) (12,073)
---------- ----------
Net income......................................... 350,712 68,401
Members' equity, beginning of year................. 57,217 166,210
Distribution to members............................ (241,719) (193,175)
---------- ----------
Members' equity, end of year....................... $ 166,210 $ 41,436
========== ==========

The accompanying notes are an integral part of the financial statements.

F-42

NETLINK SYSTEMS, L.L.C.

STATEMENTS OF CASH FLOWS

Year ended Nine months
December 31, September 30,
1997 1998

Cash Flows From Operating Activities:
Net income......................................... $ 350,712 $ 68,401
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization..................... 41,540 73,808
Changes in assets and liabilities:
Accounts receivable.............................. 23,718 (38,019)
Prepaids and other assets........................ (1,500) 1,200
Accounts payable................................. 29,937 (30,143)
Accrued expenses................................. (5,197) (2,453)
Deferred revenue................................. -- 119,166
--------- ---------
Net cash provided by operating activities......... . 439,210 191,960
Cash Flows From Investing Activities:
Purchase of property and equipment................. (279,672) (28,942)
--------- ---------
Net cash used in investing activities............... (279,672) (28,942)
Cash Flows Provided By Financing Activities:
Payment on line of credit.......................... (26,805) (48,490)
Proceeds from line of credit....................... 176,042 67,000
Payment on note payable............................ (25,023) (17,690)
Distributions to members........................... (241,719) (193,175)
--------- ---------
Net cash used in financing activities............... (117,505) (192,355)
--------- ---------
Net increase (decrease) in cash..................... 42,033 (29,337)
Cash at beginning of period......................... 13,374 55,407
--------- ---------
Cash at end of period............................... $ 55,407 $ 26,070
========= =========
Supplemental disclosure of cash flow information:
Interest paid...................................... $ 9,422 $ 12,831
========= =========

The accompanying notes are an integral part of the financial statements.

F-43

NETLINK SYSTEMS, L.L.C.

NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies:

Organization and Basis of Presentation

NetLink Systems, L.L.C. (the "Company") provides full service access to the
Internet for corporate and individual users in Michigan.

Revenue Recognition

The Company recognizes revenue when Internet access services are provided.
Advance collections relating to future access services are recorded as deferred
revenue and recognized as revenue when earned.

Property and Equipment

Property and equipment are stated at cost and depreciated over their
estimated useful lives using the straight-line method. Costs of repair and
maintenance are charged to expense as incurred.

Use of Estimates

Income Taxes

The Company is classified as a limited liability corporation for federal
income tax purposes. Accordingly, no provisions for income taxes are required
as income or losses generated flow to the individual members.

2. Property and Equipment:

Cost of property and equipment and depreciable lives are summarized as
follows:

Depreciable
1997 1998 Life-Years

Computer equipment........................... $446,722 $473,171 5
Furniture and fixtures....................... 21,415 21,415 7
-------- --------
468,137 494,586
Less accumulated depreciation............... (84,560) (155,875)
-------- --------
Property and equipment, net................ $383,577 $338,711
======== ========

Depreciation expense of approximately $42,000 and $74,000 was charged to
operations in 1997 and 1998, respectively.

F-44

NETLINK SYSTEMS, L.L.C.

NOTES TO FINANCIAL STATEMENTS--(Continued)

3. Other Liabilities:

Other liabilities consist of the following:

1997 1998

Accrued payroll and related expenses........................ $19,091 $10,302
Accrued expenses............................................ 6,500 12,836
------- -------
$25,591 $23,138
======= =======

4. Operating Leases:

The Company leases office space and communication services under operating
leases expiring in various years through 2001.

Minimum future rental payments under noncancellable operating leases as
follows:

1998

1999............................................................... $ 47,040
2000............................................................... 45,920
2001............................................................... 40,260
--------
Total minimum future rental payments............................... $133,220
========

Rent expense under the above operating leases was approximately $56,000 and
$45,000 in 1997 and 1998, respectively.

5. Line of Credit:

In 1997, the Company entered into a $250,000 revolving term loan with a bank
which matures July 10, 2000, bearing interest at the bank's prime rate plus
.25%. The rate at September 30, 1998 is 8.5%. Borrowings are collateralized by
substantially all of the Company's assets and the limited personal guarantees
of the members. At December 31, 1997 and September 30, 1998, $149,237 and
$167,747, respectively, was outstanding under the credit facility.

6. Long-Term Debt:

At December 31, 1996, the Company entered into an agreement to purchase a
member's equity. Under the terms of the agreement, the Company is to pay the
former member $46,300 in full consideration for a note payable and accrued
interest of $27,627 and a return of capital in the amount of $18,673. The full
consideration to be paid consists of a $10,300 cash payment and an unsecured
note in the amount of $36,000. The unsecured note bearing interest at 7 percent
is payable in monthly installments of $1,093, including interest, through July
1999.

F-45

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and the Stockholders of
Voyager.net, Inc.:

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, stockholders' equity and cash flows, present
fairly, in all material respects, the financial position of GDR Enterprises,
Inc. (the "Company") and its subsidiaries at December 31, 1998, and the results
of their operations and their cash flows for the year then ended, in conformity
with generally accepted accounting principles. 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 of these financial statements in accordance with generally
accepted auditing standards, which 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,
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.

PricewaterhouseCoopers LLP

Grand Rapids, Michigan
June 9, 1999

F-46

GDR ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEET

March 31,
December 31, ----------------------
1998 1998 1999
(unaudited)

Assets
Current assets:
Cash and cash equivalents................ $1,771,056 $1,315,887 $1,995,158
---------- ---------- ----------
Total current assets...................... 1,771,056 1,315,887 1,995,158
Property and equipment, net............... 1,309,222 981,382 1,278,068
Note receivable, related party............ 172,432 273,614 169,422
Intangible assets, net.................... 36,765 53,355 31,235
---------- ---------- ----------
Total assets.............................. $3,289,475 $2,624,238 $3,473,883
========== ========== ==========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Current portion of obligations under
capital leases.......................... $ 704,577 $ 434,257 $ 643,679
Accounts payable......................... 392,781 254,198 249,255
Income taxes payable..................... 18,510 62,406 37,728
Other liabilities........................ 84,878 154,200 76,705
Current portion of deferred revenue...... 1,570,855 1,527,553 1,874,555
---------- ---------- ----------
Total current liabilities................. 2,771,601 2,432,614 2,881,922
Obligations under capital leases.......... 294,849 211,612 245,943
Deferred revenue, non-current portion..... 175,237 23,262 185,396
Stockholders' equity (deficit):
Common stock............................. 1,000 1,000 1,000
Paid-in capital.......................... 49,500 49,500 49,500
Retained earnings (deficit).............. (2,712) (93,750) 110,122
---------- ---------- ----------
Total stockholders' equity (deficit)...... 47,788 (43,250) 160,622
---------- ---------- ----------
Total liabilities and stockholders' equity
(deficit)................................ $3,289,475 $2,624,238 $3,473,883
========== ========== ==========

The accompanying notes are an integral part of the consolidated financial
statements.

F-47

GDR ENTERPRISES, INC.

CONSOLIDATED STATEMENT OF INCOME

Three months ended
March 31,
December 31, -------------------
1998 1998 1999
(unaudited)

Revenue, Internet access service............... $3,860,368 $914,138 $1,141,331
---------- -------- ----------
Operating expenses:
Internet access service costs................. 1,253,554 301,666 318,029
Sales and marketing........................... 136,221 25,903 83,782
General and administrative.................... 1,739,115 406,809 353,138
Depreciation and amortization................. 651,771 146,929 228,864
---------- -------- ----------
Total operating expenses....................... 3,780,661 881,307 983,813
---------- -------- ----------
Income from operations before other income
and expense................................... 79,707 32,831 157,518
---------- -------- ----------
Other income (expense):
Interest income............................... 101,124 24,983 25,316
Loss on sale of assets........................ (108,843) -- --
---------- -------- ----------
Total other income (expense)................... (7,719) 24,983 25,316
---------- -------- ----------
Income before income taxes..................... 71,988 57,814 182,834
Income taxes................................... 34,000 22,000 70,000
---------- -------- ----------
Net income..................................... $ 37,988 $ 35,814 $ 112,834
========== ======== ==========

The accompanying notes are an integral part of the consolidated financial
statements.

F-48

GDR ENTERPRISES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

Common Stock
-------------
Retained Total
Paid-in Earnings Stockholders'
Shares Amount Capital (Deficit) Equity (Deficit)

Balances at January 1,
1998....................... 800 $1,000 $49,500 $(40,700) $ 9,800
Net income................ 37,988 37,988
--- ------ ------- -------- --------
Balances at December 31,
1998....................... 800 $1,000 $49,500 $ (2,712) $ 47,788
Net income (unaudited).... 112,834 112,834
--- ------ ------- -------- --------
Balances at March 31, 1999
(unaudited)................ 800 $1,000 $49,500 $110,122 $160,622
=== ====== ======= ======== ========

The accompanying notes are an integral part of the consolidated financial
statements.

F-49

GDR ENTERPRISES, INC.

CONSOLIDATED STATEMENT OF CASH FLOW

Three Months Ended
Year Ended March 31,
December 31, ----------------------
1998 1998 1999
(unaudited)

Cash Flows From Operating Activities:
Net income............................. $ 37,988 $ 35,814 $ 112,834
Adjustments to reconcile net income to
net cash
provided by operating activities:
Depreciation and amortization........ 651,771 146,929 228,864
Loss on sale of equipment............ 108,843 -- --
Changes in assets and liabilities:
Accounts payable................... 209,906 71,323 (142,526)
Income taxes payable............... (55,404) 78,050 19,218
Other liabilities.................. 147,736 49,450 (8,173)
Deferred revenue................... 391,474 196,197 313,859
---------- ---------- ----------
Net cash provided by operating
activities.............................. 1,492,314 577,763 524,076
Cash Flows Used In Investing Activities:
Purchase of property and equipment..... (229,006) (82,689) (85,633)
---------- ---------- ----------
Net cash used in investing activities.... (229,006) (82,689) (85,633)
Cash Flows From Financing Activities:
Payments on capital leases............. (536,814) (122,567) (217,351)
Proceeds from note receivable, related
party................................. 101,784 602 3,010
---------- ---------- ----------
Net cash used in financing activities.... (435,030) (121,965) (214,341)
---------- ---------- ----------
Net increase in cash and cash
equivalents............................. 828,278 373,109 224,102
Cash and cash equivalents at beginning of
period.................................. 942,778 942,778 1,771,056
---------- ---------- ----------
Cash and cash equivalents at end of
period.................................. $1,771,056 $1,315,887 $1,995,158
========== ========== ==========
Supplemental disclosure of cash flow
information:
Refundable income taxes received....... $ 32,000 $ -- $ --
========== ========== ==========
Equipment acquired through capital
leases................................ $1,086,239 $ 310,200 $ 106,546
========== ========== ==========

The accompanying notes are an integral part of the consolidated financial
statements.

F-50

GDR ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies:

Organization and Basis of Presentation

GDR Enterprises, Inc. ("Company") provides full service access to the
Internet for corporate and individual users in Ohio, Indiana, Kentucky,
Tennessee, North Carolina, and Alabama through its wholly-owned subsidiaries
Mall 2000, Inc. and TDIN, Inc. EriNet Telecom, a wholly-owned subsidiary of the
Company, is a competitive local exchange carrier licensed in approximately 15
Ohio counties. On July 16, 1998 all the issued and outstanding common stock of
Mall 2000, Inc. were exchanged for shares in the Company.

Revenue Recognition

Cash Equivalents

The Company considers all highly liquid investments purchased with an
initial maturity of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost and depreciated over their
estimated useful lives using an accelerated method. Equipment acquired under
capital leases are depreciated over their related lease terms. Costs of repair
and maintenance are charged to expense as incurred.

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs of
approximately $122,000 were charged to operations in 1998.

Intangible Assets

Intangible assets consist primarily of the acquired customer base. The
acquired customer base is amortized using the straight-line method over 3 years
based on the estimated customer churn rate. The carrying value of intangible
assets will be periodically reviewed to determine if an impairment has
occurred. Impairments, if any, are measured based upon discounted cash flow
analyses and are recognized in operating results in the period in which the
impairment in value is determined.

F-51

GDR ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Use of Estimates

Income Taxes

2. Property and Equipment:

Cost of property and equipment and depreciable lives are summarized as
follows at December 31, 1998:

Depreciable
Life-Years

Equipment acquired under capital lease.................. $1,678,395 2
Computer equipment...................................... 431,993 5-7
Leasehold improvements.................................. 106,030 7
Furniture and fixtures.................................. 38,895 5-7
----------
2,255,313
Less accumulated depreciation......................... (946,091)
----------
Property and equipment, net......................... $1,309,222
==========

Depreciation expense of approximately $622,000 was charged to operations in
1998.

3. Intangible Assets:

Intangible assets consist of the following at December 31, 1998:

Acquired customer base................................................. $66,050
Other.................................................................. 500
-------
66,550
Less accumulated amortization........................................ (29,785)
-------
Intangible assets, net................................................. $36,765
=======

4. Capital Leases:

The Company leases computer equipment under capital leases expiring in
various years through the year 2000. The assets under capital leases are
recorded at the lower of the present value of the minimum lease payments or
the fair value of the assets. The net

F-52

GDR ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

book value of these assets as of December 31, 1998 is $1,029,396. Depreciation
of assets under capital leases is included in depreciation expense.

Future minimum lease payments under capital leases as of December 31, 1998
are as follows:

1999................................................................. $ 753,573
2000................................................................. 323,510
---------
Total minimum lease payments......................................... 1,077,083
Less amount representing interest.................................... (77,657)
---------
Present value of net minimum lease payments.......................... $ 999,426
=========

The Company also leases office facilities and point of presence locations
under operating lease agreements that expire in the years 1999, 2000, 2001, and
2002. The following is a schedule of future minimum rental payments under these
leases:

1999................................................................... $ 49,707
2000................................................................... 35,765
2001................................................................... 15,258
2002................................................................... 7,596
--------
$108,326
========

In addition to these leases, the Company also leases point of presence
locations under lease terms of less than one year.

Rent expense under all operating leases of approximately $57,959 was charged
to operations in 1998.

5. Other Liabilities:

Other liabilities consist of the following at December 31, 1998:

Accrued payroll and related expenses................................... $19,733
Accrued profit sharing................................................. 45,935
Other.................................................................. 19,210
-------
$84,878
=======

6. Income Taxes:

The components for income taxes at December 31, 1998 are as follows:

Current federal income tax............................................. $19,000
Current state and local income taxes................................... 15,000
-------
Provision for income taxes............................................. $34,000
=======

F-53

GDR ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

A reconciliation of the statutory U.S. federal tax rate to the Company's
effective tax rate at December 31, 1998 is as follows:

U.S. federal statutory.................................................... 34.0%
Effect of graduated tax rates............................................. (8.0)
State and local income taxes.............................................. 21.0
----
47.0%
====

7. Notes Receivable, Related Party:

In 1997, an officer of the Company borrowed $275,000 from the Company at an
interest rate of ten percent. Principal and interest of $1,970 are due monthly
through August 2027. Interest income on the note receivable in 1998 was
approximately $21,000.

8. Retirement Savings Plan:

In 1997, the Company established a retirement savings 401(k) plan for all
employees. The Company can make discretionary contributions to the plan.
Contributions charged to operations were approximately $50,000 in 1998.

F-54

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
, 1999

[LOGO]

Shares of Common Stock

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

PROSPECTUS

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

Donaldson, Lufkin & Jenrette

First Union Capital Markets Corp.

CIBC World Markets

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

DLJdirect Inc.

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

We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as
to matters not stated in the prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where
that would not be permitted or legal. Neither the delivery of this prospectus
nor any sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of
Voyager.net have not changed since the date hereof.

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

Until , 1999 (25 days after the date of this prospectus), all dealers that
effect transactions in these shares of common stock may be required to deliver
a prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as an underwriter and with respect to their unsold
allotments or subscriptions.
- -------------------------------------------------------------------------------

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the estimated expenses payable by us in
connection with the offering (excluding underwriting discounts and
commissions):

Nature of Expense Amount
----------------- -------

SEC Registration Fee................................................ $31,970
NASD Filing Fee..................................................... 12,000
Nasdaq National Market Listing Fee.................................. *
Accounting Fees and Expenses........................................ *
Legal Fees and Expenses............................................. *
Printing Expenses................................................... *
Blue Sky Qualification Fees and Expenses............................ *
Transfer Agent's Fee................................................ *
Miscellaneous....................................................... *
-------
TOTAL............................................................. $
=======

The amounts set forth above, except for the Securities and Exchange
Commission, NASD Regulation, Inc. and Nasdaq National Market fees, are in each
case estimated.
- ---------------------
* To be completed by amendment.

Item 14. Indemnification of Directors and Officers

In accordance with Section 145 of the Delaware General Corporation Law,
Article VII of our second amended and restated certificate of incorporation
provides that no director of Voyager.net be personally liable to Voyager.net,
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (1) for any breach of the director's duty of
loyalty to Voyager.net or its stockholders, (2) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (3) in respect of unlawful dividend payments or stock redemptions or
repurchases, or (4) for any transaction from which the director derived an
improper personal benefit. In addition, our first amended and restated
certificate of incorporation provides that if the Delaware General Corporation
Law is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.

Article V of our amended and restated by-laws provides for indemnification
by Voyager.net of its officers and certain non-officer employees under certain
circumstances against expenses, including attorneys fees, judgments, fines and
amounts paid in settlement, reasonably incurred in connection with the defense
or settlement of any threatened, pending or completed legal proceeding in which
any such person is involved by reason of the fact that such person is or was an
officer or employee of the registrant if such person acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of Voyager.net, and, with respect to criminal actions or proceedings,
if such person had no reasonable cause to believe his or her conduct was
unlawful.

We have also entered into indemnification agreements with each of our
directors. These agreements provide that we indemnify each of our directors to
the fullest extent permitted under law and our by-laws, and provide for the
advancement of expenses to each director. We have also obtained directors' and
officers' insurance against certain liabilities.

II-1

Item 15. Recent Sales of Unregistered Securities

Set forth in chronological order below is information regarding the number
of shares of capital stock issued by Voyager.net during the past three years.
Also included is the consideration, if any, received by Voyager.net for the
shares. There was no public offering in any transaction and we believe that
each transaction was exempt from the registration requirements of the
Securities Act of 1933, as amended, by reason of Section 4(2) thereof, based
on the private nature of the transactions and the financial sophistication of
the purchasers, all of whom had access to complete information concerning
Voyager.net and acquired the securities for investment and not with a view to
the distribution thereof. In addition, we believe that the transactions
described below with respect to issuances and option grants to our employees
and consultants were exempt from the registration requirements of said Act by
reason of Rule 701 promulgated thereunder. The share numbers and per share
values set forth below do not give effect to the -for-1 stock split effected
in connection with this offering. The share numbers and per share values set
forth below with respect to Voyager Information Networks, Inc. do not give
effect to the 20-for-1 stock split effected in September 1998.

. On August 7, 1997, Voyager sold an aggregate 25,000 shares of series A
preferred stock and 424,900 shares of common stock for an aggregate
purchase price of $504,249 and 2,696 shares of preferred shares to
Media/Communications Partners II Limited Partnership and
Media/Communications Investors Limited Partnership, respectively

. On August 7, 1997, Voyager sold an aggregate 53,416 shares of restricted
common stock under its 1997 Stock Option and Incentive Plan, including
sales of 41,568, 5,924 and 5,924 shares to Messrs. Friedly, Baird and
Heinze, respectively, for aggregate consideration of $415.68, $59.24 and
$59.24, respectively

. On January 15, 1998, Voyager sold 6,003 shares of restricted common stock
to Alan Baird, a consultant to Voyager, under its 1997 Stock Option and
Incentive Plan for aggregate consideration of $60.03

. On January 15, 1998, Voyager granted options to purchase an aggregate
91,984 shares of common stock at a per share exercise price of $.01 to
certain of its employees, including options to purchase 67,984 shares of
common stock to Mr. Williams, pursuant to its 1997 Stock Option and
Incentive Plan

. On February 20, 1998, Voyager granted Mr. Torto options to purchase 67,984
shares of common stock at a per share exercise price of $.01 pursuant to
its 1997 Stock Option and Incentive Plan

. On July 31, 1998, Voyager sold an aggregate 15,000 shares of series A
preferred stock and an aggregate 182,100 shares of common stock, and issued
demand promissory notes in the aggregate principal amount of $2,800,000,
for an aggregate purchase price of $4,301,821 to Media/Communications
Partners II Limited Partnership and Media/Communications Investors Limited
Partnership

. On September 23, 1998, we granted options to purchase an aggregate
1,520,000 shares of our common stock at a per share exercise price of
$.0005 to certain of our employees pursuant to our 1998 Stock Option and
Incentive Plan, including options to purchase 1,400,000 shares of common
stock to Mr. Williams

. On September 23, 1998, we sold an aggregate 33,657 shares of series A
preferred stock and an aggregate 360,000 shares of common stock to
Media/Communications Partners II Limited Partnership and
Media/Communications Investors Limited Partnership for an aggregate
purchase price of $533,513 in cash and cancellation of demand promissory
notes in the aggregate principal amount, plus interest, of $2,832,526

. On September 23, 1998, we sold 1,400,000 shares of restricted common stock
to Mr. Torto under our 1998 Stock Option and Incentive Plan for aggregate
consideration of $700

. On October 2, 1998, we sold an aggregate 400,000 shares of restricted
common stock for an aggregate purchase price of $200 under the 1998 Stock
Option and Incentive Plan, including sales of 200,000, 100,000 and 100,000
shares to Messrs. Torto, Shires and Michaels, respectively, for aggregate
consideration of $100, $50 and $50, respectively

II-2

. On January 1, 1999, we granted options to purchase an aggregate 135,000
shares of common stock at a per share exercise price of $6.00 to certain of
our employees pursuant to our 1998 Stock Option and Incentive Plan

. On January 11, 1999, we sold 300,000 shares of restricted common stock to
Mr. deFaria under our 1998 Stock Option and Incentive Plan for aggregate
consideration of $1.8 million

. On January 11, 1999, we sold 700,000 shares of restricted common stock to
Mr. Friedly under our 1998 Stock Option and Incentive Plan for aggregate
consideration of $4.2 million

. On May 3, 1999, we sold an aggregate 6,667 shares of series A preferred
stock for an aggregate $666,700, including 5,147, 740, and 740 shares to
Messrs. Friedly, Baird and Heinze, respectively, for aggregate
consideration of $514,700, $74,000 and $74,000, respectively

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits
*1.1 Form of Underwriting Agreement.
**2.1 Stock Exchange Agreement dated as of September 23, 1998, by and among
the Registrant and the parties named therein (excluding schedules,
which the Registrant agrees to furnish supplementally to the Commission
upon request).
**2.2 Stock Purchase Agreement dated as of September 23, 1998 by and among
the Registrant and the investors identified therein (excluding
schedules and exhibits, which the Registrant agrees to furnish
supplementally to the Commission upon request).
*3.1 Form of Amended and Restated Certificate of Incorporation of the
Registrant.
*3.2 Form of Second Amended and Restated Certificate of Incorporation of the
Registrant (to be effective upon consummation of this offering).
*3.3 Form of Amended and Restated By-laws of the Registrant.
*4.1 Specimen certificate for shares of common stock, $.0001 par value, of
the Registrant.
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being offered.
**10.1 Credit Agreement dated as of September 23, 1998 by and among the
Registrant, Fleet National Bank, as agent, and the lenders identified
therein (excluding schedules and exhibits, which the Registrant agrees
to furnish supplementally to the Commission upon request).
**10.2 First Amendment to Credit Agreement dated as of April 13, 1999 by and
among the Registrant, the Agent and the lenders identified therein.
**10.3 Amended and Restated Promissory Note made by the Registrant in favor of
Horizon Cable I Limited Partnership.
**10.4 Asset Purchase Agreement dated as of July 31, 1998 by and among the
Registrant, Freeway, Inc. (n/k/a Offline, Inc.) and the other parties
identified therein (excluding schedules and exhibits, which the
Registrant agrees to furnish supplementally to the Commission upon
request).
**10.5 Asset Purchase Agreement dated as of September 23, 1998 by and among
the Registrant, EXEC-PC, Inc. (n/k/a The Mahoney Group) and the other
parties identified therein (excluding schedules and exhibits, which the
Registrant agrees to furnish supplementally to the Commission upon
request).
10.6 Asset Purchase Agreement dated as of October 2, 1998, effective
September 30, 1998, by and among the Registrant, NetLink Systems,
L.L.C., and the other parties identified therein (excluding schedules
and exhibits, which the Registrant agrees to furnish supplementally to
the Commission upon request).
10.7 Reseller Agreement dated as of April 13, 1999 by and among the
Registrant and Millennium Digital Media Systems, L.L.C.
*10.8 Employment Agreement dated as of February 20, 1998 between the
Registrant and Christopher Torto, as amended.

II-3

**10.9 Employment Agreement dated as of January 15, 1998 between the
Registrant and Michael Williams.
*10.10 Employment Agreement dated as of October 2, 1998 between the
Registrant and Christopher Michaels, as amended.
**10.11 Employment Agreement dated as of October 2, 1998 between the
Registrant and David Shires.
**10.12 Employment Agreement effective as of January 11, 1999 between the
Registrant and Osvaldo deFaria.
**10.13 Employment Agreement dated as of March 18, 1999 between the Registrant
and Dennis Stepaniak.
**10.14 Agreement Regarding Inventions, Non-competition and Confidentiality
dated as of February 20, 1998 between the Registrant and Christopher
Torto.
**10.15 Agreement Regarding Inventions, Non-competition and Confidentiality
dated as of October 15, 1997 between the Registrant and Michael
Williams.
**10.16 Agreement Regarding Inventions, Non-competition and Confidentiality
dated as of November 11, 1998 between the Registrant and Osvaldo
deFaria.
**10.17 Agreement Regarding Inventions, Non-competition and Confidentiality
dated as of March 18, 1999 between the Registrant and Dennis
Stepaniak.
**10.18 Employee Non-Competition Agreement dated as of October 2, 1998 between
the Registrant and Christopher Michaels.
**10.19 Employee Non-Competition Agreement dated as of October 2, 1998 between
the Registrant and David Shires.
*10.20 Amended and Restated 1998 Stock Option and Incentive Plan.
**10.21 Form of Incentive Stock Option and Restriction Agreement.
**10.22 Form of Stock Purchase and Stock Restriction Agreement.
10.23 Promissory Note made by Osvaldo deFaria in favor of the Registrant.
10.24 Promissory Note made by Glenn Friedly in favor of the Registrant.
**10.25 Promissory Note made by Christopher Torto dated April 13, 1999, in
favor of the Registrant.
**10.26 Form of Director Indemnification Agreement.
*10.27 SNAP! Online Distribution Agreement dated as of February 12, 1998 by
and between CNET, Inc. and the Registrant.
10.28 Planet Direct Internet Service Provider Agreement dated as of March
17, 1997 by and among Planet Direct Corporation and the Registrant
(excluding Schedules and Exhibits which the Registrant agrees to
furnish supplementally to the Commission upon request).
*10.29 Telecommunications Services Agreement dated as of September 3, 1998 by
and between IXC Communications Services, Inc. and the Registrant.
10.30 Stock Purchase Agreement dated as of May 7, 1999 by and among the
Registrant, GDR Enterprises, Inc. and the other parties identified
therein (excluding schedules and exhibits which the Registrant agrees
to furnish supplementally to the Commission upon request).
*10.31 Promissory Note made by Christopher Torto dated June , 1999, in favor
of the Registrant.
*16.1 Letter re: change in independent accountants.
21.1 Schedule of Subsidiaries of the Registrant.
*23.1 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1
hereto).
23.2 Consent of PricewaterhouseCoopers LLP.
**24.1 Powers of Attorney.
**27.1 Financial Data Schedule.

- ---------------------
* To be filed by amendment to this registration statement.

** Previously filed.

II-4

(b)Financial Statement Schedules

Schedule II--Valuation and Qualifying Accounts

Except for the financial statement schedule listed above, all schedules have
been omitted because they are not required or because the required information
is given in the Financial Statements or Notes to those statements.

Item 17. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised 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. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to the Registration Statement File No.
333-77917 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, Commonwealth of Massachusetts, on June 11,
1999.

Voyager.net, Inc.

/s/ Dennis J. Stepaniak
By:__________________________________

Dennis J. Stepaniak

Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

* President, Chief Executive June 11, 1999
______________________________________ Officer and Director
Christopher P. Torto (Principal Executive
Officer)

/s/ Dennis J. Stepaniak Chief Financial Officer June 11, 1999
______________________________________ (Principal Financial
Dennis J. Stepaniak Officer and Principal
Accounting Officer)

* Director June 11, 1999
______________________________________
Glenn R. Friedly

* Director June 11, 1999
______________________________________
John G. Hayes

* Director June 11, 1999
______________________________________
Christopher S. Gaffney

Director June 11, 1999
______________________________________
David F. Dietz

/s/ Dennis J. Stepaniak

*By:________________________

Attorney-in-fact

II-6

VOYAGER.NET AND SUBSIDIARIES

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

Additions
----------------------
Balance at Charged to Charged to Deductions for Balance at
Beginning costs and other accounts end of
of period expenses accounts(1) written off(2) period
---------- ---------- ----------- -------------- ----------

Description

Year ended December 31,
1996:
Allowance for doubtful
accounts.............. $ -- $ 92,000 $ 2,000 $ 90,000

Valuation allowance for
deferred tax assets... 216,000 524,000 740,000

Year ended December 31,
1997:
Allowance for doubtful
accounts.............. 90,000 199,000 249,000 40,000

Valuation allowance for
deferred tax assets... 740,000 333,000 1,073,000

Year ended December 31,
1998:
Allowance for doubtful
accounts.............. 40,000 178,000 119,000 99,000

Valuation allowance for
deferred tax assets... 1,073,000 1,157,000 2,230,000

- ---------------------
(1) Describe non-income statement accounts charged.
(2) Describe other changes to account balance.

S-1

REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE

To the Board of Directors of Voyager.net, Inc.:

Our audits of the consolidated financial statements referred to in our
report dated March 5, 1999 (except for Notes 17 for which the date is April 23,
1999) of Voyager.net, Inc. also included an audit of the financial statement
schedule listed in Item 16(b) herein. In our opinion, the financial statement
schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.

PricewaterhouseCoopers LLP

Grand Rapids, Michigan
May 3, 1999

S-2

Exhibit
Number Description Page No.
------- ----------- --------

*1.1 Form of Underwriting Agreement.
**2.1 Stock Exchange Agreement dated as of September 23, 1998, by
and among the Registrant and the parties named therein
(excluding schedules, which the Registrant agrees to
furnish supplementally to the Commission upon request).
**2.2 Stock Purchase Agreement dated as of September 23, 1998 by
and among the Registrant and the investors identified
therein (excluding schedules and exhibits, which the
Registrant agrees to furnish supplementally to the
Commission upon request).
*3.1 Form of Amended and Restated Certificate of Incorporation
of the Registrant.
*3.2 Form of Second Amended and Restated Certificate of
Incorporation of the Registrant (to be effective upon
consummation of this offering).
*3.3 Form of Amended and Restated By-laws of the Registrant.
*4.1 Specimen certificate for shares of common stock, $.0001 par
value, of the Registrant.
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality
of the securities being offered.
**10.1 Credit Agreement dated as of September 23, 1998 by and
among the Registrant, Fleet National Bank, as agent, and
the lenders identified therein (excluding schedules and
exhibits, which the Registrant agrees to furnish
supplementally to the Commission upon request).
**10.2 First Amendment to Credit Agreement dated as of April 13,
1999 by and among the Registrant, the Agent and the lenders
identified therein.
**10.3 Amended and Restated Promissory Note made by the Registrant
in favor of Horizon Cable I Limited Partnership.
**10.4 Asset Purchase Agreement dated as of July 31, 1998 by and
among the Registrant, Freeway, Inc. (n/k/a Offline, Inc.)
and the other parties identified therein (excluding
schedules and exhibits, which the Registrant agrees to
furnish supplementally to the Commission upon request).
**10.5 Asset Purchase Agreement dated as of September 23, 1998 by
and among the Registrant, EXEC-PC, Inc. (n/k/a The Mahoney
Group) and the other parties identified therein (excluding
schedules and exhibits, which the Registrant agrees to
furnish supplementally to the Commission upon request).
10.6 Asset Purchase Agreement dated as of October 2, 1998,
effective September 30, 1998, by and among the Registrant,
NetLink Systems, L.L.C. and the other parties identified
therein (excluding schedules and exhibits, which the
Registrant agrees to furnish supplementally to the
Commission upon request).
10.7 Reseller Agreement dated as of April 13, 1999 by and among
the Registrant and Millennium Digital Media Systems, L.L.C.
*10.8 Employment Agreement dated as of February 20, 1998 between
the Registrant and Christopher Torto, as amended.
**10.9 Employment Agreement dated as of January 15, 1998 between
the Registrant and Michael Williams.
*10.10 Employment Agreement dated as of October 2, 1998 between
the Registrant and Christopher Michaels, as amended.
**10.11 Employment Agreement dated as of October 2, 1998 between
the Registrant and David Shires.

Exhibit
Number Description Page No.
------- ----------- --------

**10.12 Employment Agreement effective as of January 11, 1999
between the Registrant and Osvaldo deFaria.
**10.13 Employment Agreement dated as of March 18, 1999 between the
Registrant and Dennis Stepaniak.
**10.14 Agreement Regarding Inventions, Non-competition and
Confidentiality dated as of February 20, 1998 between the
Registrant and Christopher Torto.
**10.15 Agreement Regarding Inventions, Non-competition and
Confidentiality dated as of October 15, 1997 between the
Registrant and Michael Williams.
**10.16 Agreement Regarding Inventions, Non-competition and
Confidentiality dated as of November 11, 1998 between the
Registrant and Osvaldo deFaria.
**10.17 Agreement Regarding Inventions, Non-competition and
Confidentiality dated as of March 18, 1999 between the
Registrant and Dennis Stepaniak.
**10.18 Employee Non-Competition Agreement dated as of October 2,
1998 between the Registrant and Christopher Michaels.
**10.19 Employee Non-Competition Agreement dated as of October 2,
1998 between the Registrant and David Shires.
*10.20 Amended and Restated 1998 Stock Option and Incentive Plan.
**10.21 Form of Incentive Stock Option and Restriction Agreement.
**10.22 Form of Stock Purchase and Stock Restriction Agreement.
10.23 Promissory Note made by Osvaldo deFaria in favor of the
Registrant.
10.24 Promissory Note made by Glenn Friedly in favor of the
Registrant.
**10.25 Promissory Note made by Christopher Torto dated April 13,
1999, in favor of the Registrant.
**10.26 Form of Director Indemnification Agreement.
*10.27 SNAP! Online Distribution Agreement dated as of February
17, 1998 by and between CNET, Inc. and the Registrant.
10.28 Planet Direct Internet Service Provider Agreement dated as
of March 17, 1997 by and among Planet Direct Corporation
and the Registrant.
*10.29 Telecommunications Services Agreement dated as of September
3, 1998 by and between IXC Communications Services, Inc.
and the Registrant (excluding schedules and exhibits, which
the Registrant agrees to furnish supplementally to the
Commission upon request).
10.30 Stock Purchase Agreement dated as of May 7, 1999 by and
among the Registrant, GDR Enterprises, Inc. and the other
parties identified therein (excluding schedules and
exhibits which the Registrant agrees to furnish
supplementally to the commission upon request).
*10.31 Promissory Note made by Christopher Torto dated June ,
1999, in favor of the Registrant.
*16.1 Letter re: change in independent accountants.
21.1 Schedule of Subsidiaries of the Registrant.
*23.1 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1 hereto).
23.2 Consent of PricewaterhouseCoopers LLP.
**24.1 Powers of Attorney.
**27.1 Financial Data Schedule.

- ---------------------
* To be filed by amendment to this registration statement.

** Previously filed.