UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 8-K/A


                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)     April 13, 2000
                                                    ----------------


                         FUSION NETWORKS HOLDINGS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Delaware                     0-23900                 51-0393382
----------------------------       -------------         ----------------------
(State or other jurisdiction       (Commission              (IRS Employer
     of incorporation)              file number)         Identification Number)


                   8115 N.W. 29th Street, Miami, Florida 33122
               --------------------------------------------------
               (Address of principal executive offices)(Zip Code)


                                 (305) 477-6701
               ---------------------------------------------------
              (Registrant's telephone number, including area code)

                             IDM Environmental Corp.
               396 Whitehead Avenue, South River, New Jersey 08882
         ---------------------------------------------------------------
         (Former name and former address, if changed since last report)


This amended Form 8-K relates to the  transaction  on April 13, 2000 pursuant to
which Fusion  Networks  Holdings,  Inc.  ("FNHI" or the  "Company")  completed a
holding company reorganization and merger in which it acquired IDM Environmental
Corp. ("IDM") and Fusion Networks,  Inc. ("Fusion").  This amendment is filed to
restate certain  financial  statements  relating to the Company's  investment in
Marketing  Services  Group,  Inc. to carry that  investment at fair value,  with
unrealized  gains and losses reported as a separate  component of  stockholders'
equity.

Item 7.  Financial Statements and Exhibits

     (a)  Financial Statements of Businesses Acquired

          Fusion Networks, Inc.

           Independent Auditor's Report...................................   F-1
           Consolidated Balance Sheet - December 31, 1999.................   F-2
           Consolidated Statement of Operations for the Period from
              Inception (July 1, 1999) to December 31, 1999...............   F-3
           Consolidated Statement of Cash Flows for the Period from
              Inception (July 1, 1999) to December 31, 1999...............   F-4
           Consolidated Statement of Stockholders' Equity for the Period
              from Inception (July 1, 1999) to December 31, 1999..........   F-5
           Notes to Consolidated Financial Statements.....................   F-6

           Consolidated Balance Sheet (Unaudited) - March 31, 2000........  F-17
           Consolidated Statement of Operations for the Quarter Ended
              March 31, 2000 (Unaudited)..................................  F-18
           Consolidated Statement of Cash Flows for the Quarter Ended
              March 31, 2000..............................................  F-19
           Notes to Consolidated Financial Statements (Unaudited).........  F-20

     (b)  Pro Forma Financial Information

           Summary Unaudited Pro Forma Consolidated Financial Data........  F-23
           Pro Forma Consolidated Balance Sheet - March 31, 2000..........  F-24
           Pro Forma Consolidated Statement of Operations for the Year
               Ended December 31, 1999 and for the Three Months Ended
               March 31, 2000.............................................  F-25
           Notes to Pro Forma Consolidated Financial Data.................  F-26

     (c)  Exhibits

          None

                                       2


                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly caused this Current  Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.

                                              FUSION NETWORKS HOLDINGS, INC.

Dated: January 12, 2001
                                              By:  /s/ Gary M. Goldfarb
                                                  ---------------------------
                                                   Gary M. Goldfarb
                                                   President


                                      3


                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors of
Fusion Networks, Inc. and Subsidiary
Miami, Florida 33122


We have audited the accompanying  consolidated balance sheet of Fusion Networks,
Inc. and  Subsidiary (A  Development  Stage Company) as of December 31, 1999 and
the related consolidated statements of operations, stockholders' equity and cash
flows for the period from inception  (July 1, 1999) to December 31, 1999.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Fusion  Networks,  Inc. and
Subsidiary (A Development Stage Company) as of December 31, 1999 and the results
of its  operations  and its cash  flows for the  initial  period  then  ended in
conformity with generally accepted accounting principles.









                                                 SAMUEL KLEIN AND COMPANY


Newark, New Jersey
May 30, 2000

                                      F-1



                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 1999



ASSETS
-------

Current Assets:

   Cash and cash equivalents                                        $ 7,044,458
   Employee and other loans                                                 535
   Prepaid expenses                                                      21,858
                                                                     -----------
          Total Current Assets                                      $ 7,066,851

Other Assets:
   Investment in equity securities                                   25,500,000

Property and Equipment:
   Office equipment                                                     610,025
   Furniture and fixtures                                                23,306
   Automobiles                                                           37,165
                                                                     -----------
          Total Property and Equipment                                  670,496

   Less: Accumulated depreciation                                       (27,938)
                                                                     -----------
          Net Property and Equipment                                    642,558
                                                                     -----------
                                                                    $33,209,409
                                                                     ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses                         $      122,109
   Due to affiliate                                                       8,971
                                                                     -----------
          Total Current Liabilities                              $      131,080

Stockholders' Equity:
   Common stock, authorized 60,000,000 shares, $.00001
     par value, issued and outstanding 33,113,333 shares                    331
   Additional paid-in-capital                                        54,437,419
   Foreign currency translation adjustment                               14,551
   Deficit accumulated during the development stage                 (21,373,972)
     Accumulated other comprehensive income (loss):
     Foreign currency translation                                        14,551
                                                                     -----------
          Total Stockholders' Equity                                 33,078,329
                                                                     -----------
                                                                    $33,209,409
                                                                     ===========

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

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

                                      F-2



                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENT OF OPERATIONS

        FOR THE PERIOD FROM INCEPTION (JULY 1, 1999) TO DECEMBER 31, 1999







Revenues                                                      $            -
--------

Costs and Expenses:
   General and administrative expenses                        $      386,742
   Product development and engineering                             1,038,671
   Sales and marketing                                               164,249
   Consulting expenses                                            19,575,000
   Merger expenses                                                   238,350
                                                                 ------------
          Total Costs and Expenses                                21,403,012
                                                                 ------------
Loss from Operations                                             (21,403,012)

Other Income (Expenses):
   Interest income                                                    35,568
   Foreign currency (loss)                                            (5,528)
   Miscellaneous                                                      (1,000)
                                                                 ------------
                                                                      29,040
                                                                 ------------
Net Loss                                                     $   (21,373,972)
                                                                 ============

Loss per Share:
   Basic loss per share                                      $          (.64)
                                                                 ============
   Diluted loss per share                                    $          (.64)
                                                                 ============
   Basic common shares outstanding                                33,113,333
                                                                 ============
   Diluted common shares outstanding                              33,113,333
                                                                 ============





----------------------
The accompanying notes are an integral part of these financial statements.

                                      F-3


                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENT OF CASH FLOWS
        FOR THE PERIOD FROM INCEPTION (JULY 1, 1999) TO DECEMBER 31, 1999





Cash Flows from Operating Activities:
   Net loss                                                        $(21,373,972)

   Adjustments to reconcile net loss to net cash
     used in operating activities:
       Depreciation                                                      27,938
       Compensation cost of consultants= warrants                    19,575,000
   Increase in employee and other loans                                    (535)
   Increase in prepaid expenses                                         (21,858)
   Increase in accounts payable and accrued expenses                    122,109
   Increase in due to affiliate                                           8,971
                                                                    ------------
          Net cash used in operating activities                      (1,662,347)
                                                                    ------------

Cash Flows from Investing Activities:
   Purchase of property and equipment                                  (670,496)
                                                                    ------------
          Net cash used in investing activities                        (670,496)
                                                                    ------------

Cash Flows from Financing Activities:
   Net proceeds in connection with the issuance of
     common stock and warrants                                        9,362,750
                                                                    ------------
          Net cash provided by financing activities                   9,362,750
                                                                    ------------
Effect of Exchange Rate Changes on Cash                                  14,551
                                                                    ------------
Net Increase in Cash and Cash Equivalents                             7,044,458

Cash and Cash Equivalents - Inception,  July 1, 1999                          -
                                                                    ------------
Cash and Cash Equivalents - End of period, December 31, 1999       $  7,044,458
                                                                    ============

Supplemental Disclosures of Cash Flow Information:
   Cash paid during the period for:
     Interest                                                      $          -
                                                                    ============
     Taxes                                                         $        160
                                                                    ============
Supplemental Disclosure of Noncash Investing and
  Financing Activities:
    Issuance of common stock in exchange for investment
     in affiliate                                                    25,500,000
                                                                    ============
-----------------------

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

                                      F-4



                      FUSION NETWORKS, INC. AND SUBSIDIARY
                         (A DEVELOPMENT STAGE COMPANY)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

        FOR THE PERIOD FROM INCEPTION (JULY 1, 1999) TO DECEMBER 31, 1999






                                                                                    Deficit     Accumulated
                                              Common Stock                         Accumulated    other
                                            $.00001 Par Value         Additional   During the  Comprehensive   Total
                                      Number                           Paid-In     Development    Income       Stockholders'
                                    of Shares             Amount       Capital        Stage       (Loss)       Equity
                                   -----------           --------    ------------ --------------  -------   --------------
                                                                                          


At Inception on July 1, 1999                            $      -     $         -   $         -    $     -     $      -

Issuance of common stock           26,600,000                266       1,000,484                             1,000,750

Issuance of common stock and
  warrants in connection with
  private placement                 3,013,333                 30       8,361,970                             8,362,000

Issuance of common stock for
  investment in affiliate           3,500,000                 35      25,499,965                            25,500,000

Issuance of common stock
 warrants to consultants                                              19,575,000                            19,575,000

Foreign Currency Translation
  Adjustment                                                                                       14,551       14,551

Net Loss for the Period from
  Inception (July 1, 1999) to
  December 31, 1999                                                                (21,373,972)            (21,373,972)
                                  -----------           ---------     ----------   ------------   -------- ------------

Balances, December 31, 1999        33,113,333         $     331     $ 54,437,419  $(21,373,972)   $14,551 $ 33,078,329
                                  ===========           =========     ==========   ============   ======== ============



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

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

                                      F-5



                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

1.   THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business
------------------
Fusion  Networks,  Inc.,  (the  "Company")  a  development  stage  company,  was
incorporated  under  the laws of the State of  Delaware  on June 30,  1999.  The
Company is a start-up  Internet  company  founded to provide  improved  Internet
content and services to Latin American  markets and to the Spanish and Portugese
speaking   population   around  the  world  through  their   Internet  Web  Site
LatinFusion.com.

On September 23, 1999 the Company  formed a wholly-owned  Columbian  subsidiary,
Fusion  Networks DE Colombia  LTDA for the purpose of  conducting  the Company's
business in Colombia, South America.

Principles of Consolidation
---------------------------
The accompanying financial statements as of December 31, 1999 and for the period
then ended  consolidate the accounts of the parent company and its  wholly-owned
subsidiary.  All significant  intercompany  accounts and transactions  have been
eliminated in consolidation.

Cash and Cash Equivalents
-------------------------
The Company  considers  all highly liquid  investments  with a maturity of three
months or less to be cash equivalents.

Use of Management's 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 as of 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.

Property and Equipment
----------------------
Property and equipment are depreciated for financial  accounting purposes on the
straight-line   method  over  their  respective  estimated  useful  lives.  Upon
retirement  or  other  disposition  of  these  assets,   the  cost  and  related
accumulated  depreciation  are removed from the accounts and the resulting gains
or  losses  are  reflected  in  the  results  of  operations.  Expenditures  for
maintenance and repairs are charged to operations.  Renewals and betterments are
capitalized.  Depreciation of leased  equipment under capital leases is included
in depreciation.

Investments
-----------
The  company  accounts  for its  investments  in debt and equity  securities  in
accordance  with the  Statement  of  Financial  Accounting  Standards  No.  115,
"Accounting for Certain  Investments in Debt and Equity  Securities"(SFAS  115),
which  requires  that  investments  in debt  securities  and  marketable  equity
securities be designated as trading, held-to-maturity or available-for-sale.

Management determines the appropriate  classification of its investments in debt
and  equity   securities   at  the  time  of  purchase  and   reevaluates   such
determinations at each balance sheet date. Debt securities for which the Company
does not have the  intent or  ability  to hold to  maturity  are  classified  as
available for sale, along with any investments in equity securities.  Securities
available for sale are carried at fair value,  with unrealized gains and losses,
net of income taxes, reported as a separate component of Stockholder's Equity.


Impairment of Long-Lived Assets
-------------------------------
The Company adopted  Statement of Financial  Accounting  Standards No. 121 (SFAS
121),  "Accounting  for the  Impairment of Long-Lived  Assets and for Long-Lived
Assets to be Disposed  of".  SFAS 121 requires  that if facts and  circumstances
indicate  that the cost of fixed  assets or other  assets  may be  impaired,  an
evaluation  of  recoverability  would be performed by  comparing  the  estimated
future undiscounted  pre-tax cash flows associated with the asset to the  assets
carrying  value to  determine  if a  write-down  to market  value or  discounted
pre-tax cash flow value would be required.

                                      F-6


                      FUSION NETWORKS, INC. AND SUBSIDIARY
                         (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999
                                   (Continued)



1.   THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition
-------------------
The  Company's   revenues  will  be  derived   principally   from  the  sale  of
"infomercials"  which  are full  multimedia  advertisements  including  animated
graphics,  sound and voice.  Additional  revenues will be derived from corporate
sponsorships of various services and games provided on  LatinFusion.com  as well
as from e-commerce commissions and transaction fees.

Product Development
-------------------
Costs incurred in conjunction  with the  development of new products are charged
to expense as incurred.  Material  software  development costs subsequent to the
establishment of technological  feasibility will be capitalized.  Based upon the
Company's product development process,  technological feasibility is established
upon the  completion of a working  model.  To date  attainment of  technological
feasibility and general release to customers have substantially coincided.

Comprehensive Income
--------------------
The Company adopted Statement of Financial  Accounting  Standards No. 130, (SFAS
130) "Reporting  Comprehensive Income". This statement establishes rules for the
reporting of comprehensive  income and its components which require that certain
items such as foreign  currency  translation  adjustments,  unrealized gains and
losses on certain  investments in debt and equity  securities,  minimum  pension
liability  adjustments  and  unearned  compensation  expense  related  to  stock
issuances to employees be  presented  as separate  components  of  stockholders=
equity.

Earnings (Loss) Per Share
-------------------------
The  Company  calculates  earnings  per share in  accordance  with SFAS No. 128,
"Computation  of Earnings Per Share" and SEC Staff  Accounting  Bulletin No. 98.
Accordingly,  basic  earnings per share is computed  using the weighted  average
number of common and dilutive common  equivalent shares  outstanding  during the
period.  Common  equivalent  shares  consist of the  incremental  common  shares
issuable  upon the  conversion of the  Preferred  Stock (using the  if-converted
method)  and shares  issuable  upon the  exercise  of stock  options  (using the
treasury  stock  method);   common  equivalent  shares  are  excluded  from  the
calculation if their effect is anti- dilutive.

Stock Splits
------------
On August 23, 1999,  the Company's  Board of Directors  authorized a 1,000 for 1
forward  stock split of its common stock and amended the par value of the common
stock  to  $0.00001  and  increased  the  authorized  shares  to  3,000,000  for
shareholders of record at the close of business on August 23, 1999.

                                      F-7



                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999
                                   (Continued)


1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock Splits (Continued)
------------
On November 16, 1999, the Company=s  Board of Directors  authorized a 17.7333333
for 1  stock  split  of  its  common  stock  effective  November  18,  1999  for
shareholders of record at the close of business on November 18, 1999.

All share and  per-share  amounts  in the  accompanying  consolidated  financial
statements  have  been  restated  to give  effect to both the 1000 for 1 and the
subsequent 17.7333333 for 1 stock splits.

Concentrations of Credit Risk
-----------------------------
Financial  instruments  that  potentially  subject  the  Company to  significant
concentrations of credit risk consist  principally of cash and cash equivalents.
The Company  maintains  the majority of its cash and cash  equivalents  with one
financial institution and this creates an inherent concentration of credit risk.

Start-Up Activities
-------------------
The American Institute of Certified Public Accountants recently issued Statement
of Position ("SOP") 98-5, "Reporting the Costs of Start-up Activities". SOP 98-5
requires start-up costs, as defined, to be expensed as incurred and is effective
for financial statements for fiscal years beginning after December 15, 1998. The
Company  expenses  all  start-up  costs as  incurred  in  accordance  with  this
statement and  therefore the issuance of SOP 98-5 had no material  impact on the
Company's financial statements.

Income Taxes
------------
The Company follows Statement of Financial  Accounting  Standards No. 109, (SFAS
109)  "Accounting  for Income  Taxes".  SFAS 109  requires  the  recognition  of
deferred tax liabilities and assets for the expected future tax  consequences of
events that have been included in the financial statements or tax returns. Under
this method,  deferred tax  liabilities  and assets are determined  based on the
difference  between the financial  statement  carrying  amounts and tax bases of
assets and  liabilities  using enacted tax rates in effect in the years in which
the  differences are expected to reverse.  Valuation  allowances are established
when  necessary  to reduce  deferred  tax  assets to the amount  expected  to be
realized.

2. INVESTMENTS

As of December 31, 1999 the fair value of the  investment  in equity  securities
classified as available for sale securities approximated cost.

3.  PLAN OF OPERATIONS

Fusion  Networks,  Inc.  is a  development  stage  company  in  the  process  of
developing LatinFusion.com, a universal portal offering a comprehensive suite of
Internet products, services and solutions to Latin America and other Spanish and
Portugese speaking markets.  The Company believes that by offering an integrated
platform of content,  community and commerce and related services,  all produced
locally and in Spanish or Portugese,  with the specific needs and desires of the
Spanish and Portugese speaking population as its focus,  LatinFusion.com will be
well  positioned  to  capitalize  on the  anticipated  growth  of  the  Internet
throughout the Spanish and Portugese speaking world.

                                      F-8


                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999
                                   (Continued)


3.  PLAN OF OPERATIONS (Continued)

In order to capitalize on the anticipated growth of the Internet  throughout the
Spanish and  Portugese  speaking  population,  the Company  intends to establish
credibility  in the Spanish and Portugese  speaking  markets by  establishing  a
local  presence  in those  markets  and  developing  content  tailored  to those
markets.  The  Spanish and  Portugese  speaking  populations  of the world share
important  cultural and  linguistic  characteristics.  To succeed in serving the
Internet  needs of these  communities  the  Company  believes  it is critical to
establish  itself as a part of that  community and display a sensitivity  to the
needs of that  community.  While  existing  Internet  providers  produce  native
language content for the Spanish and Portugese speaking community,  the majority
of their content is translations of English language content.

The Company  believes  that in order to create  loyalty and a sense of community
among Spanish and Portugese  speaking  Internet  users,  a Web site must contain
content which is both locally produced and produced in Spanish and/or Portugese.

The Company intends to establish and grow the LatinFusion.com  site from a local
base in key markets to larger  regional  presences.  To begin this process,  the
Company will  establish an initial  presence in the Bogota,  Colombia  market to
support  its  initial  pilot   operations.   The  Company  will   establish  the
infrastructure  and local content  development  and support teams to ensure that
the LatinFusion.com  site develops a reputation for quality,  responsiveness and
reliability of both the Web site and related services.

All content  will be  developed  locally and will be  multi-cultural  as well as
multilingual (available in Spanish, Portugese and English). By locally producing
native  language   content  with  reliable   services,   the  Company   believes
LatinFusion.com  will  become  a  recognized  name  and  preferred  Web site for
Internet users in the Bogota market. The Company also feels that by establishing
a favorable  reputation in Bogota,  the  LatinFusion.com  site will quickly gain
recognition and a favorable  reputation in the surrounding  region.  The Company
plans to repeat this process in other key markets  throughout  Latin  America as
well as in certain key markets in the United States and Europe.

In addition to  establishing  credibility  and local presence in the Spanish and
Portugese markets,  the Company plans to offer a comprehensive range of Internet
products and services  tailored to those markets.  The  LatinFusion.com  site is
expected to be initially  divided  into seven  channels,  each  offering a broad
array of related  products and  services.  The  channels  will include (1) home,
where users can access time,  weather,  and currency data,  search engines and a
help desk; (2) media, which will provide access to national,  regional and local
newspapers, regional magazines and regional television and radio broadcasts; (3)
guides, where users can access community,  entertainment and tourist information
for  selected  regions  and cities;  (4)  commerce,  providing  access to a wide
variety of on-line  shopping  options,  on-line  banking and on-line  investment
options;  (5) games,  where users can access  interactive games, (6) connection,
providing users with access to e-mail,  video chat,  Internet telephone services
and other communication tools, and (7) contests,  where users can participate in
various contests. The Company plans to monitor new products and services as well
as user demand for those  products and services and will add such to assure that
users have the broadest range of Internet products and services available.

                                      F-9


                      FUSION NETWORKS, INC. AND SUBSIDIARY
                         (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999
                                   (Continued)

3.  PLAN OF OPERATION (Continued)

The Company also plans to utilize state-of-the-art technologies to improve their
users Internet  experience.  The Company intends to continually adopt the latest
technologies  to both overcome  bandwidth  limitations  and provide the richest,
most   entertaining   multimedia   experience   available   on   the   Internet.
LatinFusion.com  has been designed using Macromedia's Flash 4.0 which will offer
streaming video, interactive on-screen graphics and full stereo sound throughout
the site.  The  Company  believes  that the  adoption  of this  technology  will
differentiate LatinFusion.com from many of the sites on the Internet and make it
an exciting and enjoyable Web site to visit.  The Company plans to  consistently
monitor  new  technologies  and will  adopt  new  technologies  to  assure  that
LatinFusion.com  offers the  richest  and most  attractive  Internet  experience
available.

Utilizing  state-of-the-art   technology  also  allows  the  Company  to  deploy
innovative   new   advertising   strategies  to  better  serve  both  users  and
advertisers.  Presently,  advertising on the Internet today consists principally
of banners placed on Web sites which are linked to an advertiser's Web site. The
Company has adopted a new, non-banner,  advertising model which it believes will
be better received by both Web users and advertisers. Utilizing Macromedia Flash
4.0, the Company will  produce  Ainfomercials@  which are ten seconds or less in
length and will include full multimedia,  including  graphics,  sound and voice.
These  infomercials  will be downloaded in the  background  and run between page
views,  and will be  customized  and  targeted  based  on the user  demographics
associated  with the Web page being  viewed.  The Company  believes this type of
advertising is similar to highly  targeted  television  advertising,  which is a
proven and long standing means of advertising, and will produce superior results
to traditional banner advertising.

4.  PROPERTY AND EQUIPMENT

At December 31, 1999 property and equipment consist of the following:

           Office equipment                                          $610,025
           Furniture and fixtures                                      23,306
           Automobiles                                                 37,165
                                                                     ---------
                                                                      670,496
           Accumulated depreciation                                  (27,938)
                                                                     ---------
                                                                     $642,558
                                                                     =========

5.  RELATED PARTIES

The Company currently leases  approximately 1,600 square feet of office space in
an office  building  in Miami,  Florida,  from Latam  Holding,  Inc.,  a Florida
corporation,  whose principle owner is Enrique Bahamon, a stockholder,  director
and the Chief Financial  Officer of the Company.  The lease is for a term of one
year  which  commenced  on July 1, 1999 and  calls  for a  monthly  base rent of
$2,500.  The related  expense for this lease for the period  ended  December 31,
1999 was $14,355. As of December 31, 1999, the Company was current on all rental
obligations due the related party.

                                      F-10


                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999
                                   (Continued)


5.   RELATED PARTIES (Continued)

During 1999, the Company entered into an agreement with Red Colombia,  a company
domiciled  in Bogota,  Colombia,  owned in part by  Hernando  Bahamon and Felipe
Santos, principal stockholders,  officers and/or directors of the Company, under
which Red Colombia agreed to provide certain Web site development services, at a
total cost of $229,171,  which was  expensed  for the period ended  December 31,
1999.

6.   COMMITMENTS AND CONTINGENCIES

Merger Agreement
----------------
On July 26, 1999 the Company announced that it entered into a non-binding merger
agreement  with IDM  Environmental  Corp.  (collectively  with its  subsidiaries
referred to herein as "IDM") a New Jersey  based  publicly  traded  corporation,
pursuant to which IDM agreed to form a holding  company known as Fusion Networks
Holding, Inc. ("FNH") with both the Company and IDM merging with subsidiaries of
FNH.  On August 18,  1999 the  agreement  was  amended  and became a  definitive
agreement.  As a  result  both the  Company  and IDM will  become  wholly  owned
subsidiaries of FNH.

The  stockholders  of the Company  will receive one share of common stock of FNH
for each share of the Company=s  common stock held and the  stockholders  of IDM
will receive one share of FNH for each share of IDM common stock held, resulting
in the current  stockholders  of the  Company  owning  approximately  89% of FNH
common  stock.  The proposed plan of merger is subject to a number of conditions
including,  but  not  limited  to,  regulatory  approvals  and  the  receipt  of
stockholder approval from both the Company and IDM.

Employment Agreement
--------------------
In September 1999, Hernando Bahamon, President, CEO and Chairman of the Board of
Directors of the  Company,  entered  into a Service  Agreement  with the Company
pursuant  to which Mr.  Bahamon  agreed to provide  services  to the  Company in
connection  with the launch of its  Bogota,  Colombia  Web site.  The  agreement
provides for monthly  compensation  of $15,000 and runs for a term of six months
from July 1, 1999 subject to automatic renewal on a monthly basis thereafter. It
is anticipated that Mr. Bahamon will enter into a long-term employment agreement
with the Company following the merger.

Year 2000
---------
The  Company  has  contacted,  and in  the  future  intends  to  contact,  their
third-party vendors, licensors and providers of software,  hardware and services
regarding their Year 2000 readiness.  Because  LatinFusion.com  is a new network
and the Company intends to utilize new equipment and software which is Year 2000
compliant,  they believe that their network will perform  correctly through Year
2000 and beyond.  Due to the highly dynamic nature of their  business,  however,
they will  continue  the testing  process  through Year 2000 and beyond and will
continue to confirm that their third-party vendors,  licensors and providers are
Year 2000 ready.

                                      F-11



                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999
                                   (Continued)


6.   COMMITMENTS AND CONTINGENCIES (Continued)

Foreign Operations
------------------
The Company will be relying heavily on foreign  Internet  markets,  primarily in
Latin America,  for its  operations.  The market for Internet  services in Latin
America  is in an early  stage of  development  and is an  unproven  medium  for
advertising  and other  commercial  services.  In  addition,  there are  several
factors  involved in  increasing  the use of the  Internet in Latin  America for
commercial  purposes  which  include  security,   reliability,   cost,  ease  of
development,   administration   and  quality  of  service.   In  addition,   the
telecommunications structure in Latin America is not as well developed as in the
United States or Europe.  Access to the Internet requires a relatively  advanced
telecommunications    infrastructure   and   continued    development   of   the
telecommunications   infrastructure  will  have  a  substantial  impact  on  the
Company's  ability  to deliver  services  and on the  market  acceptance  of the
Internet in Latin America in general.  Social, political and economic conditions
in Latin  America  could also have an effect on the  Company's  operations.  The
volatility  of these  conditions  could  make it  difficult  for the  Company to
sustain  their  expected  growth in revenues and  earnings,  which could have an
adverse  effect on their stock  price.  Currency  exchange  rates have also been
somewhat volatile throughout Latin America and the economies of these areas have
experienced  significant  economic downturns.  Poor economic conditions in Latin
American countries may cause the Company's customers to reduce their advertising
spending, which could have an adverse effect on the Company.


7.   STOCKHOLDERS' EQUITY

Common Stock
------------
The holders of Common Stock have no  preemptive  rights and the Common Stock has
no redemption, sinking fund or conversion provisions. Each share of Common Stock
is  entitled  to one vote on any matter  submitted  to the  holders and to equal
rights in the assets of the Company  upon  liquidation.  All of the  outstanding
shares of Common Stock are fully paid and nonassessable.

On August 23, 1999,  the Company's  Board of Directors  authorized a 1,000 for 1
forward  stock split of its common stock and amended the par value of the common
stock  to  $0.00001  and  increased  the  authorized  shares  to  3,000,000  for
shareholders  of record at the close of business on August 23,  1999.  All share
and per-  share  amounts  in the  accompanying  financial  statements  have been
restated to give effect to the 1,000 for 1 forward stock split.

On November 16, 1999, the Company's  Board of Directors  authorized a 17.7333333
for 1 forward  stock  split of its common  stock and  increased  the  authorized
shares to  60,000,000  for  shareholders  of record at the close of  business on
November  18,  1999.  All  share  and  per-share  amounts  in  the  accompanying
consolidated  financial  statements  have been  restated  to give  effect to the
17.7333333 for 1 forward stock split.

The  original  incorporators  of the Company  were issued a total of  13,300,000
shares of the Company's common stock for a nominal cash consideration of $750.

                                      F-12


                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999
                                   (Continued)


7.  STOCKHOLDERS' EQUITY (Continued)

Common Stock (Continued)
------------
On July 8, 1999, the Company  entered into an agreement  with certain  investors
for the purchase of 4,433,333  shares of the Company=s common stock for $500,000
and options to purchase an additional  8,866,667  shares of the Company's common
stock, at any time before December 31, 1999, for an additional  $500,000.  As of
December 31, 1999,  the  investors had  exercised  their options  resulting in a
total of 13,300,000  shares of common stock being issued and $1,000,000 in funds
being received by the Company under this agreement.

During  August 1999 the Company  initiated a private  placement  offering  under
which the Company is offering  units (the "Units") for sale at $60,000 per Unit.
Each Unit  consists  of 20,000  shares of common  stock and  20,000  three  year
warrants  (the  "Warrants")  to purchase  common  stock at $6.00 per share for a
period of three years. In addition, licensed broker-dealers participating in the
private  placement will receive  commissions of $4,500 cash and 1,500 three year
warrants  (the "Brokers  Warrants") to purchase  common stock at $6.00 per share
for a period of three  years,  for each unit sold.  As of December  31, 1999 the
Company had issued  3,013,333  shares of common  stock,  3,013,333  common stock
Warrants and 226,005 Brokers Warrants, for net proceeds of $8,362,000.

On December 20,  1999,  Fusion  Networks  and  Marketing  Services  Group,  Inc.
("MSGI")  entered  into a Stock  Purchase and Sale  Agreement  pursuant to which
Fusion Networks issued  3,500,000 shares of common stock to MSGI in exchange for
1,500,000  shares of common stock of MSGI. MSGI is traded on the NASDAQ National
Market and has  approximately  26 million  shares  outstanding  and had a market
price of approximately $17 per share at the time of the agreement. MSGI provides
direct and database marketing, telemarketing and telefundraising, media planning
and buying,  online consulting and common,  automated internet marketing and web
design services.  Pursuant to the terms of that agreement MSGI has the right for
a six month period ending in June 2000 to acquire up to an additional  3,500,000
shares  of  common  stock of  Fusion  Networks  in  exchange  for an  additional
1,500,000  shares of MSGI  common  stock and MSGI has the right to  designate  a
nominee  for  director  of Fusion  Networks  for a period of one year.  MSGI and
Fusion  Networks  each agreed to "lock-up"  the shares  received  from the other
preventing resale of these shares for a period of one year ending December 2000.

                                      F-13


                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999
                                   (Continued)


7.   STOCKHOLDERS' EQUITY (Continued)

Employee Stock Options
----------------------
During  October 1999, the Company's  Board of Directors  approved a stock option
plan for the  Company,  the Fusion  Networks,  Inc.  1999 Stock Option Plan (the
"1999  Plan"),  under which  stock  option  awards may be made to  eligible  key
employees,  consultants  and  directors  of the  Company.  The 1999 Plan  became
effective  immediately and it will remain in effect until the tenth  anniversary
of the  effective  date  unless  terminated  earlier by the Board of  Directors.
Pursuant to the plan, the Company will reserve  5,320,000 shares of common stock
for issuance  pursuant to the grant of incentive stock options and  nonqualified
stock options.

During October and December,  1999 the Company granted stock options to purchase
845,000  shares of its common stock to employees  under the Company's 1999 Stock
Option Plan.  In addition,  on October 12, 1999 the Company  granted  under this
plan stock options to 100,000  shares of its common stock to 10  consultants  in
Colombia,  South America who assisted in the development of the web-site.  These
options were all granted with an exercise price of $5.34,  the fair market value
of the  underlying  common  stock at the date of  grant.  The  Company  recorded
approximately $84,000 as consulting expense for the value of the 100,000 options
issued to the 10  consultants.  The value was computed  using the Black  Scholes
value option pricing model.

Warrants
--------
On November 18, 1999 the Company issued a total of 2,500,000 warrants to various
consultants.  The  warrants  are  exercisable  for  three (3) years at $5.00 per
share.  In connection with this  transaction the Company  recorded in the fourth
quarter of 1999 consulting expenses of $14 million which was estimated using the
Black Scholes value option pricing model.

On December  29, 1999 the Company  issued to a  consultant a warrant to purchase
500,000 shares of the Company's  common stock for services  provided  during the
fourth  quarter of 1999 for  financing,  merger and  acquisition  and  strategic
alliance consulting activities. The warrant is exercisable immediately, in whole
or in part,  for a period of three years and at an  exercise  price of $5.00 per
common  share.  The Company  recorded  approximately  $5,600,000  as  consulting
expense with this transaction.

8.   SUBSEQUENT EVENTS

The merger  agreement  between  the  Company  and IDM  Environmental  Corp.,  as
described in Note 5, was approved by the  shareholders of the Company and of IDM
Environmental  Corp. in March 2000 and the reorganization was completed in April
2000. As a result of the reorganization, the Company and IDM became wholly-owned
subsidiaries of Fusion Networks Holdings,  Inc. The Company and IDM both plan to
continue their historical operations for the foreseeable future.

                                      F-14


                      FUSION NETWORKS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999
                                   (Continued)


8.  SUBSEQUENT EVENTS (Continued)

In February  2000 the Company  entered into a contract  with a public  relations
firm  which  will  assist in the  preparation  of  internal  and  external  news
releases,   relations   with  local  and  national   trade  and  general   press
organizations, also the preparation of product literature for the general public
and the  trade.  The  contract  is for a term of one year for  $60,000 a year or
$5,000 a month. In addition,  the Company also granted 45,000 common stock share
warrants at an exercise price of $10.3125 per share. These common stock warrants
vest at 15,000 warrants per year.

In May 2000 the  Company  entered  into an  employment  contract  with Mr.  Gary
Goldfarb to serve as President and Chief Executive Officer of the Company for an
undisclosed period of time. The contract provides for a monthly  compensation of
$18,750 per month.  The contract also grants Mr.  Goldfarb  1,000,000  five year
stock options  exercisable at the closing price of the Company's common stock on
the  effective  date.  The  options  will  vest 25% on each of the  first  three
anniversaries,  the  remaining  25% will vest at various times.

9. OTHER SUBSEQUENT EVENTS (UNAUDITED)

During 2000 the  investment in MSGI suffered a significant  decline in it's fair
value.  During the fourth  quarter of 2000, the Company  wrote down the value of
their  investment  and  recorded  from the  original  cost a realized  loss of $
12,750,000  and provided an allowance  for an  additional  unrealized  loss of $
10,980,000, which reduces the carrying value of the investment to $ 1,770,000 at
December 31, 2000.

     SALE OF IDM

     On July 25, 2000, the Company  entered into a letter of intent  pursuant to
     which the Company  agreed in  principal  to sell all of its stock of IDM to
     two  principal  officers of IDM. The Company  completed  the sale of IDM on
     August  18,  2000.  Pursuant  to the  terms of the IDM  sale,  the  Company
     received a  promissory  note in the amount of $58,881 and were  relieved of
     guarantees in the amount of $300,000.

     Based on the  agreement in  principal  to sell IDM, the Company  recorded a
     write-down of the goodwill  associated  with the  acquisition of IDM in the
     amount of $7,354,181 in the second quarter of 2000 and recorded the loss on
     the sale of $1,320,847 in the third quarter of 2000.

     CONVERTIBLE DEBENTURES AND WARRANTS

     On June 15, 2000,  the Company sold  $4,000,000  of 6% Secured  Convertible
     Debentures and 1,500,000 Warrants. The Debentures and Warrants were sold to
     three  accredited  investors.  The Debentures and Warrants were sold for an
     aggregate  offering price of $4,000,000.  A finders fee of 5%, or $200,000,
     was paid in connection  with the sale of the Debentures  and Warrants.  The
     Debentures   and  Warrants  were  sold  pursuant  to  the  exemption   from
     registration set out in Rule 506 as promulgated pursuant to Section 4(2) of
     the Securities Act of 1933. The  securities  were offered  without  general
     solicitation in a privately  negotiated  transaction  with three accredited
     investors.

     The Debentures bear interest at 6% per annum,  are due on June 13, 2001 and
     are  secured  by a pledge of the  investment  in  affiliates  of  Marketing
     Services Group,  Inc. The Debentures are convertible  into shares of Common
     Stock of the Company at a fixed  conversion  price of $1.75 per share.  The
     Warrants are  exercisable to purchase  Common Stock of the Company at $1.50
     per share.

                                       15


     VISUALCOM PURCHASE

     In August  2000,  the  Company  entered  into a letter of intent to acquire
     Visualcom,  Inc., a Miami based Internet consulting company specializing in
     Strategic Consulting, I-Business Solutions, Internet Marketing and Internet
     Wireless.  Under the terms of the letter of intent,  the Company  agreed to
     issue 2 million  shares of common stock and 2.5 million five year warrants,
     exercisable  at 110% of the average  closing price of the Company's  common
     stock over the seven trading days preceding closing, in exchange for all of
     the issued and outstanding  shares of Visualcom.  One million of the shares
     and one  million of the  warrants  issuable  under the letter of intent are
     issuable  in  escrow  subject  to  release  upon  satisfaction  of  certain
     "earn-out"  criteria.  The  letter of intent  also  provided  that  certain
     shareholders  of Visualcom  would purchase  shares of the Company's  common
     stock  with  the  proceeds  of that  sale  to be  used  to  fund  Visualcom
     operations  pending  closing.  In November  2000, the Company and Visualcom
     signed a definitive  Plan of Share  Exchange and the Company  completed the
     acquisition of Visualcom.

     PRIVATE PLACEMENT AND VISUALCOM CREDIT FACILITY

     In September 2000, certain Visualcom  shareholders acquired an aggregate of
     359,574  shares of common stock of the Company for $475,000,  or $1.321 per
     share.  The Company  utilized  the  proceeds  from the sale to  establish a
     credit  facility  for  Visualcom  with  funds  being  advanced  subject  to
     forgiveness on closing of the acquisition of Visualcom by the Company.

      BRIDGE LOAN

     In October and November 2000, the Company secured a short-term  bridge loan
     in the amount of $500,000  from the sale of  Convertible  Bridge Loan Notes
     and  125,000  Bridge  Loan  Warrants.  The Bridge  Loan Notes are due on or
     before  December  31, 2000 with  interest  accruing  at 12% per annum.  The
     Bridge Loan Notes are  convertible  into common stock, at the option of the
     holder,  at market value on the date of closing.  The Bridge Loan  Warrants
     are exercisable for a term of five years to purchase common stock at $0.845
     per share with respect to 100,000 of the warrants and $0.875 per share with
     respect to 25,000 of the warrants.


                                      F-16


                     FUSION NETWORKS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

                                 MARCH 31, 2000

ASSETS

Current Assets:

   Cash and cash equivalents                       $  3,350,733
   Employee and other loans                             137,135
   Prepaid expenses                                     132,112
   Deposits                                              10,918
                                                     -----------
          Total Current Assets                                      $  3,630,898

Other Assets:
   Investment in equity securities                                    26,625,010

Property and Equipment:
   Office equipment                                   1,290,346
   Furniture and fixtures                               205,465
   Automobiles                                           37,195
                                                     -----------
          Total Property and Equipment                1,533,006
   Less: Accumulated depreciation                       (83,337)
                                                     -----------
          Net Property and Equipment                                   1,449,669
                                                                      ----------
                                                                     $31,705,577
                                                                      ==========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses           $    303,541
   Due to affiliate                                      16,428
                                                     -----------
          Total Current Liabilities                               $      319,969

Stockholders' Equity:
   Common stock, authorized 60,000,000 shares,
     $.00001 par value, issued and outstanding
     33,113,333 shares
   Common stock                                             331
   Additional paid-in-capital                        54,437,419
   Foreign currency translation                          (9,894)
   Retained deficit                                 (24,167,248)
                                                    -----------
   Accumulated other comprehensive income (loss):
     Foreign currency translation                        (9,894)
     Unrealized gain on equity securities             1,125,000
                                                    -----------
          Total Stockholders' Equity                                  31,385,608
                                                                      ----------
                                                                     $31,705,577
                                                                      ==========
------------------------

See accompanying notes to consolidated financial statements.

                                      F-17


                     FUSION NETWORKS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)

                      FOR THE QUARTER ENDED MARCH 31, 2000



Income:
   Revenues                                                      $        -

Costs and Expenses:
   General and administrative                      $   996,940
   Project development and engineering               1,510,907
   Sales and marketing                                 278,667
   Depreciation and amortization                        55,399
                                                    -----------
          Total Costs and Expenses                                2,841,853
                                                                 -----------
Loss from Operations                                             (2,841,853)

Other Income (Expenses):
   Interest income                                      45,808
   Foreign currency (loss)                               2,766
                                                    -----------
          Total Other Income (Expense)                              48,574
                                                                ------------
Net Loss                                                       $(2,793,279)
                                                                ============
Loss per Share:
   Basic loss per share                                        $      (.08)
                                                                ============
   Diluted loss per share                                             (.08)
                                                                ============
   Basic common shares outstanding                              33,113,333
                                                                ============
   Diluted common shares outstanding                            33,113,333
                                                                ============


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

See accompanying notes to consolidated financial statements.

                                      F-18


                     FUSION NETWORKS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

                      FOR THE QUARTER ENDED MARCH 31, 2000



Cash Flows from Operating Activities:
   Net loss                                                         $(2,793,279)

   Adjustments to reconcile net loss to net cash
     used in operating activities:
       Depreciation                                                      55,399

   Increase in employee and other loans                                (136,600)
   Increase in prepaid expenses                                        (110,254)
   Increase in deposits                                                 (10,918)
   Increase in accounts payable and accrued expenses                    181,432
   Increase in due to affiliate                                           7,457
                                                                     -----------
          Net cash used by operating activities                      (2,806,763)
                                                                     -----------
Cash Flows from Investing Activities:
   Purchase of property and equipment                                  (862,517)
                                                                     -----------
          Net cash used by investing activities                        (862,517)
                                                                     -----------
 Effect of Exchange Rate Changes on Cash                                (24,445)
                                                                     -----------
Net Decrease in Cash and Cash Equivalents                            (3,693,725)

Cash and Cash Equivalents - beginning of period                       7,044,458
                                                                     -----------
Cash and Cash Equivalents - end of period                          $  3,350,733
                                                                     ===========

Supplemental disclosures of cash flow information:
   Cash paid during the period for:
     Interest                                                      $          -
                                                                     ===========
     Taxes                                                         $          -
                                                                     ===========
Supplement disclosure of noncash investing and financing activities:
     Unrealized gain and equity securities                         $  1,125,000
                                                                     ===========



----------------
See accompanying notes to consolidated financial statements.

                                      F-19



                     FUSION NETWORKS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

                                 MARCH 31, 2000

Note 1
------
Fusion  Networks,  Inc. (the "Company") was  incorporated  under the laws of the
State of Delaware on June 30, 1999.  The Company is an Internet  portal  company
founded to provide  improved  Internet  content and  services to Latin  American
markets and to the Spanish and Portugese  speaking  population around the world.
Fusion Networks launched its Internet site, LatinFusion.com, in Bogota, Columbia
in October 1999 followed by the launch of its site in Miami in January 2000, and
plans  similar  launches in  targeted  cities and  regions in the  Americas  and
Europe.

Note 2
------
In the opinion of management,  the accompanying  unaudited financial  statements
contain all adjustments necessary to present fairly the financial position as of
March 31, 2000 and the statements of operations for the three months ended March
31, 2000 and the  statements  of cash flows for the three months ended March 31,
2000.

The  statements of operations  for the three months ended March 31, 2000 are not
necessarily indicative of results for the full year.

While the Company  believes that the disclosures  presented are adequate to make
the  information not misleading,  these financial  statements  should be read in
conjunction with the financial statements and accompanying notes included in the
Company's Annual Report for the year ended December 31, 1999.

Note 3
------
Earnings per share are based on the  weighted  average  number of common  shares
outstanding including common stock equivalents.

Note 4
------
Due to the  availability of net operating losses there is no tax effect with any
component of other comprehensive gain (loss)

Note 5
------
The  proposed  reorganization  between  the Company  and IDM  Environmental  was
approved  by the  shareholders  of the  Company  and IDM in  March  2000 and the
reorganization   was   completed  on  April  13,  2000.   As  a  result  of  the
reorganization,  the Company and IDM became wholly-owned  subsidiaries of Fusion
Networks  Holdings,  Inc.  The  Company  and IDM  both  plan to  continue  their
historical operations for the foreseeable future.

Note 6
------
OTHER COMPREHENSIVE INCOME (LOSS)
Statement of Financial  Accounting  Standards  No.130  "Reporting  Comprehensive
Income"  effective in 1998,  requires the  disclosure  of  comprehensive  income
(loss) to reflect changes in equity that result from  transactions  and economic
events from nonowner  sources.  Due to the  availability of net operating losses
there is no tax effect on any component of other comprehensive income (loss).

Other comprehensive income (loss):                   For the three
                                                     Months ended
                                                     March 31,2000
                                                     --------------
         Net loss                                    $ ( 2,793,279)
           Unrealized gain on equity securities          1,125,000
           Foreign currency translation
              adjustments                                  (24,445)
         Total other comprehensive (loss)            $ ( 1,692,724)

                                      F-20


Note 7
------
INVESTMENTS IN EQUITY SECURITIES
As of March 31,  2000 all  equity  securities  are  deemed by  management  to be
available for sale and are reported at fair value with net  unrealized  gains or
losses reported  within  shareholders'  equity as a separate  component of other
comprehensive income. Realized gains and losses are recorded in the statement of
operations in the period in which they become known.  The carrying amount of the
company's investments is shown as follows:

                                                         March 31, 2000
                                                                    Market
                                                      Cost          Value
                                                     ------       ---------
         Investment in equity securities         $ 25,500,000   $26,625,000
         Unrealized gains                           1,125,000             -
                                                  ------------  ------------
                                                   26,625,000    26,625,000

During 2000 the  investment in MSGI suffered a significant  decline in it's fair
value.  During the fourth  quarter of 2000,  the Company wrote down the value of
their  investment  and  recorded  from the  original  cost a realized  loss of $
12,750,000  and provided an allowance  for an  additional  unrealized  loss of $
10,980,000, which reduces the carrying value of the investment to $ 1,770,000 at
December 31, 2000.

Note 8
------
SUBSEQUENT EVENTS

SALE OF IDM

     On July 25, 2000, the Company  entered into a letter of intent  pursuant to
     which the Company  agreed in  principal  to sell all of its stock of IDM to
     two  principal  officers of IDM. The Company  completed  the sale of IDM on
     August  18,  2000.  Pursuant  to the  terms of the IDM  sale,  the  Company
     received a  promissory  note in the amount of $58,881 and were  relieved of
     guarantees in the amount of $300,000.

     Based on the  agreement in  principal  to sell IDM, the Company  recorded a
     write-down of the goodwill  associated  with the  acquisition of IDM in the
     amount of $7,354,181 in the second quarter of 2000 and recorded the loss on
     the sale of $1,320,847 in the third quarter of 2000.

CONVERTIBLE DEBENTURES AND WARRANTS

     On June 15, 2000,  the Company sold  $4,000,000  of 6% Secured  Convertible
     Debentures and 1,500,000 Warrants. The Debentures and Warrants were sold to
     three  accredited  investors.  The Debentures and Warrants were sold for an
     aggregate  offering price of $4,000,000.  A finders fee of 5%, or $200,000,
     was paid in connection  with the sale of the Debentures  and Warrants.  The
     Debentures   and  Warrants  were  sold  pursuant  to  the  exemption   from
     registration set out in Rule 506 as promulgated pursuant to Section 4(2) of
     the Securities Act of 1933. The  securities  were offered  without  general
     solicitation in a privately  negotiated  transaction  with three accredited
     investors.

     The Debentures bear interest at 6% per annum,  are due on June 13, 2001 and
     are  secured  by a pledge of the  investment  in  affiliates  of  Marketing
     Services Group,  Inc. The Debentures are convertible  into shares of Common
     Stock of the Company at a fixed  conversion  price of $1.75 per share.  The
     Warrants are  exercisable to purchase  Common Stock of the Company at $1.50
     per share.

                                      F-21



     VISUALCOM PURCHASE

     In August  2000,  the  Company  entered  into a letter of intent to acquire
     Visualcom,  Inc., a Miami based Internet consulting company specializing in
     Strategic Consulting, I-Business Solutions, Internet Marketing and Internet
     Wireless.  Under the terms of the letter of intent,  the Company  agreed to
     issue 2 million  shares of common stock and 2.5 million five year warrants,
     exercisable  at 110% of the average  closing price of the Company's  common
     stock over the seven trading days preceding closing, in exchange for all of
     the issued and outstanding  shares of Visualcom.  One million of the shares
     and one  million of the  warrants  issuable  under the letter of intent are
     issuable  in  escrow  subject  to  release  upon  satisfaction  of  certain
     "earn-out"  criteria.  The  letter of intent  also  provided  that  certain
     shareholders  of Visualcom  would purchase  shares of the Company's  common
     stock  with  the  proceeds  of that  sale  to be  used  to  fund  Visualcom
     operations  pending  closing.  In November  2000, the Company and Visualcom
     signed a definitive  Plan of Share  Exchange and the Company  completed the
     acquisition of Visualcom.

     PRIVATE PLACEMENT AND VISUALCOM CREDIT FACILITY

     In September 2000, certain Visualcom  shareholders acquired an aggregate of
     359,574  shares of common stock of the Company for $475,000,  or $1.321 per
     share.  The Company  utilized  the  proceeds  from the sale to  establish a
     credit  facility  for  Visualcom  with  funds  being  advanced  subject  to
     forgiveness on closing of the acquisition of Visualcom by the Company.

      BRIDGE LOAN

     In October and November 2000, the Company secured a short-term  bridge
     loan in the amount of  $500,000  from the sale of  Convertible  Bridge
     Loan Notes and 125,000 Bridge Loan Warrants. The Bridge Loan Notes are
     due on or before  December 31, 2000 with interest  accruing at 12% per
     annum. The Bridge Loan Notes are convertible into common stock, at the
     option of the  holder,  at market  value on the date of  closing.  The
     Bridge  Loan  Warrants  are  exercisable  for a term of five  years to
     purchase  common  stock at $0.845 per share with respect to 100,000 of
     the  warrants  and  $0.875  per share  with  respect  to 25,000 of the
     warrants.



                                      F-22



             SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA


The  following  unaudited  pro  forma  consolidated  financial  data for  Fusion
Networks  Holdings,  Inc. is based on the  historical  financial  statements  of
Fusion Networks, Inc. and Subsidiaries and IDM Environmental Corp. (collectively
with its  subsidiaries  referred to herein as "IDM") which  appear  elsewhere in
this Form 8-K and has been  prepared  on a pro forma basis to give effect to the
merger  under the  purchase  method of  accounting,  as if the  transaction  had
occurred at January 1, 1999 for each operating period  presented.  The pro forma
information was prepared based upon certain assumptions  described below and may
not be indicative  of results that  actually  would have occurred had the merger
occurred at the  beginning of the last full fiscal year  presented or of results
which may occur in the future.  The unaudited pro forma  consolidated  financial
data and  accompanying  notes should be read in conjunction  with the annual and
interim financial statements and notes thereto of Fusion Networks,  Inc. and IDM
Environmental  Corp.  appearing  elsewhere  herein and incorporated by reference
into this Form 8-K filing.

The unaudited pro forma consolidated balance sheet as of March 31, 2000 presents
the financial  position of Fusion Networks  Holdings,  Inc. as if the merger had
occurred on that date and was prepared  utilizing the unaudited Fusion Networks,
Inc.  balance  sheet as of March 31, 2000 and the  unaudited  IDM  Environmental
Corp. balance sheet as of March 31, 2000. The pro forma consolidated  statements
of operations data presented assumes the merger occurred at the beginning of the
periods  presented.  It should not be assumed that IDM  Environmental  Corp. and
Fusion Networks,  Inc. would have achieved the unaudited pro forma  consolidated
results if they had actually been combined during the periods shown.

The merger is expected to be accounted for as a purchase.  The  stockholders  of
Fusion Networks,  Inc. will receive one share of common stock of Fusion Networks
Holdings, Inc. for each share of Fusion Networks, Inc. common stock held and the
stockholders of IDM will receive one share of Fusion Networks Holdings, Inc. for
each share of IDM common stock held,  resulting in the current  stockholders  of
Fusion Networks, Inc. owning approximately 90% of Fusion Networks Holdings, Inc.
common stock. The plan of merger was approved by the stockholders of both Fusion
Networks,  Inc. and IDM during March 2000 and the merger was  completed on April
13, 2000.

The  unaudited  pro  forma  consolidated  results  are  based on  estimates  and
assumptions, which are preliminary and have been made solely for the purposes of
developing  such pro forma  information.  The unaudited  pro forma  consolidated
results are not  necessarily  an  indication of the results that would have been
achieved had such  transactions  been  consummated as of the dates  indicated or
that may be achieved in the future.

The unaudited pro forma combined  results should be read in conjunction with the
historical  consolidated financial statements and notes thereto set forth herein
for Fusion and set forth for IDM on Form 10K for  December 31, 1999 and Form 10Q
for the quarterly period ended March 31, 2000.

                                      F-23


                         FUSION NETWORKS HOLDINGS, INC.
                      PRO FORMA CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2000


                                                                                                        Fusion
                                                                      Fusion                           Networks
                                                       IDM           Networks                        Holdings, Inc.
                                                  March 31,2000    March 31, 2000     Pro Forma        Pro Forma
                                                   (Unaudited)      (Unaudited)      Adjustments        Results
                                                  -------------    ---------------   -----------     --------------
                                                                                        

ASSETS

Current Assets:
   Cash and cash equivalents                     $    211,175      $   3,350,733                    $    3,561,908
   Accounts receivable                              4,366,589                                            4,366,589
   Other loans                                                           137,135                           137,135
   Recoverable income taxes                           650,242                                              650,242
   Prepaid expenses and other
      current assets                                2,299,100            143,030                         2,442,130
                                                  ------------       ------------  -----------         ------------
              Total Current Assets                  7,527,106          3,630,898                        11,158,004

Goodwill, net of accumulated                                                         7,362,754 (2)
   amortization                                                                     (1,314,777)(3)       6,047,977
Investments in and advances to
   unconsolidated affiliates                           929,266                                             929,266
Investment in affiliate, at cost                     1,853,125                                           1,853,125
Investment in equity securities                                       26,625,010                        26,625,010
Property, plant and equipment, net                   1,814,675         1,449,669                         3,264,344
Other assets                                           979,925                                             979,925

                                                  ------------       ------------  -----------         ------------
                                                  $ 13,104,097      $ 31,705,577  $ 6,047,977         $ 50,857,651
                                                  ============       ============  ===========         ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liablities:
   Current portion of long-term debt             $      13,873                                        $     13,873
   Accounts payable and accrued expenses             8,760,333           319,969                         9,080,302
   Billings in excess of costs and estimated
     earnings                                        1,327,722                                           1,327,722
   Due to officers                                     220,682                                             220,682
                                                  ------------       ------------  -----------         ------------
              Total Current Liabilities             10,322,610           319,969                        10,642,579

Long-Term Debt                                          15,810                                              15,810
                                                  ------------       ------------  -----------         ------------
              Total Liabilities                     10,338,420           319,969                        10,658,389

Commitments and Contingencies

Stockholders' Equity:
   Common stock                                         39,184               331       (39,145)(2)            370
   Additional paid-in-capital                       60,922,920        54,437,419     7,362,754 (2)     63,251,034
                                                                                    (1,314,777)(3)
                                                                                   (58,607,282)(2)
                                                                                       450,000 (1)
   Foreign currency translation                                          (9,894)                           (9,894)
   Retained earnings (deficit)                    (58,196,427)      (24,167,248)      (450,000)(1)    (24,167,248)
                                                                                    58,646,427 (2)
   Accumulated other comprehensive income (loss):
     Foreign currency translation                                        (9,894)                           (9,894)
     Unrealized gain on securities                                    1,125,000                         1,125,000
                                                  ------------       ------------  -----------         ------------
Total Stockholders' Equity                          2,765,677        31,385,608      6,047,977         40,199,262
                                                  ------------       ------------  -----------         ------------
                                                 $ 13,104,097       $31,705,577   $  6,047,977        $50,857,651
                                                  ============       ============  ===========         ============


See Notes to Pro Forma Consolidated Financial Data

                                      F-24


                         FUSION NETWORKS HOLDINGS, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS



                                                    For the Year Ended                             For the three months ended
                                                     December 31, 1999                                   March 31,2000
                                   -------------------------------------------------------  ----------------------------------------
                                                                         Fusion                                           Fusion
                                                                         Networks                                         Networks
                                                                       Holdings, Inc.             Fusion               Holdings, Inc
                                                Fusion    Pro Forma     Pro Forma         IDM      Networks   Pro Forma   Pro Forma
                                      IDM      Networks  Adjustments     Results      (Unaudited) (Unaudited) Adjustments Results
                                   ---------  ----------------------  --------------  -----------  ---------  ----------- --------
                                                                                                  


Contract Income                 $13,581,298    $        $             $13,581,298     $3,064,595   $          $          $3,064,595

Direct Job Costs                 13,366,165                            13,366,165      1,988,110                          1,988,110
Write-down of inventory surplus     582,517                               582,517
                                 -----------   --------- ----------- -----------      -----------  ---------    --------- ----------

Gross Profit (Loss)                (367,384)                                           1,076,485                          1,076,485
                                 -----------   --------- ----------- -----------      -----------  ---------    --------- ----------
Costs and Expenses:
   General and administrative
     expenses                     7,054,208   20,276,036              27,330,244       2,453,333    926,299               3,379,632
   Product development and
     engineering                               1,011,941               1,011,941                  1,510,907               1,510,907
   Sales and marketing                            87,097                  87,097                    349,248                 349,248
   Merger expenses                                                                                             450,000(1)   450,000
   Depreciation and amortization    334,617       27,938 1,051,822(3)  1,414,377         67,047      55,399    262,955(3)   385,401
   Write-down on investment on
     unconsolidated partnerships    105,757                              105,757
   Equity in net loss of
     unconsolidated partnerships    176,814                              176,814
                                  -----------   --------  ----------- -----------    ----------- ---------    ---------   ----------

                                  7,671,396   21,403,012  1,051,822   30,126,230     2,520,380   2,841,853     712,955    6,075,188
                                  -----------   --------  ----------- -----------    ----------- ---------    ---------   ----------

Loss from Operations             (8,038,780) (21,403,012)            (29,441,792)   (1,443,895) (2,841,853)              (4,285,748)

Other Income (Expense):
   Loss on disposal of property,
     plant and equipment          (285,194)                             (285,194)       (3,385)                              (3,385)
   Miscellaneous income (expense) (172,519)                             (172,519)
   Interest income (expense)       145,626        29,040                 174,666       (12,104)     48,574                   36,470
                                  -----------   --------  ----------- -----------    ----------- ---------    ---------   ----------
Loss before Credit for Income
   Taxes                        (8,350,867)  (21,373,972)(1,051,822) (30,776,661)   (1,459,384) (2,793,279)   (712,955)  (4,965,618)

Provision (Credit) for Income
   Taxes                        (1,200,000)                           (1,200,000)
                                 -----------   --------- ----------- -----------      ----------- ---------    ---------  ----------

Net Loss                        (7,150,867)  (21,373,972)(1,051,822) (29,576,661)   (1,459,384) (2,793,279)   (712,955)  (4,965,618)

Preferred Stock Dividends
   including Amortization of
   Beneficial Conversion Feature    11,289                                11,289
                                 -----------   --------- ----------- -----------      ----------- ---------    ---------  ----------

Net Loss on Common Stock       ($7,162,156) ($21,373,972)($1,051,822)($29,565,372) ($1,459,384)($2,793,279)  ($712,955) ($4,965,618)
                                 ===========  ========== =========== =============  =========== ===========
Loss per Share:
   Basic loss per share         $    (2.21)  $     (0.64)            $     (0.81)   $    (0.38) $    (0.08)               $   (0.13)
                                 ===========  ========== =========== =============  =========== ===========               ==========
   Diluted loss per share       $    (2.21)  $     (0.64)            $     (0.81)   $    (0.38) $    (0.08)               $   (0.13)
                                 ===========  ========== =========== =============  =========== ===========               ==========
Basic common shares outstanding  3,243,493    33,113,333              36,356,826     3,798,658  33,113,333               36,911,991

Diluted common shares outstanding3,243,493    33,113,333              36,356,826     3,798,658  33,113,333               36,911,991



See Notes to Pro Forma Consolidated Financial Data

                                      F-25



                         FUSION NETWORKS HOLDINGS, INC.

                 NOTES TO PRO FORMA CONSOLIDATED FINANCIAL DATA

                                 MARCH 31, 2000



(1)  To record as  compensation,  merger expenses for 400,000  consultant  stock
     options  granted with an exercise  price of $1.15,  the market price at the
     date of grant. The options were granted for a ten year period and vest upon
     the  completion of the merger.  The estimated fair market value of $450,000
     for this option is based on the Black Scholes value option pricing model.


(2)  To record the  purchase  of IDM and the  issuance of  33,113,333  shares of
     common  stock of Fusion  Networks  Holdings,  Inc. to the  stockholders  of
     Fusion Networks,  Inc. and the issuance of 3,918,393 shares of common stock
     of  Fusion  Networks  Holdings,  Inc.  to the  stockholders  of IDM and the
     elimination  of IDM's  accumulated  deficit as a result of the merger.  The
     transaction,   accounted  for  as  a  purchase,  resulted  in  goodwill  of
     $7,362,754  being recorded.  The purchase price and goodwill was determined
     as follows:

                    IDM common shares outstanding                3,918,393
                    Estimated fair value of shares issued            $2.47 (a)
                                                                 ---------
                    Purchase price before merger costs          $9,678,431
                    Merger costs                                   450,000
                                                                 ---------
                          Purchase price                        10,128,431

                    IDM net book value                           2,765,677
                                                                 ---------
                          Goodwill                             $ 7,362,754
                                                                 =========

          (a)The  estimated fair value of shares issued was determined using the
          average  closing  market  price of IDM=s  common  stock for the 3 days
          prior and 3 days  subsequent to the public  announcement of the letter
          of intent.


(3)   To record amortization of goodwill over a seven year period.


                                      F-26