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Mark N. Hong, CFA T: 212.953.4919 F: 212.953.1025 Epixtar Corp. (OTC Bulletin Board: EPXR - $6.30) Industry: Call Center Services SB Research, Inc. and the analyst(s) who wrote this report, owns securities in this Company, which they received as compensation for writing this report and other follow-on research services to be provided to the Company through August 31, 2004 (see Disclosure Section). 52-Week Range $9.20 - $0.28 S&P 500 983 Market Cap $66.2 million Fully Diluted Shares Outstanding 11.4 million Avg. Daily Trading Volume (10 days) 31,900

EPS 2001A 2002A 2003E Q1 NA ($0.10) $0.19 Q2 ($0.21) NA Q3 ($0.08) Q4 $0.15 CY ($2.13) ($0.23) NA EBITDA ($1.0) ($1.7) NA Revenue $1.2 $26.3 NA Book Value (per share) $1.33 Tang. Book Value (per share) ($0.27) Cash (per share) $0.02 Debt / Equity 21.6% Insider Holdings 53% Institutional Holdings NA Dividend / Yield NM Source: ILX Systems Fiscal Year End Dec 31 # of Employees 58 Auditors Lehman, Goldberg

& Drogin

A = Actual; E = Estimates All Prices are as of the close August 4, 2003. Additional information is available upon request

COMPANY KEY POINTS

Over the past 2 years, Epixtar has successfully grown its revenues and reached profitability in the highly competitive and fragmented call center services industry. It has done so by taking advantage of the past decade's advances in telecommunication technology, which has increased the reliability of international communication networks and significantly lowered the cost of bandwidth. With this combination, Epixtar is able to effectively access high quality labor in foreign countries at a significantly lower cost than in the US.

Successful Offshore Call Center Experience. Currently using 6 offshore call centers and has trained and supervised over 20 within the past 2 years. EPXR is the largest outbound call center outsourcing customer in the Philippines, with over 1,000 call center seats. Assembling 3 High Capacity, Call Centers in India and the Philippines. With a total planned capacity of 4,000 seats within 12 months. Shift from outsourced seat capacity to owned call centers, increasing operating margins and utilizing its marketing platform for other clients.

Having proven its ability to train and manage over 20 different offshore call centers facilities to sell its own products, management now believes that the Company’s continued success will come from its expansion into the offshore telemarketing of third party products using its own call center facilities. These facilities are expected to be up and running by November 2003.

Plans to Augment the Telemarketing of its Proprietary Products with those of Third Party Clients. Focused on Fortune 1000 Clients within the Telecom, Computer Service Vertical Markets. Double Digit Revenue and Earnings Growth in Past Two Quarters. Two quarters of year-over-year revenue and earnings growth.

EPIXTAR CORP. (EPXR)

Company Overview A major risk to telemarketing firms is their reliance on third party products to maximize productivity. During periods of economic decline and cut backs in marketing expenditures, telemarketing companies suffer due to overcapacity and unused seats. Epixtar believes that its ownership of proprietary products allows it to optimize “down time” and is a competitive advantage during times of general economic weakness. Whereas competitors are left with high fixed overheads within declining revenue, Epixtar appears able to mitigate this risk.

Today, Epixtar Corp. (OTCBB: EPXR), headquartered in Miami, Florida is a fast growing and profitable provider of bundled ISP communication services through offshore independent telemarketers to US small and medium sized businesses. By the end of 2003, the Company intends to be a leading provider of offshore telemarketing services to US Fortune 1000 companies. The cornerstone of Epixtar’s business is its ability to cost effectively train workers in offshore countries to market products to US businesses. What allows the Company to compete against existing large multi-billion dollar companies in the call center space is (i) its exclusive use of offshore telemarketing centers that minimize college educated labor costs and (ii) its lack of sole dependence on third party products. Epixtar is presently working with 6 offshore call center companies in the Philippines, India and parts of the Caribbean, where the cost of English speaking, articulate, college educated employees is significantly lower than that of the average US high school graduate. These labor cost savings are expected to be passed on to client companies, driving the Company’s long-term revenue growth. Management believes 90% of its current representatives are college educated.

Recent Developments July 28 – announced it has executed a Memorandum of Understanding with Global e-Services Pvt. Ltd, to acquire its Bombay-based call center assets and for the lease and expansion of this facility. The 120-seat facility is currently undergoing expansion and renovation and will accommodate 1,000 call center seats within six months of closing the transaction -- anticipated to be on or before October 15, 2003. This will bring the total number of seats currently under development to 4,000. Epixtar has agreed to take over the day-to-day operations of the call center on August 4, 2003, and will begin utilizing the center's capacity to market its ISP and telecommunications services.

Epixtar is in the midst of a two-fold transition. First, the Company is switching from contracted third party call centers to owning and operating its own call centers facilities. On May 30, the Company announced that it had identified and has executed a Memorandum of Understanding to build a 1,000-seat call center in the West Bengal region of India. This platform facility is expected to be operational by year-end and management plans to expand the facility to 2,500 seats by 2005. Additionally, the Company is in negotiations to acquire several existing call centers that may bring total seats up to 4,000 within 12 months. Management believes that by owing its own facilities, margins may be significantly enhanced and that it would allow the company to effectively manage incoming and outbound telemarketing schedules.

June 24 – announced it has finalized the first round of equity financing consisting of convertible preferred stock and warrants from several institutions and high-net worth individuals through the efforts of its investment bankers, Sands Brothers & Co., Ltd. (see disclosure section) May 30 – announced that it has executed a Memorandum of Understanding with the West Bengal Industrial Development Corporation Limited (WBIDC), an agency of the Calcutta-based West Bengal government. The Company has identified a premium site for its new facility and plans to establish a 1,000 seat call center facility in the West Bengal region of India with operations slated to begin in early November, 2003. Management expects the center to grow to 2,500 seats by 2005.

The second phase of the Company’s transition is to expand into the marketing of third party products and services. Presently, Epixtar is only marketing its own proprietary ISP products (see Products and Services section). By focusing on the call center needs of Fortune 1000 companies, Epixtar expects to develop long-term relationships with clients that can provide the Company with larger and longer lasting request for proposal (RFP) opportunities. Further, Fortune 1000 companies typically have stronger, healthier balance sheets than smaller companies and have the ability to weather weakening economic environments.

Management believes the $5.3 million venture will result in the first mega-center of its kind in the region. The WBIDC will provide financial support as well as assistance with site location, utility services procurement, and all necessary legal and regulatory clearances subject to a formal agreement. April 30 – Epixtar reported record-operating results for the first quarter ended March 31, 2003, with revenues for the quarter of $12.4 million and net income of $1.9 million, or $0.185 per share after tax.

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This compares with revenue of $2.0 million and a loss of $1.0 million, or ($0.10) per share, in the first quarter of 2002 as restated.

Outsourcing / Offshore Competitive Advantages For Third Party Clients

Outsourced call center services offer a flexible, more efficient and less costly alternative to in-house personnel;

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Revenue in CY02 was $26 million compared with $1.2 million in CY01 and the Company turn profitable for the first time in the fourth quarter.

Outsourced offshore call center service provides clients college educated service representatives at a lower cost that US high school labor;

The Company attributes the positive results to the maturation of its customer base that resulted in reduced customer churn. In addition, the Company expanded the utilization of offshore customer contact centers. The result has reduced the Company’s sales costs and has increased efficiency.

Changing fixed, high capital intensive assets to a variable cost;

Access to the latest technologies and applications operated in a reliable, secure, maintained and highly scalable operations at significant cost savings;

Potential Catalysts 1. National Exchange Listing – Epixtar is currently listed on the bulletin board exchange. If the Company decides and receives approval to list on a national exchange, the stock may experience increased visibility among other brokerage firms.

Frees up management’s attention to the company’s core business practices;

Ability to satisfy the growing demand for 24/7 customer service;

2. The completion of the Company’s 1,000-seat flagship call center in Manila, Philippines or the announcement of a call center acquisition. Once the Company has control of its own facility, management anticipates expanding gross and operating margins.

Strengthen client brands and increase overall customer satisfaction.

Financial Highlights

3. Signed Contracts with Fortune 1000 Clients. In order to prove out the Company's new business plan, it must be able to attract customers. Once service quality credibility is attained, additional clients are expected to follow.

Upcoming Quarterly Revenue, 2002A – 2003A ($ millions) Quarter 2002A 2003E 1Q 2.1 12.4 2Q 3.1 NA 3Q 8.0 4Q 13.1 Full Year 26.3 Source: Company reports

Upcoming Quarterly Net Income, 2002A – 2003A ($ mm) Quarter 2002A 2003E 1Q (1.0) 1.9 2Q (2.2) NA 3Q (0.8) 4Q 1.5 Full Year (2.4) Source: Company reports

4. Sustained Profitability. Thus far, Epixtar has maintained profitability for the past two quarters. Achieving a full year of profitability, especially in the midst of a large capital intensive build out of call center facilities would be a significant milestone. Company History Epixtar is the culmination of two acquisitions that began on November 14, 2000, when the Company (at that time, "Global Asset Holdings, Inc. Corp.") acquired an 80% membership interest in SavOnCalling.com, LLC. SavOn was engaged in the marketing and resale of domestic and international telecommunications services. On March 31, 2001, the Company acquired 100% of the outstanding shares of National Online Services, Inc., which provided Internet related services to small business subscribers. These services were marketed through independent telemarketers. Although the Company has ceased operations of SavOn, these acquisitions became the base from which the Company launched additional products in 2002.

Margins, 2001A – YTD03A 2001A 2002A 3/31/03A Gross Margin (41.6%) 32.3% 51.6% Operating Margin (407.1%) (91.5%) 18.6% Pretax Margin NM (91.5%) 15.7% Source: Company reports Balance Sheet Summary, 2001A – 2003E 2001A 2002A 3/31/03A Cash Equiv. 0.1 0.7 0.2 Total Assets 17.9 23.0 23.1 Total Liabilities 4.4 10.9 9.1 Shareholders’ Eq 13.5 12.0 14.0 Source: Company reports

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EPIXTAR CORP. (EPXR)

Capital Structure and Balance Sheet For the past two quarters, Epixtar has achieved positive cash flow and has generated almost $4 million in net income. The first quarter’s performance was on top of very strong over year revenue growth of 498%. These results, in addition to the capital it recently raised through Sands Brothers & Co., Ltd. will assist the Company in its plans to build out its own facilities and to make strategic acquisitions. As of March 31, 2003, gross margins have expanded to 51.6% of sales and operating margins have grown to 18.6%. However, with a working capital deficit of ($1.2MM), the Company’s ability to grow and take advantage of new opportunities in constrained. However, several more quarters of positive results may alleviate this problem. The Company is currently using two billing companies. One billing company in addition to a traditional factoring company is providing short-term liquidity of the Company’s receivables. Strategy Epixtar's objective is to continue to grow its operations and enhance profitability by leveraging its experience in offshore call center management and training to service Fortune 1000 companies. Its goal is to become a leading provider of high quality, reliable and affordable outsourced customer attraction and management solutions. Services are customized to address each client’s unique needs and focused on improving the quality and cost-effectiveness of the clients’ existing business needs. Call centers aim to win consistent, long-lasting RFPs in order to maintain a steady flow of revenue and to occupy as many call center seats as possible. Unfortunately, reductions in marketing expenses, cancellations of projects, and general economic weakness can cause wide fluctuations in revenue and operating performance.

Exhibit 1. Traditional Call Center Activity

Epixtar hopes to smooth out the fluctuations with the telemarketing of its own suite of products. The gross margin of outsourced third party products is

higher than its own products. As a result, during times of slow third party telemarketing activity, Epixtar is able to fill seats with outbound telemarketing sales of its own products.

Exhibit 2. Epixtar Business Activity

Principal strategies include: Building Long-term Client Relationships. By providing superior quality service. Today, Fortune 1000 companies are seeking to diversify its dependence on any single call center provider. Epixtar intends to capture market share from existing call center providers by providing clients a low cost alternative and to grow its market share by providing superior quality service. Capitalize on Global Service Offering in Offshore Markets. Epixtar currently utilizes 6 offshore call center facilities, representing 400 seats. Over the past 2 years, the Company has used as many as 20 different call centers and over time, Management has gained significant insight and experience in the supervision and training of offshore facilities. Management believes it is this experience that will drive superior quality service and customer acquisitions. Vertical Market. Targeted vertical markets include telecommunications, financial services, debt collection and technology industries. It is within these industries that the firm’s experienced management team has industry contacts that may allow it to gain traction quickly. Quality Assurance. Over the past several months, the Company has taken steps to insure correct billing and proper customer acquisition. The current process as illustrated in Appendix 2 shows that after a customer lead has been received and filtered through federal, state and company DNC lists, it is then sent to a customer representative to make a sale. A sale is made once (1) the customer agrees to subscribe to the service, which is recorded and reviewed internally by Epixtar’s internal Quality Assurance team, and (2) the recording is cleared by an independent third party

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verification company. At this point, a notification e-mail is sent to the client welcoming him to the service and then a Welcome Package is sent by mail. Once the package is received, the 30 day free trial period begins. Fifteen days into the free trial period, an intent to bill notification is sent to the client by mail and by e-mail. This allows the client time to respond without being charged. Customers are only charged after the It is only after the 30 free trial period. To take customer care and quality assurance one step further, Epixtar has instituted a complete refund policy whereby customers who have a complaint may be completely reimbursed. Customers have been completely reimbursed even having subscribed for over 3 months.

Industry Historically, businesses have relied on in-house personnel to provide customer sales and service. However, recently businesses are increasingly outsourcing business processes to other firms in order to (i) focus more internal resources on core business practices, (ii) increase the productivity of their marketing services, (iii) and reduce the overall cost of marketing expenditures. Typically, call center service providers offer clients lower overall telemarketing costs due to economies of scale in sharing the cost of new technology among a larger base of users and higher capacity utilization rates. The result is enhanced end user experience, strengthened company brands and maximized value to customers.

Sales and Marketing Today, the $22 billion call center services industry

is extremely competitive and highly fragmented with approximately 6,000 companies worldwide vying for a piece of the Fortune 1000 marketing budget. Although the top 15 companies in the industry represent $ 1.15B in total revenue, they only account for 20% of the total market, and the total market is declining. Call center service providers are suffering due to the weak US economy, and clients are demanding higher quality service at lower cost. Further, US call center providers are facing rising wages, pensions and healthcare expenses, which are further pressuring margins. The result is the need to find high quality labor at a lower cost; hence, the move offshore. In fact, offshore call center activity is growing as more and more companies are building new facilities or making acquisitions in areas like Calcutta, Bombay and the Caribbean. In fact, Convergys, the industry leader announced on May 21, that it plans to construct a 880 workstation facility in the Philippines.

Fortune 1000 companies demand that their service providers own their own call centers in order to have more control over its employees. As a result, Epixtar is building its own facilities as opposed to relying on contracted offshore facilities. Management has stated that it expects its owned facilities to be up and running by November 2003. Sales and marketing to the Company's new client base is driven and supported by the Company's executive management team. Until the Company’s facilities are up and running, heavy marketing may be effective. See Company Bios. Clients Call center service providers typically serve clients that seek to telemarket or provide customer care for their own products. The dominant players in the industry are virtually all focused on the Fortune 1000. Even worse, they are focused on the same lucrative vertical markets.

While large US corporations expand their operations offshore, they remain anchored by their large US facilities, which leaves their per seat cost at a relatively high rate. Epixtar uses exclusively offshore call center facilities. The result is Epixtar’s ability to bid on projects that may be below the cost structure of many competitors.

Epixtar differentiates itself by servicing two sets of clients. Rather than just servicing the clients of the Fortune 1000, Epixtar has its own client base of over 230,000 US small and medium sized clients. The advantages of having its own client base include (i) diversification of revenue and independence from relying on third party marketing activity, (ii) possessing a leveragable client base to upsell additional B-to-B products, and (iii) provides a valuable asset that potential suitors interested in a large client may find attractive.

Projects are segmented into either inbound or outbound call center services. Inbound transactions include customer care and maintenance services, which accounts for over 70% of all inbound transactions and order taking and sales, which account for the remaining 30%. The average inbound customer service call is priced between $25 - $32 per hour. Demand for inbound order taking is expected to increase as the effects of Do Not Call lists reduces the effectiveness of outbound telemarketing and advertising through direct mailings and television

The average length of client retention under the Company’s ISP product has increased over the past several months to 6 months as a result of the maturity of its client base.

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advertising becomes a primary medium of customer acquisition.

Proprietary Product Offering Epixtar has four primary brands of ISP services (NOL, Liberty Online, B2B Advantage, and Ameripages) each offer small business customers value-added ISP services billed to the subscriber's local phone bill at $29.95 per month. These services substantially represented all of the Company’s 2002 revenues of $26 million and Q1 2003 revenues of $12 million.

Outbound transactions take the form of sales and telemarketing, which represents over 90% of all transactions. Customer care and maintenance services account for the remaining 10% or so. The average cost of outbound service is between $22 and $28 per hour. According to the Federal Trade Commission (FTC), as many as 104 million calls are made every day. Telemarketing remains one of the most effective marketing mediums generating $660B in sales on $28.4B in telemarketing expenditures in 2001, according to Direct Marketing Association estimates. Not included in this statistic is the debt collections industry, which according to the 2001 Kaulkin Report, represents approximately $13 billion in revenue. More importantly, the outsourced portion of the industry grew at an accelerated pace of 25% to 30% annually.

ISP Services. These services offer customers a turn-key Internet marketing and access solution that provide a Web presence with unlimited Internet access, e-mail service, customized Web site development and hosting, directory listings and search engine notification for a single monthly fee of $29.95. Customers also get a one-month free service trial period. These services are marketed under the trade names National Online Services, Liberty Online, B2B Advantage and Ameripages.

Federal Do-Not-Call List The Company’s core customer network infrastructure is maintained in collocation facilities equipped with redundant systems located in Virginia and Florida. All management of the systems takes place from the corporate offices in Florida.

Do Not Call (DNC) lists have been around for years with 20 or so states having already instituted their own legislation. They were created to limit customer annoyances from telemarketers.

Recently, the Federal government has opened the registration doors for consumers to register their resident phone numbers on a national DNC list. The new Federal DNC has been extremely popular with 635,000 telephone numbers registered on the first day, 12.5 million telephone numbers logged in as of July 1, and 14 million numbers being automatically transferred to the federal list from various state DNC lists. The DNC is expected to block about 80% of telemarketing calls, according to the Federal Trade Commission (FTC). This list will be effective October 1, 2003 and violations will result in a $11,000 fine per incident.

B2B Advantage is the Company’s most recent product offering that is geared towards providing a small business owner both ISP services and access to a legal and accounting portal. This portal allows subscribers access to attorney referrals, legal document templates, and financial consultations. The Company has signed on two billing companies that work with local exchange carriers to provide a seamless billing and processing execution. Epixtar’s services are invoiced on the customer’s existing monthly phone bill, making customer payments easier. Further, by using a billing intermediary, Epixtar enjoys the benefits of account factoring services and collection.

Although the Federal and State DNC lists are only applicable to resident phone numbers, there will be an impact on Epixtar’s proprietary products business, which is only Business to Business (B-to-B). While there will be increased inbound work as advertising though mailings and television advertisements increases, there may be increased competition in B-to-B sector as Business to Consumer (B-to-C) begins to suffer. Also, business consumers are likely to mistakenly list business numbers on DNC lists and there will probably be significant confusion as it relates to businesses operated out of the home office.

Customers are billed through local telephone service providers and can cancel at any time. Of the 230,000 subscribers, the average client has been with the Company for 6.5 months. The average is expected to increase as the size of retained customers increases and as the Company refines its product. Customer acquisition is done by outbound telemarketing to small US businesses. Telecommunication services are currently being performed by 6 third party call centers located in the Philippines, India and the Caribbean. It is through the Company’s experience in working with and training these workers that the Company believes that it can properly manage its own facilities. Presently, the cost

The biggest effect will be the necessity to properly train employees to upsell products and services on increasing inbound calls.

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of new customer acquisition is approximately $30. On going costs of servicing a client is $2. Once new facilities are put in place, the Company expects to save $6 per client on acquisition cost.

�� Performance based pricing model �� Higher quality call center reps with 90%

having been college educated �� Flexibility without bureaucracy

Customer Service. Telemarketing has become a commodity business, with customer service being the differentiating factor. The Company has 16 full time customer service employees in the US, 9 in the Philippines. Epixtar has a country manager in India and is in the process of hiring 2 more.

Management Epixtar has assembled an experienced team of industry professionals that understand the call center market dynamics and the industry’s current migration to offshore telemarketing. The Company’s Miami facility hosts these professional whose expertise range from knowledge of regulatory compliance to telemarketing training.

Telecommunication Services. Epixtar provides business users a comprehensive long distance telecommunications solution through the One Nation Calling Plan, provides long distance, travel card, and toll-free access at attractive rates.

Martin Miller – CEO, Chief Officer of the Board, age 63, joined Epixtar's Board in November 2002. Mr. Miller has been a private investor for the last five years. During part of this period he also acted as a United States manager of corporate finance for a foreign investment group.

Competition (See Appendix 1) Epixtar competes in an extremely fragmented industry. While many companies provide customer management solutions and outbound customer acquisition services, Epixtar believes no one company is dominant in the industry. There are numerous and varied providers of such services, including firms specializing in various customer management solutions, niche and large market companies, as well as companies that manage their customer support needs in-house. Epixtar faces significant competition from companies that possess substantially greater resources, greater name recognition and a more established customer base.

William D. Rhodes Jr. – President, CEO, Director, Epixtar Group: age 55, joined Epixtar in 2000 and was promoted to president of Epixtar Corp. and Board Member in November, 2001. From 1976 to 1996 he served as an executive at Rockwell International. While there, he played key engineering and marketing roles in the GPS program as well as led the development and commercialization of several military communication systems. Subsequent to that, he served as President and Chief Operating Officer of ValuLine Telecommunications as it developed into Advanced Communications Group through an NYSE IPO and merger and later served as Chief Operating Officer for Equalnet Communications Corp., a NASDAQ-traded telecommunications firm.

Epixtar believes that the most significant competitive factors in the sale of services include low cost offshore college educated labor, superior service quality, reliability, scalability, offshore industry experience, and tailored service offerings. Competition for contracts for many of Epixtar’s services is in the form of competitive bidding in response to requests for proposals (RFPs).

Irving Greenman – Chief Financial Officer, Director: age 67, has been CFO of Epixtar since 2000. A leader in financial management working in the media, entertainment and healthcare fields for over forty years, he was chief financial officer for Kaleidoscope Media Group, Inc., Medica Media, and Healthcare International. Mr. Greenman is a Certified Public Accountant in New York and Florida. He is also on the Board of Directors.

Many of Epixtar’s potential clients contract call center services providers primarily from a limited number of preferred vendors. Epixtar must be prepared to exert pricing pressure on these vendors in order to gain market share. These companies also require vendors to own their call center facilities. Until the Company’s facilities are operational, customer attraction will be limited.

David Srour – President, Epixtar Corp. 42, joined Epixtar in November 2001, as chief operating officer. Prior to joining the Company, he was a manager at Ernst & Young Consulting and a senior manager at KPMG Consulting, Inc. where he led client service teams in the implementation of Internet-based technologies for clients General Motors, Simon Property Group and Lehman Brothers. He also held the position of chief operating officer at iTelsa and SmarTel Communications.

Competitive Advantages

�� Ability to submit request for Proposals (RFPs) for projects below that cost structure of larger competitors.

�� Two years of offshore call center management and training experience

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Gerald M. Dunne – Senior Vice President, Chief Marketing Officer: age 40, joined Epixtar in June 2001. Formerly he was the Chairman & CEO of Group Long Distance Inc., a NASDAQ traded long distance reseller. Mr. Dunne led GLD to over 200,000 business subscribers before leaving to join Epixtar. Ricardo Sablon – Vice President, Chief Technology Officer: age 43, became Epixtar's CTO in 2000. Previously he was vice president and chief telephony engineer for Equalnet Communications Corp. Mr. Sablon was also a founder of FreeCaller Communications. While there, he developed and managed the underlying technology for advertiser-sponsored long distance service, which he patented. Harry B. Fozzard II – Vice President, Chief Information Officer: age 38, joined Epixtar in June of 2002. Prior to his arrival, he was the founder and CEO of an eLearning company, LeanForward, Inc. Prior to acquisition, Mr. Fozzard led LeanForward to projects for several Fortune 500 organizations including Sprint, the State of Florida, Sunglass Hut, Ford Motor Company, Shell, Texaco, and Pennzoil-Quaker State. Deborah Gambone, Esq. – Vice President, Corporate Counsel & Corporate Secretary: age 51, joined Epixtar in December of 2001. Her previous experience includes corporate counsel duties at several technology and software firms. In her capacity as corporate counsel, Mrs. Gambone was responsible for contract agreements and negotiations, liaison activities with numerous state and federal agencies. Kurt Protzman – Senior Vice President, 36, Business Development, joined Epixtar in April of 2003 having spent the past several years managing his own company Direct Marketing Development, Inc. Before that, he was a Vice President and General Manager at SITEL handling strategic accounts. Prior to SITEL, he was VP and General Manager at TranscomUSA, Inc. another call center facility in Indianapolis, IN. David Berman – Director, age 56, has been a board member of Epixtar Corp. since September 2001. Mr. Berman is a practicing attorney and partner for Berman & Berman, a Miami firm specializing in tax law. He was formerly senior trial attorney for the district counsel of the Internal Revenue Service of the United States. Kenneth Elan – Director, 50, is an attorney specializing in commercial litigation with extensive experience in the prosecution and defense of complex corporate and securities cases. Elan is a member of the New York County Lawyers Association and formerly a member of its Committee on Corporation Law. He was an Adjunct Professor in the Accounting

Department of the City of New York (Queens College) for more than 12 years. Elan received his juris doctor from the University of Baltimore School of Law in 1977. He is the former law colleague of Epixtar General Counsel, Michael D. DiGiovanna. Risks Transition Risk. As Epixtar evolves into a provider of third party products, there is significant risk that the Company will be unable to attract its target market customers. Labor Pool. Call centers are highly labor intensive. With large call centers being built offshore, there is a risk that qualified employees may be limited. Financially Constrained. As of March 31, cash and cash equivalents were $242,209. Since then, the Company has raised an additional $2.35MM through a private placement in which Sands Brothers & Co., Ltd. acted as the Company’s financial advisor. Sands Brothers is a related entity to SB Research, Inc. Epixtar may need to raise additional capital in the near term in order to finish the build out of its facilities. Competition from better capitalized competition. As previously indicated, the call center services industry is highly competitive and fragmented. Many competitors are better capitalized and have strong relationships with Epixtar’s target market clients. The Company is listed on the OTC Bulletin Board and is also a micro-cap stock. Risks associated with owning shares in micro-cap securities include price volatility, liquidity, and lack of exposure within the investment community. It may be difficult to purchase or sell significant positions in the security due to low trading volume. Even small purchases or sales may have a large impact on the stock’s price. Customer complaints to regulatory. Epixtar is regulated by the Federal Trade Commission and is subject to State regulations. The state of Missouri has placed a preliminary injunction baring Epixtar from placing charges on the phone bills of Missourians without their express verifiable authorization or otherwise misrepresenting facts to consumers. Downward pricing pressure. As previously stated, telemarketing is a commoditized industry and price is commonly a deciding factor when selecting an outsourced provider. As competitors increase their offshore competencies, margins may be compressed. Overall poor economic conditions. The Company’s new business is targeting the marketing budgets of other companies. As economic conditions deteriorate, marketing budgets commonly shrink.

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Exhibit 1

4Q01 1Q02 2Q02 3Q02 4Q02 1Q03(Restated) (Restated) (Restated) (Restated)

ASSETS Current Assets: Cash and cash equivalents 73,883 16,391 138,822 165,255 722,674 242,209 Accounts Receivable (net of reserves) 731,511 946,593 638,883 2,201,080 3,802,326 4,326,210 Prepaid expenses and advances 1,666 2,192 10,595 21,445 59,940 11,596 Debt restructuring costs - current portion - - - - 500,000 500,000 Deferred billing costs 35,500 78,681 156,925 301,634 154,246 277,309 Total current assets 842,560 1,043,857 945,225 2,689,414 5,239,186 5,357,324

Property and equip, net 201,466 370,282 367,571 400,702 406,971 448,356

Debt-restructuring costs - non current portion - - - - 458,333 333,333 Goodwill (net of amortization) 16,801,359 16,801,359 16,801,359 16,801,359 16,801,359 16,801,359 Security Deposits 33,996 21,051 24,813 25,158 76,716 135,101 Total Other Assets 16,835,355 16,822,410 16,826,172 16,826,517 17,336,408 17,269,793

Total Assets 17,879,381 18,236,549 18,138,968 19,916,633 22,982,565 23,075,473

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities: Notes payable 2,649,000 2,649,000 2,663,712 2,900,678 404,466 404,466 Accounts payable 1,176,943 1,605,207 2,796,009 3,744,679 3,211,934 3,229,738 Accounts payable - subject to compromise - - - 385,401 385,401 385,401 Accrued expenses and taxes 127,325 285,576 727,576 968,125 1,398,664 834,552 Deferred revenue 355,001 622,130 1,061,667 2,202,108 2,897,693 1,227,528 Capitalized lease obligations - current portion 29,861 94,004 94,169 95,506 79,320 74,027 Corporate Income Tax Payable - - - - - 389,672

Total Current Liabilities 4,338,130 5,255,917 7,343,133 10,296,497 8,377,478 6,545,384

Long-Term Liabilities: Note payable - - - - 2,474,000 2,474,000 Capitalized lease obligations - non-current portion 30,514 113,932 100,368 106,705 88,451 71,575 Loan payable 22,212 22,212 - - - - Total long-term liabilities 52,726 136,144 100,368 106,705 2,562,451 2,545,575

Total liabilities 4,390,856 5,392,061 7,443,501 10,403,202 10,939,929 9,090,959

Commitments and Contingencies Stockholders' Equity: Common stock, 50,000,000 shares authorized and 10,503,000 shares issued and outstanding in 2003 and 2002, respectively 10,503 10,503 10,503 10,503 10,503 10,503 Additional paid in capital in excess of par value 30,757,997 30,757,997 30,757,997 30,757,997 31,757,997 31,757,997 Accumulated deficit (17,279,975) (17,924,012) (20,073,033) (21,255,069) (19,725,864) (17,783,986) Total stockholders' equity 13,488,525 12,844,488 10,695,467 9,513,431 12,042,636 13,984,514

Total liabilities and stockholders' equity 17,879,381 18,236,549 18,138,968 19,916,633 22,982,565 23,075,473

9

Exhibit 2

INCOME STATEMENT ANALYSIS, 2001A - 1Q03A

FY01 1Q02 2Q02 3Q02 4Q02 FY02 1Q03(Restated) (Restated) (Restated) (Restated)

Revenues 1,189,723 2,066,131 3,094,740 7,974,025 13,115,955 26,250,851 12,366,775 Cost of sales 1,684,615 1,607,815 3,272,680 6,133,040 6,768,432 17,781,967 5,983,628 Gross profit (loss) (494,892) 458,316 (177,940) 1,840,985 6,347,523 8,468,884 6,383,147 Gross Profit Margin (%) -41.6% 22.2% -5.7% 23.1% 48.4% 32.3% 51.6%

- Expenses: - Selling, general and administrative 2,298,048 1,363,820 1,868,929 2,458,341 4,542,439 10,233,529 3,849,705

- Income (Loss) from operations (2,792,940) (905,504) (2,046,869) (617,356) 1,805,084 (1,764,645) 2,533,442

- Interest expense 90,597 71,560 77,883 146,542 243,384 539,369 165,893 Depreciation 6,817 13,724 24,269 28,068 32,496 98,557 35,999 Amortization of purchased intangibles 1,950,241 - - - - - -

2,047,655 85,284 102,152 174,610 275,880 637,926 201,892 -

Income (Loss) from continuing operations (4,840,595) (990,788) (2,149,021) (791,966) 1,529,204 (2,402,571) 2,331,550 Loss from discontinued operation (1,551,537) (16,406) (26,035) (877) - (43,318) - (write-off of goodwill) (10,126,955) - - - - - -

- Net Income(loss) before taxes (16,519,087) (1,007,194) (2,175,056) (792,843) 1,529,204 (2,445,889) 2,331,550

- Less: Provision for Corporate Income Taxes - - - - - - 389,672

- Net Income(Loss) (16,519,087) (1,007,194) (2,175,056) (792,843) 1,529,204 (2,445,889) 1,941,878

EPS (2.13) (0.10) (0.21) (0.08) 0.15 (0.23) 0.19 Weighted Avg Shares 7,758,693 10,503,000 10,503,000 10,503,000 10,503,000 10,503,000 10,503,000

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Exhibit 3

Statement of Cash Flows

(Restated) FY01 FY02 1Q03

Cash Flows from Operating Activities: Net (loss) (16,519,087) (2,445,889) 1,941,878 Adjustments to Reconcile Net Loss to Net Cash (Used in) Operating Activities: Depreciation and amortization 3,798,922 140,224 160,999 Write-off of goodwill 10,126,955 - Changes in Assets and Liabilities: (Increase) in accounts receivable (716,215) (3,070,815) (523,884) (Increase) Decrease in prepaid expenses and advances 897 (58,274) 48,344 (Increase) in deferred billing costs (35,500) (118,746) (123,063) (Increase) in deposits (30,973) (42,720) (58,385) Increase in accounts payable and accrued expenses 960,455 3,306,330 (546,308) Increase in Corporate Income Tax payable ?same as below? 389,672 Increase in accounts payable - subject to compromise - 385,401 - Increase in deferred revenues 355,001 2,542,692 (1,670,165)

Net cash (used in) provided by operating activities (2,059,545) 638,203 (380,912)

Cash Flows from Investing Activities: Acquisition of fixed assets-net of disposals to subsidiary (127,094) (304,062) (77,384)

Net cash (used in) investing activities (127,094) (304,062) (77,384)

Cash Flows from Financing Activities: Increase in notes payable and capitalized lease obligations 2,424,375 624,282 - Repayment of notes and loans payable and capitalized lease obligations - (309,632) (22,169) Acquisition of goodwill (net of non-cash) stock issuance (225,000) - Issuance of stock for services 13,500 - Investment in subsidiary 1,000 -

Net cash provided by financing activities 2,213,875 314,650 (22,169)

Increase in cash 27,236 648,791 (480,465)

Cash, beginning of period 46,647 73,883 722,674

Cash, end of period 73,883 722,674 242,209

Income tax - - - Interest paid 6,925 306,396 86,101

11

Exhibit 4

Comparable Analysis

Symbol Company

Price as of August 4,

2003Mkt Cap ($MM) Rev

Rev Growth (Y/Y) EPS

EBITDA (TTM)

EBITDA Margin Rev EPS

EBITDA ($MM)

EBITDA Margin

Public CompsCVG Convergys Corp. 16.95 2,507.9 2,286.2 (1.5%) 1.35 498.1 21.8% 560.4 0.26 100.2 17.9%SYKE Sykes Enterprises Inc. 6.32 254.7 452.7 (8.7%) 0.16 44.4 9.8% 117.3 0.00 8.9 7.6%SWW SITEL Corp. 1.28 95.2 770.2 6.2% 0.16 64.4 8.4% 194.1 0.00 13.3 6.9%WSTC West Corp. 24.47 1,622.3 820.7 5.2% 1.01 168.3 20.5% 216.2 0.30 49.1 22.7%APAC APAC Customer Services 2.75 136.0 371.2 (13.4%) 0.25 41.0 11.1% 86.2 0.04 6.9 8.0%TTEC Teletech Holdings Inc. 4.08 302.2 1,017.4 11.1% 0.33 105.9 10.4% 245.8 0.03 19.3 7.8%Average (0.2%) 13.7% 11.8%

EPXR Epixtar Corp. 6.30 66.2 26.3 111.7% (0.23) (1.8) (6.7%) 12.4 0.19 2.5 20.2%

Figures are as of FY End.

Sales $M Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 EPS Mar-02 Jun-02 Sep-02 Dec-02 Mar-03CVG 588 573 561 565 560 CVG 0.35 0.35 0.34 0.31 0.26SYKE 117 113 110 114 117 SYKE 0.08 0.07 0.03 (0.02) 0.00SWW 193 197 191 190 194 SWW 0.04 0.05 0.01 0.06 0.00WSTC 211 195 199 216 216 WSTC 0.33 0.30 0.20 0.18 0.30APAC 104 94 85 98 86 APAC 0.06 0.07 0.04 0.08 0.04TTEC 254 254 252 258 246 TTEC 0.09 0.09 0.08 0.07 0.03EPXR 2 3 8 13 12 EPXR (0.10) (0.21) (0.08) 0.15 0.19

2002A 1Q03A

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Appendix #1 – Competitor Profile

Company Website: Symbol 2002 Sales

($M)1 Yrs Sales

Growth2002 NI

($M)2002

EmployeesConvergys Corporation www.convergys.com NYSE: CVG 2,286 (1.5%) 145.9 48,800Spherion www.spherion.com NYSE: SFN 2,117 (22.0%) (903.3) 310,000 TeleTech Holdings, Inc. www.teletech.com TTEC 1,017 11.1% (16.7) 28,000 West Corporation www.west.com WSTC 821 5.2% 68.6 24,000 SITEL Corporation www.sitel.com NYSE: SWW 770 6.2% (9.8) 23,000 SR. Teleperformance* www.srteleperformance.com Euronet Paris: RCF 732 49.3% 34.0 19,879 Sykes Enterprises www.sykes.com Nasdaq SYKE 453 (8.9%) (18.6) 15,750 ClientLogic Corporation www.clientlogic.com Toronto: OCX 399 3.6% NA 11,400 APAC Customer Services, Inc. www.apaccustomerservices.com Nasdaq: APAC 371 (13.4%) 6.2 12,600 ICT Group, Inc. www.ictgroup.com Nasdaq: ICTG 299 24.9% 3.0 11,200 RMH TeleServices www.rmhteleservices.com Nasdaq: RMHT 239 36.5% (17.5) 13,486 Telespectrum Worldwide www.telespectrum.com OTC: TLSP 218 (28.1%) (83.2) 5,782 Aegis Communications Group www.goaegis.com OTC: AGIS 136 (42.7%) (62.3) 4,500 * Figures are 2001 Convergys Corporation provides outsourced services to clients in financial services, telecommunications, and Internet services industries. Its Customer Management Group (CMG) provides customer service, technical support, and telemarketing for clients through more than 45 contact centers worldwide. Its Information Management Group (IMG) processes about 50 million bills a month from its data centers, provides consulting services, and licenses its data processing software. West Corporation providers outsourced teleservices, with more than 30 call centers and seven automated voice and data centers. Clients include AT&T, Dell, and Microsoft. West's services include inbound call handling (customer service, product support, order processing) and outbound calls (product sales, customer acquisition and retention). West Corp. also offers computerized call processing services and Web-based services. TeleTech Holdings, Inc. services Fortune 1000 clients with customer relationship management (CRM) services through than 50 "customer interaction centers" across the globe. Among its offerings are customer acquisition, service, and retention programs; customer satisfaction and loyalty programs; customer data management services; and consulting and marketing services. Clients include American Express, Blockbuster, Citigroup, AT&T, and Microsoft. SITEL Corporation provides inbound call handling for customer service requests, technical support, and order taking. SITEL also offers outbound telemarketing, database and list-building services, and direct response marketing. The company has more than 80 call centers in 20 countries and boasts more than 300 corporate clients. Four units of General Motors account for nearly 25% of sales. APAC Customer Services, Inc. provides outsourced telephone-based customer-management and acquisition services. It operates about 32 call centers in about a dozen states. APAC's customer management services include customer retention, help-line information, direct mail response and order entry services. Clients include companies in the parcel delivery, pharmaceutical, telecommunications, retail, and financial services industries. United Parcel Service accounts for nearly 15% of sales and Citigroup, Inc. for 11%. ClientLogic Corporation provides outsourced customer management and order fulfillment services through almost 50 facilities in 10 countries. The company offers multi-channel customer service, technical support, and order placement services through its 33 call centers, while its four fulfillment centers handle inventory management, packaging, and shipping. With clients such as Earthlink, Handspring, Sony, and TiVo, ClientLogic also provides marketing and support services, including database management and e-commerce. The company is owned by Canadian conglomerate Onex. Spherion provide traditional temporary staffing, it has expanded its services to include professional and executive recruitment and employee consulting and assessment. In addition, Spherion provides staffing and technology services in such areas as project management, quality assurance, and data center and network operations. Its outsourcing

13

division offers customer care and administrative and support services. Spherion operates through a network of some 820 offices in Asia, Australia, Europe, and North America. Sykes Enterprises operates 40 technical help and customer service centers in Africa, the Americas, Asia, and Europe using phone, e-mail and chat to serve those in need of help. It also provides large corporations with technical staffing and consulting relating to customer relationship management (CRM). Sykes also provides multi-lingual order processing and fulfillment through its european operations. The company's top ten clients made up more than half of 2002 revenues. SR. Teleperformance Group is the largest telemarketing firm in Europe with nearly 150 call centers in about 30 countries (covering more than 25 languages). The company handles inbound and outbound calls in marketing, sales, and customer service. It also provides a full range of marketing services -- including research, identity and image creation, and operational marketing -- through some 60 specialist companies throughout Europe. In addition, its SR.Marketing Services operates firms dedicated to health care marketing and advertising and pharmaceutical clinical trials. RMH TeleServices provides inbound and outbound calling services through its 22 call centers in the US, Canada, India, and the Philippines. It offers such services as telemarketing, customer retention, and follow-up calling, as well as e-mail management, technical support, and order processing. RMH is involved in such industries as telecommunications, financial services, and insurance with the likes of AT&T, MCI, Microsoft, and Providian as clients. ICT Group, Inc. handles outgoing and incoming calls from about 49 call centers in Australia, Europe, and North America. Its services include marketing research, sales support, consulting, and e-commerce support for clients in such fields as insurance and financial services (which together account for more than half of sales), as well as information technology and telecommunications. ICT's clients include Aegon Life Insurance, America Online, Capital One, and Pfizer. Aegis Communications Group, Inc. provides outsourced telemarketing and customer care services through a dozen call centers in the US. The company handles both inbound and outbound calling services, order provisioning, and multilingual communications programs, among other services. In addition to teleservices, Aegis offers online customer services such as e-mail responses, real-time chat, and data collection. Major clients include AT&T, American Express, and Qwest Communications. Telespectrum Worldwide provides telemarketing and customer care services to FORTUNE 500 companies in the financial services, insurance, pharmaceutical, telecommunications, and utility industries, among others. The company manages and operates 10 call centers, through which it handles incoming customer inquiries and places outbound telemarketing calls on behalf of clients. Its b-to-b Internet subsidiary, eSatisfy, measures and monitors customer satisfaction.

14

EPIXTAR CORP. (EPXR)

Appendix 2 – Sale & Compliance Process

16

EPIXTAR CORP. (EPXR)

16

DISCLOSURE SECTION STOCK RATING DISTRIBUTION (as of August 4, 2003) Coverage Universe Investment Banking Clients Stock Rating Category Count % of Total SB Research, Inc. does not provide Buy - - investment banking services.Speculative Buy - - Neutral - - Sell - - No Rating EPXR 1 100.0% Total 1 100.0% ANALYST STOCK RATINGS The following guide is provided to help investors understand the recommendations of the firm. BUY. The common stock’s total return is expected to exceed the average total return of the S&P 500 Index or Nasdaq Composite by 15 percentage points over the next 12-18 months. SPECULATIVE BUY. The common stock’s total return is expected to provide a total return that is at least 10 percentage points greater than that of the S&P 500 Index or Nasdaq Composite over the next 6 months. NEUTRAL. The common stock is expected to provide a total return that does not generally outperform or underperform the S&P 500 Index or Nasdaq Composite over the next 12-18 months. SELL. The common stock is expected to provide a negative total return that is at least (5) percentage points greater than that of the S&P 500 Index or Nasdaq Composite over the next 6 months. NO RATING. SB Research has received compensation in the form of cash and/or securities from the Company on behalf of the report. Conflicts of Interest: SB Research, Inc. will be paid $2,000 per month for a minimum of 12 months and 2,500 warrants to purchase Epixtar common stock to prepare this report. SB Research, Inc. compensates research analysts for activities and services intended to benefit the firm’s investor clients. Individual compensation determinations for research analysts, including the author(s) of this report, are based on a variety of factors, including the overall profitability of the firm and the total revenue derived from all sources. The author(s) of this report and/or members of their households may own position in the Common shares of EPXR. Sands Brothers & Co., Ltd. (Sands Brothers) is the financial advisor to Epixtar and is related to SB Research, Inc. Readers should assume that Sands Brothers & Co., Ltd. and/or its related companies have and continues to offer investment banking services to Epixtar Corp. Within the next three months Sands Brothers and SB Research, Inc will seek to be compensated for its services. Sands Brothers makes a market in the shares of EPXR. Prices are as of the close, August 4, 2003. Dow Jones 30: 9,186. The information set forth in this background report was obtained from primary and secondary sources, which SB Research, Inc. believes to be reliable, but we do not guarantee its accuracy or completeness. None of the information contained herein nor any opinions expressed constitutes a solicitation by us for the purchase or sale of any securities, but is provided for the information of our clients and customers and other interested parties. Officers, employees and other affiliates of SB Research, Inc. or members of their families, may hold positions in these securities and may make purchase and/or sales from time to time in the open market or otherwise. Securities recommended by SB Research, Inc. (i) are not insured by the Federal Deposit Insurance Corporation; (ii) are subject to investment risks, including the possible loss of the principal amount invested. All opinions and estimates constitute SB Research’s judgment as of the date of the report and are subject to change without notice. This report may not be duplicated without the express permission of SB Research, Inc. Analyst Certification: Each SB Research Analyst named on the front page of this report hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such Analyst’s personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such Analyst, and (ii) no part of the Analyst’s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such Analyst in this report.