The Company, through its operating subsidiaries, operates in niche banking markets. WebBank provides commercial and consumer specialty finance transactions utilizing, in some cases, U.S. Government credit enhancement. The benefits of WebBank's special charter allow it to "export" Utah's regulatory environment (interest rates, late charges, and prepayment fees, etc.) to all fifty states of the U.S. WebBank is a small, business oriented institution insured by the Federal Deposit Insurance Corporation ("FDIC") and examined and regulated by the FDIC and the State of Utah Department of Financial Institutions. Part of the business plan of WebBank represents a non-traditional approach to generating growth within the context of the regulatory standards of safety and soundness. Prudent business goals and protection of WebBank's charter are the key elements of the Company's business strategy for WebBank. Pursuant to this strategy, WebBank has focused on several lines of business as described below: ACCOUNTS RECEIVABLE FACTORING is a form of collateral-based commercial lending in which companies sell their receivables to a lender, principally to secure working capital. The receivables are repaid directly to the lender. WebBank is engaged in accounts receivable factoring utilizing a sourcing and servicing company. The owner of the sourcing and servicing company is also an employee of WebBank. CREDIT CARD processing is a highly competitive product and service that WebBank provides and continues to actively pursue. WebBank offers customized service within Utah's favorable banking environment. PRIVATE LABEL STUDENT LENDING is an alternative to federally subsidized student loan programs. A third party sourcing company is engaged to source these loans. WebBank provides funding to the students and sells the loans to the third party shortly after origination of each loan. 1

ELECTIVE MEDICAL AND DENTAL TREATMENT LENDING is a form of unsecured consumer lending that allows customers to finance elective surgery or other treatments not covered under traditional health insurance plans. A third party company is engaged to source these loans. WebBank provides funding to the patients and sells the loans to the third party shortly after origination of each loan. AUTOMOBILE FINANCING VIA THE INTERNET is a relatively new method for financing the purchase of new and used vehicles to consumers. A third party company is engaged to source these loans. WebBank provides funding to the borrowers and sells the loans to the third party sourcing company shortly after origination of each loan. USDA BUSINESS AND INDUSTRY (B&I) LENDING is a commercial loan product of which 70% to 90% is guaranteed by the full faith and credit of the Federal government. The loan program is administered by the United States Department of Agriculture to assist businesses located in rural areas (under 50,000 population) to promote industrial modernization and job creation. Originations of new B&I loans were discontinued by WebBank in 2001. However, WebBank continues to service loans in its existing portfolio and for several other investors. The Company continues to evaluate its different business lines and consider various alternatives to maximize the aggregate value of its businesses and increase stockholder value. Some of these alternatives may include insurance related deposit gathering programs, consumer e-lending programs, and selective acquisitions, divestitures or the discontinuance of an existing business line. COMPETITION The banking and financial services industry is highly competitive. The increasingly competitive environment is primarily attributable to changes in regulation, changes in technology and product delivery systems, and the accelerating pace of consolidation among financial services providers. The Company competes for loans, deposits, and customers with other commercial banks, thrift institutions, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market funds, credit unions, and other nonbank financial service providers. Many of these competitors are much larger in total assets and capitalization, have greater access to capital markets and offer a broader range of financial services than the Company. REGULATION WebBank is regulated by Federal and state banking agencies including the FDIC and the State of Utah Department of Financial Institutions. As a result, WebBank is subject to various regulatory capital requirements administered by the Federal and state banking agencies. Failure to meet minimum capital requirements can result in the initiation of certain actions by regulators that, if undertaken, could have a direct material effect on WebBank's and the Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, WebBank must meet specific capital guidelines that involve quantitative measures of WebBank's assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. WebBank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Management believes that, as of December 31, 2002, WebBank met all capital adequacy requirements to which it is subject. EMPLOYMENT As of March 26, 2003, the Company had 6 employees, all of whom were full-time employees. The Company believes that its employee relations are satisfactory. Steel Partners, Ltd., an entity controlled by the Company's Chairman of the Board and Chief Executive Officer, provides certain management, consulting and advisory services to the Company pursuant to a Management Agreement with Steel Partners, Ltd. James Henderson, the Company's Vice President of Operations, provides management, accounting and financial services to WebBank pursuant to an Employee Allocation Agreement between WebBank and Steel Partners, Ltd. See "Certain Relationships and Related Transactions." 2