U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

For the quarterly period ended June 30, 1999

Commission File No. 33-55254-39

                             SKYNET TELEMATICS INC.
        (Exact name of Small Business Issuer as specified in its charter)


                  NEVADA                            87-0485315
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                      Identification No.)

Link  House,  259 City Road  London,  England  EC1V 1JE  (Address  of  principal
executive offices)

Issuer's telephone number, including area code: 44 (171)490-7900

Check  whether  the issuer:  (1) has filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
                                                     Yes X No

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest  practicable date:  23,609,379 shares of $.001 par value
class A common stock outstanding as of June 30, 1999.

Transitional Small Business Disclosure Format (check one):  Yes        No  X


                                        1

<PAGE>



                             SKYNET TELEMATICS INC.
                          FORM 10-QSB FOR QUARTER ENDED

                                  June 30, 1999
                                      INDEX

PART I - FINANCIAL INFORMATION                                          Page No.

         Item 1   Financial Statements

         Balance Sheets as of June 30, 1999 and December 31, 1998             4

         Statements of Operations for the three and six month periods ended
                  June 30, 1999 and 1998                                      5

         Statements of Cash Flows for the six month periods ended
                  June 30, 1999 and 1998                                      6

         Selected Notes to Unaudited Financial Statements                     7


         Item 2   Management's Discussion and Analysis
                           and Plan of Operations                             8

PART II - OTHER INFORMATION

         Item 1   Legal Proceedings                                          10

         Item 2   Changes in Securities                                      10

         Item 3   Defaults Upon Senior Securities                            11

         Item 4   Submission of Matters to a Vote of Security Holders        11

         Item 5   Other Information                                          11

         Item 6   Exhibits and Reports on Form 8-K                           11




                                        2

<PAGE>



                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.

         In the  opinion  of the  management  of  Skynet  Telematics  Inc.  (the
Company) the accompanying unaudited financial statements contain all adjustments
(consisting  only of normal recurring  adjustments)  necessary to present fairly
the financial  position as of June 30, 1999,  the results of operations  for the
three and six month periods ended June 30, 1999 and 1998, and the cash flows for
the six month periods ended June 30, 1999 and 1998.

         While the Company believes that the disclosures  presented are adequate
to make the  information  not  misleading,  it is suggested that these condensed
financial  statements be read in conjunction  with the financial  statements and
the notes included in the Company's latest annual report on Form 10-KSB.

         The statements of operations include the activities of the Company, its
United Kingdom subsidiary Netking Limited  ("Netking") and Netking's  subsidiary
Skynet 2001 Limited,  and Skynet Satellite  Communication  Corporation  ("SSCC")
which is owned by the Company's U.S. subsidiary Peripheral Canada, Inc. which is
currently  inactive.  The  accounting  records  for  Netking and Skynet 2001 are
denominated in British  pounds and translated to U.S.  dollars for the financial
statements.



                                        3

<PAGE>


                     SKYNET TELEMATICS INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                               June 30,            December 31,
                                                                                                 1999                  1998
                                                                                              (Unaudited)            (Audited)
                                                                                          ------------------    ------------------
         ASSETS
CURRENT ASSETS
<S>                                                                                       <C>                   <C>
     Cash in bank                                                                         $          139,827    $               20
     Accounts receivable                                                                              32,019                23,473
     Inventory                                                                                       129,405                   830
     Prepaid expenses                                                                                 84,212                37,453
                                                                                          ------------------    ------------------
                                                                    TOTAL CURRENT ASSETS             385,463                61,776

OTHER ASSETS
     Furniture and equipment                                                                         378,994                75,984
     Vehicles                                                                                         71,936                     0
     Software and intellectual property rights                                                     6,432,347             6,810,446
                                                                                          ------------------    ------------------
                                                                                                   6,883,277             6,886,430
                                                                                          ------------------    ------------------

                                                                                          $        7,268,740    $        6,948,206
                                                                                          ==================    ==================

         LIABILITIES & EQUITY
CURRENT LIABILITIES
     Bank overdraft                                                                       $                0    $           41,742
     Accounts payable                                                                                150,196               249,765
     Accrued expenses                                                                                 76,725               161,423
     Current portion of loans                                                                      1,159,293               886,652
     Interest payable                                                                                 69,767                23,500
                                                                                          ------------------    ------------------
                                                               TOTAL CURRENT LIABILITIES           1,455,981             1,363,082

Long-term portion of loans                                                                           338,375               282,709
                                                                                          ------------------    ------------------
                                                                       TOTAL LIABILITIES           1,794,356             1,645,791

STOCKHOLDERS' EQUITY
     Preferred Stock $.001 par value:
         Authorized 20,000,000 shares
         Issued 0 shares                                                                                   0                     0
     Common Stock $.001 par value:
         Authorized - 75,000,000 shares
         Issued and outstanding 23,609,379 shares (21,944,416 in 1998)                                23,609                21,944
     Additional paid-in capital                                                                   10,061,453             8,092,172
     Deficit accumulated during the development stage                                             (4,678,266)           (2,902,565)
     Accumulated other comprehensive income                                                           67,588                90,864
                                                                                          ------------------    ------------------
                                                              TOTAL STOCKHOLDERS' EQUITY           5,474,384             5,302,415
                                                                                          ------------------    ------------------

                                                                                          $        7,268,740    $        6,948,206
                                                                                          ==================    ==================
</TABLE>

                                                                 4

<PAGE>


                     SKYNET TELEMATICS INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                                        3/14/90
                                                            For the three months           For the six months          (Date of
                                                               ended June 30,                ended June 30,          inception) to
                                                            1999           1998            1999           1998          6/30/99
                                                       --------------  -------------  -------------  --------------  -------------
<S>                                                    <C>             <C>            <C>            <C>             <C>
Net sales                                              $       50,886  $      60,327  $      63,936  $       79,183  $     218,587
Cost of sales                                                 131,693        192,221        228,549         254,928        698,784
                                                       --------------  -------------  -------------  --------------  -------------
                                           GROSS LOSS         (80,807)      (131,894)      (164,613)       (175,745)      (480,197)

Bad debt - related party                                            0              0              0               0        171,417
Depreciation and amortization                                 205,642        159,268        400,244         214,103      1,031,197
Research & development                                          4,127              0         12,820               0        134,949
Net interest expense                                          144,095          1,157        166,510           1,052        209,701
General & administrative expenses                             652,193        298,542      1,031,514         343,299      2,400,265
                                                       --------------  -------------  -------------  --------------  -------------
                                                            1,006,057        458,967      1,611,088         558,454      3,947,529
                                                       --------------  -------------  -------------  --------------  -------------
                                NET LOSS BEFORE OTHER      (1,086,864)      (590,861)    (1,775,701)       (734,199)    (4,427,726)

OTHER (EXPENSE)
   Finder's fee related to subsidiary acquisition                   0       (150,000)             0        (150,000)      (250,540)
                                                       --------------  -------------  -------------  --------------  -------------

                                             NET LOSS      (1,086,864)      (740,861)    (1,775,701)       (884,199)    (4,678,266)

OTHER COMPREHENSIVE INCOME
   Foreign currency translation adjustments                   (24,222)             0        (23,276)              0         67,588
                                                       --------------  -------------  -------------  --------------  -------------

                             TOTAL COMPREHENSIVE LOSS  $   (1,111,086) $    (740,861) $  (1,798,977) $     (884,199) $  (4,610,678)
                                                       ==============  =============  =============  ==============  =============

Net (loss) per weighted average share                  $         (.05) $        (.05) $        (.08) $         (.10)
                                                       ==============  =============  =============  ==============

Weighted average number of common shares used
   to compute net (loss) per weighted average share        22,949,911     14,600,000     22,508,581       9,225,000
                                                       ==============  =============  =============  ==============
</TABLE>




                                        5

<PAGE>


                     SKYNET TELEMATICS INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                  3/14/90
                                                                              For the six months                 (Date of
                                                                                ended June 30,                 inception) to
OPERATING ACTIVITIES                                                       1999                1998               6/30/99
                                                                     -----------------  ------------------  ------------------
<S>                                                                  <C>                <C>                 <C>
   Net (loss)                                                        $      (1,775,701) $         (884,199) $       (4,678,266)
   Adjustments to reconcile net (loss) to cash
     used by operating  activities
   Stock issued for expenses                                                   314,545             150,000             855,832
   Depreciation and amortization                                               400,244             214,103           1,031,197
   Foreign currency adjustments                                                (23,276)             (5,740)             67,588
   Changes in assets and liabilities:
       Accounts receivable                                                      (8,546)            (52,314)            (32,019)
       Inventory                                                              (128,575)             29,102            (129,405)
       Prepaid expenses                                                        (46,759)            (34,629)            (84,212)
       Bank overdraft                                                          (41,742)                  0                   0
       Accounts payable                                                        (99,569)            121,644             150,196
       Accrued expenses                                                        (84,698)            125,488              76,725
       Accrued interest payable                                                 46,267                   0              69,767
                                                                     -----------------  ------------------  ------------------

                             NET CASH USED BY OPERATING ACTIVITIES          (1,447,810)           (336,545)         (2,672,597)

INVESTING ACTIVITIES
   Purchase fixed assets                                                      (220,474)           (375,922)           (629,474)
                                                                     -----------------  ------------------  ------------------
                                                   NET CASH (USED)
                                           BY INVESTING ACTIVITIES            (220,474)           (375,922)           (629,474)

FINANCING ACTIVITIES
   Proceeds from sale of common stock                                        1,607,515                   0           2,368,153
   Proceeds from convertible debentures                                              0                   0             400,000
   Loans                                                                             0             675,804             434,134
   Loan repayments                                                             (68,559)                  0            (513,485)
   Loans - shareholders                                                        269,135                   0             950,460
   Cash from subsidiaries                                                            0                   0                 445
   Paid-in capital of subsidiary                                                     0                   0               2,191
   Debenture repayments                                                              0                   0            (200,000)
                                                                     -----------------  ------------------  ------------------

                         NET CASH PROVIDED BY FINANCING ACTIVITIES           1,808,091             675,804           3,441,898
                                                                     -----------------  ------------------  ------------------

                                              INCREASE (DECREASE)
                                        IN CASH & CASH EQUIVALENTS             139,807             (36,663)            139,827
   Cash & cash equivalents at beginning of year                                     20              10,965                   0
                                                                     -----------------  ------------------  ------------------

                          CASH & CASH EQUIVALENTS AT END OF PERIOD   $         139,827  $          (25,698) $          139,827
                                                                     =================  ==================  ==================

Cash paid for interest                                               $           4,597  $                0  $            8,455
                                                                     =================  ==================  ==================
</TABLE>

SUPPLEMENTAL ACTIVITIES
During 1997,  550,000 shares of restricted common stock were issued for services
of $55,000 and 2,300,000  shares of restricted  stock were issued to cancel debt
of $200,000 and accrued interest of $30,000.

During  1998,  the Company  issued  10,000,000  shares of  Regulation S stock to
acquire a  subsidiary,  Netking.  The  Company  also  issued  750,000  shares of
Regulation  S  stock  as a  finder's  fee  valued  at  $150,000.  The  Company's
subsidiary  acquired assets of $6,720,000  during the period by incurring a loan
payable in the same amount. The loan was converted into equity of $6,600,000.

The Company through a subsidiary  purchased a subsidiary  (SSCC) with net assets
of $424,063 by incurring a liability in the same amount.  The liability  will be
satisfied  by issuing  500,000  shares of the  Company's  Regulation  S stock on
December 31,1999,  2000, and 2001 (1,500,000 shares total).  172,920 shares were
issued in April, 1999 to reduce the debt by $48,886.

The Company will pay to the former owners of SSCC 10% of the consolidated  gross
sales  made in Canada and Hong Kong and 1% of the gross  U.S.  sales  related to
SSCC's product from the closing date through  December 31,1999 with payments due
within 30 days of December 31, 1999.  For sales in the year 2000, the percent is
6 2/3% of the  sales in Canada  and Hong Kong and .66% of sales in the U.S.  For
sales in the year 2001,  the  percent is 3 1/3% of sales in Canada and Hong Kong
and .33% of sales in the U.S.

During 1999,  fixed assets of $176,617 were  acquired by incurring  loans of the
same amount.

                                        6

<PAGE>


                     SKYNET TELEMATICS INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                SELECTED NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                  JUNE 30, 1999


NOTE 1:       PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                                                           Net
                                                                                     Accumulated       Book Value
                                                                       Cost         Depreciation         6/30/99
                                                                  --------------  -----------------  --------------
<S>                                                               <C>             <C>                <C>
              Furniture and equipment                             $      407,529  $          28,535  $      378,994
              Vehicles                                                    74,617              2,681          71,936
              Software and intellectual property rights                7,432,328            999,981       6,432,347
                                                                  --------------  -----------------  --------------

                                                                  $    7,914,474  $       1,031,197  $    6,883,277
                                                                  ==============  =================  ==============
</TABLE>

NOTE 2:       LOANS PAYABLE

<TABLE>
<CAPTION>
                                                                        Current            Long-term
                                                                  ------------------  ------------------
<S>                                                               <C>                 <C>
              Payable to acquire SSCC (1)                         $          125,059  $          250,118
              Payable - shareholder 12%                                      771,310                   0
              Payable - shareholder 12%                                      138,150                   0
              Payable - shareholder 15%                                       41,000                   0
              Payable - directors                                              1,734                   0
              Payable - equipment loans                                       82,040              88,257
                                                                  ------------------  ------------------

                                                                  $        1,159,293  $          338,375
                                                                  ==================  ==================
</TABLE>

              (1) Will  be paid  by  issuing  442,360  shares  of the  Company's
                  Regulation S common  stock on December  31, 1999,  and 442,360
                  shares on December 31, 2000 and 2001 (1,327,080 shares total).

                                        7

<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION.

         This  quarterly   report  on  Form  10-QSB   contains   forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, particularly  statements regarding opportunities for expansion,  growth of
sales, new product sales, revenues from monitoring services, customer acceptance
of new  products,  and  selling,  general  and  administrative  expenses.  These
forward-looking  statements involve risks and uncertainties,  and the cautionary
statement set forth below,  identifies  important  risk factors that could cause
actual  results  to  differ   materially   from  those  predicted  in  any  such
forward-looking  statements.  Such  factors  include,  but are not  limited  to,
adverse changes in general economic conditions, including adverse changes in the
specific  markets  for the  Company's  products,  adverse  business  conditions,
decrease  or lack of growth  in the  automotive  industry,  adverse  changes  in
customer  order  patterns,  increased  competition,  lack of  acceptance  of new
products,  pricing  pressures,  lack of success in  technological  advancements,
risks  associated with foreign  operations,  risks associated with the Company's
efforts to comply with the Year 2000 requirements, and other factors.

         The Company has a short operating history.  All risks inherent in a new
and inexperienced enterprise are inherent in the Company's business. The Company
is  continuing  the  operations  of a subsidiary  which was acquired on April 9,
1998.

         On April 9, 1998, the Company beneficially acquired all of the stock of
Netking  Limited,  an English  private limited  company  ("Netking")  from Tomas
George Wilmot  ("Seller"),  who beneficially  owned all of the stock of Netking.
The title holders of Netking were Local Protectors  Limited and SNH Cooper,  who
held the  shares  as  nominees  for  Seller.  The  purchase  price  paid for the
purchased  stock was  10,000,000  newly issued shares of the common stock of the
Company,  which is  approximately  68.5% of all of the outstanding  stock of the
Company after such  issuance.  Tomas George Wilmot,  individually,  is the title
holder of all of the 10,000,000 newly issued shares of the Company. There are no
arrangements or understandings  among members of both the former and new control
person or their  associates  with  respect to  election  of  directors  or other
matters.

         On April 9, 1998, the Company beneficially acquired all of the stock of
Netking from Seller, who beneficially  owned all of the stock of Netking.  There
are two  shares  of  Netking  outstanding.  Because  English  law  requires  two
shareholders,  the Company  holds title to one share of stock of Netking and the
Company and Tomas Wilmot, as nominee for the Company,  jointly hold title to the
other share.  Netking is the beneficial  owner of Skynet 2001 Limited  (formerly
Keymore  Limited),  an English private limited company  ("Skynet").  Skynet owns
intellectual  property  pertaining to all aspects of the Skynet 2000  in-vehicle
system.  The Skynet 2000  system uses  communications  and  security  technology
coupled with proprietary software that provides in-vehicle protection,  security
and information  services using mobile cellular  telecommunications.  The Skynet
2000 system provides 24 hour monitoring of vehicle  security,  personal distress
alarm,  and impact sensor and information  services,  as well as normal cellular
telephone  capability.  The  purchase  price  paid for the  purchased  stock was
10,000,000  shares  of  newly  issued  common  stock  of the  Company,  which is
approximately  68.5% of all of the  outstanding  stock of the Company after such
issuance.  The consideration was determined by arm's length negotiations between
the  Company  and  Seller.  Prior  to the  acquisition,  there  was no  material
relationship  between the Seller and the Company or any of its  affiliates,  any
director or officer of the Company,  or any  associate  of any such  director or
officer.

         A portion of the business of Skynet and Netking acquired by the Company
constitutes  equipment  and  other  physical  property  previously  used  in the
business of the Seller.  The Company  intends to continue to use such  equipment
and physical property for the same purposes.

         The discussions below highlight certain of the more material changes in
results of  operations  and changes in  financial  condition  for the fiscal six
month period ended June 30, 1999.

Results of Operations.

The Company has generated  revenues from  operations  since March 1998.  The six
months ended June 30, 1999 therefore  incorporates the results for six months of
operations compared to only four months for the six months ended June 30, 1998.

The  Company's  consolidated  sales for the  quarter  ended  June 30,  1999 were
$50,886 compared to $60,327 in 1998. This decrease is the result of the sales of
the Skynet 2001 unit being reduced in order to focus the Company's  resources on
developing  the new Skamp range of products.  The Skamp  product  range is being
modified to suit the Company's precise  requirements and has undergone extensive
testing.  Volume  sales of the  product  are  expected to commence at the end of
August 1999.  Skynet has orders for 87,000 Skamp units that it anticipates  will
be provided to customers over the next 18 months.  Revenue from related services
such as monitoring  fees,  airtime  connections,  airtime usage, and information
services should also add significantly to the Company's revenues.

                                        8

<PAGE>



The  Company's  consolidated  total cost of sales for the quarter ended June 30,
1999 was  $131,693  compared to $192,221 in 1998.  The largest  component of the
total cost of sales was wages,  including social security, for Skynet monitoring
personnel,  representing  59% of the total. In 1998, the comparative  figure was
only 34%  although  payments to  subcontractors  for  technical  support for the
product,  of which there are none in the quarter  ended June 30,  1999,  made up
another 26%. The actual increase in monthly monitoring  personnel costs is below
10%. Skynet has created a full scale operational monitoring facility in order to
expand that portion of its business and the current  facility has the capability
of  handling a six fold  increase  in its current  monitoring  business.  Skynet
anticipates  that revenue from  monitoring  services  will provide a substantial
portion of the Company's future consolidated revenues.

The   Company's   consolidated   overhead   expenses,   including   selling  and
administrative  costs for the quarter ended June 30, 1999 were  $1,006,057.  The
comparative  figure for 1998 was $458,967 which was  significantly  lower due to
very little interest expense and no costs associated with expanding  operations.
The Company's  infrastructure costs were higher in 1999 than 1998. Comparison of
individual  figures is therefore not  meaningful.  Depreciation  of $205,642 was
charged for the quarter to June 30, 1999, a non-cash item that represents 20% of
total  overhead.  The largest  element of this was the  depreciation of Skynet's
intellectual property rights in the amount of $166,414.  The depreciation amount
for 1998 was  $159,268.  Research  and  development  expenditure  of $4,127  was
incurred during the quarter  representing  costs  associated with developing and
testing the new Skamp  range of  products.  Interest  charges  were  incurred of
$144,095,  of which $24,251 was payable to shareholders in respect to loans made
to the Company after March 31, 1998.  Interest  expense  included  $113,659 paid
with common  stock to the former  shareholders  of SSCC in  connection  with the
purchase of SSCC. General and administrative expenses, totaling $652,193 for the
quarter ended June 30, 1999,  includes the largest single  component of overhead
expenses, which are wages and salaries,  including social security. This amounts
to $176,656, or 18% of total overhead,  and represents the wages and salaries of
all of Skynet's personnel,  excluding monitoring personnel.  The Company and its
subsidiaries  have  created  a  management  team and other  personnel  that they
believe  to be  necessary  for  the  expected  growth  of  the  business.  Other
significant  components of the Company and its  subsidiaries'  overhead expenses
were  marketing  costs,  professional  fees, and facility costs such as rent and
utilities.  General and administrative expenses for 1998 were $298,542, of which
$108,931 related to wages and salaries,  including social security. This amounts
to 24% of total overhead.

The  Company's  consolidated  net loss for the  quarter  ended June 30, 1999 was
$(1,086,864) and after foreign currency translation losses of $24,222, the total
comprehensive loss for the quarter was $(1,111,086).  For the June 1998 quarter,
the  consolidated  net loss was  $(740,861)  and there was no  foreign  currency
translation  gain or loss.  The loss in 1999 is higher  mainly  because  of more
costs associated with expanding operations.

The consolidated net loss consisted of that of the Company  $(368,948),  Netking
$(696,497),   and  SSCC  $(21,419)  for  a  total   consolidated   net  loss  of
$(1,086,864).

The  Company's  consolidated  sales for the six months  ended June 30, 1999 were
$63,936 compared to $79,183 in 1998. This decrease is the result of the sales of
the Skynet 2001 unit being reduced in order to focus the Company's  resources on
developing  the new Skamp range of products.  The Skamp  product  range is being
modified to suit the Company's precise  requirements and has undergone extensive
testing.  Volume  sales of the  product  are  expected to commence at the end of
August 1999.  Skynet has orders for 87,000 Skamp units that it anticipates  will
be provided to customers over the next 18 months.  Revenue from related services
such as monitoring  fees,  airtime  connections,  airtime usage, and information
services should also add significantly to the Company's revenues.

The Company's consolidated total cost of sales for the six months ended June 30,
1999 was  $228,549  compared to $254,928 in 1998.  The largest  component of the
total cost of sales was wages,  including social security, for Skynet monitoring
personnel,  representing  34% of the total. In 1998, the comparative  figure was
only 34%  although  payments to  subcontractors  for  technical  support for the
product,  of which there are none in the six months ended June 30, 1999, made up
another  25%.  The  increase in the cost of  personnel  is  exaggerated  in this
comparison as six months of operations  and related costs are included this year
compared to four months of operations  and related  costs in 1998  amounts.  The
actual increase in monthly  monitoring  personnel costs is below 10%. Skynet has
created a full scale  operational  monitoring  facility  in order to expand that
portion of its business and the current  facility has the capability of handling
a six fold increase in its current monitoring business.  Skynet anticipates that
revenue  from  monitoring  services  will provide a  substantial  portion of the
Company's future consolidated revenues.

The   Company's   consolidated   overhead   expenses,   including   selling  and
administrative costs for the six months ended June 30, 1999 were $1,611,088. The
comparative  figure for 1998 was $558,454  which was  significantly  lower as it
only  represented  four  month's  costs.  Comparison  of  individual  figures is
therefore  not  meaningful.  Depreciation  of  $400,244  was charged for the six
months to June 30, 1999, a non-cash item that  represents 25% of total overhead.
The  largest  element  of this was the  depreciation  of  Skynet's  intellectual
property rights in the amount of $335,261.  The depreciation amount for 1998 was
$214,103.  Research and  development  expenditure of $12,820 was incurred during
the six months representing costs associated with developing and testing the new
Skamp range of products.

                                        9

<PAGE>



Interest  charges  were  incurred of $166,510,  of which  $45,748 was payable to
shareholders  in respect  to loans made to the  Company  after  March 31,  1998.
Interest  expense  included  $113,659  paid  with  common  stock  to the  former
shareholders  of SSCC in  connection  with the  purchase  of SSCC.  General  and
administrative  expenses,  totaling $1,031,514 for the six months ended June 30,
1999,  includes the largest  single  component of overhead  expenses,  which are
wages and salaries,  including social security. This amounts to $359,223, or 22%
of total  overhead,  and  represents  the wages and  salaries of all of Skynet's
personnel, excluding monitoring personnel. The Company and its subsidiaries have
created a management  team and other personnel that they believe to be necessary
for the expected  growth of the business.  Other  significant  components of the
Company  and  its   subsidiaries'   overhead   expenses  were  marketing  costs,
professional  fees, and facility  costs such as rent and utilities.  General and
administrative  expense for 1998 were  $343,299,  of which  $136,517  related to
wages and salaries which were 24% of total overhead.

The Company's  consolidated  net loss for the six months ended June 30, 1999 was
$(1,775,701) and after foreign currency translation losses of $23,276, the total
comprehensive  loss for the six months was $(1,798,977).  For the 1998 six month
period,  the  consolidated  net loss was  $(884,199)  and there  was no  foreign
currency  translation gain or loss. The loss in 1999 is higher mainly because of
more costs associated with expanding operations.

The consolidated net loss consisted of that of the Company  $(394,424),  Netking
$(1,335,382),   and  SSCC  $(45,895)  for  a  total  consolidated  net  loss  of
$(1,775,701).

Financial Condition.

There were no significant  changes to the net financial condition of the Company
in the six month  period  ended  June 30,  1999.  The  working  capital  deficit
decreased  by about  $230,000  mainly  as a result  of an  increase  in cash and
inventory.  The  Company  continues  to believe it has the  support of its major
stockholders and that financing is available to meet all requirements.  In 1999,
the Company raised $1,600,000 by issuing Regulation S shares. This extra working
capital will allow the Company to fully exploit the market potential for the new
Skamp range of products,  and expand its business in a controlled but aggressive
manner.

Readiness for Year 2000

The Company has  analyzed  its Year 2000 risk and,  although it is  confident of
Year 2000 compliance,  a process of checks is ongoing.  The monitoring equipment
for the Skynet  2001  system  has been  upgraded  to meet Year 2000  compliance.
ComROAD  has  confirmed  that its  products  provided  to  Skynet  are Year 2000
compliant  including all equipment  purchased  from ComROAD to monitor the Skamp
products.  The Company does not expect any Year 2000 problems to have a material
impact on the Company's business.

                                     PART II

                                Other Information

Item 1.  Legal proceedings:  None

Item 2.  Changes in Securities: Sale of Regulation S stock to offshore investors

In January 1999, the Company sold 65,000 shares at $2.00 per share for $130,000.
In January,  39,250 shares were sold at $1.50 per share for $58,875. In January,
75,000  shares were sold at $1.00 per share for  $75,000.  In  February,  10,000
shares were sold at $2.00 per share for $20,000.  In March,  375,000 shares were
sold at $.33 per share for $123,750.  In March,  4,000 shares were sold at $3.50
per share for $14,000.  In April,  3,500 shares were sold at $1.50 per share for
$5,250 and 2,860 shares were sold at $3.50 per share for $10,010. In May, 12,580
shares  were sold at $1.50 per share for  $18,870,  600,000  shares were sold at
$2.00 per share for  $1,200,000  and 63,024  shares were sold at $3.50 per share
for  $220,584.  In June,  50,000 shares were sold at $.82 per share for $41,000,
22,087  shares were sold at $1.50 per share for $33,131,  4,000 shares were sold
at $2.50 per share for  $10,000,  3,636  shares were sold at $2.75 per share for
$9,999, 4,578 shares were sold at $3.50 per share for $16,023, 3,750 shares were
sold at $3.62 per share for  $13,575,  1,000 shares were sold at $3.75 per share
for $3,750,  6,000  shares were sold at $3.87 per share for  $23,220,  and 1,500
shares  were sold at $4.00 per share for  $6,000.  There  were  capital  raising
costs, including commissions, of $425,522 associated with the transactions which
were paid in cash.



                                       10

<PAGE>



Issuance of Regulation S and 144 Stock

Regulation S:

During April 1999,  the Company issued 172,920 shares of stock at $.94 per share
to pay principal of $48,886 and interest expense of $113,659 related to the SSCC
purchase.  Also in April,  the Company  issued 7,500 shares of stock at $.82 per
share for  interest  expense of $6,150  and 3,750  shares at $3.52 per share for
expenses of $13,200.  In June,  the Company  issued  97,536  shares at $1.00 per
share for  expenses of $97,536 and 7,000  shares at $2.00 per share for expenses
of $14,000.

Regulation 144:

In  April,  the  Company  issued  35,000  shares of stock at $2.00 per share for
expenses of $70,000.

Summary of 1999 stock transactions:

<TABLE>
<CAPTION>

<S>                                                                              <C>
         1,346,765 shares of Regulation S stock were sold for cash                $     2,033,037
         Less capital raising costs including commissions                                (425,522)
                                                                                  ---------------

                                                         Net proceeds to Company  $     1,607,515
                                                                                  ===============
</TABLE>

         288,706  shares  of  Regulation  S  stock  were  issued  for  principal
         reduction of $48,886 and expenses of $244,545.

         35,000  shares of  Regulation  144 stock were  issued for  expenses  of
         $70,000.

Item 3.  Defaults Upon Senior Securities:  None

Item 4.  Submission of Matters to a Vote of Security Holders:  None

Item 5.  Other Information:  None

Item 6.  Exhibits and Reports on Form 8-K

                  (a)  Exhibits:    None
                  (b)                                Reports on Form 8-K: An 8-K
                                                     was filed on April 14, 1999
                                                     to report  the 1998 sale of
                                                     Regulation  S stock and the
                                                     1998 issuance of Regulation
                                                     S stock for services.


                                   SIGNATURES

         In accordance with the requirements of the Securities and Exchange Act,
the registrant  caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.



                                 Skynet Telematics, Inc.


Dated: August 6, 1999
                                 Tomas George Wilmot, President



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