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 September 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:  24,104,088 shares of $.001 par value
class A common stock outstanding as of September 30, 1999.

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


                                        1

<PAGE>



                             SKYNET TELEMATICS INC.
                          FORM 10-QSB FOR QUARTER ENDED

                               September 30, 1999
                                      INDEX

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                                             Page No.

         Item 1            Financial Statements

<S>                                                                                                               <C>
         Balance Sheets as of September 30, 1999 and December 31, 1998                                            4

         Statements of Operations for the three and nine month periods ended
                  September 30, 1999 and 1998                                                                     5

         Statements of Cash Flows for the nine month periods ended
                  September 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

</TABLE>





                                        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 September 30, 1999,  the results of operations for
the three and nine month periods ended September 30, 1999 and 1998, and the cash
flows for the nine month periods ended September 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  Telematics Ltd ("STL")  (formerly  Skynet 2001  Limited),  its 51% owned
United Kingdom subsidiary, Skamp International Ltd ("Skamp International") which
was organized on August 27, 1999, 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, STL, and Skamp
International  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>
                                                                                             September 30,         December 31,
                                                                                                 1999                  1998
                                                                                              (Unaudited)            (Audited)
                                                                                          ------------------    ------------------
         ASSETS
CURRENT ASSETS
<S>                                                                                       <C>                   <C>
     Cash in bank                                                                         $           23,945    $               20
     Accounts receivable                                                                              95,433                23,473
     Inventory                                                                                       239,319                   830
     Prepaid expenses                                                                                119,338                37,453
                                                                                          ------------------    ------------------
                                                                    TOTAL CURRENT ASSETS             478,035                61,776

OTHER ASSETS
     Furniture and equipment                                                                         446,770                75,984
     Vehicles                                                                                         67,465                     0
     Software and intellectual property rights                                                     6,389,439             6,810,446
                                                                                          ------------------    ------------------
                                                                                                   6,903,674             6,886,430
                                                                                          ------------------    ------------------

                                                                                          $        7,381,709    $        6,948,206
                                                                                          ==================    ==================

         LIABILITIES & EQUITY
CURRENT LIABILITIES
     Bank overdraft                                                                       $           27,370    $           41,742
     Accounts payable                                                                                346,514               249,765
     Accrued expenses                                                                                 51,053               161,423
     Current portion of loans                                                                      1,021,656               886,652
     Interest payable                                                                                 91,637                23,500
                                                                                          ------------------    ------------------
                                                               TOTAL CURRENT LIABILITIES           1,538,230             1,363,082

Long-term portion of loans                                                                           323,552               282,709
                                                                                          ------------------    ------------------
                                                                       TOTAL LIABILITIES           1,861,782             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 24,104,088 shares (21,944,416 in 1998)                                24,104                21,944
     Additional paid-in capital                                                                   11,010,237             8,092,172
     Deficit accumulated during the development stage                                             (5,595,594)           (2,902,565)
     Accumulated other comprehensive income                                                           81,180                90,864
                                                                                          ------------------    ------------------
                                                              TOTAL STOCKHOLDERS' EQUITY           5,519,927             5,302,415
                                                                                          ------------------    ------------------

                                                                                          $        7,381,709    $        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 nine months         (Date of
                                                             ended September 30,           ended September 30,       inception) to
                                                            1999           1998            1999           1998          9/30/99
                                                       --------------  -------------  -------------  --------------  -------------
<S>                                                    <C>             <C>            <C>            <C>             <C>
Net sales                                              $       83,506  $      70,464  $     147,442  $      149,647  $     302,093
Cost of sales                                                 190,690        172,482        419,239         427,410        889,474
                                                       --------------  -------------  -------------  --------------  -------------
                                           GROSS LOSS        (107,184)      (102,018)      (271,797)       (277,763)      (587,381)

Bad debt - related party                                            0              0              0               0        171,417
Depreciation and amortization                                 221,307        187,738        621,551         401,841      1,252,504
Research & development                                         53,730              0        150,860               0        272,989
Net interest expense                                           20,465            605        186,975           1,657        230,166
General & administrative expenses                             515,446        390,315      1,462,650         733,614      2,831,401
                                                       --------------  -------------  -------------  --------------  -------------
                                                              810,948        578,658      2,422,036       1,137,112      4,758,477
                                                       --------------  -------------  -------------  --------------  -------------
                                NET LOSS BEFORE OTHER        (918,132)      (680,676)    (2,693,833)     (1,414,875)    (5,345,858)

OTHER (EXPENSE)
   Finder's fee related to subsidiary acquisition                   0              0              0        (150,000)      (250,540)
   Minority interest                                              804              0            804               0            804
                                                       --------------  -------------  -------------  --------------  -------------

                                             NET LOSS        (917,328)      (680,676)    (2,693,029)     (1,564,875)    (5,595,594)

OTHER COMPREHENSIVE INCOME
   Foreign currency translation adjustments                    13,592              0         (9,684)              0         81,180
                                                       --------------  -------------  -------------  --------------  -------------

                             TOTAL COMPREHENSIVE LOSS  $     (903,736) $    (680,676) $  (2,702,713) $   (1,564,875) $  (5,514,414)
                                                       ==============  =============  =============  ==============  =============

Net (loss) per weighted average share                  $         (.04) $        (.05) $        (.12) $         (.14)
                                                       ==============  =============  =============  ==============

Weighted average number of common shares used
   to compute net (loss) per weighted average share        23,834,157     14,600,000      22,985,902     11,016,667
                                                        =============  =============  ==============  =============
</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 nine months                (Date of
                                                                              ended September 30,              inception) to
OPERATING ACTIVITIES                                                       1999                1998               9/30/99
                                                                     -----------------  ------------------  ------------------
<S>                                                                  <C>                <C>                 <C>
   Net (loss)                                                        $      (2,693,029) $       (1,564,875) $       (5,595,594)
   Adjustments to reconcile net (loss) to cash
     used by operating  activities
   Stock issued for expenses                                                   356,535             150,000             897,822
   Depreciation and amortization                                               621,551             401,841           1,252,504
   Foreign currency adjustments                                                 (9,684)            (19,738)             81,180
   Changes in assets and liabilities:
       Accounts receivable                                                     (71,960)            (41,845)            (95,433)
       Inventory                                                              (238,489)             (1,710)           (239,319)
       Prepaid expenses                                                        (81,885)            (70,917)           (119,338)
       Bank overdraft                                                          (14,372)                  0              27,370
       Accounts payable                                                         96,749             178,678             346,514
       Accrued expenses                                                       (110,370)            298,044              51,053
       Accrued interest payable                                                 68,137                   0              91,637
                                                                     -----------------  ------------------  ------------------

                             NET CASH USED BY OPERATING ACTIVITIES          (2,076,817)           (670,522)         (3,301,604)

INVESTING ACTIVITIES
   Purchase fixed assets                                                      (312,322)           (355,326)           (721,322)
                                                                     -----------------  ------------------  ------------------
                                                   NET CASH (USED)
                                           BY INVESTING ACTIVITIES            (312,322)           (355,326)           (721,322)

FINANCING ACTIVITIES
   Proceeds from sale of common stock                                        2,364,948                   0           3,125,586
   Proceeds from convertible debentures                                              0                   0             400,000
   Loans                                                                             0           1,261,609             434,134
   Loan repayments                                                             (83,891)           (349,297)           (528,817)
   Loans - shareholders                                                        132,007                   0             813,332
   Cash from subsidiaries                                                            0                 445                 445
   Paid-in capital of subsidiary                                                     0               2,194               2,191
   Debenture repayments                                                              0                   0            (200,000)
                                                                     -----------------  ------------------  ------------------

                         NET CASH PROVIDED BY FINANCING ACTIVITIES           2,413,064             914,951           4,046,871
                                                                     -----------------  ------------------  ------------------

                                              INCREASE (DECREASE)
                                        IN CASH & CASH EQUIVALENTS              23,925            (110,897)             23,945
   Cash & cash equivalents at beginning of year                                     20              10,965                   0
                                                                     -----------------  ------------------  ------------------

                          CASH & CASH EQUIVALENTS AT END OF PERIOD   $          23,945  $          (99,932) $           23,945
                                                                     =================  ==================  ==================

Cash paid for interest                                               $           5,959  $                0  $            9,817
                                                                     =================  ==================  ==================
</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
                               September 30, 1999


NOTE 1:       PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                                                           Net
                                                                                     Accumulated       Book Value
                                                                       Cost         Depreciation         9/30/99
                                                                  --------------  -----------------  --------------
<S>                                                               <C>             <C>                <C>
              Furniture and equipment                             $      499,377  $          52,607  $      446,770
              Vehicles                                                    74,617              7,152          67,465
              Software and intellectual property rights                7,582,184          1,192,745       6,389,439
                                                                  --------------  -----------------  --------------

                                                                  $    8,156,178  $       1,252,504  $    6,903,674
                                                                  ==============  =================  ==============
</TABLE>

NOTE 2:       LOANS PAYABLE

<TABLE>
<CAPTION>
                                                                        Current            Long-term
                                                                  ------------------  ------------------
<S>                                   <C>                         <C>                 <C>
              Payable to acquire SSCC (1)                         $          125,059  $          250,118
              Payable - shareholder 12%                                      675,182                   0
              Payable - shareholder 12%                                      138,150                   0
              Payable - directors                                              1,225                   0
              Payable - equipment loans                                       82,040              73,434
                                                                  ------------------  ------------------

                                                                  $        1,021,656  $          323,552
                                                                  ==================  ==================
</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  Telematics Ltd (formerly Skynet 2001
Limited),  an English  private limited company  ("STL").  STL 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 STL 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.  STL now has the Irish  license to  distribute
Skynet products.

Skamp  International is forming a subsidiary  company in Slovenia which will set
up a  monitoring  station  and market  the Skamp  range of  products  in Eastern
Europe.

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

Results of Operations.

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

The Company's  consolidated  sales for the quarter ended September 30, 1999 were
$83,506 compared to $70,464 in 1998. This is a slight increase over 1998 despite
the sales of the Skynet 2000 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 in the
final quarter of 1999. STL has orders for 87,000 Skamp units that it

                                        8

<PAGE>

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 quarter ended September
30, 1999 was $190,690 compared to $172,482 in 1998. The largest component of the
total cost of sales was  product  purchases  representing  52% of the total.  In
1998, the  comparative  figure was 22%. This increase  resulted  mainly from the
growth in sales activity,  particularly the supply in September 1999 of 60 Skamp
units,  part of an order for 500, to Northgate  Plc's fleet of rental  vehicles.
The second  largest  component  of the total cost of sales was wages,  including
social security, for STL monitoring personnel, representing 38% of the total. In
1998, the comparative  figure was 44% although  payments to  subcontractors  for
technical support for the product,  of which there are none in the quarter ended
September 30, 1999, made up another 29%. The actual  monitoring  personnel costs
varied only  marginally  from the quarter  ended  September  30,  1998.  STL 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.  STL 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 September 30, 1999 were $810,948. The
comparative  figure for 1998 was $578,658 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 $221,307 was
charged for the quarter to September 30, 1999, a non-cash  item that  represents
27% of total overhead. The largest element of this was the depreciation of STL's
intellectual property rights in the amount of $192,764.  The depreciation amount
for 1998 was  $187,738.  Research  and  development  expenditure  of $53,730 was
incurred during the quarter  representing  costs  associated with developing and
testing  the new  Skamp  range of  products  and  monitoring  station  software.
Interest  charges  were  incurred  of $20,465,  of which  $20,465 was payable to
shareholders  in respect  to loans made to the  Company  after  March 31,  1998.
General and  administrative  expenses  totaled  $515,446  for the quarter  ended
September  30,  1999,  the largest  component  of which was wages and  salaries,
including social security.  This amounts to $176,179,  or 22% of total overhead,
and  represents  the wages and  salaries  of all of STL's  personnel,  excluding
monitoring and  development  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 $390,315,  of which  $135,917  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 September 30, 1999 was
$(917,328) and after foreign currency  translation  gains of $13,592,  the total
comprehensive  loss for the  quarter  was  $(903,736).  For the  September  1998
quarter,  the  consolidated  net loss was  $(680,676)  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  $(68,731),  Netking
$(823,926),  SSCC  $(21,419),  and  Skamp  International  $(3,252)  for a  total
consolidated net loss of $(917,328).

The Company's  consolidated  sales for the nine months ended  September 30, 1999
were $147,442  compared to $149,647 in 1998.  This decrease is the result of the
sales of the  Skynet  2000 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 in the
final quarter of 1999. STL 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 nine  months  ended
September  30, 1999 was  $419,239  compared  to  $427,410  in 1998.  The largest
component of the total cost of sales was wages,  including social security,  for
STL  monitoring  personnel,   representing  56%  of  the  total.  In  1998,  the
comparative  figure  was  only  38%  although  payments  to  subcontractors  for
technical  support for the  product,  of which there are none in the nine months
ended  September  30,  1999,  made up another  27%.  The increase in the cost of
personnel is  exaggerated  in this  comparison as nine months of operations  and
related costs are included this year compared to seven months of operations  and
related  costs in 1998  amounts.  The  actual  increase  in  monthly  monitoring
personnel  costs  is  below  10%.  STL  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.  STL  anticipates  that revenue  from  monitoring
services will provide a substantial portion of the Company's future consolidated
revenues.

                                        9
<PAGE>



The   Company's   consolidated   overhead   expenses,   including   selling  and
administrative  costs  for  the  nine  months  ended  September  30,  1999  were
$2,422,036.   The  comparative   figure  for  1998  was  $1,137,112   which  was
significantly  lower as it only represented  seven month's costs.  Comparison of
individual  figures is therefore not  meaningful.  Depreciation  of $621,551 was
charged  for the nine  months  to  September  30,  1999,  a  non-cash  item that
represents  26%  of  total  overhead.  The  largest  element  of  this  was  the
depreciation  of STL's  intellectual  property rights in the amount of $570,863.
The  depreciation  amount  for  1998  was  $401,841.  Research  and  development
expenditure of $150,860 was incurred during the nine months  representing  costs
associated  with  developing  and testing  the new Skamp  range of products  and
monitoring  station  software.  Interest  charges were incurred of $186,975,  of
which  $66,213  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,  totaled $1,462,650 for the nine
months ended  September 30, 1999,  the largest  component of which was wages and
salaries,  including social security.  This amounts to $451,092, or 19% of total
overhead,  and  represents  the wages and  salaries  of all of STL's  personnel,
excluding monitoring and development 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  $733,614,  of which  $272,434  related to
wages and salaries which were 24% of total overhead.

The Company's consolidated net loss for the nine months ended September 30, 1999
was $(2,693,029) and after foreign currency  translation  losses of $9,684,  the
total comprehensive loss for the nine months was $(2,702,713). For the 1998 nine
month  period,  the  consolidated  net loss was  $(1,564,875)  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  $(463,155),  Netking
$(2,159,308),  SSCC  $(67,314),  and Skamp  International  $(3,252)  for a total
consolidated net loss of $(2,693,029).

Financial Condition.

There were no significant  changes to the net financial condition of the Company
in the nine month period ended  September 30, 1999. The working  capital deficit
decreased  by about  $240,000  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 $2,300,000 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  2000  system  has been  upgraded  to meet Year 2000  compliance.
ComROAD has confirmed that its products  provided to STL 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.

Significant Subsequent Events

During  October  1999,  250 Skamp  units were  fitted to an Avis fleet of rental
vehicles at Heathrow, London. Skamp is being marketed by Avis as "Rapid 247". On
October 14, 1999, the Company  reached an agreement to buy 12.5% of West Country
Telecom  Limited  ("WCT") for a combination  of cash and common stock.  WCT is a
private company specializing in telecommunications  and internet,  and will give
the Company  immediate  access to a multilingual  integrated  voice  recognition
platform and an internet service  provider.  Skamp Motorbike was launched at the
British Motor Cycle Show on November 3, 1999.

                                     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

                                       10

<PAGE>



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,  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.  In July,
152,180 shares were sold at $2.75 per share for $418,495, 2,000 shares were sold
at $3.00 per share for  $6,000,  1,500  shares  were sold at $3.87 per share for
$5,805,  1,200 shares were sold at $3.92 per share for $4,704,  and 3,200 shares
were sold at $4.00 per share for $12,800. In August,  18,352 shares were sold at
$1.50 per share for  $27,528  and 4,042  shares were sold at $3.87 per share for
$15,643.  In  September,  2,000  shares were sold at $1.50 per share for $3,000,
4,000 shares were sold at $1.60 per share for $6,400,  172,635  shares were sold
at $2.75 per share for  $474,746,  6,000 shares were sold at $3.00 per share for
$18,000,  13,099  shares were sold at $3.87 per share for $50,693,  2,000 shares
were sold at $4.00 per share for $8,000, and 1,270 shares were sold at $4.25 per
share for $5,398. There were capital raising costs,  including  commissions,  of
$715,302 associated with the transactions which were paid in cash.

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.  In July,  the Company  issued  26,817  shares at $.82 per share for
expenses of $21,990. In September,  the Company issued 10,000 shares of stock at
$2.00 per share for expenses of $20,000.

In September,  the Company  issued 78,050 shares of stock at $1.92 per share for
$149,856 for a license to distribute products in Ireland.

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>
         1,726,607 shares of Regulation S stock were sold for cash                $     3,080,250
         Less capital raising costs including commissions                                (715,302)
                                                                                  ---------------

                                                         Net proceeds to Company  $     2,364,948
                                                                                  ===============
</TABLE>

         403,573  shares  of  Regulation  S stock  were  issued  for  assets  of
         $149,856, principal reduction of $48,886 and expenses of $286,535.

         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:          None.



                                       11

<PAGE>




                                   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:  November 18, 1999
                                     ------------------------------------------
                                     Tomas George Wilmot, President


                                       12