##### 



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

(Mark One)

[ x ]    Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended September 30,
2001; or

[    ]    Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
_________________ to _____________________ .

Commission file Number: 0-25136

Suite101.com Inc.
(Exact name of small business issuer as specified in its charter)

|                                                              |  |                                     
|------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                      |  | 33-0464753                          
|                                                              |  |                                     
|(State or other jurisdiction ofincorporation of organization) |  | (I.R.S. employer
identification no.)

Suite 210 - 1122 Mainland Street,
Vancouver, BC, Canada V6B 5L1
(Address of principal executive offices, zip code)

604-682-1400
(Issuers Telephone Number, Including Area Code)

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the issuer 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 equity, as of the latest practicable date.

|                                        |  |                                
|--------------------------------------- |  | -------------------------------
|Class                                   |  | Outstanding at October 31, 2001
|                                        |  |                                
|Common Stock, par value
$.001 per share |  | 13,155,046                     

Transitional Small Business Disclosure Format

YES  [    ]      NO  [ x ]



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##### 



SUITE101.COM, INC.

QUARTERLY REPORT ON FORM 10-QSB

TABLE OF CONTENTS

|        |  |                                                                                                                            |  |         
|------- |  | -------------------------------------------------------------------------------------------------------------------------- |  | --------
|PART I  |  | FINANCIAL INFORMATION                                                                                                      |  | PAGE NO.
|       
|Item 1. |  | Financial Statements                                                                                                       |  | 3       
|       
|        |  | Independent Accountants Report                                                                                            |  | 3       
|       
|        |  | Consolidated Balance Sheets  September 30, 2001 and
December 31, 2000                                                     |  | 4       
|       
|        |  | Consolidated Statements of Operations  Nine-Month
and Three-Month Periods Ended September 30, 2001 and
September 30, 2000 |  | 5       
|       
|        |  | Consolidated Statements of Cash Flows  Nine-Month
and Three-Month Periods Ended September 30, 2001 and
September 30, 2000 |  | 6       
|       
|        |  | Notes to Consolidated Financial Statements 
September 30, 2001 and September 30, 2000                                     |  | 7-15    
|       
|Item 2. |  | Managements Discussion and Analysis or Plan of
Operations                                                                 |  | 16-32   
|       
|PART II |  | OTHER INFORMATION                                                                                                          |  | 32      
|       
|Item 6. |  | Exhibits and Reports on Form 8-K                                                                                           |  | 32      
|       
|       

2



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##### 



Item 1.    Financial Statements

INDEPENDENT ACCOUNTANTS REPORT

To the Board of Directors and Stockholders of
Suite101.com, Inc.
Vancouver, B.C., Canada

We have reviewed the accompanying consolidated balance sheet of Suite101.com,
Inc. and subsidiaries as of September 30, 2001, the related consolidated
statements of operations for the nine-month and three-month periods then ended,
and the related consolidated statement of cash flows for the nine-month and
three-month periods then ended. These financial statements are the
responsibility of the Corporations management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to such consolidated financial statements for them to be in conformity
with generally accepted accounting principles.

|                                 |  |                                            
|-------------------------------- |  | -------------------------------------------
|                                 |  |                                            
|                                 |  |                                            
|VANCOUVER, B.C.
October 24, 2001 |  | /s/ N.I. Cameron Inc.
CHARTERED ACCOUNTANTS

3



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##### 



Suite101.com, Inc.
Consolidated Balance Sheets

(Expressed in U.S. dollars)

ASSETS

|                                                |                                |                                                                                                                    |            |           |               |   |              |           |        |  | 
|----------------------------------------------- | ------------------------------ | ------------------------------------------------------------------------------------------------------------------ | ---------- | --------- | ------------- | - | ------------ | --------- | ------ |  | 
|                                                |                                |                                                                                                                    |            |           | September 30, |   | December 31,
|                                                |                                |                                                                                                                    |            |           | 2001          |   | 2000        
|                                                |                                |                                                                                                                    |            |           |               |   |             
|                                                |                                |                                                                                                                    |            |           | (Unaudited)  
|CURRENT                                        
|                                               
|                                               
|                                               
|                                               
|                                                | Cash                           |                                                                                                                    | $          | 4,366,103 |               |   | $            | 5,671,211 |       
|                                               
|                                               
|                                               
|                                               
|                                                | Accounts receivable            |                                                                                                                    |            | 26,782    |               |   |              | 34,458    |       
|                                               
|                                               
|                                               
|                                               
|                                                | Prepaid expenses and deposits  |                                                                                                                    |            | 78,336    |               |   |              | 50,306    |       
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|                                                |                                |                                                                                                                    | 4,471,221  |           |               |   | 5,755,975    |          
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|PROPERTY, PLANT AND EQUIPMENT, at cost (Note 2)
|                                               
|                                               
|                                               
|                                               
|                                                | Computer equipment             |                                                                                                                    |            | 219,827   |               |   |              | 200,540   |       
|                                               
|                                               
|                                               
|                                               
|                                                | Furniture and fixtures         |                                                                                                                    |            | 22,554    |               |   |              | 17,677    |       
|                                               
|                                               
|                                               
|                                               
|                                                | Leasehold improvements         |                                                                                                                    |            | 8,063     |               |   |              | 11,401    |       
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|                                                |                                |                                                                                                                    | 250,444    |           |               |   | 229,618      |          
|                                               
|                                               
|                                               
|                                               
|                                                | Less: accumulated amortization |                                                                                                                    |            | 118,226   |               |   |              | 95,796    |       
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|                                                |                                |                                                                                                                    | 132,218    |           |               |   | 133,822      |          
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|TOTAL ASSETS                                    |                                | $                                                                                                                  | 4,603,439  |           |               | $ | 5,889,797    |          
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|                                               
|LIABILITIES AND STOCKHOLDERS EQUITY           
|                                               
|CURRENT LIABILITIES                            
|                                               
|                                               
|                                               
|                                               
|                                                | Accounts payable               |                                                                                                                    | $          | 190,887   |               |   | $            | 220,874   |       
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|CAPITAL STOCK (Notes 4, 5 and 8)               
|                                               
|                                               
|                                               
|                                               
|                                                | Authorized:                   
|                                               
|                                               
|                                               
|                                               
|                                                |                                | 40,000,000 common shares with a par value of $0.001 each
1,000,000 preferred shares with a par value of $0.01 each
|                                               
|                                               
|                                               
|                                               
|                                                | Issued:                       
|                                               
|                                               
|                                               
|                                               
|                                                |                                | 13,155,046 common shares                                                                                           |            |           | 13,155        |   |              |           | 13,155 | 
|                                               
|                                               
|                                               
|                                               
|DEFERRED COMPENSATION                           |                                |                                                                                                                    | (18,773    | )         |               |   | (41,775      | )        
|                                               
|                                               
|                                               
|                                               
|ADDITIONAL PAID-IN CAPITAL                      |                                |                                                                                                                    | 10,374,536 |           |               |   | 10,351,146   |          
|                                               
|                                               
|                                               
|                                               
|DEFICIT                                         |                                |                                                                                                                    | (5,869,856 | )         |               |   | (4,591,713   | )        
|                                               
|                                               
|                                               
|                                               
|EQUITY ADJUSTMENT FROM FOREIGN CURRENCY        
|                                               
|                                               
|                                               
|                                               
|                                                | TRANSLATION                    |                                                                                                                    |            | (86,510   | )             |   |              | (61,890   | )     
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|TOTAL STOCKHOLDERS EQUITY                      |                                |                                                                                                                    | 4,412,552  |           |               |   | 5,668,923    |          
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY      |                                | $                                                                                                                  | 4,603,439  |           |               | $ | 5,889,797    |          
|                                                |                                |                                                                                                                    |            |           |               |   |              |          
|COMMITMENTS (Note 8)                           

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

4



---



##### 



Suite101.com, Inc.
Consolidated Statements of Operations
For the Nine-Month and Three-Month Periods Ended
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)

|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |            |  
|----------------------- | ------------------------------------------ | - | ------------------ | ---------- | ----------------- | - | -------- | ---------- | ---- | - | ---------- | ---------- | - | - | ---------- | ---------- | -
|                        |                                            |   | Three-months ended |            | Nine-months ended
|                        |                                            |   | September 30       |            | September 30     
|                        |                                            |   |                    |            |                  
|                        |                                            |   | 2001               |            | 2000              |   | 2001     |            | 2000
|                        |                                            |   |                    |            |                   |   |          |            |     
|SALES                   |                                            | $ | 11,781             |            |                   | $ | 405      |            |      | $ | 12,043     |            |   | $ | 1,223      |           
|                       
|                       
|                       
|                       
|COST OF SALES           |                                            |   | 7,014              |            |                   |   |         |            |      |   | 7,014      |            |   |   |           |           
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           
|GROSS PROFIT            |                                            |   | 4,767              |            |                   |   | 405      |            |      |   | 5,029      |            |   |   | 1,223      |           
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           
|OPERATING EXPENSES     
|                       
|                       
|                       
|                       
|                        | General and administrative                 |   |                    | 384,303    |                   |   |          | 303,288    |      |   |            | 1,241,494  |   |   |            | 1,569,059  |  
|                       
|                       
|                       
|                       
|                        | Marketing                                  |   |                    | 31,635     |                   |   |          | 109,974    |      |   |            | 201,125    |   |   |            | 448,250    |  
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           
|                        |                                            |   | 415,938            |            |                   |   | 413,262  |            |      |   | 1,442,619  |            |   |   | 2,017,309  |           
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           
|LOSS FROM OPERATIONS    |                                            |   | (411,171           | )          |                   |   | (412,857 | )          |      |   | (1,437,590 | )          |   |   | (2,016,086 | )         
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           
|OTHER INCOME (EXPENSES)
|                       
|                       
|                       
|                       
|                        | Loss on disposal of leasehold improvements |   |                    |           |                   |   |          |           |      |   |            | (7,210     | ) |   |            |           |  
|                       
|                       
|                       
|                       
|                        | Other income, net                          |   |                    | 38,654     |                   |   |          | 91,395     |      |   |            | 166,657    |   |   |            | 244,897    |  
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           
|                        |                                            |   | 38,654             |            |                   |   | 91,395   |            |      |   | 159,447    |            |   |   | 244,897    |           
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           
|NET LOSS                |                                            | $ | (372,517           | )          |                   | $ | (321,462 | )          |      | $ | (1,278,143 | )          |   | $ | (1,771,189 | )         
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           
|INCOME (LOSS) PER SHARE
|                       
|                       
|                       
|                       
|                        | Basic and Diluted                          |   | $                  | (0.03      | )                 |   | $        | (0.02      | )    |   | $          | (0.10      | ) |   | $          | (0.14      | )
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           
|                        | Weighted average common shares outstanding |   |                    | 13,155,046 |                   |   |          | 13,155,046 |      |   |            | 13,155,046 |   |   |            | 12,940,182 |  
|                        |                                            |   |                    |            |                   |   |          |            |      |   |            |            |   |   |            |           

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

5



---



##### 



Suite101.com, Inc.
Consolidated Statements of Cash Flows
For the Nine-Month and Three-Month Periods Ended
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)

|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |            |         |  
|------------------------------------------- | --------------------------------------------------------------------------- | ------------------------------------------ | --------- | ------------------ | ------- | ----------------- | --------- | -------- | ------- | ---- | ---------- | ---------- | ------- | - | ---------- | ---------- | ------- | -
|                                            |                                                                             |                                            |           | Three-months ended |         | Nine-months ended
|                                            |                                                                             |                                            |           | September 30,      |         | September 30,    
|                                            |                                                                             |                                            |           |                    |         |                  
|                                            |                                                                             |                                            |           | 2001               |         | 2000              |           | 2001     |         | 2000
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |     
|CASH FLOWS PROVIDED BY (USED IN)           
|                                           
|                                           
|                                           
|                                           
|OPERATING ACTIVITIES                       
|                                           
|                                           
|                                           
|                                           
|                                            | Net loss                                                                    |                                            | $         | (372,517           | )       |                   | $         | (321,462 | )       |      | $          | (1,278,143 | )       |   | $          | (1,771,189 | )      
|                                           
|                                           
|                                           
|                                           
|                                            | Adjustments to reconcile net loss to net cash
used in operating activities:
|                                           
|                                           
|                                           
|                                           
|                                            |                                                                             | Stock-based compensation                   |           |                    | 15,393  |                   |           |          | 19,417  |      |            |            | 46,392  |   |            |            | 319,882 |  
|                                           
|                                           
|                                           
|                                           
|                                            |                                                                             | Loss on disposal of leasehold improvements |           |                    |        |                   |           |          |        |      |            |            | 7,210   |   |            |            |        |  
|                                           
|                                           
|                                           
|                                           
|                                            |                                                                             | Amortization                               |           |                    | 12,605  |                   |           |          | 11,712  |      |            |            | 31,795  |   |            |            | 34,043  |  
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           
|                                            |                                                                             |                                            | (344,519  | )                  |         |                   | (290,333  | )        |         |      | (1,192,746 | )          |         |   | (1,417,264 | )         
|                                           
|                                           
|                                           
|                                           
|                                            | Changes in operating assets and liabilities                                
|                                           
|                                           
|                                           
|                                           
|                                            |                                                                             | Accounts receivable                        |           |                    | 7,045   |                   |           |          | (5,082  | )    |            |            | 6,313   |   |            |            | (909    | )
|                                           
|                                           
|                                           
|                                           
|                                            |                                                                             | Due from officer                           |           |                    |        |                   |           |          | 20,801  |      |            |            |        |   |            |            |        |  
|                                           
|                                           
|                                           
|                                           
|                                            |                                                                             | Prepaid expenses and deposits              |           |                    | (11,059 | )                 |           |          | (51,117 | )    |            |            | (29,379 | ) |            |            | (21,671 | )
|                                           
|                                           
|                                           
|                                           
|                                            |                                                                             | Accounts payable and accrued expenses      |           |                    | (28,149 | )                 |           |          | 8,390   |      |            |            | (19,433 | ) |            |            | 53,910  |  
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           
|                                            | Net cash used in operating activities                                       |                                            |           | (376,682           | )       |                   |           | (317,341 | )       |      |            | (1,235,245 | )       |   |            | (1,385,934 | )      
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           
|CASH FLOWS USED IN INVESTING ACTIVITIES    
|                                           
|                                           
|                                           
|                                           
|                                            | Purchase of capital assets                                                  |                                            |           | (28,257            | )       |                   |           | (5,874   | )       |      |            | (44,125    | )       |   |            | (31,033    | )      
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           
|                                            | Net cash used in investing activities                                       |                                            |           | (28,257            | )       |                   |           | (5,874   | )       |      |            | (44,125    | )       |   |            | (31,033    | )      
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           
|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
|                                           
|                                           
|                                           
|                                           
|                                            | Shares issued                                                               |                                            |           |                   |         |                   |           |         |         |      |            |           |         |   |            | 4,717,814  |        
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           
|                                            | Net cash provided by financing activities                                   |                                            |           |                   |         |                   |           |         |         |      |            |           |         |   |            | 4,717,814  |        
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           
|                                           
|                                           
|                                           
|                                           
|EFFECT OF EXCHANGE RATES ON CASH            |                                                                             |                                            | (25,578   | )                  |         |                   | (123,252  | )        |         |      | (25,738    | )          |         |   | (78,113    | )         
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           
|NET INCREASE (DECREASE) IN CASH             |                                                                             |                                            | (430,517  | )                  |         |                   | (446,467  | )        |         |      | (1,305,108 | )          |         |   | 3,222,734  |           
|                                           
|                                           
|                                           
|                                           
|CASH AT BEGINNING OF PERIOD                 |                                                                             |                                            | 4,796,620 |                    |         |                   | 6,516,639 |          |         |      | 5,671,211  |            |         |   | 2,847,438  |           
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           
|CASH AT END OF PERIOD                       |                                                                             | $                                          | 4,366,103 |                    |         | $                 | 6,070,172 |          |         | $    | 4,366,103  |            |         | $ | 6,070,172  |           
|                                            |                                                                             |                                            |           |                    |         |                   |           |          |         |      |            |            |         |   |            |           

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

6



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##### 



Suite101.com, Inc.
Notes to Consolidated Financial Statements
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)



|1. |  | THE COMPANY
|-- |  | -----------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Suite101.com, Inc. (the Company) was incorporated in the State of
California, United States on May 20, 1991, and reincorporated in the State
of Delaware, United States on December 31, 1993. By way of a reverse
takeover on December 8, 1998, the Company acquired a wholly-owned
subsidiary, i5ive communications inc. (i5ive). i5ive is engaged in the
operation and maintenance of a World Wide Web based directory and on-line
publishing community.



| |  | Going Concern
| |  | -------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accompanying consolidated financial statements have been presented
assuming the Company will continue as a going concern. Based on the
current level of expenditures, the Company has sufficient funds to meet
expenses for at least one year. At September 30, 2001, the Company had
accumulated $5,869,856 in losses and had no material revenue producing
operations. At the date of this report, the Companys ability to continue
as a going concern is dependent upon its ability to raise additional
capital or merge with a revenue producing venture partner. These matters
raise doubt about the Companys ability to continue as a going concern.
No adjustments have been made in the accompanying consolidated financial
statements to provide for this uncertainty.



| |  | Basis of Presentation
| |  | ---------------------



| |                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries, Endovascular, Inc., a California
corporation and i5ive, a Canadian company. All intercompany accounts and
transactions have been eliminated in consolidation. As at September 30,
2001, there were no operations in Endovascular, Inc.



|2. |  | SIGNIFICANT ACCOUNTING POLICIES
|-- |  | -------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The consolidated financial statements of the Company have been prepared in
accordance with generally accepted accounting principles. Because a
precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period
necessarily involves the use of estimates, which have been made using
careful judgment by management.

7



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##### 



Suite101.com, Inc.
Notes to Consolidated Financial Statements
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)



|2. |  | SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- |  | -------------------------------------------



| |                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The consolidated financial statements have, in managements opinion, been
properly prepared within reasonable limits of materiality and within the
framework of the significant accounting policies summarized below:



| | (a) |  | Property, Plant and Equipment
| | --- |  | -----------------------------



| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | Property, plant and equipment are capitalized at original cost and
amortized over their estimated useful lives at the following annual
bases and rates:

|                                                                 |  |                                                              
|---------------------------------------------------------------- |  | -------------------------------------------------------------
|Computer equipment
Furniture and fixtures
Leasehold improvements |  | 30% declining balance
20% declining balance
20% straight-line



| |                                                                      
| | ---------------------------------------------------------------------
| | One-half the normal amortization is taken in the year of
acquisition.



| | (b) |  | Research and Development
| | --- |  | ------------------------

| |                                                         
| | --------------------------------------------------------
| | Research and development costs are expensed as incurred.



| | (c) |  | Foreign Exchange
| | --- |  | ----------------



| |                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Unless otherwise stated, all amounts are in United States dollars.
The functional currency of i5ive is the Canadian dollar. Hence, all
asset and liability accounts have been translated using the exchange
rate as at September 30, 2001 and September 30, 2000 and all
revenues and expenses have been translated using the average
exchange rate for each period. The rates used were as follows:

|                                        |  |      |       |      |  |  |       | 
|--------------------------------------- |  | ---- | ----- | ---- |  |  | ----- | 
|(equivalent CDN $ per U.S.$)            |  | 2001 |       | 2000
|                                        |  |      |       |     
|September 30 rate                       |  |      | .6335 |      |  |  | .6651 | 
|                                       
|                                       
|                                       
|                                       
|Average rate for the three-month period |  |      | .6468 |      |  |  | .6747 | 



| | (d) |  | Income Taxes
| | --- |  | ------------



| |                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company accounts for income taxes in accordance with the
provisions of Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes,which requires the recognition of
deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial
statements or tax returns.

8



---



##### 



Suite101.com, Inc.
Notes to Consolidated Financial Statements
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)



|2. |  | SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- |  | -------------------------------------------



| | (d) |  | Income Taxes (Continued)
| | --- |  | ------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement
and the tax basis of assets and liabilities using enacted rates in
effect for the year in which the differences are expected to
reverse. Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized.



| | (e) |  | Stock Options
| | --- |  | -------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation,encourages, but does not require,
companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to
continue to account for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees,and related
interpretations. Accordingly, compensation cost for stock options
is measured as the excess, if any, of the quoted market price of the
Companys stock at the date of the grant over the amount an employee
must pay to acquire the stock.



| | (f) |  | Net Loss Per Common Share
| | --- |  | -------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company computes its loss per share in accordance with Statement
of Financial Accounting Standards (SFAS) No. 128, Earnings Per
Share(EPS) issued in February 1997. SFAS No. 128 requires dual
presentation of basic EPS and diluted EPS on the face of the income
statement for entities with complex capital structures. Basic EPS
is computed as net income divided by the weighted average number of
common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur from common shares issuable
through stock options, warrants and other convertible securities.



|3. |  | RELATED PARTY TRANSACTIONS
|-- |  | --------------------------



| | (a) |  | The Company has incurred salaries and consulting fees of
$103,579 (2000  $91,148) to three directors of the Company. These
items have been recorded at the exchange amount.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Accounts payable include $132,689 (2000
 $0) due to a director for
wages and expenses.                                                                                     

9



---



##### 



Suite101.com, Inc.
Notes to Consolidated Financial Statements
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)



|4. |  | CAPITAL STOCK
|-- |  | -------------



| | (a) |  | In April 1999, the Company completed a private placement of
1,000,000 units for $5,000,000. Each unit was comprised of two
common shares and one warrant entitling the holder to purchase an
additional common share for $4.50 on or before February 29, 2000.
The Company incurred $163,750 in expenses concerning this share
issuance and issued 15,000 warrants entitling the holder to purchase
an additional common share for $5.50 on or before February 29, 2002.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | During the nine-month period ended September 30, 2000, all 1,000,000
warrants were exercised to net the Company $4,500,000.



| | (b) |  | During the nine-month period ended September 30, 2000, the
Company issued 34,396 common shares for total proceeds of $51,594
upon exercise of stock options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (c) |  | During the nine-month period ended September 30, 2000, the
Company issued 625,000 warrants as part of the private placement of
Notes payable. Each warrant entitles the holder to purchase one
common share at a price of $5.00 up to July 15, 2002. In the event
that at any time prior to July 15, 2002 (a) the shares of common
stock issuable on exercise of the warrants have been registered under
the Securities Act of 1933, as amended (the Securities Act), and
(b) the average of the closing bid and asked prices for the Companys
common stock as quoted on the OTC Bulletin Board (or such other
automated trading system or national securities exchange as is the
principal market for the Companys common stock) exceeds (U.S.) $9.00
per share for a period of ten (10) business days, then the warrants
will expire at 5:00 PM, New York City time, on a date sixty (60) days
thereafter.



|5. |  | STOCK OPTIONS                          
|-- |  | ---------------------------------------
|  
|   |  | The Companys 1998 Stock Incentive Plan



| |                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In December 1998, the Company adopted the 1998 Stock Incentive Plan (the
Plan). Under the Plan, as amended, 3,900,000 shares of common stock
have been reserved for issuance on exercise of options granted under the
Plan.



| |                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On the date of the closing of the transaction with i5ive, outstanding
options granted under i5ives 1998 Stock Incentive Plan were assumed by
the Company under the Plan and no further option grants will be made under
i5ives Plan. The assumed options have substantially the same terms,
subject to anti-dilution adjustment, as are in effect for grants made
under the Companys Plan.

10



---



##### 



Suite101.com, Inc.
Notes to Consolidated Financial Statements
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)



|5. |  | STOCK OPTIONS (Continued)
|-- |  | -------------------------

| |                                                    
| | ---------------------------------------------------
| | The Companys 1998 Stock Incentive Plan (Continued)



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Board of Directors of the Company may amend or modify the Plan at any
time, subject to any required stockholder approval. The Plan will
terminate on the earliest of (i) 10 years after the Plan Effective Date,
(ii) the date on which all shares available for issuance under the Plan
have been issued as fully-vested shares or (iii) the termination of all
outstanding options in connection with certain changes in control or
ownership of the Company.



| |                                                                                   
| | ----------------------------------------------------------------------------------
| | The following is a table of stock options under the Plan as at September
30, 2001:

|         |   |            |  |            |          |              |                    |            |                    |               |  |               |           |               |  |             |         |  |  |  |        |     |  |  |         |  |  |         |         | 
|-------- | - | ---------- |  | ---------- | -------- | ------------ | ------------------ | ---------- | ------------------ | ------------- |  | ------------- | --------- | ------------- |  | ----------- | ------- |  |  |  | ------ | --- |  |  | ------- |  |  | ------- | ------- | 
|         |   |            |  |            |          |              |                    |            |                    |               |  |               |           |               |  |             |         |  |  |  |        |     |  |  |         |  |  | Balance
|Option   |   | Expiry     |  | Vesting    |          | Balance      |                    | Granted    |                    |               |  |               |           | Balance       |  | Exercisable
|Exercise |   | Date       |  | Date       |          | December 31, |                    | During     |                    | Exercised (E) |  | September 30, |           | September 30,
|Price    |   | (mm/dd/yy) |  | (mm/dd/yy) |          | 2000         |                    | the Period |                    | Cancelled (C) |  | 2001          |           | 2001         
|         |   |            |  |            |          |              |                    |            |                    |               |  |               |           |              
|         | $ | 1.50       |  |            | 12/04/03 |              |                    |            | 12/04/99           |               |  |               | 184,649   |               |  |             |        |  |  |  | 23,223 | (C) |  |  | 161,426 |  |  |         | 161,426 | 
|        
|        
|        
|        
|         |   | 1.50       |  |            | 12/04/03 |              |                    |            | 12/04/00           |               |  |               | 36,114    |               |  |             |        |  |  |  | 6,558  | (C) |  |  | 29,556  |  |  |         | 29,556  | 
|        
|        
|        
|        
|         |   | 1.50       |  |            | 02/23/09 |              |                    |            | (1/3) 02/23/00     |               |  |               | 50,000    |               |  |             |        |  |  |  |       |     |  |  | 50,000  |  |  |         | 33,334  | 
|        
|        
|        
|        
|         |   |            |  |            |          |              | (1/3) 02/23/01     |           
|        
|        
|        
|        
|         |   |            |  |            |          |              | (1/3) 02/23/02     |           
|        
|        
|        
|        
|         |   | 1.50       |  |            | 04/27/09 |              |                    |            | (1/3) 04/27/00     |               |  |               | 50,000    |               |  |             |        |  |  |  |       |     |  |  | 50,000  |  |  |         | 33,334  | 
|        
|        
|        
|        
|         |   |            |  |            |          |              | (1/3) 04/27/01     |           
|        
|        
|        
|        
|         |   |            |  |            |          |              | (1/3) 04/27/02     |           
|        
|        
|        
|        
|         |   | 1.50       |  |            | 06/11/09 |              |                    |            | 06/11/00           |               |  |               | 10,000    |               |  |             |        |  |  |  |       |     |  |  | 10,000  |  |  |         | 10,000  | 
|        
|        
|        
|        
|         |   | 1.50       |  |            | 10/25/05 |              |                    |            | (1/2) 10/25/00     |               |  |               | 100,000   |               |  |             |        |  |  |  |       |     |  |  | 100,000 |  |  |         | 50,000  | 
|        
|        
|        
|        
|         |   |            |  |            |          |              | (1/2) 10/25/01     |           
|        
|        
|        
|        
|         |   | 1.50       |  |            | 11/13/04 |              |                    |            | 11/13/99           |               |  |               | 137,900   |               |  |             |        |  |  |  |       |     |  |  | 137,900 |  |  |         | 137,900 | 
|        
|        
|        
|        
|         |   | 1.50       |  |            | 11/13/04 |              |                    |            | 11/13/00           |               |  |               | 720,000   |               |  |             |        |  |  |  | 50,100 | (C) |  |  | 669,900 |  |  |         | 669,900 | 
|        
|        
|        
|        
|         |   | 3.53       |  |            | 01/31/02 |              |                    |            | (1/2) 01/31/00     |               |  |               | 4,000     |               |  |             |        |  |  |  |       |     |  |  | 4,000   |  |  |         | 4,000   | 
|        
|        
|        
|        
|         |   |            |  |            |          |              | (1/2) 01/31/01     |           
|        
|        
|        
|        
|         |   | 1.50       |  |            | 03/21/05 |              |                    |            | 03/21/01           |               |  |               | 20,000    |               |  |             |        |  |  |  |       |     |  |  | 20,000  |  |  |         | 20,000  | 
|        
|        
|        
|        
|         |   | 1.50       |  |            | 01/31/05 |              |                    |            | 16,668  01/31/01  |               |  |               | 70,000    |               |  |             |        |  |  |  | 20,000 | (C) |  |  | 50,000  |  |  |         | 16,668  | 
|        
|        
|        
|        
|         |   |            |  |            |          |              | 16,666  01/31/02  |           
|        
|        
|        
|        
|         |   |            |  |            |          |              | 16,666  01/31/03  |           
|        
|        
|        
|        
|         |   | 1.50       |  |            | 04/17/05 |              |                    |            | 20,402  04/17/00  |               |  |               | 110,805   |               |  |             |        |  |  |  | 50,738 | (C) |  |  | 60,067  |  |  |         | 30,047  | 
|        
|        
|        
|        
|         |   |            |  |            |          |              | 30,137  04/17/01  |           
|        
|        
|        
|        
|         |   |            |  |            |          |              | 30,133  04/17/02  |           
|        
|        
|        
|        
|         |   |            |  |            |          |              | 30,133  04/17/03  |           
|        
|        
|        
|        
|         |   | 1.50       |  |            | 07/05/05 |              |                    |            | 3,222  07/05/00   |               |  |               | 56,443    |               |  |             |        |  |  |  |       |     |  |  | 56,443  |  |  |         | 20,962  | 
|        
|        
|        
|        
|         |   |            |  |            |          |              | 17,740 - 07/05/01  |           
|        
|        
|        
|        
|         |   |            |  |            |          |              | 17,740 - 07/05/02  |           
|        
|        
|        
|        
|         |   |            |  |            |          |              | 17,741 - 07/05/03  |           
|        
|        
|        
|        
|         |   | 0.25       |  |            | 12/21/05 |              |                    |            | 585,476  12/21/00 |               |  |               | 1,012,578 |               |  |             |        |  |  |  | 13,342 | (C) |  |  | 999,236 |  |  |         | 578,559 | 
|        
|        
|        
|        
|         |   |            |  |            |          |              | 420,677  12/21/01 |           
|        
|        
|        
|        
|         |   | 1.50       |  |            | 06/12/10 |              |                    |            | 06/12/00           |               |  |               | 10,000    |               |  |             |        |  |  |  |       |     |  |  | 10,000  |  |  |         | 10,000  | 
|        
|        
|        
|        
|         |   | 0.25       |  |            | 01/04/06 |              |                    |            | 136,073  01/04/01 |               |  |               |          |               |  |             | 569,505 |  |  |  | 47,495 | (C) |  |  | 522,010 |  |  |         | 134,773 | 
|        
|        
|        
|        
|         |   |            |  |            |          |              | 376,507  01/04/02 |           
|        
|        
|        
|        
|         |   |            |  |            |          |              | 50,000  01/04/03  |           
|        
|        
|        
|        
|         |   | 0.25       |  |            | 05/10/06 |              |                    |            | 05/10/01           |               |  |               |          |               |  |             | 5,939   |  |  |  | 1,671  | (C) |  |  | 4,268   |  |  |         | 4,268   | 
|        
|        
|        
|        
|         |   | 0.25       |  |            | 06/04/11 |              |                    |            | 06/04/01           |               |  |               |          |               |  |             | 10,000  |  |  |  |       |     |  |  | 10,000  |  |  |         | 10,000  | 

11



---



##### 



Suite101.com, Inc.
Notes to Consolidated Financial Statements
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)



|5. |  | STOCK OPTIONS (Continued)
|-- |  | -------------------------

| |                                                    
| | ---------------------------------------------------
|
| | The Companys 1998 Stock Incentive Plan (Continued)



| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | Of the above options, the following options were originally granted with
exercise prices are follows:

|                         |             |  |          |                        |  |       |  | 
|------------------------ | ----------- |  | -------- | ---------------------- |  | ----- |  | 
|New OptionExercise Price | Expiry Date |  |          | OriginalExercise Price
|                         |             | 
|1.50                     |             |  | 02/23/09 |                        |  | 3.34 
|                        
|                        
|                        
|                        
|1.50                     |             |  | 04/27/09 |                        |  | 6.38 
|                        
|                        
|                        
|                        
|1.50                     |             |  | 06/11/09 |                        |  | 4.13 
|                        
|                        
|                        
|                        
|1.50                     |             |  | 01/31/05 |                        |  | 3.53 
|                        
|                        
|                        
|                        
|1.50                     |             |  | 03/21/05 |                        |  | 7.88 
|                        
|                        
|                        
|                        
|1.50                     |             |  | 06/12/10 |                        |  | 2.375



| |                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The above options are granted for services provided to the Company. Of
the above options, the following options are to non-employees and have
been reflected on the financial statements and valued, using the
Black-Scholes model with a risk-free rate of 5% and no expected dividends:

|                                                      |  |                |                               |            |  |                                                                                                    |            |              |                                           |  |  |                           |          |  |                                                 | 
|----------------------------------------------------- |  | -------------- | ----------------------------- | ---------- |  | -------------------------------------------------------------------------------------------------- | ---------- | ------------ | ----------------------------------------- |  |  | ------------------------- | -------- |  | ----------------------------------------------- | 
|Number of                                             |  |                |                               |            |  |                                                                                                    |            |              |                                           |  |  | Volatility                | Expected
|Options                                               |  | Exercise Price |                               | Grant Date |  | Value                                                                                              | Assumption | Options Life
|                                                     
|100,000  
50,000  
4,000  
100,000  
20,000  
100,000 |  |                | 1.50
3.56
3.53
7.00
7.88
0.25 |            |  | October 25, 1999
January 6, 2000
January 31, 2000
February 15, 2000
March 21, 2000
January 4, 2001 |            | $            | 99,750
99,635
5,120
203,970
45,922
23,390 |  |  | 272%
60%
60%
20%
20%
275% |          |  | 5 years
5 years
2 years
5 years
5 years
5 years



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The remaining options issued were to officers, directors and employees.
As the options were granted at exercise prices based on the market price
of the Companys shares at the dates of the grant, no compensation cost is
recognized. However, under SFAS 123, the impact on net income and net
income per share of the fair value of stock options must be measured and
disclosed on a fair value based method on a pro forma basis. The fair
value of the employees purchase rights under SFAS 123 was estimated using
the Black-Scholes model with the following assumptions used for options:
risk-free rate was 5.0%, expected volatility of 279%, 272% 263% and 257%
for the $1.50 options, and 275% for the $0.25 options, an expected option
life of 5 years and no expected dividends.

12



---



##### 



Suite101.com, Inc.
Notes to Consolidated Financial Statements
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)



|5. |  | STOCK OPTIONS (Continued)
|-- |  | -------------------------

| |                                                    
| | ---------------------------------------------------
|
| | The Companys 1998 Stock Incentive Plan (Continued)



| |                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If compensation expense had been determined pursuant to SFAS 123, the
Companys net loss and net loss per share for the nine-month period ended
September 30, 2001 would have been as follows:

|                         |             |  |   |            |  
|------------------------ | ----------- |  | - | ---------- | -
|Net loss                 |             |  |   |            |  
|                        
|                        
|                        
|                        
|                         | As reported |  | $ | (1,771,189 | )
|                        
|                        
|                        
|                        
|                         | Pro forma   |  | $ | (1,994,938 | )
|                        
|                        
|                        
|                        
|Basic net loss per share |             |  |   |            |  
|                        
|                        
|                        
|                        
|                         | As reported |  | $ | (0.10      | )
|                        
|                        
|                        
|                        
|                         | Pro forma   |  | $ | (0.15      | )



|6. |  | INCOME TAXES
|-- |  | ------------



| |                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At September 30, 2001, there were deferred income tax assets resulting
primarily from operating loss carryforwards for Canadian tax purposes
totaling approximately $1,720,000 less a valuation allowance of
$1,720,000. The valuation allowance on deferred tax assets increased by
$170,000 during the period ended September 30, 2001.



| |                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At September 30, 2001, the Company had net operating loss carryforwards
for Canadian tax purposes of approximately $4,295,000. These
carryforwards begin to expire in 2003.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At September 30, 2001, there were deferred income tax assets resulting
from operating loss carryforwards for U.S. income tax purposes totaling
approximately $548,000 less a valuation allowance of $548,000. The
valuation allowance on deferred tax assets increased by $68,000 during the
period ended September 30, 2001. The Company has approximately $1,280,000
available in operating loss carryforwards, which may be carried forward
and applied against U.S. operating income.



|7. |  | FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK
|-- |  | -------------------------------------------------------



| |                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys financial instruments consist of cash, accounts receivable
and accounts payable. It is managements opinion that the Company is not
exposed to significant interest, currency or credit risks arising from
these financial instruments. The fair value of these financial
instruments approximates their carrying values.

13



---



##### 



Suite101.com, Inc.
Notes to Consolidated Financial Statements
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)



|8. |  | COMMITMENTS
|-- |  | -----------



| | (a) |  | On March 23, 1999, the Company entered into a twelve-month
agreement with a consultant, which provided for fees of $5,000 per
month. In addition, the consultant was issued a one-year warrant to
purchase 50,000 shares of common stock at a price of $3.06 per share.
This warrant has been valued at $33,420 using the Black-Scholes
model as described earlier and is reflected as compensation on these
financial statements. During the nine-month period ended September
30, 2000, this warrant was exercised to net the Company $153,000.
Subsequent to December 31, 1999, this agreement was amended to
increase the fees to $20,900 for the six-month period beginning
August 23, 1999, extend the period of services by six-months, and to
issue a warrant to purchase 25,440 shares of common stock of the
Company at a price of $5.50 per shares expiring February 28, 2002.
This warrant has been valued at $11,750 using the Black-Scholes model
and is reflected as compensation on these financial statements.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | During the nine-month period ended September 30, 2000, the
Company entered into a one-year agreement with a consultant. The
consultant was issued a warrant to purchase 14,000 shares of common
stock of the Company at a price of $5.50 per share, expiring on
February 26, 2002. This warrant has been valued at $9,562 using the
Black-Scholes model as described earlier and is reflected as
compensation on these financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (c) |  | The Company has entered into an agreement dated February 17,
2000 for consulting and corporate finance services which provides for
the issue of 2-year warrants at the following milestones:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|                                                                                                   |  |  |          |  |          |  |  | 
|-------------------------------------------------------------------------------------------------- |  |  | -------- |  | -------- |  |  | 
|Upon execution of consulting agreement                                                             |  |  | - 25,000 |  | (issued) | 
|                                                                                                  
|                                                                                                  
|                                                                                                  
|                                                                                                  
|On signed letter of intent with target customer                                                    |  |  | - 25,000 | 
|                                                                                                  
|                                                                                                  
|                                                                                                  
|                                                                                                  
|On signed agreement with target customer                                                           |  |  | - 25,000 | 
|                                                                                                  
|                                                                                                  
|                                                                                                  
|                                                                                                  
|On signed agency agreement to market similar program   to others in same industry in North America |  |  | - 25,000 | 



| |                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In addition, the agreement provides for additional warrants to be
issued over 3 years based on 10% of any payout to participants under
the plan developed with customer(s) resulting from the agency
agreement. The warrants to be issued are based on the average price
of the Companys stock for the 10-day period prior to the issuance
of the warrants, less a 20% discount.



| |                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The initial 25,000 warrants issued have an exercise price of $4.96
per share and expire February 17, 2002. They have been valued at
$115,060 using the Black-Scholes model as described earlier and have
been reflected as compensation on these financial statements.

14



---



##### 



Suite101.com, Inc.
Notes to Consolidated Financial Statements
September 30, 2001 and September 30, 2000
(Unaudited)

(Expressed in U.S. dollars)



|8. |  | COMMITMENTS (Continued)
|-- |  | -----------------------



| | (d) |  | During the nine-month period ended September 30, 2001, the
Company entered into an operating lease for its office space. The
lease expires March 31, 2003 and provides for monthly payments
commencing May 1, 2001 of $1,914 plus the Companys proportionate
share of operating costs and taxes (currently $1,049 per month).
Under the terms of the lease, the Company has an option to renew the
lease for a further period of three years.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|9. |  | COMPREHENSIVE INCOME (LOSS)
|-- |  | ---------------------------

|                                       |                                          |   |               |         |               |   |            |         |  
|-------------------------------------- | ---------------------------------------- | - | ------------- | ------- | ------------- | - | ---------- | ------- | -
|                                       |                                          |   | September 30, |         | September 30,
|                                       |                                          |   | 2001          |         | 2000         
|                                       |                                          |   |               |         |              
|Net loss as reported                   |                                          | $ | (1,278,143    | )       |               | $ | (1,771,189 | )      
|                                      
|                                      
|                                      
|                                      
|Add (deduct)                           |                                          |   |               |         |               |   |            |        
|                                      
|                                      
|                                      
|                                      
|                                       | Foreign currency translation adjustments |   |               | (24,620 | )             |   |            | (83,529 | )
|                                       |                                          |   |               |         |               |   |            |        
|Comprehensive Income (Loss)            |                                          | $ | (1,302,763    | )       |               | $ | (1,854,718 | )      
|                                       |                                          |   |               |         |               |   |            |        
|Accumulated other
comprehensive income |                                          |   |               |         |               |   |            |        
|                                      
|                                      
|                                      
|                                      
|                                       | Foreign currency translation
adjustments |   |               |         |               |   |            |         |  
|                                      
|                                      
|                                      
|                                      
|                                       | Balance at beginning of period           |   | $             | (61,890 | )             |   | $          | 9,357   |  
|                                      
|                                      
|                                      
|                                      
|                                       | Change during the period                 |   |               | (24,620 | )             |   |            | (83,529 | )
|                                       |                                          |   |               |         |               |   |            |        
|                                       | Balance at end of period                 |   | $             | (86,510 | )             |   | $          | (74,172 | )
|                                       |                                          |   |               |         |               |   |            |        

15



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Item 2.    Managements Discussion and Analysis or Plan of Operations

General

The following discussion and analysis should be read in conjunction with,
and is qualified in its entirety by, the more detailed information including
our Financial Statements and the Notes thereto included in our Annual Report on
Form 10-KSB for the year ended December 31, 2000. This Quarterly Report
contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from the results discussed in the
forward-looking statements. Factors that may cause or contribute to such
differences include the Risk Factors set forth below as well as the Risk
Factors contained in our Annual Report. See Cautionary Statement for
Purposes of the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995 herein.

A Comparison of Our Operating Results for the Nine-Month Period Ended September 30, 2001 and theNine-Month Period Ended September 30, 2000

During the nine months ended September 30, 2001, our sales were $12,043
(gross profit of $5,029) compared with sales (and gross profit) of $1,223
during the nine months ended September 30, 2000. Virtually all of our sales
revenue earned during the first nine months of 2001 is attributable to revenue
generated from two service contracts that we entered into with Barnes&Noble.com
to provide introductions for a series of e-books and to provide proofreading
services for the related digitized e-books. During 2001, $260 in sales and all
our sales during 2000 were attributable to software licensing revenues, these
licenses have expired and therefore this source of revenue has ceased.

General and administrative expenses were $1,241,494 in the nine months
ended September 30, 2001 compared with $1,569,059 during the nine months ended
September 30, 2000. This decrease was primarily the result of a decrease in
consulting fees paid to third parties, a decrease in professional fees paid and
a decline in software purchases. Marketing expenses were $201,125 during the
nine months ended September 30, 2001 compared with $448,250 during the nine
months ended September 30, 2000. This decrease was primarily due to the
decrease in our marketing activities focused at increasing our membership.
Since the end of 2000, we have refocused our marketing programs to aim at
developing our brand and repositioning the Company as an online publishing
community. As a consequence, our marketing expenses have declined.

Our Loss From Operations was $1,437,590 during the nine months ended
September 30, 2001 compared with $2,016,086 during the nine months ended
September 30, 2000. The decrease in our Loss From Operations during the nine
months ended September 30, 2001 compared with that of the nine months ended
September 30, 2000 was the result of the decrease in our general,
administrative and marketing expenditures.

Other income was $159,447 during the nine months ended September 30, 2001
compared with $244,897 during the nine months ended September 30, 2000. This
decrease was the result of

16



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decreased interest earned on bank balances and the
write-off of the leasehold improvements of our former office premises.

Our Net Loss was $1,278,143 during the nine months ended September 30,
2001 compared with $1,771,189 during the nine months ended September 30, 2000.
The decrease in our Net Loss for the nine months ended September 30, 2001
compared with the nine months ended September 30, 2000 was the result of the
decrease in our general, administrative and marketing expenditures.

Liquidity and Capital Resources

The report of our independent auditors on their audit of our financial
statements as of December 31, 2000 contains an explanatory paragraph that
describes an uncertainty as to our ability to continue as a going concern due
to our recurring losses. In February 2000, we realized gross proceeds of $4.5
million from the exercise of warrants issued in a 1999 private sale of
securities. Also, in February 2000, we realized gross proceeds of $2.5 million
from a private sale of our securities. During 2000, we realized gross proceeds
of approximately $218,000 on the exercise of stock options and from the
exercise of warrants. At September 30, 2001, we had cash of $4,366,103. We
believe these funds will be sufficient to meet our anticipated needs for
working capital and capital expenditures for the next 12 months.

Our promissory notes due on June 30, 2000 in the principal amount of $2.5
million issued in the February 2000 private sale of our securities were repaid
in April 2000, together with accrued interest.

As a result of our limited operating history, we have limited meaningful
historical financial data upon which to base planned operating expenses.
Accordingly, our anticipated expense levels in the future are based in part on
our expectations as to future revenue from proposed revenue programs, and
anticipated growth in visitor traffic and membership. We expect that these
expense levels will become, to a large extent, fixed. Revenues and operating
results generally will depend on the volume of, timing of and ability to enter
into third-party contracts and to complete transactions, which are difficult to
forecast. In addition, there can be no assurance that we will be able to
accurately predict our net revenue, particularly in light of the early stages
of our revenue model, the intense competition among Internet businesses and
competition in the publishing industry, our limited operating history and the
uncertainty as to the broad acceptance of the Web as a publishing medium and,
in general, adverse developments in the Internet industry and adverse
economic developments and stock market conditions. We may be unable to adjust
spending in a timely manner to compensate for any unexpected failure of revenue
to materialize or revenue shortfall or other unanticipated changes in the
epublishing industry. Any failure by us to accurately make such predictions
would have a material adverse effect on our business, results of operations and
financial condition.

We may seek to raise additional funds in order to fund more aggressive
promotions and more rapid expansion, to develop newer or enhanced services, to
enter into strategic alliances, to respond to competitive pressures or to
acquire complementary businesses, technologies or services. There can be no
assurance that any additional financing will be available on terms favorable to
us, if at all. If adequate funds are not available or not available on
acceptable terms, we may not be

17



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able to fund our operations, promote our
revenue programs as we desire, or, develop and enhance services or respond to
competitive pressures. Any such inability could have a material adverse
effect on our business, results of operations and financial condition.
Additional funds raised through the issuance of equity or convertible debt
securities, will result in reducing the percentage ownership of our
stockholders, and stockholders may experience additional dilution and such
securities may have rights, preferences or privileges senior to those of the
rights of our Common Stock.

Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private SecuritiesLitigation Reform Act of 1995

With the exception of historical matters, the matters discussed above and
elsewhere in this Quarterly Report are forward-looking statements as defined
under the Securities Exchange Act of 1934, as amended, that involve risks and
uncertainties. We intend that such forward-looking statements be covered by
the safe harbor provisions for forward-looking statements contained in that act
and we are including this statement for purposes of complying with these safe
harbor provisions. The forward-looking statements discussed in this Quarterly
Report appear in various places including: Item 2  Managements Discussion
and Analysis or Plan of Operations, Liquidity and Capital Resources, as well
as in Risk Factors. We caution readers that the risk factors described in
our Annual Report on Form 10-KSB, as well as those described elsewhere in this
Quarterly Report, or in our other filings with the Commission, in some cases
have affected, and in the future could affect our actual results, could cause
our actual results during 2001, 2002 and beyond, to differ materially from
those expressed in any forward-looking statements, and could cause our
development and the development of our business plans to be different than
expressed in those statements. Important factors that could impact our
business development and cause actual results to differ materially from the
forward-looking statements in this Quarterly Report include, among others, the
accuracy of assumptions made by management as to the future growth, anticipated
revenues, and business direction of the Internet, the development of
epublishing through the facilities of the Internet and the marketability of our
distributed management capabilities of our Enabling Platform, our early stage
of development and absence of material revenues, the usual unforeseeable risks
encountered by any new enterprise, our inability to attract readership to our
Community, our potential need for additional capital and our possible inability
to attract such capital on acceptable terms or at all, the uncertainties of the
levels of our future operating expenses, fluctuations in our quarterly
revenues, the level of consumer acceptance of ecommerce, our inability to enter
into service contracts and other relationships to develop our revenue programs,
intense competition among Internet portals and ecommerce participants, our
inability to manage our growth, the impact of possible future government
regulation, the possible volatility of the market price for our Common Stock,
and the impact of additional shares possibly coming onto the market for sale.

18



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RISK FACTORS

An investment in shares of our Common Stock involves a high degree of
risk. You should consider the following factors, in addition to the other
information contained in this Quarterly Report, in evaluating our business and
proposed activities. You should also see the Cautionary Statement for
Purposes of the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1996 regarding risks and uncertainties relating to us and to
forward looking statements herein.

Risks We Face Arising Out of the Early Stage of Our Business

Early Development Stage

We are in the early stage of developing our business plan and operations.
We have realized no material revenues to date from our Internet operations
activities. From April 1996 through September 30, 2001, our total revenues
from our Internet operations activities were negligible. During that period,
we accumulated losses of $5,869,856. We have not achieved profitability on a
quarterly or annual basis to date, and anticipate that we will continue to
incur net losses for the foreseeable future. The extent of our losses will be
dependent, in part, on the amount and rates of our expenditures and our ability
to grow our Internet revenue from ecommerce transactions and services that we
provide. We expect we will continue to incur material operating expenses,
especially in the areas of business development, public relations, brand
marketing and in promoting our revenue programs. As a result, we will need to
create and continue to generate material revenue if we are to achieve
profitability and maintain our financial condition. We believe that
period-to-period comparisons of our financial condition and operating results
will not be meaningful and that you should not rely on the results for any
period as an indication of our future performance. To the extent that our
revenues do not grow at anticipated rates or that increases in our operating
expenses precede or are not subsequently followed by commensurate increases in
revenue, or that we are unable to adjust operating expense levels accordingly,
our business, results of operations and financial condition will be materially
and adversely affected. There can be no assurance that our operating losses
will not increase in the future or that we will ever achieve or sustain
profitability.

Limited Operating History; Anticipated Losses; No Assurance of Profitability

i5ive, our wholly-owned subsidiary through which we conduct our Internet
operations, was founded in April 1996 and has had no material revenues to date.
Accordingly, our current business plans and prospects are not able to be
evaluated on the basis of our operating history. Our business plans and
prospects must be considered in light of the risks, expenses and problems
frequently encountered by companies in the early stages of development. This
must be considered, particularly as to companies entering new and rapidly
developing markets like the Internet. These risks include:



| |  | The absence of a recurring source of material revenues  
|- |  | --------------------------------------------------------
| 
| |  | The recent adverse developments in the Internet industry

19



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| |  | Our inability to develop and commercialize strategic
relationships that produce material revenues                                                                                                                      
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Our inability to penetrate and develop material revenues from
the e-publishing industry                                                                                                                                
| 
| |  | The possibility that the Internet will fail to achieve broad
acceptance as a commercial medium                                                                                                                         
| 
| |  | The lack of acceptance by potential partners of our
distributive intellect and management (our Enabling Platform)                                                                                                      
| 
| |  | Our inability to continue to attract visitors, or retain Senior
Managing, Managing and Contributing Editors (our Editorial Team)                                                                                     
| 
| |  | Our inability to generate significant revenues from utilizing
the potentials of our Enabling Platform                                                                                                                  
| 
| |  | Risks associated with a new and unproven business concept                                                                                                                                                              
| 
| |  | Our ability to anticipate and adapt to a developing market                                                                                                                                                             
| 
| |  | The failure of our network infrastructure (including our
servers, hardware and software) to efficiently handle our Internet
traffic                                                                                    
| 
| |  | Changes in laws and taxes that adversely affect our business                                                                                                                                                           
| 
| |  | The possibility that we will be unable to manage effectively
any rapid expansion of our operations, including the amount and
timing of capital expenditures and other costs relating to any
expansion of our operations
| 
| |  | The introduction and development of different or more extensive
communities by direct and indirect competitors, including those with
greater financial, technical and marketing resources                              
| 
| |  | Our inability to maintain and increase levels of traffic on our Web site                                                                                                                                               
| 
| |  | Our inability to attract, retain and motivate qualified personnel                                                                                                                                                      
| 
| |  | Our inability to successfully deal with technical difficulties,
system downtime or Internet brownouts                                                                                                                  
| 
| |  | The amount and timing of operating costs and capital
expenditures relating to development of our business, operations and
infrastructure, and                                                                          
| 
| |  | General economic conditions.                                                                                                                                                                                           

To address these risks, we must, among other things:



| |  | Attract and enter into partnerships, strategic relationships,
agreements and service contracts with third parties
|- |  | -----------------------------------------------------------------------------------------------------------------
| 
| |  | Successfully develop and implement our revenue models                                                            
| 
| |  | Preserve our cash                                                                                                
| 
| |  | Form and maintain relationships with strategic partners                                                          
| 
| |  | Attract and respond to competitive developments                                                                  

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| |  | Attract visitors and members of our Editorial Team                                                                
|- |  | ------------------------------------------------------------------------------------------------------------------
| 
| |  | Retain the members of our Editorial Team                                                                          
| 
| |  | Retain and motivate qualified personnel                                                                           
| 
| |  | Develop and upgrade our technologies and commercialize our
services incorporating such technologies, and          
| 
| |  | Be successful in attracting additional substantial capital at
the times, in the amounts and on the terms required.

There can be no assurance that we will be successful in addressing these
risks. Any failure to do so could have a material adverse effect on our
business, results of operations and financial condition. Because of the
foregoing factors, our quarterly net revenue and operating results are
difficult to forecast. Consequently, we believe that period to period
comparisons of our operating results will not necessarily be meaningful and
should not be relied upon as an indication of our future performance. It is
likely that in some future quarter or quarters our operating results or
financial condition may fall below our expectations or the expectations of
securities analysts and investors. In such event, the trading price of our
Common Stock would likely be materially and adversely affected.

Unproven Business

The success of our business depends upon our ability to expand upon and
develop our Enabling Platform of distributed intellect and management and to
generate multiple revenue streams. Currently, we have no source of significant
revenues. The potential success of our business concept is unproven, and, to
be successful, we must, among other things, develop and market concepts that
achieve broad market acceptance by the publishing industry and Internet users.
We are and will be substantially dependent upon our Member-generated content,
the promotional efforts of our Editorial Team and their ability to attract Web
users to our site and to reduce the demands on our personnel. Our business
concept has existed for only a limited period of time and has continued to
evolve and be developed since our inception. As a result, it is relatively
unproven and may be considered to be not fully developed.

There can be no assurance that our Member-generated content or the
promotional efforts of our Members will continue to attract visitors to our Web
site. There can also be no assurance that our Members and our Editorial Team
will continue to devote time voluntarily to improving our community. Given the
fact that we provide free disk space to our Members and we support the
involvement of our Editorial Team, third parties may attempt to hold us
responsible for their content and/or any of their actions or omissions. There
can be no assurance that our business, results of operations and financial
condition would not be materially and adversely affected if a substantial
number of visitors, Members or members of our Editorial Team became
dissatisfied with our services or our intention to commercialize those services
or that the members of our Editorial Team become dissatisfied with the amounts
of compensation we pay to them.

Moreover, considering the modest level of compensation paid to our
Contributing Editors (between $15 and $25 per month based on the number of
articles written per month), there can be no assurance that consistent levels
of high quality Member-generated content will be maintained. These levels of
compensation may also hinder our efforts in the future to attract members of
our

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Editorial Team. Further, there can be no assurance that our community on
the Internet or our services will achieve broad market or commercial
acceptance. Accordingly, no assurance can be given that our business will be
successful, that we will achieve material revenues or that we can sustain
revenue growth or generate significant profits.

Future Capital Needs; Uncertainty of Additional Financing

The report of our independent auditors on their audit of our financial
statements as of December 31, 2000 contains an explanatory paragraph that
describes an uncertainty as to our ability to continue as a going concern due
to our recurring losses. In February 2000, we realized gross proceeds of $4.5
million from the exercise of warrants issued in a 1999 private sale of
securities. Also in February 2000, we realized gross proceeds of $2.5 million
from a private sale of our securities. We anticipate expending a substantial
portion of these funds in connection with entering into strategic alliances to
promote the Suite101.com community and to further develop and promote our
revenue models. At September 30, 2001, we had cash of $4,366,103. We believe
these funds will be sufficient to meet our anticipated needs for working
capital and capital expenditures for the next 12 months. Our promissory notes
due on June 30, 2000 in the principal amount of $2.5 million issued in the
February 2000 private sale of our securities were repaid in April 2000,
together with accrued interest.

We may seek to raise additional funds in order to fund more aggressive
promotions and more rapid expansion, to develop newer or enhanced services, to
respond to competitive pressures or to acquire complementary businesses,
technologies or services. There can be no assurance that any additional
financing will be available to us on favorable terms, or at all. If adequate
funds are not available or not available on acceptable terms, we may not be
able to fund our expansion, promote our revenue programs as we desire, or,
develop and enhance services or respond to competitive pressures. Any such
inability could have a material adverse effect on our business, results of
operations and financial condition. Additional funds raised through the
issuance of equity or convertible debt securities, will result in reducing the
percentage ownership of our stockholders, and our stockholders may experience
additional dilution and such securities may have rights, preferences or
privileges senior to those of the rights of our Common Stock.

As a result of our limited Internet operating history, we have limited
meaningful historical financial data upon which our planned operating expenses
can be based. Accordingly, our anticipated expense levels in the future are
based in part on our expectations as to future revenue from our proposed
revenue programs, and anticipated growth in visitor traffic and in Membership
and will become, to a large extent, fixed. Revenues and operating results
generally will depend on the volume of, timing of and ability to complete
transactions, which are difficult to forecast.

In addition, there can be no assurance that we will be able to accurately
predict our net revenue, particularly in light of the unproven manner in which
we intend to derive our Internet revenue, the intense competition for the sale
of products and services on the Web, our limited operating history and the
uncertainty as to the broad acceptance of the Web as an epublishing medium. We
may be unable to adjust our spending in a timely manner to compensate for
disappointing results of our marketing efforts and efforts to develop revenue,
any unexpected revenue shortfall or other unanticipated changes in the
publishing industry. Our failure to

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accurately make such predictions or adjustments in our spending would have
a material adverse effect on our business, results of operations and financial
condition.

Potential Fluctuations In Membership Growth and Quarterly Results; Seasonality;
Unpredictability Of Future Net Revenue

We are currently developing our community through efforts to attract
visitors, Members and Contributing Editors to our Web-based publishing
community. Our business plan is to implement our business-to-business revenue
program while continuing to expand our numbers of visitors, Members and our
Editorial Team. We have not, to date, realized material revenues. Currently,
we have nineteen (19) full-time personnel. There can be no assurance that our
business plan can be successfully developed or that we will realize any
material revenues. We cannot assure you that the growth of our Membership and
our Editorial Team, an increase in the number of visitors to our site or other
increases will ensure the success of our business plans and our ability to
realize material revenues.

Our operating expenses will continue to be material in connection with our
brand marketing and our promotional efforts, our funding of site development,
technology and operating infrastructure, and the general and administrative
staff needed to support our growth. We anticipate that we will incur net
losses for the foreseeable future. The extent of these losses will be
contingent, in part, on the amount and rates of growth in our revenue from
entering into business-to-business contracts implementing our Enabling Platform
and from epublishing. We believe that period-to-period comparisons of our
operating results are not meaningful and that the results for any period
should not be relied upon as an indication of future performance. There can be
no assurance that our operating losses will not increase in the future or that
we will ever achieve or sustain profitability.

We expect our operating results may fluctuate significantly in the future
as a result of a variety of factors, many of which are outside of our control.
These factors include:



| |  | The demand for the products and services we intend to market to
other businesses (the distributive intellect and management of our
Enabling Platform)
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Our Members and Editors acceptance of our involvement in the
publishing industry                                                                   
| 
| |  | The level of traffic on our Suite101.com site                                                                                                        
| 
| |  | The amount and timing of capital expenditures and other costs
relating to the expansion of our operations                                            
| 
| |  | The introduction of new or enhanced services by us or our competitors                                                                                
| 
| |  | The timing and number of new hires                                                                                                                   
| 
| |  | Our loss of a key strategic or marketing relationship                                                                                                
| 
| |  | Changes in our marketing policy or those of our competitors                                                                                          
| 
| |  | Engineering or development fees that may be paid in connection
with new Web site development and new publishing tools                                

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| |  | Technical difficulties with our Suite101.com site                                         
|- |  | ------------------------------------------------------------------------------------------
| 
| |  | General economic conditions, and                                                          
| 
| |  | Economic conditions specific to the Internet or all or a
portion of the technology market.

As a strategic response to changes in the competitive environment, we may
from time to time make certain pricing, service or marketing decisions or
business combinations that could have a material adverse effect on our
business, results of operations and financial condition. We expect to
experience seasonality in our business, with user traffic on our Suite101.com
site potentially being lower during the summer and year-end vacation and
holiday periods when overall usage of the Web is lower. Any seasonality is
likely to cause quarterly fluctuations in our operating results. There can be
no assurance that such patterns will not have a material adverse effect on our
business, results of operations and financial condition.

Management of Growth and Relationships; Brief Tenure of Management; Dependence on Key Personnel

In developing our business plan, we expect to be required to establish and
manage multiple relationships with various strategic partners, distributors,
providers of services, technology licensors, Members, marketers and other third
parties. To date, only a limited number of such relationships have been
established in order to implement our day-to-day business operations. These
requirements to enter into these relationships will be exacerbated in the event
of our material growth or in the number of third party relationships, and there
can be no assurance that our systems, procedures or controls will be adequate
to enable us to establish and enter into these relationships, to support any
substantial growth in our operations or that our management will be able to
implement or manage any growth effectively.

To effectively manage growth, we must establish, implement and improve
operational, financial and management information systems and expand, train and
manage our employee base. Our development is and will continue to be
substantially dependent on the abilities and performance of our executive
officers and other key employees. The loss of the services of any of our
executive officers or other key employees could have a material adverse effect
on our prospects, business development, and results of operations and financial
condition. Competition for senior management, experienced sales and marketing
personnel, qualified Web engineers and other employees is and is expected to
continue to be intense. There can be no assurance that we will be successful
in attracting and retaining such personnel. There can be no assurance that we
may not experience difficulty from time to time in hiring and retaining the
personnel necessary to support the growth of our business. Our failure to
successfully manage our personnel requirements would have a material adverse
effect on our business, results of operations and financial condition.

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Intense Competition

The market for community based publishing and ecommerce on the Internet is
relatively new and rapidly evolving. Competition is expected to increase in
the future. Barriers to entry into the Internet business are relatively
insubstantial. We believe that the principal competitive factors for companies
seeking to create community on the Internet are content, critical mass,
functionality, brand recognition, Member affinity and loyalty, broad
demographic focus and open access for visitors. Other companies who are
primarily focused on online publishing, online directories or community on the
Internet are About.com, Fatbrain.com, MightyWords.com, iPublish.com and Abuzz.
Some of these competitors are significantly larger than us and more
well-established and well-known in the Internet industry and have greater
capital resources.

We will also experience competition in the future from Web directories,
search engines, shareware archives, content sites, commercial online service
providers, sites maintained by Internet service providers (ISPs) and other
entities that attempt to establish epublishing communities on the Internet by
developing their own community or acquiring one of our competitors. In
addition, we could face competition in the future from traditional media
companies, a number of which, including AOL Time Warner, CBS and NBC, have
substantial investments in Internet companies. Further, there can be no
assurance that our competitors and potential competitors will not develop
communities or epublishing opportunities that are equal or superior to ours or
that achieve greater market acceptance than ours.

We also compete for visitors and Members with many Internet content
providers and ISPs, including Web directories, search engines, shareware
archives, content sites, commercial online services and sites maintained by
Internet service providers, as well as thousands of Internet sites operated by
individuals and government and educational institutions. These competitors
include free information, search and content sites or services, such as AOL
Time Warner, Inc., CNET, Inc. (CNET), Microsoft Corporation (Microsoft),
About.com Inc., Yahoo! Inc. (Yahoo!), Powered Inc., Hungry Minds and
Coursebridge. We also compete with traditional forms of media, such as
newspapers, magazines, radio and television. We believe that the principal
competitive factors in attracting strategic partners and third-party contracts
include the amount of traffic on our Web site, name recognition, customer
service and our ability to manage our Enabling Platform. We will likely face
increased competition which could, in turn, have a material adverse effect on
our business, results of operations and financial condition.

Substantially all of our existing and potential competitors, including
Internet content publishers, Web directories, search engines and large
traditional media companies, have longer operating histories in the Web market,
greater name recognition, larger customer bases and significantly greater
financial, technical and marketing resources. Such competitors are able to
undertake more extensive marketing campaigns for their brands and services,
adopt more aggressive advertising pricing policies and make more attractive
offers to potential employees, visitors, Members, marketers and third party
content providers.

In addition, we may experience difficulty in establishing the strategic
relationships needed to produce material revenues or our strategic partners may
sever or elect not to renew their agreements with us. There can also be no
assurance that we will be able to compete successfully in the Internet or that
competition will not have a material adverse effect on our business, results of
operations and financial condition.

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Growth Will Depend On Our Ability to Develop Our Brand

We believe that establishing broader brand recognition of the Suite101.com
brand is vitally important to our future success. Accordingly, we will
continue our brand-enhancing campaign that includes promotional programs
targeted at Members and visitors, and public relations activities. If our
brand building strategy is unsuccessful, these expenses may never be recovered
and we may be unable to increase our future revenues.

Risk of Reliance On Internally and Externally Developed Systems

We use and intend to use an internally developed system for our Web site,
as well as systems licensed from others. A key element of our strategy is to
generate a higher volume of traffic to our Web site. Our inability to further
develop and modify our system as necessary to accommodate increased levels of
traffic on our Web site may cause unanticipated system disruptions, slower
response times, degradation in Member and visitor satisfaction and service
leading to a possible loss of Members and Contributing Editors, and delays in
reporting accurate financial information. Any of these events could have a
material adverse effect on our business, results of operations and financial
condition.

Risks We Face Arising Out of the Nature of the Internet

Government Regulation and Legal Uncertainties

We are not currently subject to direct regulation by any government
agency, other than regulations applicable to businesses generally. There are
currently few laws or regulations directly applicable to access to or commerce
on the Internet. However, due to the increasing popularity and use of the
Internet, a number of legislative and regulatory proposals are under
consideration by U.S. and Canadian federal, state, provincial, local and
foreign governmental organizations. It is possible that a number of laws or
regulations may be adopted with respect to the Internet relating to such issues
as user privacy, user screening to prevent inappropriate uses of the Internet
by, for example, minors or convicted criminals, taxation, infringement,
pricing, content regulation, quality of products and services and intellectual
property ownership and infringement. The adoption of any such laws or
regulations may decrease the growth in the use of the Internet, which could, in
turn, decrease the demand for our community, increase our cost of doing
business, or otherwise have a material adverse effect on our business, results
of operations and financial condition.

Moreover, the applicability to the Internet of existing laws governing
issues such as property ownership, copyright, trademark, trade secret,
obscenity, libel and personal privacy is uncertain and developing. Any new
legislation or regulation, or application or interpretation of existing laws,
could have a material adverse effect on our business, results of operations and
financial condition. There can be no assurance that any legislation will not
be enacted in the future that could expose us to substantial liability.
Legislation could also dampen the growth in the use of the Web generally and
decrease the acceptance of the Web as a communications and commercial medium.
The result could, thereby, have a material adverse effect on our business,
results of operations and financial condition.

It is also possible that our use of cookies to track demographic
information and user preferences may become subject to laws limiting or
prohibiting their use. A cookie is a bit of information keyed to a specific
server, file pathway or directory location that is stored on a users

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hard drive, possibly without the users knowledge. A user is generally
able to remove cookies. Germany, for example, has imposed laws limiting the
use of cookies, and a number of Internet commentators, advocates and
governmental bodies in the United States and other countries have urged the
passage of laws limiting or abolishing the use of cookies. In addition, a
number of legislative proposals have been made at the U.S. and Canadian
federal, state, provincial and local level that would impose additional taxes
on the sale of goods and services over the Internet and certain jurisdictions
have taken measures to tax Internet-related activities. The U.S. Congress
enacted the Internet Tax Freedom Act on October 21, 1998 which imposes a
national three year moratorium in the United States on state and local taxes on
Internet access services, online services, and multiple or discriminatory taxes
on electric commerce effective October 1, 1998. This moratorium ended on
September 30, 2001 and we are uncertain of the future impact that the
cessation of this moratorium will have. There can be no assurance, with the
lifting of this moratorium, that some type of U.S. federal and/or state taxes
will be imposed upon Internet commerce, and there can be no assurance that such
legislation or other attempts at regulating commerce over the Internet will not
substantially impair the growth of commerce on the Internet. As a result, our
opportunity to derive financial benefit from these activities may be adversely
affected.

Due to the global nature of the Web, it is possible that, although our
transmissions over the Internet originate primarily in British Columbia,
Canada, the governments of various states in the United States and foreign
countries might attempt to regulate our transmissions or prosecute us for
violations of their laws. There can be no assurance that violations of local
laws will not be alleged or charged by state or foreign governments, that we
might not unintentionally violate such laws or that such laws will not be
modified, or new laws enacted, in the future. Any of the foregoing
developments could have a material adverse effect on our business, results of
operations and financial condition.

In addition, as our services are available over the Internet in multiple
foreign countries, provinces, states and other jurisdictions, such
jurisdictions may claim that we are required to qualify to do business as a
foreign corporation in each of those jurisdictions or are subject to taxation
in those jurisdictions. We are qualified to do business only in British
Columbia, and our failure to qualify as a foreign corporation in a jurisdiction
where we are required to do so could subject us to taxes and penalties and
could result in our inability to enforce contracts in such jurisdictions. Any
such new legislation or regulation, the application of laws and regulations
from jurisdictions whose laws do not currently apply to our business, or the
application of existing laws and regulations to the Internet and other online
services could have a material adverse effect on our business, results of
operations and financial condition.

Liability for Information Retrieved from the Web; Absence of Liability Insurance

Because materials may be downloaded by Members and other users of our Web
site and subsequently distributed to others, there is a potential that claims
will be made against us for defamation, negligence, copyright or trademark
infringement, personal injury or other theories based on the nature, content,
publication and distribution of these materials. Such claims have been
brought, and sometimes successfully pressed, against OSPs for example, in the
past. We have received inquiries from time to time from third parties
regarding such matters, all of which have been resolved to date without any
payments or other material adverse effect on us.

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In addition, the increased attention focused upon liability issues as a
result of these lawsuits and legislative proposals could impact the overall
growth of Internet use. We could also be exposed to liability with respect to
the offering of third party content that may be accessible through our Web
site, or through content and materials that may be posted by Members on their
personal Web sites or chat rooms, or online discussions offered by us. Such
claims might include, among others, that by directly or indirectly hosting the
personal Web sites of third parties, we are liable for copyright or trademark
infringement, or other wrongful actions by such third parties through such Web
sites.

It is also possible that if any third party content information provided
on our web site contains errors, third parties could make claims against us for
losses incurred in reliance on such information. Even to the extent that such
claims do not result in liability to us, we could incur significant costs in
investigating and defending against such claims. The imposition on us of
potential liability for information carried on or disseminated through our
systems could require us to implement measures to reduce our exposure to such
liability, which may require the expenditure of substantial resources and limit
the attractiveness of our services to Members and visitors and others.

We may enter into agreements with electronic vendors and sponsors whereby
we may be entitled to receive affiliate rewards or share in the revenue from
the purchase of goods and services through direct links from our Web site.
Such arrangements may expose us to additional legal risks and uncertainties,
including potential liabilities to consumers of such products and services by
virtue of our involvement in providing access to such products or services,
even if we do not provide such products or services. While we will seek to be
indemnified against such liabilities, there can be no assurance that such
indemnification, if available, will be adequate.

Currently, we do not carry general liability insurance intended to protect
us from any liability arising out of the foregoing. In any event, however,
insurance may not cover all potential claims to which we are exposed or may not
be adequate to indemnify us for all liability that may be imposed. Any
imposition of liability that is not covered by insurance or is in excess of our
insurance coverage would have a material adverse effect on our business,
results of operations and financial condition. In addition, the increased
attention focused upon liability issues as a result of these lawsuits and
legislative proposals could impact the overall growth of Internet use.

Security Risks

There can be no assurance that experienced programmers or hackers may
not from time to time attempt to penetrate our network security. To date, none
of this activity has occurred. However, in the event any such attempts should
occur and be successful, such a penetration may have a material adverse effect
on our business, results of operations or financial condition. A party who is
able to penetrate our network security could misappropriate proprietary
information or cause interruptions in our Web site.

In addition, in offering certain payment services, we could become
increasingly reliant on encryption and authentication technology licensed from
third parties to provide the security and authentication necessary to effect
secure transmission of confidential information, such as customer credit card
numbers. We may be required to expend significant capital and resources to
protect against the threat of such security, encryption and authentication
technology breaches or to alleviate problems cause by such breaches.

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Concerns over the security of Internet transactions and the privacy of
users may also inhibit the growth of the Internet generally, particularly as a
means of conducting commercial transactions. Security breaches or the
inadvertent transmission of computer viruses could expose us to a risk of loss
or litigation and possible liability. There can be no assurance that
contractual provisions attempting to limit our liability in such areas will be
successful or enforceable, or that other parties will accept such contractual
provisions as part of our agreements, which could have a material adverse
effect on our business, results of operations and financial condition.

Reliance on Intellectual Property and Proprietary Rights

We regard our technology as proprietary and attempt to protect it by
relying on trademark, service mark, copyright and trade secret laws and
restrictions on disclosure and transferring title and other methods. We have
applied for trademarks for the following: Suite101.com, Real People Helping
Real People and Best-of-Web Directory. We currently have no patents or
patents pending and do not anticipate that patents will become a significant
part of our intellectual property in the foreseeable future. We also generally
enter into confidentiality or license agreements with our employees and
consultants, and generally control access to and distribution of our
documentation and other proprietary information. Despite these precautions, it
may be possible for a third party to copy or otherwise obtain and use our
proprietary information without authorization or to develop similar technology
independently.

We pursue the registration of our trademarks and service marks in the
United States and Canada and internationally, and intend to apply for the
registration in the United States and Canada for a number of our
service marks.
There can be no assurance that such registration will be granted or, if
granted, that we will derive any material commercial benefit from such
registration. Effective trademark, service mark, copyright and trade secret
protection may not be available in every country in which our services are
distributed or made available through the Internet, and policing unauthorized
use of our proprietary information is difficult.

Legal standards relating to the validity, enforceability and scope of
protection of certain proprietary rights in Internet-related businesses are
uncertain and still evolving. No assurance can be given as to the future
viability or value of any of our proprietary rights or other companies within
this market. There can be no assurance that the steps taken by us will prevent
misappropriation or infringement of our proprietary information. Any such
infringement or misappropriation, should it occur, could have a material
adverse effect on our business, results of operations and financial condition.

In addition, litigation may be necessary in the future to enforce our
intellectual property rights, to protect our trade secrets or to determine the
validity and scope of the proprietary rights of others. Such litigation might
result in substantial costs and diversion of resources and management attention
and could have a material adverse effect on our business, results of operations
and financial condition and we may not have available the resources necessary
to pursue such litigation.

Furthermore, there can be no assurance that our business activities will
not infringe upon the proprietary rights of others, or that other parties will
not assert infringement claims against us. It can be expected that we will be
subjected to claims in the ordinary course of our business, including claims of
alleged infringement of the trademarks, service marks and other intellectual
property rights of third parties by us and the content generated by our
Members. Such claims and any resultant litigation, should it occur, might
subject us to significant liability for damages and might

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result in invalidation of our proprietary rights and even if not
meritorious, could be time consuming and expensive to defend and could result
in the diversion of management time and attention, any of which might have a
material adverse effect on our business, results of operations and financial
condition.

We currently license from third parties certain technologies incorporated
into our Web site. As we continue to introduce new services that incorporate
new technologies, we may be required to license additional technology from
others. There can be no assurance that these third party technology licenses
will continue to be available to us on commercially reasonable terms, if at
all. Our inability to obtain any of these technology licenses could result in
delays or reductions in the introduction of new services or could adversely
affect the performance of our existing services until equivalent technology
could be identified, licensed and integrated.

Dependence on Continued Growth in the Use of the Internet; Dependence on Web
Infrastructure

Our Companys future success is substantially dependent upon continued
growth in the use of the Internet in order to support ecommerce development on
our Web site and in the acceptance and volume of ecommerce transactions on the
Internet. There can be no assurance that the number of Internet users will
continue to grow or that ecommerce over the Internet will become more accepted
and widespread.

As is typical in the case of a new and rapidly evolving industry, demand
and market acceptance for recently introduced services are subject to a high
level of uncertainty. We cannot predict the extent to which we will be able to
engage our services to third-party contractors. The Internet may not prove to
be viable for our epublishing goals for a number of reasons, including lack of
acceptable security technologies, lack of access and ease of use, congestion of
traffic, inconsistent quality of service and lack of availability of
cost-effective, high-speed service, potentially inadequate development of the
necessary infrastructure, excessive governmental regulation, uncertainty
regarding intellectual property ownership or timely development and
commercialization of performance improvements, including high-speed modems.

The success of our Web site will depend in large part upon the continued
development of a Web infrastructure, such as a reliable network backbone with
the necessary speed, data capacity and security, and timely development of
complementary products, such as high-speed modems for providing reliable Web
access and services. Because global ecommerce and online exchange of
information on the Web and other similar open wide area networks are new and
evolving, it is difficult to predict with any assurance whether the Web will
support increasing use.

The Web has experienced, and is expected to continue to experience,
significant growth in the number of users and the amount of content. To the
extent that the Web continues to experience increased numbers of users,
frequency of use or increased band width requirements of users, there can be no
assurance that the Web infrastructure will continue to be able to support the
demands placed on it by this continued growth or that the performance or
reliability of the Web will not be adversely affected by this continued growth.
In addition, the Web could lose its viability or effectiveness due to delays
and the development or adoption of new standards and protocols to handle
increased levels of activities or due to increased government regulation.

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Sales Tax Collection

One or more states, provinces or countries may seek to impose sales tax
collection obligations on out-of-state or out-of-province or foreign companies
such as us which engage in online commerce. Any new operation or facilities in
the United States or Canada or elsewhere could subject shipments into such
states or provinces to state or provincial or foreign sales taxes. A successful
assertion by one or more states or provinces or any foreign country that we
should collect sales or other similar taxes on the sale of merchandise could
have a material adverse effect on our business, prospects, financial condition
and results of operations.

Other Risks We Face

Control by Directors, Executive Officers, Northfield Capital Corporation and 284085 BC Ltd.

As of October 31, 2001, our Directors, Executive Officers and Northfield
Capital Corporation, and their respective affiliates, in the aggregate,
beneficially owned (including shares that they, he or she has the right to
acquire the beneficial ownership within 60 days following October 31, 2001)
approximately 5,479,076 shares or 38.87% of our outstanding Common Stock. As a
result, these stockholders possess significant influence over us, giving them
the ability, among other things, to elect a majority of our Board of Directors
and approve significant corporate transactions. Such share ownership and
control may also have the effect of delaying or preventing a change in control
of us, impeding a merger, consolidation, takeover or other business combination
involving us, or discourage a potential acquiror from making a tender offer or
otherwise attempting to obtain control of us which could have a material
adverse effect on the market price of our Common Stock.

No Active Prior Public Market For Common Stock; Possible Volatility Of Stock Price

Since December 30, 1998, our Common Stock has been quoted on the OTC
Bulletin Board. There can be no assurance that an active trading market for
our Common Stock will be sustained or that the market price of our Common Stock
will not decline based upon market or other conditions. The market price may
bear no relationship to our revenues, earnings, assets or potential and may not
be indicative of our future business performance. The trading price of our
Common Stock has been and can be expected to be subject to wide fluctuations in
response to variations in our quarterly results of operations, the gain or loss
of significant strategic relationships, unanticipated delays in our
development, changes in estimates by analysts, announcements of technological
innovations or new solutions by us or our competitors, general conditions in
the technology and Internet sectors and in Internet-related industries, other
matters discussed elsewhere in this annual report and other events or factors,
many of which are beyond our control.

In addition, the stock market in general and the technology and Internet
sectors in particular have experienced extreme price and volume fluctuations
which have affected the market price for many companies in industries similar
or related to us and which have been unrelated to the

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operating performance of these companies. These market fluctuations, as
well as general economic, political and market conditions, may have a material
adverse effect on the market price of our Common Stock.

In the past, following periods of volatility in the market price of a
companys securities, securities class action litigation has often been
instituted against such companies. Such litigation, if instituted, and
irrespective of the outcome of such litigation, could result in substantial
costs and a diversion of managements attention and resources and have a
material adverse effect on our business, results of operations and financial
condition.

Item 6. Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------

None



| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------

We did not file any Current Reports on Form 8-K during the quarter ended
September 30, 2001.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                       |  |                                                                                                    
|---------------------- |  | ---------------------------------------------------------------------------------------------------
|                       |  | Suite101.com, Inc.                                                                                 
|                       |  |                                                                                                    
|                       |  | (Registrant)                                                                                       
|                       |  |                                                                                                    
|                      
|                      
|                      
|                      
|Date: November 6, 2001 |  | /s/ Peter L. Bradshaw                                                                              
|                       |  |                                                                                                    
|                       |  | Peter L. Bradshaw
President and Chief Executive Officer
(Principal Executive Officer, and Director)
|                       |  |                                                                                                    
|                      
|                      
|                      
|                      
|                       |  | /s/ Cara M. Williams                                                                               
|                       |  |                                                                                                    
|                       |  | Cara M. Williams
Vice President  Finance
(Principal Financial and Accounting Officer)             

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