<PAGE>

                          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, 1998

 [ ] Transition Report Under Section 13 or 15 (d) of the Securities Exchange Act
                                      of 1934
                   For the transition period from _____ to _____

                           Commission File Number 0-25136

                               KINETIC VENTURES, LTD
            (Name of Small Business Issuer as specified in its charter)

                 DELAWARE                              33-0464753
     ---------------------------------      -----------------------------------
     (State or other jurisdiction of        (I.R.S. Employer Identification No.)
      incorporation or organization)

         1095 Pender Street, Suite 850, Vancouver, British Columbia V6E 2M6
         ------------------------------------------------------------------
                (Address of principal executive offices) (Zip Code)

                     Issuer's telephone number, (604) 689-1428
                                               --------------

     Check whether the issuer (1) has filed all reports required 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 registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days:
YES [X]      NO [   ]


There were 39,933,733 shares of the issuer's Common Stock outstanding as of
November 4, 1998.


              This Form 10-QSB consists of 11 pages and no exhibits.


                                          1
<PAGE>

     PART I - FINANCIAL INFORMATION


     Item 1.    Financial Statements

                                KINETIC VENTURES LTD.
                                    Balance Sheets

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   September 30,        December 31,
                                                                                                       1998                1997
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    (UNAUDITED)
<S>                                                                                             <C>                     <C>
ASSETS

Current assets:
     Cash                                                                                       $         1,032             179,228
     -------------------------------------------------------------------------------------------------------------------------------

Total assets                                                                                    $         1,032             179,228
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued liabilities                                                   $        36,444              13,412
     Notes payable                                                                                            -             139,000

     Income tax payable                                                                                       -               22,553
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         36,444             174,965

Shareholders' deficit:
     Common stock, $0.001 par value,                                                                     39,934              39,934
     40,000,000 shares authorized; 39,933,733 shares outstanding
     Additional paid in capital                                                                      15,895,073          15,895,073
     Accumulated deficit                                                                            (15,970,419)        (15,930,744)
     -------------------------------------------------------------------------------------------------------------------------------
                                                                                                        (35,412)              4,263
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                $         1,032             179,228
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of the financial statements.



                                          2
<PAGE>

                                KINETIC VENTURES LTD.
                            Statements of Income (Loss)
        For the nine months and three months ended September 30, 1998 and 1997
                                    (Unaudited)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                                                         Three months ended                       Nine months ended
                                                            September 30                             September 30
                                                     1998                 1997                 1998                1997
----------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                    <C>                 <C>                   <C>
Sales                                           $         -                    -                    -              345,450
Cost of goods sold                                        -                    -                    -              253,974
----------------------------------------------------------------------------------------------------------------------------
                                                          -                    -                    -               91,476
----------------------------------------------------------------------------------------------------------------------------

Operating expenses:
     Research and development                             -                    -                    -              110,919
     Sales and marketing                                  -                    -                    -              315,137
     General and administrative                      17,203               10,108               38,768              251,198
     -----------------------------------------------------------------------------------------------------------------------
                                                     17,203               10,108               38,768              677,254
     -----------------------------------------------------------------------------------------------------------------------

Other income (expense):
     Interest expense, net                                -               (3,391)                   -              (75,496)
     Gain on sale of assets                               -                    -                    -            1,828,338
     Other                                                -                4,343                    -               17,364
     -----------------------------------------------------------------------------------------------------------------------
                                                          -                  952                    -            1,770,206
     -----------------------------------------------------------------------------------------------------------------------


Net income (loss) before provision for
income taxes                                        (17,203)              (9,156)             (38,768)           1,184,428

Provision for state income taxes                          -                    -                 (907)              (3,000)
----------------------------------------------------------------------------------------------------------------------------

Net income (loss)                               $   (17,203)              (9,156)             (39,675)           1,181,428
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

Net income (loss) per common share              $         -                    -                    -                 0.12
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

Weighted average number of
common shares outstanding                        39,933,733            9,933,733           39,933,733            9,933,733
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of the financial statements.


                                          3
<PAGE>

                                KINETIC VENTURES LTD.
                               Statements of Cash Flows
                For the nine months ended September 30, 1998 and 1997
                                     (Unaudited)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
                                                                                                  1998                1997
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>                     <C>
Cash flows from operating activities:
     Net income (loss) for the period                                                       $      (39,675)          1,181,428
     --------------------------------------------------------------------------------------------------------------------------

     Adjustments to reconcile net income (loss) to net cash
     used by operating activities:
           Net effect from sale of assets to Ballard                                                    -           (1,828,338)
           Depreciation and amortization                                                                -               25,283
           Decrease in accounts receivable                                                              -              182,982
           Decrease in inventory                                                                        -               59,074
           Decrease in prepaid expenses                                                                 -               11,695
           Increase in accounts payable and accrued liabilities                                     23,032              87,386
           Decrease in note payable                                                               (139,000)                  -
           Decrease in income tax payable                                                          (22,553)                  -
           --------------------------------------------------------------------------------------------------------------------
                                                                                                  (138,521)         (1,461,918)
           --------------------------------------------------------------------------------------------------------------------

     Net cash used by operating activities                                                        (178,196)           (280,490)

Cash provided by financing activities:
     Net proceeds from notes payable                                                                    -              180,000
     Payments & current maturities of capital lease obligations                                         -                 (321)
     Redemption of preferred stock                                                                      -               (2,281)
     --------------------------------------------------------------------------------------------------------------------------
                                                                                                        -              177,398
     --------------------------------------------------------------------------------------------------------------------------

Decrease in cash                                                                                  (178,196)           (103,092)

Cash, beginning of period                                                                          179,228             105,204
-------------------------------------------------------------------------------------------------------------------------------

Cash, end of period                                                                         $        1,032               2,112
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of the financial statements.


                                          4
<PAGE>

                                KINETIC VENTURES LTD.
                            NOTES TO FINANCIAL STATEMENTS
                       For the Period Ending September 30, 1998
                                     (Unaudited)

1.   Summary of Significant Accounting Policies:

     BASIS OF PRESENTATION:

     Although unaudited, the interim financial statements in this report reflect
     all adjustments, consisting of normal recurring accruals, which are, in the
     opinion of management, necessary for a fair statement of financial
     position, results of operations and cash flows for the interim periods
     covered and of the financial condition of the Company at the interim
     balance sheet dates.  The results of operations for the interim periods
     presented are not necessarily indicative of the results expected for the
     entire year.

     The year-end balance sheet information was derived from audited financial
     statements, but does not include all disclosures required by generally
     accepted accounting principles.  These financial statements should be read
     in conjunction with the Company's audited financial statements and notes
     thereto included in the Company's Annual Report on Form 10-KSB for the year
     ended December 31, 1997.

     The Company has experienced recurring losses from operations and has an
     accumulated deficit of $15,970,419 at September 30, 1998.  These matters
     raise substantial doubt about the Company's ability to continue as a going
     concern.

     PROPOSED BUSINESS PLANS:

     As of September 30, 1998, the Company has no active business operations.
     Management intends to attempt to seek to have the Company enter into
     further business operations.  Management is currently reviewing various
     alternatives relating to further business activities for the Company, but
     no specific business activities have been identified and no agreements or
     agreements in principle have been entered into whereby the Company will
     again be engaged in any business activities.  In addition, management has
     made no decision as to any specific industries or geographical areas where
     any such future business activities may be undertaken.  Although management
     believes that its future business activities will be the result of the
     acquisition of an existing business, there can be no assurance with respect
     thereto and the Company may become engaged in such activities through other
     means.  Management may seek to raise additional capital to enable it to
     become engaged in further business activities to finance an acquisition of
     an existing business or it may effectuate the acquisition through a merger,
     consolidation or other issuance of shares of the Company's common stock.

                                          5
<PAGE>

                               KINETIC VENTURES LTD.
                      NOTES TO FINANCIAL STATEMENTS, CONTINUED
                      For the Period Ending September 30, 1998
                                    (Unaudited)

     There can be no assurance that the Company will be successful in effecting
     the acquisition of any further business operations.  In addition, there can
     be no assurance that the terms of such acquisition may not be dilutive to
     the Company's existing stockholders or that such terms will be advantageous
     to the Company.  There can be no assurance that the Company will be
     successful in its attempts to enter into any further business activities.

     Until such time as the Company is successful in entering into further
     business activities, it should be expected that the Company will not
     realize any material revenues.

2.   Note Payable:

     Note payable consists of the following:

<TABLE>
<CAPTION>
                                              (Unaudited)
                                              September 30,       December 31,
                                                  1998                1997
                                              -------------       ------------
<S>                                           <C>                 <C>
   Note payable due on demand, and
   non-interest bearing                                  $0           $139,000
</TABLE>

3.   Income Taxes:

     At December 31, 1997, the Company had net operating loss carryforwards for
     federal and state purposes of approximately $15,300,000 and $6,130,000
     respectively.  In addition, the Company had research and experimentation
     credit carryforwards for federal and state purposes of approximately
     $323,000 and $139,000, respectively.  The federal credit carryforward
     expires beginning in 2006.  The utilitzation of net operating losses and
     credit carryforwards may be limited under the provisions of Internal
     Revenue Code Section 382 when a change of ownership occurs.


                                          6
<PAGE>

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

     On March 20, 1997 the Company completed the sale, pursuant to a Stock
     Purchase and Option Agreement dated July 17, 1995, of substantially all its
     assets to Ballard Medical Products ("Ballard").  Reference should be made
     to the Company's Annual Report on Form 10-KSB for the year ended December
     31, 1997 for a description of the transaction and the Company's future
     business plans.  As a result of the disposition of the Company's assets,
     and until such time, if ever, that the Company enters into further business
     operations, the Company will not realize any sales and does not expect to
     incur any related expenses.

     The following discussion should be read in conjunction with the 
     Financial Statements and Notes thereto appearing elsewhere in this 
     Quarterly Report on Form 10-QSB.  In addition the Company desires to 
     take advantage of certain provisions of the Private Securities 
     Litigation Reform Act of 1995 that provide a "safe harbor" for forward 
     looking statements made by or on behalf of the Company.  Except for the 
     historical information contained herein, the matters discussed herein 
     are forward looking statements, the accuracy of which is necessarily 
     subject to risks and uncertainties.  Specifically, the Company wishes to 
     alert readers that the information set forth in "Item 1.  Description of 
     Business -Proposed Business Plans," and the Company's intentions and 
     efforts to enter into further business activities contained herein and 
     in the Company's Annual Report on Form 10-KSB for the year ended 
     December 31, 1997 are forward looking statements.  Various factors, 
     including the inability of management to identify, locate and acquire in 
     a timely manner future business activities, among other matters 
     discussed in this Report, may adversely affect the Company's ability to 
     remain in existence.  Failure to locate further business activities 
     could lead to the dissolution of the Company.

     Until the Company is successful in entering into further business
     activities, it can be expected that its revenues will be nominal.


                                          7
<PAGE>

     NET SALES

     The sale of the Company's assets which was completed on March 20, 1997
     resulted in there being no sales activity in the current year.  Net Sales
     decreased to $Nil for the three months and the nine months ended September
     30, 1998 as compared to $Nil for the three months and $345,450 for the nine
     months ended September 30, 1997, a year to date decrease of 100%.

     GROSS PROFIT

     The sale of the Company's assets which was completed on March 20, 1997
     resulted in there being no sales activity in the current year.  Gross
     Profit decreased to $Nil for the three months and the nine months ended
     September 30, 1998 as compared to $Nil for the three months and $91,476 for
     the nine months ended September 30, 1997 a year to date decrease of 100%.

     RESEARCH AND DEVELOPMENT

     Research and Development expenses represented the Company's investment in
     the advancement of less invasive technology in the fields of neuro and
     vascular surgery. No such expenses were incurred subsequent to March 20,
     1997. These expenses decreased to $Nil for the three months and the nine
     months ended September 30, 1998 as compared to $Nil for the three months
     and $110,919 for the nine months ended September 30, 1997, a year to date
     decrease of 100%.  This decrease was due to a decrease in personnel and
     related benefit costs and a reduced spending in expenses related to the
     Company's vascular products including clinical and regulatory submissions.

     SALES AND MARKETING EXPENSES

     Sales and Marketing expenses were $Nil for the three months and the nine
     months ended September 30, 1998 as compared to $Nil for the three months
     and $315,137 for the nine months ended September 30, 1997, a year to date
     decrease of 100%.  This decrease was the result of the discontinuance of
     these activities after the sale of the Company's assets in March, 1997.

     GENERAL AND ADMINISTRATIVE EXPENSES

     General and administrative expenses were $17,203 for the three months and
     $38,768 for the nine months ended September 30, 1998 as compared to $10,108
     for the three months and $251,198 for the nine months ended September 30,
     1997, a increase of 70% and a decrease of 85% respectively.  The increase
     for the three months was due to Management's attempt to locate further
     business activities, and the year to date decrease was due to the sale of
     the Company's business on March 20,1997.


                                          8
<PAGE>

     NET INCOME (LOSS)

     Net loss was $17,203 for the three months and $39,675 for the nine months
     ended September 30, 1998.  Net loss was $9,156 for the three months and net
     income was $1,184,428 for the nine months ended September 30, 1997, a
     decrease of $8,047 and $1,224,103 respectively.  The prior year income is
     primarily attributable to the gain on sale of the Company's assets.

     LIQUIDITY AND CAPITAL RESOURCES

     Working capital was a deficit of $35,412 at September 30, 1998 as compared
     to working capital deficiency of $172,911 at September 30, 1997 or an
     decrease of $137,499.  The Company's cash resources at September 30, 1998
     were minimal.

     The Company had, at September 30, 1998, no commitments for any other credit
     facilities such as revolving loans or lines of credit that could provide
     additional working capital.


                                          9
<PAGE>

                             PART II - OTHER INFORMATION


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a)  The Company held its annual meeting of shareholders on July 14, 1998.

(b)  Management's nominees: Brian E. Bayley, A. Murray Sinclair and Jennine M.
     Ballard were elected directors of the Company at the meeting.

(c)  (i)  A proposal was submitted to a vote of shareholders at the meeting to
     amend the Certificate of Incorporation to effect a 1:6 reverse stock split
     of the issued and outstanding shares of the Company's Common Stock.  A vote
     on the proposal was taken and the holders of 34,090,165 shares voted in
     favor of the proposal, the holders of 13,606 shares voted against the
     proposal and the holders of 23,200 shares had abstained.  The reverse stock
     split will become effective on a date in the future to be determined.

     (ii) A proposal was submitted to a vote of shareholders at the meeting to
     amend the Certificate of Incorporation to change the name of the Company to
     Kinetic Technologies Corp., or such other name as the Board of Directors
     may approve. A vote on the proposal was taken and the holders of 34,114,971
     shares voted in favor of the proposal, there were no holders of shares
     which voted against the proposal and the holders of 12,000 shares
     abstained.

ITEM 5.  OTHER INFORMATION

On October 30, 1998, the Company entered into a share purchase agreement (the
"Agreement") with Northfield Capital Corporation and 284085 B.C. Ltd.
(collectively the "Vendors") pursuant to which the Company will purchase and the
Vendors will sell all of the issued and outstanding common shares (the "Shares")
of i5ive communications inc., a British Columbia corporation ("i5ive") with its
principal office in Vancouver, British Columbia, Canada.  Under the terms of the
Agreement, the purchase price for the Shares will be the issuance of 3,405,622
shares of Common Stock (after reflecting a 1-for-6 reverse stock split of the
Company's outstanding shares) and the sum of approximately US$65,000
(Cdn$100,000) deposited with i5ive on execution of the Agreement to be applied
towards the purchase price.

The closing of the transaction is to occur on or before January 29, 1999 subject
to the fulfillment of a number of conditions.  Reference is made to the
Company's Current Report on Form 8-K for October 30, 1998.


                                          10
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a)   Exhibits - none

b)   The Company did not file any Current Report on Form 8-K during the quarter
     ended September 30, 1998.

                                     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.


                                                   KINETIC VENTURES LTD.


     DATED: NOVEMBER 13, 1998               Y:  /s/ BRIAN BAYLEY
                                                --------------------------------
                                                BRIAN BAYLEY, PRESIDENT
                                                (PRINCIPAL EXECUTIVE OFFICER AND
                                                PRINCIPAL FINANCIAL OFFICER)


                                          11