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

                                   FORM 10-QSB

(Mark One)

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

      For the quarterly period ended: June 30, 2001

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

      For the transition period from _______________ to _______________

      Commission file number 0-16665
                             -------

                        The Internet Advisory Corporation
                    ----------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)

                Utah                                       87-042 6358
-----------------------------------                    -------------------
    (State or other jurisdiction                          (IRS Employer
  of incorporation or organization)                    Identification No.)

                     150 E. 58th Street, New York, NY 10022
                 ----------------------------------------------
                    (Address of principal executive offices)

                                 (212) 486-2444
                              --------------------
                           (Issuer's telephone number)

         -------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

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

      State the number of shares  outstanding of each of the issuer's classes of
common equity, as of the latest practical date: 14,445,018 as of August 14, 2001
                                                --------------------------------

      Transitional Small Business Disclosure Format (check one). Yes __; No X


<PAGE>

                        The Internet Advisory Corporation
                                  June 30, 2001
                         Quarterly Report on Form 10-QSB

                                Table of Contents
                                                                           Page
                                                                           ----

Special Note Regarding Forward Looking Statements ...........................3

                         PART I - FINANCIAL INFORMATION

Item  1. Financial Statements ...............................................4
Item  2. Management and Discussion and Analysis
           of Financial Condition and Results of Operations ................11

                           PART II - OTHER INFORMATION

Item  1. Legal Proceedings .................................................12
Item  5. Other Information .................................................13
Item  6. Exhibits and Reports on Form 8-K ..................................13


                                       2
<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      To the extent that the information  presented in this Quarterly  Report on
Form 10-QSB for the quarter ended June 30, 2001 discusses financial projections,
information or  expectations  about our products or markets,  or otherwise makes
statements  about future events,  such  statements are  forward-looking.  We are
making  these  forward-looking   statements  in  reliance  on  the  safe  harbor
provisions of the Private Securities  Litigation Reform Act of 1995. Although we
believe that the expectations reflected in these forward-looking  statements are
based on reasonable  assumptions,  there are a number of risks and uncertainties
that could cause actual results to differ  materially from such  forward-looking
statements.  These risks and uncertainties are described,  among other places in
this Quarterly  Report,  in  "Management's  Discussion and Analysis of Financial
Condition and Results of Operations".

      In addition,  we disclaim any  obligations  to update any  forward-looking
statements to reflect events or  circumstances  after the date of this Quarterly
Report.  When considering such  forward-looking  statements,  you should keep in
mind the risks  referenced  above and the other  cautionary  statements  in this
Quarterly Report.


                                       3
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS                                            Page
                                                                        ----
   Consolidated Balance Sheets as of
     June 30, 2001 and December 31, 2000 ..................................5
   Consolidated Statements of Operations
     for the three and six-months ended
     June 30, 2001 and June 30, 2000 ....................................6-7
   Consolidated Statement of Deficiency In Assets .........................8
   Consolidated Statements of Cash Flows
     for the six months ended June 30, 2001
     and June 30, 2000 ....................................................9
   Notes to Consolidated Financial Statements ............................10


                                       4
<PAGE>

                        THE INTERNET ADVISORY CORPORATION

                           CONSOLIDATED BALANCE SHEET

                                                        June 30,    December 31,
                                                          2001          2000
                                                      -----------   ------------
                                                      (Unaudited)    (Audited)

                                     ASSETS
CURRENT ASSETS:
    Cash and cash equivalents                        $    22,240    $    21,031
    Accounts receivable                                    4,525          4,452
                                                     -----------    -----------
       Total Current Assets                               26,765         25,483
                                                     -----------    -----------

PROPERTY AND EQUIPMENT, Net                              408,418        480,094
                                                     -----------    -----------

OTHER ASSETS:
    Security deposit                                      14,361         14,361
                                                     -----------    -----------
       Total Other Assets                                 14,361         14,361
                                                     -----------    -----------
       TOTAL ASSETS                                  $   449,544    $   519,938
                                                     ===========    ===========

                      LIABILITIES AND DEFICIENCY IN ASSETS

CURRENT LIABILITIES
    Accounts payable                                 $        --    $   231,534
    Accrued expenses                                          --        559,941
    Prepetition debt                                     854,642             --
    Post petition accrued expenses                        12,600             --
    Deferred revenue                                       3,440         18,352
    Loan payable - officer                                    --         30,500
                                                     -----------    -----------
       Total Current Liabilities                         870,682        840,327
                                                     -----------    -----------

       TOTAL LIABILITIES                                 870,682        840,327
                                                     -----------    -----------

DEFICIENCY IN ASSETS
    Common stock, $.001 par value; 50,000,000
      shares authorized, 14,445,018 issued,
      and outstanding                                     14,445         14,445
    Additional paid-in capital                         3,423,014      3,423,014
    Accumulated deficit                               (3,858,597)    (3,757,848)
                                                     -----------    -----------
       Total Deficiency in assets                       (421,138)      (320,389)
                                                     -----------    -----------
       TOTAL LIABILITIES AND
         DEFICIENCY IN ASSETS                        $   449,544    $   519,938
                                                     ===========    ===========

                See notes to consolidated financial statements.


                                       5
<PAGE>

                       THE INTERNET ADVISORY CORPORATION

                      CONSOLIDATED STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------

                                                        Three Months Ended
                                                -------------------------------
                                                June 30, 2001     June 30, 2000
                                                -------------     -------------
                                                 (Unaudited)       (Unaudited)

NET SALES                                        $     56,749      $    168,855

COST OF GOODS SOLD                                     33,369                --
                                                 ------------      ------------

GROSS PROFIT                                           23,380           168,855

GENERAL AND ADMINISTRATIVE EXPENSES                       265           491,132
                                                 ------------      ------------

NET LOSS FROM OPERATIONS                               23,115          (322,277)

OTHER INCOME (EXPENSE):
     Interest Expense                                    (106)               --
     Other Income                                          --               678
                                                 ------------      ------------

NET LOSS BEFORE INCOME TAXES                           23,009          (321,599)

PROVISION FOR INCOME TAXES                                 --                --
                                                 ------------      ------------

NET PROFIT (LOSS)                                $     23,009      $   (321,599)
                                                 ============      ============

NET PROFIT (LOSS) PER SHARE                      $       0.00      $      (0.02)
                                                 ============      ============

WEIGHTED AVERAGE OF COMMON SHARES
  OUTSTANDING                                      14,445,018        13,344,017
                                                 ============      ============

                See notes to consolidated financial statements.


                                       6
<PAGE>

                        THE INTERNET ADVISORY CORPORATION

                      CONSOLIDATED STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------

                                                        Six Months Ended
                                                --------------------------------
                                                June 30, 2001      June 30, 2000
                                                -------------      -------------
                                                 (Unaudited)        (Unaudited)

NET SALES                                       $    175,979       $    357,700

COST OF GOODS SOLD                                    88,761                 --
                                                ------------       ------------

GROSS PROFIT                                          87,218            357,700

GENERAL AND ADMINISTRATIVE EXPENSES                  187,710          1,119,355
                                                ------------       ------------

NET LOSS FROM OPERATIONS                            (100,492)          (761,655)

OTHER INCOME (EXPENSE):
     Interest Expense                                   (257)
     Other Income                                         --              2,021
                                                ------------       ------------

NET LOSS BEFORE INCOME TAXES                        (100,749)          (759,634)

PROVISION FOR INCOME TAXES                                --                 --
                                                ------------       ------------

NET LOSS                                        $   (100,749)      $   (759,634)
                                                ============       ============

NET LOSS PER SHARE                              $      (0.01)      $      (0.06)
                                                ============       ============

WEIGHTED AVERAGE OF COMMON SHARES
  OUTSTANDING                                     14,445,018         13,344,017
                                                ============       ============

                See notes to consolidated financial statements.


                                       7
<PAGE>

                        THE INTERNET ADVISORY CORPORATION

                 CONSOLIDATED STATEMENT OF DEFICIENCY IN ASSETS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                             Common Stock           Additional
                                      -------------------------     Paid - in     Accumulated
                                        Shares          Amount       Capital        Deficit        Total
                                      ----------      ---------     ----------    -----------   -----------

<S>                                   <C>           <C>            <C>           <C>            <C>
Balance, December 31, 1999            13,344,017    $    13,344    $ 2,712,115   $(1,718,640)   $ 1,006,819
                                      ----------    -----------    -----------   -----------    -----------

Proceeds from the sale of stock          700,000            701        299,299                      300,000

Issued stock for services                400,000            400        411,600                      412,000

Net loss                                                                          (2,039,208)    (2,039,208)
                                      ----------    -----------    -----------   -----------    -----------

Balance, December 31, 2000            14,444,017         14,445      3,423,014    (3,757,848)      (320,389)
                                      ----------    -----------    -----------   -----------    -----------

Net loss                                                                            (100,749)      (100,749)
                                      ----------    -----------    -----------   -----------    -----------

Balance, June 30, 2001 (Unaudited)    14,444,017    $    14,445    $ 3,423,014   $(3,858,597)   $  (421,138)
                                      ==========    ===========    ===========   ===========    ===========
</TABLE>

                See notes to consolidated financial statements.


                                       8
<PAGE>

                        THE INTERNET ADVISORY CORPORATION

                      CONSOLIDATED STATEMENT OF CASH FLOWS
--------------------------------------------------------------------------------

                                                        Six Months Ended
                                                  -----------------------------
                                                  June 30, 2001   June 30, 2000
                                                  ------------    -------------
                                                   (Unaudited)    (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                           $(100,749)     $(759,634)
Adjustments to reconcile net loss to
  net cash provided by (used in)
     operating activities:
        Depreciation expense                          71,676         60,441
        Accounts receivable                              (73)            --
        Prepaid expenses                                  --         (6,016)
        Accounts payable                            (231,534)         1,670
        Accrued expenses                            (559,941)            --
        Debt restructuring                           867,242             --
        Deferred revenue                             (14,912)            --
                                                   ---------      ---------

     CASH FLOW PROVIDED BY (USED IN)
       OPERATING ACTIVITIES                           31,709       (703,539)
                                                   ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment                  --        (40,047)
     Purchase of investments                              --         50,000
                                                   ---------      ---------

     CASH FLOW PROVIDED BY INVESTING ACTIVITIES           --          9,953
                                                   ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Principal collections on loan                        --        645,000
     Proceeds from officer loan                      (30,500)            --
                                                   ---------      ---------

     CASH FLOW (USED IN) PROVIDED BY
       FINANCING ACTIVITIES                          (30,500)       645,000
                                                   ---------      ---------

NET DECREASE IN CASH                                   1,209        (48,586)

CASH AT BEGINNING OF PERIOD                           21,031         57,087
                                                   ---------      ---------

CASH AT END OF PERIOD                              $  22,240      $   8,501
                                                   =========      =========

                See notes to consolidated financial statements.


                                       9
<PAGE>

                          INTERNET ADVISORY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Note 1. Basis of Presentation

The  accompanying   unaudited  consolidated  financial  statements  of  Internet
Advisory  Corporation  (the  "Company")  have been prepared in  accordance  with
generally accepted accounting  principles for interim financial  information and
with the  instructions to Form 10-QSB and Regulation S-B.  Accordingly,  they do
not include all of the information and footnotes  required by generally accepted
accounting  principles  for  complete  financial  statements.  In the opinion of
management,  all  adjustments  considered  necessary  for  a  fair  presentation
(consisting of normal recurring accruals) have been included. The preparation of
financial statements in conformity with generally accepted accounting principles
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.  Operating  results expected for the six months ended June
30, 2001 are not necessarily  indicative of the results that may be expected for
the year  ending  December  31,  2001.  For  further  information,  refer to the
financial  statements  and footnotes  thereto  included in the Company's  Annual
Report on Form 10-KSB for the year ended  December 31, 2000.  Per share data for
the periods are based upon the weighted average number of shares of common stock
outstanding during such periods, plus net additional shares issued upon exercise
of options and warrants.

Note 2. Equity Transactions

The Company did not issue any new shares of common stock for the six months
ended June 30, 2001.

Note 3. Going Concern

These financial statements have been prepared assuming the Company will continue
as going concern.  The Company has suffered  recurring  losses amounting to $3.9
million.  The Company is in default of several of its trade payable obligations.
The Company intends to raise additional  financing through debt or equity in the
near future to enable the Company to continue operations for at least one year.

Note 4. Bankruptcy

On June 8th, 2001, the Company voluntarily filed for protection under Chapter 11
of the U.S.  Bankruptcy Code to restructure its balance sheet,  while continuing
to provide service to its business customers.


                                       10
<PAGE>

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

Result of Operations.

      For the three-month  periods ended June 30, 2001 and June 30, 2000, we had
revenues of $56,749 and $168,855,  respectively. For the six-month periods ended
June 30,  2001 and June 30,  2000 we had  revenues  of  $175,979  and  $357,700,
respectively.  The decreases in revenues were  attributable to changes in market
conditions.  Our cost of goods sold was $33,369 for the three-month period ended
June 30, 2001 and $0 for the three-month period ended June 30, 2000. Our cost of
goods sold was $88,761 for the  six-month  period ended June 30, 2001 and $0 for
the six-month period ended June 30, 2000. We incurred general and administrative
expenses of $265 for the three-month period ended June 30, 2001 and $491,132 for
the three-month period ended June 30, 2000. General and administrative  expenses
were $187,710 for the six-months  ended June 30, 2001 and $1,119,355 for the six
months ended June 30, 2000.  For the  three-month  period ended June 30, 2001 we
had a net profit of $23,009 or  approximately  $0 per share as compared to a net
loss of  $321,599 or  approximately  $.02 per share for the  three-month  period
ended June 30, 2000.  For the six-month  period ended June 30, 2001 we had a net
loss of  $100,749 or  approximately  $.01 per share as compared to a net loss of
$759,634 or approximately  $.06 per share for the three-month  period ended June
30,  2000.  The net profit for the  three-month  period  ended June 30,  2001 is
attributable to the reversal of  approximately  $86,000 in professional  fees as
the result of our ongoing bankruptcy proceeding described in more detail in Part
II, Item 5. below. We recognize  revenues as they are earned, not necessarily as
they are collected. Direct costs such as hosting expense, design cost and server
expense are classified as cost of goods sold. The increase in cost of goods sold
during  the  three  and  six-month  periods  ended  June  30,  2001is  primarily
attributable to increased bandwidth costs.  General and administrative  expenses
include  accounting,  advertising,  contract labor, bank charges,  depreciation,
entertainment,  equipment rental,  insurance,  legal,  supplies, pay roll taxes,
postage,  professional  fees,  telephone and travel. The decrease in general and
administrative  expenses  during the three and six-month  periods ended June 30,
2001 is primarily  attributable  to the  decrease in employee  levels which went
form a high of twenty five to our current level of five employees.  The decrease
in general and administrative  expenses during the three month period ended June
30,  2001 is also  attributable  to the  reversal  of  approximately  $86,000 in
professional fees as the result of the bankruptcy proceeding.

Liquidity and Capital Resources.

      Our auditor's report that accompanied our audited financial statements for
the year ended  December  31, 2001  indicated  that there is  substantial  doubt
respecting our ability to continue as a going concern. The qualification was due
to our need to generate  positive cash flow from operations or obtain additional
financing.  Consequently,  on May 25th, 2001 we voluntarily filed for protection
under Chapter 11 of the U.S.  Bankruptcy  Code to restructure our balance sheet,
while continuing to provide services to our business customers.

      We have  incurred  losses since the  inception  of our Internet  business.
Although we  technically  achieved a profit  during the  quarter  ended June 30,
2001, this was solely the result of the reversal of


                                       11
<PAGE>

approximately   $86,000  in   professional   fees  relating  to  the  bankruptcy
proceeding.  We do however,  expect to achieve true  profitability by the end of
the third  quarter  2001 due to our  continuing  efforts to reduce  general  and
administrative expenses. No assurance can be given however, that this will prove
to be the case. Since our inception,  we have been dependent on acquisitions and
funding from lenders and investors to conduct operations. As at June 30, 2001 we
had an accumulated  deficit of $3,858,597  compared to an accumulated deficit of
$3,757,848  at December 31,  2000.  As at June 30,  2001,  we had total  current
assets of $26,765 and total current liabilities of $870,6827 or negative working
capital of  $843,917.  At December  31,  2000,  we had total  current  assets of
$25,483 and total current liabilities of $840,327 or negative working capital of
$814,844. We currently have no material commitments for capital expenditures. We
will continue to evaluate  possible  acquisitions of or investments in business,
products and technologies  that are complimentary to ours. These may require the
use of cash, which would require us to seek financing.  We believe that existing
net sales will be sufficient to pay our current operating expenses.  However, we
may  sell  additional  equity  or  debt  securities  or seek  additional  credit
facilities  to fund  acquisition-related  or  other  business  costs.  Sales  of
additional  equity or  convertible  debt  securities  would result in additional
dilution  to our  stockholders.  We may also need to raise  additional  funds in
order to support  more rapid  expansion,  develop  new or  enhanced  services or
products,  respond to competitive pressures,  or take advantage of unanticipated
opportunities.  Our future liquidity and capital  requirements  will depend upon
numerous  factors,  including the success of our service offerings and competing
technological  and  market  developments.  Our  future  liquidity  will  also be
affected by the manner in which we emerge from the bankruptcy proceeding.

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

      Except as otherwise  disclosed  herein,  no material legal proceedings are
pending to which we or any of our property is subject,  nor to our knowledge are
any such proceedings  threatened.  On March 21, 2001 a judgment in the amount of
$12,359.60  was  entered  against us in the Circuit  Court of the 17th  Judicial
Circuit in and for Broward County, Florida in favor of Diamondpoint.Com, Inc., a
Florida  corporation,  in  connection  with a claim of  breach of  contract.  We
subsequently  filed an appeal seeking to overturn this judgement.  The matter is
expected to be settled in the bankruptcy proceeding.

      Our prior management signed several agreements for Internet based services
which are currently in dispute. In one instance,  the dispute relates to whether
the  contracted  for services were ever  provided to us. In other  instances the
disputes  relate to the timing of the provision of such services to us. To date,
none of these disputes have resulted in litigation. Our auditors have recorded a
$500,000  accrued  liability  for such  services.  This matter is expected to be
settled in the bankruptcy proceeding.


                                       12
<PAGE>

Item 5. Other Information

      Effective May 15, 2001,  Jeffrey  Olweean  resigned as our Chairman of the
Board of Directors. Such resignation was not the result of any disagreement with
us on any matter relating to our operations, policies or practices.

      On May 25, 2001, we voluntarily  filed for protection  under Chapter 11 of
the US Bankruptcy Code with the US Bankruptcy Court for the Southern District of
Florida.  We intend to utilize the Chapter 11 process to restructure our balance
sheet   through  the  reduction  of  debt  thereby   increasing   our  operating
flexibility.  The Chapter 11 filing has not impacted  our day to day  operations
with regard to our  employees,  customers and general  business  operations.  We
anticipate  filing a disclosure  statement and plan of  reorganization  with the
Bankruptcy  Court  in the  near  future.  No  assurance  can be  given  that the
Bankruptcy Court will accept our plan of  reorganization  or that we will emerge
from bankruptcy in the manner we anticipate.

Item 6. Exhibits and Reports on Form 8-K

      On June 8,  2001,  we filed a current  report on Form 8-K  respecting  our
filing a voluntary  bankruptcy  petition  under  Chapter 11 of the US Bankruptcy
Code which was  reported in Item 3 thereof.  See Item 5. Other  Information  for
more detailed information respecting the bankruptcy petition.

                                   SIGNATURES

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

                                     The Internet Advisory Corporation

Dated: August 16, 2001               By: /s/ Richard Goldring
                                         ------------------------------
                                           Richard Goldring
                                           President and Chief Executive Officer

Dated:  August 16, 2001              By: /s/ Joseph A. Erickson
                                         ------------------------------
                                           Joseph A. Erickson
                                           Treasurer and Chief Financial Officer


                                       13