UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      FOR THE QUARTERLY PERIOD ENDED MAY 31, 2003

                                       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: 0-18222

                             CHELL GROUP CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

         NEW YORK                                           11-2805051
(STATE OR OTHER JURISDICTION OF                           (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)                           IDENTIFICATION NO.)

    150, 630 - 8TH AVENUE SW, CALGARY AB                        T2P 1G6
(ADDRESS OF REGISTRANT'S PRINCIPAL EXECUTIVE                   (ZIP CODE)
                OFFICES)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (403) 303-8258

Indicate by check mark whether the registrant (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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |_| No |X|

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act) Yes |_| No |X|

As of November 30, 2004 the number of shares issued and outstanding of the
Company's common stock, par value $0.0467 per share was 32,129,417


                                     - 1 -
<PAGE>

                             CHELL GROUP CORPORATION
                                AND SUBSIDIARIES

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                        PAGE
                                        PART I - FINANCIAL INFORMATION

ITEM 1.  Financial Statements
<S>                                                                                                    <C>
          Consolidated Balance Sheets as of May 31, 2003 (Unaudited) and August 31, 2002                 3

          Consolidated Statements of Operations for the three and nine months ended May 31, 2003 and
          2002 (Unaudited)                                                                               4

          Consolidated Statements of Cash Flows for the nine months ended May 31, 2003 and 2002
          (Unaudited)                                                                                    5

          Notes to Unaudited Consolidated Financial Statements                                           6

ITEM 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations         12

ITEM 3.   Quantitative and Qualitative Disclosures About Market Risk                                    16

ITEM 4.   Controls and Procedures                                                                       16

                           PART II - OTHER INFORMATION

ITEM 1.   Legal Proceedings                                                                             17

ITEM 2.   Unregistered Sales of Equity Securities and Use of Proceeds                                   17

ITEM 3.   Defaults upon Senior Securities                                                               17

ITEM 4.   Submissions of Submissions of Matters to a Vote of Security Holders                           17

ITEM 5.   Other Information                                                                             17

ITEM 6.   Exhibits                                                                                      18

          Signatures                                                                                    22
</TABLE>


                                     - 2 -
<PAGE>

ITEM 1. FINANCIAL STATEMENTS

                             CHELL GROUP CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                         (EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
================================================================================================
                                                                    MAY 31, 2003     August 31,
                                                                     (UNAUDITED)       2002
                                                                          $              $
================================================================================================
<S>                                                                  <C>            <C>
ASSETS
CURRENT
Cash and cash equivalents                                                 31,540        107,258
Accounts receivable, trade - net of allowance for doubtful
         accounts of $532,055 and $356,195, respectively               4,894,684      4,944,843
Other receivables                                                            965         31,406
Inventory                                                                248,092        268,980
Prepaid expenses                                                         112,718             --
------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS                                                   5,287,999      5,352,487
------------------------------------------------------------------------------------------------
Property and equipment, net                                            1,852,991      3,460,763
Licenses, net of accumulated amortization                                     --         47,015
Goodwill                                                                 276,794        276,794
Other assets                                                              91,776        109,696
Net assets of discontinued operations                                    804,598      4,133,911
------------------------------------------------------------------------------------------------
                                                                       8,314,158     13,380,666
================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT
Bank overdraft                                                           395,212        603,740
Bank indebtedness                                                      3,765,915      2,990,914
Accounts payable and accrued liabilities                               6,188,433      4,613,824
Income taxes payable                                                      13,557             --
Accrued interest payable                                               1,429,762        655,050
Deferred revenue                                                         242,037        422,980
S-term advances                                                          303,603             --
Current portion, long-term debt                                        1,777,714      1,534,073
Payable on acquisition                                                 4,852,976      4,852,976
Loan payable, related party                                              600,000        200,000
Short-term note and loan payable, other                                       --        443,189
Convertible debt                                                       7,650,732      6,587,622
------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                                             27,219,941     22,904,368
------------------------------------------------------------------------------------------------
Long-term debt, net of current portion                                   859,433      2,914,656
Net liabilities from discontinued operations                             927,742      4,542,884
------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                     29,007,116     30,361,908
================================================================================================

PREFERRED SERIES B SHARES: 454,545 SHARES [August 2002 - 454,545]          7,294          7,294

SHAREHOLDERS' EQUITY (DEFICIT)
    10,795,410 common shares [August 2002 - 10,504,913]                  733,997        712,652
    Due from shareholder                                                      --       (227,365)
    Additional paid in capital                                        26,655,538     26,220,561
    Accumulated other comprehensive income                             1,219,001        215,097
    Accumulated deficit                                              (49,308,788)   (43,909,481)
------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)                                 (20,700,252)   (16,988,536)
------------------------------------------------------------------------------------------------
                                                                       8,314,158     13,380,666
================================================================================================
</TABLE>

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


                                     - 3 -
<PAGE>

                          CHELL GROUP CORPORATION INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
        FOR THE THREE AND NINE MONTHS ENDED MAY 31, 2003 AND MAY 31, 2002
                   (EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

<TABLE>
<CAPTION>
================================================================================================================
                                                        THREE MONTHS ENDED MAY 31     NINE MONTHS ENDED MAY 31
                                                         2003            2002           2003            2002
                                                                   (restated Note 6)            (restated Note 6)
                                                           $               $              $            $
================================================================================================================
<S>                                                     <C>            <C>            <C>           <C>
REVENUE
Product sales                                           10,581,232     16,727,313     26,314,342     25,789,442
Service sales                                              701,102      1,055,794      1,707,616      1,614,037
Other                                                           --              8             --         (3,049)
----------------------------------------------------------------------------------------------------------------
                                                        11,282,334     17,783,115     28,021,958     27,400,430
----------------------------------------------------------------------------------------------------------------

COST OF SALES
Product sales                                            9,720,280     15,520,144     24,408,777     23,810,616
Service sales                                               74,090        751,861        196,707      1,249,215
----------------------------------------------------------------------------------------------------------------
                                                         9,794,370     16,272,005     24,605,484     25,059,831
----------------------------------------------------------------------------------------------------------------
GROSS PROFIT                                             1,487,964      1,511,110      3,416,474      2,340,599

OPERATING EXPENSES
Selling, general and administrative expenses             2,166,544      1,009,795      6,428,657      2,847,055
Depreciation and amortization                              313,460        250,725        939,392        547,874
----------------------------------------------------------------------------------------------------------------
                                                         2,480,004      1,260,520      7,368,049      3,394,929
----------------------------------------------------------------------------------------------------------------
(LOSS) GAIN FROM OPERATIONS                               (992,040)       250,590     (3,951,575)    (1,054,330)

Interest expense                                           618,832        331,267      1,835,601      1,665,933
Loss on extinguishment of debt                                  --        521,119             --        521,119
Financing costs                                                 --      1,884,134             --      1,884,134
Interest cost of beneficial conversion feature                  --      6,283,881             --      6,283,881
Loss on disposal of investments/property                        --             --        248,587             --
----------------------------------------------------------------------------------------------------------------
Loss before provision for income taxes                  (1,610,872)    (8,769,811)    (6,035,763)   (11,409,397)
Provision for income taxes                                 (19,500)            --         (1,305)            --
----------------------------------------------------------------------------------------------------------------
LOSS FROM CONTINUING OPERATIONS                         (1,630,372)    (8,769,811)    (6,037,068)   (11,409,397)
----------------------------------------------------------------------------------------------------------------
 DISCONTINUED OPERATIONS
Loss on sale of subsidiary                                (829,196)      (301,238)      (829,196)      (301,238)
(Loss) Gain from discontinued operations (net of
applicable income tax of $0)                               436,567     (2,401,976)      (584,258)    (3,681,045)
Gain on disposal on debt                                        --             --      2,051,215             --
----------------------------------------------------------------------------------------------------------------
GAIN (LOSS) FROM DISCONTINUED OPERATIONS                  (392,629)    (2,703,214)       637,761     (3,982,283)
----------------------------------------------------------------------------------------------------------------

NET LOSS                                                (2,023,001)   (11,473,025)    (5,399,307)   (15,391,680)
OTHER COMPREHENSIVE INCOME - FOREIGN CURRENCY
TRANSLATION                                                881,780             --      1,003,904             --
----------------------------------------------------------------------------------------------------------------
COMPREHENSIVE LOSS                                      (1,141,221)   (11,473,025)    (4,395,403)   (15,391,680)
================================================================================================================

----------------------------------------------------------------------------------------------------------------
LOSS PER SHARE:
Basic and diluted from continuing operations                 (0.15)         (0.93)         (0.56)         (1.24)
Basic and diluted from discontinued operations               (0.04)         (0.29)          0.06          (0.43)
----------------------------------------------------------------------------------------------------------------
Net loss per share                                           (0.19)         (1.22)         (0.50)         (1.67)
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Basic weighted average number of common shares
outstanding                                             10,795,410      9,441,028     10,744,234      9,230,935
Diluted weighted average number of common shares
outstanding                                             10,795,410      9,441,028     10,744,234      9,230,935
================================================================================================================
</TABLE>

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


                                     - 4 -
<PAGE>

                             CHELL GROUP CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE NINE MONTHS ENDED MAY 31, 2003 AND MAY 31, 2002
                   (EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

<TABLE>
<CAPTION>
==================================================================================================
                                                                          2003          2002
                                                                                     (restated -
                                                                                        Note 6)
                                                                            $              $
==================================================================================================
<S>                                                                     <C>           <C>
OPERATING ACTIVITIES
Net loss for the year from continuing operations                        (5,399,307)   (15,391,680)
Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization                                       2,694,171        250,725
     Loss on disposal/sale of capital assets                               248,587             --
     Provision for doubtful accounts                                       175,860             --
     Interest cost from amortization of discount                           752,713        907,524
     Due from stockholder                                                  227,365             --
     (Gain) Loss on settlement of debt                                  (2,051,215)       521,119
     Loss on sale of subsidiary                                            829,196             --
     Interest costs of beneficial conversion features                           --      6,283,881
     Services rendered for shares                                               --        110,943
     Warrants issued                                                            --        501,129
     Financing costs                                                            --        773,314
     Write-off of prepaids arising from Chell asset purchase                    --        136,023
Changes in assets and liabilities:
     Decrease (increase) in short-term investments                              --         19,676
     Decrease (increase) in accounts receivable, trade                      34,543     (6,104,371)
     Decrease (increase) in income taxes receivable                             --        (32,872)
     Decrease (increase) in inventory                                         (803)    (2,194,019)
     Decrease (increase) in prepaid expenses                               (21,715)        27,039
     Decrease (increase) in other accounts receivable                           --       (180,707)
     Decrease (increase) in other assets                                    94,091        104,684
     Increase (decrease) in accounts payable and accrued liabilities     2,406,141      3,688,291
     Increase (decrease) in accrued interest payable                       774,712             --
     Increase (decrease) in income taxes payable                            73,155             --
     Increase (decrease) in deferred revenue                              (377,031)            --
--------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                            460,463    (10,576,301)
--------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
Purchase of property and equipment                                        (202,327)      (312,750)
Proceeds from the sale of GalaVu                                           176,003             --
Proceeds from the sale of Magic Lantern                                         --      1,850,000
Proceeds from disposal of property and equipment                           264,759             --
Logicorp acquisition                                                            --     (1,500,000)
--------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                            238,435         37,250
==================================================================================================

FINANCING ACTIVITIES
Bank Indebtedness                                                          167,628      3,306,542
Net borrowings on line of credit                                          (716,994)            --
Options exercised                                                               --        313,466
Borrowings from related parties                                            400,000             --
Borrowing from Logicorp shareholders                                       303,603             --
Payments to Logicorp shareholders                                         (148,655)            --
Increase of notes and loans payable                                             --      8,072,410
Repayment of notes and loans payable                                      (577,460)    (1,522,011)
--------------------------------------------------------------------------------------------------
CASH USED IN FINANCING ACTIVITIES                                         (571,878)    10,170,407
==================================================================================================

--------------------------------------------------------------------------------------------------
EFFECTS OF FOREIGN EXCHANGE                                                (46,010)            --
--------------------------------------------------------------------------------------------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS DURING THE             81,010       (368,644)
PERIOD FROM CONTINUING OPERATIONS

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS DURING THE           (156,728)     2,382,687
PERIOD FROM DISCONTINUE OPERATIONS

Cash and cash equivalents, beginning of period                             107,258        133,160
--------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                    31,540      2,147,203
==================================================================================================

Income taxes paid                                                               --             --
Interest paid                                                              557,752        309,291
</TABLE>

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


                                     - 5 -
<PAGE>

                             CHELL GROUP CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  FOR THE THREE AND NINE MONTHS ENDED MAY 31, 2003 AND MAY 31, 2002 (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

      The accompanying financial statements for the interim periods are
unaudited and reflect all adjustments (consisting only of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of the financial position and operating results for the periods
presented. These financial statements should be read in conjunction with the
financial statements and notes thereto, together with Management's Discussion
and Analysis of Financial Condition and Results of Operations, contained in the
Annual Report on Form 10-K of Chell Group Corporation (the "Company")
(Commission No.0-18066), filed with the Securities and Exchange Commission on
May 13, 2004. The results of operations for the three and nine months ended May
31, 2003 are not necessarily indicative of the results for the full fiscal year
ending August 31, 2003.

NOTE 2. GENERAL

      The financial statements of the Company for the three and nine months
ended May 31, 2003 (the "2003 Third Fiscal Quarter" and "2003 First Three Fiscal
Quarters"), includes the operations of the Company's wholly-owned subsidiaries
Chell Merchant Capital Group Inc. ("CMCG"), Chell.com (USA) Inc., and 3484751
Canada Inc. The financial statements also includes CMCG's wholly-owned
subsidiaries Logicorp Data Systems Ltd. and Logicorp Service Group Ltd., 123557
Alberta Ltd., and 591360 Alberta Ltd., which will be together referred to as
"Logicorp" and Logicorp's wholly-owned subsidiary eTelligent Solutions Inc.
("eTelligent). Discontinued operations consist of NTN Interactive Network Inc.
("NTNIN") which was sold on December 15, 2003 and GalaVu Entertainment Network
Inc. ("GalaVu") which was sold on April 25, 2003.

      The financial statements of the Company for the three and nine months
ended May 31, 2003 (the "2002 Third Fiscal Quarter" and "2002 First Three Fiscal
Quarters"), includes the operations of the Company's wholly-owned subsidiaries
CMCG, Chell.com (USA) and 3484751 Canada Inc. The financial statements also
CMCG's wholly-owned subsidiaries Logicorp Data Systems Ltd. and Logicorp Service
Group Ltd., 123557 Alberta Ltd., and 591360 Alberta Ltd., which will be together
referred to as "Logicorp". Discontinued operations consist of NTNIN (sold
December 15, 2003), GalaVu (sold April 25, 2003) and NTNIN's wholly-owned
subsidiary Magic Lantern Communications Inc. and it subsidiaries (sold March 18,
2002).

      Prior period's figures have been reclassified to be consistent with any
reclassifications in the current period.


                                     - 6 -
<PAGE>

NOTE 3. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

      In August 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-lived Assets (SFAS 144), that is applicable to financial
statements issued for fiscal years beginning after December 15, 2001. The new
rules on asset impairment supersede SFAS 121, Accounting for the impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and portions of
Accounting Principles Board Opinion 30, "Reporting the Results of Operations."
This Standard provides a single accounting model for long-lived assets to be
disposed of and significantly changes the criteria that would have to be met to
classify an asset as held-for-sale. Classification as held-for-sale is an
important distinction since such assets are not depreciated and are stated at
the lower of fair value and carrying amount. This Standard also requires
expected future operating losses from discontinued operations to be displayed in
the period(s) in which the losses are incurred, rather than as of the
measurement date as presently required. The Company is currently assessing the
potential impact of SFAS 144 on the operating results and financial position.

      In June 2001, the Financial Accounting Standards Board issued Statements
of Financial Accounting Standards No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules, business combinations can no longer be
reflected by using the pooling of interests method of accounting and goodwill
(and intangible assets deemed to have indefinite lives) will no longer be
amortized but will be subject to annual impairment tests in accordance with the
Statements. Other intangible assets will continue to be amortized over their
useful lives.

NOTE 4 - SEGMENT INFORMATION (UNAUDITED)

The following describes the performance by segment for the three and nine months
ended May, 2003 and 2002:

<TABLE>
<CAPTION>
=================================================================================================
                                        FOR THE THREE MONTHS            For the Nine months Ended
                                            ENDED MAY 31                         May 31
                                           2003          2002            2003           2002
                                             $             $               $              $
=================================================================================================
<S>                                      <C>            <C>            <C>            <C>
EXTERNAL REVENUE
  Systems Integration                    11,282,334     17,783,107     28,021,958     27,403,479
  Corporate                                      --              8             --         (3,049)
-------------------------------------------------------------------------------------------------
                                         11,282,334     17,783,115     28,021,958     27,400,430
-------------------------------------------------------------------------------------------------

OPERATING PROFIT (LOSS)
  Systems Integration                      (502,837)       114,447     (2,207,257)       112,782
  Corporate                                (489,203)       136,143     (1,744,318)    (1,419,933)
-------------------------------------------------------------------------------------------------
                                           (992,040)       250,590     (3,951,575)    (1,054,330)
-------------------------------------------------------------------------------------------------

NET INCOME (LOSS)
  Systems Integration                      (647,880)        70,456     (2,584,668)         4,896
  Corporate                                (982,492)    (8,840,267)    (3,452,380)   (11,715,531)
   Discontinued operations                 (392,629)    (2,703,214)       637,761     (3,681,045)
-------------------------------------------------------------------------------------------------
                                         (2,023,001)   (11,473,025)    (5,399,307)   (15,391,680)
=================================================================================================

                                                                             As at
                                                                      MAY 31, 2003   May 31, 2003
                                                                                     (Restated -
                                                                                        Note 6)
                                                                            $              $
=================================================================================================

TOTAL ASSETS
  Systems Integration                                                   5,731,433     17,610,214
  Corporate                                                             1,778,127      7,882,724
   Discontinued operations                                                804,598      5,032,985
-------------------------------------------------------------------------------------------------
                                                                        8,314,158     30,525,923
=================================================================================================
</TABLE>


                                     - 7 -
<PAGE>

NOTE 5. EARNINGS PER SHARE

      Earnings per share were calculated in accordance with Statement of
Financial Accounting Standards No. 128. The following table sets forth the
computation of basic and diluted earnings per share for the three and nine
months ended May 31, 2003 and May 31, 2003:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                          For the Three Months           For the Nine months
                                                              Ended May 31                  Ended May 31
                                                        2003           2002           2003           2002

                                                          $              $              $            $
--------------------------------------------------------------------------------------------------------------

<S>                                                   <C>            <C>            <C>           <C>
NUMERATOR:
Net loss (numerator for basic and diluted loss per
share) from continuing operations                     (1,630,372)    (8,769,811)    (6,037,068)   (11,409,397)
Net loss (numerator for basic and diluted loss per
share) from discontinued operations                     (392,629)    (2,703,214)       637,761     (3,982,283)
--------------------------------------------------------------------------------------------------------------
Net loss (numerator for basic and diluted loss per    (2,023,001)   (11,473,025)    (5,399,307)   (15,391,680)
share)
==============================================================================================================

DENOMINATOR FOR BASIC AND DILUTED LOSS PER SHARE
-adjusted weighted average number of shares and       10,795,410      9,441,028     10,744,234      9,230,935
assumed conversions
==============================================================================================================

Basic and diluted loss per share from continuing           (0.15)         (0.93)         (0.56)         (1.24)
operations
Basic and diluted loss per share from discontinued         (0.04)         (0.29)          0.06          (0.43)
operations
--------------------------------------------------------------------------------------------------------------
Net loss per share                                         (0.19)         (1.22)         (0.50)         (1.67)
==============================================================================================================
</TABLE>

NOTE 6. RESTATEMENT OF FINANCIAL STATEMENTS

Restatements to the three and nine months ended May 31, 2003:

[A] DISCOUNT ON CONVERTIBLE DEBT

      On October 3, 2000, the Company closed the sale of a US$3,000,000
Convertible 10% Debenture of which US$1,700,000 has been advanced. EITF-00-27
"Application of Issue No. 98-5 to Certain Convertible Instruments" requires that
a discount be recorded for any beneficial conversion features associated with
convertible debt. The Company did not record the discount on the US$1,700,000
debt and therefore had to make an adjustment and restate its fiscal 2001
financial statements. The Company has now recorded a discount of $1,959,144 in
October 2000 and has amortized $916,707 to date and $163,363 and $326,726 to
interest expense for the three months and nine months ending May 31, 2003.


                                     - 8 -
<PAGE>

[B] WARRANTS

      On October 3, 2000, the Company closed the sale of a US$3,000,000
Convertible 10% Debenture of which US$1,700,000 has been advanced. There were
warrants associated with the debt and the Company recognized a $252,706 cost
associated with these warrants. The company had expensed $77,215 and had
$175,491 as other assets. The amount has been reversed.

      Since the statements reflected these warrants on the books at the time of
these filings, the amount was being amortized. As a result the $44,030
corresponding expense needed to be reversed.

[C] LOGICORP PURCHASE

      The Company originally accrued shares for the purchase of Logicorp. The
purchase agreement states for the issuance of shares in CMCG that are
convertible to CGC shares. Prior to year-end, the Company began negotiations to
adjust the purchase price of Logicorp due to an investigation of claims filed by
Logicorp owed by Hewlett-Packard (Canada) Ltd. ("HP"). As a result the purchase
price for Logicorp has been amended, the issuance of convertible common shares
has been decreased to 3,000,000 from 5,355,000 and a portion of the second
promissory note of $500,000 has been removed. In addition, a historical audit of
Logicorp found irregularities in the financial statements provided to the
Company. As a result the share accrual of common shares of $395,124 and
additional paid in capital of $4,904,980 have been reversed, an increase to note
payable to Logicorp shareholders by $200,000, a decrease to SG&A of $84,189 and
a decrease to goodwill of $5,015,915.

The following table presents the impact of the 2002 restatements:

--------------------------------------------------------------
                                      As           As Restated
                                  Previously
                                   Reported

                                       For the three months
                                              ended
                                           May 31, 2003
-----------------------------------------------------------------

  Statement of operations:
    Selling, general and admin        3,232,791        3,126,587
    Interest and Bank Charges           918,818        1,082,081
    Net loss                         (2,740,556)      (2,797,615)

EPS
Basic and diluted from
continuing operations             $       (0.18)   $       (0.26)
Basic and diluted from
discontinued operations           $       (0.03)   $       (0.04)
Net loss per share                $       (0.21)   $       (0.30)
-----------------------------------------------------------------

-----------------------------------------------------------------
                                      As        As Restated
                                  Previously
                                   Reported

                                For the nine months ended
                                      May 31, 2003
-----------------------------------------------------------------
  Balance sheet:
      Goodwill                     13,609,273      8,601,978
      Other Assets                    614,540        483,077
Long-term debt                      4,978,074      4,144,083
    Share Capital
      Common shares                 1,040,524        645,400
      Capital in excess of         25,366,699     22,168,157
par value
      Deficit                     (16,356,877)   (17,076,598)

  Statement of operations:
    Selling, general and admin      4,819,575      4,691,356
    Interest and Bank Charges       1,236,522      1,563,048
    Net loss                       (3,720,347)    (3,918,654)

EPS
Basic and  diluted from
continuing operations             $     (0.26)   $     (0.33)
Basic and  diluted from
discontinued operations           $     (0.08)   $     (0.09)
Net loss per share                $     (0.34)   $     (0.42)
-----------------------------------------------------------------


                                     - 9 -
<PAGE>

NOTE 7. SUBSEQUENT EVENTS

[A] GAIN ON SALE OF SUBSIDIARY'S ASSETS

      Effective the 15th day of December, 2003, the Company sold to NTN
Communications, Inc. (Amex: NTN) the assets and certain liabilities of NTN
Interactive Network, Inc. The Company sold NTN Interactive Network's assets for
approximately USD$1.55 million. The consideration was composed of US$250,000 in
cash, US$650,000 in shares of unregistered NTN common stock (approximately
238,000 shares valued at the closing market price on the date of sale which was
$2.73 per share). The Company intends to hold the shares of NTN for an
indeterminate period of time, no less than the required time for Rule 144
restrictions to be removed. The remainder of the purchase price was based upon
the application of unpaid licensing payables (approximating US$650,000) owed to
NTN Communications, Inc., at the closing of the transaction.

      The Company has adopted SFAS 144 and as a result the fiscal balances have
been restated in order to conform with the presentation of fiscal 2004 financial
presentation. Interactive is reported as part of the discontinued business
segment (previously entertainment segment).

      In an effort to streamline and focus the Company's resources on its core
business segment of systems integration, all other segments were decided to be
discontinued. Interactive had historical been profitable, provided positive cash
flows and faced little or no competition; however the organization no longer
strategically fit with the Company and the asset were sold.

      Details of the transaction are detailed below

       -------------------------------------------------
       Proceeds
          Shares                            $   853,125
          Loan receivable                       328,125
       Assets sold                             (953,267)
       Liabilities assumed                    1,531,330
       -------------------------------------------------
       Gain from sale of subsidiary         $ 1,759,313
       -------------------------------------------------

[B] SALE OF BUILDINGS AND LAND

      During the fiscal year ended August 31, 2002, we owned an approximately
25,000 square foot parcel of land, located at 14 Meteor Drive in Toronto,
Ontario, on which stands a 12,500 square foot, one story building. On December
19, 2003, we sold this land and building to an unrelated third party for
approximately $730,000 and recorded a gain on the sale of approximately
$100,000.


                                     - 10 -
<PAGE>

      During the fiscal year ended August 31, 2002, we owned an approximately
29,000 square foot parcel of land, located at 10 Meteor Drive, Toronto, Ontario,
on which stands a 14,000 square foot, two story building. We sold this land and
building to an unrelated party on March 7, 2004 for approximately $710,000. The
Company anticipates a gain of approximately $70,000.

[C] LOGICORP ADVANCES

      During 2003, B.O.T.B., an affiliated company, advanced Logicorp Data
Systems $820,000. The advance is due on demand and did not carry a stated
interest rate. Due to its long-term nature, the Company has imputed interest on
the advance at a rate of 9%.

[D] RESIGNATION OF STEPHEN MCDERMOTT (CEO)

      Effective April 28, 2004, Stephen McDermott resigned his posts of Chief
Executive Officer and Chairman of the Board. David Bolink, current Board Member
has been appointed Chief Executive Officer and Chairman of the Board.

[E] SALE OF LOGICORP

      Effective August 8, 2004, the Company's previously wholly-owned
subsidiaries, Logicorp Data Systems Inc., and Logicorp Service Group Inc.
(together, "Logicorp") issued common shares to NewMarket Technologies
("NewMarket"), a publicly-traded company for US$2.1 million, such that NewMarket
holds 51% of the outstanding equity securities of Logicorp. In exchange for 51%
of these subsidiaries, NewMarket will pay Logicorp $1.1 million in cash at
closing. An additional $1.0 million will be paid to Logicorp according to the
terms of a $1.0 million, 24-month promissory note. As a result of this
transaction, the Company holds the remaining 49% of the outstanding shares of
Logicorp.

      Twelve (12) months following the first anniversary of the purchase of the
51% interest, if Logicorp has achieved annual sales of at least $18,000,000 with
at least a breakeven profit, Chell Group will have an option to require
NewMarket to acquire the remaining 49% of the sellers remaining stock for a
purchase price of $1,900,000 to be paid in NewMarket stock with piggyback
registration rights. NewMarket will have an equal right to require the sale of
Chell Group's remaining 49% stock position in Logicorp under the same
performance conditions.

[F] 1109822 ALBERTA INC.

      Subsequent to year end, on May 26, 2004, the Company founded a new
Canadian subsidiary corporation, 1109822 Alberta Ltd. This wholly-owned
subsidiary was created to act as a holding company for investments in various
sectors, including electronic payment processing. 1109822 Alberta Ltd. has
purchased 33 Units of a Canadian limited partnership, Tech Income Limited
Partnership 1 ("Tech Income") for $495,000 (approximately US$390,000 at current
exchange rates). Tech Income was founded in early 2004 with the objective of
building products and services to compete in the growing online payment
processing industry. Tech Income is currently carrying on business as "Broker
Payment Systems" or "BPS". This is an electronic payment transfer system which
facilitates payments and transfers of funds securely and in real time to and
from equity brokerage firms for investing clients. BPS is currently marketing
this system in the United States. Management of the Company (and its subsidiary)
believes that the Chell Group can better profit from the expected growth in this
sector by pooling resources with Tech Income (and its existing product offering)
rather than by moving into this area alone. The most recent information provided
to us by Tech Income (as at September 15, 2004) shows that 1109822 Alberta Ltd.
holds approximately 32% of Tech Income's issued and outstanding units. This
position may be diluted as Tech Income continues to sell units to other
investors. The Company expects to account for this under the equity method of
accounting.


                                     - 11 -
<PAGE>

      Broker Payment Management Inc., which works with Tech Income in
distributing the BPS products and services, has been invested in directly by the
Company ($495,000 was advanced on June 18, 2004). Chell Group currently (as at
September 15, 2004) holds approximately 19% of Broker Payment Management Inc.'s
equity shares. The Company expects to account for this under the cost method of
accounting.

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

GENERAL

      Management is responsible for preparing the Company's consolidated
financial statements and related information that appears in this Form 10-Q.
Management believes that the consolidated financial statements fairly reflect
the form and substance of transactions and reasonably present the Company's
consolidated financial condition and results of operations in conformity with
accounting principles generally accepted in the United States of America
("GAAP"). Management has included in the Company's consolidated financial
statements amounts that are based on estimates and judgments, which it believes
are reasonable under the circumstances. The Company maintains a system of
internal accounting policies, procedures and controls intended to provide
reasonable assurance, at the appropriate cost, that transactions are executed in
accordance with the Company's authorization and are properly recorded and
reported in the consolidated financial statements, and that assets are
adequately safeguarded.

      The Company's operations are primarily conducted through its 100% owned
subsidiaries: Logicorp Data Systems Ltd. ("LDS"), and Logicorp Service Group
Ltd., ("LSG") and LDS wholly-owned subsidiary eTelligent Solutions Inc.
("eTelligent").

      The following discussion addresses the financial condition and results of
operations of the Company. This discussion should be read in conjunction with
the Company's Annual Report on Form 10-K for the fiscal year ended August 31,
2002 and with the Company's unaudited consolidated interim financial statements
as of May 31, 2003 and for the three and nine month periods ended May 31, 2003
and 2002 contained herein.

      Results for any interim periods are not necessarily indicative of results
for any full year.

CORPORATE BACKGROUND

      We are engaged in the business of providing interactive entertainment
services and systems integration services. Our core businesses are the systems
integration services provided by our Logicorp Data Systems Ltd. subsidiary and
the interactive entertainment services provided by our NTN Interactive Network
and GalaVu Entertainment Network Inc. subsidiaries.

      As of May 31, 2003, we had a working capital deficit of $21,931,942 and an
accumulated deficit of $49,308,788. We generated revenues of $28,021,958 for the
2003 First Three Fiscal Quarters and incurred a net loss of $5,399,307. In
addition, during the 2003 Fiscal Year, net cash used in operating activities was
$1,094,133.

      We are in a transitional stage of operations and, as a result, the
relationships between revenue, cost of revenue, and operating expenses reflected
in the financial information included in this annual file do not represent
future expected financial relationships. Accordingly, we believe that, at our
current stage of operations period-to-period comparisons of results of
operations are not meaningful.

PLAN OF OPERATIONS

      Our business strategy is to divest ourselves of non-core operating and
wind up all non-operating companies. While at the same time refocusing our
energies in our core companies and bring these operations to profitable
operations. Our core operations are the systems integration segment companies.
We will be bringing our corporate entity current with all of its filings and
will begin to petition for market status. While all the time looking for new
opportunities that may arise in order to increase our value and profitability.


                                     - 12 -
<PAGE>

      We expect our general and administrative costs to increase in future
periods due to our operating as a public company whereby we will incur added
costs for filing fees, increased professional services and insurance costs.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 31, 2003 COMPARED TO THE
THREE MONTHS ENDED MAY 31, 2003.

      The Company's total revenues for the 2003 First Fiscal Quarter were
$11,282,334, compared to $17,783,115 for the 2002 Third Fiscal Quarter, a
decrease of $6,500,781 or 36.6%. Logicorp experienced a major decrease in its
sales levels, due to changes in sales staff, slumping technology market and
decreased government expenditures.

      Total cost of sales for the 2003 Third Fiscal Quarter were $9,794,370
compared to $16,272,005 for the 2002 Third Fiscal Quarter, a decrease of
$6,477,635 or 39.8%. The decrease results from decreased costs associated with
our service sales and changes to product mix and decreased sales.

      Total selling, general and administrative expenses for the 2003 Third
Fiscal Quarter were $2,166,544, compared to $1,009,795 for the 2002 Third Fiscal
Quarter, an increase of $1,156,749 or 115.0%. eTelligent was purchase on June 1,
2002, so there are no comparative financials for the 2002 Third Fiscal Quarter.
eTelligent accounted for $264,603 or 22.9% of the total increase. Like for like
growth was $892,146 or 77.1%. The increase can be attributed to increase
accounting and legal fees and increasing operating costs. As a percentage of
total revenue these costs increased to 19.2% from 5.7% in the 2002 Third Fiscal
Quarter.

      Interest and bank charges for the 2003 Third Fiscal Quarter were $618,832,
compared to $331,267 for the 2002 Third Fiscal Quarter, an increase of $287,565
or 86.8%. The increase results from increased levels of debt. As a percentage of
total revenue these costs increased to 5.5% from 1.9% in the 2002 Third Fiscal
Quarter.

      There was a $19,500 provision for income taxes recorded in the 2003 Third
Fiscal Quarter compared with no provision/recovery of income taxes for the 2002
First Fiscal Quarter. As the tax provision is based upon the individual
companies' taxable income, a minimal provision was incurred, as not all the
companies are in a taxable position. There are no deferred tax assets recorded
by the Company.

      There were costs associated with the 2002 Third Fiscal Quarter that did
not occur in the 2003 Third Fiscal Quarter. The $521,119 loss on settlement of
debt, $1,884,134 of financing costs and the $6,283,881 of interest costs of
beneficial conversion features did not occur in the 2003 Third Fiscal Quarter.
These costs may not be one-time in nature as the type of transaction may occur
in the Company's future.

      As a result of all of the above, the net loss from continuing operations
for the 2003 Third Fiscal Quarter was $1,630,372, compared to net loss of
$8,769,811 for the 2002 Third Fiscal Quarter, a decrease of $7,139,439. The
decrease in loss was primarily the result of the non-occurrence of the one-time
interest costs.

      The loss from discontinued operations for the 2003 Third Fiscal Quarter
was $392,629, compared to net loss of $2,703,214 for the 2002 Third Fiscal
Quarter, a decrease of $2,310,585. This gain was primarily the result of no
losses ($949,432) from the discontinued operation of Magic, which was sold on
March 18, 2002.


                                     - 13 -
<PAGE>

      As a result of all of the above, the net loss for the 2003 Third Fiscal
Quarter was $2,023,001, compared to net loss of $11,473,025 for the 2002 Third
Fiscal Quarter, a decrease of $9,450,024. The 2003 Third Fiscal Quarter reduced
loss resulted primarily from decreased losses from discontinued operations
($2,310,647) and one-time losses ($8,689,134).

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED MAY 31, 2003 COMPARED TO THE
NINE MONTHS ENDED MAY 31, 2003.

      The Company's total revenues for the 2003 First Three Fiscal Quarters are
$28,021,958, compared to $27,400,430 for the 2002 First Three Fiscal Quarters,
an increase of $621,528. Logicorp was purchased on January 1, 2002 and
eTelligent was purchased on June 1, 2002, so the comparative financials for the
2002 First Three Fiscal Quarters only have five months versus nine for the 2003
First Three Fiscal Quarters. The total sales for the four months in the 2003
First Three Fiscal Quarters were $6,337,563. Therefore like for like sales were
$21,976,779 for the 2003 First Three Fiscal Quarters compared to $27,400,430 for
the 2002 First Three Fiscal Quarters, a decrease of $5,423,651 or 19.8%.

      Total cost of sales for the 2003 First Three Fiscal Quarters were
$24,605,484 compared to $25,059,831 for the 2002 First Three Fiscal Quarters, a
decrease of $454,347. Logicorp was purchased on January 1, 2002 and eTelligent
was purchased on June 1, 2002, so the comparative financials for the 2002 First
Three Fiscal Quarters only have two months versus six for the 2003 First Three
Fiscal Quarters. The total cost of sales for the four months in the 2003 First
Three Fiscal Quarters were $4,953,264. Therefore like for like cost of sales
were $19,652,220 for the 2003 First Three Fiscal Quarters compared to
$25,059,831 for the 2002 First Three Fiscal Quarters, a decrease of $5,047,611
or 21.6%.

      Total selling, general and administrative expenses for the 2003 First
Three Fiscal Quarters were $6,428,657, compared to $2,847,055 for the 2002 First
Three Fiscal Quarters, an increase of $3,581,602 or 125.8%. Logicorp was
purchased on January 1, 2002 and eTelligent was purchased on June 1, 2002, so
the comparative financials for the 2002 First Three Fiscal Quarters only have
five months versus nine for the 2003 First Three Fiscal Quarters. The selling
general and administrative expenses for the four months in the 2003 First Three
Fiscal Quarters were $1,835,228 or 51.2% of the total increase. The Company has
experienced increase accounting and legal fees and increased operating costs.

      Interest and bank charges for the 2003 First Three Fiscal Quarters were
$1,835,601, compared to $1,665,933 for the 2002 First Three Fiscal Quarters, an
increase of $169,668 or 10.2%. The increase results from increased debt levels.
As a percentage of total revenue these costs increased to 6.6% from 6.1% in the
2002 Third Fiscal Quarter.

      There was a $1,305 provision for income taxes recorded in the 2003 First
Three Fiscal Quarters compared with no provision/recovery of income taxes for
the 2002 First Three Fiscal Quarters. As the tax provision is based upon the
individual companies' taxable income, a minimal provision was incurred, as not
all the companies are in a taxable position. There are no deferred tax assets
recorded by the Company.

      There were costs associated with the 2002 First Three Fiscal Quarters that
did not occur in the 2003 First Three Fiscal Quarters. The $521,119 loss on
settlement of debt, $1,884,134 of financing costs and the $6,283,881 of interest
costs of beneficial conversion features did not occur in the 2003 First Three
Fiscal Quarters. These costs may not be one-time in nature as the type of
transaction may occur in the Company's future.

      As a result of all of the above, the net loss from continuing operations
for the 2003 First Three Fiscal Quarters was $6,037,068, compared to net loss of
$11,409,397 for the 2002 First Three Fiscal Quarters, a decrease of $5,372,359.
The decrease in loss was primarily the result of the non-occurrence of the
one-time interest costs offset by increased operating costs.

      The gain from discontinued operations for the 2003 First Three Fiscal
Quarters was $637,761, compared to net loss of $3,982,283 for the 2002 First
Three Fiscal Quarters, an increase of $4,620,044. This gain was primarily the
result of the retirement of debt incurred with the GalaVu subsidiary of
$2,051,215 and decreased operating losses from the discontinued operation of
$3,096,787.


                                     - 14 -
<PAGE>

      As a result of all of the above, the net loss for the 2003 First Three
Fiscal Quarters was $5,399,307, compared to net loss of $15,391,680 for the 2002
First Three Fiscal Quarters, a decrease of $9,992,373. The 2003 First Three
Fiscal Quarters reduced loss resulted primarily from gains from discontinued
operations, no one-time costs offset by increase in continuing operating losses.

LIQUIDITY AND CAPITAL RESOURCES

      The Company's working capital deficit changed from $17,551,881 at August
31, 2002 to $21,931,942 at May 31, 2003, an increase of $4,380,061.

      For the 2003 First Three Fiscal Quarters, the Company had a net increase
of cash of $81,010 compared to a net decrease of $368,644 in the 2002 First
Three Fiscal Quarters.

      Cash provided by operating activities for the 2003 First Three Fiscal
Quarters was $460,463, compared to $10,576,301 used in operating activities in
the 2002 First Three Fiscal Quarters. In 2003, the major items that contributed
to cash being provided by operating activities were as follows: The major items
that contributed to cash being provided by operating activities were as follows:
the increase in accounts payable and accrued liabilities of $2,406,141 and the
increase in accrued interest of $774,712. The major items that contributed to
cash being used in operating activities were as follows: net loss with non-cash
expenses added back of $2,522,630, the increase in prepaid expenses of $21,715
and the decrease in deferred revenue of $377,061. In 2002 First Three Fiscal
Quarters, the major item that contributed to cash being used in operating
activities was the net loss with non-cash expenses added back of $5,907,022, the
increase in accounts receivable of $6,104,371, the increase in inventory of
$2,194,019, and the increase in other accounts receivable of $180,707. The major
sources of cash provided by operating activities included increases in accounts
payable and accrued liabilities of $3,688,291.

      Cash provided by investing activities in the 2003 First Three Fiscal
Quarters was $238,435 compared to the $37,250 provided by investing activities
in the 2002 First Three Fiscal Quarters, an increase of $201,185.

      Cash used in financing activities in the 2003 First Three Fiscal Quarters
was $571,878, compared to the $10,170,407 provided by the 2002 First Three
Fiscal Quarters. The decrease is primarily due to the decreased levels of funds
raised.

      Our business plan for 2003 contemplates obtaining additional working
capital through refinancing or restructurings of our existing loan agreements,
reducing operating overhead (which has already begun through workforce
consolidation), and the possible sale of some of our existing subsidiaries. Our
management is of the opinion that they will be able to obtain enough working
capital and that together with funds provided by operations, there will be
sufficient working capital for the Company's requirements.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF
SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

      The Company and its representatives may, from time to time, make written
or oral forward-looking statements with respect to their current views and
estimates of future economic circumstances, industry conditions, company
performance and financial results. These forward-looking statements are subject
to a number of factors and uncertainties, which could cause the Company's actual
results and experiences to differ materially from the anticipated results and
expectations, expressed in such forward-looking statements. The Company cautions
readers not to place undue reliance on any forward-looking statements, which
speak only as of the date made. Among the factors that may affect the operating
results of the Company are the following: (i) fluctuations in the cost and
availability of raw materials, such as feed grain costs in relation to
historical levels; (ii) market conditions for finished products, including the
supply and pricing of alternative proteins which may impact the Company's
pricing power; (iii) risks associated with leverage, including cost increases
attributable to rising interest rates; (iv) changes in regulations and laws,
including changes in accounting standards, environmental laws, occupational and
labor laws, health and safety regulations, and currency fluctuations; and (v)
the effect of, or changes in, general economic conditions.


                                     - 15 -
<PAGE>

      This management discussion and analysis of the financial condition and
results of operations of the Company may include certain forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
including, without limitation, statements with respect to anticipated future
operations and financial performance, growth and acquisition opportunity and
other similar forecasts and statements of expectation. Words such as expects,
anticipates, intends, plans, believes, seeks, estimates, should and variations
of those words and similar expressions are intended to identify these
forward-looking statements. Forward-looking statements made by the Company and
its management are based on estimates, projections, beliefs and assumptions of
management at the time of such statements and are not guarantees of future
performance. The Company disclaims any obligations to update or review any
forward-looking statements based on the occurrence of future events, the receipt
of new information or otherwise.

      Actual future performance, outcomes and results may differ materially from
those expressed in forward-looking statements made by the Company and its
management as a result of a number of risks, uncertainties and assumptions.
Representative examples of these factors include, without limitation, general
industrial and economic conditions; cost of capital and capital requirements;
shifts in customer demands; changes in the continued availability of financial
amounts and the terms necessary to support the Company's future business.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INFLATION

      The rate of inflation has had little impact on the Company's operations or
financial position during the nine months ended May 31, 2003 and May 31, 2002
and inflation is not expected to have a significant impact on the Company's
operations or financial position during the 2003 Fiscal Year.

FOREIGN EXCHANGE RISK

      The Company pays a number of its suppliers, including its licensor and
principal supplier, NTN Communications, Inc., in US dollars. In addition the
Company holds a large amount of US dollar debt, and fluctuations in the value of
the Canadian dollar against the US dollar will have an impact on its gross
profit as well as its net income. If the value of the Canadian dollar falls
against the US dollar, the cost of sales of the Company will increase thereby
reducing its gross profit and net income. Conversely, if the value of the
Canadian dollar rises against the US dollar, its gross profit and net income
will increase.

      As of May 31, 2003, the Company had outstanding indebtedness of
approximately $5.3 million denominated in U.S. dollars. The potential foreign
exchange loss resulting from a hypothetical 10% increase for the nine months
ended May 31, 2003 in the devaluation of the Cdn/US dollar exchange rate would
be approximately $530,000. This loss would be reflected in the balance sheet as
increases in the principal amount of its dollar-denominated indebtedness and in
the income statement as an increase in foreign exchange losses, reflecting the
increased cost of servicing dollar-denominated indebtedness. This analysis does
not take into account the positive effect that the hypothetical increase would
have on accounts receivable and other assets denominated in U.S. dollars.

ITEM 4. CONTROLS AND PROCEDURES


                                     - 16 -
<PAGE>

      As of the end of the period covered by this quarterly report, an
evaluation was performed under the supervision and with the participation of the
Company's management, including the Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Section 13a-15(e) and
15d-15(3) of the Securities Exchange Act of 1934, as amended). Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the design and operation of these disclosure controls and procedures were
effective.

      There have been no significant changes in the Company's internal controls
over financial reporting that occurred during the Company's Third Fiscal Quarter
that has materially affected or is reasonably likely to materially affect, the
Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.


                                     - 17 -
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      The following list sets forth the applicable exhibits (numbered in
accordance with Item 601 of Regulation S-K) required to be filed with this
Quarterly Report on Form 10-Q:

<TABLE>
<CAPTION>
    Exhibit
    Number                                    Description of Exhibit                                  Location
<S>            <C>                                                                           <C>
     2.1       Stock Purchase Agreement, dated October 1, 1996, among Connolly-Daw
               Holdings Inc., 1199846 Ontario Ltd., Douglas Connolly, Wendy Connolly and
               NTN Interactive Network Inc., minus Schedules thereto....................      +1, Exh. 10.1
     3.1       Articles of Incorporation, as amended to date............................              p. 59
     3.2       By-Laws, as amended to date..............................................              p. 62
     4.1       Specimen Stock Certificate...............................................              p. 71
    10.1       License Agreement, dated March 23, 1990, between NTN Communications, Inc.
               and NTN Interactive Network Inc..........................................      +2, Exh. 10.9
    10.2       Stock Purchase Agreement, dated as of October 4, 1994, between NTN Canada
               and NetStar Enterprises Inc. (formerly, Labatt Communications Inc.)......
                                                                                                 +3, Exh. A
    10.3       Option, dated as of October 4, 1994, registered in the name of NetStar
               Enterprises Inc. (formerly, Labatt Communications Inc)...................         +3, Exh. B
    10.4       Designation Agreement dated as of October 4, 1994, among NTN Canada,
               Inc., NTN Interactive Network Inc. and NetStar Enterprises Inc. (formerly
               Labatt Communications Inc.)..............................................         +3, Exh. C
    10.5       Registration Rights Agreement, dated as of October 4, 1994, between NTN
               Canada and NetStar Enterprises Inc. (formerly, Labatt Communications Inc.)        +3, Exh. D
    10.6       Promissory Note of NTN Interactive Network Inc. registered in the name of
               Connolly-Daw Holdings, Inc...............................................      +1, Exh. 10.2
    10.7       Promissory Note of NTN Interactive Network Inc., registered in the name
               of 1199846 Ontario Ltd...................................................      +1, Exh. 10.3
    10.8       Option Agreement, dated October 1, 1996, among Connolly-Daw Holdings
               Inc., NTN Interactive Network Inc. and NTN Canada, Inc...................     +1, Exh. 10.5
    10.9       Option Agreement, dated October 1, 1996, among 1199846 Ontario Ltd., NTN
               Interactive Network Inc. and NTN Canada, Inc.............................      +1, Exh. 10.6
   10.10       Registration Rights Agreement, dated October 1, 1996, among NTN Canada,
               Inc., Connolly-Daw Holdings Inc. and 1199846 Ontario Ltd.................      +1, Exh. 10.4
   10.11       Employment Agreement dated as of August 31, 1994, between NTN Interactive
               Network Inc. and Peter Rona..............................................     +4, Exh. 10.11
   10.12       Management Agreement dated October 1, 1996, between Magic Lantern
               Communications Ltd. and Connolly-Daw Holdings Inc........................     +4, Exh. 10.12
   10.13       Employment Agreement dated October 1, 1996, between Magic Lantern
               Communications Ltd. and Douglas Connolly.................................     +4, Exh. 10.13
   10.14       Employment Agreement dated October 1, 1996, between Magic Lantern
               Communications Ltd. and Wendy Connolly...................................     +4, Exh. 10.14
   10.15       Asset Purchase Agreement, dated September 10, 1999, by and between
               1373224 Ontario Limited, Networks North Inc. and Arthur Andersen Inc., to
               acquire the property and assets of GalaVu Entertainment Inc., from the
               person appointed by the court of competent jurisdiction as the receiver
               or receiver and manager of the property, assets and undertaking of
               GalaVu. .................................................................     +5, Exh. 10.15
</TABLE>


                                     - 18 -
<PAGE>

<TABLE>
<S>            <C>                                                                           <C>
   10.16       Promissory Note, dated September 10, 1999, by and between 1373224 Ontario
               Limited, as Debtor, and the Holder, as Creditor. ........................     +5, Exh. 10.16
   10.17       General Security Agreement, dated September 10, 1999, by and between
               1373224 Ontario Limited, to acquire the property and assets of GalaVu
               Entertainment Inc., from the person appointed by the court of competent
               jurisdiction as the receiver or receiver and manager of the property,
               assets and undertaking of GalaVu.........................................     +5, Exh. 10.17
   10.18       Securities Pledge Agreement, dated September 10, 1999, by and between
               1373224 Ontario Limited to acquire the property and assets of GalaVu
               Entertainment Inc., from the person appointed by the court of competent
               jurisdiction as the receiver or receiver and manager of the property,
               assets and undertaking of GalaVu.........................................     +5, Exh. 10.18
   10.19       Certificate to the Escrow Agent certifying that the conditions of Closing
               have been satisfied or waived............................................   +5, Exh. 10.19
   10.20       Certificate to the Escrow Agent certifying that the conditions of Closing
               have not been satisfied or waived........................................     +5, Exh. 10.20
   10.21       Occupancy and Indemnity Agreement, dated September 10, 1999, by and
               between 1373224 Ontario Limited to acquire the property and assets of
               GalaVu Entertainment Inc., from the person appointed by the court of
               competent jurisdiction as the receiver or receiver and manager of the
               property, assets and undertaking of GalaVu...............................     +5, Exh. 10.21
   10.22       Order of the Ontario Superior Court of Justice, dated September, 1999,
               approving the transaction contemplated herein, and vesting in the
               Purchaser the right, title and interest of GalaVu and the Receiver, if
               any, in and to the Purchased Assets, free and clear of the right, title
               and interest of any other person other than Permitted Encumbrances.......
                                                                                             +5, Exh. 10.22
   10.23       Bill of Sale, dated September 13, 1999, by and between 1373224 Ontario
               Limited to acquire the property and assets of GalaVu Entertainment Inc.,
               from the person appointed by the court of competent jurisdiction as the
               receiver or receiver and manager of the property, assets and undertaking
               of GalaVu................................................................     +5, Exh. 10.23
   10.24       Covenant of Networks North Inc. for valuable consideration to allot and
               issue and pay to the Receiver 100,000 common shares in accordance with
               the Purchase Agreement date September 10, 1999, between 1373224 Ontario
               Limited and the Receiver.................................................     +5, Exh. 10.24
   10.25       Agreement of Purchase and Sale dated August 4, 2000 by and among Networks
               North Inc., Networks North Acquisition Corp., Chell.com Ltd. and Cameron
               Chell.....................................................................        +6, Exh. A
   10.26       Valuation of Chell.com Ltd. as of May 31, 2000 by Stanford Keene.........        +6, Exh. B.
   10.27       Share Purchase Agreement by and among Chell Group Corporation, Chell
               Merchant Capital Group, Inc., Melanie Johannesen, Randy Baxandall, Morris
               Chynoweth, Elaine Chynoweth, the Johannesen Family Trust, the Baxandall
               Family Trust, the Merc Family Trust, Logicorp Data Systems Ltd., 123557
               Alberta Ltd., Logicorp Service Group Ltd. and 591360 Alberta
               Ltd................................................................          +7, Exhibit 2.1
   10.28       Share Purchase Agreement, dated as of April 25, 2003 between DVOD
               Networks Inc., and Chell Group Corporation, minus schedules thereto;
   10.29       Assignment of Debt and Security, dated April 25, 2003 between Chell Group
               Corporation and DVOD Networks Inc;
   10.30       Assignment of Debt and Security, dated April 25, 2003 among NTN
               Interactive Network Inc., DVOD Networks Inc and GalaVu Entertainment
               Network Inc.;
   10.31       Form of Assignment of Debt and Security, dated April 25, 2003 among
               488605 Ontario Limited, Ruth Margel and DVOD Networks Inc., minus
               schedules thereto.
</TABLE>


                                     - 19 -
<PAGE>

<TABLE>
<S>            <C>                                                                           <C>
   10.32       Stock Purchase Agreement dated as of August 2, 2004, by and among             +5, Exh. 10.25
               NewMarket Technology, Inc., the Registrant and Logicorp Data Systems, Ltd.
   10.33       Bonus Agreement entered into August 2, 2004, by and between the               +5, Exh. 10.26
               Registrant and NewMarket Technology.
   10.34       Form of Promissory Note issued by NewMarket Technology, Inc. to Logicorp      +5, Exh. 10.27
               Data Systems, Ltd.
   10.35       Unanimous Shareholders Agreement dated August 2, 2004 by and among            +5, Exh. 10.28
               NewMarket Technology, Inc., the Registrant and Logicorp Data Systems, Ltd.
   10.36       Registration Rights Agreement dated as of August 2, 2004, is entered into     +5, Exh. 10.29
               by and among NewMarket Technology, Inc., and the Registrant.
    . . . . .
      21       List of Subsidiaries.....................................................              p. 19

    31.1       Certification of the Chief Executive Officer pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002

    31.2       Certification of the Chief Financial Officer pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002

    32.1       Certification of the Chief Executive Officer pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002

    32.2       Certification of the Chief Financial Officer pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002
</TABLE>

----------------

+1    All Exhibits so indicated are incorporated herein by reference to the
      exhibit listed above in the Company's Current Report on Form 8-K (Date of
      Report: October 2, 1996) (File No. 0-18066), filed on October 17, 1996.

+2    All Exhibits so indicated are incorporated herein by reference to the
      exhibit listed above in the Annual Report on Form 10-K of NTN
      Communications, Inc., for its fiscal year ended December 31, 1990) (File
      No. 2-91761-C), filed on April 1, 1991.

+3    All Exhibits so indicated are incorporated herein by reference to the
      exhibit listed above in the Company's Current Report on Form 8-K (Date of
      Report: October 4, 1994) (File No. 0-18066), filed on October 18, 1994.

+4    All Exhibits so indicated are incorporated herein by reference to the
      exhibit listed above in the Company's Annual Report on Form 10-K (Date of
      Report: November 27, 1996) (File No. 0-18066), filed on December 16, 1996.

+5    All Exhibits so indicated are incorporated herein by reference to the
      exhibit listed above in the Company's 8-K (Date of Report: September 13,
      1997) (File No. 0-18066), filed on December 16, 1996.

+6    All Exhibits so indicated are incorporated herein by reference to the
      exhibit number listed above in the Definitive Proxy Statement on Form 14A
      of the Registrant (File No. 000-18066), filed with the Securities and
      Exchange Commission on August 8, 2000.

+7    All Exhibits so indicated are incorporated herein by reference to the
      exhibit number listed above in the Company's Current Report on Form 8-K
      (Date of Report: December 13, 2001) (File No. 0-18066), filed on December
      28, 2001.

++    Filed electronically pursuant to Item 401 of Regulation S-T.


                                     - 20 -
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                       CHELL GROUP CORPORATION

                                       By       /s/ David Bolink
Dated: November 30, 2004                 ---------------------------------------
                                                 DAVID BOLINK
                                             CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

                                                /s/ David Bolink
Dated: November 30, 2004                 ---------------------------------------
                                                  DAVID BOLINK
                                           CHIEF EXECUTIVE OFFICER AND
                                             CHIEF ACCOUNTING OFFICER


                                     - 21 -