FORM 10-QSB
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES
EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001

                                       OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

      For the transition period from _____________ to ____________________


                        Commission file number 000-26011


                           INTERNET CABLE CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                                     NEVADA
         --------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)


                                   87-0540291
                      ------------------------------------
                      (I.R.S. Employer Identification No.)


               195 RIVIERA DRIVE, UNIT 2, MARKHAM, ONTARIO L3R 5J6
              -----------------------------------------------------
               (Address of principal executive offices) (Zip Code)


                                 (313) 218-2276
               ---------------------------------------------------
              (Registrant's telephone number, including area code)






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
    -----     -----


The number of shares outstanding of each of the issuer's classes of common
stock, as of August 10, 2001, was 10,493,984 shares, all of one class (common
stock), par value $0.001 per share.


<PAGE>


Transitional Small Business Disclosure Format (check one);

Yes        No   x
    -----     -----


<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1.        FINANCIAL STATEMENTS

                           INTERNET CABLE CORPORATION
                             CONDENSED BALANCE SHEET

                                     ASSETS

                                                             June 30, 2001
                                                              (Unaudited)
                                                             --------------

Current assets
Cash                                                              $397,625
Accounts receivable, net of allowance for doubtful accounts      1,141,842
of $267,627
Unbilled receivables                                               218,789
Inventories                                                        118,780
Prepaid expenses and other current assets                          125,818
                                                                ----------
Total current assets                                             2,002,854

Property and equipment - at cost, less accumulated               1,029,230
depreciation of $761,259

Goodwill and other intangibles, net of accumulated               3,024,863
amortization of $1,296,371

Other assets                                                        18,106
                                                                ----------
                                                                $6,075,053
                                                                ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities
Notes payable, stockholders                                      $ 100,077
Accounts payable and accrued expenses                            1,740,455
Accrued salaries and wages                                         932,923
Current portion of capital leases                                  148,890
Short term financing                                               493,472
                                                                ----------
Total current liabilities                                        3,415,817

Long-term liabilities
Long-term capital leases                                             8,346
Accrued lease cancellation charge                                  336,400
                                                                ----------
Total liabilities                                                3,760,563
                                                                ----------


Stockholders' equity

Preferred Stock, $0.001 par value, 5,000,000 shares                      -
authorized and no shares issued or outstanding
Common stock, $0.001 par value, 50,000,000 shares
authorized,
10,493,984 shares issued and outstanding                            10,494
Additional paid-in capital                                      18,846,277
Cumulative translation adjustments                                   1,508
Accumulated deficit                                            (16,543,789)
                                                                ----------


<PAGE>


Total stockholders' equity                                       2,314,490
                                                                ----------
                                                                $6,075,053
                                                                ==========
The accompanying notes are an integral part of these condensed financial
statements


<PAGE>


                           INTERNET CABLE CORPORATION
                       CONDENSED STATEMENTS OF OPERATIONS
                       FOR THE THREE MONTHS ENDED JUNE 30,
                                   (Unaudited)


                                                 2001              2000
                                       ------------------------------------


Sales and services                             $1,926,827       $2,749,372
Cost of sales
Direct costs                                      820,861        1,229,150
Indirect costs                                    609,940          718,209
Depreciation                                       27,588           36,574
                                       ------------------------------------
Gross operating profit                            468,438          765,439

Operating costs
Selling, general and administrative               780,267        1,551,206
expenses
Discontinued lease expense                        458,532                -
Depreciation                                       33,921           14,433
Gain on disposal of assets                         17,779              250
Amortization of intangibles                       216,063          393,740
                                       ------------------------------------

Loss from operations                          (1,002,566)      (1,193,690)

Interest (expense) income                        (57,927)           19,561
                                       ------------------------------------

Pretax loss                                   (1,060,493)      (1,174,129)
Income tax provision                              (1,381)                -
                                       ------------------------------------

Net loss                                     $(1,061,874)     $(1,174,129)
                                       ====================================

Change in cumulative foreign                      $11,516             $642
translation adjustment
                                       ------------------------------------

Comprehensive loss                           $(1,050,358)     $(1,173,487)
                                       ====================================

Weighted average common shares                 10,493,984       10,188,740
outstanding                            ------------------------------------

Basic and diluted loss per share                  $(0.10)          $(0.12)



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


<PAGE>


                           INTERNET CABLE CORPORATION
                       CONDENSED STATEMENTS OF OPERATIONS
                        FOR THE SIX MONTHS ENDED JUNE 30,
                                   (Unaudited)

                                              2001              2000
                                       ------------------------------------


Sales and services                             $3,273,816       $5,161,943
Cost of sales
Direct costs                                    1,575,030        2,273,720
Indirect costs                                  1,297,657        1,369,784
Depreciation                                       73,360           70,100
                                       ------------------------------------
Gross operating profit                            327,769        1,448,339

Operating costs
Selling, general and administrative             1,764,076        2,800,311
expenses
Discontinued lease expense                        458,532                -
Depreciation                                       48,439           32,710
Gain /(Loss) on disposal of assets                 17,779         (52,743)
Amortization of intangibles                       432,126          757,804
                                       ------------------------------------

Loss from operations                          (2,357,625)      (2,195,229)

Interest expense (income)                         112,689         (22,968)
                                       ------------------------------------

Pretax loss                                   (2,470,314)      (2,172,261)
Income tax (provision) benefit                    (1,381)          184,855
                                       ------------------------------------

Net loss before extraordinary item            (2,471,695)      (1,987,406)

Extraordinary item
Charge for early extinguishment of                      -          400,136
debt

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

Net loss                                     $(2,471,695)     $(2,387,542)
                                       ====================================

Change in cumulative foreign                     $(1,772)          $18,110
translation adjustment                 ------------------------------------

Comprehensive loss                           $(2,473,467)     $(2,369,432)
                                       ====================================

Weighted average common shares                 10,493,984       10,091,064
outstanding                            ------------------------------------

Basic and diluted loss per share                  $(0.24)          $(0.24)



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


<PAGE>


                           INTERNET CABLE CORPORATION
                       CONDENSED STATEMENTS OF CASH FLOWS
                        FOR THE SIX MONTHS ENDED JUNE 30,
                                   (Unaudited)

                                               2001             2000
                                          ---------------------------------

Cash flows from operating activities             $234,831     $(1,686,337)

Cash flows from investing activities
   Notes receivable                                     -           40,000
   Release of deposits on acquisitions                  -        5,652,576
   Disposal (acquisition) of property              32,858        (365,938)
   and equipment
   Loans receivable, employee                           -         (22,941)
   Business acquisitions, net of cash                   -      (5,469,414)
   balances acquired                      ---------------------------------

Net cash provided by (used in) investing           32,858        (165,717)
activities

Cash flows from financing activities
   Notes payable stockholder, net                  14,000         (12,158)
   Net payments against line of credit            (4,528)                -
   Notes payable                                        -        (650,000)
   Issuance of common stock                             -        1,530,000
   Stock offering costs                                 -        (153,000)
   Capital lease payments                        (60,316)         (32,891)
                                          ---------------------------------

Net cash (used in) provided by financing         (50,844)          681,951
activities                                ---------------------------------

Impact of foreign exchange                        (1,772)         (18,498)
Net increase (decrease) in cash                   215,073      (1,188,601)

Cash, beginning of period                         182,552        1,531,708
                                          ---------------------------------

Cash, end of period                               397,625         $343,107
                                          =================================




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


<PAGE>


NOTES TO FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION, GOING CONCERN AND REVENUE RECOGNITION

Basis of presentation

The consolidated financial statements of Internet Cable Corporation (the
"Company") presented herein include the operations of its wholly owned
subsidiaries Cable Systems Technical Services, Inc. (incorporated under the laws
of Ontario, Canada) and Cable Systems Technical Services, Inc. (incorporated
under the laws of Delaware), collectively referred to as "TSI", Internet Cable
corporation NA (incorporated under the laws of Pennsylvania), and CAD
Consultants, Inc. (incorporated under the laws of New Jersey) referred to as
"CAD". The consolidated financial statements of Internet Cable Corporation have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission for quarterly reports of Form 10-QSB. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles ("GAAP")
have been condensed or omitted pursuant to such rules and regulations. It is
suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2000. All significant
intercompany balances and transactions have been eliminated in consolidation.


The financial information in this report reflects, in the opinion of management,
all adjustments of a normal recurring nature necessary to present fairly the
results for the interim period.


Due to the inherent seasonal nature of the businesses, quarterly operating
results may not be indicative of the actual operating results for the full year.

Inventory

Inventory, consisting primarily of goods held for resale, are valued at the
lower of cost or market. Cost is calculated using the average cost method for
quantities on hand.

Revenue recognition

For its TSI subsidiary, the Company recognizes revenue using either a unit of
measure (based on feet or other units) or contractually permitted hourly fees,
which represent earned revenue. Prior to its closure, the CAD subsidiary
recognized revenue upon the completion of a project, or if unrelated to a
project then upon the delivery of a service or the shipment of any products
sold.

Going concern

The Company has incurred significant losses from operations since inception. The
operating environment confronting the Company raises substantial doubt about the
Company's ability to continue as a going concern. The principal conditions
giving rise to this include the following:

o        The Company experienced substantial downward pressures on its revenue
         during the fourth quarter of 2000, which has continued into 2001. This
         contributed to significant operational losses in these periods.
o        Although the Company repaid its outstanding line of credit on August 2,
         2001, it must immediately obtain additional funding and a new banking
         relationship to meet ongoing working capital requirements. Securing
         financing in light of the Company's financial position will likely
         prove challenging, and include onerous terms and (in the case of equity
         financing) carry with it substantial dilution for shareholders.
o        The Company is subject to litigation, which could have a material
         impact on the financial position of the Company (see Note 5 -
         Commitments and contingencies)
o        The above events have contributed to increased concerns among
         investors, key customers, prospects, and employees about the Company's
         viability going forward. As a result, on May


<PAGE>


         24, 2001, there was a change in the Board and management of the
         Company. See Note 10- Board of Directors and management reorganization
         - for details on this reorganization.

Accordingly, the Company is seeking additional funding in the near term but if
management is unable to secure such funding, it may be compelled to consider
other alternatives, including the liquidation of the Company. The Company is
also addressing its overhead structure and, as a result, has closed its West
Chester, Pennsylvania corporate headquarters. The Company has applied accounting
principles based on the Company continuing as a going concern. There remains
substantial doubt about the Company's ability to continue as a going concern and
therefore about its ability to realize its assets and discharge its liabilities
in the normal course of business. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or to amounts and classifications of liabilities that may be necessary
if the entity is unable to continue as a going concern.

There can be no assurance that the Company will be able to obtain additional
financing on terms acceptable to the Company or successfully restructure its
operations. The Company believes if it is able to obtain at least $1.5 million
in financing, it may have the financial resources necessary to meet its
presently anticipated business requirements for approximately the next 12
months. Nonetheless, depending on the market conditions, the Company may seek to
sell additional equity or debt securities or obtain alternative credit
facilities. The sale of additional equity or debt securities may result in
significant dilution to the existing shareholders and/or significant charges to
earnings. There is no assurance that the Company will be able to raise such
capital on terms acceptable to the Company, if at all.


NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the FASB issued SFAS No. 141, "Business Combinations" ("FAS141")
an SFAS No. 142, "Goodwill and Other Intangible Assets" ("FAS142"). FAS 141
requires that all business combinations be accounted for under the purchase
method, and the use of the pooling-of-interests method is prohibited for
business combinations initiated after June 30, 2001. FAS 141 also establishes
criteria for the separate recognition of intangible assets acquired in a
business combination. FAS 142 requires that goodwill no longer be amortized to
earnings, but instead be subject to periodic testing for impairment. FAS 142 is
effective for fiscal yeas beginning after December 15, 2001, with earlier
application permitted only in specified circumstances. Management is currently
evaluating the expected impact of FAS 142.


NOTE 3 - LINE OF CREDIT

On August 15, 2000, the Company obtained a one-year $1,000,000 line of credit
with a bank. The terms included, among other things, a line of credit based on
certain qualified accounts receivable, collateralization by certain assets
including but not limited to all accounts receivable, and an interest rate of
prime plus 1% that increased by 3% on January 31, 2001 as a result of the
default described below. At June 30, 2001, the prime rate was 6.75%. The loan
covenants placed certain restrictions on the Company which, among other things,
required the Company to maintain a minimum current ratio and a maximum leverage
ratio, restricted certain distributions including dividends, restricted selling
or otherwise disposing of certain property, limited the ability to incur
additional debt, restricted the Company's ability to redeem capital stock, and
restricted its ability to acquire or merge into other companies. As of June 30,
2001, the Company had drawn $493,472 against this line of credit.

The loan agreement also required the issuance of 32,990 warrants at market
price, which vested immediately at a strike price of $6.0625 per share and which
expire August 14, 2005. The Black-Scholes model assigned a value of $159,605 to
these warrants. This amount has been recorded as a deferred financing cost in
other current assets and is being amortized ratably over the life of the loan
agreement. As such, $75,546 was amortized as interest expense in the period
ending June 30, 2001. The remaining $24,207 will be amortized during the third
quarter.

As of January 31, 2001, and for all monthly periods subsequent to that date
through to August 2, 2001, the Company was in technical default of the loan
covenants and/or collateral requirements as stipulated in the


<PAGE>


loan and security agreement and related documents associated with the line of
credit from a bank. As of August 2, 2001, the loan has been repaid in full.


NOTE 4 - ACCRUED LEASE CANCELLATION CHARGE

As of June 1, 2001, the Company closed the West Chester office in Philadelphia,
PA. The office was subject to an operating lease with monthly payments of $8,333
plus common area costs escalating to $9,167 per month in the final year ending
March 2004. The costs relating to the discontinued office, totaling $485,290
have been charged to expense in the current quarter, as they have no substantive
future use or benefit to the Company. Included in the costs expensed during the
period are any remaining unamortized leasehold improvements.


NOTE 5 - COMMITMENTS AND CONTINGENCIES

On March 31, 2000, a complaint was filed by James A. Sims, Jr. against the
Company in the Court of Common Pleas for the Ninth Judicial Circuit, County of
Charleston, South Carolina. The complaint alleges that the Company is a
successor by merger to Internet Channel, Inc. ("Internet Channel"), a company in
which the plaintiff claims to have had an equity interest. The complaint further
alleges that the Company failed to redeem plaintiff's equity interest in
Internet Channel or to exchange the Company's stock for the plaintiff's equity
interest in Internet Channel as part of the alleged merger. The complaint also
alleges that the Company altered certain account and loan documents in
connection with the alleged merger, failed to observe corporate formalities or
comply with statutory laws governing corporations and issued stock to
controlling persons without adequate consideration. The plaintiff seeks actual
damages in an amount to be determined at trial, which plaintiff believes is at
least $25 million, together with punitive damages, pre-judgement interest, costs
and attorney's fees. A complaint, alleging similar facts, was filed on September
8, 2000 by Jeff Adair against the Company in the same court. Mr. Adair's
complaint seeks similar damages, except that the plaintiff expresses no view as
to the minimum level of damages. In June 2000, the Company filed an answer to
the complaint brought by Mr. Sims and in February 2001 the Company filed an
answer to the complaint brought by Mr. Adair. Both actions are currently in
discovery. Management is currently assessing the merits and other aspects of
these claims. We believe we have good defenses and we intend to vigorously
pursue defense of the actions. We cannot assure, however, that the Company will
be successful and that an adverse outcome will not occur which could materially
impact the financial position of the Company.

The Company has also been served with a complaint from a former vendor filed on
April 18, 2000 in the Court of Common Pleas, Richland County, South Carolina.
The complaint demands approximately $18,000 in past due amounts for alleged
services. The Company disputes any services were provided, is investigating the
complaint and has filed a counterclaim. The Company will vigorously pursue its
defense against this claim and its counterclaim.

On April 12, 2001, a complaint was filed by Joseph Melanson against the Company,
its subsidiary Cable Systems Technical Services, Inc. and former
officers/directors, in the Ontario Superior Court of Justice. The complaint
sought damages for alleged constructive termination of Mr. Melanson's employment
agreement for failure to pay amounts owed thereunder. Following the Company's
management change in May 2001, Mr. Melanson assumed the role of chairman and
chief executive officer of the Company and Mr. Melanson subsequently
discontinued the legal proceeding. Mr. Melanson and the Company are presently
engaged in active discussions regarding the terms of a new employment
arrangement.

The Company may be engaged in other legal actions arising in the ordinary
course of its business. The Company believes that the ultimate outcome of any
such matters will not have material adverse effect on the Company's consolidated
financial position but may have a material impact on results of operations in a
given period.


NOTE 6 - LOSS PER SHARE


<PAGE>


The Company has reported loss per share in accordance with Statement of
Financial Accounting Standards No.128 ("SFAS 128"), "Earnings per Share". SFAS
128 requires the presentation of basic and diluted earnings per share for
companies with complex capital structures. Basic loss per share is computed by
dividing the net loss by the weighted average number of shares of common stock
outstanding during the period. As of June 30, 2001, certain executives, key
employees and investors have been granted a total of 9,761,012 warrants and
options, 5,572,262,of which are currently vested, to purchase shares of the
Company's common stock. In accordance with SFAS 128, these warrants and options
have been excluded from the calculation of diluted earnings per share for the
three and six month periods ended June 30, 2001, as the results would be
anti-dilutive since the Company reported losses from operations in the period.


NOTE 7 - CONCENTRATION OF RISK

The Company provides broadband infrastructure engineering services to the major
cable plant operators. As such, and due to the continuing acquisitions and
consolidation in the cable plant industry, the Company has a high concentration
of sales to select group of customers as follows:


                                 3 Months Ended          6 Months Ended
                                  June 30, 2001           June 30, 2001
                              --------------------   ---------------------

AOL/Time Warner               $581,014        30.2%  $1,222,615      37.3%
Rogers Cable Systems           538,336        27.9%     939,042      28.7%
IBM                            405,786        21.1%     405,786      12.4%
Cogeco Cable                   141,515         7.3%     397,093      12.1%
Other                          260,176        13.5%     309,280       9.5%
                          -------------------------------------------------
Total sales                 $1,926,827       100.0%   3,273,816     100.0%
                          =================================================


NOTE 8 - RELATED PARTY TRANSACTIONS

In June 2000, the then acting Chairman of the Board and Chief Executive Officer
Michael Mulholland, loaned $67,842 to the Company. The terms of the loan include
9% interest and a repayment requirement upon the receipt of any bank loans,
lines of credit or other equity or debt financing. This loan was repaid from the
proceeds of the exercise of options. Subsequently, in July 2000, Mr. Mulholland
loaned the Company an additional $54,485 upon the same terms and exercised
certain stock options, acquiring 10,000 shares of common stock at a strike price
of $4.625 per share. The cost of the stock option exercise was applied against
the previous loans, resulting in a net loan to the Company of $76,077 as of July
31, 2000. During the third quarter of 2000, the Company repaid $40,000 of the
loan. During the second quarter of 2001, Mr. Mulholland loaned the Company an
additional $14,000 upon the same terms. No payments were made to June 30, 2001.
As of June 30, 2001, the principal and accrued interest on the outstanding loan
was $50,077 and $3,743 respectively.

In November 1999, a previous Chairman and CEO, Timothy Karnes loaned $50,000 to
the Company. The terms of the loan include 10% interest and a repayment
requirement upon the receipt of any bank loans, lines of credit, or other equity
or debt financing. No payments have been made on principal or interest. As of
June 30, 2001 the principal and accrued interest on the outstanding loan was
$50,000 and $9,106, respectively.

During the year ended December 31, 2000 and the quarter ended March 31, 2001,
certain executives and other employees voluntarily deferred receipt of payment
for their earned salaries and auto allowances. The total deferred and accrued
payroll at June 30, 2001 was $709,809 of which $655,540 was deferred by the
executive officers.

NOTE 9 - DISPOSITION OF CAD CONSULTANTS, INC.


<PAGE>


At a board meeting held on March 2, 2001, the board approved a resolution
authorizing the management of the Company to pursue the sale or other
disposition of CAD. The Company's management believed that the core business of
CAD, a wireless integrator, does not possess a strong enough strategic fit with
the current focus of the Company, which is to become the preferred vendor for
outsourcing upgrades and maintenance of cable plants. Additionally, management
had determined that continued funding of CAD's operating losses is not in the
best interest of its shareholders. As a result of this decision, the Company
took steps to seek the best solution in the sale, disposal or closure of CAD.
The Company did enter into negotiations with one potential buyer, but failed to
arrive at mutually acceptable terms. Therefore, on April 11, 2001, management
closed down the operations of CAD and terminated all related employees. Mr.
Craig Lerman, who was the sole shareholder of CAD prior to its acquisition by
the Company and who served as Wireless Division President of the Company until
the closing of CAD, has chosen to continue the business of CAD. He has agreed to
assist in collecting outstanding accounts receivable and, for a fee, to complete
short term pending projects related to the CAD business. No definitive
agreements have been entered into with Mr. Lerman concerning the transition. Due
to the failure to come to terms with Craig Lerman, the former principal of CAD,
concerning the termination, the Company is potentially exposed to additional
claims. While the Company expects to resolve such claims without litigation the
Company cannot assure that it will be able to do so.

The pro forma unaudited consolidated results of operations for the three-month
period ended June 30, for Internet Cable Corporation as though the operations of
CAD had been closed as of January 1, 2000 is as follows:

                              3 Months ended      3 Months ended
                               June 30, 2001       June 30, 2000
                             ----------------     ---------------
Revenue                           $1,749,315          $2,337,636
Loss from operations               (992,010)         (1,114,923)
Net loss                         (1,050,516)         (1,192,811)
Weighted average common           10,493,984          10,188,740
shares outstanding
Net loss per share                   $(0.10)             $(0.12)


The pro forma unaudited consolidated results of operations for the six-month
period ended June 30, for Internet Cable Corporation as though the operations of
CAD had been closed as of January 1, 2000 is as follows:

                              6 Months ended      6 Months ended
                               June 30, 2001       June 30, 2000
                            -----------------     ---------------
Revenue                           $2,961,888         $4,417,950
Loss from operations             (2,196,175)        (2,047,369)
Net loss                         (2,309,429)        (2,267,235)
Weighted average common           10,493,984         10,191,064
shares outstanding
Net loss per share                   $(0.22)            $(0.22)


NOTE 10 - BOARD OF DIRECTORS AND MANAGEMENT REORGANIZATION

At a special meeting of the Board of Directors of Internet Cable Corporation
held May 24, 2001, the incumbent board increased the permissible number of board
members and elected four additional directors to fill vacancies created by the
increase. The election was pursuant to a Memorandum of Understanding
("Memorandum") dated May 24, 2001 and negotiated between Hovey Aiken III, for
himself as a stockholder of the Company, Michael F. Mulholland, Company chairman
and president and William F. Walsh and Robert F. Bronner, both Company officers.
Pursuant to the Memorandum, the incumbent board resigned from their positions as
board members, which action left the newly elected directors as the sole


<PAGE>


members of the board. Upon ratification of the Memorandum by the new Board,
management (consisting of Messrs. Mulholland, Walsh, and Bronner (the "Resigned
Executives")) resigned from their positions as officers with the new Board's
consent, effective immediately. At a meeting of the newly elected directors
convened later the same day, two more persons, Joseph Melanson and Blaine
Burnie, were elected as directors to fill vacancies. The Memorandum contained
certain other conditions including a requirement that the new Board members
cause the Company to pay certain obligations of the Company within thirty days.
These obligations include paying off the bank line of credit borrowings
amounting to approximately $600,000, a note payable to Mulholland of
approximately $54,000, unpaid back wages and accrued vacation to certain
executives of approximately $645,000. The Memorandum also called for certain
stock options held by the Resigned Executives to be forfeited and other stock
options to be immediately vested.

Joseph Melanson assumed the role of chairman and chief executive officer of the
Company effective May 25, 2001. He had served as a director and president of the
Company from January 2000, when Cable Systems Technical Services was acquired by
the Company until February 12, 2001 when he resigned from the Board. Mr.
Melanson made certain statements in his written resignation as a board member
regarding concerns related to, among other things, "record-keeping' (see Form
8-K as filed February 20, 2001, incorporated herein by reference). As a result,
the Company's audit committee commissioned a Rule 10A investigation, as defined
by the Securities Act of 1934, to understand if the alleged concerns had any
validity and to resolve this issue to permit the completion of the financial
statements. During this time the Company was having severe liquidity problems
and pending the outcome of a Rule 10A investigation, the Company was delinquent
in the filing of its Form 10-KSB. The 10A investigation has been completed. The
Company is satisfied with the results, and filed its 10-KSB on July 20, 2001.
The failure to file its Form 10-KSB on time resulted in the Company's stock
being de-listed from the OTC Bulletin Board on May 31, 2001. The Company's stock
now trades on "the pink sheets". The Company intends to file for listing on the
OTC Bulletin Board as soon as possible.


NOTE 11 - SUBSEQUENT EVENT

On August 1, 2001 the Company borrowed $250,000 from two stockholders for which
the Company has issued two Promissory Notes in the principal amount of $125,000
each. These Notes bear interest at a rate of 9% per annum and are due and
payable in full along with interest 120 days after issuance. The Notes are
secured by certain assets of the Company. As additional consideration for the
principal amount of the Notes, the Company has agreed to issue to each Holder a
warrant to purchase up to 50,000 shares of Common stock of the Company at an
exercise price of $0.15 per share. The warrants are immediately exercisable and
expire on the fifth anniversary of the date of issuance.

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

Introductory Note

This report contains, in addition to historical information, forward-looking
statements by the Company with regard to its expectations as to financial
results and other aspects of its business that involve risks and uncertainties
and may constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "may," "should,"
"anticipate," "believe," "plan," "estimate," "expect," and "intend," and other
similar expressions are intended to identify forward-looking statements. These
include statements regarding the sufficiency of the Company's liquidity,
including cash resources, the availability of additional equity funding,
utilization of lines of credit or other borrowing facilities or opportunities,
concentration of sales risk, gross margins, current and future expenses, future
revenues and shortfalls in revenues, contract pricing and pricing uncertainty,
growth and expansion plans, sales and marketing plans, availability of adequate
technical personnel, capital expenditures, seasonality, and operating results.
Such statements are based on management's current expectations and are subject
to a number of uncertainties and risks that could cause actual results to differ
materially from those described in any forward-looking statements. Factors that
may cause such a difference include, but are not limited to, the risks set forth
in the Company's filings with the Securities and Exchange Commission (see the
"Risk



<PAGE>


Factors" section in the Company's Form 10-KSB for the year ended December
31, 2000). The Company does not intend to update these cautionary statements or
any forward-looking statements.


GENERAL

The Company's primary business focus is to provide broadband engineering
services to the North American and other emerging broadband markets. Major cable
operators engage the Company's services to upgrade, maintain and expand the
technical network infrastructure (cable plant facilities and networks)
underlying their delivery of new, robust broadband services, including
high-speed Internet access, cable-phone (telephony), digital and interactive TV
cable, pay-per-view, alarm monitoring and smart home devices.

During the second quarter, the Company entered into its first significant
contract outside of the cable industry. The company provided broadband
engineering services to IBM Corporation, supporting their efforts with
integration and ongoing maintenance and support services for broadband cable
systems installed in large shopping malls throughout the United States.

During the second quarter, the Company closed its first significant sale of its
proprietary software, DQMC, to a major Canadian MSO, Rogers Cable Systems. DQMC
is field proven certification and preventative maintenance software used to
upgrade and maintain the broadband network infrastructure.

In June 2001 the Company successfully completed its first Return Path training
seminar jointly offered by the Society of Telecommunications Engineers (the
SCTE), and the Company. This was the first seminar, which is part of an
agreement entered into in January 2001, whereby the Company is to provide
various broadband training courses to SCTE's cable industry membership of
approximately 17,500 professionals. This relationship provides the Company with
nominal incremental training revenue, but more importantly, recognition and
awareness within the cable industry. The Company plans to leverage its training
services relationship with the SCTE to enhance its marketing efforts. Planned
activities include co-branded communications at trade shows, website marketing,
and press releases aimed at promoting the Return Path training seminar series
jointly offered by the SCTE and the Company. This training seminar includes
courses developed by the Company and delivered at SCTE chosen venues by
employees of the Company. The Company believes that this program with the SCTE
will provide recognition for its training services within the cable industry and
also provide increased general name recognition within its primary market
segment.

Pro forma financials

On April 11, 2001 management closed operations of CAD and terminated all related
employees. The pro forma financial information assumes the operations of CAD had
been closed as of January 1. 2000.

Sales

Sales for the second quarter and year to date 2001 were $1,926,827 and
$3,273,816, respectively. This represents a decrease of $822,545 or 29.9% from
the second quarter of 2000 and a decrease of $1,888,127 or 36.6% year to date
from the results of 2000. Pro forma sales, excluding the sales of CAD, for the
second quarter and year to date 2001 were $1,749,315 and $2,961,888,
respectively. This represents a decrease of $588,321 or 25.2% from the pro forma
sales of $2,337,636 for the second quarter of 2000 and a decrease of $1,456,062
or 33.0% from the pro forma sales of $4,417,950 for the year to date in 2000.
The Company experienced a substantial reduction in its revenue as a result of
the loss of a significant customer during the fourth quarter of 2000, which has
continued through the first half of 2001. The Company resumed work with that
customer in certain locations during the third quarter of 2001. The Company
completed certain contracts begun by CAD prior to its closure resulting in some
additional revenue from CAD in the second quarter.

Cost of Sales



<PAGE>


Direct costs for the second quarter and year to date 2001 were $820,861 and
$1,575,030 respectively. This represents a reduction of $408,289 or 33.2% from
the direct costs of $1,229,150 incurred in the second quarter of 2000 and a
reduction of $698,690 or 30.7% from the direct costs of $2,273,720 incurred in
the year to date in 2000. The decrease is a result of the lower sales volume
experienced in the second quarter and year to date in 2001 versus 2000. Pro
forma direct costs for the second quarter and year to date 2001 were $668,400
and $1,257,949, respectively. This represents a reduction of $297,343 or 30.8%
from the direct costs of $965,743 incurred in the second quarter of 2000 and a
reduction of $558,116 or 30.7% from the direct costs of $1,816,065 incurred in
the year to date in 2000.


Indirect costs

Indirect costs for the second quarter and year to date 2001 were $609,940 and
$1,297,657 respectively. Indirect costs were reduced by $108,269 or 15.1% from
the second quarter of 2000 and were reduced by $72,127 or 5.3% from the level
expended during the year to date in 2000. This category of expense includes the
less variable type of project expenses such as project supervisors and long term
lease vehicle costs. As the Company experienced a drop in revenues during the
fourth quarter of 2000 and first half of 2001, the indirect costs were not as
readily reduced. The Company sought to maintain its skilled workforce in order
to avoid the cost of re-hiring and training new workers. During the second
quarter of 2001, the Company commenced efforts at cost containment through the
lay off of project supervisors and disposition of surplus assets thereby
reducing indirect costs. As the majority of CAD's cost of goods sold was
comprised of direct costs, the closure of CAD had little impact on indirect
costs.


Selling, general and administrative expenses

Selling, general and administrative expenses ("SG&A") decreased by 20.1% or
$312,407 to $1,238,799 (64.3% of revenue) from $1,551,206 (56.4% of revenue)
during the second quarter of 2001 compared to the second quarter of 2000. The
reduction in SG&A expense is attributable to cost containment efforts and non
recurring expenditures made in 2000 relating to the West Chester office start up
and development of the business plan. Included in cost reductions are salaries
and related expenses, outside professional services, advertising and travel
expenditures. Included with the SG&A expense during the second quarter and year
to date 2001 is an amount of approximately $460,000 relating to the discontinued
use of the West Chester property subject to a five-year operating lease.


Depreciation and amortization

The consolidated fixed assets of the Company amount to $1,790,489 with a net
book value of $1,029,230. The most significant component of the fixed assets is
technical testing equipment used by the technicians of TSI in the field. Current
year capital expenditures are generally being depreciated over five years using
the straight-line, half-year convention method. Total consolidated depreciation
expense was $61,509 and $51,007 for the quarter ended June 30 2001 and 2000
respectively. Total consolidated depreciation expense was $121,799 and $102,810
for the year to date in 2001 and 2000 respectively.

Amortization expense was $216,063 and $432,126 for the second quarter and year
to date 2001 respectively. Amortization expense was $393,740 and $757,804 for
the second quarter and year to date 2000. Goodwill is being amortized over five
years using the straight-line method of amortization. The decrease in
amortization expense in 2001 versus 2000 reflects the Company's decision in
December 2000 to write off the goodwill associated with CAD due to the
impairment of that asset. At June 30, 2001 the balance sheet reflects gross
goodwill of $4,321,234, which relates solely to the TSI acquisition, net of
accumulated amortization thereon.


Interest

The Company incurred net interest expense of $57,927 for the quarter ended June
30, 2001 and $112,689 for the year to date. In 2000 the Company earned net
interest income of $19,561 for the quarter ended June 30, 2000 and $22,968 for
the year to date. The interest charges for 2001 are largely related to the
interest on the Company's line of credit borrowings as well as the interest
expense associated with capitalized



<PAGE>


leases at TSI. The increase over 2000 is due to the fact that the line of credit
was entered into and drawdowns were initiated in the third quarter of 2000.

Liquidity and capital resources

Historically, the Company has financed its operations primarily through a
combination of private sales of equity securities and loans from the Company's
executive officers and private investors. During the third quarter of 2000, the
Company secured additional funding through a $1 million line of credit,
providing additional working capital secured by certain qualified accounts
receivable. As of August 2, 2001 the Company repaid the line of credit in full,
and the line of credit was cancelled. See Note 3 of Notes to the Financial
Statements. At June 30, 2001, the Company had cash of $397,625; and the
Company's current liabilities of $3,415,817 exceeded its current assets of
$2,002,854 by $1,412,963 providing a current ratio of 0.59 to 1.0.

The Company's immediate capital requirements primarily relate to funding
operating losses, working capital needs and capital expenditures. The Company is
in need of additional financing to satisfy its immediate working capital
requirements. Accordingly, the Company is seeking additional funding. If
management is unable to secure such funding, it may be compelled to consider
other alternatives, including the liquidation of the Company. The Company is
also addressing its overhead structure and, as a result, has closed its West
Chester corporate headquarters. See Note 1, of the Notes to the Financial
Statements concerning doubt as to the Company's ability to continue as a going
concern.

There can be no assurance that the Company will be able to obtain additional
financing on terms acceptable to the Company or successfully restructure its
operations. The Company believes if it is able to obtain at least $1.5 million
in financing, it may have the financial resources necessary to meet its
presently anticipated business requirements for the next 12 months. Nonetheless,
depending on the market conditions, the Company may seek to sell additional
equity or debt securities or obtain alternative credit facilities. The sale of
additional equity or debt securities may result in significant dilution to the
existing shareholders and/or significant charges to earnings. There is no
assurance that the Company will be able to raise such capital on terms
acceptable to the Company, if at all.

On August 1, 2001 the Company borrowed $250,000 from two stockholders for which
the Company has issued two Promissory Notes of $125,000 each. These Notes bear
interest at a rate of 9% per annum and are due and payable in full along with
interest 120 days after issuance. As additional consideration for the principal
amount of the Notes, the Company has agreed to issue to each Holder a warrant to
purchase up to 50,000 shares of Common stock of the Company at an exercise price
of $0.15 per share. The warrants are immediately exercisable and expire on the
fifth anniversary of the date of issuance.

For the six-month period ended June 30, 2001, cash flow provided by operating
activities amounted to $234,831. This amount was derived from the loss of
$2,471,695, adding back non-cash expenditures of $536,146 and a net decrease in
working capital of $2,170,380. The decrease in working capital was due to a
reduction in business activity, resulting in, among other things, collection of
accounts receivable and unbilled revenue and an increase in accounts payable,
accrued charges and other current liabilities.

Investing activities for the period ended June 30, 2001 provided net cash in the
amount of $32,858 due to the disposal of surplus fixed assets.

Cash used by financing activities for the period ended June 30, 2001 amounted to
$50,844. This was comprised of a increase in stock holder notes payable in the
amount of $14,000, payments against the line of credit in the amount of $4,528,
net of advances, and repayment of capital leases in the amount of $60,316.

Part II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS



<PAGE>


On April 12, 2001, a complaint was filed by Joseph Melanson against the Company,
its subsidiary Cable Systems Technical Services, Inc. and former
officers/directors, in the Ontario Superior Court of Justice. The complaint
sought damages for alleged constructive termination of Mr. Melanson's employment
agreement for failure to pay amounts owed thereunder. Following the Company's
management change in May 2001, Mr. Melanson assumed the role of chairman and
chief executive officer of the Company and Mr. Melanson subsequently
discontinued the legal proceeding. Mr. Melanson and the Company are presently
engaged in active discussions regarding the terms of a new employment
arrangement.

For a discussion of certain other legal proceedings to which the Company is a
party, see the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2000.


ITEM 3.  DEFAULT UPON SENIOR SECURITIES

See the discussion above under "Management Discussion and Analysis - Liquidity
and Capital Resources" for a description of default under the Company's line of
credit as of June 30, 2001. The line of credit was repaid in full and cancelled
effective August 2, 2001.


ITEM 5.  OTHER INFORMATION

For a description of the changes to the Company's management and Board of
Directors, see Note 10 to the Financial Statements, Board of Directors and
Management Reorganization.

The Company was late in filing its Annual Report on Form 10-KSB for the year
ended December 31, 2000 as well as Form 10-QSB for the period ended March 31,
2001. For a discussion of the events relating to the late filings, see Note 10
to the Notes to the Financial Statements.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

   (a)   Exhibits

         None.


   (b)  Reports on Form 8-K


   DATE OF REPORT          ITEMS REPORTED          DESCRIPTION

   April 24, 2001          Item 5           Current Report - Closure of wireless
                                            division, Status of Form 12b-25
                                            filed March 29, 2001, Liquidity

   April 24, 2001          Item 5           Amended  Current Report - Closure of
                                            wireless division, Status of Form
                                            12b-25 filed March 29, 2001,
                                            Liquidity


   May 31, 2001            Item 5           Current Report - Change in Directors
                                            and Memorandum of Understanding


<PAGE>


                                   SIGNATURES

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

Internet Cable Corporation


/s/ Joseph M. Melanson                       Date signed: August 17, 2001
--------------------------------------
Joseph M. Melanson
Chairman and Chief Executive Officer



/s/ Jill Macdonald
----------------------------------------     Date signed: August 17, 2001
Jill Macdonald, Corporate Controller
(Principal Financial Officer)