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 JUNE 30, 2000.
                                       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: 0-26975

                       PREFERENCE TECHNOLOGIES, INC.
           (Exact name of Registrant as specified in its charter)

                     Nevada                          88-0417949
         (State or other jurisdiction             (I.R.S. Employer
         of incorporation or organization)        Identification No.)

         333 North Ranch Drive, Suite 810
                  Las Vegas, Nevada                    89106
         (Address of principal executive offices)    (Zip Code)

       Registrant's telephone number, including area code: (702) 648-6400

         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   ..X..      No  ___




                   APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate  the  numbers of shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practical date.

         At July 31,  2000,  there were  28,712,974  shares of the  Registrant's
$.001 par value Common Stock outstanding.


                            Exhibit Index on page 16

<PAGE>


                       PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>
                          Preference Technologies, Inc.
                          (A Development Stage Company)
                                  Balance Sheet
<CAPTION>
Assets
                                                      June 30, 2000   December 31, 1999
                                                       (unaudited)         (audited)
Current assets
<S>                                                   <C>             <C>
Cash and cash equivalents                             $      4,892    $     32,791
Accounts and notes receivable net of allowances              1,129            ----
   for doubtful accounts of $0 and $0
Notes receivable - employees, net of  allowances            13,484          14,700
   for doubtful accounts of $1,600 and nil
Prepaid expenses                                            72,417            ----
                                                       -----------      ----------
         Total current assets                               91,922          47,491

Furniture & equipment, net                                 859,701         637,276
Other assets                                                67,756          67,756
                                                       -----------      ----------
Total assets                                          $  1,019,379    $    752,523
                                                       ===========      ==========

Liabilities and Stockholders' Deficit

Accounts payable & accrued expenses                   $  1,186,967    $    770,912
Deferred revenue                                           409,352            ----
                                                       -----------      ----------
Total current liabilities                                1,596,319         770,912


Stockholders' deficit

Common Stock @ $.001 par value
Authorized  200,000,000 shares
Issued and outstanding
   28,712,974 and 26,413,052 shares, respectively           28,713          26,413
Additional paid-in capital                              14,422,463       8,315,941
Deficit accumulated during development stage           (15,028,116)     (8,360,743)
                                                       -----------      ----------
Total stockholders' deficit                               (576,940)        (18,389)
                                                       -----------      ----------
Total liabilities and stockholders' equity            $  1,019,379    $    752,523
                                                       ===========      ==========
</TABLE>


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

                                       2
<PAGE>


<TABLE>

                          Preference Technologies, Inc.
                          (A Development Stage Company)
                             Statement of Operations
<CAPTION>
                                                                                    February 3,         For the
                                                     For the Three Months               1999           Six months
                                            ------------------------------------
                                                    Ended             Ended        (Inception) to        Ended
                                                June 30, 1999    June 30, 2000     June 30, 1999     June 30, 2000
                                                -------------    -------------     -------------     -------------
                                                 (unaudited)      (unaudited)       (unaudited)       (unaudited)
<S>                                               <C>               <C>               <C>                <C>
Revenues                                                   $0            $5,098                $0            $5,098

Cost of sales                                               0                 0                 0                 0
                                            ------------------------------------------------------------------------

                                                                          5,098
Gross profit                                                0                                   0             5,098

Selling, general and admin. exp                     1,557,189         3,325,560         1,943,666         6,692,826

                                            ------------------------------------------------------------------------
Loss from operations                               (1,557,189)       (3,320,462)       (1,943,666)       (6,687,728)

Other income & expense

Misc. income                                                0                 0                 0               236
Interest income                                         9,265             7,595             9,265            20,120
                                                            0                              81,822
Forgiveness of debt                                         0                                   0
                                                            0                          (1,557,335)
Financing expense                                           0                                   0

                                            ------------------------------------------------------------------------
Total other income (expense)                            9,265             7,595        (1,466,248)           20,356

                                            ------------------------------------------------------------------------
Net loss                                          ($1,547,924)      ($3,312,867)      ($3,409,914)       (6,667,372)
                                            ========================================================================

Basic loss per share                                   ($0.06)           ($0.12)           ($0.14)           ($0.24)

Diluted loss per share                                 ($0.06)           ($0.12)           ($0.14)           ($0.24)

Weighted - average shares outstanding              25,118,670        28,681,974        25,118,670        27,925,667
</TABLE>



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

                                      3

<PAGE>
<TABLE>
                                   Preference
                               Technologies, Inc.
                          (A Development Stage Company)
                             Statement of Cash Flows
<CAPTION>
                                                          For the            For the Period from
                                                     Six months Ended   February 3, 1999 (Inception) to
                                                       June 30, 2000           June 30, 1999
                                                       -------------           -------------
                                                        (unaudited)             (unaudited)
<S>                                                    <C>                     <C>
Cash flows from operating activities:
Net loss                                               $(6,667,372)            $(3,409,914)

Adjustments to reconcile net loss to net cash
     used in operating activities:
Depreciation and amortization                              160,626                  67,420
Increase from common stock issued for services                ----                 100,000
Financing expense recognized from issuing
below market warrants                                         ----                 693,000
Compensation expense for issuing below
     market options                                        711,506                 343,448
Financing expense recognized for issuing below
     market stock options                                     ----                 864,335
Common stock issued for employee settlement                 69,219                    ----
(Increase) decrease in
     Accounts receivable                                    (1,129)
     Notes receivable - employee                             1,216                 (20,600)
     Prepaid expenses                                      (72,417)                 (8,564)
     Prepaid Services                                         --                   (56,922)
     Other assets                                             --                   (52,756)
Increase (decrease) in
     Accounts payable and accrued expenses                 416,055                  80,895
     Deferred revenue                                      409,352                    ----
                                                       -----------             -----------
Net cash used in operating activities                   (4,972,944)             (1,399,658)
                                                       -----------             -----------
Cash flows from investing activities:
    Purchase of furniture and equipment                   (383,051)               (227,923)
                                                       -----------             -----------
Net cash used in investing activities:                    (383,051)               (227,923)
                                                       -----------             -----------
Cash flows from financing activities:
    Proceeds from exercise of stock options                 68,000                 292,000
    Proceeds from private placement of
       common stock                                      6,060,643               3,200,000
    Offering costs                                        (800,547)               (300,000)
                                                       -----------             -----------
Net cash flows provided by financing activities          5,328,096               3,192,000
                                                       -----------             -----------
Net increase (decrease) in cash and cash equivalents       (27,899)              1,564,419
Cash and cash equivalents, beginning of period              32,791
                                                       -----------             -----------
Cash and cash equivalents, end of the period           $     4,892             $ 1,564,419
                                                       ===========             ===========
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                      4
<PAGE>


                                                   PREFERENCE TECHNOLOGIES, INC.
                                                    (formerly STOCKUP.COM, INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                   NOTES TO FINANCIAL STATEMENTS
                                                                   June 30, 2000

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

NOTE 1 - GENERAL

     The accompanying financial statements and footnotes have been condensed and
     therefore do not contain all  disclosures  required by  generally  accepted
     accounting principles.  The interim financial data are unaudited;  however,
     in the  opinion of  Preference  Technologies,  Inc.  (the  "Company"),  the
     interim data include all  adjustments,  consisting only of normal recurring
     adjustments,  necessary  for a fair  statement  of results  for the interim
     period.  Results for the interim periods are not necessarily  indicative of
     those to be expected for the full year.

NOTE 2 - DESCRIPTION OF BUSINESS

     Preference Technologies, Inc. (the "Company") was incorporated in Nevada in
     February 1999 under its former name StockUp.com,  Inc.  Effective  February
     23,  2000,  StockUp.com,  Inc.  officially  changed its name to  Preference
     Technologies, Inc.

     The  Company  is  developing   second-generation   Internet  technology(TM)
     products  that  will be  licensed  to other  websites  and  distributed  to
     end-users.  The Company's  products offer the end user increased  levels of
     customization  and  interactivity.  Websites  deploying the technology will
     benefit from increased traffic, enhanced user retention, and the ability to
     build targeted aggregate marketing profiles of users.

     Courtleigh  Capital,  Inc.  ("Courtleigh"),  a  Kansas  corporation  and  a
     publicly traded  corporation,  was first  incorporated under the name ANCR,
     Inc. on July 30, 1985 under the laws of the State of Colorado.  ANCR,  Inc.
     became an inactive shell corporation, and on July 23, 1997 changed its name
     to  CEA  Lab,  Inc.  Furthermore,  on  October  16,  1995,  CEA  Lab,  Inc.
     reincorporated in the State of Kansas and subsequently  changed its name to
     Courtleigh Capital, Inc. In February 1999, Courtleigh  subsequently changed
     its name to StockUp.com, Inc. and reincorporated in the State of Nevada.

     On December 30, 1998,  Marketing Direct Concepts,  Inc.  ("MDC"),  a Nevada
     corporation,  entered into an Asset Purchase and Escrow Agreement,  whereby
     it sold  assets and  liabilities,  valued at  $368,178,  to the  Company in
     exchange for 18,000,000 shares of Courtleigh's common stock.

     Courtleigh  had  minimal  assets  and   liabilities  at  the  date  of  the
     acquisition  and  did  not  have  operations   prior  to  the  acquisition.
     Therefore, no pro forma information is presented.

                                      5
<PAGE>


                                                   PREFERENCE TECHNOLOGIES, INC.
                                                    (formerly STOCKUP.COM, INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                   NOTES TO FINANCIAL STATEMENTS
                                                                   June 30, 2000

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

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation
     ---------------------
     The accompanying financial statements have been prepared in conformity with
     generally accepted accounting  principles that contemplate  continuation of
     the  Company as a going  concern.  Negative  cash flows used in  operations
     during the six months  ended June 30, 2000 and the period from  February 3,
     1999   (inception)  to  June  30,  1999  were   $4,972,944  and  $1,399,658
     respectively.  These  factors raise  substantial  doubt about the Company's
     ability to continue as a going concern.

     Recovery of the  Company's  assets is  dependent  upon future  events,  the
     outcome of which is indeterminable.  Successful completion of the Company's
     development  program and its  transition  to the  attainment  of profitable
     operations  is  dependent  upon  the  Company  achieving  a level  of sales
     adequate to support the Company's cost structure. In addition,  realization
     of a major  portion  of the  assets in the  accompanying  balance  sheet is
     dependent upon the Company's ability to meet its financing requirements and
     the success of its plans to sell products.  The financial statements do not
     include any adjustments  relating to the  recoverability and classification
     of recorded asset amounts or amounts and classification of liabilities that
     might be necessary should the Company be unable to continue in existence.

     In  addition  to the capital  raised as of June 30,  2000  through  private
     equity  offerings,  the  Company  is  currently  negotiating  with  certain
     investors  about  raising  additional  capital  through  private  placement
     offerings.  Unless the Company raises additional  funds,  either by debt or
     equity issuances, management believes that its current cash on hand will be
     insufficient  to cover its working  capital needs until the Company's sales
     volume reaches a sufficient level to cover operating expenses.

     The  information  included in this Form 10-Q should be read in  conjunction
     with  Management's  Discussion  and Analysis and financial  statements  and
     notes thereto included in Preferences Technologies, Inc.'s Form 10-K.

     Advertising
     -----------
     The Company expenses  advertising costs as incurred.  Advertising costs for
     the three  months  and six  months  ended June 30,  2000 were  $55,635  and
     $437,910,  respectively.  For the three  months ended June 30, 1999 and for
     the period from February 3, 1999  (inception) to June 30, 1999  advertising
     costs were $100,302 and $114,021, respectively.

     Net Loss per Share
     ------------------
     For the periods,  the Company  adopted SFAS No. 128,  "Earnings per Share."
     Basic loss per share is  computed  by  dividing  loss  available  to common
     stockholders by the weighted-average number of common shares outstanding.

                                      6
<PAGE>
                                                   PREFERENCE TECHNOLOGIES, INC.
                                                    (formerly STOCKUP.COM, INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                   NOTES TO FINANCIAL STATEMENTS
                                                                   June 30, 2000

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

     Diluted  loss per share is computed  similar to basic loss per share except
     that the  denominator  is  increased  to include  the number of  additional
     common  shares that would have been  outstanding  if the  potential  common
     shares had been issued and if the  additional  common shares were dilutive.
     For the periods from  February 3, 1999  (inception)  to June 30, 1999,  six
     months ended June,  30, 2000 and the three months ended June 30, 2000,  and
     1999 the Company  incurred a net loss.  Basic and diluted loss per share is
     the same.

     Stock Split
     -----------
     On February 23, 2000, the Company effected a two-for-one stock split of its
     common stock. All share and per share data have been retroactively restated
     to reflect this stock split.

     Concentrations of Credit Risk
     -----------------------------
     The  financial   instrument  which  potentially  subjects  the  Company  to
     concentrations  of credit risk is cash.  The  Company  places its cash with
     high quality financial institutions, and at times it may exceed the Federal
     Deposit  Insurance  Corporation  $100,000  insurance  limit. As of June 30,
     2000, there were no uninsured portions held at financial institutions.

     Revenue Recognition
     -------------------
     Revenue  from the sale of CD's and setup fees are  recognized  as shipments
     occur. Revenues from advertising,  internet service providers and "opt-ins"
     are recognized per the individual  controlling  contract,  which stipulates
     the detail and frequency of the billing  procedure.  Licensing  fees (under
     contract)  are  recognized  per  the  contract,  which  generates  periodic
     billing.

NOTE 4 - STOCKHOLDERS EQUITY
     In April 2000, an employee exercised 32,000 options into common stock at an
     exercise price of $2.125 for a total consideration of $68,000.

     In  April  2000,  the  Company  issued  9,000  shares  of  common  stock as
     settlement of outstanding  claims with three former employees.  The Company
     recorded $69,219 as settlement expense.

     In June  2000,  the  Company  issued  21,000  shares of common  stock as an
     accommodation  to the purchasers and under the same terms and conditions of
     the June 1999  Private  Placement  Memorandum  at $3.00 per share for total
     consideration of $62,950. In connection with the issuance, the Company also
     issued  3,000  warrants to purchase  common  stock at an exercise  price of
     $5.00.

     As of December 31, 1999,  the number of shares of common stock  outstanding
     totaled  26,413,052.  As of June 30, 2000, common stock shares  outstanding
     totaled 28,712,974.

NOTE 5 - UNFULFILLED ORDERS
     As of June 30, 2000, the company has sales contracts totaling $273,783 that
     have not yet been fulfilled.  These contracts are for CD's $254,683, set up
     fees $4,100 and for ISP License fees $15,000.

                                       7
<PAGE>


NOTE 6 - SUBSEQUENT EVENTS
     The Company  entered  into a Credit  Agreement  to provide  $1,000,000  for
     working  capital in July 2000.  The Company is in the process of finalizing
     the documents,  and has received  $450,000 to date. It is anticipated  that
     the $1,000,000  will be repaid from the proceeds of a private  placement of
     the Company's securities;  however,  there is no assurance that the Company
     will be able to complete a private  placement.  The Company's  inability to
     obtain additional financing will severely impact the company.






Item  2.   MANAGEMENT'S   DISCUSSION   AND  ANALYSES  OF  FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

THIS REPORT CONTAINS  FORWARD-LOOKING  STATEMENTS  RELATING TO FUTURE EVENTS AND
FUTURE  PERFORMANCE  OF THE  COMPANY  WITHIN THE  MEANING OF SECTION  27A OF THE
SECURITIES ACT OF 1933 AND SECTION 21E OF THE  SECURITIES  EXCHANGE ACT OF 1934,
INCLUDING, WITHOUT LIMITATION,  STATEMENTS REGARDING THE COMPANY'S EXPECTATIONS,
BELIEFS,  INTENTIONS  OR  FUTURE  STRATEGIES  THAT ARE  SIGNIFIED  BY THE  WORDS
"EXPECTS,"  "ANTICIPATES,"  "INTENDS,"  "BELIEVES" OR SIMILAR  LANGUAGE.  ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE  ANTICIPATED IN SUCH  FORWARD-LOOKING
STATEMENTS.  THE CAUTIONARY  STATEMENTS  MADE IN THIS DOCUMENT SHOULD BE READ AS
BEING APPLICABLE TO ALL RELATED FORWARD-LOOKING  STATEMENTS WHEREVER THEY APPEAR
IN THIS DOCUMENT.  ALL FORWARD-LOOKING  STATEMENTS INCLUDED IN THIS DOCUMENT ARE
BASED ON  INFORMATION  AVAILABLE  TO THE  COMPANY  ON THE DATE  HEREOF,  AND THE
COMPANY  ASSUMES NO OBLIGATION  TO UPDATE ANY FORWARD  LOOKING  STATEMENTS.  THE
COMPANY  CAUTIONS  INVESTORS  THAT ITS BUSINESS AND  FINANCIAL  PERFORMANCE  ARE
SUBJECT TO  SUBSTANTIAL  RISKS AND  UNCERTAINTIES.  IN EVALUATING  THE COMPANY'S
BUSINESS,  PROSPECTIVE  INVESTORS SHOULD CAREFULLY  CONSIDER THE INFORMATION SET
FORTH BELOW.


Overview


The  Company  was  incorporated  in Nevada in  February  1999 and is  developing
second-generation  Internet technology products.  The Global Information Gateway
(GIG)  is the  Company's  first  product.  The GIG  aggregates  news  and  other
information  customized to the users  preference and delivered to the desktop in
real time. The Corporation Information Gateway (CIG) is a branded version of the
GIG. By deploying the CIG,  companies  create a two-way  communication  link and
establish a permanent presence on the user's desktop.  The CIG provides business
to business (B2B) and business to consumer (B2C) marketing solutions.

From its inception to date, the Company has incurred costs  associated  with the
development  and launch of its products,  probable  markets,  and business.  The
Company has established  relationships with information  providers that increase



                                       8
<PAGE>




the quality and marketability of the Company's products.  The Company's products
commenced generating revenues during the second quarter of 2000.

The Company has historically financed its operations to date through the sale of
its common stock.  Since  inception  through June 30, 2000,  the company  issued
28,712,974  shares of its common stock. The Company raised $2.9 million,  net of
offering  costs,  from four accredited  investors as follows:  (i) February 1999
("the  February  Offering")  - issuance of  2,666,664  shares of common stock in
exchange for $900,000; and (ii) issuance of options under Rule 506 of Regulation
D, promulgated under Section 4(2) of the Securities Act of 1933 (the "Securities
Act"),  to acquire  units  comprised of 2,400,000  shares of common  stock,  and
1,200,000  warrants  exercisable  at $1.25 per  share,  and  options  to acquire
581,672  shares of common  stock at an  aggregate  exercise  price of $31,250 in
exchange for $2.3 million cash.  The February 1999 Offering was conducted  under
Rule 504 of the  Securities  Act.  It provided  the  necessary  seed  capital to
commence  implementation  of the  Company's  business  plan.  2,400,000 of these
shares issued in the February 1999 Offering are currently restricted and subject
to a demand  registration rights as of January 1, 2000. The 2,400,000 shares and
the  shares  underlying  the  1,200,000   warrants  are  subject  to  reasonable
underwriter  trading  restrictions  in  the  event  of a  public  offering.  The
investors holding these securities are also entitled to anti-dilution  rights in
the event the Company issues stock at less than $1.25 per share.

In June 1999, the Company entered into a private placement agreement to offer up
to $12,000,000 worth of shares of common stock (4,000,000  shares).  The Company
extended the minimum  offering of $600,000  through  October 31, 1999, for which
the minimum was timely met.  The Company also issued two warrants at an exercise
price of $5 per share for every six  shares of common  stock to  investors  that
provide a minimum of $18,000 with a two-year term. The shares  underlying  these
warrants  shall be  subject to  piggy-back  registration  rights.  Institutional
investors  received  the same type and number of  warrants,  except the exercise
price  shall  be $5  per  share.  The  Company  was  required  to  pay  to  each
broker-dealer  warrants to purchase shares equal to 10% of the Company's  common
stock sold by such  broker-dealer  with an exercise  price of $7.50.  The shares
issued pursuant to the June 1999 private placement are not freely tradable until
the  registration  of the  private  placement  agreement.  The  warrants  may be
exercised,  commencing upon the date the Company closes a public offering of its
stock pursuant to a Registration Statement registering the shares underlying the
warrants and terminating 180 days thereafter.  The investment  period expired on
December 1, 1999.

At December 31, 1999, a total offering of $1,201,247, net of offering costs, was
completed,  pursuant to which  458,334  shares of common stock were  issued.  In
connection with such offering, the Company granted 113,106 warrants to investors
at December 31, 1999 at an exercise price of $5 per share.  The Company  further
granted  45,832  warrants to  broker-dealers  at an exercise  price of $7.50 per
share.

On  December  5, 1999,  the  Company  entered  into  another  private  placement
agreement to offer up to $4,000,000 worth of units to accredited  investors with
a minimum offering of $2,000,000. During the six months ended June 30, 2000, the
Company received  $2,910,978, net of offering costs, and issued 1,301,600 shares
of common stock and 433,866  warrants.  Each unit was comprised of six shares of
the  Company's  common  stock and two  warrants at an  exercise  price of $5 per


                                       9
<PAGE>


share.  The  warrants  may be  exercised,  commencing  upon the date the Company
closes a public  offering  of its stock  pursuant  to a  Registration  Statement
registering  the shares  underlying  the  warrants and  terminating  three years
thereafter.  Each warrant shall be callable  upon  providing the holder 20 days'
written notice in the event the shares have been  registered and the closing bid
price of the shares is at a price of $10 per share during 10 consecutive trading
days.  The securities  comprising  the units shall not be detachable  unless and
until a Registration Statement is declared effective.

The  December  5, 1999  offering  also  included  distribution  of  warrants  to
broker-dealers  in the amount of 20% of the  aggregate  proceeds  raised by each
broker,  divided by 3.75 at an exercise price of $5 per share. At June 30, 2000,
a total of 178,600 warrants had been issued to brokers. In the event the Company
registers its  securities,  the Company shall register the shares and the shares
underlying the warrants,  subject to a trading lock-up, as follows: (i) upon the
effective date of the Registration  Statement ("the Effective Date"),  33.33% of
such  securities  shall be free trading;  (ii) 45 days after the Effective Date,
33.33% of such  securities  shall be  free-trading,  and (iii) 90 days after the
Effective Date,  33.33% of such securities shall be  free-trading.  In the event
the Company has not filed a Registration  Statement  registering  the shares and
the shares underlying the warrants prior to July 1, 2000, then a majority of the
holders  of the units  issued  shall have the right to demand  that the  Company
immediately  register all such securities.  In the event of such a demand,  then
upon the first of each month after such  demand  during  which the  Registration
Statement is not  effective,  commencing  no earlier  then October 1, 2000,  the
number of warrants issued hereunder shall be increased,  on a pro-rata basis, to
the holders of the units, by an amount equal to 2% of the warrants issued. As of
August 11, 2000 no demand has been made.

On December 3, 1999, the Company entered into a subscription  agreement to offer
units at a price of $9 per unit.  For investors  investing at least  $1,000,000,
the price per unit was  decreased to $7.50 per unit.  Each unit was comprised of
six shares of the Company's common stock and two warrants.  There was no minimum
or maximum total investment related to this agreement.  The Company was required
pay to each  broker-dealer  warrants  to  purchase  shares  equal  to 10% of the
Company's  total units issued.  All warrants  shall have an exercise price of $5
per share. In the event the Company has not filed a Registration Statement on or
prior to  September  1,  2000,  the  investor  shall  have the  right to  demand
registration  of the shares and the warrant  shares,  and the number of warrants
issued  shall be  increased  by 5% of the  original  number of warrants  issued,
commencing September 1, 2000 and upon the first of each month thereafter,  until
the shares and warrants  are  registered.  In the event the Company,  during the
six-month  period of time following the date of the  agreement,  sells shares at
less than $3 per share (or $2.50 per share in the event an investor is providing
$1,000,000),  then the Company is required to issue additional securities to the
investor in an amount such that the investor  would  receive,  in the aggregate,
the same securities as if he had participated in the reduced price offering.

As of March 31, 2000, a total offering of $3,435,577, net of offering costs, was
completed,  and 1,436,314 shares of common stock were issued. In connection with
the offering,  a total of 47,878 and 478,780 warrants were issued to brokers and
investors, respectively.

The Company has incurred  significant  net losses and  negative  cash flows from
operations since our inception.  At June 30, 2000, we had an accumulated deficit

                                       10
<PAGE>


of $15,028,116.  These losses have been funded primarily through the issuance of
our equity securities.  We intend to continue to invest heavily in marketing and
brand  development,  content  enhancements,  and technology  and  infrastructure
development.  As a result,  we believe that we will continue to incur net losses
and negative cash flows from operations for the foreseeable future.

For the three  months  ended June 30, 2000 and for the six months  period  ended
June 30, 2000, the Company's selling,  general and administrative  expenses were
$3,325,560  and  $6,692,826,  respectively.  For the three months ended June 30,
1999 and from  February 3, 1999  (inception)  to June 30,  1999,  the  Company's
selling,  general and  administrative  expenses were  $1,557,189 and $1,943,666,
respectively.  The Company earned $7,595 in interest income for the three months
ended June 30, 2000 and $20,120 for the six months ended June 30, 2000.  For the
comparable  periods of 1999 the Company earned $9,265 and $9,265,  respectively.
The net loss for the three  months and six months  ended June 30,  2000  totaled
$3,312,867 and $6,667,372, respectively. The net loss for the three months ended
June 30, 1999 and for the period from February 3, 1999  (inception)  to June 30,
1999 totaled $1,547,924 and $3,409,914, respectively.

We incurred  cumulative deferred  compensation,  which represents the difference
between the exercise price of stock options granted and the fair market value of
the underlying common stock at the date of grant. The difference is recorded and
amortized  over the vesting period of the applicable  options.  Options  granted
through December 1999 typically vest over 15 months, although a portion of those
options vested  immediately.  Options granted after December 1999 generally vest
over  36  months.  Of the  total  deferred  compensation  amount,  approximately
$209,664 and  $343,448 was expensed  during the three months ended June 30, 2000
and 1999.  For the six months  ended June 30, 2000  approximately  $711,506  was
expensed and $343,448,  respectively for the period from (inception) February 3,
1999 to June 30, 1999.

As of June 30, 2000, the Company had current assets of $91,922,  and $859,701 in
furniture,  equipment and other assets of $67,756,  resulting in total assets of
$1,019,379. The Company's current liabilities were $1,596,319.


Results of Operations

The Company is a  development  stage company and  generated  operating  revenues
totaling  $5,098 for the three  months ended June 30, 2000 and $0 for the period
from February 3, 1999 (inception) to June 30, 1999. While the Company  continues
to focus its efforts on developing  quality products,  it is moving forward with
its sales and  marketing  efforts to establish a large  consumer  base for these
products.  Revenues have  initiated and are expected to grow.  While there is no
assurance,  the  Company  anticipates  that by  continuing  to  develop  quality
products and  establishing a consumer base, it will be in a position to generate
greater revenues in the future.

On June 29, 2000, the Company entered into two licensing  agreements for the use
of its product for one year.  The  initiation  date is July 1, 2000.  The annual
value is  $400,000,  which was  received  as of June 30,  2000 and is  currently
booked as deferred revenue. In addition,  as of June 30, 2000, the Company,  has
sales contracts totaling $273,783 that have not been fulfilled.


                                       11
<PAGE>


Operating Expenses
------------------

Selling, General and Administrative Expenses
--------------------------------------------

For the three months ended June 30, 2000 and for the comparable  period in 1999,
the  Company  incurred  $3,325,560  and  $1,557,189,  respectively, in operating
expenses.  For the six  months  ended  June  30,  2000 and for the  period  from
inception  (February 3, 1999)  through June 30, 1999,  operating  expenses  were
$6,692,826 and $1,943,666, respectively. These expenses were primarily for sales
and marketing expenses,  product development and general  administrative  costs.
The  increase  is due to the  increased  activity in sales,  continuing  product
development and increased  general  business  activity.  The Company expects its
absolute dollar expenses to decline from current levels for the remainder of the
year.

Other Income
------------

Miscellaneous  Income and  Interest  Income  totaled  $20,356 and $7,595 for the
three months and six months ended June 30, 2000, respectively. Investment income
in future  periods may  fluctuate  as a result of  fluctuations  in average cash
balances  maintained  by the  Company  and  changes in the  market  rates of its
investments.

Financing Expense
-----------------

For the three months ended June 30, 2000 and June 30, 1999, there was no finance
expense incurred. For the six months ended June 30, 2000 and for the period from
February  3, 1999  (inception)  to June 30,  1999,  finance  expense  was $0 and
$1,557,335,   respectively.   Financing  expense  consists   primarily  of  cost
associated with the issuance of below market options and warrants.

Depreciation and Amortization
-----------------------------

For the three months ended June 30, 2000 and for the comparable  period in 1999,
depreciation and amortization  expenses were $94,532 and $40,682,  respectively.
For the six months  ended June 30,  2000 and the period  from  February  3, 1999
(inception)  to June 30,  1999,  depreciation  and  amortization  expenses  were
$160,626 and $67,420, respectively.

Stock-Based Compensation Expense
--------------------------------

For the three months ended June 30, 2000,  $209,664 of compensation  expense was
recorded.  For the six months  ended June 30,  2000,  $711,506  of  compensation
expense  was  recorded.  The  unamortized  balance is being  amortized  over the
vesting  period for the  individual  options,  which is  typically 15 months for
options issued earlier than December 1999 and 36 months for options issued since
that date. For the three months and six months ended June 30, 1999  compensation
expense of $343,448 and $343,448 were recorded, respectively.



                                       12
<PAGE>

Liquidity and Capital Resources
-------------------------------

The Company has generated  revenues totaling $5,098 for the three months and six
months ended June 30, 2000.  The Company  anticipates  that it will  continue to
incur net losses and negative  cash flows from  operations  for the  foreseeable
future.  The rate at which  these  losses will be incurred  are  anticipated  to
decline from current  levels.  The Company's  source of capital from February 3,
1999 (inception) to June 30, 2000 has been investment  capital provided by third
parties.  Further,  the Company  anticipates it will require  additional capital
contributions to fund its operations during the year 2000. In December 1999, the
Company commenced two private offerings of its securities.

During the three months ended June 30, 2000,  the company  received  proceeds of
$130,950  from the sales of 53,000  shares of capital stock through the exercise
of employee  stock options and as an  accommodation  to the purchasers and under
the same terms and conditions of the June 1999 Private Placement Memorandum. For
the six months ended June 30, 2000,  total capital raised was $5,328,096 (net of
offering costs) for the issuance of 2,299,912 shares.

Capital  expenditures  have  generally  been  comprised of purchases of computer
hardware  and  software  as well as  leasehold  improvements  related  to leased
facilities and are expected to remain constant in future periods.

The Company  currently has  commitments, including  those under  operating lease
agreements.  The Company has  experienced a substantial  increase in its capital
expenditures  and operating  lease  arrangements  since its inception,  which is
consistent  with  increased  staffing,  and does not  anticipate  that this will
continue  to grow in the future.  Additionally,  the  Company  will  continue to
evaluate possible  acquisitions of or investments in businesses,  products,  and
technologies that are  complementary to those of the Company,  which may require
the use of cash.  Management  believes existing cash and investments will not be
sufficient  to meet the  Company's  operating  requirements  for the next twelve
months;  however,  the Company may sell additional  equity or debt securities or
obtain credit facilities to further enhance its liquidity position.  The sale of
additional  securities  could  result in  additional  dilution to the  Company's
shareholders.

















                                       13
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is a party to various actions and proceedings incident to its normal
business  operations.  The Company  believes that the outcome of such litigation
and  proceedings,  individually  and in the aggregate,  will not have a material
adverse effect on the business or financial condition of the Company.


Item 2. Changes in Securities

During  the three  months  ended  June 30,  2000,  the  Company  received  funds
($130,950)  for shares sold from our offering of June 30, 1999  (21,000  shares)
and sold 32,000 shares from the exercise of employee stock options.  The Company
also issued 9,000 shares in a former employee  settlement  dispute.  For the six
months ended June 30, 2000,  the Company  received  $5,328,096  (net of offering
costs) for the issuance of 2,299,912 shares of common stock.

As of  December  31,  1999,  the  number of shares of common  stock  outstanding
totaled  26,413,052.  As of the March 31, 2000, common stock shares  outstanding
totaled  28,650,964.  As of June 30,  2000 the number of  outstanding  shares of
common stock totaled 28,712,974.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders.

On June 21,  2000,  the annual  stockholders  meeting  was held.  Two items were
presented to the shareholders for consideration:  (1) The election of a Board of
Directors to serve until the annual  stockholders  meeting of 2001;  and (2) The
Ratification of the appointment of Singer, Lewak, Greenbaum & Goldstein LLP, the
Independent Auditors, through 12/31/00.

The votes were as follows:

Director Candidate              For         Against        Abstain
------------------              ---         -------        -------
Robert Forbuss                549,419          0                0
William Louden                549,419          0                0
Frank Marino                  549,419          0                0
Leo Verheul                   549,419          0                0
Michael Calderone             549,019        400                0

Auditors                      528,215          0           21,204
--------

Item 5. Other Information

On July 17, 2000, Leo Verheul,  Chief Information  Officer and a Director of the
Company  passed away. On July 1, 2000,  Paul Yeager,  Chief  Financial  Officer,
resigned to pursue other interests.  The Company  continues to diligently search
for replacements for these two positions.

As of August 1, 2000,  Mr. E. J. Conner,  Jr. was named interim Chief  Financial
Officer. Mr. Conner brings over 20 years of financial experience to the Company.
Mr. Conner has served as Vice-President  Operations & Chief Financial Officer of
Porta-Kamp  Construction,  Inc.,  Houston,  TX and  Vice  President  of L. C. M.
Management Company,  Barker, TX, a company  specializing in financial consulting
services.  He has held numerous financial  positions in the oil and gas industry
and served on the Board of Directors of two manufacturing companies.

                                       14
<PAGE>


Item 6.

     (A) Exhibits

     27. Financial Data Schedule


     (B) During the three months  ended June 30, 2000,  no Form 8-K reports were
         filed.




                                   SIGNATURES


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


    Signature                             Title                      Date
    ---------                             -----                      ----

/s/ Michael Calderone
________________________       Director                        August 14, 2000
Michael Calderone              Chief Executive Officer
                               (Principal Executive Officer)


/s/ E. J. Conner, Jr.
________________________       Chief Financial Officer         August 14, 2000
E. J. Conner, Jr.              (Principal Accounting/Financial
                               Officer)















                                       15
<PAGE>




                               INDEX TO EXHIBITS
--------------------------------------------------------------------------------
 Exhibit
   No.                           Description                            Page
   ---                           -----------                            ----

   27                Financial Data Schedule                             17








































                                       16