<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                   FORM 10-QSB



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


For the quarterly period ended:             June 30, 2000
Commission file number:                     000-26047



                             EMAILTHATPAYS.COM, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)




         Florida                                       65-0609891
         (State or Other Jurisdiction of               (I.R.S. Employer
         Incorporation or Organization)                Identification No.)


                              428 West Sixth Avenue
                       Vancouver, British Columbia V5Y1L2
                    (Address of Principal Executive Offices)

                                 (604) 801-5566
                (Issuer's Telephone Number, Including Area Code)


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

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                                    X  Yes     No
                                   ---     ---

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: August 2, 2000: 8,723,093 shares of
common stock, $.005 par value per share.
<PAGE>


                    EMAILTHATPAYS.COM, INC. AND SUBSIDIARIES
                                   FORM 10-QSB
                      QUARTERLY PERIOD ENDED June 30, 2000
                                      INDEX



<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                           ----
<S>                                                                                                        <C>
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Consolidated Balance Sheets
         As of June 30, 2000 (Unaudited) and December 31, 1999...............................................3
Consolidated Statements of Operations and Deficit (Unaudited)
         For the Three and Six Months Ended June 30, 2000 and June 30, 1999 .................................4
Consolidated Statements of Cash Flows (Unaudited)
         For the Six Months Ended June 30, 2000 and June 30, 1999 ...........................................5
Notes to Unaudited Consolidated Financial Statements ......................................................6-9

Item 2 - Management's Discussion and Analysis of Financial Condition and
          Results of Operations .........................................................................10-11

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings  ................................................................................12
Item 2 - Changes in Securities and Use of Proceeds..........................................................12
Item 3 - Defaults Upon Senior Securities....................................................................12
Item 4 - Submission of Matters to a Vote of Security Holders ...............................................12
Item 5 - Other Transactions.................................................................................12
Item 6 - Exhibits and Reports on Form 8-K ..................................................................12

Signatures .................................................................................................13
</TABLE>
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

emailthatpays.com, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
===============================================================================================================
                                                                           June 30,                December 31,
                                                                             2000                     1999
                                                                          (Unaudited)               (Audited)
---------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                      <C>
Assets
Current assets:
              Cash                                                       $   259,189              $   121,609
              Accounts receivable                                            257,125                  176,688
              Prepaid expenses                                                51,121                   10,510
---------------------------------------------------------------------------------------------------------------
                                                                             567,435                  308,807

Property and equipment, less accumulated amortization                        182,127                  191,115

---------------------------------------------------------------------------------------------------------------
                                                                         $   749,562              $   499,922
===============================================================================================================

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
              Accounts payable and accrued liabilities                   $   305,845              $   304,383
              Loans payable - current portion                                 38,323                  121,112
              Lease obligation - current portion                               5,089                    5,002
              Due to related parties - current portion                          --                     55,667
---------------------------------------------------------------------------------------------------------------
                                                                             349,257                  486,164

Loans payable                                                                123,532                  146,766
Lease obligation                                                              19,293                   22,457
Due to related parties                                                          --                     91,137
---------------------------------------------------------------------------------------------------------------
   Total liabilities                                                         492,082                  746,524

Stockholders' equity (deficit):
              Common stock                                                    44,615                   43,140
              Additional paid-in capital                                   3,532,957                2,224,432
              Deficit                                                     (2,291,695)              (1,372,793)
              Deferred stock-based compensation                           (1,015,100)              (1,130,000)
              Accumulated other comprehensive income (loss):
                 Foreign currency translation adjustment                     (13,297)                 (11,381)
---------------------------------------------------------------------------------------------------------------
   Total stockholders' equity (deficit)                                      257,480                 (246,602)


---------------------------------------------------------------------------------------------------------------
                                                                         $   749,562              $   499,922
===============================================================================================================
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.
<PAGE>

emailthatpays.com, Inc.
Consolidated Statements of Operations and Deficit (unaudited)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
=============================================================================================================================
                                                                   Three Months Ended               Six Months Ended
                                                                        June 30,                         June 30,
                                                                2000             1999               2000              1999
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>               <C>               <C>               <C>
Revenue                                                     $   311,282       $   290,116       $   544,207       $   456,369

Cost of revenue                                                 248,051           206,247           435,215           334,114
-----------------------------------------------------------------------------------------------------------------------------

Gross profit                                                     63,231            83,869           108,992           122,255
=============================================================================================================================
Operating expenses:
             Depreciation                                        17,786             5,873            31,917             7,965
             Salaries and fringe benefits                       222,842           101,871           483,811           198,979
             Stock-based compensation                            57,450              --             114,900              --
             Legal and accounting                                48,667            18,547            72,589            29,721
             Consulting fees                                     16,363             8,147            67,016            12,562
             Phones and utilities                                 9,056             4,224            20,398             7,526
             Rent                                                21,299             7,421            45,586            20,129
             Advertising and promotion                           30,383             3,932            57,190             9,643
             Other selling, general and administrative           46,137            30,990           123,570            64,683
             ----------------------------------------------------------------------------------------------------------------
                                                                469,983           181,005         1,016,977           351,208

-----------------------------------------------------------------------------------------------------------------------------
Loss from operations                                           (406,752)          (97,136)         (907,985)         (228,953)

Other income (expenses):
             Interest income                                      3,942               860             3,967               958
             Interest expense                                    (5,861)           (8,737)          (14,884)          (14,554)
             ----------------------------------------------------------------------------------------------------------------
                                                                 (1,919)           (7,877)          (10,917)          (13,596)

-----------------------------------------------------------------------------------------------------------------------------
Net loss                                                       (408,671)         (105,013)         (918,902)         (242,549)

Deficit, beginning of period                                 (1,883,024)         (390,329)       (1,372,793)         (252,793)

-----------------------------------------------------------------------------------------------------------------------------
Deficit, end of period                                      $(2,291,695)      $  (495,342)      $(2,291,695)      $  (495,342)
=============================================================================================================================

Net loss per common share, basic and diluted                      (0.05)         (105,013)            (0.11)         (242,549)

Weighted average common shares outstanding,                   8,717,597                 1         8,612,130                 1
    basic and diluted
==============================================================================================================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.
<PAGE>

emailthatpays.com, Inc.
Consolidated Statements of Cash Flows (unaudited)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
=============================================================================================================================
                                                                                                   Six Months Ended
                                                                                                       June 30,
                                                                                             2000                    1999
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>                      <C>
Cash provided by (used in):

Operations:
       Net loss                                                                          $  (918,902)             $  (242,549)
       Items not involving cash:
             Depreciation                                                                     31,917                    7,965
             Stock-based compensation                                                        114,900                     --
             Foreign exchange on subsidiary operations                                        (1,916)                  (4,382)
             Loss on disposal of equipment                                                     2,914                     --
       Changes in operating assets and liabilities:
             Decrease (increase) in accounts receivable                                      (80,438)                (217,253)
             Decrease (increase) in prepaid expenses                                         (40,612)                  (8,197)
             Increase (decrease) in accounts payable and accrued liabilities                   1,464                  237,212

-----------------------------------------------------------------------------------------------------------------------------
       Net cash used in operating activities                                                (890,673)                (227,204)

Cash flows used in investing activities:
       Purchase of property and equipment                                                    (36,755)                 (85,480)
       Proceeds from disposal of equipment                                                    10,912                     --

-----------------------------------------------------------------------------------------------------------------------------
       Net cash used in investing activities                                                 (25,843)                 (85,480)

Cash flows provided by financing activities:
       Increase (decrease) in loans payable                                                 (109,100)                 757,089
       Increase (decrease) in advances from related parties                                 (146,804)                 (65,673)
       Issue of share capital                                                              1,310,000                     --

-----------------------------------------------------------------------------------------------------------------------------
       Net cash provided by financing activities                                           1,054,096                  691,416

-----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash                                                                  137,580                  378,732

Cash, beginning of period                                                                    121,609                   22,264
-----------------------------------------------------------------------------------------------------------------------------

Cash, end of period                                                                      $   259,189              $   400,996
=============================================================================================================================

Supplementary information:
       Interest paid                                                                          14,884                   14,554
       Income taxes paid                                                                           0                        0
</TABLE>

See accompanying notes to unaudited consolidated financial statements.
<PAGE>

EMAILTHATPAYS.COM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000


1.       The Company and description of business:

emailthatpays.com, Inc. (the "Company") is incorporated in the state of Florida
and is a "permission-based" e-mail marketing and integrated advertising
strategies service. Combining online direct marketing technology with
promotional and marketing expertise, the Company's infrastructure is set up to
deliver a full slate of innovative B2B and B2C marketing solutions to a vast
array of products and organizations.

The Company's services include the creation, delivery and analysis of targeted
"one-to-one" e-mail campaigns, customized loyalty programs and comprehensive
list management / brokerage capabilities and the planning, integration and
execution of both online and offline advertising strategies.

On October 22, 1999, the Company, then named Realm Production and Entertainment,
Inc. ("Realm"), a public company listed on the over-the-counter bulletin board
in the United States, issued 6,572,000 shares of its common stock in connection
with the merger of a wholly owned subsidiary of Realm with and into
emailthatpays.com ("email Nevada"), a company incorporated in the state of
Nevada. This transaction was accounted for as a recapitalization of email
Nevada, effectively as if email Nevada had issued common shares for
consideration equal to the net monetary assets of Realm. On October 27, 1999
Realm changed its name to tvtravel.com, Inc. and subsequently on December 21,
1999 to emailthatpays.com, Inc.

The Company's historical financial statements reflect the financial position,
results of operations and cash flows of email Nevada since its inception and
include the operations of Realm from the date of the effective recapitalization,
being October 22, 1999. Stockholders' equity gives effect to the shares issued
to the stockholders of email Nevada prior to October 22, 1999 and of the Company
thereafter.
<PAGE>

email Nevada (formerly Hotel Media Group Inc.) was incorporated on June 26,
1998. In August 1999, it acquired 100% of Coastal Media Group Ltd ("Coastal"), a
full-service advertising agency founded in May 1998. A common group of
shareholders controlled both Coastal and email Nevada. For accounting purposes,
the transaction was considered to be an acquisition by Coastal for consideration
equal to the net assets and liabilities of email Nevada. Accordingly, the assets
and liabilities of email Nevada have been recorded at their carrying values in
the Company's accounts.

2.       Liquidity and future operations:

The Company has sustained net losses and negative cash flows from operations
since its inception. At June 30, 2000, the Company has positive working capital
of $218,178. The Company's ability to meet its obligations in the ordinary
course of business is dependent upon its ability to establish profitable
operations or to obtain additional funding through public or private equity
financing, collaborative or other arrangements with corporate sources, or other
sources. Management is seeking to increase revenues through continued marketing
of its services; however additional funding will be required. There is no
assurance that the aforementioned events, including the receipt of additional
funding, will occur and be successful.
<PAGE>

EMAILTHATPAYS.COM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000

3.       Basis of Presentation:

The unaudited consolidated financial statements of the Company at June 30, 2000
and for the three and six month periods then ended include the accounts of the
Company and its wholly-owned subsidiaries and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the financial position and
operating results for the interim periods. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted in
these interim statements under the rules and regulations of the Securities and
Exchange Commission ("SEC"). Accounting policies used in fiscal 2000 are
consistent with those used in fiscal 1999. The results of operations for the six
months ended June 30, 2000 are not necessarily indicative of the results for the
entire fiscal year ending December 31, 2000. These interim financial statements
should be read in conjunction with the financial statements for the fiscal year
ended December 31, 1999 and the notes thereto included in the Company's Form
10-KSB filed with the SEC on March 30, 2000.


4.       Foreign currency:

The functional currency of the operations of the Company's wholly-owned Canadian
operating subsidiaries is the Canadian dollar. Assets and liabilities measured
in Canadian dollars are translated into United States dollars using exchange
rates in effect at the balance sheets date with revenue and expense transactions
translated using average exchange rates prevailing during the period. Exchange
gains and losses arising on this translation are excluded from the determination
of income and reported as foreign currency translation adjustment (which is
included in the comprehensive income (loss)) in stockholders' equity.

5.       Common Stock Options and Stock-based Compensation:

During the six months ending June 30, 2000, the Company, under the terms of its
1999 Equity Compensation Plan (the "Plan"), granted to certain employees a total
of 70,000 non-qualified stock options. The options have a three-year vesting
period and an exercise price of $6.63 (an amount that approximated or exceeded
the market value of the Company stock on the date of the grant). Also during
this six-month period, 226,806 options reverted back to the Plan due to changes
in the employment and contractual status of certain employees and key advisors.

The Company accounts for stock-based employee and director compensation
arrangements in accordance with provisions of Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees", and related
interpretations and complies with the disclosure provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation" in its annual audited financial
statements. Under APB No. 25, compensation expense is based on the difference,
if any, on the date the number of shares exercisable is determined, between the
market value of the Company's stock and the exercise price of options to
purchase that stock.
<PAGE>

EMAILTHATPAYS.COM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000

5.       Common Stock Options and Stock-based Compensation (Continued):

At June 30, 2000, the Company has recorded aggregate deferred stock-based
compensation totaling $1,149,000 in connection with the granting of stock
options to employees. The deferred compensation is being amortized over the
estimated service life of the employees holding the options. For the three and
six month periods ended June 30, 2000, the Company recorded non-cash
compensation expense related to these options of $57,450 and $114,900,
respectively.

6.       Capital Stock and Warrants:

On March 5, 2000, the Company issued and sold 275,000 shares of common stock at
$5 each for a total of $1,375,000. After deducting a commission /
investment-banking fee of 8% or $110,000, the net consideration received for
this share issuance is $1,265,000. In connection with the share issuance, the
Company issued warrants to purchase 100,000 shares of common stock with an
exercise price of $5.00 and an expiry date of March 5, 2003.

On April 26, 2000, the Company issued 20,000 shares of common stock in exchange
for promotional goods valued at $45,000.

On June 6, 2000, in connection with the March 5, 2000 share issuance, the
Company issued warrants to purchase a further 325,000 shares of common stock.
These warrants have an exercise price of $3.25 and an expiry date of June 6,
2003.

7.       Net loss per share:

The Company computes net loss per share in accordance with SFAS No. 128,
Earnings per Share, and SEC Staff Accounting Bulletin ("SAB") No. 98. Under the
provisions of SFAS No. 128 and SAB No. 98, basic loss per share is computed
using the weighted average number of common stock outstanding during the
periods, and gives retroactive effect to the shares issued on the
recapitalization described in note 1. Diluted loss per share is computed using
the weighted average number of common and potentially dilutive common stock
outstanding during the period. As the Company generated net losses in each of
the periods presented, basic and diluted net loss per share are the same as any
exercise of options or warrants would be anti-dilutive.
<PAGE>

EMAILTHATPAYS.COM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000


8.       Comprehensive income (loss):

Effective January 1, 1999, the Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income," which establishes standards for reporting
comprehensive income (loss) and its components in financial statements. Other
comprehensive income, as defined, includes all changes in equity (net assets)
during a period from non-owner sources. Comprehensive loss for each of the
periods presented is as follows:

<TABLE>
<CAPTION>
                                          Three Months Ended June 30            Six Months Ended June 30
                                               2000        1999                     2000          1999
<S>                                         <C>          <C>                     <C>             <C>
Net loss                                     $408,671    $105,013                 $918,902       $242,549
Other comprehensive (income) / loss:
 Foreign currency translation adjustment        2,372       3,109                    1,916          4,382
Comprehensive loss                           $411,043    $108,122                 $920,818       $246,931
</TABLE>

<PAGE>

EMAILTHATPAYS.COM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000

9.       Recently issued accounting pronouncements:

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which defines derivatives, requires that
all derivatives be carried at fair value, and provides for hedge accounting when
certain conditions are met. SFAS No. 133 is effective for the Company in 2001.
The Company does not believe that the adoption of this statement will have a
material impact on the Company's financial position or results of operations.
The Company does not currently hold derivative instruments or engage in hedging
activities.

In December 1999, the Staff of the Securities and Exchange Commission (SEC)
released Staff Accounting Bulletin 101 (SAB 101), "Revenue Recognition in
Financial Statements." This pronouncement summarizes certain of the SEC staff's
views in applying generally accepted accounting principles to revenue
recognition. The Company believes their revenue recognition practices are in
conformity with the guidelines in SAB 101.

In March 2000, the Financial Accounting Standards Board released FASB
Interpretation No. 44, "Accounting for Certain Transactions involving Stock
Compensation, an interpretation of APB Opinion No. 25." This interpretation
provides clarification of Opinion 25 for certain issues such as the
determination of an employee, the criteria for determining whether a plan
qualifies as a non-compensatory plan, the accounting consequences of various
modifications to the terms of a previously fixed stock option or award, and the
accounting for an exchange of stock compensation awards in a business
combination. The Company believes that its practices are in conformity with this
guidance, and therefore Interpretation No. 44 will have no impact on the
Company's financial statements.
<PAGE>

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

Cautionary Statement Regarding Forward-Looking Statements

This Report includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about us and about our affiliate companies,
including, among other things:

o                 development of an e-commerce market;

o                 our ability to successfully execute our business model;

o                 growth in demand for Internet products and services; and

o                 adoption of the Internet as an advertising medium.

In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this Report might not occur.

Results of Operations
For the Three and Six Months Ending June 30, 2000 and 1999

Revenue

We earn revenues by delivering online direct marketing, promotional, and
informational offers and by developing and implementing integrated marketing and
advertising strategies. We charge our advertisers based on a number of criteria
including offers delivered, qualified leads generated, online transactions
executed and marketing services performed.

Revenue consists of the gross value of our billings to clients and includes the
price of the advertising that we purchase from offline and online suppliers.
Under marketing services contracts, we recognize the cost of the advertising we
purchase for our clients as an expense and the payments we receive from our
clients for this advertising as revenue. Under these arrangements, we are
ultimately responsible for payment to suppliers for the cost of the advertising
that we purchase.

We believe that our revenues will be subject to seasonal fluctuations as a
result of general patterns of retail advertising, which are typically higher
during the second and fourth calendar quarters. In addition, expenditures by
advertisers tend to be cyclical, reflecting overall economic conditions and
consumer buying patterns.

To date, the vast majority of our revenue has been generated from the provision
of integrated marketing and advertising strategies as our email delivery system,
relational database program and Canadian email marketing sales offices were not
fully operational until February 2000. With increased focus, time and
expenditure being directed to these online services, we anticipate proportionate
increases in revenue, both in absolute and percentage terms.
<PAGE>

Revenues for the quarter ending June 30, 2000 were $311,000, an increase of 33%
over the first quarter of 2000 and 7% over the quarter ending June 30, 1999. The
increase over the first quarter reflects seasonal fluctuations in retail
advertising, which typically are higher in the second and fourth quarters. The
increase over last year represents increased spending from existing clients. For
the six months ending June 30, 2000, total revenues of $544,000 exceed last year
by 19%. This increase results from increased spending by existing clients,
partially offset by the loss of one consulting contract that accounted for
approximately $35,000 last year.

Cost of revenue

Cost of revenue represents the cost of advertising purchased for clients. The
increases over last year directly correspond to our increased revenue.
Additionally, revenues during the first six months of fiscal 2000 contain more
integrated advertising services and less consulting services than the same
period last year. As consulting services do not involve the purchase of
advertising, our cost of revenues is thus proportionately less in 1999.


Operating Expenses

Salaries and benefits for the three months ending June 30, 2000 totaled
$223,000, a decrease of $37,000 from the first quarter of fiscal 2000 but an
increase of $121,000 over the second quarter of 1999. The decrease from the
first quarter represents the savings generated by our decision to reduce our
internal technological staff, outsource the maintenance and storage of our
technological facilities, and utilize IT professionals on a project-by-project
contract basis. The increase over last year, on both a quarterly and
year-to-date basis, represents additional staffing levels to support increased
client activity and the expansion of sales, marketing, technological and
administrative infrastructure.

At June 30, 2000, we have recorded aggregate deferred stock-based compensation
totaling $1,149,000 in connection with the granting of stock options to
employees. The deferred compensation is being amortized over the estimated
service life of the employees holding the options. For the three and six months
ending June 30, 2000, we have recorded non-cash compensation expenses of $57,000
and $115,000, respectively. We expect this level of amortization to continue
over each of the next two quarters. As the options were not granted until the
fourth quarter of 1999, there is no stock-based compensation for the six months
ended June 30, 1999.

The consolidation of our two western Canada offices into one location and the
completion of our relational database and email delivery system programs in
February resulted in other operating expenses decreasing to $190,000 for the
three months ending June 30, 2000 from $230,000 for the three months ending
March 31, 2000. Versus last year, quarterly and year-to-date increases in other
operating expenses reflect the costs associated with the marketing and
development of our "permission-based" email program and services including; the
addition of sales offices in western and eastern Canada, preparation of
marketing and presentation materials, attendance at conventions, seminars, and
client facilities, and ongoing improvements in our technological products.
<PAGE>

Liquidity and Capital Resources

We have sustained net losses and negative cash flows from operations since our
inception. As of June 30, 2000 we have positive working capital of $218,178. Our
ability to meet our obligations in the ordinary course of business is dependent
upon our ability to establish profitable operations or to obtain additional
funding through public or private equity financing, collaborative or other
arrangements with corporate sources, or other sources. We are seeking to
increase revenues through continued marketing of our services; however
additional funding will be required by the end of the third quarter. There is no
assurance that the aforementioned events, including the receipt of additional
funding, will occur and be successful.

Net cash used in operating activities was $891,000 and $227,000 for the six
months ending June 30, 2000 and 1999, respectively. Cash used in operations was
primarily the result of the net losses of $918,000 and $242,000, for the six
months ending June 30, 2000 and 1999 respectively.

Net cash used in investing activities was $26,000 and $85,000 for the six months
ending June 30, 2000 and 1999, respectively and relates to purchases of property
and equipment.

Net cash provided by financing activities was $1,054,000 and $691,000 for the
six months ending June 30, 2000 and 1999 respectively. Cash provided by
financing activities for the six months ending June 30, 2000 consists of
$1,310,000 from the issuance of capital stock; less repayments of loans totaling
$109,000 and a reduction in advances from related parties of $147,000. Cash
provided by financing activities for the period ending June 30, 1999 consists of
an increase in loans payable of $757,000, offset by a reduction of $66,000 in
advances from related parties.
<PAGE>

                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

         None.

Item 2.  Changes in Securities and Use of Proceeds.

         Recent Sales of Unregistered Securities.

         On March 5, 2000, the Company issued and sold an aggregate of 275,000
         shares of common stock at $5 per share pursuant to Rule 506 of the
         Securities Act of 1933, as amended. After deducting a commission
         /investment-banking fee of 8% or $110,000 paid to LCP Capital Corp.,
         the net consideration received for this share issuance is $1,265,000.
         In connection with this share issuance, the Company issued warrants to
         purchase 100,000 shares of common stock with an exercise price of $5.00
         and an expiry date of March 2003.

         On April 26, 2000, pursuant to Section 4(2) of the Securities Act of
         1933, as amended, the Company issued 20,000 shares of common stock in
         exchange for promotional goods valued at $45,000.

         On June 6, 2000, in connection with the March 5, 2000 share issuance,
         the Company issued warrants to purchase a further 325,000 shares of
         common stock. These warrants have an exercise price of $3.25 and an
         expiry date of June 6, 2003.


Item 3.  Defaults Upon Senior Securities.

         None.

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

The Company held its Annual Meeting of Stockholders on June 26, 2000. At the
meeting four matters were voted on.

    1.  Election of three directors to serve a one-year term ending at the 2001
        Annual Meeting. ......
        Daniel Hunter..........Votes For: 6,970,053Against: 0Abstentions: 315
        James MacKenzie .......Votes For: 6,970,053Against: 0Abstentions: 315
        H. Earl Joudrie........Votes For: 6,970,053Against: 0Abstentions: 315

    2.  Approval of an amendment to the Company's Amended and Restated Articles
        of Incorporation to increase the authorized number of common shares to
        100,000,000.
        ........................Votes For: 6,969,856Against: 512Abstentions: 0

    3.  Approval of the Company's 1999 Equity Compensation Plan
        ........................Votes For: 6,823,987Against: 765Abstentions: 110

    4.  Ratification of the selection of KPMG as independent auditors for the
        fiscal year ending December 31, 2000.
        ........................Votes For: 6,970,093Against: 150Abstentions: 125
<PAGE>

Item 5.  Other Information.


         None.

Item 6.  Exhibits and Reports on Form 8-K.

         (a)    Furnish the exhibits required by Item 601 Regulation S-B

                27   -  Financial Data Schedule

         (b)    Reports on Form 8-K

                None.
<PAGE>

                                   SIGNATURES


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


                                           EMAILTHATPAYS.COM, INC.



Dated:   August 2, 2000                    By:       /s/ Daniel Hunter
                                                    ---------------------------
                                                     Daniel Hunter
                                                     Chief Executive Officer





                                  EXHIBIT INDEX



EXHIBIT
NUMBER                     DESCRIPTION                            LOCATION
------                     -----------                            --------

27                    Financial Data Schedule                       *1


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