U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-KSB
(Mark One)

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

     For the fiscal year ended July 31, 2001

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

Commission File No.  000-27769

                          Power Interactive Media, Inc.
                  --------------------------------------------
               (Name of small business registrant in its charter)

Florida                                                               65-0522144
-------------------------------                              -------------------
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)

181 Whitehall Drive
Markham, Ontario, Canada                                                 L3R 9T1
-----------------------------------------                             ----------
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number (905) 948-9600

Securities registered under Section 12(b) of the Exchange Act:

Title of each class                                        Name of each exchange
                                                             on which registered
           None
-----------------------------                          -------------------------
Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $0.0001 par value
                                (Title of class)
                               -------------------

Copies of Communications Sent to:

                              Mintmire & Associates
                              265 Sunrise Avenue, Suite 204
                              Palm Beach, FL 33480
                              Tel: (561) 832-5696 Fax: (561) 659-5371


<PAGE>



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

                  Yes  X        No
                        ---     -----

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

     State registrant's revenues for its most recent fiscal year. $35,411

     Of the  6,993,183  shares  of voting  stock of the  registrant  issued  and
outstanding as of July 31, 2001,  3,682,942  shares are held by  non-affiliates.
The  aggregate  market  value of the voting stock held by  non-affiliates  as of
November 2, 2001 is $1,546,835.64.

                                     PART I

Item 1. Description of Business

     (a)  Business Development

     Power Interactive  Media, Inc. (the "Company" or "PIAM") is incorporated in
the  State of  Florida.  The  Company  was  originally  incorporated  as  Global
Corporate Quality,  Inc. on September 9, 1994 ("GCQ").  The Company subsequently
changed  its name to  Alternate  Achievements,  Inc.  on October 1, 1999,  Power
Kiosks,  Inc. on March 2, 2000 and to Power Interactive  Media, Inc. on March 1,
2001.  The  Company's  common stock is currently  quoted on the Over the Counter
Bulletin  Board under the symbol "PIAM" and has been since March 7, 2001.  Prior
to that  time,  it was  quoted  under the symbol  "PWKK"  since  July 2000.  Its
executive  offices  are  presently  located  at 181  Whitehall  Drive,  Markham,
Ontario,  Canada,  L3R 9T1.  Its  telephone  number  is (905)  948-9600  and its
facsimile number is (905) 948-8377.

     The Company is filing this Form 10-KSB in compliance with the effectiveness
of its filing on Form 10-SB. The Company will file periodic reports in the event
its  obligation  to file such  reports is  suspended  under the  Securities  and
Exchange Act of 1934 (the "Exchange Act".)

     Originally,  the  Company  was  formed  to  engage  in  the  marketing  and
distribution of training  programs and seminars to corporate level executives on
various  management  issues.  The Company failed in its attempt to implement its
initial  business plan and during  September  1995  abandoned  its efforts.  The
Company had no operations  for the period prior to September  1995.  The Company
was  inactive and there were no  transactions  from  September  1995 to February
2000, when the Company,

                                        2

<PAGE>



Power Photo Enterprises,  Inc. n/k/a Power Photo Kiosks, a Canadian  corporation
("PPK") and the individual  holders of all of the  outstanding  capital stock of
PPK (the  "Holders")  consummated  a  reverse  acquisition  pursuant  to a share
exchange  agreement (the  "Agreement").  Pursuant to the Agreement,  the Holders
tendered to the Company all issued and outstanding shares of PPK in exchange for
3,000,000 shares (only 2,995,539 shares were actually issued due to rounding) of
common stock of the Company. Of the 2,995,539 shares issued,  Ronald Terry Cooke
is the beneficial owner of 1,359,846 shares and Allan Turowetz is the beneficial
owner of 1,103,146  shares.  The  reorganization  was accounted for as a reverse
acquisition.

     Currently,  the Company is a provider of a  network-based,  digital imaging
kiosk system that delivers a range of retail consumer products. The kiosk system
is enabled by leading-edge  technology in the areas of digital imaging software,
delivery hardware and e-commerce network capabilities.

     Each kiosk operates as a fully-functional,  stand-alone business unit. When
linked electronically,  the kiosks function as a broadcast network that delivers
national and site-specific  advertising and marketing programs to any geographic
delivery area.

     As part of the ongoing product  improvement  process, in December 1999, PPK
signed a teaming agreement with Sybase Canada Limited the Canadian subsidiary of
Sybase  ("Sybase")  to develop a retail kiosk  delivery  system in an attempt to
create an interactive "smart" digital kiosk network.  The Company hopes that the
result will allow the Company to deliver a broader range of consumer-based kiosk
products and will form the basis of an electronic  network capable of delivering
national  and  site-specific  advertising  marketing  programs.  Sybase  is also
working  with the  Company  to rewrite  the  operating  software  with a view to
enhancing  the  usability  for the  consumer  while at the same time  making the
connection between the kiosk operating system and the network software seamless.

     It is the  Company's  intention  to (i) to market  its kiosks in the United
States and Canada;  (ii) to research and further  develop its new products;  and
(iii) to continue to improve its kiosk system.

     The Company  relied upon Section  4(2) of the  Securities  Act of 1933,  as
amended (the "Act") and Rule 506 of Regulation D promulgated  thereunder  ("Rule
506") for  several  transactions  regarding  the  issuance  of its  unregistered
securities. In each instance, such reliance was based upon the fact that (i) the
issuance  of the shares did not  involve a public  offering,  (ii) there were no
more than thirty-five (35) investors (excluding "accredited  investors"),  (iii)
each  investor  who was not an  accredited  investor  either  alone  or with his
purchaser  representative(s)  has such knowledge and experience in financial and
business  matters that he is capable of  evaluating  the merits and risks of the
prospective  investment,  or the issuer reasonably believes immediately prior to
making any sale that such  purchaser  comes  within this  description,  (iv) the
offers  and  sales  were made in  compliance  with  Rules  501 and 502,  (v) the
securities  were subject to Rule 144  limitations on resale and (vi) each of the
parties was a sophisticated  purchaser and had full access to the information on
the Company necessary to make an informed  investment  decision by virtue of the
due diligence  conducted by the purchaser or available to the purchaser prior to
the transaction (the "506 Exemption").

                                        3

<PAGE>



     In January 2000, PPK, prior to its acquisition by the Company, entered into
negotiations  with  Remington  Financial  Group,  Inc.,  a  Wyoming  corporation
("Remington")  regarding  a share  exchange,  whereby PPK would be acquired in a
reverse  acquisition  by Remington in exchange for shares in  Remington.  Rhonda
Networks,  Inc., an Alberta Business  corporation  ("Rhonda") brokered the deal,
which was never consummated.  Since that time, Rhonda has made certain claims to
PPK  regarding  monies and time expended on PPK's  behalf.  In August 2000,  the
Company  agreed to pay Rhonda  $25,000 and to issue Rhonda 225,000 shares of its
restricted  common stock with piggy back  registration  rights in exchange for a
general  release in favor of both PPK and the  Company.  The Company  issued the
225,000 shares in October 2000.  For such offering,  the Company relied upon the
506 Exemption  and no state  exemption,  since Rhonda is located in Canada.  See
Part III, Item 12. "Certain Relationships and Related Transactions".

     In June 2000,  the Company  executed a promissory  note in favor of Thomson
Kernaghan & Co., Ltd., a Bermuda  corporation  ("TK") in the principal amount of
$250,000.  The loan had a maturity date of August 31, 2000. In December 2000, TK
converted all  outstanding  principal  and interest  into 250,000  shares of the
restricted  common stock of the Company.  For such offering,  the Company relied
upon the 506 Exemption. No state exemption was necessary because the investor is
a foreign entity located in Canada. See Part I, Item 6. "Management's Discussion
and Analysis or Plan of Operation - Financial  Condition,  Liquidity and Capital
Resources";  Part III, Item 11. "Security Ownership of Certain Beneficial Owners
and  Management;  "and Part III,  Item 12.  "Certain  Relationships  and Related
Transactions".

     In July 2000, the Company entered into an employment  agreement with Ronald
Terry Cooke, to employ him as President and CEO of the Company.  The term of the
agreement is for a period of five (5) years, beginning July 1, 2000. Mr. Cooke's
initial basic compensation is one hundred twenty thousand dollars ($120,000) per
year.  Such salary will be reviewed as  appropriate by the Board of Directors of
the  Company and may be  increased  in the Board's  sole  discretion  based upon
performance.  Mr.  Cooke  received a signing  bonus of two  hundred  twenty five
thousand  (225,000)  restricted shares of the Company's common stock, which were
issued in August  2000,  as well as a  seventy-five  thousand  dollar  ($75,000)
bonus. Under the terms of the employment agreement,  Mr. Cooke has the option to
purchase up to a total of one hundred thousand (100,000) shares of the Company's
restricted  common stock  annually,  which options are exercisable at a price of
one dollar ($1.00) per share. The stock options will begin to vest at the end of
the  employment  year  commencing  on July 1,  2000  and  each  employment  year
thereafter.  Mr.  Cooke will have five (5) years  after the shares are vested to
exercise  the  options.  For such  offering,  the  Company  relied  upon the 506
Exemption.  No state  exemption  was  necessary  because Mr. Cooke is a Canadian
resident.  ee Part  I,  Item 1.  "Description  of  Business  - (b)  Business  of
Registrant  -  Employees  and  Consultants";   Part  III,  Item  10.  "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

     In August 2000, the Company filed a Registration  Statement on Form S-8 for
the purpose

                                        4

<PAGE>



of  registering  the Company's Year 2000  Consultant  Stock  Compensation  Plan.
Pursuant to such plan,  the Company issued 105,000 shares of its common stock to
Allan Turowetz,  the Company's current  Vice-President and Director. See Part I,
Item 1.  "Description  of Business - (b) Business of  Registrant - Employees and
Consultants";  Part III, Item 10. "Executive  Compensation - Employee  Contracts
and Agreements";  Part III, Item 11. "Security  Ownership of Certain  Beneficial
Owners  and  Management";  and Part III,  Item 12.  "Certain  Relationships  and
Related Transactions".

     In August 2000, the Company issued 120,000 shares of its restricted  common
stock to Team Power  Enterprises  Incorporated  ("TPE"),  which is  beneficially
owned by both Ronald Terry Cooke, the Company's  current  President and Chairman
and Allan Turowetz,  the Company's  current Vice- President and Director as full
and final  repayment  of a loan by TPE to PPK.  For such  offering,  the Company
relied  upon the 506  Exemption  and no state  exemption,  as TPE is  located in
Canada.  See  Part  I,  Item 1.  "Description  of  Business  - (b)  Business  of
Registrant  -  Employees  and  Consultants";   Part  III,  Item  10.  "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

     In August  2000,  the Company  entered  into an  agreement  with  Discovery
Enterprises,   Inc.  d/b/a  Discovery  Financial,   Inc.  to  provide  financial
consulting  and  business  advisory  services  including  a  complete  investors
relations program for the Company. The term of the contract expired February 23,
2001.  For such  services,  the Company issued 20,000 shares of its common stock
upon execution of the agreement.  For such offering, the Company relied upon the
506 Exemption and Section  517.061(11)  of the Florida code. See Part I, Item 1.
"Description   of  Business  -  (b)  Business  of  Registrant  -  Employees  and
Consultants";  and  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

     The facts relied upon to make the Florida  exemption  available include the
following:  (i) sales of the  shares of common  stock were not made to more than
thirty-five  (35)  persons;  (ii)  neither  the offer nor the sale of any of the
shares was  accomplished  by the  publication  of any  advertisement;  (iii) all
purchasers either had a preexisting  personal or business  relationship with one
or more of the executive officers of the Company or, by reason of their business
or financial  experience,  could be  reasonably  assumed to have the capacity to
protect  their own  interests  in  connection  with the  transaction;  (iv) each
purchaser  represented that he was purchasing for his own account and not with a
view to or for sale in connection with any  distribution of the shares;  and (v)
prior to sale,  each  purchaser  had  reasonable  access to or was furnished all
material books and records of the Company,  all material contracts and documents
relating to the proposed  transaction,  and had an  opportunity  to question the
executive  officers of the Company.  Pursuant to Rule  3E-500.005,  in offerings
made under Section  517.061(11) of the Florida Statutes,  an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or  given  reasonable  access  to full  and  fair  disclosure  of  material
information.  An  issuer  is deemed to be  satisfied  if such  purchaser  or his
representative  has been given access to all  material  books and records of the
issuer;   all  material   contracts  and  documents  relating  to  the  proposed
transaction; and an opportunity to question the appropriate executive officer.


                                        5

<PAGE>



     In September 2000, PPK entered into a teaming agreement with Mattel Canada,
Inc. to design and market the Mattel Retail Delivery  Kiosk,  for the purpose of
distribution to Wal-Mart  stores.  Phase one (1) is projected to deploy fourteen
(14)  kiosks  for a pilot  project,  with  ten (10)  units  for  Wal-Mart  store
locations located in Canada and four (4) units for promotional  purposes located
in places such as Mattel's Head Office and Wal-Mart's Head Office. Phase two (2)
is projected to include a complete  rollout to all  Wal-Mart  stores  located in
Canada [approximately two hundred (200) stores]. Phase three (3) is projected to
include  locations  throughout  the United States as determined by Wal-Mart U.S.
PPK  must  bear  all  costs  including  manufacturing,   shipping,  maintenance,
electrical and telephone charges,  delivery and setup of the kiosk units. Mattel
is to provide all images and to contribute to advertising efforts.

     In September 2000, the Company's Board of Directors increased the number of
director  positions from two (2) to four (4) and appointed June  Nichols-Sweeney
and Jean Beliveau to fill the vacancies  created  thereby until the next meeting
of the  shareholders.  The Company  approved the issuance of 100,000 and 200,000
shares of its common  stock to them  respectively,  although the shares were not
actually  issued until November 2000. The Company also granted the new directors
warrants to purchase an additional  100,000 shares each,  exercisable at a price
of $1.00 per share for a period of three (3) years. Ms. Sweeney may exercise the
right to purchase a maximum of 25,000 shares every quarter, whereas Mr. Beliveau
has the same  right  beginning  May 1,  2001.  In June  2001,  the Mr.  Beliveau
returned his shares to the Company for  cancellation  and they were  returned to
the Company's  authorized,  but unissued  common stock.  For such offering,  the
Company  relied on the 506 Exemption and Section  10-5-9 of the Georgia Code. No
state  exemption  was  required for the  issuance to Jean  Beliveau,  as he is a
Canadian  resident.  See Part I, Item 1. "Description of Business - (b) Business
of  Registrant  - Employees  and  Consultants";  Part III,  Item 10.  "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

     The facts relied upon to make the Georgia  Exemption  available include the
following:  (i) the aggregate  number of persons  purchasing the Company's stock
during  the twelve  (12) month  period  ending on the date of  issuance  did not
exceed  fifteen (15) persons;  (ii) neither the offer nor the sale of any of the
shares was accomplished by a public  solicitation or  advertisement;  (iii) each
certificate contains a legend stating "These securities have been issued or sold
in reliance of paragraph (13) of Code Section  10-5-9 of the Georgia  Securities
Act of 1973 and may not be sold or transferred  except in a transaction which is
exempt under such act or pursuant to an effective  registration under such act";
and (iv) each  purchaser  executed a statement to the effect that the securities
purchased have been purchased for investment  purposes.  Offerings made pursuant
to this  section  of the  Georgia  Securities  Act  have no  requirement  for an
offering memorandum or disclosure document.

     In October 2000, the Company  executed a promissory  note in favor of TK in
the principal amount of $110,000.  The Company actually  received  $100,000,  as
$10,000 was deducted as an agent fee.  The note bears  interest at a rate of ten
percent  (10%) per annum and is for a term of one (1) year.  For such  offering,
the Company  relied upon the 506  Exemption.  No state  exemption  was necessary
because the investor is a foreign entity located in Canada. See Part I, Item 6.

                                        6

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"Management's   Discussion  and  Analysis  or  Plan  of  Operation  -  Financial
Condition,  Liquidity  and  Capital  Resources";  Part III,  Item 11.  "Security
Ownership of Certain  Beneficial Owners and  Management;"and  Part III, Item 12.
"Certain Relationships and Related Transactions".

     In October 2000, the Company entered into a marketing  agreement with PACEL
Corp.  and Child Watch of North America to promote the  ChildWatch(TM)  software
and include it as part of the Company's advertising campaigns.  The Company also
agreed to place the ChildWatch(TM) logo on its website with a link to the PC Sam
website.  The  ChildWatch(TM)  software is a parent  controlled  security access
monitor software distribution program.

     In October 2000,  PPK entered into a letter of intent with Groome  Capital.
Com, Inc. ("Groome") to provide equity financing for the Company.  Groome agreed
to use its best efforts to initially  raise four  million  dollars  ($4,000,000)
through  the sale of units  consisting  of one  common  share and a  warrant  to
purchase an additional  common  share.  Groome is to receive an agent fee in the
amount of ten percent (10%) of the gross proceeds  raised in the first offering.
Additionally, the Company must pay to Groome a fee equal to ten percent (10%) of
the amount of any  financing  provided by any investor  within six (6) months of
the  introduction  of the investor by Groome to PPK.  Groome is also entitled to
options entitling Groome to purchase an amount equal to ten percent (10%) of the
number of securities  issuable  pursuant to the offerings,  at a price per share
equal to the price per share  under the  relevant  offering,  exercisable  for a
period of  twenty  four  (24)  months  from the  closing  date of each  relevant
offering. Should the Company enter into a merger,  amalgamation,  arrangement or
reorganization involving the sale or exchange of all or substantially all of the
assets of PPK or any material subsidiary or the issuance of securities of PPK in
excess of five percent (5%) of the total value or number of securities currently
outstanding,  PPK must pay to Groome a fee equal to the greater of three percent
(3%) of the value of such transaction or $150,000.  All shares held by officers,
directors and affiliates will be further restricted with a lockup agreement.

     In October 2000,  the Company filed a third amended  Current Report on Form
8-K.  The purpose of this third  amendment  to Form 8-K was to provide  adjusted
financial statements and pro forma financial information for Power Photo Kiosks,
Inc., a Canadian corporation, as required by Item 7 of Form 8-K.

     In November 2000,  the Company filed a  Registration  Statement on Form S-8
for its Year 2000  Supplemental  Employee/Consultant  Stock  Compensation  Plan.
60,000  shares of the  Company's  common  stock were issued each to Ronald Terry
Cooke, the Company's current  President and Chairman and to Allan Turowetz,  the
Company's current  Vice-President and Director.  290,000 shares were issued each
to Donald F.  Mintmire,  legal  counsel to the Company and to Noreen  Wilson,  a
consultant to the Company.  See Part I, Item 1.  "Description  of Business - (b)
Business  of  Registrant  -  Employees  and  Consultants";  Part  III,  Item 10.
"Executive Compensation - Employee Contracts and Agreements"; Part III, Item 11.
"Security Ownership of Certain Beneficial Owners and Management";  and Part III,
Item 12. "Certain Relationships and Related Transactions".

     In November 2000, the Company sold 100,000 shares of its restricted  common
stock to EIG

                                        7

<PAGE>



Capital  Investments,   Ltd.,  a  Bermuda  limited  partnership,  for  $200,000.
Additionally,  the Company  issued  warrants to purchase an  additional  100,000
shares of its restricted common stock at an exercise price of $0.0001 per share,
which are exercisable for a period of three (3) years.  The shares of stock sold
as well as the  warrant  shares  carry  mandatory  registration  rights.  If the
registration statement is not declared effective with two hundred ten (210) days
of execution of the original  agreement,  the Company must pay a cash penalty of
$4,000  per  month  until  the  registration  is  declared  effective.  For such
offering,  the Company  relied upon the 506  Exemption.  No state  exemption was
required,  as the purchaser is a foreign entity. See Part III, Item 12. "Certain
Relationships and Related Transactions".

     In November 2000, the Company entered into a consulting  services agreement
with  World of  Internet.com  AG,  a German  corporation  to  provide  corporate
financial and investment  advisory services,  specifically  focusing on European
markets.  The term of the  agreement is until three (3) months from the date the
Company's corporate profile is posted on  www.stockreporter.de.  The Company was
required to pay an engagement  fee of $173,750 or 40,882 shares of the Company's
free trading  common stock which has been  registered  with the SEC. See Part I,
Item 1.  "Description  of Business - (b) Business of  Registrant - Employees and
Consultants";  and  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

     In  November  2000,  PPK  entered  into a letter  of intent  with  Playtime
Entertainment,  Inc. and KRI Canada Ltd. to develop,  deploy and operate a kiosk
network  of five to ten  (5-10)  kiosk  units for a period  of three (3)  months
beginning  December  15,  2000.  The  network  is to  serve  as a pilot  to test
viability in a shopping mall environment for  entertainment  purposes.  A profit
sharing arrangement has also been agreed to.

     In January  2001,  PPK entered into an  installation  agreement  with Clark
Memorial  Hospital ("CMH") to install one (1) photo kiosk at the hospital in the
maternity  wing.  PPK is to provide all service  and  support.  PPK and CMH have
agreed to share revenues generated by the unit. The agreement is for a period of
three (3) years, although either party may terminate with ten (10) days notice.

     In March 2001,  the Company  changed its name to Power  Interactive  Media,
Inc.  Management  believed that its old name limited people's  perception of the
Company to a kiosk designer and  distributor.  The new name better  reflects the
Company's desire to be a full service interactive media provider.

     In March  2001,  PPK engaged  the firm of Peyser  Associates,  Incorporated
("PAI")  to  provide  government  relations  services  to PPK.  The  term of the
contract  is for a period  of one (1) year  beginning  April 1,  2001.  For such
services,  PPK is obligated to pay a monthly retainer in the amount of $6,500 in
addition to a fee of ten percent (10%) of the value of any contract  consummated
in whole or in part through the efforts of PAI. PAI is also entitled to a fee of
three percent (3%) of the total dollar amount  relating to the  development  and
construction  of a  manufacturing  facility  in Bibb  Co.,  GA.  PPK is  further
obligated  to issue a  percentage  of its stock to PAI to be agreed  upon in the
future.  See  Part  I,  Item 1.  "Description  of  Business  - (b)  Business  of
Registrant - Employees and Consultants."

                                        8

<PAGE>





     In March 2001,  Ronald  Terry Cooke,  the  Company's  current  Chairman and
President loaned the Company $90,000. The loan is not evidenced by a note, bears
no  interest  and is  payable  on demand.  See Part I, Item 1.  "Description  of
Business - (b) Business of  Registrant - Employees and  Consultants";  Part III,
Item 10. "Executive Compensation - Employee Contracts and Agreements"; Part III,
Item 11. "Security  Ownership of Certain Beneficial Owners and Management";  and
Part III, Item 12. "Certain Relationships and Related Transactions".

     In April  2001,  the  Company,  at a  meeting  of the  Board of  Directors,
approved the issuance of warrants to purchase 40,000, 200,000, 250,000, 250,000,
200,000,  200,000 and 15,000 shares of the Company's common stock exercisable at
a price of $0.25 per share for a period of three (3) years to Evelyn  Armstrong,
Jeff Baun,  Allan  Turowetz the Company's  current Vice  President and Director,
Ronald Terry Cooke the Company's current President and Chairman, Jean Beliveau a
current Director of the Company,  June Nichols-Sweeney a current Director of the
Company and Greg Woodall  respectively  pursuant to a Registration  Statement on
Form S-8 to be filed by the Company.  The Company also  approved the issuance of
100,000,  700,000, 40,000 and 300,000 shares of the Company's common stock to be
issued to Robert  Delvecchio,  Noreen Wilson,  Dmitry Ivanov and Donald Mintmire
respectively  pursuant to the same S-8  Registration  Statement.  The Board also
approved the cancellation of 60,000,  200,000,  200,000 and 60,000 shares of the
Company's  common stock  previously  issued to Ronald Terry Cooke the  Company's
current President and Chairman, Jean Beliveau a current Director of the Company,
June  Nichols-Sweeney  a current  Director of the Company and Allan Turowetz the
Company's  current  Vice  President  and Director  respectively.  The Board also
rescinded a $75,000  bonus  previously  awarded to Allan  Turowetz and a $75,000
bonus  awarded  to  Ronald  Terry  Cooke.  See Part I, Item 1.  "Description  of
Business - (b) Business of  Registrant - Employees and  Consultants";  Part III,
Item 10. "Executive Compensation - Employee Contracts and Agreements"; Part III,
Item 11. "Security  Ownership of Certain Beneficial Owners and Management";  and
Part III, Item 12. "Certain Relationships and Related Transactions".

     In April 2001, the Company entered into a partnership  agreement with Child
Watch of North  America  for the  purpose  of  displaying  pictures  of  missing
children  to the public on the  Company's  kiosk  machines as well as to promote
Child Watch of North America fundraising programs.

     In April 2001,  the Company  engaged  the  services of Business  Strategies
Group LLC ("BSG") as an advisor to the Company for transactional,  strategic and
capital  raising  activities.  The  agreement  is for a  period  of one (1) year
commencing  March 19, 2001. For their services,  BSG is to receive 10,000 shares
of the Company's common stock,  warrants to purchase an additional 50,000 shares
at an  exercise  price  of $0.50  per  share.  Upon  completion  of a  financing
transaction  of at least  $4,000,000,  BSG is to receive  warrants  to  purchase
160,000  shares of the Company's  common stock at an exercise price of $2.50 per
share. All warrants to be issued expire in two (2) years.  Additionally,  BSG is
to receive a cash fee of four  percent (4%) of all money raised from BSG sources
and a stock fee of three percent (3%).  BSG is also to receive  Company stock in
connection  with the  placement  of  either  conventional  photo  kiosks or baby
kiosks, a percentage of gross picture

                                        9

<PAGE>



revenues and an  advertising  commission  payable in cash. No shares or warrants
have been  issued to date.  See Part I, Item 1.  "Description  of Business - (b)
Business of  Registrant - Employees  and  Consultants";  and Part III,  Item 12.
"Certain Relationships and Related Transactions".

     In April 2001, the Macon-Bibb  County Authority (the "Authority") set forth
proposed  financing  terms for the planned  building of a Company  manufacturing
facility in Macon,  Georgia.  The Authority  will lend up to  $10,000,000 to the
Company  in the form of  revenue  bonds for the  project.  The  project is to be
planned,  designed  and  constructed  during  the  years  2001  and  2002,  with
completion  scheduled  for December  2002.  During the term in which the revenue
bonds are  outstanding,  the Authority  will hold fee simple title to all of the
elements of the project which are acquired with bond proceeds and lease the same
to the  Company.  See Part III,  Item 12.  "Certain  Relationships  and  Related
Transactions".

     In June 2001, the Company  entered into an agreement  with Online  Research
Partners, LLC ("ORP LLC") which terminated an earlier contract dated January 18,
2001  between the  parties.  To induce ORP LLC to terminate  the  contract,  the
Company  committed to issue 12,000 shares of its  unrestricted  common stock and
warrants to purchase an additional  50,000 shares of the Company's  common stock
at a price of $2.00 per share. For such offering,  the Company relied on the 506
Exemption.  The Company  failed to file an M-11 with the state of New York as of
the date of this filing,  however they have not yet issued the  securities.  See
Part I,  Item 1.  "Description  of  Business  - (b)  Business  of  Registrant  -
Employees and  Consultants";  and Part III, Item 12. "Certain  Relationships and
Related Transactions".

     In July 2001,  pursuant to the Company's Bylaws,  the Company increased the
number of directors  from five (5) to six (6). The Directors  filled the vacancy
with James  Martin  Bates,  who will serve as a Director  until the next  annual
meeting of the  shareholders.  In connection  with his  appointment,  in October
2001, the Company  issued  100,000 shares of its restricted  common stock to Mr.
Bates as compensation for bona fide services to the Company.  For such offering,
the Company  relied on the 506 exemption and Section  517.061(11) of the Florida
Code. See Part I, Item 1.  "Description of Business - (b) Business of Registrant
- Employees and  Consultants";  Part III,  Item 10.  "Executive  Compensation  -
Employee  Contracts and Agreements";  Part III, Item 11. "Security  Ownership of
Certain  Beneficial  Owners and  Management";  and Part III,  Item 12.  "Certain
Relationships and Related Transactions".

     The facts relied upon to make the Florida  exemption  available include the
following:  (i) sales of the  shares of common  stock were not made to more than
thirty-five  (35)  persons;  (ii)  neither  the offer nor the sale of any of the
shares was  accomplished  by the  publication  of any  advertisement;  (iii) all
purchasers either had a preexisting  personal or business  relationship with one
or more of the executive officers of the Company or, by reason of their business
or financial  experience,  could be  reasonably  assumed to have the capacity to
protect  their own  interests  in  connection  with the  transaction;  (iv) each
purchaser  represented that he was purchasing for his own account and not with a
view to or for sale in connection with any  distribution of the shares;  and (v)
prior to sale,  each  purchaser  had  reasonable  access to or was furnished all
material books and records of the Company,  all material contracts and documents
relating to the proposed transaction, and had an opportunity to

                                       10

<PAGE>



question the executive officers of the Company.  Pursuant to Rule 3E-500.005, in
offerings made under Section  517.061(11) of the Florida  Statutes,  an offering
memorandum is not required;  however each purchaser (or his representative) must
be  provided  with or given  reasonable  access to full and fair  disclosure  of
material  information.  An issuer is deemed to be satisfied if such purchaser or
his  representative  has been given access to all material  books and records of
the issuer;  all  material  contracts  and  documents  relating to the  proposed
transaction; and an opportunity to question the appropriate executive officer.

     In October 2001, the Company filed a Registration Statement on Form S-8 for
its Year 2001 Supplemental  Employee/Consultant  Stock  Compensation Plan. Since
that time,  20,000 shares of the Company's  common stock have been issued to the
Company's  transfer  agent.  See Part I, Item 1.  "Description of Business - (b)
Business of  Registrant - Employees  and  Consultants";  and Part III,  Item 12.
"Certain Relationships and Related Transactions".

     Since February  2000,  the Company has raised a total of  $876,912.27  from
private sales of its restricted  common stock to fifty (50) investors.  For such
offering, the Company relied upon the 506 Exemption,  Section 517.061(11) of the
Florida Code, Section 10-5-9 of the Georgia Code,  Section  49:3-50(b)(9) of the
New Jersey Code and Section 201 of the Pennsylvania Code. See Part III, Item 12.
"Certain Relationships and Related Transactions".

     The facts relied upon to make the Florida  exemption  available include the
following:  (i) sales of the  shares of common  stock were not made to more than
thirty-five  (35)  persons;  (ii)  neither  the offer nor the sale of any of the
shares was  accomplished  by the  publication  of any  advertisement;  (iii) all
purchasers either had a preexisting  personal or business  relationship with one
or more of the executive officers of the Company or, by reason of their business
or financial  experience,  could be  reasonably  assumed to have the capacity to
protect  their own  interests  in  connection  with the  transaction;  (iv) each
purchaser  represented that he was purchasing for his own account and not with a
view to or for sale in connection with any  distribution of the shares;  and (v)
prior to sale,  each  purchaser  had  reasonable  access to or was furnished all
material books and records of the Company,  all material contracts and documents
relating to the proposed  transaction,  and had an  opportunity  to question the
executive  officers of the Company.  Pursuant to Rule  3E-500.005,  in offerings
made under Section  517.061(11) of the Florida Statutes,  an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or  given  reasonable  access  to full  and  fair  disclosure  of  material
information.  An  issuer  is deemed to be  satisfied  if such  purchaser  or his
representative  has been given access to all  material  books and records of the
issuer;   all  material   contracts  and  documents  relating  to  the  proposed
transaction; and an opportunity to question the appropriate executive officer.

     The facts relied upon to make the Georgia  Exemption  available include the
following:  (i) the aggregate  number of persons  purchasing the Company's stock
during  the twelve  (12) month  period  ending on the date of  issuance  did not
exceed  fifteen (15) persons;  (ii) neither the offer nor the sale of any of the
shares was accomplished by a public  solicitation or  advertisement;  (iii) each
certificate contains a legend stating "These securities have been issued or sold
in reliance of paragraph (13) of Code Section  10-5-9 of the Georgia  Securities
Act of 1973 and may not be sold or transferred except

                                       11

<PAGE>



     in a transaction which is exempt under such act or pursuant to an effective
registration  under such act"; and (iv) each  purchaser  executed a statement to
the effect that the  securities  purchased  have been  purchased for  investment
purposes.  Offerings made pursuant to this section of the Georgia Securities Act
have no requirement for an offering memorandum or disclosure document.

     The facts relied upon to make the New Jersey  Exemption  available  include
the  following:  (i) the sale was to not more than ten (10)  persons  during any
period of twelve (12) consecutive  months;  (ii) the Company reasonably believed
that  all  buyers  purchased  for  investment;  (iii)  no  commission  or  other
remuneration  was paid for soliciting any prospective  buyer;  and (iv) the sale
was not offered or sold by general solicitation or any general advertisement.

     The facts relied upon to make the Pennsylvania  Exemption available include
the  following:  (i)  the  Company  filed  a  completed  SEC  Form  D  with  the
Pennsylvania Securities Commission, Division of Corporate Finance; (ii) the Form
was filed not later than fifteen  (15) days after the first sale;  and (iii) the
Company  paid an  appropriate  filing  fee.  See (b)  "Business  of  Registrant"
immediately below for a description of the Company's business.

     (b)  Business of Registrant

Background of the Industry

     Management's  research has found that an intense interest in photo stickers
began in Japan in the mid-1990s, and that there are currently about 40,000 photo
kiosks in the Japanese  market that  generate  sales in excess of  approximately
US$2.4 billion per annum. During 1998, sticker machines started to appear in the
United States.  Management also found that at the same time,  consumers'  desire
for a fun, fantasy-filled, ego-gratifying photo experience is increasing and the
volume  of  disposable  income  available  for the right  type of  entertainment
experience is large.

     Management's research had discovered that major corporations with expertise
in film technology,  including Polaroid,  Agfa (Bayer) and Kodak, are committing
resources to this market,  and that the following  statistics support the growth
of the photo kiosk industry:

     *    The total U.S. vending market had sales of US$31.5 billion in 1997.
     *    The total U.S. photography market has sales of US$37 billion in 1997
     *    Every  household in the U.S.  spends an average of US$500 per annum on
          photo-related products.
     *    There are now over 40,000 sticker machines on location in Japan, which
          account for 35% of all money spent in amusement machines.
     *    The U.S.  photo sticker  machine  market is expected to have 25,000 to
          40,000 units on location by 2003.  According  to 1998 data,  there are
          currently about 2,500 units on location throughout the United States.
     *    Over 90% of Americans use vending machines.


                                       12

<PAGE>



Kiosk Operational Management System

     The Company's  proprietary,  recently  developed  Kiosk  Management  System
("KMS")  provides  the Company  with the ability to remotely  update and add and
remove data or images on individual or groups of kiosks.  This means the Company
can  easily  remotely  customize  the  kiosk  for  special  events,  advertising
specials,  or seasonal  holidays with no need for client or partner  assistance.
Maintaining  current  images or data at the kiosk  can be  handled  from one (1)
central control operation. The Kiosk units will be connected via the Intranet to
the central  control  website to attain  up-to-the-minute  information  on kiosk
usage,  royalty  information  and kiosk status.  The remote  diagnostic  and the
health   monitoring   capability   begin  with  each  kiosk  in  its  standalone
configuration, continually monitoring the health of individual components in the
kiosk.  Upon  recognizing  a  failure  in or  abnormal  status  of  any  of  the
components,  the kiosk itself initiates  communication  with the central control
server and  reports its  diagnosis.  The central  server is then  programmed  to
respond  appropriately,  sending e-mail,  paging or phone  communications to the
specific   technical  service  individual  who  will  respond  and  correct  the
situation,  all of this without the intervention of the Company or client. These
application  enhancements  should create the most flexible and dependable  kiosk
network  available.  The KMS should  differentiate  the Company from other kiosk
providers and through its inherent versatility, ensure market acceptance.

Company Products

Stand Alone Interactive Power Entertainment Kiosk (NON-NETWORKED):

     A fully functional,  digital photo entertainment kiosk for use primarily at
promotional  events such as NASCAR  races,  trade  shows,  corporate  events and
individual business locations.

Features:

o    Revenue generation occurs primarily from the sale of digital photographs. o
     Image packages can be customized to site requirements.
o    Kiosk shell graphics can be customized to site requirements.
o    Individual  client  advertising  programs  can be  developed  based on site
     requirements.

Networked Interactive Power Kiosk System:

1.  Power Entertainment Kiosk

     A fully  functional,  digital  photo  entertainment  kiosk for use by large
corporations with multi- location, national operations.

Features:

o    Revenue generation occurs from the sale of digital photographs and from the
     sale of advertising.

                                       13

<PAGE>



o    Kiosks  operate  as  a  broadcast   network  that  delivers   national  and
     site-specific advertising and marketing programs to any geographic delivery
     area.
o    Image packages can be customized to national and site requirements.
o    In concert with corporate brand promotion  strategies,  merchandise display
     space can be built into the kiosk  design to  increase  sales of  specified
     products.
o    Kiosk design and graphics can be completely  customized  to meet  corporate
     requirements.

2. Power Multi-Functional Kiosk

     A retail kiosk system that enables consumers to receive a range of Internet
and  Intranet-based   products  including  digital   photographs,   information,
governmental  services  etc.,  for  use by  large  corporations  and  government
agencies.

Features:

o        Revenue generation occurs from the sale of digital photographs, the
         sale of advertising and from service fees.

o        Kiosks operate as a broadcast network that delivers national and
         site-specific advertising and marketing programs to any geographic
         delivery area.

o    Image packages can be customized to national and site requirements.
o    In concert with corporate brand promotion  strategies,  merchandise display
     space can be built into the kiosk  design to  increase  sales of  specified
     products.
o    Kiosk design and graphics can be completely  customized  to meet  corporate
     requirements.
o    Customization of the kiosk system allows the consumer product  manufacturer
     and the retailer to directly  interact  with the consumer  thereby  driving
     traffic and increasing brand awareness.
o    Customization  of the kiosk system allows the product  manufacturer and the
     retailer to gather consumer demographic information.

3.  Power Financial Services Kiosk

     A retail ATM kiosk system that,  in addition to offering  standard  banking
transactions, provides the opportunity for additional revenue generation through
loyalty-based  sports  themed  products such as digital  photographs  and sports
memorabilia.

Features:

o Kiosk provides current ATM banking capabilities.

o    Revenue generation occurs from the sale of digital photographs, advertising
     and sports memorabilia products.
o    Kiosks  operate  as  a  broadcast   network  that  delivers   national  and
     site-specific advertising and marketing programs to any geographic delivery
     area.
o    Image packages can be customized to national and site requirements.
o    In concert with corporate brand promotion  strategies,  merchandise display
     space can be built into the kiosk  design to  increase  sales of  specified
     products.

                                       14

<PAGE>



o    Kiosk design and graphics can be completely  customized  to meet  corporate
     requirements. o Customization of the kiosk system allows the bank to gather
     consumer demographic information.

Connectivity

     The kiosk is networked  through a standard phone line and internal modem to
transmit  sales  data  such as  number  of  transactions  per day,  royalty  fee
calculations,  ratios of one (1) image versus another,  etc. This data will help
the Company  track what is sold in each market  segment and  location and should
optimize  profits  for  both  the  Company  and  its  clients.   This  networked
communication  system should prove  beneficial in  determining  when  preventive
maintenance  should  be  performed,  in  reducing  potential  down  time  and in
increasing disk efficiency by providing  on-line  diagnostic  programming.  This
feature should decrease the need for sending  technicians to the customer's site
for routine, simple problems.

     Content in the kiosk can be changed automatically by simply downloading new
CDs supplied by the Company or by utilizing  the enhanced  data  management  and
networking capabilities currently being developed.  That network capability will
allow content transfer over phone lines and enable the kiosk to create a central
database that can be used for direct marketing  activities,  such as e- commerce
and mail order  merchandise  sales.  In this way, the Company  intends to create
unique photographic image programs that will attract specific types of consumers
and encourage repeat  transactions via a continuous  refresh program.  The Power
Photo  Entertainment  Kiosk  transcends the  conventional  photo kiosk market by
using the latest hardware, connective and software technological advances.

Hardware

     The outer shell of each kiosk,  which  dimensions are 40" X 40" by 90", can
be  customized  with  graphics  that  will draw more  consumer  attention.  More
specifically,  the kiosk represents additional revenue generation possibilities,
by utilizing the 20" TV monitor or side and rear graphic  panels as  advertising
tools. Software image banks can be customized to match any business,  any market
segment and any special  event.  These  software  image banks will be constantly
updated to keep pace with changing market trends and fads.

Each Power Kiosk is equipped with the following:

o    A proprietary software operating system that is user-friendly and flexible,
     enabling the Company to change the image programs frequently and easily.
o    Multiple  licensed  image  packages and a unique  personal  portrait  image
     package.
o    Fully digitized sound, for easy to follow voice prompts and/or music.
o    A  20-inch  Sony TV  monitor  that can be used for  advertising  and  cross
     promotions and when the kiosk is not in use.
o    Up to four (4) Sony Dye  Sublimation  printers,  providing  multiple papers
     formats allowing an 800-sheet loading capacity (200 sheets per printer).

                                       15

<PAGE>



o    A Sony digital camera.
o    A Micro Touch Screen computer monitor.
o    Choice of Mars bill, coin, token, debit or credit card acceptors. o Pentium
     II based  computer  system.
o    Intel-Based computer system o All control electronics.

The Future

     In terms of future trends,  kiosks tied to Intranet and Internet technology
is a burgeoning  field in which photo kiosks are likely to make extensive use of
these  bi-directional  communications  systems.  Consumers  are already  sending
high-quality  photo images over the  Internet as a result of  scanners,  digital
cameras and camera centers that deliver photo images. This connective technology
is growing and photo kiosks are seen as just another extension of this trend. In
fact, this technology may actually increase the opportunities for kiosks as more
and more  recipients  of e-cards  have the  capability  to receive them and have
familiarity with the technology.  The photo kiosk, especially when combined with
sports,  theatrical or vacation  experience,  can encourage  sharing during such
spontaneous occasions.

Business Strategy

     Any discussion of business strategy contained herein is contingent upon the
ability of the Company to continue as a going concern.

     The  preferred  approach  is for  the  Company  to own  the  kiosks  in the
marketplace and to work with revenue sharing programs on both picture income and
advertising income.  Company ownership of the kiosks will facilitate  enormously
the placement process and in particular,  make the management of the advertising
component of the kiosk network simpler.

     The Company's  marketing focus is market  segment-specific  and directed at
non-conventional kiosk markets. The conventional kiosk markets, mainly malls and
movie theaters,  are also important  market segments that will also be targeted.
Each kiosk will be placed as a customized and turnkey  system.  The kiosk can be
custom-designed with graphics and licensed image packages that meet the needs of
individual markets.

     Management has found that the kiosk industry is in a strong growth position
as the business is  relatively  new to the North  American  market.  Vending and
photography  sales are  extremely  large,  and  growing.  The number of Internet
kiosks in the U.S. market,  for example,  is forecast to increase greatly in the
next five (5) years,  while  revenues are projected to increase by slightly less
(2.5  times) as the  market  becomes  more  competitive.  This  market had 5,100
Internet-based  kiosks in 1993,  management  expects the market to have  445,000
different types of kiosk in 2003.

     The overall  market  strategy has evolved  significantly  over the past few
years. The Company has determined that in order to control the technology, it is
imperative to own the software and the

                                       16

<PAGE>



kiosk units and work with a revenue  sharing program on both the photo income as
well as the  advertising  revenue.  Ownership of the units by the Company should
allow the  Company to  facilitate  the  placement  process  in large  retail and
restaurant  chains  and in  particular,  make the  managing  of the  advertising
component of the kiosk network simpler. With the appropriate financing in place,
this economic model of combined picture and advertising revenues can be in place
in a relatively short time.

     The Company is entering the industry at a time when converging technologies
may  enable the  Company  to quickly  establish  a  leadership  position  in the
marketplace:

*    Advances in digital,  photographic technology now enable software programs,
     such as that  developed by the Company to create high quality  photo images
     without the use of film.

*    Computer  chips have  increased  the  abilities of  computer,  printers and
     cameras, and new software  authorizing  equipment such as Java and WebMajic
     complement   HTML   in   multimedia   programming,   thereby   facilitating
     connectivity in various ways.

*    Kiosks  can now be used for a broad  range of  interactive  uses other than
     just photography.

     Power Kiosk will be placed as a customized  and turnkey  system.  The kiosk
can be custom-  designed with graphics and licensed  image  packages to meet the
needs of individual markets.

     The Company  intents to target what it believes is the primary  markets for
the   placement   of  the  kiosks.   These   primary   markets  are   corporate,
multiple-location  businesses,  such  as fast  food  restaurants,  colleges  and
universities, consumer retail and merchandise companies, movie and sports- based
business, themed environments,  bookstores,  shopping malls and sporting venues.
These target  locations for kiosk placement offer large  opportunities  for both
picture sales and the sale of advertising.

Status of Publicly Announced New Products and Services

     The  Stand  Alone  Interactive  Power   Entertainment   Kiosk  is  a  fully
functional,  non-networked,  digital  photo  entertainment  kiosk  that  is used
primarily at  promotional  events such as NASCAR races,  trade shows,  corporate
events and individual business locations.

     The Power Entertainment Kiosk, is a networked, fully functional, networked,
digital photo  entertainment kiosk which is used primarily by large corporations
and multi-location, national operations.

     The Power  Multi-Functional  Kiosk is a retail  kiosk  system that  enables
consumers to receive a range of Internet and  Intranet-based  products including
digital  photographs,  information,  governmental  services,  etc.,  and is used
primarily for large corporations and government agencies.

     The Power  Financial  Services  Kiosk is a retail ATM kiosk system that, in
addition to offering standard banking  transactions,  sells sports-based  themed
products such as digital photographs and memorabilia.

                                       17

<PAGE>





Competition

     The Company faces competition from large,  well-established  companies with
considerably greater financial, marketing, sales, technical resources as well as
greater name recognition than the Company.  Additionally,  many of the Company's
present and potential  competitors  have research and  development  capabilities
that may allow such  competitors to develop new and improved  products which may
compete with the Company's  products.  The Company's  products could be rendered
obsolete or made uneconomical by the development of new products,  technological
advances  affecting the cost of production,  or marketing or pricing  actions by
one or more of the  Company's  competitors.  The Company's  business,  financial
condition or results of operations could be materially adversely affected by one
or more of such  developments.  The Company expects that more  competitors  will
enter the photo kiosks  market,  resulting in even greater  competition  for the
Company.  There can be no  assurance  that the  Company  will be able to compete
successfully  against current or future competitors or that competition will not
have a material adverse effect on the Company's business, financial condition or
results of operations.

     The Company  competes with many other  companies  which utilize photo kiosk
services.  Competition is intense within the entertainment  kiosk industry,  and
the Company must compete with well established  companies as well as independent
companies like itself. Some of these well established companies,  such as Global
Media,  which has the one of the largest virtual magazine  entertainment  kioks,
are therefore  able to offer their  customers an  interactive,  large network of
media, news and music on the internet, which the Company is unable to provide at
this time. Another well established competitor,  Harvest Moon, is a full service
design and production studio for interactive kiosks, and websites for the themed
entertainment industry. These and other such competitors have a broader spectrum
of themed entertainment  choices within their products and services,  as well as
internet service for their customers.  Kodak's  Entertainment  Imaging division,
Themed Entertainment, offers a self-serve photography kiosk consumers can use to
output sticker- backed images of themselves combined with themed content.  These
competitors have a much larger name  recognition than the Company,  and have its
entertainment photo kiosk machines broadly distributed in malls, theme parks and
amusement parks.

Sources and Availability of Raw Materials

     The Company's  products are manufactured from readily available  components
including electronics, digital cameras, computers and computer chips, modems and
telecommunications  hardware,  printers and ink, monitors,  various size labels,
and bill,  coin and debit and credit card acceptors.  The Company  believes that
all raw materials  necessary to produce its products are readily  available from
numerous sources.

Dependence on Major Customers



                                       18

<PAGE>


     Presently,  the Company has few customers.  The Company will depend heavily
upon its existing  contracts,  such as that with Universal  Studios,  Ohio State
University, Mattel Canada, Inc. and Sybase. The Company will rely heavily on its
quality of  technology,  products and services,  in providing its customers with
turnkey  service  and being a full  service  provider to  customers.  Should the
Company  obtain  additional  customers  in the  future,  it is  likely to depend
heavily on their business, as it is likely to represent all or significantly all
of the  Company's  source of income.  If the  Company  is unable to attain  this
customer base, this may have a material adverse effect on the Company.

Patents, Copyrights and Trademarks

     The Company  intends to protect its  original  intellectual  property  with
patents,  copyrights and/or trademarks as appropriate.  To date, the Company has
no registered patents, copyrights or trademarks.

Governmental Regulation

     There are  currently no  governmental  regulations  in any country that the
Company must conform to.

Effect of Probable Governmental Regulation on the Business

     The Company may be subject to regulation if the Federal  government  enacts
controls  in which case the  Company  will be  required  to comply  with new and
emerging  laws,  the  interpretation  of which will be  uncertain  and  unclear.
However,  future  enactment of governmental  legislation  which would impact the
Company's business is not expected.

     However,  in foreign  countries,  the Company's products may be impacted by
legislation  that applies to photo kiosk products.  The Company expects that its
products will meet or exceed any standard imposed upon it.

     Currently there is no government  regulation of the Company's  business nor
of the  Company's  products.  However,  new laws  are  emerging  which  regulate
commerce over the internet and the way data and  information  may be transmitted
over the  Internet.  Should  the  Company  engage in  activities  involving  the
Internet in the future, it may be subject to these laws and/or regulations.

     As the Company's  products and services are available  over the Internet in
multiple states and foreign  countries,  these  jurisdictions may claim that the
Company is required to qualify to do business as a foreign  corporation  in each
such state and foreign  country.  New legislation or the application of laws and
regulations from jurisdictions in this area could have a detrimental effect upon
the Company's business.

     A governmental  body could impose sales and other taxes on the provision of
the  Company's  products and services,  which could  increase the costs of doing
business.  A number of state and local  government  officials  have asserted the
right or indicated a willingness to impose taxes on

                                       19

<PAGE>



Internet-related  services and commerce,  including sales, use and access taxes;
however,  no such  laws  have  become  effective  to date.  The  Company  cannot
accurately  predict  whether the  imposition of any such taxes would  materially
increase its costs of doing  business or limit the  services  which it provides,
since it may be  possible  to pass on some of these  costs to the  consumer  and
continue to remain competitive.

     If,  as the law in this area  develops,  the  Company  becomes  liable  for
information  carried on, stored on, or disseminated  through its website, it may
be  necessary  for the Company to take steps to reduce its exposure to this type
of liability through  alterations in its equipment,  insurance or other methods.
This may  require  the  Company  to spend  significant  amounts of money for new
equipment or premiums and may also require it to discontinue offering certain of
its products or services.

     Due to the increasing  popularity  and use of the Internet,  it is possible
that  additional  laws  and  regulations  may be  adopted  with  respect  to the
Internet,  covering issues such as content,  privacy, access to adult content by
minors, pricing, bulk e-mail (spam), encryption standards,  consumer protection,
electronic  commerce,  taxation,  copyright  infringement and other intellectual
property  issues.  L.L.  Brown cannot  predict the impact,  if any,  that future
regulatory changes or developments may have on the Company's business, financial
condition, or results of operation.

Cost of Research and Development

     For fiscal  year 2000,  the  Company  expended  $436,471  on  research  and
development  efforts.  For fiscal year 2001,  the Company  expended  $598,808 on
research and development efforts. At the current time, the costs associates with
research and  development are bourne  primarily by the Company,  and secondarily
from  additional  debt  financing.   The  costs  associated  with  research  and
development are currently not bourne directly by the customer,  however there is
no guarantee  that such costs will not be bourne by customers in the future and,
at the current  time,  the Company  does not know the extent to which such costs
will be bourne by the customer, if at all.

Cost and Effects of Compliance with Environmental Laws

     The  Company's  business is not subject to  regulation  under the state and
Federal  laws  regarding  environmental   protection  and  hazardous  substances
control,  including the  Occupational  Safety and Health Act, the  Environmental
Protection Act, and Toxic  Substance  Control Act. The Company is unaware of any
bills  currently  pending in Congress which could change the application of such
laws so that they would affect the Company.

Employees and Consultants

     At July 31, 2001, the Company  employed twelve (12) persons.  None of these
employees  are   represented  by  a  labor  union  for  purposes  of  collective
bargaining.  The  Company  considers  its  relations  with its  employees  to be
excellent.  The  Company  plans to employ  additional  personnel  as needed upon
product rollout to accommodate its needs.


                                       20

<PAGE>



     In July 2000, the Company entered into an employment  agreement with Ronald
Terry Cooke, to employ him as President and CEO of the Company.  The term of the
agreement is for a period of five (5) years, beginning July 1, 2000. Mr. Cooke's
initial basic compensation is one hundred twenty thousand dollars ($120,000) per
year.  Such salary will be reviewed as  appropriate by the Board of Directors of
the  Company and may be  increased  in the Board's  sole  discretion  based upon
performance.  Mr.  Cooke  received a signing  bonus of two  hundred  twenty five
thousand  (225,000)  restricted shares of the Company's common stock, which were
issued in August  2000,  as well as a  seventy-five  thousand  dollar  ($75,000)
bonus. Under the terms of the employment agreement,  Mr. Cooke has the option to
purchase up to a total of one hundred thousand (100,000) shares of the Company's
restricted  common stock  annually,  which options are exercisable at a price of
one dollar ($1.00) per share. The stock options will begin to vest at the end of
the  employment  year  commencing  on July 1,  2000  and  each  employment  year
thereafter.  Mr.  Cooke will have five (5) years  after the shares are vested to
exercise  the  options.  For such  offering,  the  Company  relied  upon the 506
Exemption.  No state  exemption  was  necessary  because Mr. Cooke is a Canadian
resident. ee Part III, Item 10. "Executive Compensation - Employee Contracts and
Agreements"; Part III, Item 11. "Security Ownership of Certain Beneficial Owners
and  Management";  and Part III,  Item 12.  "Certain  Relationships  and Related
Transactions".

     In August 2000, the Company filed a Registration  Statement on Form S-8 for
the purpose of registering the Company's Year 2000 Consultant Stock Compensation
Plan.  Pursuant to such plan,  the Company  issued  105,000 shares of its common
stock to Allan Turowetz,  the Company's current  Vice-President and Director. ee
Part III, Item 10. "Executive Compensation - Employee Contracts and Agreements";
Part  III,  Item 11.  "Security  Ownership  of  Certain  Beneficial  Owners  and
Management";   and  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

     In August 2000, the Company issued 120,000 shares of its restricted  common
stock to TPE,  which is  beneficially  owned by both  Ronald  Terry  Cooke,  the
Company's  current  President  and Chairman and Allan  Turowetz,  the  Company's
current Vice-President and Director as full and final repayment of a loan by TPE
to PPK. For such  offering,  the Company  relied upon the 506  Exemption  and no
state exemption,  as TPE is located in Canada.  ee Part III, Item 10. "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

     In August  2000,  the Company  entered  into an  agreement  with  Discovery
Enterprises,   Inc.  d/b/a  Discovery  Financial,   Inc.  to  provide  financial
consulting  and  business  advisory  services  including  a  complete  investors
relations program for the Company. The term of the contract expired February 23,
2001.  For such  services,  the Company issued 20,000 shares of its common stock
upon execution of the agreement.  For such offering, the Company relied upon the
506 Exemption and Section 517.061(11) of the Florida code. ee Part III, Item 12.
"Certain Relationships and Related Transactions".

     In September 2000, the Company's Board of Directors increased the number of
director  positions from two (2) to four (4) and appointed June  Nichols-Sweeney
and Jean Beliveau to fill the

                                       21

<PAGE>



vacancies  created  thereby  until the next  meeting  of the  shareholders.  The
Company  approved the issuance of 100,000 and 200,000 shares of its common stock
to them  respectively,  although  the  shares  were not  actually  issued  until
November 2000.  The Company also granted the new directors  warrants to purchase
an additional 100,000 shares each, exercisable at a price of $1.00 per share for
a period of three (3) years.  Ms.  Sweeney may  exercise the right to purchase a
maximum of 25,000 shares every quarter,  whereas Mr. Beliveau has the same right
beginning May 1, 2001. In June 2001, the Mr. Beliveau returned his shares to the
Company for cancellation and they were returned to the Company's authorized, but
unissued  common  stock.  For  such  offering,  the  Company  relied  on the 506
Exemption  and  Section  10-5-9 of the  Georgia  Code.  No state  exemption  was
required for the issuance to Jean  Beliveau,  as he is a Canadian  resident.  ee
Part III, Item 10. "Executive Compensation - Employee Contracts and Agreements";
Part  III,  Item 11.  "Security  Ownership  of  Certain  Beneficial  Owners  and
Management";   and  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

     In November 2000,  the Company filed a  Registration  Statement on Form S-8
for its Year 2000  Supplemental  Employee/Consultant  Stock  Compensation  Plan.
60,000  shares of the  Company's  common  stock were issued each to Ronald Terry
Cooke, the Company's current  President and Chairman and to Allan Turowetz,  the
Company's current  Vice-President and Director.  290,000 shares were issued each
to Donald F.  Mintmire,  legal  counsel to the Company and to Noreen  Wilson,  a
consultant to the Company.  See Part III,  Item 10.  "Executive  Compensation  -
Employee  Contracts and Agreements";  Part III, Item 11. "Security  Ownership of
Certain  Beneficial  Owners and  Management";  and Part III,  Item 12.  "Certain
Relationships and Related Transactions".

     In November 2000, the Company entered into a consulting  services agreement
with  World of  Internet.com  AG,  a German  corporation  to  provide  corporate
financial and investment  advisory services,  specifically  focusing on European
markets.  The term of the  agreement is until three (3) months from the date the
Company's corporate profile is posted on  www.stockreporter.de.  The Company was
required to pay an engagement  fee of $173,750 or 40,882 shares of the Company's
free trading common stock which has been  registered with the SEC. See Part III,
Item 12. "Certain Relationships and Related Transactions".

     In March 2001, PPK engaged the firm of PAI to provide government  relations
services  to PPK.  The  term of the  contract  is for a  period  of one (1) year
beginning  April 1, 2001. For such  services,  PPK is obligated to pay a monthly
retainer in the amount of $6,500 in  addition  to a fee of ten percent  (10%) of
the value of any contract consummated in whole or in part through the efforts of
PAI.  PAI is also  entitled to a fee of three  percent  (3%) of the total dollar
amount relating to the development and construction of a manufacturing  facility
in Bibb Co., GA. PPK is further  obligated to issue a percentage of its stock to
PAI to be agreed upon in the future.

     In March 2001,  Ronald  Terry Cooke,  the  Company's  current  Chairman and
President loaned the Company $90,000. The loan is not evidenced by a note, bears
no  interest  and is  payable  on  demand.  See Part  III,  Item 10.  "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

                                       22

<PAGE>



     In April  2001,  the  Company,  at a  meeting  of the  Board of  Directors,
approved the issuance of warrants to purchase 40,000, 200,000, 250,000, 250,000,
200,000,  200,000 and 15,000 shares of the Company's common stock exercisable at
a price of $0.25 per share for a period of three (3) years to Evelyn  Armstrong,
Jeff Baun,  Allan  Turowetz the Company's  current Vice  President and Director,
Ronald Terry Cooke the Company's current President and Chairman, Jean Beliveau a
current Director of the Company,  June Nichols-Sweeney a current Director of the
Company and Greg Woodall  respectively  pursuant to a Registration  Statement on
Form S-8 to be filed by the Company.  The Company also  approved the issuance of
100,000,  700,000, 40,000 and 300,000 shares of the Company's common stock to be
issued to Robert  Delvecchio,  Noreen Wilson,  Dmitry Ivanov and Donald Mintmire
respectively  pursuant to the same S-8  Registration  Statement.  The Board also
approved the cancellation of 60,000,  200,000,  200,000 and 60,000 shares of the
Company's  common stock  previously  issued to Ronald Terry Cooke the  Company's
current President and Chairman, Jean Beliveau a current Director of the Company,
June  Nichols-Sweeney  a current  Director of the Company and Allan Turowetz the
Company's  current  Vice  President  and Director  respectively.  The Board also
rescinded a $75,000  bonus  previously  awarded to Allan  Turowetz and a $75,000
bonus  awarded  to  Ronald  Terry  Cooke.  See Part  III,  Item  10.  "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

     In April 2001, the Company engaged the services of BSG as an advisor to the
Company  for  transactional,  strategic  and  capital  raising  activities.  The
agreement is for a period of one (1) year  commencing  March 19, 2001. For their
services,  BSG is to  receive  10,000  shares  of the  Company's  common  stock,
warrants to purchase an additional  50,000 shares at an exercise  price of $0.50
per share.  Upon completion of a financing  transaction of at least  $4,000,000,
BSG is to receive  warrants to purchase  160,000 shares of the Company's  common
stock at an exercise price of $2.50 per share.  All warrants to be issued expire
in two (2) years.  Additionally,  BSG is to  receive a cash fee of four  percent
(4%) of all money raised from BSG sources and a stock fee of three percent (3%).
BSG is also to receive  Company stock in connection with the placement of either
conventional photo kiosks or baby kiosks, a percentage of gross picture revenues
and an advertising  commission  payable in cash. No shares or warrants have been
issued to date.  See Part  III,  Item 12.  "Certain  Relationships  and  Related
Transactions".

     In June 2001,  the Company  entered  into an  agreement  with ORP LLC which
terminated an earlier  contract  dated January 18, 2001 between the parties.  To
induce ORP LLC to terminate the contract,  the Company committed to issue 12,000
shares of its  unrestricted  common stock and warrants to purchase an additional
50,000 shares of the Company's  common stock at a price of $2.00 per share.  For
such offering,  the Company  relied on the 506 Exemption.  The Company failed to
file an M-11 with the state of New York as of the date of this  filing,  however
they  have not yet  issued  the  securities.  See Part  III,  Item 12.  "Certain
Relationships and Related Transactions".

     In July 2001,  pursuant to the Company's Bylaws,  the Company increased the
number of directors  from five (5) to six (6). The Directors  filled the vacancy
with James  Martin  Bates,  who will serve as a Director  until the next  annual
meeting of the shareholders. In connection with his

                                       23

<PAGE>



appointment,  in  October  2001,  the  Company  issued  100,000  shares  of  its
restricted  common stock to Mr. Bates as compensation  for bona fide services to
the Company.  For such  offering,  the Company  relied on the 506  exemption and
Section  517.061(11)  of the Florida  Code.  See Part III,  Item 10.  "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

     In October 2001, the Company filed a Registration Statement on Form S-8 for
its Year 2001 Supplemental  Employee/Consultant  Stock  Compensation Plan. Since
that time,  20,000 shares of the Company's  common stock have been issued to the
Company's  transfer  agent.  See Part III, Item 12. "Certain  Relationships  and
Related Transactions".

Item 2. Description of Property

     Its  executive  offices  are  presently  located  at 181  Whitehall  Drive,
Markham, Ontario, Canada L3R 9T1. Its telephone number is (905) 948-9600 and its
facsimile number is 905) 948-8377.

     In June  1998,  Team Power  Enterprises,  Inc.,  as tenant,  signed a Lease
Agreement with Bruce N. Huntley  Contracting  Limited,  as landlord.  Team Power
Enterprises,  Inc. is  beneficially  owned by Ronald Terry Cooke,  the Company's
President and Chairman,  and Allan  Turowetz,  the Company's  Vice President and
Director.  The lease is for the property located at 181 Whitehall Drive, Unit 1,
in Markham, Ontario, which serves as the Company's headquarters.  The lease term
began July 1998 and is for a period of five (5) years.  The rents to be paid are
as  follows:  From July 1,  1998  through  June 30,  1999 the  rental  amount is
$9,235.41 monthly;  from July 1, 1999 through June 30, 2000 the rental amount is
$10,075  monthly;  and from July 1, 2001 through June 30, 2003 the rental amount
is $10,914.58 monthly. See Part III, Item 12. "Certain Relationships and Related
Transactions".

     The Company owns no real  property and its  personal  property  consists of
furniture, fixtures and equipment.

Item 3. Legal Proceedings

     No legal  proceedings  have been initiated either by or against the Company
to date.

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

     No matter was  submitted to a vote of the Company's  shareholders,  through
the  solicitation  of proxies or otherwise  from the Company's  inception to the
close of the 2001 fiscal year ended July 31, 2001, covered by this report.



                                       24

<PAGE>



Item 5. Market for Common Equity and Related Stockholder Matters.

         a)       Market Information.

     The common stock of the Company currently is quoted on the Over the Counter
Bulletin Board and has been since the National Association of Securities Dealers
approved  quotation of the Company's  common stock on July 20, 2000. The Company
traded under the symbol "PWKK" until March 7, 2001,  when the symbol  changed to
"PIAM," its current symbol.  The high and low close information for each quarter
since July 20, 2000 to the present are as follows:

Quarter                    High Close        Low Close
------------------------   -----------       ---------
5/1/00 - 7/31/00              0                0
8/1/00 -10/31/00              7.37             4.12
11/1/00- 1/31/01              4.62             2.13
2/1/01- 4/30/01               3.06             0.25
5/1/01-7/31/01                0.79             0.30
8/1/01-10/31/01               0.54             0.18

     Please note that  over-the-counter  market  quotations  have been  provided
herein.  The  quotations  reflect  inter-dealer  prices,  without retail markup,
mark-down or commission and may not represent actual transactions.

     In February 2000, the Company  effected a forward split of its Common Stock
at a rate of 2.78 to 1, for  holders  of  record  on  February  22,  2000,  with
distribution effective March 1, 2000.

(b)  Holders.

     As of July 31, 2001 the Company had sixty-two (62)  shareholders  of record
of its  6,993,183  outstanding  shares of common  stock,  4,718,732 of which are
restricted Rule 144 shares,  2,049,451 of which are  free-trading and 225,000 of
which are control stock. Of the Rule 144 shares, 3,132,992 shares have been held
by affiliates of the Company for more than one (1) year.

(c)  Dividends.

     The Company has never paid or declared  any  dividends  on its common stock
and does not anticipate paying cash dividends in the foreseeable future.

Item 6. Management's Discussion and Analysis or Plan of Operation

     The Company was originally  incorporated as Global Corporate Quality,  Inc.
on September  9, 1994.  The Company  subsequently  changed its name to Alternate
Achievements,  Inc. on October 1, 1999, to Power  Kiosks,  Inc. on March 2, 2000
and to Power Interactive Media, Inc. on March 1, 2001.  Originally,  the Company
was formed to engage in the marketing and distribution of training

                                       25

<PAGE>



programs  and  seminars to  corporate  level  executives  on various  management
issues. The Company failed in its attempt to implement its initial business plan
and during  September 1995 abandoned its efforts.  The Company had no operations
for the period prior to September  1995. The Company was inactive and there were
no transactions from September 1995 to February 2000, when the Company,  PPK and
the  individual  holders  of  all  of  the  outstanding  capital  stock  of  PPK
consummated a reverse acquisition pursuant to a share exchange agreement.

     Currently,  the Company is a provider of a  network-based,  digital imaging
kiosk system that delivers a range of retail consumer products. The kiosk system
is enabled by leading-edge  technology in the areas of digital imaging software,
delivery hardware and e-commerce network capabilities.

     It is the Company's intention to (i) to market its networked and standalone
kiosk products; (ii) to research and further develop its new products; and (iii)
to continue to improve Power Kiosk products and services.

     The Company was still in the  development  stage at February  2000 when the
share exchange took place between Power Photo Enterprises and the Company and is
still  emerging  from that stage.  During the year 2001,  the Company  generated
revenues in the amount of $35,411.  Since  inception (May 13, 1998) through July
31,  2001,  the  Company  has  generated   cumulative  losses  of  approximately
$17,328,044.  Due  to  the  Company's  limited  operating  history  and  limited
resources,  among other factors, there can be no assurance that profitability or
significant revenues on a quarterly or annual basis will occur in the future.

     Since  entering  into   negotiations  and  contracts  with  its  first  few
customers,  the Company has begun to make  preparations  for a period of growth,
which may require it to significantly increase the scale of its operations. This
increase will include the hiring of additional personnel in all functional areas
and will result in  significantly  higher  operating  expenses.  The increase in
operating  expenses  is  expected  to be matched  by a  concurrent  increase  in
revenues. However, the Company's net loss may continue even if revenues increase
and  operating  expenses  may  still  continue  to  increase.  Expansion  of the
Company's operations may cause a significant strain on the Company's management,
financial and other  resources.  The Company's  ability to manage recent and any
possible  future  growth,  should  it  occur,  will  depend  upon a  significant
expansion  of its  accounting  and other  internal  management  systems  and the
implementation  and subsequent  improvement of a variety of systems,  procedures
and controls. There can be no assurance that significant problems in these areas
will not occur. Any failure to expand these areas and implement and improve such
systems,  procedures  and controls in an efficient  manner at a pace  consistent
with  the  Company's  business  could  have a  material  adverse  effect  on the
Company's business,  financial condition and results of operations.  As a result
of  such  expected  expansion  and the  anticipated  increase  in its  operating
expenses,  as well as the difficulty in forecasting  revenue levels, the Company
expects to continue to  experience  significant  fluctuations  in its  revenues,
costs and gross margins, and therefore its results of operations.



                                       26

<PAGE>



Results of Operations - Full Fiscal Years - July 31, 2001 and July 31, 2000

Revenues

     Revenues  for the twelve (12) month period ended July 31, 2001 were $35,411
and for the twelve (12) month period ended July 31, 2000 were $0.

Operating Expenses

     Operating  Expenses  for the twelve (12) month  period  ended July 31, 2001
were  $7,645,896  versus  $4,265,889 for the twelve (12) month period ended July
31, 2000. Net loss was $9,833,568 and $6,230,796 respectively.

Assets and Liabilities

     Total assets were $404,306 as of July 31, 2001, and $597,327 as of July 31,
2000. As of July 31, 2001, assets consisted primarily of property and equipment.
As of July 31, 2000,  assets  consisted  primarily  of property  and  equipment.
Liabilities were $3,563,341 and $3,233,009 as of July 31, 2001 and July 31, 2000
respectively.  As of July 31,  2001,  liabilities  consisted  primarily of loans
payable. As of July 31, 2000, liabilities consisted primarily of a loan payable.

Stockholders' Deficiency

     Stockholders'  deficiency was $3,159,035 as of July 31, 2001 and $2,635,682
as of July 31, 2000.  The Company had 6,993,183  and 5,375,084  shares of common
stock issued and outstanding at July 31, 2001 and 2000, respectively.

Financial Condition, Liquidity and Capital Resources

     The Company is in its development stage.  Since its inception,  the Company
has incurred significant expenditures on the research, development and marketing
of a kiosk digital  imaging  system and has a deficit of  $17,328,044 as at July
31, 2001 (2000 - $7,494,476).  The Company has as yet not generated  significant
revenue.  These  financial  statements  have been  prepared on the going concern
basis which assumes the  realization of assets and liquidation of liabilities in
the normal course of business.  The Company has suffered  continuing losses from
operations and has a net capital  deficiency that raise  substantial doubt about
its ability to continue as a going concern.  These  financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.

     The continued  application of the going concern concept is dependent on the
Company's ability to obtain adequate sources of financing and to achieve a level
of revenue  sufficient  to support  the  Company's  operations.  The  Company is
currently   attempting  to  obtain   additional   financing  from  its  existing
shareholders and other strategic investors to continue its operations.  However,
there can be no  assurance  that the Company will obtain  additional  funds from
these sources.

     At July 31,  2001 the  Company had cash of $0 as compared to $0 at July 31,
2000.

     In June 2000, the Company  executed a promissory note in favor of TK in the
principal  amount of $250,000.  The loan had a maturity date of August 31, 2000.
In December  2000,  TK converted  all  outstanding  principal  and interest into
250,000 shares of the restricted common stock of the Company. For such offering,
the Company  relied upon the 506  Exemption.  No state  exemption  was necessary
because the investor is a foreign entity  located in Canada.  See Part III, Item
12. "Certain Relationships and Related Transactions".

     In October 2000, the Company  executed a promissory  note in favor of TK in
the principal amount of $110,000.  The Company actually  received  $100,000,  as
$10,000 was deducted as an agent fee.  The note bears  interest at a rate of ten
percent  (10%) per annum and is for a term of one (1) year.  For such  offering,
the Company  relied upon the 506  Exemption.  No state  exemption  was necessary
because the investor is a foreign entity  located in Canada.  See Part III, Item
11. "Security  Ownership of Certain Beneficial Owners and  Management;"and  Part
III, Item 12. "Certain Relationships and Related Transactions".

                                       27

<PAGE>





     The Company may raise  additional  capital  through  private  and/or public
sales of securities in the future but has no definite commitments at this time.

Forward-Looking Statements

     This Form 10-KSB includes  "forward-looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange  Act of  1934,  as  amended.  All  statements,  other  than
statements of historical  facts,  included or  incorporated by reference in this
Form 10-KSB which address  activities,  events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital  expenditures  (including the amount and nature thereof),  demand
for the Company's  products and services,  expansion and growth of the Company's
business and operations, and other such matters are forward-looking  statements.
These  statements  are based on certain  assumptions  and  analyses  made by the
Company in light of its  experience  and its  perception of  historical  trends,
current conditions and expected future  developments as well as other factors it
believes are appropriate in the circumstances.  However,  whether actual results
or developments will conform with the Company's  expectations and predictions is
subject  to a number of risks and  uncertainties,  general  economic  market and
business  conditions;  the business  opportunities (or lack thereof) that may be
presented  to and pursued by the  Company;  changes in laws or  regulation;  and
other   factors,   most  of  which  are  beyond  the  control  of  the  Company.
Consequently, all of the forward-looking statements made in this Form 10-KSB are
qualified by these cautionary  statements and there can be no assurance that the
actual results or  developments  anticipated by the Company will be realized or,
even if substantially  realized, that they will have the expected consequence to
or effects on the Company or its business or operations.

Item 7.   Financial Statements

     The Company's  financial  statements  have been prepared in accordance with
generally  accepted  accounting  principles  and pursuant to  Regulation  S-B as
promulgated by the Securities and Exchange  Commission and are included  herein,
on Page F-1 hereof in response to Part F/S of this Form 10-KSB.



                                       28
<PAGE>



                    Consolidated Financial Statements
                    (In U.S. dollars)

                    Power Interactive Media, Inc.
                    (FORMERLY POWER KIOSKS, INC.)
                    (A Development Stage Enterprise)

                    Years ended July 31, 1999, 2000 and 2001










<PAGE>






                          independent auditors' report


To the Board of Directors and Stockholders of Power Interactive Media, Inc.



We  have  audited  the  accompanying   consolidated   balance  sheets  of  Power
Interactive  Media,  Inc.  (formerly  Power Kiosks,  Inc.) (A Development  Stage
Enterprise)  as at July  31,  2000  and  2001  and  the  related  statements  of
operations,  comprehensive loss, stockholders' deficiency and cash flows for the
years ended July 31, 1999,  2000 and 2001.  These  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the United States.  Those standards require that we plan and perform an audit
to obtain  reasonable  assurance  whether the financial  statements  are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our  opinion,  these  consolidated  financial  statements  referred  to above
present fairly, in all material respects,  the financial position of the Company
as at July 31,  2000 and 2001 and the  results  of its  operations  and its cash
flows  for the years  ended  July 31,  1999,  2000 and 2001 in  conformity  with
generally accepted accounting principles in the United States.

The accompanying  consolidated  financial statements have been prepared assuming
the Company  will  continue as a going  concern.  As  discussed in note 1 to the
financial statements,  the Company has suffered recurring losses from operations
and has a net capital  deficiency that raise substantial doubt about its ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in note 1. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.


draft

Chartered Accountants


Toronto, Canada
October 25, 2001



<PAGE>


<TABLE>
<CAPTION>


Power Interactive Media, Inc.
(FORMERLY POWER KIOSKS, INC.)
(A Development Stage Enterprise)

Consolidated Balance Sheets
(in U.S. dollars)

July 31, 2000 and 2001
----------------------------------------------------------------------------------------------------
                                                                          2000                 2001
----------------------------------------------------------------------------------------------------
<S>                                                             <C>                  <C>
Assets

Current assets:
     Investment tax credits receivable                          $       33,625       $       12,888
     Inventories                                                        40,965                1,882
     Miscellaneous receivable                                            1,528                  981
     Prepaid expenses                                                   42,190                1,962
----------------------------------------------------------------------------------------------------
     Total current assets                                              118,308               17,713

Property and equipment (note 4)                                        479,019              386,593

----------------------------------------------------------------------------------------------------
Total assets                                                    $      597,327       $      404,306
----------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Deficiency

Current liabilities:
     Bank indebtedness                                          $       46,576       $       37,402
     Accounts payable                                                  120,382              827,747
     Accrued liabilities                                               351,097              400,067
     Accrued salaries payable                                          148,890                    -
     Accrued financing costs payable                                 1,012,500                    -
     Loans payable (note 5)                                          1,377,942            1,516,796
     Due to shareholders (note 6)                                      135,272              742,095
     Convertible notes (note 7)                                         40,350               39,234
----------------------------------------------------------------------------------------------------
     Total current liabilities                                       3,233,009            3,563,341

Stockholders' deficiency:
     Capital stock (note 8):
         Authorized:
              50,000,000 $0.0001 par value common shares
                (2000 - 50,000,000)
              10,000,000 preferred shares (2000 - 10,000,000)
         Issued and outstanding:
              7,466,584 common shares (2000 - 5,375,084)                   538                  746
              Nil preferred shares (2000 - nil)                              -                    -
     Contributed surplus                                             9,234,291           17,419,609
     Warrants issued (note 9)                                                -            1,170,200
     Deferred stock-based compensation                              (4,388,125)          (4,335,792)
     Accumulated other comprehensive income (loss)                      12,090              (85,754)
     Deficit accumulated during the development stage               (7,494,476)         (17,328,044)
----------------------------------------------------------------------------------------------------
     Total stockholders' deficiency                                 (2,635,682)          (3,159,035)

Going concern (note 1(b))
Commitments (note 17)
Subsequent events (note 18)
----------------------------------------------------------------------------------------------------
Total liabilities and stockholders' deficiency                  $      597,327       $      404,306
----------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.



<PAGE>

<TABLE>
<CAPTION>
Power Interactive Media, Inc.
(FORMERLY POWER KIOSKS, INC.)
(A Development Stage Enterprise)

Consolidated Statements of Operations
(in U.S. dollars)

Years ended July 31, 1999, 2000 and 2001

---------------------------------------------------------------------------------------------------------------
                                                                                                   Period from
                                                                                                  May 13, 1998
                                                              Years ended July 31,              (inception) to
                                                    1999              2000              2001     July 31, 2001
---------------------------------------------------------------------------------------------------------------
                                              (Restated)
<S>                                        <C>               <C>              <C>               <C>
Sales                                      $           -     $           -    $       35,411    $       35,411

Cost of sales                                          -                 -            56,453            56,453
---------------------------------------------------------------------------------------------------------------

Gross loss                                             -                 -           (21,042)          (21,042)

Expenses:
     Sales and marketing                   $     323,017     $     595,443    $      391,361    $    1,313,257
     Research and development                    141,299           436,471           598,808         1,202,114
     General and administrative                  479,601         3,233,975         6,655,727        10,369,303
---------------------------------------------------------------------------------------------------------------
Total expenses                                   943,917         4,265,889         7,645,896        12,884,674
---------------------------------------------------------------------------------------------------------------

Loss from operations                             943,917         4,265,889         7,666,938        12,905,716

Financing costs                                        -         1,793,165         2,003,598         3,796,763

Interest expense                                 290,791           171,742           163,032           625,565
---------------------------------------------------------------------------------------------------------------

Loss before provision for income taxes         1,234,708         6,230,796         9,833,568        17,328,044

Provision for income taxes (note 11)                   -                 -                 -                 -

---------------------------------------------------------------------------------------------------------------
Loss for the period                        $   1,234,708     $   6,230,796    $    9,833,568    $   17,328,044
---------------------------------------------------------------------------------------------------------------

Basic and diluted loss
   per common share (note 16)              $        0.41     $        1.73    $         1.48

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

Shares used in computing basic and
   diluted loss per common share               2,995,000         3,595,000         6,628,034

---------------------------------------------------------------------------------------------------------------
</TABLE>


          See accompanying notes to consolidated financial statements.




<PAGE>


<TABLE>
<CAPTION>
Power Interactive Media, Inc.
(FORMERLY POWER KIOSKS, INC.)
(A Development Stage Enterprise)

Consolidated Statements of Comprehensive Loss
(in U.S. dollars)

Years ended July 31, 1999, 2000 and 2001

---------------------------------------------------------------------------------------------------------------
                                                                                                   Period from
                                                                                                  May 13, 1998
                                                              Years ended July 31,              (inception) to
                                                 1999               2000              2001       July 31, 2001
---------------------------------------------------------------------------------------------------------------
                                           (Restated)
<S>                                    <C>                <C>               <C>                <C>

Loss for the period                    $   (1,234,708)    $   (6,230,796)   $   (9,833,568)    $   (17,328,044)

Other comprehensive income (loss):
     Currency translation adjustment          (21,790)            33,000           (97,844)            (85,754)

---------------------------------------------------------------------------------------------------------------
Comprehensive loss                     $   (1,256,498)    $   (6,197,796)   $   (9,931,412)    $   (17,413,798)
---------------------------------------------------------------------------------------------------------------
</TABLE>


          See accompanying notes to consolidated financial statements.


<PAGE>


<TABLE>
<CAPTION>
Power Interactive Media, Inc.
(FORMERLY POWER KIOSKS, INC.)
(A Development Stage Enterprise)

Consolidated Statements of Stockholders' Deficiency
(in U.S. dollars)

Years ended July 31, 1999, 2000 and 2001



------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Accumulated   Deficit
                                                                                                 other     accumulated
                                                                                   Deferred  comprehensive during the       Total
------------------------------------------------------------------------------------------------------------------------------------
                                         Common shares              Contributed  stock-based    income    development  stockholders'
------------------------------------------------------------------------------------------------------------------------------------
                                        Number  Amount   Warrants      surplus  compensation   (loss)      stage        deficiency
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>     <C>        <C>         <C>         <C>        <C>            <C>
Balances, July 31, 1998              1,024,450   $  102  $        - $       (36)$        -  $      880 $    (28,972)
   $                                   (28,026)
Deferred stock-based compensation
     (note 8(b)) (restated)            245,550       25           -     491,409   (491,434)          -            -             -
Shares issued in exchange for
     financing services
     (note 8(b)) (restated)            120,000       12           -     301,703          -           -            -       301,715
Amortization of deferred stock-
     based compensation (restated)           -        -           -           -    491,434           -            -       491,434
Currency translation adjustment
     (restated)                              -        -           -           -          -     (21,790)           -       (21,790)
Loss for the period (restated)               -        -           -           -          -           -   (1,234,708)   (1,234,708)
---------------------------------------------------------------------------------------------------------------------------------

Balances, July 31, 1999 (restated)   1,390,000      139           -     793,076          -     (20,910)  (1,263,680)     (491,375)
Shares issued pursuant to reverse
   acquisition (note 2)              2,995,539      300           -        (300)         -           -            -             -
Contributed surplus (note 8(c))              -        -           -     194,849          -           -            -       194,849
Deferred stock-based compensation
   (note 8(c))                         450,000       45           -   7,475,918 (7,460,236)          -            -        15,727
Shares issued for cash,
     net of issue costs                539,545       54           -     770,748          -           -            -       770,802
Amortization of deferred
     stock-based compensation                -        -           -           -  3,072,111           -            -     3,072,111
Currency translation adjustment              -        -           -           -          -      33,000            -        33,000
Loss for the period                          -        -           -           -          -           -   (6,230,796)   (6,230,796)
---------------------------------------------------------------------------------------------------------------------------------

Balances, July 31, 2000              5,375,084      538           -   9,234,291 (4,388,125)     12,090   (7,494,476)   (2,635,682)
Shares issued for cash,
       net of issue costs              796,500       79           -     763,463          -           -            -       763,542
Shares issued for services
       (note 8(d))                   1,270,000      127           -   6,409,357          -           -            -     6,409,484
Shares cancelled (note 8(d))          (200,000)     (20)          -          20          -           -            -             -
Warrants issued for services
      (note 8(d) and 9)                      -        -   1,170,200           - (1,152,000)          -            -        18,200
Shares issued on settlement of
   accrued finance costs (note 8(d))   225,000       22           -   1,012,478          -           -            -     1,012,500
Amortization of deferred stock
   based compensation                        -        -           -           -  1,204,333           -            -     1,204,333
Currency translation adjustment              -        -           -           -          -     (97,844)           -       (97,844)
Loss for the period                          -        -           -           -          -           -   (9,833,568)   (9,833,568)

---------------------------------------------------------------------------------------------------------------------------------
Balances, July 31, 2001              7,466,584   $  746  $1,170,200 $17,419,609 $(4,335,792)$  (85,754)$(17,328,044) $ (3,159,035)
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>


          See accompanying notes to consolidated financial statements.


<PAGE>


<TABLE>
<CAPTION>
Power Interactive Media, Inc.
(FORMERLY POWER KIOSKS, INC.)
(A Development Stage Enterprise)

Consolidated Statements of Cash Flows
(in U.S. dollars)

Years ended July 31, 1999, 2000 and 2001

---------------------------------------------------------------------------------------------------------------
                                                                                                   Period from
                                                                                                  May 13, 1998
                                                            Years ended July 31,                (inception) to
                                                 1999               2000              2001       July 31, 2001
---------------------------------------------------------------------------------------------------------------
                                           (Restated)
<S>                                     <C>                <C>               <C>                <C>
Cash flows from operating activities:
     Loss for the period                $  (1,234,708)     $  (6,230,796)    $  (9,833,568)     $  (17,328,044)
     Items not affecting cash:
         Amortization and write-down
           of assets                              308             57,481           275,440             333,229
         Accretion of interest on loan
           payable                            234,513                  -                 -             234,513
         Stock-based compensation
           expense                            479,601          3,388,007         7,455,987          11,323,595
         Accrued interest on loan payable           -            192,934           163,032             355,966
     Change in operating assets and liabilities:
         Accounts receivable                        -             26,961                 -              26,961
         Investment tax credits receivable    (33,105)                 -            20,737             (12,368)
         Inventories                         (342,020)            18,944            (1,787)           (324,863)
         Miscellaneous receivable             (26,276)                 -               547             (25,729)
         Prepaid expenses                     (13,347)           (30,401)           40,228              (3,520)
         Accounts payable                      54,491             65,698           707,365             827,554
         Accrued liabilities                   67,559            285,353           114,970             401,882
         Accrued salaries payable                   -            150,408          (148,890)              1,518
---------------------------------------------------------------------------------------------------------------
     Net cash flows used in operating
       activities                            (812,984)        (2,075,411)       (1,205,939)         (4,189,306)

Cash flows from financing activities:
     Accrued finance costs payable                  -          1,022,817                 -           1,022,817
     Issuance of common shares,
       net of issue costs                           -            770,748           763,542           1,534,359
     Increase (decrease) in bank
       indebtedness                            20,451            (26,125)           (9,174)            (14,848)
     Loan proceeds                            678,426            519,701            14,822           1,216,086
     Issuance of convertible notes                  -             40,761                 -              40,761
     Due to shareholders                      137,651            (17,527)          593,745             713,869
---------------------------------------------------------------------------------------------------------------
     Cash flows from financing activities     836,528          2,310,375         1,362,935           4,513,044

Cash flows from investing activities:
     Purchase of property and equipment        (7,153)          (243,749)         (154,912)           (405,814)
---------------------------------------------------------------------------------------------------------------
     Cash flows used in investing activities   (7,153)          (243,749)         (154,912)           (405,814)

Effect of currency translation of
   cash balances                              (16,391)             8,785            (2,084)             82,076
---------------------------------------------------------------------------------------------------------------

Increase in cash                                    -                  -                 -                   -

Cash, beginning of period                           -                  -                 -                   -

---------------------------------------------------------------------------------------------------------------
Cash, end of period                     $           -     $            -    $            -     $             -
---------------------------------------------------------------------------------------------------------------

Supplemental cash flow information:
     Interest paid                      $           -     $            -    $            -     $             -
     Income taxes paid                              -                  -                 -                   -

---------------------------------------------------------------------------------------------------------------
</TABLE>

Supplemental cash flow disclosures (note 16)



          See accompanying notes to consolidated financial statements.



<PAGE>



Power Interactive Media, Inc.
(FORMERLY POWER KIOSKS, INC.)
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements
(in U.S. dollars)

Years ended July 31, 1999, 2000 and 2001

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


1.   General:


     (a)  The Company:


     Power Interactive Media, Inc. (formerly Power Kiosks, Inc.) (the "Company")
     is currently in the development stage. Its activities  primarily consist of
     the  development and marketing of kiosk digital imaging systems and raising
     capital.


     The  Company's  accounting  principles  are in accordance  with  accounting
     principles generally accepted in the United States.


     (b)  Going concern:

     The Company is in its development stage.  Since its inception,  the Company
     has incurred  significant  expenditures  on the research,  development  and
     marketing  of  a  kiosk  digital  imaging  system  and  has  a  deficit  of
     $17,328,044 as at July 31, 2001 (2000 - $7,494,476). The Company has as yet
     not generated  significant  revenue.  These financial  statements have been
     prepared on the going concern basis which assumes the realization of assets
     and  liquidation  of  liabilities  in the normal  course of  business.  The
     Company  has  suffered  continuing  losses  from  operations  and has a net
     capital  deficiency  that  raise  substantial  doubt  about its  ability to
     continue as a going concern.  These financial statements do not include any
     adjustments that might result from the outcome of this uncertainty.

     The continued  application of the going concern concept is dependent on the
     Company's  ability to obtain adequate sources of financing and to achieve a
     level of  revenue  sufficient  to support  the  Company's  operations.  The
     Company is currently  attempting to obtain  additional  financing  from its
     existing  shareholders  and  other  strategic  investors  to  continue  its
     operations. However, there can be no assurance that the Company will obtain
     additional funds from these sources.



<PAGE>



2.   Reverse acquisition:


     On  February  23,  2000,  the Company  entered  into an  agreement  for the
     exchange of common stock with Power Photo,  a Canadian  corporation.  Under
     the terms of the agreement,  the Company issued  2,995,539 common shares in
     exchange for all of the issued and  outstanding  shares  (1,000,000  common
     shares) of Power  Photo.  At the time of the  transaction,  the Company had
     nominal net assets.


     As the former shareholders of Power Photo control the consolidated  entity,
     the  transaction  was  accounted  for as a  reverse  acquisition,  whereby,
     notwithstanding  the legal  acquisition of Power Photo by the Company,  the
     transaction  has been  accounted  for as an  acquisition  of the Company by
     Power Photo on February 23, 2000. The consolidated  financial statements of
     the  combined  entity are issued under the name of the legal parent but are
     considered  the  continuation  of the  financial  statements  of the  legal
     subsidiary,  Power Photo.  As Power Photo was deemed to be the acquirer for
     accounting  purposes,  its  assets  and  liabilities  are  included  in the
     consolidated  financial statements at their historical carrying values. The
     Company has adopted the fiscal year end of Power Photo,  being July 31. The
     comparative financial statements for the year ended July 31, 1999 are those
     of Power Photo.


3.   Significant accounting policies:


     (a)  Principles of consolidation:


     The consolidated  financial  statements include the accounts of the Company
     and its wholly owned subsidiary,  Power Photo. All significant intercompany
     transactions and balances have been eliminated on consolidation.


     (b)  Use of estimates:


     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements and the reported amounts of expenses during the year.
     Actual results could differ from those estimates.



<PAGE>



3.   Significant accounting policies (continued):


     (c)  Inventories:


     Inventories,  which consist of paper for the Kiosk digital  imaging systems
     are  valued at the  lower of cost and  replacement  cost  with  cost  being
     determined on a first-in, first-out basis.


     (d)  Property and equipment:


     Property and equipment are stated at cost, net of accumulated  amortization
     and are depreciated over their useful lives. Amortization is computed using
     the straight-line method as follows:

           Kiosk digital imaging systems..................... 33%
           Computer and other equipment...................... 10% - 20%


     The Company  regularly  reviews the  carrying  values of its  property  and
     equipment  by comparing  the  carrying  amount of the asset to the expected
     future  cash flows to be  generated  by the asset.  If the  carrying  value
     exceeds  the amount  recoverable,  a  write-down  to fair  market  value is
     charged to the consolidated statements of operations.


     During the quarter  ended July 31, 2000,  the Company  altered its business
     model from the sale of kiosk  digital  imaging  systems  to either  rent or
     enter into profit-sharing arrangements for these systems;  accordingly, the
     kiosk  digital  imaging  systems are recorded as property and equipment and
     have been  amortized  commencing  May 1, 2000,  the beginning of the fourth
     quarter. Previously, these systems were recorded as inventories.


     (e)  Deferred financing costs:


     The costs of extending the maturity date of financing obtained are deferred
     and  amortized  on a  straight-line  basis  over the term of the  extension
     period.



<PAGE>



3.   Significant accounting policies (continued):


     (f)  Stock-based compensation:


     The Company has elected to follow  Accounting  Principles Board Opinion No.
     25 ("APB  25"),  "Accounting  for Stock  Issued to  Employees"  and related
     interpretations,  in accounting for its employee  stock options.  Under APB
     25, deferred stock-based  compensation is recorded at the option grant date
     in an amount equal to the difference  between fair market value of a common
     share  and  the  exercise  price  of  the  option.   Deferred   stock-based
     compensation  resulting  from employee  option grants is amortized over the
     vesting  period of the  individual  options,  in accordance  with Financial
     Accounting  Standards Board  Interpretation No. 28. The Company applies the
     fair value method of SFAS 123 for valuing options granted to non-employees.


     (g)  Currency translation:


     Monetary  assets and  liabilities  of the Company  and of its wholly  owned
     subsidiary,  which is an integrated foreign operation, that are denominated
     in foreign  currencies  are  translated  into  Canadian  dollars  (which is
     considered to be the functional  currency) at the exchange rate  prevailing
     at  the  balance  sheet  date.  Non-monetary  assets  and  liabilities  are
     translated  at the  historical  exchange  rate.  Transactions  included  in
     operations  are  translated  at the average  rate for the period.  Exchange
     gains   and   losses    resulting    from   the    translation   of   these
     foreign-denominated  amounts are reflected in the consolidated statement of
     operations in the period in which they occur.  As the  Company's  reporting
     currency is the U.S. dollar,  the Company translates assets and liabilities
     denominated  in Canadian  dollars into U.S.  dollars at the  exchange  rate
     prevailing at the balance sheet date,  and the results of operations at the
     average  rate  for  the  period.  Cumulative  translation  adjustments  are
     included as a separate  component of stockholders'  deficiency within other
     comprehensive income (loss).


     (h)  Research and development expenses:


     Research costs, other than capital expenditures,  are expensed as incurred.
     Development  costs are  expensed as incurred  unless they meet the criteria
     under   generally   accepted   accounting   principles   for  deferral  and
     amortization.  The Company has not deferred any such  development  costs to
     date.  Research and development costs are reduced by related investment tax
     credits.



<PAGE>



3.   Significant accounting policies (continued):


     (i) Impairment of long-lived assets:

     The  Company  accounts  for  long-lived   assets  in  accordance  with  the
     provisions of SFAS No. 121,  "Accounting  for the  Impairment of Long-lived
     Assets to be Disposed Of." SFAS No. 121 requires that long-lived assets and
     certain  identifiable  intangibles  be reviewed  for  impairments  whenever
     events or changes in circumstances  indicate that the carrying amount of an
     asset may not be recoverable.  Recoverability of assets to be held and used
     is measured by a comparison  of the  carrying  amount of an asset to future
     net cash flows  expected to be generated  by the asset.  If such assets are
     considered  impaired,  the  impairment  to be recognized is measured by the
     amount by which the carrying amount of the assets exceeds the fair value of
     the assets.

     (j)  Investment tax credits:

     The Company is entitled to Canadian  federal and provincial  investment tax
     credits  which are earned as a percentage  of eligible  current and capital
     research  and  development  expenditures  incurred in each  taxation  year.
     Certain  investment tax credits were fully  refundable to the Company until
     as it was a  Canadian-controlled  private corporation  Currently,  at which
     time,  investment  tax credits are available to be applied  against  future
     income  tax  liabilities,   subject  to  a  10-year   carryforward  period.
     Investment  tax credits  are  accounted  for as a reduction  of the related
     expenditure  for items of a current  nature and a reduction  of the related
     asset cost for items of  long-term  nature,  provided  that the Company has
     reasonable assurance that the tax credits will be realized.


     (k) Income taxes:

     Under the asset and liability  method of Statement of Financial  Accounting
     Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes", deferred tax
     assets and  liabilities  are  recognized  for the  future tax  consequences
     attributable  to  differences  between  the  financial  statement  carrying
     amounts of existing assets and  liabilities and their  respective tax bases
     and operating  loss and tax credit  carryforwards.  Deferred tax assets and
     liabilities  are  measured  using  enacted  tax rates  expected to apply to
     taxable  income in the periods in which  those  temporary  differences  are
     expected to be recovered or settled. Under SFAS 109, the effect on deferred
     tax assets and  liabilities  of a change in tax rates is  recognized in the
     statement of operations in the period that includes the enactment date.



<PAGE>



3.   Significant accounting policies (continued):

     (l)  Loss per common share:

     Loss per  common  share  has been  calculated  on the basis of loss for the
     period divided by the weighted average number of common shares  outstanding
     during each period.

     (m) Comprehensive income:

     SFAS No. 130,  "Reporting  Comprehensive  Income,"  issued by the Financial
     Accounting   Standards  Board  establishes   standards  for  reporting  and
     presentation of comprehensive  income. This standard defines  comprehensive
     income as the changes in equity of an  enterprise  except  those  resulting
     from shareholder transactions.

     (n) Fair values of financial assets and financial liabilities:

     The  carrying  values  of  miscellaneous  receivable,   bank  indebtedness,
     accounts payable,  accrued liabilities,  accrued salaries payable,  accrued
     financing costs payable and loans payable approximate their fair values due
     to the relatively  short periods to maturity of the  instruments.  The fair
     value of the due to shareholders  cannot be determined due to their related
     party nature and terms.


4.   Property and equipment:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                                        Accumulated            Net book
       2000                                               Cost         amortization               value
--------------------------------------------------------------------------------------------------------
<S>                                               <C>                 <C>                 <C>
       Kiosk digital imaging systems              $   527,115         $     55,120        $    471,995
       Computer and other equipment                     8,805                1,781               7,024

--------------------------------------------------------------------------------------------------------
                                                  $   535,920         $     56,901        $    479,019
--------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------
                                                                        Accumulated            Net book
       2001                                               Cost         amortization               value
--------------------------------------------------------------------------------------------------------

       Kiosk digital imaging systems              $   662,025         $    285,379        $    376,646
       Computer and other equipment                    13,509                3,562               9,947

--------------------------------------------------------------------------------------------------------
                                                  $   675,534         $    288,941        $    386,593
--------------------------------------------------------------------------------------------------------
</TABLE>




<PAGE>



4.   Property and equipment (continued):


     Amortization  of $206,456 was recorded during the year (1999 - $308; 2000 -
$57,481).


     The kiosk  digital  imaging  systems  are  pledged as  security  for a loan
payable (note 5).


5.   Loans payable:

<TABLE>
<CAPTION>
-------------------------------------------------------------------
                                         2000                 2001
-------------------------------------------------------------------
<S>    <C>                     <C>                  <C>
       Loan payable            $      941,492       $      915,460
       Promissory notes               245,460              210,000
       Accrued interest               190,990              341,336
       Other loan payable                   -               50,000
-------------------------------------------------------------------
                               $    1,377,942       $    1,516,796
-------------------------------------------------------------------
</TABLE>


     The loan payable  bears  interest at the following  rates:  May 10, 1999 to
     July 30, 1999 - 12% per annum;  July 30, 1999 to August 31, 1999 - $450 per
     day;  subsequent  to September 14, 1999 - $700 per day. The loan is secured
     by the kiosk digital  imaging  systems or any  receivable  from the sale of
     these systems. The original maturity date of the loan was July 30, 1999 and
     the maturity  date was extended as described in note 8 and presently has no
     repayment  terms.  In connection  with the loan, the Company issued 120,000
     common  shares of the Company to the lender.  As a result,  $240,300 of the
     loan proceeds, representing the fair value of the 120,000 common shares has
     been  allocated  to share  capital,  with  the  remainder  of the  proceeds
     reflected as loan  payable.  The loan payable is accreted to the  principal
     amount of the loan and the  accretion is  reflected as interest  expense in
     the consolidated statements of operations for the year ended July 31, 1999.


     The promissory notes bear interest at the rate of 10% per annum and are due
on demand.


     The other loan payable was repayable  September 25, 2001 and must be repaid
     from any funds  obtained  from a potential  financing.  The  advance  bears
     interest at $10,000 for each sixty-day period.



<PAGE>



6.   Due to shareholders:


     The amounts due to shareholders  bear no interest and are unsecured.  Terms
of repayment have not been established.


7.   Convertible notes:


     During January 2000, the subsidiary,  Power Photo, issued eight units, each
     consisting of a 12%  convertible  note due December 31, 2000 for total cash
     proceeds of Cdn.  $60,000.  Each unit was  convertible at the option of the
     holder into 390 Class A common shares of Power Photo at the due date.


8.   Capital stock:


     (a)  On  February  22,  2000,  the  Company's  shareholders   authorized  a
     2.78-for-one stock split and 15,290,000 common shares were cancelled by the
     Company without consideration.  As described in note 2, the Company entered
     into a reverse  acquisition  and  issued 3  post-stock-split  shares of the
     Company for every outstanding common share of Power Photo.


     All references to common shares,  common shares outstanding,  stock options
     and per share amounts in these  financial  statements have been restated to
     reflect the above transactions on a retroactive basis.


     (b) July 31, 1999:


     (i)  In May 1999,  the Company  issued 245,550 common shares of the Company
          to an officer and shareholder for nominal  consideration.  The Company
          recorded  stock-based  compensation  of  $491,434,   representing  the
          difference  between the fair value of the common  shares and the issue
          price.


     (ii) On July 27, 1999,  the Company  issued  120,000  common  shares to its
          lender in consideration  for the extension of the maturity date of the
          loan  described in note 5 from July 30, 1999 to August 31,  1999.  The
          fair  value of the  shares  issued  has been  recorded  as a  deferred
          financing  cost  which was  amortized  over the term of the  extension
          period.



<PAGE>



8.   Capital stock (continued):


     (c) July 31, 2000:


     (i)  On September 14, 1999,  two senior  officers and  shareholders  of the
          Company  transferred  title to 90,000  common shares of the Company to
          the lender of the Company in  consideration  for the  extension of the
          maturity date of the loan  described in note 6 from August 31, 1999 to
          December 17, 1999. The fair value of the shares  transferred  has been
          recorded as contributed surplus and as a deferred financing cost which
          is amortized over the term of the extension period.


     (ii) On January 12, 2000, a senior  officer and  shareholder of the Company
          transferred title to 45,000 common shares of the Company to the lender
          of the Company in  consideration  for the indefinite  extension of the
          maturity  date of the loan  described in note 6. The fair value of the
          shares  transferred  has been  recorded as  contributed  surplus and a
          financing cost.


     (iii)On February 24, 2000,  the Company  issued  350,000  common shares for
          proceeds of  $300,000,  net of issue costs of $50,000.  In  connection
          with the share  issuance,  warrants  were  issued to  acquire  300,000
          common shares  exercisable at a price of $0.01 per share. The warrants
          expire  February  24,  2003.  Deferred  stock-based   compensation  of
          $525,000 has been recorded,  representing the difference  between fair
          value and the proceeds received.


     (iv) During  July 2000,  the  Company  issued  120,000  common  shares to a
          company  controlled  by two senior  officers and  shareholders  of the
          Company as repayment of a loan  payable of $15,727.  Accordingly,  the
          Company   has   recorded   stock-based   compensation   of   $639,955,
          representing  the  difference  between  the fair  value of the  common
          shares and that of the loan payable.



<PAGE>



8.   Capital stock (continued):


     (v)  During July 2000, two senior officers and  shareholders of the Company
          were awarded  330,000 shares of the Company upon signing of employment
          contracts.  The terms of the employment contracts expire in June 2005.
          Accordingly,  the Company has  recorded  stock-based  compensation  of
          $1,832,781,  representing  the  difference  of the  fair  value of the
          shares  issued.  In addition,  during July 2000,  the Company  granted
          options to these  officers to acquire  1,000,000  common shares of the
          Company with an exercise  price of $1 per share  vesting 20% per year.
          Deferred  stock-based  compensation  of $4,462,500  has been recorded,
          representing  the difference  between the fair value of the shares and
          the exercise price of the options.


     (d) July 31, 2001:


     (i)  During  August  2000,  the  Company  issued  20,000  common  shares in
          exchange for  investor  consulting  services  pursuant to a consulting
          agreement  expiring in February 2001.  Financing  expenses of $109,200
          has been  recorded,  representing  the fair value of the common shares
          issued.


     (ii) During  September  2000,  the Company  issued 300,000 common shares to
          directors of the Company for no consideration  and warrants to acquire
          200,000  common shares of the Company with an exercise price of $1 per
          share.  The warrants vest on a quarterly basis  commencing May 1, 2001
          and expire during September 2003.


          The  Company   recorded   stock-based   compensation   of  $1,995,000,
          representing the fair value of the common shares. The Company recorded
          deferred  stock-based  compensation  of  $1,110,000  for the  warrants
          granted,  representing  the  difference  between the fair value of the
          warrants and the issue price.


          During  April 2001,  a board  resolution  was passed  authorizing  the
          cancellation  of these  300,000  common  shares to be  replaced by the
          issuance of warrants to acquire  300,000  common shares of the Company
          with an exercise  price of $0.25 per share.  The warrants  vest over a
          three-year  period  and  expire  during  April  2004.  (See note 9 for
          details  of stock  compensation  cost.) As at July 31,  2001,  200,000
          shares have been cancelled.



<PAGE>



8.   Capital stock (continued):


     (iii)During  September  2000, two senior  officers and  shareholders of the
          Company were awarded  120,000 common shares of the Company in exchange
          for  services  provided in securing  contracts  for the  Company.  The
          Company recorded  stock-based  compensation of $798,000,  representing
          the fair value of the common shares.


          During  April 2001,  a board  resolution  was passed  authorizing  the
          cancellation  of these  120,000  common  shares to be  replaced by the
          issuance of warrants to acquire  300,000  common shares of the Company
          with an exercise  price of $0.25 per share.  The warrants  vest over a
          three-year  period  and  expire  during  April  2004.  (See note 9 for
          details of stock compensation cost.)


     (iv) During  October 2000,  the Company  issued  225,000 common shares to a
          former supplier as settlement for amounts due of $1,025,500.


     (v)  On November 21, 2000,  the Company  issued  580,000  common  shares to
          consultants  as  consideration  for  legal  and  consulting   services
          provided to the Company and as settlement  of an accrued  liability of
          $66,000.  The Company has  recorded  stock-based  compensation  in the
          amount of $2,136,000,  representing  the  difference  between the fair
          value of the common shares and the accrued liability.


     (vi) During  December  2000,  the Company  issued  250,000 common shares as
          settlement of a loan payable of $39,000,  accordingly, the Company has
          recorded   stock-based   compensation   in  the  amount  of   $838,500
          representing  the  difference  between  the fair  value of the  common
          shares and the loan payable.


     (vii)During  April  2001,  the  Company  entered  into  a  contract  with a
          financial  advisor  whereby a portion of the advisor's fee was paid by
          the issuance of 10,000 common  shares and 50,000  warrants to purchase
          common  stock with an  exercise  price of $0.50 per share.  The 10,000
          shares were issued at $0.40 per share,  which reflects market value at
          that time.  The  issuance  of the  warrants  resulted  in  stock-based
          compensation  costs  representing  the fair value of the  warrants  of
          $8,200.



<PAGE>



8.   Capital stock (continued):


     (viii)During  July 2001,  the Company  issued  100,000  common  shares to a
          director of the Company for no  consideration  and warrants to acquire
          50,000  common  shares of the Company with an exercise  price of $0.25
          per share. The warrants vest immediately and expire July 2004.


          The Company recorded stock-based compensation of $45,000, representing
          the fair value of the  common  shares  issued.  The  Company  recorded
          stock-based   compensation  of  $10,000  for  the  warrants   granted,
          representing  the  difference  between  the fair  value of the  common
          shares and the exercise price.


     (ix) On  April  15,  2001,  pursuant  to the  filing  of  the  Registration
          Statement,  the board approved the issuance of 1,140,000 common shares
          as follows:


          740,000 shares are to be issued to employees for no consideration. The
          Company recorded  stock-based  compensation of $214,000,  representing
          the  difference  between  the fair value of the common  shares and the
          consideration to be received.


          300,000  shares  are to be issued in  settlement  for  amounts  due of
          $105,000. To date, these shares have not been issued and, accordingly,
          the  value  of the  accrual  has  been  maintained  in  the  financial
          statements.


          100,000 shares are to be issued as settlement  for investor  relations
          services received.  The Company has recorded stock-based  compensation
          of $29,508,  representing the difference between the fair value of the
          common shares and the consideration to be received.


     (e)  Common stock issued and outstanding as at July 31, 2001 include common
          shares for which share  certificates  have not been  registered by the
          Company's share transfer agent as of July 31, 2001.



<PAGE>



9.   Warrants:


     On April 15, 2001,  the board  approved the issuance of warrants to acquire
     1,055,000  common  shares  at an  exercise  price of $0.25 per  share.  The
     warrants  vest over a  three-year  period and  expire  during  April  2004,
     resulting in deferred stock-based compensation of $42,000.


     As at July 31, 2001, the Company had 1,655,000 warrants outstanding with an
     exercise price ranging from $.01 to $1.0 and expiring from 2003 to 2004.


10.  Stock compensation plan:


     During October 2000, the Company's stock compensation plan (the "Plan") was
     established for the benefit of the employees and certain consultants of the
     Company.  The maximum  number of common  shares  which may be set aside for
     issuance  under  the Plan is  700,000  shares,  provided  that the Board of
     Directors of the Company has the right, from time to time, to increase such
     number.  During April 2001,  the Board  approved an increase in the Plan to
     2,500,000 shares subject to the filing of a Registration Statement with the
     Securities and Exchange Commission. The Registration Statement was filed on
     October 11, 2001.


     The weighted  average grant date fair value of options  outstanding at July
     31, 2001 was $5.46 per share.


     The following options were outstanding as at July 31, 2001:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                          Options outstanding                       Options exercisable
                   ------------------------------------------   ---------------------------
                                                     Weighted
                                                      average
                                     Weighted       remaining                      Weighted
                                      average     contractual                       average
                        Number       exercise            life    Exercisable       exercise
                   outstanding          price          (year)        options          price
--------------------------------------------------------------------------------------------
<S>                 <C>              <C>               <C>      <C>                 <C>
 Common shares       1,000,000       $    1.0            7.0    $    200,000        $   1.0

--------------------------------------------------------------------------------------------
</TABLE>




<PAGE>



10.  Stock compensation plan (continued):


     For purposes of computing pro forma loss and loss per share that would have
     resulted if the Company had accounted for its stock option awards under the
     fair value recognition provision of SFAS 123, the fair value of each option
     grant is  estimated  on the date of grant using the fair value  method with
     the following assumptions:

<TABLE>
<CAPTION>
-------------------------------------------------------------------
                                      2000                 2001
-------------------------------------------------------------------
<S>                                 <C>                  <C>
       Volatility                     150%                 181%
       Risk-free interest rate       5.86%                5.41%
       Dividend yield                    -                    -
       Expected life (years)             8                4.5

-------------------------------------------------------------------
</TABLE>


     The table  below sets out the pro forma  amounts of loss and loss per share
     that would have resulted if the Company had accounted for its stock options
     under the fair value recognition provisions of SFAS No. 123.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
                                                               Years ended July 31,
                                                    1999                2000                 2001
--------------------------------------------------------------------------------------------------
                                              (Restated)
<S>                                      <C>                  <C>                  <C>
       Loss for the period:
       As reported                       $     1,234,708      $    6,230,796       $    9,833,568
       Pro forma                               1,234,708           6,244,796           10,065,568

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

       Basic loss per common share:
       As reported                       $          0.41      $         1.73       $         1.44
       Pro forma                                    0.41                1.74                 1.52

--------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>



11.  Provision for income taxes:


     The provision for income taxes differs from the amount computed by applying
     the  statutory  income tax rate to loss before  provision for income taxes.
     The sources and tax effects of the differences are as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                        1999                  2000                 2001
--------------------------------------------------------------------------------------------------------
                                                  (Restated)
<S>                                            <C>                 <C>                   <C>
Basic rate applied to loss before
  provision for income taxes                   $    (538,333)      $    (2,616,000)      $   (4,130,000)
Adjustments resulting from:
    Stock-based compensation
       not deducted for tax                          308,752             1,947,000            3,132,000
    Change in valuation allowance
       due to change in enacted tax rate                   -                     -              255,000
    Other                                             (1,048)              (10,000)              25,000
Change in valuation allowance                         230,629              679,000              718,000

--------------------------------------------------------------------------------------------------------
Provision for income taxes                     $           -       $             -       $            -
--------------------------------------------------------------------------------------------------------
</TABLE>


     Significant components of the Company's deferred tax assets are as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                        1999                  2000                 2001
---------------------------------------------------------------------------------------------------------
                                                  (Restated)
<S>                                            <C>                 <C>                   <C>
Deferred tax asset:
    Benefit of net operating losses
       carried forward                         $     243,087       $       900,000       $    1,532,000
    Amortization                                           -                22,000              108,000
---------------------------------------------------------------------------------------------------------
                                                     243,087               922,000            1,640,000

Less valuation allowance                             243,087               922,000            1,640,000

---------------------------------------------------------------------------------------------------------
                                               $           -       $             -       $            -
---------------------------------------------------------------------------------------------------------
</TABLE>




<PAGE>



11.  Provision for income taxes (continued):


     In assessing the realizability of deferred tax assets, management considers
     whether it is more likely than not that some portion or all of the deferred
     tax assets will not be realized.  The ultimate  realization of deferred tax
     assets is dependent upon the generation of future taxable income during the
     periods in which those temporary differences become deductible.  Management
     considers  projected  future taxable income,  uncertainties  related to the
     industry in which the Company  operates,  and tax  planning  strategies  in
     making this assessment. Due to the uncertainties related to the industry in
     which the Company  operates  and its history of losses,  the tax benefit of
     the above  carried  forward  loss amounts has been  completely  offset by a
     valuation allowance.


     At July 31,  2001,  the  Company  has net  operating  losses for income tax
     purposes of  approximately  $4,200,000,  which will  expire  during 2005 to
     2008.


12.  Related party transactions:


     During 2000, the Company made payments of $26,000 to a corporation owned by
     two senior officers of the Company for management services. No amounts were
     paid during 2001 and 1999.


13.  Stock-based compensation:


     The Company has  recorded  stock-based  compensation  in the  statement  of
     operations as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
                                           1999              2000             2001
------------------------------------------------------------------------------------
<S>                               <C>             <C>               <C>
General and administration        $     479,601   $     1,594,842   $    5,452,389
Financing costs                               -         1,793,165        2,003,598

------------------------------------------------------------------------------------
                                  $     479,601   $     3,388,007   $    7,455,987
------------------------------------------------------------------------------------
</TABLE>




<PAGE>



14.  Segmented information:


     The  Company  currently  operates  in  one  operating  segment,  being  the
     development and marketing of kiosk digital imaging  systems.  Substantially
     all of the Company's  long-lived assets are located in Canada.  The Company
     does not have any significant concentrations of credit risk.


15.  Supplemental cash flow disclosures:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                                     Years ended July 31,
                                                          1999                2000                 2001
--------------------------------------------------------------------------------------------------------
                                                    (Restated)
<S>                                              <C>                <C>                  <C>
Deferred stock-based compensation                $     491,434      $    7,460,236       $    1,152,000
Shares issued as settlement of
  loan payable                                               -              15,414               39,000
Inventory reclassified to property
  and equipment                                              -             290,608                    -
Shares issued as settlement of accrued
  financing fees                                             -                   -            1,012,500
Shares issued as settlement of
  accounts payable                                           -                   -               66,000

--------------------------------------------------------------------------------------------------------
</TABLE>


16.  Loss per share:


     Due to the net loss for all periods presented,  all potential common shares
     outstanding  are  considered   anti-dilutive  and  are  excluded  from  the
     calculation  of  diluted  loss per share.  Common  shares  issuable  on the
     exercise of common  shares  that could  potentially  dilute  basic loss per
     share in the future that were not  included in the  computation  of diluted
     loss per share, because to do so would have been anti-dilutive for the year
     ended July 31,  1999,  2000 and 2001,  and  amounted  to nil,  100,000  and
     1,726,000, respectively.



<PAGE>



17.  Commitments:


     (a)  The Company has entered into various licensing agreements that provide
          for royalty payments of between 5% and 10% of net revenue, and minimum
          royalty payments over the terms of the agreements as follows:

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

           2002          $    295,000
           2003                20,000
           2004                 5,000

          -------------------------------
                         $    320,000
          -------------------------------


     (b)  The  Company  is  committed  to  the  following  payments  for  leased
          premises:

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

          2002           $     88,000
          2003                 81,000

          --------------------------------
                         $    169,000
          --------------------------------


18.  Subsequent events:


     On October 3, 2001, the Company received a loan of $160,000 from a director
     of the Company.  The loan bears interest at 6.25% and entitles the director
     to receive a finance fee of 50,000  common  shares of the Company  prior to
     November  30,  2001.  The loan is secured by ten of the  Company's  Digital
     photo  kiosks.  The loan and  accrued  interest  are to be repaid  from the
     proceeds  of a  potential  financing  of the  Company  which  has not  been
     finalized.


     Subsequent  to year  end,  the  Company  received  a loan in the  amount of
     $55,000 from a third party. The loan is unsecured, non-interest bearing and
     is to be repaid from the  proceeds of a potential  financing of the Company
     which has not been finalized.  The third party is acting as a consultant to
     the Company for this potential financing.


<PAGE>



Item 8.  Changes  In  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

         None.

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act

     (a) Set forth below are the names,  ages,  positions,  with the Company and
business experiences of the executive officers and directors of the Company.


Name                     Age        Position(s) with Company
---------------------    ---        -------------------------
Ronald Terry Cooke       55         President and Chairman

Allan Turowetz           53         Vice President and Director

Jean Arthur Beliveau     70         Director

June Nichols Sweeney     65         Director

James Martin Bates       45         Director

     All  directors  hold office until the next annual  meeting of the Company's
shareholders and until their successors have been elected and qualify.  Officers
serve at the pleasure of the Board of Directors. The officers and directors will
devote such time and effort to the business and affairs of the Company as may be
necessary  to  perform  their  responsibilities  as  executive  officers  and/or
directors of the Company.

Family Relationships

     There are no family  relationships  between or among the executive officers
and directors of the Company.

Business Experience

     Ronald Terry Cooke, age 55, is the President and Chairman of the Board. Mr.
Cooke has a Master of Business  Administration  degree from McMaster  University
and two  undergraduate  degrees  from  the  University  of  Waterloo.  He is the
co-founder of The Nack Company Ltd.,  which recently  introduced a revolutionary
and highly acclaimed new utility knife to the North American  marketplace.  From
1988 to 1997, Mr. Cooke was the Executive Vice-President of Sony of Canada Ltd.,
responsible  for  maximizing  revenues  through  effective  fiscal and operation
management, planning and administration.  He has also held senior positions with
Alexander  Proudfoot and the Canadian  Imperial  Bank of Commerce.  From 1967 to
1985,  he  worked  with  Shell  Canada  and  Shell  Canada  Resources,   holding
increasingly senior positions, including Senior Advisor, Business Development.

     Allan Turowetz, age 53, is the Executive Vice President and Director of the
Company. Mr. Turowetz is a corporate consulting specialist,  sociologist, author
and former professor of The Sociology of Sports at Concordia University.  He has
a Masters degree in Sociology from McGill University and an undergraduate degree
from Sir George Williams University. Over the past 15

                                       29

<PAGE>



years, Mr. Turowetz  provided  corporate  training and team building seminars to
numerous Fortune 100 companies,  including AT&T, Sony and Toshiba.  From 1990 to
1997, he was President of Team Building Associates.  He has also had an academic
career,  including  21 years as  Sessional  Professor  of Sociology at Condordia
University and 14 years a Professor of Sociology at Dawson College.

     Jean Arthur  Beliveau,  age 70, is a Director of the Company.  Mr. Beliveau
played  centerman  for the Montreal  Canadiens for close to twenty (20) seasons,
achieving impressive statistical records that stood for many years. Mr. Beliveau
went on to a twenty two (22) year career as the Canadiens' Senior Vice President
of Corporate  Affairs.  Mr.  Beliveau is also the author of "My Life in Hockey",
the story of his career and his philosophy of winning through teamwork.

     June Nichols  Sweeney,  age 65, is a Director of the Company.  Ms.  Sweeney
currently sits on the board of American  Enterprise.com Corp. and has sat on the
boards of Georgia Certified Development Corp., and TransMillenial Resource Corp.
From  1980-1992,   Ms.  Sweeney  held  positions  with  the  US  Small  Business
Administration   (SBA),   rising  from   Special   Assistant   to  the  Regional
Administrator,  to Regional  Administrator for Region IV, and finally serving as
the Deputy Administrator  during the Bush  Administration.  Ms. Sweeney's public
service includes serving as Advisory  Committee Member to the Export-Import Bank
(1996),  Advisory  Council  Member to the National  Council of Women Advisors to
Congress  (1995-1997)  and Civic  Leader  Representative  to the  United  States
Strategic  Command (1995).  Awards include the "Power of One" Award presented by
Senator Paul Coverdale  (1998),  Presidential  Commendation and the Presidential
Quality and Management  Improvement  Award from  President  George Bush, and the
Small Business  Administrations  Administrator's  Award,  Performance Awards (10
years) and Achievement Award.

     James  Martin  Bates,  age 45, is a  Director  of the  Company.  Mr.  Bates
recently   resigned  as  Senior   Vice-President   of  U.S.  and   International
Distribution  for the Golf Channel in Orlando,  FL. There he was responsible for
worldwide distribution of the network. Mr. Bates attended Springfield College in
Springfield,  ME between 1975 and 1979.  There he earned a degree in  Psychology
and  Political  Science.  He also  holds a  certificate  of study  from  Harvard
University in  Negotiation  for Senior  Executives  and the  Cambridge  Forum in
Executive Leadership.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

     No Director,  Officer,  beneficial  owner of more than ten percent (10%) of
any class of equity  securities of the Company  failed to file on a timely basis
reports  required by Section  16(a) of the  Exchange  Act during the most recent
fiscal year or prior fiscal years.



                                       30

<PAGE>



Item 10. Executive Compensation

<TABLE>
<CAPTION>
                                           Annual
                                           Comp          Annual
                          Annual Comp      Bonus         Comp         LT Comp        LT Comp        LTIP
Name and Post     Year    Salary               ($)       Other        Rest Stock     Options        Payouts      All Other
----------------- ------- -------------    ----------    ---------    ----------     ----------     ----------   ------------
<S>               <C>     <C>               <C>           <C>         <C>            <C>            <C>          <C>
Ronald Terry      1998
Cooke             1999
(1)(3)(5)(6) (7)  2000    $120,000                                                   100,000
                  2001    $120,000

Allan Turowetz    1998
(2)(3)(5)(7)      1999
                  2000    $100,000                                                   100,000
                  2001    $100,000

Jean Arthur       1998
Beliveau (4)(7)   1999
                  2000                                                   200,000     100,000
                  2001       $0

June Nichols      1998
Sweeney (4)(7)    1999
                  2000                                                   100,000     100,000
                  2001       $0

James Martin      1998
Bates(8)          1999
                  2000
                  2001       $0
</TABLE>

(1)  In July 2000, the Company entered into an employment  agreement with Ronald
     Terry Cooke, to employ him as President and CEO of the Company. The term of
     the  agreement is for a period of five (5) years,  beginning  July 1, 2000.
     Mr.  Cooke's  initial basic  compensation  is one hundred  twenty  thousand
     dollars ($120,000) per year. Such salary will be reviewed as appropriate by
     the Board of  Directors  of the Company and may be increased in the Board's
     sole discretion based upon performance.  Mr. Cooke received a signing bonus
     of two hundred  twenty five  thousand  (225,000)  restricted  shares of the
     Company's  common  stock,  which were issued in August  2000,  as well as a
     seventy-five  thousand  dollar  ($75,000)  bonus.  Under  the  terms of the
     employment agreement, Mr. Cooke has the option to purchase up to a total of
     one hundred thousand  (100,000) shares of the Company's  restricted  common
     stock  annually,  which  options are  exercisable  at a price of one dollar
     ($1.00) per share.  The stock  options will begin to vest at the end of the
     employment  year  commencing  on July 1,  2000  and  each  employment  year
     thereafter.  Mr. Cooke will have five (5) years after the shares are vested
     to exercise the options. For such offering, the Company relied upon the 506
     Exemption. No state exemption was necessary because Mr. Cooke is a Canadian
     resident.  ee Part III, Item 11. "Security  Ownership of Certain Beneficial
     Owners

                                       31

<PAGE>



     and Management";  and Part III, Item 12. "Certain Relationships and Related
     Transactions".

(2)  In August 2000, the Company filed a Registration  Statement on Form S-8 for
     the  purpose  of  registering  the  Company's  Year 2000  Consultant  Stock
     Compensation Plan. Pursuant to such plan, the Company issued 105,000 shares
     of its common stock to Allan Turowetz, the Company's current Vice-President
     and  Director.  ee Part  III,  Item  11.  "Security  Ownership  of  Certain
     Beneficial  Owners  and  Management";  and  Part  III,  Item  12.  "Certain
     Relationships and Related Transactions".

(3)  In August 2000, the Company issued 120,000 shares of its restricted  common
     stock to TPE, which is beneficially  owned by both Ronald Terry Cooke,  the
     Company's current President and Chairman and Allan Turowetz,  the Company's
     current  Vice-President  and Director as full and final repayment of a loan
     by TPE to PPK. For such offering, the Company relied upon the 506 Exemption
     and no state exemption,  as TPE is located in Canada. ee Part III, Item 11.
     "Security Ownership of Certain Beneficial Owners and Management";  and Part
     III, Item 12. "Certain Relationships and Related Transactions".

(4)  In September 2000, the Company's Board of Directors increased the number of
     director   positions   from  two  (2)  to  four  (4)  and  appointed   June
     Nichols-Sweeney  and Jean  Beliveau to fill the vacancies  created  thereby
     until the next  meeting  of the  shareholders.  The  Company  approved  the
     issuance  of  100,000  and  200,000  shares  of its  common  stock  to them
     respectively,  although the shares were not actually  issued until November
     2000.  The Company also granted the new  directors  warrants to purchase an
     additional  100,000 shares each,  exercisable at a price of $1.00 per share
     for a period of three (3) years.  Ms.  Sweeney  may  exercise  the right to
     purchase a maximum of 25,000 shares every quarter, whereas Mr. Beliveau has
     the same right  beginning  May 1,  2001.  In June  2001,  the Mr.  Beliveau
     returned his shares to the Company for  cancellation and they were returned
     to the Company's authorized,  but unissued common stock. For such offering,
     the Company  relied on the 506 Exemption and Section  10-5-9 of the Georgia
     Code. No state exemption was required for the issuance to Jean Beliveau, as
     he is a Canadian  resident.  ee Part III, Item 11.  "Security  Ownership of
     Certain Beneficial Owners and Management";  and Part III, Item 12. "Certain
     Relationships and Related Transactions".

(5)  In November 2000,  the Company filed a  Registration  Statement on Form S-8
     for its Year 2000 Supplemental Employee/Consultant Stock Compensation Plan.
     60,000  shares of the  Company's  common  stock were  issued each to Ronald
     Terry Cooke,  the  Company's  current  President  and Chairman and to Allan
     Turowetz, the Company's current Vice-President and Director. 290,000 shares
     were issued each to Donald F. Mintmire, legal counsel to the Company and to
     Noreen  Wilson,  a  consultant  to the  Company.  See  Part  III,  Item 11.
     "Security Ownership of Certain Beneficial Owners and Management";  and Part
     III, Item 12. "Certain Relationships and Related Transactions".

(6)  In March 2001,  Ronald  Terry Cooke,  the  Company's  current  Chairman and
     President loaned the Company $90,000.  The loan is not evidenced by a note,
     bears  no  interest  and is  payable  on  demand.  See Part  III,  Item 11.
     "Security Ownership of Certain Beneficial Owners and Management";  and Part
     III, Item 12. "Certain Relationships and Related Transactions".

(7)  In April  2001,  the  Company,  at a  meeting  of the  Board of  Directors,
     approved the  issuance of warrants to purchase  40,000,  200,000,  250,000,
     250,000, 200,000, 200,000 and 15,000 shares of the Company's

                                       32

<PAGE>



     common  stock  exercisable  at a price of $0.25  per  share for a period of
     three  (3)  years to  Evelyn  Armstrong,  Jeff  Baun,  Allan  Turowetz  the
     Company's  current  Vice  President  and  Director,  Ronald Terry Cooke the
     Company's current President and Chairman,  Jean Beliveau a current Director
     of the Company,  June Nichols-Sweeney a current Director of the Company and
     Greg Woodall respectively pursuant to a Registration  Statement on Form S-8
     to be filed by the  Company.  The Company  also  approved  the  issuance of
     100,000,  700,000,  40,000 and 300,000 shares of the Company's common stock
     to be issued to Robert Delvecchio,  Noreen Wilson, Dmitry Ivanov and Donald
     Mintmire respectively pursuant to the same S-8 Registration Statement.  The
     Board also approved the cancellation of 60,000, 200,000, 200,000 and 60,000
     shares of the  Company's  common  stock  previously  issued to Ronald Terry
     Cooke the Company's current President and Chairman, Jean Beliveau a current
     Director of the Company,  June  Nichols-Sweeney  a current  Director of the
     Company  and Allan  Turowetz  the  Company's  current  Vice  President  and
     Director respectively.  The Board also rescinded a $75,000 bonus previously
     awarded to Allan  Turowetz  and a $75,000  bonus  awarded  to Ronald  Terry
     Cooke.  See Part III, Item 11.  "Security  Ownership of Certain  Beneficial
     Owners and Management";  and Part III, Item 12. "Certain  Relationships and
     Related Transactions".

(8)  In July 2001,  pursuant to the Company's Bylaws,  the Company increased the
     number of  directors  from five (5) to six (6).  The  Directors  filled the
     vacancy with James  Martin  Bates,  who will serve as a Director  until the
     next  annual  meeting  of  the   shareholders.   In  connection   with  his
     appointment,  in October 2001,  the Company  issued  100,000  shares of its
     restricted common stock to Mr. Bates as compensation for bona fide services
     to the Company. For such offering,  the Company relied on the 506 exemption
     and  Section  517.061(11)  of the  Florida  Code.  See Part  III,  Item 11.
     "Security Ownership of Certain Beneficial Owners and Management";  and Part
     III, Item 12. "Certain Relationships and Related Transactions".

Compensation of Directors

     The Company has no standard  arrangements for compensating the directors of
the Company for their attendance at meetings of the Board of Directors.

Item 11. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth  information as of July 31, 2001,  regarding
the ownership of the  Company's  Common Stock by each  shareholder  known by the
Company  to be the  beneficial  owner  of more  than  five  percent  (5%) of its
outstanding shares of common stock, each director and all executive officers and
directors as a group.  Except as otherwise  indicated,  each of the shareholders
has sole voting and  investment  power with respect to the share of common stock
beneficially owned.



                                       33

<PAGE>


<TABLE>
<CAPTION>
Name and Address of           Title of         Amount and Nature of       Percent of
Beneficial Owner               Class            Beneficial Owner             Class
---------------------------  -----------    --------------------------    ----------
<S>                           <C>              <C>                         <C>
Ronald Terry Cooke(1)(2)(4)   Common           1,704,846                    24.4%
(7)(8)(9)

Allan Turowetz(1)(3)(4)(7)    Common           1,328,146                    19.0%
(9)

Jean Arthur Beliveau(1)(5)    Common                   0                       0%
(9)

June Nichols Sweeney(1)(5)    Common             100,000                     1.4%
(9)

James Martin Bates(1)(10)     Common                   0                       0%

All Executive Officers and
Directors as a Group
[five (5) persons]            Common           3,269,692                    46.8%

Thomson Kernaghan &           Common             600,000                     8.6%
Co., Ltd.(1)(6)
----------
</TABLE>

(9)  The address for each of the above is c/o Power Interactive Media, Inc., 181
     Whitehall  Drive,  Markham,  Ontario,  Canada  L3R 9T1,  except  for Thomas
     Kernaghan & Co. Ltd, whose address is 65 Bay Street,  10th Floor,  Toronto,
     Ontario M5H 2V2.

(10) In July 2000, the Company entered into an employment  agreement with Ronald
     Terry Cooke, to employ him as President and CEO of the Company. The term of
     the  agreement is for a period of five (5) years,  beginning  July 1, 2000.
     Mr.  Cooke's  initial basic  compensation  is one hundred  twenty  thousand
     dollars ($120,000) per year. Such salary will be reviewed as appropriate by
     the Board of  Directors  of the Company and may be increased in the Board's
     sole discretion based upon performance.  Mr. Cooke received a signing bonus
     of two hundred  twenty five  thousand  (225,000)  restricted  shares of the
     Company's  common  stock,  which were issued in August  2000,  as well as a
     seventy-five  thousand  dollar  ($75,000)  bonus.  Under  the  terms of the
     employment agreement, Mr. Cooke has the option to purchase up to a total of
     one hundred thousand  (100,000) shares of the Company's  restricted  common
     stock  annually,  which  options are  exercisable  at a price of one dollar
     ($1.00) per share.  The stock  options will begin to vest at the end of the
     employment  year  commencing  on July 1,  2000  and  each  employment  year
     thereafter.  Mr. Cooke will have five (5) years after the shares are vested
     to exercise the options. For such offering, the Company relied upon the 506
     Exemption. No state exemption was necessary because Mr. Cooke is a Canadian
     resident.  ee  Part  III,  Item  12.  "Certain  Relationships  and  Related
     Transactions".


                                       34

<PAGE>



(11) In August 2000, the Company filed a Registration  Statement on Form S-8 for
     the  purpose  of  registering  the  Company's  Year 2000  Consultant  Stock
     Compensation Plan. Pursuant to such plan, the Company issued 105,000 shares
     of its common stock to Allan Turowetz, the Company's current Vice-President
     and Director.  ee Part III,  Item 12.  "Certain  Relationships  and Related
     Transactions".

(12) In August 2000, the Company issued 120,000 shares of its restricted  common
     stock to TPE, which is beneficially  owned by both Ronald Terry Cooke,  the
     Company's current President and Chairman and Allan Turowetz,  the Company's
     current  Vice-President  and Director as full and final repayment of a loan
     by TPE to PPK. For such offering, the Company relied upon the 506 Exemption
     and no state exemption,  as TPE is located in Canada. ee Part III, Item 12.
     "Certain Relationships and Related Transactions".

(13) In September 2000, the Company's Board of Directors increased the number of
     director   positions   from  two  (2)  to  four  (4)  and  appointed   June
     Nichols-Sweeney  and Jean  Beliveau to fill the vacancies  created  thereby
     until the next  meeting  of the  shareholders.  The  Company  approved  the
     issuance  of  100,000  and  200,000  shares  of its  common  stock  to them
     respectively,  although the shares were not actually  issued until November
     2000.  The Company also granted the new  directors  warrants to purchase an
     additional  100,000 shares each,  exercisable at a price of $1.00 per share
     for a period of three (3) years.  Ms.  Sweeney  may  exercise  the right to
     purchase a maximum of 25,000 shares every quarter, whereas Mr. Beliveau has
     the same right  beginning  May 1,  2001.  In June  2001,  the Mr.  Beliveau
     returned his shares to the Company for  cancellation and they were returned
     to the Company's authorized,  but unissued common stock. For such offering,
     the Company  relied on the 506 Exemption and Section  10-5-9 of the Georgia
     Code. No state exemption was required for the issuance to Jean Beliveau, as
     he is a Canadian resident. ee Part III, Item 12. "Certain Relationships and
     Related Transactions".

(14) In October 2000, the Company  executed a promissory  note in favor of TK in
     the principal amount of $110,000.  The Company actually received  $100,000,
     as $10,000 was deducted as an agent fee. The note bears  interest at a rate
     of ten percent (10%) per annum and is for a term of one (1) year.  For such
     offering, the Company relied upon the 506 Exemption. No state exemption was
     necessary  because the investor is a foreign entity located in Canada.  See
     Part III, Item 12. "Certain Relationships and Related Transactions".

(15) In November 2000,  the Company filed a  Registration  Statement on Form S-8
     for its Year 2000 Supplemental Employee/Consultant Stock Compensation Plan.
     60,000  shares of the  Company's  common  stock were  issued each to Ronald
     Terry Cooke,  the  Company's  current  President  and Chairman and to Allan
     Turowetz, the Company's current Vice-President and Director. 290,000 shares
     were issued each to Donald F. Mintmire, legal counsel to the Company and to
     Noreen Wilson, a consultant to the Company. See Part III, Item 12. "Certain
     Relationships and Related Transactions"

(16) In March 2001,  Ronald  Terry Cooke,  the  Company's  current  Chairman and
     President loaned the Company $90,000.  The loan is not evidenced by a note,
     bears no interest and is payable on demand. See Part III, Item 12. "Certain
     Relationships and Related Transactions".

(17) In April  2001,  the  Company,  at a  meeting  of the  Board of  Directors,
     approved the  issuance of warrants to purchase  40,000,  200,000,  250,000,
     250,000,  200,000,  200,000 and 15,000 shares of the Company's common stock
     exercisable  at a price of $0.25  per share for a period of three (3) years
     to Evelyn  Armstrong,  Jeff Baun, Allan Turowetz the Company's current Vice
     President and Director,  Ronald Terry Cooke the Company's current President
     and Chairman, Jean Beliveau a current Director of the Company,

                                       35

<PAGE>



     June  Nichols-Sweeney  a current  Director of the Company and Greg  Woodall
     respectively  pursuant to a Registration  Statement on Form S-8 to be filed
     by the Company. The Company also approved the issuance of 100,000, 700,000,
     40,000 and 300,000  shares of the  Company's  common  stock to be issued to
     Robert  Delvecchio,  Noreen  Wilson,  Dmitry  Ivanov  and  Donald  Mintmire
     respectively  pursuant to the same S-8  Registration  Statement.  The Board
     also  approved  the  cancellation  of 60,000,  200,000,  200,000 and 60,000
     shares of the  Company's  common  stock  previously  issued to Ronald Terry
     Cooke the Company's current President and Chairman, Jean Beliveau a current
     Director of the Company,  June  Nichols-Sweeney  a current  Director of the
     Company  and Allan  Turowetz  the  Company's  current  Vice  President  and
     Director respectively.  The Board also rescinded a $75,000 bonus previously
     awarded to Allan  Turowetz  and a $75,000  bonus  awarded  to Ronald  Terry
     Cooke.  See  Part  III,  Item  12.  "Certain   Relationships   and  Related
     Transactions".

(18) In July 2001,  pursuant to the Company's Bylaws,  the Company increased the
     number of  directors  from five (5) to six (6).  The  Directors  filled the
     vacancy with James  Martin  Bates,  who will serve as a Director  until the
     next  annual  meeting  of  the   shareholders.   In  connection   with  his
     appointment,  in October 2001,  the Company  issued  100,000  shares of its
     restricted common stock to Mr. Bates as compensation for bona fide services
     to the Company. For such offering,  the Company relied on the 506 exemption
     and  Section  517.061(11)  of the  Florida  Code.  See Part  III,  Item 12.
     "Certain Relationships and Related Transactions".

     There are no arrangements  which may result in the change of control of the
Company.

Item 12. Certain Relationships and Related Transactions

     In January 2000, PPK, prior to its acquisition by the Company, entered into
negotiations  with Remington  regarding a share  exchange,  whereby PPK would be
acquired  in a reverse  acquisition  by  Remington  in  exchange  for  shares in
Remington.  Rhonda brokered the deal,  which was never  consummated.  Since that
time,  Rhonda has made certain claims to PPK regarding  monies and time expended
on PPK's behalf. In August 2000, the Company agreed to pay Rhonda $25,000 and to
issue  Rhonda  225,000  shares of its  restricted  common  stock with piggy back
registration  rights in exchange for a general  release in favor of both PPK and
the Company.  The Company  issued the 225,000  shares in October 2000.  For such
offering,  the Company  relied upon the 506  Exemption  and no state  exemption,
since Rhonda is located in Canada.

     In June 2000, the Company  executed a promissory note in favor of TK in the
principal  amount of $250,000.  The loan had a maturity date of August 31, 2000.
In December  2000,  TK converted  all  outstanding  principal  and interest into
250,000 shares of the restricted common stock of the Company. For such offering,
the Company  relied upon the 506  Exemption.  No state  exemption  was necessary
because the investor is a foreign entity located in Canada.

     In July 2000, the Company entered into an employment  agreement with Ronald
Terry Cooke, to employ him as President and CEO of the Company.  The term of the
agreement is for a period of five (5) years, beginning July 1, 2000. Mr. Cooke's
initial basic compensation is one hundred twenty thousand dollars ($120,000) per
year.  Such salary will be reviewed as  appropriate by the Board of Directors of
the  Company and may be  increased  in the Board's  sole  discretion  based upon
performance.  Mr.  Cooke  received a signing  bonus of two  hundred  twenty five
thousand  (225,000)  restricted shares of the Company's common stock, which were
issued in August  2000,  as well as a  seventy-five  thousand  dollar  ($75,000)
bonus. Under the terms of the employment agreement,  Mr. Cooke has the option to
purchase up to a total of one hundred thousand (100,000)

                                       36

<PAGE>



shares of the  Company's  restricted  common stock  annually,  which options are
exercisable at a price of one dollar  ($1.00) per share.  The stock options will
begin to vest at the end of the employment  year  commencing on July 1, 2000 and
each  employment year  thereafter.  Mr. Cooke will have five (5) years after the
shares are vested to exercise the options. For such offering, the Company relied
upon the 506 Exemption.  No state exemption was necessary because Mr. Cooke is a
Canadian resident.

     In August 2000, the Company filed a Registration  Statement on Form S-8 for
the purpose of registering the Company's Year 2000 Consultant Stock Compensation
Plan.  Pursuant to such plan,  the Company  issued  105,000 shares of its common
stock to Allan Turowetz, the Company's current Vice-President and Director.

     In August 2000, the Company issued 120,000 shares of its restricted  common
stock to TPE,  which is  beneficially  owned by both  Ronald  Terry  Cooke,  the
Company's  current  President  and Chairman and Allan  Turowetz,  the  Company's
current Vice-President and Director as full and final repayment of a loan by TPE
to PPK. For such  offering,  the Company  relied upon the 506  Exemption  and no
state exemption, as TPE is located in Canada.

     In August  2000,  the Company  entered  into an  agreement  with  Discovery
Enterprises,   Inc.  d/b/a  Discovery  Financial,   Inc.  to  provide  financial
consulting  and  business  advisory  services  including  a  complete  investors
relations program for the Company. The term of the contract expired February 23,
2001.  For such  services,  the Company issued 20,000 shares of its common stock
upon execution of the agreement.  For such offering, the Company relied upon the
506 Exemption and Section 517.061(11) of the Florida code.

     In September 2000, the Company's Board of Directors increased the number of
director  positions from two (2) to four (4) and appointed June  Nichols-Sweeney
and Jean Beliveau to fill the vacancies  created  thereby until the next meeting
of the  shareholders.  The Company  approved the issuance of 100,000 and 200,000
shares of its common  stock to them  respectively,  although the shares were not
actually  issued until November 2000. The Company also granted the new directors
warrants to purchase an additional  100,000 shares each,  exercisable at a price
of $1.00 per share for a period of three (3) years. Ms. Sweeney may exercise the
right to purchase a maximum of 25,000 shares every quarter, whereas Mr. Beliveau
has the same  right  beginning  May 1,  2001.  In June  2001,  the Mr.  Beliveau
returned his shares to the Company for  cancellation  and they were  returned to
the Company's  authorized,  but unissued  common stock.  For such offering,  the
Company  relied on the 506 Exemption and Section  10-5-9 of the Georgia Code. No
state  exemption  was  required for the  issuance to Jean  Beliveau,  as he is a
Canadian resident.

     In October 2000, the Company  executed a promissory  note in favor of TK in
the principal amount of $110,000.  The Company actually  received  $100,000,  as
$10,000 was deducted as an agent fee.  The note bears  interest at a rate of ten
percent  (10%) per annum and is for a term of one (1) year.  For such  offering,
the Company  relied upon the 506  Exemption.  No state  exemption  was necessary
because the investor is a foreign entity located in Canada.

     In November 2000,  the Company filed a  Registration  Statement on Form S-8
for its Year 2000  Supplemental  Employee/Consultant  Stock  Compensation  Plan.
60,000  shares of the  Company's  common  stock were issued each to Ronald Terry
Cooke, the Company's current  President and Chairman and to Allan Turowetz,  the
Company's current  Vice-President and Director.  290,000 shares were issued each
to Donald F.  Mintmire,  legal  counsel to the Company and to Noreen  Wilson,  a
consultant to the Company.

     In November 2000, the Company sold 100,000 shares of its restricted  common
stock to EIG Capital

                                       37

<PAGE>



Investments,  Ltd., a Bermuda limited partnership,  for $200,000.  Additionally,
the Company  issued  warrants to purchase an  additional  100,000  shares of its
restricted  common  stock at an exercise  price of $0.0001 per share,  which are
exercisable for a period of three (3) years. The shares of stock sold as well as
the warrant shares carry  mandatory  registration  rights.  If the  registration
statement is not declared effective with two hundred ten (210) days of execution
of the  original  agreement,  the Company  must pay a cash penalty of $4,000 per
month until the  registration  is declared  effective.  For such  offering,  the
Company relied upon the 506 Exemption.  No state exemption was required,  as the
purchaser is a foreign entity.

     In November 2000, the Company entered into a consulting  services agreement
with  World of  Internet.com  AG,  a German  corporation  to  provide  corporate
financial and investment  advisory services,  specifically  focusing on European
markets.  The term of the  agreement is until three (3) months from the date the
Company's corporate profile is posted on  www.stockreporter.de.  The Company was
required to pay an engagement  fee of $173,750 or 40,882 shares of the Company's
free trading common stock which has been registered with the SEC.

     In March 2001,  Ronald  Terry Cooke,  the  Company's  current  Chairman and
President loaned the Company $90,000. The loan is not evidenced by a note, bears
no interest and is payable on demand.

     In April  2001,  the  Company,  at a  meeting  of the  Board of  Directors,
approved the issuance of warrants to purchase 40,000, 200,000, 250,000, 250,000,
200,000,  200,000 and 15,000 shares of the Company's common stock exercisable at
a price of $0.25 per share for a period of three (3) years to Evelyn  Armstrong,
Jeff Baun,  Allan  Turowetz the Company's  current Vice  President and Director,
Ronald Terry Cooke the Company's current President and Chairman, Jean Beliveau a
current Director of the Company,  June Nichols-Sweeney a current Director of the
Company and Greg Woodall  respectively  pursuant to a Registration  Statement on
Form S-8 to be filed by the Company.  The Company also  approved the issuance of
100,000,  700,000, 40,000 and 300,000 shares of the Company's common stock to be
issued to Robert  Delvecchio,  Noreen Wilson,  Dmitry Ivanov and Donald Mintmire
respectively  pursuant to the same S-8  Registration  Statement.  The Board also
approved the cancellation of 60,000,  200,000,  200,000 and 60,000 shares of the
Company's  common stock  previously  issued to Ronald Terry Cooke the  Company's
current President and Chairman, Jean Beliveau a current Director of the Company,
June  Nichols-Sweeney  a current  Director of the Company and Allan Turowetz the
Company's  current  Vice  President  and Director  respectively.  The Board also
rescinded a $75,000  bonus  previously  awarded to Allan  Turowetz and a $75,000
bonus awarded to Ronald Terry Cooke.

     In April 2001,  the Company  engaged  the  services of Business  Strategies
Group LLC ("BSG") as an advisor to the Company for transactional,  strategic and
capital  raising  activities.  The  agreement  is for a  period  of one (1) year
commencing  March 19, 2001. For their services,  BSG is to receive 10,000 shares
of the Company's common stock,  warrants to purchase an additional 50,000 shares
at an  exercise  price  of $0.50  per  share.  Upon  completion  of a  financing
transaction  of at least  $4,000,000,  BSG is to receive  warrants  to  purchase
160,000  shares of the Company's  common stock at an exercise price of $2.50 per
share. All warrants to be issued expire in two (2) years.  Additionally,  BSG is
to receive a cash fee of four  percent (4%) of all money raised from BSG sources
and a stock fee of three percent (3%).  BSG is also to receive  Company stock in
connection  with the  placement  of  either  conventional  photo  kiosks or baby
kiosks,  a percentage of gross picture  revenues and an  advertising  commission
payable in cash. No shares or warrants have been issued to date.

     In April 2001,  the Authority set forth  proposed  financing  terms for the
planned  building of a Company  manufacturing  facility in Macon,  Georgia.  The
Authority  will lend up to  $10,000,000  to the  Company  in the form of revenue
bonds for the project.  The project is to be planned,  designed and  constructed
during the years 2001 and 2002,  with  completion  scheduled for December  2002.
During the term in which the revenue bonds

                                       38

<PAGE>



are outstanding, the Authority will hold fee simple title to all of the elements
of the project  which are acquired  with bond proceeds and lease the same to the
Company.

     In June 2001,  the Company  entered  into an  agreement  with ORP LLC which
terminated an earlier  contract  dated January 18, 2001 between the parties.  To
induce ORP LLC to terminate the contract,  the Company committed to issue 12,000
shares of its  unrestricted  common stock and warrants to purchase an additional
50,000 shares of the Company's  common stock at a price of $2.00 per share.  For
such offering,  the Company  relied on the 506 Exemption.  The Company failed to
file an M-11 with the state of New York as of the date of this  filing,  however
they have not yet issued the securities.

     In July 2001,  pursuant to the Company's Bylaws,  the Company increased the
number of directors  from five (5) to six (6). The Directors  filled the vacancy
with James  Martin  Bates,  who will serve as a Director  until the next  annual
meeting of the  shareholders.  In connection  with his  appointment,  in October
2001, the Company  issued  100,000 shares of its restricted  common stock to Mr.
Bates as compensation for bona fide services to the Company.  For such offering,
the Company  relied on the 506 exemption and Section  517.061(11) of the Florida
Code.

     In October 2001, the Company filed a Registration Statement on Form S-8 for
its Year 2001 Supplemental  Employee/Consultant  Stock  Compensation Plan. Since
that time,  20,000 shares of the Company's  common stock have been issued to the
Company's transfer agent.

     Since February  2000,  the Company has raised a total of  $876,912.27  from
private sales of its restricted  common stock to fifty (50) investors.  For such
offering, the Company relied upon the 506 Exemption,  Section 517.061(11) of the
Florida Code, Section 10-5-9 of the Georgia Code,  Section  49:3-50(b)(9) of the
New Jersey Code and Section 201 of the Pennsylvania Code.

Item 13. Exhibits and Reports on Form 8-K.

     (a) The exhibits  required to be filed  herewith by Item 601 of  Regulation
S-B, as described in the following index of exhibits, are incorporated herein by
reference, as follows:

Exhibit No.       Exhibit Name
--------------    ---------------------
<TABLE>
<S>      <C>      <C>
3(i).1   [1]      Articles of Incorporation filed September 9, 1994.

3(i).2   [1]      Articles of Amendment filed October 1, 1999.

3(i).3   [3]      Articles of Amendment filed March 2, 2000.

3(i).4   [11]     Articles of Amendment filed March 1, 2001.

3(ii).1  [1]      By-laws.

4.1      [2]      Share Exchange Agreement between the Company, Power Photo Kiosks, Inc. and the
                  shareholders of Power Photo Kiosks, Inc. dated February 23, 2000.
</TABLE>


                                       39

<PAGE>


<TABLE>
<S>      <C>      <C>
4.2      [5]      Loan Agreement between Power Photo Kiosks, Inc. and MLIC Holdings, Inc. dated May 1999.

4.3      [5]      Loan Extension between Power Photo Kiosks, Inc. and MLIC Holdings, Inc. dated July 1999.

4.4      [5]      Loan Extension between Power Photo Kiosks, Inc. and MLIC Holdings, Inc. dated September
                  1999.

4.5      [5]      Common Stock Purchase Agreement with Thomson Kernaghan & Co., Ltd., as Agent dated
                  February 2000.

4.6      [9]      Promissory Note by the Company in favor of Thomson Kernaghan & Co., Ltd. dated June 5,
                  2000.

4.7      [9]      Promissory Note by the Company in favor of Thomson Kernaghan & Co., Ltd. dated October 26,
                  2000.

5.1      [6]      Opinion of Mintmire & Associates.

5.2      [8]      Opinion of Mintmire & Associates.

5.3      [13]     Opinion of Mintmire & Associates

10.1     [5]      Revised Licensing Agreement between Power Photo Enterprises, Inc. and Licensing Resource
                  Group, Inc. dated October 1998.

10.2     [5]      Licensing Agreement between Power Photo Enterprises, Inc. and Titan Sports, Inc. dated October
                  1998.

10.3     [5]      Master Merchandising License Agreement between Power Photo Kiosks, Inc. and Universal
                  Studios Licensing, Inc. dated September 1999.

10.4     [5]      Teaming Agreement between Power Photo Kiosks, Inc., Sybase Canada Limited, Advanced
                  Kiosk Services, Inc. and Integrated Kiosks, Inc. dated November 1999.

10.5     [5]      License Agreement between Power Photo Kiosks, Inc. and The Ohio State University dated
                  February 2000.

10.6     [5]      Manufacturing Agreement between Power Photo Kiosks, Inc. and Integrated Kiosk, Inc. dated
                  May 1999.

10.7     [6]      Power Kiosks, Inc.  Year 2000 Consultant Stock Compensation Plan

10.8     [8]      Power Kiosks, Inc. Year 2000 Supplemental Employee/Consultant Stock Compensation Plan.

10.9     [9]      Lease Agreement between Team Power Enterprises, Inc. and Bruce N. Huntley Contracting
                  Limited, dated July 1, 1998.
</TABLE>


                                       40

<PAGE>


<TABLE>
<S>      <C>      <C>
10.10    [9]      Financial Consulting and Services Agreement between the Company and Discovery Enterprises,
                  Inc. d/b/a Discovery Financial, Inc. dated August 23, 2000.

10.11    [9]      Teaming Agreement between Power Photo Kiosks, Inc. and Mattel Canada, Inc. dated September
                  18, 2000.

10.12    [9]      Co-Marketing and Sponsorship Agreement between the Company, PACEL Corp. and Child
                  Watch of North America dated October 11, 2000.

10.13    [9]      Letter of Intent between Power Photo Kiosks, Inc. and Groome Capital. Com, Inc. dated October
                  12, 2000.

10.14    [9]      Employment Agreement between Power Kiosks, Inc. and Ronald Terry Cooke, dated July 2000.

10.15    [9]      Employment Agreement between Power Kiosks, Inc. and Allan Turowetz, dated July 2000.

10.16    [10]     Common Stock Purchase Agreement between the Company and EIG Capital Investments, Ltd.
                  dated November 9, 2000.

10.17    [10]     Registration Rights Agreement between the Company and EIG Capital Investments, Ltd. dated
                  November 9, 2000.

10.18    [10]     Purchaser's Warrant in the name of EIG Capital Investments, Ltd. dated November 9, 2000.

10.19    [10]     Agent's Warrant in the name of EIG Capital Management, Ltd. dated November 9, 2000.

10.20    [10]     Conversion of Note by the Company in favor of Thomson Kernaghan & Co., Ltd. in the principal
                  amount of $250,000 dated June 5, 2000.

10.21    [11]     Consulting Services Agreement between the Company and World of Internet.com AG dated
                  November 15, 2000.

10.22    [11]     Installation Agreement between Power Photo Kiosks, Inc. and Clark Memorial Hospital dated
                  January 15, 2001.

10.23    [11]     Letter of Intent between Power Photo Kiosks, Inc., Playtime Entertainment, Inc. and KRI Canada
                  Ltd. dated November 21, 2000.

10.24    [12]     Letter of Engagement between Power Photo Kiosks, Inc. and Peyser Associates Incorporated
                  dated March 26, 2001.

10.25    [12]     Partnership Agreement between the Company and Child Watch of North America dated April 4,
                  2001.

10.26    [12]     Engagement Letter of Business Strategies Group by the Company dated April 30, 2001.

10.27    [12]     Macon-Bibb County Industrial Authority Financing Proposal dated April 18, 2001.
</TABLE>

                                       41

<PAGE>


<TABLE>
<S>      <C>      <C>
10.28    [13]     Power Interactive Media, Inc. Year 2001  Employee/Consultant Stock Compensation Plan.

16.1     [4]      Letter on change of certifying accountant.

16.2     [4]      Letter dated May 1, 2000 from Dorra Shaw & Dugan.

23.1     [6]      Consent of KPMG, LLP.

23.2     [6]      Consent of Mintmire & Associates (contained  in  the opinion filed as Exhibit 5.1)

23.3     [8]      Consent of KPMG, LLP.

23.4     [8]      Consent of Mintmire & Associates (contained in the opinion filed as Exhibit 5.2).

23.5     [13]     Consent of KPMG, LLP.

23.6     [13]     Consent of Mintmire & Associates (contained in the opinion filed as Exhibit 5.3 hereof).

99.1     [4]      Board Resolution dated May 1, 2000 authorizing change in fiscal year of the Company to July
                  31.

99.2     [7]      The accountant's statement required by Rule 12b-25(c).
------------------------------------------------
</TABLE>

[1] Previously filed with the Company's registration on Form 10SB.

[2] Previously filed with the Company's report on Form 8K filed March 9, 2000.

[3]  Previously  filed  with the  Company's  report on Form 10QSB for the period
ending February 29, 2000.

[4] Previously filed with the Company's report on Form 8KA1 filed May 2, 2000.

[5]  Previously  filed  with the  Company's  report on Form 10QSB for the period
ending April 30, 2000.

[6] Previously filed with the Company's Registration Statement on Form S-8 filed
August 2, 2000.

[7] Previously filed with the Company's 12b-25 NT filed on October 30, 2000.

[8] Previously filed with the Company's Registration Statement on Form S-8 filed
November 1, 2000.

[9]  Previously  filed with the  Company's  Annual  Report on Form  10KSB  filed
November 14, 2000.

[10] Previously  filed with the Company's  Quarterly  Report on Form 10QSB filed
December 15, 2000.

[11] Previously  filed with the Company's  Quarterly  Report on Form 10QSB filed
March 26, 2001.

[12] Previously  filed with the Company's  Quarterly  Report on Form 10QSB filed
June 19, 2001.

                                       42

<PAGE>



[13]  Previously  filed with the  Company's  Registration  Statement on Form S-8
filed October 11, 2001.

*        Filed herewith.

     (b) The  Company  filed a report on Form 8K on March 9, 2000 in  connection
with  the  Company's  acquisition  of  Power  Photo  Kiosks,  Inc.,  a  Canadian
corporation.

The Company filed a report on Form 8KA1 on May 2, 2000  dismissing  Dorra Shaw &
Dugan and retaining KPMG, LLP as its auditors. Additionally, the Company changed
its fiscal year to July 31.

The  Company  filed a report  on Form  8KA2 on May 8,  2000  with  the  required
financial  statements  pursuant  to its first  report on Form 8K dated  March 9,
2000.

The  Company  filed a report on Form 8KA3 on October 31, 2000 for the purpose of
providing adjusted financial statements and pro forma financial  information for
Power Photo Kiosks, Inc., a Canadian corporation,  as required by Item 7 of Form
8-K.


                                       43

<PAGE>


                                   SIGNATURES

         In accordance with Section 13 and 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                          Power Interactive Media, Inc.
                                  (Registrant)

Date: Nov. 13, 2001       By:
                               --------------------------------------------
                               Ronald Terry Cooke, President and Chairman

                          By:
                               --------------------------------------------
                               Allan Turowetz, Vice President and Director

                          By:
                               --------------------------------------------
                               Jean Arthur Beliveau, Director

                          By:
                               --------------------------------------------
                               June Nichols Sweeney, Director

                          By:
                               --------------------------------------------
                               James Martin Bates, Director

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

Signature                           Title                         Date


---------------------------   President and Chairman             Nov. 13, 2001
Ronald Terry Cooke


---------------------------   Vice President and Director        Nov. 13, 2001
Allan Turowetz


---------------------------   Director                           Nov. 13, 2001
Jean Arthur Beliveau


---------------------------   Director                           Nov. 13, 2001
June Nichols Sweeney


---------------------------   Director                           Nov. 13, 2001
James Martin Bates

                                       44