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

                                    FORM 20-F

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

                   For the fiscal year ended December 31, 2000
                        Commission File Number 000-23785

                                 ACTFIT.COM INC.
                   (formerly Lasermedia Communications Corp.)
               (Exact Name of Company as Specified in Its Charter)

                                 ONTARIO, CANADA
                 (Jurisdiction of Incorporation or Organization)

          124 Merton Street, Suite 503, Toronto, Ontario Canada M4S 2Z2
                     (Address of Principal Executive Office)

Securities  registered or to be registered  pursuant to Section12(b) of the Act:
                                      None

Securities registered or to be registered pursuant to Section 12(g) of the Act:

                                  COMMON STOCK
                                (Title of Class)

Securities for which there is a reporting  obligation  pursuant to Section 15(d)
of the Act: None

Number of  outstanding  shares of the  issuer's  common stock as of December 31,
2000: 36,191,322

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                 YES [ ] NO [X]

Indicate by check mark which financial statement item the registrant has elected
to follow:

                             Item 17 [X] Item 18 [ ]

<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
<S>                                                                                            <C>
SECTION                                                                                        PAGE
-------                                                                                        ----
                                     PART I
                                     ------

Item 1.  IDENTITY OF DIRECTORS, SENIOR MAMAGEMENT AND ADVISOR.....................................2
Item 2.  OFFER STATISTICE AND EXPECTED TIMETABLE..................................................2
Item 3.  KEY INFORMATION..........................................................................2
A.       Selected Financial Data..................................................................2
B.       Capitalization and Indebtedness..........................................................4
C.       Reasons for the Offer and Use of Proceeds................................................4
D.       Risk Factors.............................................................................4
Item 4.  INFORMATION ON THE COMPANY..............................................................16
A.       History and Development of the Company..................................................16
B.       Business Overview.......................................................................17
C.       Organizational Structure................................................................23
D.       Property Plants and Equipment...........................................................24
Item 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS............................................24
Item 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES..............................................27
A.       Directors and Senior Management........................................................ 27
B.       Compensation............................................................................29
C.       Board Practices.........................................................................30
D.       Employees...............................................................................30
E.       Share Ownership.........................................................................31
Item 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.......................................31
Item 8.  FINANCIAL INFORMATION...................................................................32
Item 9.  THE OFFER AND LISTING    ...............................................................33
Item 10. ADDITIONAL INFORMATION..................................................................35
A.       Share Capital...........................................................................35
B.       Memorandum and Articles of Association..................................................36
C.       Material Contracts......................................................................40
D.       Exchange Controls.......................................................................41
E.       Taxation................................................................................41
F.       Dividends and Paying Agents.............................................................49
G.       Statement by Experts....................................................................49
H.       Documents on Display....................................................................49
Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES - MARKET RISK..................................50
Item 12. DESCRIPTION OF SECURITITES OTHER THAN DEBTSECURITIES....................................50

                                     PART II
                                     -------

Item 13. DEFAULT, DIVIDEND ARREARAGES AND DILINQUENCIES..........................................50
Item 14  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND THE USE OF
         PROCEEDS................................................................................51

                                    PART III
                                    --------

Item 17. FINANCIAL STATEMENTS...................................................................51
Item 18. FINANCIAL STATEMENTS...................................................................51
</TABLE>

<PAGE>


                                 ACTFIT.COM INC.
                 Annual Report on Form 20-F for the Fiscal Year
                             Ended December 31, 2000

         This report on Form 20-F,  including  Item 1  ("Business")  and Item 17
("Financial  Statements"),  contains forward looking statements regarding future
events or the future financial condition of ActFit.com Inc. and its subsidiaries
(the  "Company") that involve  certain risks and  uncertainties  discussed under
"Risk Factors" below.  Actual events or the actual future results of the Company
may differ  materially from any forward looking  statement due to such risks and
uncertainties.


                                     PART I
                                     ------

ITEM 1 - IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

ITEM 2 - OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.


ITEM 3.  KEY INFORMATION

A.  Selected Financial Data

The selected  financial data set forth below should be read in conjunction with,
and are qualified by reference to, our  consolidated  financial  statements  and
notes thereto,  and our "Operating and Financial Review and Prospects"  included
elsewhere in this annual report.  The consolidated  statement of operations data
for the years ended 2000,  1999 and 1998,  as set forth below,  are derived from
our  consolidated  audited  financial  statements  and the  notes  thereto,  and
included  elsewhere  in  this  annual  report.  The  consolidated  statement  of
operations  data for the years  ended 1997 and 1996 have been  derived  from our
consolidated audited financial statements not included in this annual report. We
have prepared our audited  financial  statements in accordance  with  accounting
principles  generally accepted in Canada,  which differ in certain respects from
generally accepted  accounting  principles in the United States. The differences
between  Canadian  GAAP and US GAAP,  as set out in Note 16 to the  notes to the
audited financial statements, have a material impact on the operating results of
the Company. Under US GAAP, the operating loss increased by $925,688, $1,627,154
and $143,871 in the years ended December 31, 2000,  1999, and 1998  respectively
resulting in operating  losses of $6,276,538,  $5,547,956and  $3,975,965 for the
years ended December 31, 2000, 1999, and 1998 and total shareholders  deficiency
of  $1,939,766,  $2,384,617  and $539,752 for the years ended December 31, 2000,
1999, and 1998, respectively under US GAAP.

                                       2
<PAGE>

<TABLE>
<CAPTION>

                                                  2000            1999            1998
                                          ------------    ------------    ------------
<S>                                       <C>             <C>             <C>
REVENUE                                   $    149,378    $    290,730    $    584,259
                                          ------------    ------------    ------------



EXPENSES

         General and administrative          1,770,262       2,129,197       1,873,580

         Corporate Development               1,711,094         138,760         124,769

         Sales and Marketing                   458,738       1,099,595         647,738

         Amortization                          164,540         177,634         268,955

         Other                                  17,479          70,710         488,107

         Interest                               28,220          70,602          90,180

         Product Cost                           14,785          12,694         378,309
                                          ------------    ------------    ------------

                                          $  4,165,118    $  3,699,192    $  3,871,638
                                          ------------    ============    ============


INCOME (LOSS) BEFORE UNDERNOTED ITEMS       (4,015,740)     (3,408,462)     (3,287,379)


Write-off of Deferred Development Costs           --           418,879          69,196

Write-off of Goodwill                             --            93,461         373,448

Write-off of Publishing Rights                    --              --           102,071
                                          ------------    ------------    ------------

Write-off of Active Trainer                    999,990            --              --
                                          ------------    ------------    ------------

Write-down of Fixed Assets                     335,140            --              --
                                          ------------    ------------    ------------

                                             1,335,130         512,340         544,715
                                          ------------    ------------    ------------


INCOME (LOSS) FOR THE YEAR                $ (5,350,870)   $ (3,920,802)   $ (3,832,094)
                                          ------------    ============    ============


BASIC EARNINGS (LOSS) PER SHARE           $      (0.19)   $      (0.20)   $      (0.29)
                                          ------------    ============    ============


AVERAGE SHARES OUTSTANDING - BASIC          28,606,483      19,668,993      13,278,649
                                          ------------    ============    ============
</TABLE>

EXCHANGE RATES OF THE CANADIAN DOLLAR

Financial  information  in this annual report is expressed in Canadian  dollars,
unless otherwise noted. References to "CDN$" or "$" are to Canadian dollars. The
following table sets forth, for the periods indicated, the high and low exchange
rates, the average of the month-end  exchange rates and the period-end  exchange
rate of the Canadian  dollar in exchange for the United  States  dollars,  based
upon the inverse of exchange rates  reported by the Bank of Canada.  On June 30,
2001 the noon buying rate was CDN$1.00 = U.S.
$0.6754

                                       3
<PAGE>

<TABLE>
<CAPTION>

FISCAL YEAR ENDED         AVERAGE          HIGH           LOW          CLOSE
-----------------         -------          ----           ---          -----
<S>                       <C>           <C>            <C>           <C>
    12/31/2000            $0.6733       $0.6984        $0.6397       $0.6668

      12/31/99            $0.6730       $0.6935        $0.6462       $0.6928

      12/31/98            $0.6741        0.7060         0.6484        0.6522

      12/31/97            $0.7223        0.7424         0.6991        0.6991

      12/31/96            $0.7334        0.7557         0.7209        0.7297

      12/31/95            $0.7285        0.7533         0.7009        0.7331

      12/31/94            $0.7321        0.7591         0.7198        0.7198

      12/31/93            $0.7751        0.8046         0.7439        0.7544
</TABLE>

B.       Capitalization and Indebtedness

         Not applicable.

C.       Reasons for the Offer and Use of Proceeds

         Not applicable.

D.       Risk Factors

         OUR LIMITED OPERATING HISTORY MAKES EVALUATING OUR BUSINESS DIFFICULT.

                                       4
<PAGE>

While the company was founded in September 1995, until 2000 the company operated
solely as a developer of CD-ROM based  interactive  fitness  applications  and a
sport and fitness based Internet portal.  During December 2000 we began to shift
our focus to the development of Marketing and Customer  Relationship  Management
(CRM) online software applications for the health club industry, and in December
2000 we terminated our sport and fitness Internet portal and CD-ROM  operations.
Accordingly,  there is only a limited operating history to base an evaluation of
us and our business prospects.  Our business and prospects must be considered in
light  of the  risks,  uncertainties  and  expenses  frequently  encountered  by
companies in their early stages of  development,  particularly  companies in new
and rapidly evolving markets such as Internet based software  applications.  Our
business  strategy may not be  successful  and we may not  successfully  address
those risks.

WE WILL  NEED  ADDITIONAL  CAPITAL  CURRENTLY,  AND IF WE ARE  UNABLE  TO SECURE
ADDITIONAL  FINANCING  WHEN  WE NEED  IT,  WE MAY BE  REQUIRED  TO  CURTAIL  OUR
OPERATIONS  SIGNIFICANTLY,  WHICH  WOULD HAVE A MATERIAL  ADVERSE  EFFECT ON OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The Company is in need of additional  capital currently in order to meet a large
working capital deficiency.  If the funds are not received, the Company will not
be able to continue as a public Company. Since we began our operations,  we have
been funded primarily through the sale of securities to investors in a series of
private placements,  sales of equity to and investments from strategic partners,
gains from investments,  option exercises and, to a limited extent, through cash
flow from operations.

At this time,  funds from  operations are not sufficient to meet our anticipated
financial requirements beyond 2001. As of June 15, 2001, we had cash on hand and
marketable securities of approximately  $250,000 USD. Based on current plans and
our  recent  implementation  of  cost  cutting  measures,   including  workforce
reductions,  we believe that current cash  balances and  anticipated  funds from
operations  will support  operations into the third quarter 2001.  However,  the
actual amount of funds that will be required  until that time will be determined
by many factors,  some of which are beyond our control. As a result, we may need
funds sooner or in greater amounts than currently anticipated.

We do not have any committed sources of additional financing at this time and we
are uncertain  whether  additional  funding will be available when we need it on
terms  that  will be  acceptable  to us or at all.  If we are not able to obtain
financing when we need it, we would be unable to carry out our business plan and
would have to significantly curtail our operations,  which would have a material
adverse effect on our business,  financial  condition and results of operations.
Potential  sources  of  financing  include  strategic  relationships,  public or
private sales of our shares or debt or other arrangements.  If we raise funds by
selling  additional   shares,   including  common  shares  or  other  securities
convertible  into  common  shares,  the  ownership  interests  of  our  existing
shareholders will be diluted.  If we raise funds by selling  preference  shares,
such  shares may carry more  voting  rights,  higher  dividend  payments or more
favorable rights upon distribution than those for the common shares.  Because of
our potential long term capital  requirements,  we may seek to access the public
or private equity markets whenever  conditions are favorable,  even if we do not
have an immediate need for additional capital at that time.

                                       5
<PAGE>

WE ARE NOT PROFITABLE AND WE MAY NEVER BECOME PROFITABLE.

We have  accumulated  net losses of  approximately  $ 12.9  million for the year
ended  December 31, 2000.  We have never  achieved  profitability  and expect to
continue to incur losses for the foreseeable  future.  We cannot assure you that
we will earn  profits or generate  positive  cash flows from  operations  in the
future.

THE INTERNET  INITIATIVES  OF OUR CUSTOMERS  MAY NOT BE SUCCESSFUL  AND THIS MAY
CREATE COLLECTION  ISSUES FOR US AND REDUCE THE AMOUNT OF REVENUE-BASED  FEES WE
MAY RECEIVE

There  can be no  assurance  that  our  customers  will be  successful  in their
Internet initiatives. Success will be dependent on their willingness and ability
to devote  sufficient  resources to such  initiatives,  and the demand for their
products and services. If our clients are unsuccessful, they may be less willing
or able to pay amounts owing to us for services. In addition, if our clients are
unsuccessful  they may generate less  revenue,  which would reduce the amount of
revenue-based  fees payable to us.  Furthermore,  a lack of success could reduce
the number of clients willing or able to provide references to future prospects.

POTENTIAL  FLUCTUATIONS  IN OUR FINANCIAL  RESULTS MAKES  FINANCIAL  FORECASTING
DIFFICULT

Our  operating  results  have  varied on a  quarterly  basis in the past and may
fluctuate  significantly as a result of a variety of factors,  many of which are
outside our control.  Factors that may affect our  quarterly  operating  results
include:

o        general economic  conditions as well as economic conditions specific to
         the Internet and online commerce industries;

o        any  decision by us to reduce  prices for our  solutions in response to
         price reductions by competitors;

o        the amount  and  timing of  operating  costs and  capital  expenditures
         relating to expansion of our business, operations and infrastructure;

o        the announcement or introduction of new sites, services and products by
         us or our competitors; and

                                       6
<PAGE>

o        the timing of, and our ability to integrate,  any future acquisition of
         businesses,  technologies  or products or any strategic  investments or
         relationships into which we may enter.

As a result of our limited operating history, the emerging nature of the markets
in which we compete and the inherent  degree of variability  in dynamic  pricing
transactions,  it is  difficult  for us to  accurately  forecast  our  revenues,
earnings,  cash flow and other  financial  information.  Our  current and future
expense levels are based largely on our investment plans and estimates of future
revenues and are, to a large extent,  fixed. We may be unable to adjust spending
in a timely manner to compensate for any unexpected revenue shortfall.

Any significant shortfall in revenues relative to our planned expenditures would
have an immediate  adverse effect on our business,  results of operations,  cash
flow and financial condition. Further, as a strategic response to changes in the
competitive environment,  we may from time to time make certain pricing, service
or  marketing  decisions  that  could  have a  material  adverse  effect  on our
business, results of operations, financial condition and prospects. In addition,
payment and  recognition of revenues may be affected by  implementation  delays,
which are not always in our control.

Due to these factors, our quarterly revenues and operating results are difficult
to  forecast.  We believe that  period-to-period  comparisons  of our  operating
results may not be meaningful  and should not be relied upon as an indication of
future  performance.  In  addition,  it is  likely  that in one or  more  future
quarters,  our operating  results will fall below the expectations of securities
analysts and  investors.  In such event,  the trading price of our common shares
would almost certainly be materially adversely affected.

THE VOLATILITY OF THE STOCK MARKETS AND OUR SHARE PRICE COULD  ADVERSELY  AFFECT
OUR SHAREHOLDERS.

The market prices for securities of  Internet-related  and technology  companies
have been highly volatile, especially recently. These companies have experienced
extreme  price  and  volume  fluctuations  that have  often  been  unrelated  or
disproportionate  to their  operating  performance.  Broad  market and  industry
factors  may  materially  and  adversely  affect the market  price of our common
shares, regardless of our operating performance. The trading price of our common
shares on the Canadian  Venture  Exchange (CDNX) (and previously on the Canadian
Dealer Network) and NASD OTC Bulletin Board has fluctuated  significantly in the
past and could be subject to wide fluctuations in the future.

In the past,  following periods of volatility in the market price of a Company's
securities, securities class-action litigation has often been instituted against
that  Company.  Such  litigation,  if  instituted  against us,  could  result in
substantial costs and a diversion of management's attention and resources, which
could have a material  adverse  effect on our business,  results of  operations,
cash flow, financial condition and prospects.

                                       7
<PAGE>

OUR  MARKETS  ARE  HIGHLY  COMPETITIVE  AND  WE  MAY  NOT  BE  ABLE  TO  COMPETE
EFFECTIVELY.

The online Marketing and CRM software market is relatively new, rapidly evolving
and intensely competitive.  We expect that competition will further intensify in
the future.  Barriers to entry are minimal,  and current and new competitors can
launch new sites and technologies at a relatively low cost.

Many of our competitors have longer operating histories,  larger customer bases,
greater brand recognition and  significantly  greater  financial,  marketing and
other  resources  than we. We cannot  assure you that we will be able to compete
effectively.

WE DEPEND ON OUR KEY  PERSONNEL  AND WE MAY NOT BE ABLE TO ATTRACT OR RETAIN THE
HIGHLY SKILLED PERSONNEL WE NEED.

Our success is  substantially  dependent  on the ability and  experience  of our
senior  management and other key personnel.  We do not have long term employment
agreements  with any of our key  personnel  and  maintain no "key  person"  life
insurance policies.

In March,  2001, we  implemented a workforce  reduction in which we eliminated 8
positions.  We anticipate that during the remainder of 2001 additional employees
may  voluntarily  elect to terminate their  employment  because of our workforce
reductions.  In the future, we may need to hire additional  personnel because of
attrition or growth of our business. Competition for personnel, especially those
with software development and other technical  expertise,  is intense. We cannot
be  certain we will be able to retain  existing  personnel  or hire  additional,
qualified personnel. Our inability to retain and attract the necessary personnel
or the  loss of  services  of any of our key  personnel  could  have a  material
adverse effect on us.

Stock options are an important  component of the  compensation of our personnel.
We face a significant challenge in retaining our employees if the value of these
stock options is not substantial  enough. To retain our employees,  we expect to
continue to grant new options to motivate  and retain  employees,  which will be
dilutive to investors.

WE MAY NOT BE ABLE TO MANAGE GROWTH.

As our  business  grows,  there may be  significant  demands on our  management,
administrative, operating and financial resources. In order to manage any future
growth  effectively,  we will  need  to  expand  and  improve  our  operational,
financial and management information systems and hire, train,  motivate,  manage
and retain  additional  employees.  We cannot assure you that we will be able to
manage future growth effectively, that our management, personnel or systems will
be adequate to support such growth, or that we will be able to achieve levels of
revenue  commensurate with the increased levels of operating expenses associated
with such growth.

                                       8
<PAGE>

WE PLAN TO EXPAND  INTERNATIONALLY  AND ARE  SUBJECT  TO RISKS  ASSOCIATED  WITH
GLOBAL EXPANSION.

We  currently  operate in the United  States and  Canada.  We plan to expand our
international  presence in Europe and Asia.  We may incur  significant  costs in
connection with our  international  expansion.  There are also risks inherent in
doing business on a global level, including:

o        various laws and regulatory requirements;

o        tariffs, customs, duties and other trade barriers;

o        longer payment cycles and problems in collecting accounts receivable;

o        difficulties in managing foreign operations;

o        export and import restrictions;

o        political risks;

o        currency and foreign exchange controls;

o        seasonal  reductions in business  activity  during the summer months in
         Europe and elsewhere; and

o        potentially adverse tax consequences.

Any of these risks could adversely affect the success of our global operations.


ANY FUTURE  ACQUISITIONS OF COMPANIES OR TECHNOLOGIES  MAY RESULT IN DISRUPTIONS
TO OUR BUSINESS AND/OR THE DISTRACTION OF OUR MANAGEMENT.

As part of our business  strategy,  in the future we may seek to acquire or make
investments in complementary  businesses or technologies.  We may not be able to
acquire or manage additional businesses profitably or to successfully  integrate
any acquired  businesses with our business.  Businesses that we acquire may have
liabilities that we underestimate or do not discover during our pre- acquisition
investigations.  Certain  liabilities,  even if we do not expressly assume them,
may be imposed on us as the successor to the business. Further, each acquisition
may involve other special risks that could cause the acquired businesses to fail
to meet our expectations. For example:

                                       9
<PAGE>

o        the acquired businesses may not achieve expected results;

o        we may not be able to retain key personnel of the acquired businesses;

o        we  may  incur  substantial,   unanticipated  costs,  delays  or  other
         operational or financial  problems when we try to integrate  businesses
         we acquire with our own;

o        our management's attention may be diverted; or

o        our  management  may  not  be  able  to  manage  the  combined   entity
         effectively or to make acquisitions and grow our business internally at
         the same time.

o        The  occurrence of one or more of these factors could  materially  harm
         our business, financial condition and results of operations.

In addition,  we may incur debt or issue equity securities to pay for any future
acquisitions  or investments,  which could dilute the ownership  interest of our
existing shareholders.

IF WE ARE UNABLE TO  SUCCESSFULLY  PROTECT OUR  INTELLECTUAL  PROPERTY OR OBTAIN
CERTAIN LICENSES, OUR COMPETITIVE POSITION MAY BE HARMED.

Our  performance and ability to compete are dependent in part on our proprietary
technology. We rely on a combination of patent,  copyright,  trademark and trade
secret laws as well as  confidentiality  agreements and technical  measures,  to
establish  and protect our  proprietary  rights.  We cannot  guarantee  that any
patents issued to us will afford meaningful protection for our technology.
Our  proprietary  software is protected by common law copyright laws, as opposed
to registration under copyright statutes.  Common law protection may be narrower
than that which we could obtain under registered copyrights. As a result, we may
experience  difficulty in enforcing our copyrights  against  certain third party
infringements.  The source code for our  proprietary  software is protected as a
trade secret. As part of our confidentiality protection procedures, we generally
enter into  agreements  with our employees and  consultants and limit access to,
and  distribution  of,  our  software,   documentation   and  other  proprietary
information.  We  cannot  assure  you that the  steps  taken by us will  prevent
misappropriation  of our  technology  or that  agreements  entered into for that
purpose will be enforceable.  In order to protect our intellectual  property, it
may be necessary for us to litigate.  While this has not been necessary to date,
there can be no  guarantee  that we will not be  required  to do so in future to
protect  our  rights.  The laws of other  countries  may  afford us little or no
protection for our intellectual property.

We also rely on a variety  of  technology  that we license  from third  parties,
including our database and Internet  server  software,  which is used to perform
key functions.  We cannot assure you that these third party technology  licenses
will continue to be available to us on commercially reasonable terms, or at all.
If we are  unable  to  maintain  these  licenses  or  obtain  upgrades  to these
licenses, we could be delayed in completing some products or services.

                                       10
<PAGE>

OTHERS COULD CLAIM THAT WE INFRINGE ON THEIR INTELLECTUAL PROPERTY RIGHTS, WHICH
MAY RESULT IN COSTLY AND TIME CONSUMING LITIGATION.

Our success will also depend partly on our ability to operate without infringing
upon the proprietary  rights of others, as well as our ability to prevent others
from infringing on our proprietary  rights.  We may be required at times to take
legal  action in order to protect our  proprietary  rights.  Also,  from time to
time,  we may receive  notice from third  parties  claiming that we may infringe
their patent or other proprietary  rights.  Despite our best efforts,  we may be
sued for infringing on the patent or other  proprietary  rights of others.  Such
litigation is costly, and even if we prevail,  the cost of such litigation could
harm us. If we do not prevail,  in addition to any damages we might have to pay,
we could be required  to stop the  infringing  activity or obtain a license.  We
cannot  be  certain  that  any  required  license  would be  available  to us on
acceptable terms, or at all. If we fail to obtain a license,  or if the terms of
a license are burdensome to us, our business, financial condition and results of
operations could be materially harmed.

WE  MAY  HAVE  TO  EXPEND   SIGNIFICANT   RESOURCES  TO  KEEP  PACE  WITH  RAPID
TECHNOLOGICAL CHANGE.

The Internet and e-commerce  industries are characterized by rapid technological
change,  changes in user and  customer  requirements,  frequent  new  service or
product  introductions  embodying  new  technologies  and the  emergence  of new
industry  standards  and  practices.  Any of these could render our  proprietary
technology obsolete. Our performance will depend, in part, on our ability to:

o        develop new  proprietary  technology  that  addresses the  increasingly
         sophisticated   and  varied  needs  of  our  existing  and  prospective
         customers;

o        respond to technological  advances and emerging industry  standards and
         practices on a timely and cost-effective basis;

o        continually  improve the  performance,  features and reliability of our
         services in response to evolving market demands; and

o        license leading technologies.

We may be required to make substantial  expenditures to accomplish the foregoing
and to modify or adapt our services or infrastructure.

                                       11
<PAGE>

SYSTEMS  DEFECTS,  FAILURES OR BREACHES  OF SECURITY  COULD CAUSE A  SIGNIFICANT
DISRUPTION TO OUR BUSINESS, DAMAGE OUR REPUTATION AND EXPOSE US TO LIABILITY.

We believe our  reputation  for  providing  reliable and  efficient  services is
critical  to our future  success.  Our  systems  are  vulnerable  to a number of
factors that may cause  interruptions in our ability to enable or host solutions
for third parties, including, among others:

o        damage from human error, tampering and vandalism;

o        breaches of security;

o        fire and power losses;

o        telecommunications failures and capacity limitations; and

o        software or hardware defects.

Service  offerings   involving  complex   technology  often  contain  errors  or
performance  problems.  Defects  are often found  during the period  immediately
following  introduction  and  implementation  of new  services or  enhancements.
Errors or performance  problems could result in lost revenue or  cancellation of
customer  agreements  and may expose us to litigation,  potential  liability and
damage to our  reputation.  Certain of our  contracts  provide the customer with
penalties  or a right of  termination  in the event we are  unable  to  maintain
minimum performance levels.

We have  developed  a  redundant  system and a formal  disaster  recovery  plan.
Despite the precautions we have taken and plan to take, the occurrence of any of
these  events  or  other   unanticipated   problems   could  result  in  service
interruptions, which could damage our reputation, subject us to loss of business
and significant repair costs. Advances in computer capabilities, new discoveries
in the field of  cryptography,  or other events or developments  may result in a
compromise or breach of the algorithms we use to protect customer data. Security
breaches could expose us to a risk of loss or litigation and possible  liability
for failing to secure  confidential  customer  information.  These factors could
expose us to  liabilities  which could exceed our  insurance  coverage.  Service
disruptions  could  also  damage  our  reputation,  cause  us to  lose  existing
customers  and make it  difficult  to attract new ones.  Extensive  repair costs
could also affect our ability to operate.  Although we continue to take steps to
enhance the security and redundancy of our systems, our systems are not now, nor
will they ever be, fully secure and redundant.

IF THE WEB  INFRASTRUCTURE IS UNABLE TO SUPPORT USER DEMAND OR IF OUR CONNECTION
TO THE INTERNET IS INTERRUPTED OUR BUSINESS MAY BE HARMED.

The success of our online  software  offerings  will  depend,  to a  significant
degree,  upon the  development  and  maintenance of the Web  infrastructure  and

                                       12
<PAGE>

reliable Web access and services.  The Web has  experienced,  and is expected to
continue to experience, significant growth in the numbers of users and amount of
traffic.  There can be no assurance that the Web infrastructure will continue to
be able to support the  demands  placed on it by this  continued  growth or that
such growth will not adversely affect the performance or reliability of the Web.

Furthermore, from time to time, the Web has experienced a variety of outages and
other delays as a result of damage to portions of its infrastructure,  and could
face such  outages and delays in the  future.  These  outages  and delays  could
adversely  affect  the  level of Web  usage  and the  level of  traffic  and the
reliability of Internet  based  software.  In addition,  we do not own a gateway
onto the Internet. Instead, we rely on Internet service providers to connect our
Web site to the  Internet.  From  time to time,  we have  experienced  temporary
interruptions in our Web site connection and in our  telecommunications  access.
Continuous  or  prolonged  interruptions  in our Web site  connection  or in our
telecommunications   access  would  have  a  material   adverse  effect  on  our
operations.

The Web could lose its viability due to delays in the development or adoption of
new  standards  and  protocols to handle  increased  levels of activity.  If the
necessary  infrastructure,   standards,  protocols  or  complementary  products,
services or facilities are not developed,  our business,  results of operations,
cash flow and financial condition will be materially and adversely affected.

OUR  LONG-TERM   VIABILITY  IS  SUBSTANTIALLY   DEPENDENT  UPON  THE  WIDESPREAD
ACCEPTANCE  AND USE BY BUSINESSES  AND CONSUMERS OF THE INTERNET AS A MEDIUM FOR
BUSINESS MARKETING,  CUSTOMER  RELATIONSHIP  MANAGEMENT,  EVENT BROADCASTING AND
INTERNAL BUSINESS COMMUNICATION.

Our future  success  depends in part on the  continued  growth and  reliance  by
businesses and consumers on the Internet,  particularly  in the areas of product
and service marketing,  customer relationship management, event broadcasting and
for internal business communication.  Because use of the Internet as a source of
information,  products  and services is a relatively  recent  phenomenon,  it is
difficult  to predict  whether  the number of users drawn to the  Internet  will
continue to increase and whether the market for  commercial  use of the Internet
will  continue to develop and expand.  Internet  use patterns may decline as the
novelty of the medium recedes.

The Internet may not be commercially  viable for a number of reasons,  including
potentially  inadequate  development  of the necessary  network  infrastructure,
delayed  development  of  enabling   technologies  and  inadequate   performance
improvements.  In addition, the Internet's viability as a commercial marketplace
could be adversely  affected by delays in the  development of services or due to
increased  government  regulation.  Changes in or  insufficient  availability of
telecommunications  services to support the Internet also could result in slower
response  times and  adversely  affect usage of the Internet  generally  and our
business in particular.  Moreover,  adverse publicity and consumer concern about
the security of transactions  conducted on the Internet and the privacy of users
may also  inhibit  the growth of  commerce  on the  Internet.  If the use of the
Internet does not continue to grow or grows more slowly than expected, or if the
infrastructure  for the Internet does not  effectively  support  growth that may
occur, our business would be materially and adversely affected.

                                       13
<PAGE>

In addition,  even if businesses and consumers accept the use of the Internet as
a viable medium of commerce, we cannot assure you that our software applications
will develop  successfully or achieve widespread  acceptance.  If the market for
our products  fail to develop,  or develops more slowly than expected or becomes
saturated  with  competitors,  our  business,  financial  condition,  results of
operations, cash flow and prospects would be materially adversely affected.

CHANGES IN GOVERNMENT REGULATIONS MAY RESULT IN INCREASED EXPENSES,  WHICH COULD
DECREASE THE DEMAND FOR OUR SERVICES AND NEGATIVELY IMPACT OUR RESULTS.

We are not currently  subject to direct  regulation by any governmental  agency,
other  than  regulations   applicable  to  businesses  generally  and  laws  and
regulations  directly  applicable  to access to or  commerce  on, the  Internet.
However, a number of legislative and regulatory proposals under consideration by
federal,  state,  provincial,  local and foreign governmental  organizations may
lead  to  laws  or  regulations  concerning  various  aspects  of the  Internet,
including but not limited to, on-line content,  user privacy,  taxation,  access
charges and liability for third-party activities.  Additionally, it is uncertain
how existing laws governing issues such as property ownership,  copyright, trade
secrets,  libel and  personal  privacy  will be  applied  to the  Internet.  The
adoption of new laws or the broader  application  of existing laws may expose us
to significant liabilities and additional operational  requirements and expenses
and may  decrease  the growth in the use of the  Internet,  which  could in turn
decrease the demand for our products and increase our cost of doing business.

OUR BUSINESS IS SENSITIVE TO THE OVERALL ECONOMIC ENVIRONMENT,  AND ANY SLOWDOWN
IN E-BUSINESS GROWTH OR OTHER FACTORS IMPACTING INFORMATION  TECHNOLOGY SPENDING
BUDGETS COULD HARM OUR OPERATING RESULTS

The primary  customers  for our  products are  enterprises  seeking to launch or
expand  e-business  initiatives.  Any  significant  downturn  in our  customers'
markets or in general  economic  conditions that results in reduced  information
technology  spending  budgets would likely result in a decreased  demand for our
products and services and will harm our business.  Industry downturns like these
have been,  and may  continue  to be,  characterized  by  diminished  demand for
products and services and subsequent erosion of average selling prices.

OUR BUSINESS MAY BE AFFECTED BY EVOLVING TAX REGULATIONS.

A number of  proposals  have been made at the U.S.  state and local  level  that
would  impose  additional  taxes on the sale of goods and  services  through the
Internet.  Such proposals,  if adopted, could substantially impair the growth of
electronic  commerce,  and could  adversely  affect  our  opportunity  to derive
financial benefit, through our customers, from such activities.

                                       14
<PAGE>

WE ARE SUBJECT TO RISKS ASSOCIATED WITH EXCHANGE RATE FLUCTUATIONS.

Substantially  all of our revenues are in U.S. dollars while the majority of our
operating expenses are in Canadian dollars.  We do not have any hedging programs
in place to manage the potential exposure to fluctuations in the Canadian dollar
exchange rate. Fluctuations in the Canadian dollar exchange rate or the exchange
rate of other  currencies  against  the U.S. or  Canadian  dollars  could have a
material adverse effect on our earnings and cash flows.

OUR PREFERENCE  SHARES COULD PREVENT OR DELAY A TAKEOVER THAT SOME OR A MAJORITY
OF SHAREHOLDERS CONSIDER FAVORABLE.

Our Board of Directors, without any further vote of our shareholders,  may issue
up to 2 million preference shares and determine the price,  preferences,  rights
and  restrictions  of those  shares.  The rights of the holders of common shares
will be subject to, and may be adversely  affected by, the rights of the holders
of any series of preference shares that may be issued in the future. That means,
for example, that we can issue preference shares with more voting rights, higher
dividend  payments or more favorable rights upon distribution than those for the
common shares.  If we issue certain types of preference shares in the future, it
may also be more  difficult  for a third  party to  acquire  a  majority  of our
outstanding  voting  shares and may,  in certain  circumstances,  deter or delay
mergers,  tender offers or other  possible  transactions  that may be favored by
some or a majority of our shareholders.

IT MAY BE DIFFICULT FOR YOU TO ENFORCE CIVIL  LIABILITIES  ON US OR OUR OFFICERS
OR DIRECTORS.

We are incorporated under the laws of the Province of Ontario,  Canada.  Certain
of our directors and officers are residents of Canada and a substantial  part of
our assets and all or a  substantial  portion of the assets of such  persons are
located outside the United States.  As a result, it may be difficult for holders
of common  shares to effect  service of legal  process  within the United States
upon those  directors and officers who are not residents of the United States or
to realize in the United  States upon  judgments of courts of the United  States
predicated upon civil liability under the Securities Act of 1933, as amended, or
the Exchange Act or the rules and regulations  promulgated  under such statutes.
We believe that a judgment of a United States court predicated solely upon civil
liability under such U.S. federal  securities laws would probably be enforceable
in Canada if the United  States  court in which the  judgment was obtained had a
basis for jurisdiction in the matter that was recognized by a Canadian court for
such purposes.  However,  we believe that there is substantial  doubt whether an
action  could be brought  successfully  in Canada in the first  instance  on the
basis of liability predicated solely upon such U.S. federal securities laws.

                                       15
<PAGE>

OUR COMPANY  HAS BEEN  ISSUED A  TEMPORARY  CEASE TRADE ORDER FOR NOT FILING OUR
ANNUAL FINANCIAL REPORT BY MAY 19, 2001

A  temporary  cease  trade  order  has been  issued  by the  Ontario  Securities
Commission for late filing of our annual  financial  report.  As a result of the
cease trade order,  trading was halted on the  Canadian  Venture  Exchange.  The
financial  report is anticipated to be filed by July 18, 2001 and it is expected
the cease trade  order will be lifted.  The company may be required to meet tier
maintenance  requirements  by the  Canadian  Venture  Exchange  and  there is no
guarantee the company will be able to meet them. If the company  cannot meet the
minimum  requirements  the  company  may be  de-listed  and  liquidity  would be
affected.


ITEM 4.  INFORMATION ON THE COMPANY

A.       History and Development of the Company

The Company was  incorporated  under the Business  Corporations Act (Ontario) on
April 20,  1964 under the name Benvan  Mines  Limited.  The Company  underwent a
number of name changes  between 1964 and 1987. The principal  business office is
located at 124 Merton Street, Suite 503, Toronto, Ontario M4S 2Z2. The Company's
phone number is 416-932-9204.

On  June  27,  1997,   the  name  of  the  Company  was  changed  to  LaserMedia
Communications  Corp.  ("LaserMedia")  as part of a  transaction  in  which  the
Company  acquired all the issued and  outstanding  securities of LaserMedia Inc.
LaserMedia  Inc.'s  principal  business was the production and  distribution  of
multimedia  interactive  consumer software products in the  entertainment,  home
education and personal fitness categories.  The securities issued by the Company
in exchange for the issued and  outstanding  securities of LaserMedia  Inc. were
valued  at  CDN$8,300,000.  The  value  of  the  Company  was  determined  by an
unaffiliated  business valuation and litigation support Company. The Company, at
that time had one other wholly owned subsidiary,  Verisim, Inc., which developed
Internet software.

In 1997 the Company  determined  the need to move its business  activities  away
from diffuse and divergent  multimedia  activities  toward the more focused core
business  of the  delivery of health and fitness  information  via the  Internet
through the creation of a sport and fitness portal.

MAJOR DEVELOPMENTS

By the last quarter of fiscal year 2000,  management determined long term growth
and  profitability  would not be possible under the sport portal  business model
and through the acquisition of ClubSite  Internet Network Inc. shifted the focus
of the business to the  development  and  distribution of Internet based CRM and
marketing software for the health and fitness club industry. In December of 2000
the ActFit sport and fitness portal was shut down.

                                       16
<PAGE>

ActFit acquired 100% of the outstanding shares in ClubSite Internet Network Inc.
in December of 2000.  ClubSite  had  produced  website  and  e-commerce  service
solution for over 1800 health and fitness  clubs in the United States and Canada
and was in the early development  stages of a suite of online software solutions
to help clubs better manage their customer  relationship  building  initiatives.
Prior to the December  acquisition  of ClubSite  management  worked closely with
ActFit on a number of strategic  initiatives  including a purchasing network for
health  clubs,  a sport  specific  training  CD and online  application  and the
promotion  of the Active  Trainer/Body  of  Knowledge  CD-ROM to the health club
market.  Given  the  state of the  equity  markets  in  relation  to  technology
companies  during the month of December 2000,  management  decided not to pursue
the raising of sufficient capital to launch and develop the three initiatives.

The Company focused on the online CRM and marketing software applications as the
best vehicle for  attaining  profitability  and long term growth.  In March 2001
ActFit began marketing the SmartClub Software suite to the health club market.

In the month of October 2000,  Sam Paul resigned as a director and as CFO of the
Company.  In February 2000, Alan Hardy resigned as a director of the Company. In
May 2001, Richard Hue resigned as CEO, Chairman and director of the Company.  In
May 2001, Mark Vange was appointed director of the company.

In May of 2001,  ActFit signed a letter of intent to purchase the full rights to
Mediapage  Software form Telum Inc.  (subject to CDNX approval).  Telum Inc will
receive cash and ActFit.com shares. ActFit will receive shares in Telum Inc. and
the  complete   distribution  and  intellectual  property  rights  to  Mediapage
software.  Management  considers  the letter of intent to be legally  binding on
both parties and anticipates an August 2001 closing date.  Mediapage software is
currently being integrated into the SmartClub product family.  Mediapage will be
marketed  as a stand alone  product and will allow  ActFit to expand its markets
beyond the health and fitness. The Telum acquisition,  if completed,  will bring
strength to the management and programming teams.

PRINCIPAL CAPITAL EXPENDITURES AND DIVESTITURES

The Company made no investments during the period.

B.       BUSINESS OVERVIEW

At the time of filing,  ActFit has  entered  into a letter of intent  with Telum
Inc. to acquire the world wide rights and  intellectual  property for  Mediapage
software. The acquisition is expected to be finalized by August 2001. At present
management  considers  the letter of intent to be binding and is working in good
faith with Telum to launch the Mediapage  software product.  ActFit develops and
markets  customer  communications  solutions  focused on  helping  organizations

                                       17
<PAGE>

improve  their  bottom line  through  cost  effective  and  innovative  customer
acquisition  and  retention  software  tools.  ActFit has  developed  a suite of
Customer   Relationship   Management  (CRM)  software  applications  that  allow
organizations regular communications on a one to one basis with each customer in
an  efficient  and  cost   effective   manner.   Upon  the   completion  of  the
Telum/Mediapage  acquisition  the Company  anticipates  developing a proprietary
desktop broadcasting application,  Mediapage Technology, providing organizations
with the ability to easily  create  Internet  based  marketing  and  educational
webcasts.  If the  Telum/Mediapage  acquisition does not close the company would
suffer a major  setback and would have to restate its  revenue  projections  and
operating budget.

KEY ADVANTAGES

The advantage of ActFit  technology is that it enables  efficient  communication
with a dispersed  customer base as well as simple  management of the  customer's
information  resources by using an array of  communication  tools.  Furthermore,
there is no  significant  set-up or technical  expertise  required to use ActFit
Technology.

A significant  differentiator of Mediapage Webcasting Technology (in the process
of being acquired by ActFit.com) is that during real-time  webcasts,  presenters
can  initiate  one-to-one  conversations  with  audience  members  that are then
broadcast  as a  part  of  their  presentation.  Combined  with  the  platform's
automation  and  intuitive   interface,   Mediapage  is  a  unique   interactive
communication solution.

MARKETING AND PRODUCT STRATEGY

ActFit  software  solutions are applicable to a wide range of industry  specific
target markets.  ActFit is developing  industry specific business units in order
to focus and maximize its marketing efforts. This entails branding and packaging
ActFit software products for each specific  industry.  ActFit builds a core team
for each  business  unit  and  leverages  strategic  partnerships  with  channel
partners to distribute  the  products.  ActFit will develop  business  units and
brands for the financial service industry,  the travel industry,  the commercial
and corporate real estate industries and the distance learning industry over the
next two years.

The first business unit  developed  serves the health and fitness club industry.
The club industry was chosen for its rapid growth and its ideal balance  between
customer acquisition and retention needs as well as ActFit in-depth knowledge of
the industry.

ActFit  has  developed  a suite of  software  applications  under the brand name
SmartClub for the health and fitness club industry, the following is the initial
product offering to the club market.

SmartClub Technologies

SmartClub  Technologies  are  distributed  client/server  customer  relationship
management  software  applications based on Java technology,  PHP, PERL and XML.
ACTFIT is able to provide a number of services for health and fitness clubs that
are not platform specific.

                                       18
<PAGE>

This proprietary communications application enables clubs to interact with their
members as  follows:  a fitness  instructor  calls the club to let them know she
will be sick and  cannot  teach a  scheduled  class,  the club then  immediately
updates the  schedule  on their  website in seconds  via the  SmartClub  Manager
Software.  The club will also be able notify  registered  members through a text
message to their cell phone using a proprietary wireless  application  currently
in  development.  Another  example  is the club  notifying  a  previous  massage
customer of an opening that afternoon with the masseuse via an unobtrusive  text
message on their cell phone.  Most  importantly,  SmartClub allows the member to
request information on what is of importance to them.

The  SmartClub  interface  further  allows the member to record  their  specific
fitness routine information such as exercises, repetitions,  resistance load and
time and  upload  the  information  to the club in order to  receive  advice and
encouragement  specific to their needs.  By  automating  this process  SmartClub
solves the problem of how to efficiently  communicate  with thousands of members
on an  individual  basis.  Clubs are  constantly  seeking  methods of creating a
relationship with each member in a fashion that makes the club an important part
of the member's everyday life.  SmartClub  provides the technology to offer this
level of personalized attention.  This technology will be sold on a subscription
basis with the monthly cost dependent upon the number of clubs to be networked.

SmartClub Mediapage - Providing the Mediapage/Telum acquisition closes

SmartClub  Mediapage  Technology (a product to be offered upon completion of the
Telum/Mediapage  acquisition) is a singular approach to Web  communication  that
merges  online  broadcasting,  or  "Webcasting",  with  the  benefits  practical
multi-user  voice  conversations  over the internet  thus  enabling the seamless
integration  of  interactive  Webcasting  into  any  Website.  It is a  complete
end-to-end solution that combines ActFit voice technology with its unique patent
pending interface creating a massively  multi-user  interactive Webcast platform
that enables rich media group communication and live interaction to be broadcast
from virtually any desktop computer over the Internet.

At its  core is a  Webcasting  studio  that  allows  users to  easily  organize,
generate  and stream  programming  complete  with audio  and/or video as well as
controlled  real-time  audience  participation.  Content  rich  Webcasts  can be
generated to suit either live programming  where presenters or hosts connect for
real-time voice  conversations with audience members, or to create programs that
are automatically  archived for on-demand  viewing.  The Mediapage platform also
incorporates  the ability to serve both  conventional  banner and streaming rich
media advertising to viewing audiences.  The latter allows customers to leverage
existing advertising assets across this new medium.

The practical application of the technology to a club business is twofold: first
as marketing  tool and  secondly as a means  providing a higher level of service
and to retain  its  customer  base  through  online  seminars  (webcasts).  As a

                                       19
<PAGE>

marketing   tool   SmartClub   Mediapage   provides  the  club  with  an  online
television-like  commercial to back up its current marketing efforts.  Mediapage
allows the club to clearly demonstrate its mission,  the features,  benefits and
atmosphere  through video,  audio and a graphical  presentation and increase its
return on marketing through online lead collection and trials. As retention tool
the product allows clubs to  inexpensively  and efficiently  provide seminars of
all types including proper exercise instruction,  nutrition and wellness.  Using
SmartClub  Mediapage to provide marketing and seminar delivery over the internet
enables  subscribers  to deliver  services  that are otherwise  financially  and
technically  out of the reach for.  Backing up the  offering  is a full suite of
integrated billing and management tools that allow the Company,  re-sellers, and
customers to fully manage their interaction with the platform.

Developed on an application  service provision (ASP) model,  SmartClub Mediapage
supplies full service management of tools,  infrastructure and Webcast streaming
technology.  Integration of the service into any Web presence allows subscribers
to focus on generating  Webcast  programming  that maximizes their revenue model
instead  of  focusing  on  the  technical   challenges   involved  in  providing
interactive webcasting.  SmartClub Mediapage can be sold on a subscription basis
with additional fees charged according to the number of audience members viewing
a club's programming.

In the short term,  the ActFit  health and fitness club  business  unit plans to
focus on sales and  generating  revenues  from  SmartClub  Technologies  and the
SmartClub  Mediapage marketing tool,  providing the Mediapage/Telum  acquisition
closes. A further retention  solution is anticipated be available in the form of
Mediapage online training and seminars services.

ActFit  intends to develop  market entry  strategies  for the financial  service
industry, the print media industry, the corporate communication and the distance
learning  industry  and the Company  anticipates  a launch of a second  industry
specific business unit to deliver newly packaged ActFit software  products.  The
Company  anticipates four to six business units established and selling industry
specific  solutions,  ActFit  will  be in a  position  to  broaden  its  product
distribution  with  the  objective  of  establishing   itself  as  a  leader  in
interactive  customer  communications  solutions.  The  following  describes the
Mediapage product:

Mediapage - Providing the Telum/Mediapage acquisition closes

The objective  with  Mediapage  (currently  in the process of being  acquired by
ActFit.com) is to make Internet communications simple, reliable, inexpensive and
all-inclusive. With Mediapage you use simple-to-use tools launched directly from
an Internet  browser,  like  Microsoft  Internet  Explorer,  answer a few simple
questions, click a couple of links, and you are broadcasting live to two, ten or
ten  thousand  people.  The  Mediapage   Technology  servers  handle  everything
automatically,  and make sure that  everything  runs  smoothly.  Unlike  current
solutions, Mediapage is much more interactive and much easier to use.

With Mediapage you can show your audience  PowerPoint  presentations,  pictures,
charts, open Web pages, or use interactive polls and surveys.  And, unlike other
solutions,  you can also play music clips, show them videos clips, or animations

                                       20
<PAGE>

or group together pictures,  video, music or sound,  documents or web pages into
rich  television-like  combination.  And unlike many other solutions,  Mediapage
manages its own  bandwidth  for maximum  effectiveness  however your audience is
connected to the Internet.

Using Mediapage  Technology,  you can create a very rich,  interesting  Internet
program quickly,  easily and  inexpensively  that the average Internet users can
actually  watch,  using today's  equipment,  without  sacrificing the ability to
create the broadband content tomorrows  Internet users will demand.  Mediapage's
easy to use software and powerful  features make creating and broadcasting  LIVE
easier and cheaper than ever before, and automatically  creating programming for
`ON DEMAND' viewing later. Each broadcast is saved on our servers for playback.

Mediapage  Technology  is a  two-way  communication  tool  that  lets you  speak
directly  with your audience and have your  audience  speaks  directly with you.
Just like talk-radio  programming,  the presenter can speak directly to a member
of the  audience,  and everyone  listening and watching the show will hear their
conversation.   Mediapage  eliminates  the  need  for  telephone   conferencing,
expensive  video  conferencing  systems and  replaces it with an easy to manage,
easy to use system.

For larger  presentations,  Mediapage  includes  software that lets questions be
screened and  pre-qualified,  with the  presenter  getting only the best or most
important  questions.  Further,  a full range of text-chat tools compliments the
voice-chat technology, increasing Mediapage Technologies reach and compatibility
by making sure everyone can communicate with the presenter.

Mediapage uses Hewlett Packard  servers,  hosted at a highly secure data center,
to manage, broadcast and control all of the presentations using the system. Each
customer has access to sophisticated,  secure account management,  customization
and  billing  information,  and  complete  control  over all of their  own saved
programming.  128 bit keys securing  each  customer's  content  completes a full
service  Mediapage  offering  that  aims to  simplify  communications  in a cost
effective solution.

Target market segments

Mediapage  is  targeted  at  prospective   customers  in  the  Web-conferencing,
financial  presentations,  professional  training as well as online commerce and
entertainment.  Mediapage  is  particularly  suited for any  personality  driven
businesses  where  customer  service  and  retention  are key.  It is a  perfect
solution for companies that need to:

o        Consolidate  communications  strategy and improve productivity
o        Save money on  enterprise  wide  communications,  travel  and  training
         expenses
o        Implement  new,  cost-effective  ways to  engage  and  retain a growing
         online customer base
o        Generate  original  and  compelling  content  for their  customers  and
         network, including broadband content.
o        Communicate with large groups in a meaningful, controlled environment

                                       21
<PAGE>

One of the challenges facing any Internet-based service or application is how to
generate  revenue for that service or  application.  The question is how to make
money from the mass of Internet users that you can tap as your customer base?

The Internet is nothing more than a huge network of computers  that  provides an
infrastructure for communications and information  delivery.  Mediapage provides
the technology to use that infrastructure in an innovative an effective way. The
Mediapage model does not depend on banner  advertising,  or competing with brick
and  mortar  businesses,  but  rather  bills  as  traditional  telecommunication
companies do. Mediapage  Technology  tracks and records each customer's usage of
the system, and bills based on the number of viewing minutes generated.  Revenue
is  generated  based on  billing  for  bandwidth  costs  plus a premium  for the
service, training, content creation and licensing.

ActFit will pursue  world-wide  markets by  licensing  its  products to regional
licensees as well as  developing  partnerships  with  operators who will deliver
Application  Service  Provision  (ASP)  services  tailored to the needs of their
specific target markets.

COMPETITION

The online  CRM,  marketing  and webcast  market is new,  rapidly  evolving  and
intensely competitive.  We believe that the principal competitive factors in the
these markets are flexibility and breadth of the technical solution,  quality of
service,  reliability,  technical  expertise  and price.  We believe that we are
competitive in each of these areas.

Many of these  companies  and many of our other  competitors  have much  greater
financial, technical, research and development resources than we do.

RESEARCH AND DEVELOPMENT

We believe that our proprietary software provides a competitive  advantage,  and
that our future success depends,  in part, on our ability to continue developing
and  enhancing  that  software.  Therefore,  we have  focused our  research  and
development  efforts on the continued  development of our  proprietary  software
offerings.  Our  ongoing  research  and  development  efforts  are  aimed at the
'productization'  of specific  elements of our software,  enhancing the features
and  functionality of our existing software  components,  the development of new
software components, and the integration of superior third party technology into
our   environment.   Productization   involves  the   development  of  'generic'
applications to reduce programming time and costs for client implementations.

                                       22
<PAGE>

Our  research  and  development  expenditures  were  minimal  for the year ended
December 31, 2000,  including  salaries  and related  expenses of our  personnel
engaged in research and development. Research and development activities in 2000
included the preliminary development of our SmartClub Solutions and enhancements
to Mediapage Technology Solutions.

TRADEMARKS, LOGOS AND TRADENAMES

The Company relies upon copyright,  trade secret and contract law to protect its
proprietary  technology  in  Canada,  the  United  States  and in  international
markets.  Such copyright protection prohibits the reproduction of exact language
and  code  of  the  Company's  products  and  software  programs  but  does  not
effectively  protect  the  Company  against  selective  reproduction  of certain
aspects of any product or  program.  The Company  utilizes  confidentiality  and
non-competition  provisions in its employee and consultant agreements as well as
with  various  third  parties with whom it deals in order to restrict the use of
its  proprietary  technology.  There are no assurances as to the extent to which
such  agreements  will be enforceable or be able to protect the interests of the
Company

GOVERNMENT REGULATION OF ENVIRONMENT

There are no significant  rules or regulations in connection  with  governmental
regulation  of the  environment  applicable  to the  Company  that  would have a
material effect on capital expenditures, earnings or its competitive position.

C.       ORGANIZATIONAL STRUCTURE

The table below lists our subsidiaries.  Unless otherwise indicated,  we, or one
of our subsidiaries,  own 100% of the outstanding common shares of the companies
listed.

         Name of Subsidiary                       Country of Incorporation
         ------------------                       ------------------------

         ActiveFitness Communications Inc         Canada
         ClubSite Internet Network Inc            Canada

                                       23
<PAGE>

D.       PROPERTY, PLANTS AND EQUIPMENT

Until March 2001,  the Company's  principal  product  research and  development,
marketing, sales, customer support,  administrative,  and warehousing activities
were conducted from an  approximately  10,000 square feet facility located at 11
Charlotte  Street,  Toronto,  Ontario,  M5V 2H5. This facility was leased to the
Company by an  unaffiliated  third party for a term of five years expiring April
16, 2002. The Company paid rent of $85,000 per annum for such facility. In March
2001 the Company  negotiated  an exit from the lease and relocated to 124 Merton
Street,  Suite 503,  Toronto  Ontario,  M4S 2Z2. The new office is approximately
1600 square feet and is leased until  September 2001 for  approximately  $36,000
per year with an option for a twelve month extension.

Management believes that should it be needed,  suitable additional space will be
available to accommodate  expansion of the Company's  operations on commercially
reasonable terms.


ITEM 5 - OPERATING AND FINANCIAL REVIEW AND PROSPECTS

RESULTS OF OPERATIONS
Comparison of Years Ended December 31, 2000 and December 31, 1999

Revenue:  Revenue is  comprised  of CD-ROM  sales  revenue,  graphic  design and
website services.  Revenue for the period was $149,378, a 49% decrease from 1999
revenue of  $290,730.  This  decrease  is  attributable  to a decrease in CD-ROM
sales. The Company shifted from traditional retail to online retail sales during
the third and fourth  quarters of 1999 and was  completely  reliant  upon online
sales for CD-ROM revenue in 2000.  Online sales of the Active Trainer CD-ROM did
meet expectations.

General and Administrative  Expense:  General and administrative expense for the
period was $1,770,262 a reduction of 17% of the 1999 expense of $2,129,197. This
reduction is  attributable  to a reduction in the company's  workforce and other
cost cutting measures taken by management including  elimination of the employee
benefit program.

Corporate Development Expense:  Corporate development expense for the period was
$1,711,094 an increase of $1,572,334 over 1999 corporate development expenses of
$138,760.  This increase is  attributable  to an increase in the use of investor
relations  consultants  primarily CUNE  Management and RT Management.  Contracts
with both of these  companies have been  terminated  and the company  expects to
dramatically lower corporate development costs in the coming fiscal year.

Sales and Marketing: Sales and marketing expenses for the period were $458,738 a
decrease  of 58% over 1999  sales and  marketing  expense  of  $1,099,595.  This
decrease is directly  attributable to the move from traditional to online retail
promotion  of the  CD-ROM  products.  The  Company  did  not  advertise  or fund
promotional events to the same extent as in 1999. In 1999 the Company retained a
spokesperson,  Sherry  Groggin  and funded a number of events  including  the LA
Street Race and a number of golf  tournaments.  Sales and marketing  expense for
2000 was  comprised  mainly of  marketing  personnel  salaries,  trade shows and
promotional materials.

                                       24
<PAGE>

Amortization:  Amortization  expense for the period was  $164,540.  Amortization
expense for 1999 was $177,634. Please see note (2) of the consolidated financial
statements accompanying this form.

Other  Expenses:  Other expenses  include the write down of obsolete  inventory,
uncollectible  loans and other  uncategorized  expenses.  Other  expense for the
period was  $17,479 a decrease of 75% from 1999 other  expense of  $70,710.  The
increase is attributable to obsolete CD-ROM inventory and uncollectible loans.

Interest Expense:  Internet expense for the period was $28,220 down from $70,602
in 1999.  The  reduction  is due to the  completion  of  certain  lease and loan
agreements in 1999.

Product  Costs:  Product  costs for the period  $14,785 up from $12,694 in 1999.
Product  costs  remained  low (down from  $378,309  in 1998) due to the shift in
focus from traditional  retail and the subsequent  inventory levels to a just in
time  inventory  system  for  fulfilling  online  orders.  In 1999  the  Company
outsourced CD manufacturing and inventory management to Duplium Supply.

Write-off  of  Distribution  Rights:  In May  2000,  the  Company  acquired  the
distribution  rights to  Active  Trainer  software  from a  company  engaged  in
providing  consulting  services to them.  The purchase  cost of  $1,000,000  was
settled by the issuance of 3,663,333  common shares of the Company at an average
price  of $.27  per  share.  The  valuation  of these  distribution  rights  was
subsequently  written down to $10 when the Company  completed the acquisition of
ClubSite  Internet  Network Inc. and  discontinued  the  production  and sale of
Active Trainer software.

Write-down of Fixed Assets: The Company regularly reviews the carrying values of
its fixed assets by comparing  the carrying  amount of the asset to the expected
undiscounted  future cash flows to be  generated  by the asset.  If the carrying
value exceeds the undiscounted future cash flows, a write-down is charged to the
consolidated statement of operations and deficit for the excess. In May 2000 the
Company moved primary office locations in order to reduce costs. As there was an
excess of  office  furniture  and  fixtures  given  the size of the new  office,
certain fixed assets were put into storage or discarded. Obsolete computers were
also written off during this period.

LIQUIDITY AND CAPITAL RESOURCES

Funding  to Date.  We have  been  funded to date  primarily  through a series of
private  placements of equity.  During the fiscal year ended  December 31, 1999,
the Company  received  $1,991,219  resulting from private  placements for common
shares of the Company and an additional  $872,750 resulting from the exercise of
options  and  warrants  for  common  shares  of  the  Company,  for a  total  of
$2,863,969.

                                       25
<PAGE>

Present Status.  We have not earned profits to date and, at December 31, 2000 we
had an accumulated deficit of $12,925,966.  We have generated negative cash flow
from  operations  since inception and we have expended and expect to continue to
expend  substantial  funds to continue to develop  technology,  and expand other
areas of our business including the acquisition of, or strategic investments in,
complementary  products,  businesses or technologies.  As a result, we expect to
incur losses for the  foreseeable  future and there can be no assurance  that we
will ever achieve  profitability.  Operating  results have varied on a quarterly
basis in the past and may fluctuate significantly in the future as a result of a
variety of factors, many of which are outside of our control.

As of December 31, 2000, and March 31, 2001, we had cash on hand of $0 . At this
time,  funds  from  operations  may not be  sufficient  to meet our  anticipated
financial requirements beyond the third quarter of 2001. The Company has secured
a loan from  investors  in the amount of  $250,000  USD to meet  immediate  cash
needs.  The loan is in the form of a promissory  note that is payable on demand.
The Company cannot currently offer  debentures,  private  placements or warrants
due to a cease trade order imposed by the Ontario Securities Commission for late
filing.  The cease  trade order is  temporary  and is  anticipated  to be lifted
following  the  filing of the  annual  consolidated  financial  statements.  Our
management  has  developed a business  and  financial  plan to reduce  operating
costs,  and  refocus  our efforts on more  profitable  elements of our  business
model. As a short term measure to improve operating performance,  management has
implemented  a  revised   financial  and  business   plan   requiring   internal
restructuring and cost cutting measures.  However,  we believe that current cash
balances are insufficient to support the activities of the company long term and
further  capital  infusions  will be necessary.  The actual amount of funds that
will be required  during the interim  period will be determined by many factors,
some of which are beyond our control.  As a result,  we may require funds sooner
or in greater amounts than currently anticipated.

We do not have  committed  sources of financing at this time and there can be no
assurance that we will be able to obtain  financing when needed on  commercially
reasonable terms or at all. If adequate funds are not available or not available
on acceptable terms when needed, our business,  operations,  financial condition
and future prospects will be materially adversely affected.  If additional funds
are raised through the issuance of equity or convertible  debt  securities,  the
percentage  ownership  of our  shareholders  will be reduced,  shareholders  may
experience additional dilution and such securities may have rights,  preferences
and privileges senior to those of our common shares.

Foreign  Currency  Rate  Fluctuations.  While our  financial  statements  are in
Canadian dollars,  revenue is generated in US dollars and other  currencies.  We
incur the  majority of our  expenses in Canadian  dollars.  As a result,  we may
suffer losses due to  fluctuations in exchange rates between the Canadian dollar
and US dollar, and the Canadian dollar and currencies of other countries.  We do
not  currently  engage  in  foreign  exchange  hedging  activities  or use other
financial instruments in this regard.

Net  Operating  Losses for Tax  Purposes.  We have  available  an  aggregate  of
approximately  $12,925,966 of net operating  losses for tax purposes that may be
used to reduce  taxable  income in future years.  Our net  operating  losses are
subject to assessment of our tax returns by taxation authorities.

                                       26
<PAGE>

ITEM 6 - DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.       DIRECTORS AND SENIOR MANAGEMENT

The following  table sets forth the name,  position and year of election of each
of our directors and executive officers.



                                                                  YEAR BECAME
        NAME                     POSITION                         A DIRECTOR
        ----                     --------                         ----------

       Robert Clapperton         Chief Executive Officer,         2000
                                 President and Director

       Mark Vange                Director                         2001


The  principal  occupations,  business  or  employment  of each of the  proposed
directors and their respective biographies are as follows:

Robert Clapperton

Robert Clapperton  recently served as President of ClubSite Internet Network, an
e-commerce and website  provider to the health club industry.  Prior to that Mr.
Clapperton served as Vice-President of Operations for XRNet Corporation where he
led the  development of a number of Internet  business  communities  including a
network of 150 online art galleries.  Mr. Clapperton has also served as Director
of  Marketing  for 701.COM the leading  provider of small  business  websites in
Canada.  Mr.  Clapperton  brings  over 16 years  of  operational  experience  in
technology development and marketing to the Company

                                       27
<PAGE>

Mark Vange

Mark Vange has  established  his reputation as a trailblazer  for  strategically
fostering  emerging  innovations  through  his  direction  of a number of highly
successful  technology  companies.  In 1994, he founded Gemsoft Corporation,  an
electronic  game  development  Company.  VR-1 and Mr.  Vange  stayed-on as chief
technology  officer  to  pioneer  the  development  and  publishing  of  massive
multi-user online entertainment  technologies  acquired Gemsoft.  More recently,
VR-1 has been renamed  Circadence  Corporation,  broadening its scope to provide
solutions for bandwidth-constrained services over the Internet.

EXECUTIVE OFFICERS (Other than Mr. Clapperton)

Perry Tucciarone Vice-President SmartClub Product Group

Perry  Tucciarone  has 14 years  experience in sales and marketing  with some of
North America's  largest fitness club chains including 24 Hour Fitness (formerly
Family Fitness) and Gold's Gym. Mr.  Tucciarone was also VP of Sales for 701.com
Inc.,  Canada's  largest  developer of community  websites.  Mr.  Tucciarone has
developed extensive contacts in the fitness club industry and is responsible for
maximizing  e-business  opportunities  within the rapidly  expanding  network of
CLUBsite members across North America.

Kim Criece  Vice President Mediapage Product Group

Kim  Criece  has  14-year  experience  in  sales,   marketing,   promotions  and
advertising.  She has held positions with Telemedia  Publishing as the Promotion
Manager for  Consumer  Marketing,  launching a data base which now boasts over 5
million customer  profiles and a promotional  marketing  vehicle targeted to the
health and fitness consumer.  As a Senior Account Executive for Transcontinental
Publishing,  she launched a new promotion distribution vehicle targeted to women
and  as  Senior   Account   Executive   for  Act  Media,   became  the  Canadian
Representative  for the U.S.,  launched several new products and brought in more
than four million in new business.  Ms. Criece has extensive sales and marketing
experience  coupled  with a  fitness  and  computer  background  and  brings  to
ActFit.com an excellent track record for new business development and launches.

Marc Lutz, Vice-President  Technology

As head of  technology,  Marc Lutz  draws on his broad  academic  and  corporate
experience in managing  Telum's product  development  and technology  personnel.
Following his studies in Computer  Science at the  University of New  Brunswick,
Canada  where he lectured,  Mr. Lutz went on to achieve a Masters in  Economics.
During his years as an  information  specialist  and consultant in the corporate
sector, he designed  workflow and job management  solutions as well as extensive
solutions for corporate  Y2K issues in global  companies  such as Glaxo Inc. Mr.
Lutz's insight into  technology and business has also earned him the designation
of inventor on Telum's pending patents.

                                       28
<PAGE>

Ian Sinclair, Vice-President Operations

Ian Sinclair has served with the Federal  Government of Canada as well as having
broad experience in consulting with private small and medium  enterprises  where
his  focus  has been on  operational  management,  communications  and  business
development.

Born in Canada,  Mr.  Sinclair  completed his secondary  schooling in France and
received his BA from Trent  University in Cultural Studies with special emphasis
on media analysis and  administrative  policy. He has worked  communications for
the  MacDonald  Royal  Commission of the Canadian  Government,  operated his own
entertainment  management  firm and was  Director  of Business  Development  for
Planning Initiatives,  a Toronto based  management-consulting  firm with clients
throughout North America. Mr. Sinclair also co-founded eyeLink, a Canadian based
entertainment  development workshop to combine multi-media and Internet content.
He  brings to Telum his  wide-ranging  expertise  in  developing  and  expanding
operations.

The articles of the Company  provide for a minimum of three and a maximum of ten
directors.  There were four  directors  elected at the last  annual and  special
shareholder's meeting. There are currently two vacancies.

EXECUTIVE COMPENSATION

During the fiscal year ended December 31, 2000 the aggregate  remuneration  paid
to all officers of the Company as a group was approximately $240,075.

The table below sets forth all annual and long term compensation for services in
all  capacities to the Company and its  subsidiary  for the Company's  financial
years ending  December 31, 1999,  and December 31, 2000,  for the president (the
"Named Executives") being the only executive officers of the Company with income
over $100,000 annually.
<TABLE>
<CAPTION>
------------------------------------- ------------------------------------------------- ---------------------------------
                                                    Annual Compensation                      Long Term Compensation
------------------------------------- ------------------------------------------------- ---------------------------------
         Name and                                                      Other Annual             Securities under
    Principal Position        Year       Salary          Bonus       Compensation (1)         Options Granted (2)
    ------------------        ----       ------          -----       ----------------         -------------------

<S>                          <C>        <C>           <C>                   <C>                     <C>
Richard Hue                  1999          NIL           NIL                $3,160                  1,200,000
Chief Executive Officer      2000       $66,667(3)    $50,000(3)            $21,408(1)              1,025,000
and President
---------------------------- -------- -------------- --------------- ------------------ ---------------------------------
</TABLE>

(1) Represents Automobile expense.
(2) For the fiscal year ended December 31, 1999,  1,200,000 options were granted
to the Company's named executive  officers.  (3) Paid by way of common shares of
the Company.

                                       29
<PAGE>

Compensation of Directors

During the financial  year ended  December 31, 2000,  the directors  received no
fees for meetings of the Board or a committee  of the Board which they  attended
and no fee for the signing of any resolution of directors or documents on behalf
of the Company.

BOARD PRACTICES

Our Articles  currently provide for a Board of Directors  consisting of not less
than 3 and not more than 10  directors,  to be  elected  annually.  The  Ontario
Business  Corporations  Act provides that, where a minimum and maximum number of
directors  are provided for in the articles of a Company,  the directors of that
Company  may, if  empowered  by special  resolution  of the  shareholders,  by a
resolution  determine  the number of  directors  to be  elected  at each  annual
meeting of the  shareholders.  Two new directors will be elected at the upcoming
annual shareholders meeting.

The Board of Directors presently consists of 2 directors.  Under Canadian law, a
majority of our board of directors and of each of our Board  Committees  must be
residents of Canada, subject to certain exceptions.  Each of our directors holds
office until the next annual meeting of  shareholders or until his successor has
been elected and qualified. Our executive officers are appointed by our board of
directors and serve at the discretion of our Board of Directors.

No director has any contract or  arrangement  with us entitling them to benefits
upon termination of their directorship.

The Audit Committee activities are handled by the board as a whole.

EMPLOYEES

In March,  2001, we  implemented a workforce  reduction in which we eliminated 9
positions.  As of June 30, 2001, we employed 10 full-time employees, 1 part-time
employee, and 2 independent contractors, as follows:

          2 in sales and marketing;

          8 in technical support and operations;

          3 in finance, administrative and senior management functions.

                                       30
<PAGE>


SHARE OWNERSHIP

The  following  table  sets  forth  certain  information  concerning  the  share
ownership of our directors and executive officers as of April 20, 2001:
<TABLE>
<CAPTION>
---------------------- ---------------- ---------------------- ------------ ------------ ---------------------
                       Number of        Number of Common       Exercise     Expiration   Percentage of
                       Common           Shares that may be     Price        Date of      Common Shares
                       Shares Owned     acquired under         of Options   Options      Beneficially Owned
                       (1)              option plan (2)                                  (3)
---------------------- ---------------- ---------------------- ------------ ------------ ---------------------
<S>                    <C>              <C>                    <C>          <C>                   <C>
Robert Clapperton      500,000          100,000                0.22         07/31/02              *
---------------------- ---------------- ---------------------- ------------ ------------ ---------------------
Mark Vange             0                0                      0                                  *
---------------------- ---------------- ---------------------- ------------ ------------ ---------------------
Perry Tucciarone       500,000          100,000                0.22         07/31/02              *
---------------------- ---------------- ---------------------- ------------ ------------ ---------------------
Kim Criece             0                100,000                0.22         07/31/02              *
---------------------- ---------------- ---------------------- ------------ ------------ ---------------------
Marc Lutz              0                0                      0                                  *
---------------------- ---------------- ---------------------- ------------ ------------ ---------------------
Ian Sinclair           0                0                      0                                  *
---------------------- ---------------- ---------------------- ------------ ------------ ---------------------

* Represents less than 1%
</TABLE>

(1) Represents  shares owned  beneficially  by the named  individual  other than
those shares which may be acquired  under our  Company's  option  plans.  Unless
otherwise  noted,  all  persons  referred  to above  have sole  voting  and sole
investment power.

(2) Includes  all shares  which the named  individual  has  the right to acquire
under all vested and  unvested  options  granted  to such  individual  under our
Company's option plan.

(3) This information is based on 36,541,597 common shares outstanding as of June
30, 2001. Common shares subject to options exercisable within 60 days are deemed
outstanding  for computing the  percentage  ownership of the person  holding the
options but are not deemed outstanding for computing the percentage ownership of
any other person.


ITEM 7 - MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

To our  knowledge,  no person  beneficially  owns,  directly or  indirectly,  or
exercises  control or direction over more than 5% of our issued and  outstanding
common shares. This information is based on our records, information provided to
us by directors and executive officers.

                                       31
<PAGE>

RELATED PARTY TRANSACTIONS

On August 1, 2000, the Company entered into a one year consulting agreement with
Hue, Martini and Vaughan Design Inc. ("HMVD"),  a Company owned by the sister of
one of the  directors  (now a former  director).  HMVD was  engaged  to  provide
consulting  advice and services in connection  with the website  development and
Internet  marketing of the Company in exchange  foe options to purchase  500,000
common shares of the Company at an exercise price of $0.15 USD per share.  These
options were issued in August 2000 expiring in July 2002.

CUNE  Management  and  RT  Management  provided  investor  relations  consulting
services to the Company. Both of these Companies are shareholders in ActFit.com.

ITEM 8 - FINANCIAL INFORMATION

See Item 17 for our audited consolidated financial statements.

LEGAL PROCEEDINGS

Neither we, nor any of our subsidiaries,  are a party to, or the subject of, any
material  legal  proceedings.  Due to a lack of cash  flow  some  suppliers  are
threatening  litigation.  Management has negotiated  extensions and  settlements
with the majority of these suppliers.  It is possible legal proceedings  against
the company may be initiated by these  suppliers.  All amounts have been accrued
in the financial statements.

DIVIDEND POLICY

We have not  declared  or paid any  cash  dividends  on our  common  shares.  We
currently  intend to retain any future  earnings  for use in the  operation  and
expansion of our business. We do not anticipate paying any cash dividends on our
common shares in the foreseeable future.

We have not  issued any  preference  shares.  The  dividend  entitlement  of any
preference shares issued will be determined by our Board of Directors.

SIGNIFICANT CHANGES
None.

                                       32
<PAGE>

ITEM 9 - THE OFFER AND LISTING

Our common  shares are quoted on the  NASD/OTC  Bulletin  Board and the Canadian
Venture  Exchange.  Our common shares have been quoted on the NASD/OTC  Bulletin
Board since October 19, 1998, under the symbol "LZMCF" at which time the Company
name was LaserMedia Communications Corp. On August 19, 1999 the Company name was
changed to  ActFit.com  Inc. and the new symbol on the NASD/OTC  Bulletin  board
became ACTFF. Our common shares began trading on the Canadian Dealing Network on
August 14, 1997 under the symbol  "LMCD",  and, since August 19, 1999 our common
shares traded under the symbol "ACTF.U.  Since October 20, 2000 our shares began
trading on the Canadian Venture Exchange under the symbol YAC.U.

Due to the late filing of its annual financial report,  the Company is currently
under a cease trade order form the Ontario Securities Commission.  Shares in the
company  cannot  currently  be traded on the CDNX  under the symbol  YAC.U.  The
company will apply to have the cease trade order  released  following the filing
of the annual financial report for fiscal year 2000.

The following tables set forth the range of high and low sales prices(rounded to
the nearest  hundredth) as reported by Canadian Dealing Network (through October
19,  2000),  the  Canadian  Venture  Exchange  (beginning  October 20, 2000) and
NASD/OTC  Bulletin  Board  (beginning   October  19,   1998)during  the  periods
indicated:

The Canadian Dealing Network
----------------------------

                                            High            Low

               Annual Market Prices
               --------------------

                     1998                   2.05[CAN$]      0.10[CAN$]
                     1999                   3.10[CAN$]      0.10[CAN$]
                     2000                   0.88[US$]       0.04[US$]

              Quarterly Market Prices
              -----------------------

                    1998
                    ----

                 1/st/ Quarter [N/A]
                 2/nd/ Quarter              2.05[CAN$]      0.45[CAN$]
                 3/rd/ Quarter              0.55[CAN$]      0.25[CAN$]
                 4/th/ Quarter              0.40[CAN$]      0.10[CAN$]

                                       33
<PAGE>

                    1999
                    ----

                 1/st/ Quarter              0.85[CAN$]      0.10[CAN$]
                 2/nd/ Quarter              2.22[CAN$]      0.47[CAN$]
                 3/rd/ Quarter              2.12[US$]       0.95[US$]
                 4/th/ Quarter              1.15[US$]       0.43[US$]



                    2000
                    ----

                 1/st/ Quarter              0.88[US$]       0.45[US$]
                 2/nd/ Quarter              0.70[US$]       0.27[US$]
                 3/rd/ Quarter              0.37[US$]       0.16[US$]
                 4/th/ Quarter              0.34[US$]       0.04[US$]


                    2001
                    ----

                 1/st/ Quarter              0.23[US$]       0.03[US$]

                 April 1 - May 18           0.14[US$]       0.04[US$]

              Monthly Market Prices
              ---------------------

                 November 2000              0.18[US$]       0.09[US$]
                 December 2000              0.09[US$]       0.04[US$]
                 January 2001               0.23[US$]       0.06[US$]
                 February 2001              0.12[US$]       0.07[US$]
                 March 2001                 0.09[US$]       0.03[US$]
                 April 2001                 0.08[US$]       0.04[US$]

NASD/OTC Bulletin Board
-----------------------


                    1999                    High            Low
                                            (US$)               US$)

                                       34
<PAGE>

Annual Market Prices

                    1999                    2.12            0.10

                    2000                    0.88            0.04

            Quarterly Market Prices
            -----------------------

                    1999
                    ----

                 1/st/ Quarter              0.58            0.10
                 2/nd/ Quarter              1.47            0.31
                 3/rd/ Quarter              2.12            0.95
                 4/th/ Quarter              1.15            0.43

                    2000
                    ----

                 1/st/ Quarter              0.88            0.45
                 2/nd/ Quarter              0.70            0.27
                 3/rd/ Quarter              0.37            0.16
                 4/th/ Quarter              0.34            0.04

                    2001
                    ----

                 1/st/ Quarter              0.23            0.03
                 April 1-May 18             0.14            0.04

             Monthly Market Prices
             ---------------------

                 November 2000              0.18            0.09
                 December 2000              0.09            0.04
                 January 2001               0.23            0.06
                 February 2001              0.12            0.07
                 March 2001                 0.09            0.03
                 April 2001                 0.08            0.04

ITEM 10 - ADDITIONAL INFORMATION

A.       Share Capital

         Not applicable.

                                       35
<PAGE>

B.       Memorandum and Articles of Association

Our  Articles  of  Amalgamation,  as amended,  are on file with the  Ministry of
Consumer and  Commercial  Relations  for the Province of Ontario  under  Ontario
Corporation Number 132323. Our articles do not include a stated purpose.

Directors

Directors  of our  Company  need not be  shareholders.  In  accordance  with our
by-laws and the Ontario Business  Corporations  Act, a majority of our directors
must be  residents  of  Canada,  subject  to certain  exceptions.  In  addition,
directors  must be at least 18 years of age,  of sound mind,  and not  bankrupt.
Neither our  articles or by-laws,  nor the Ontario  Business  Corporations  Act,
impose any mandatory retirement age for directors.

A  director  who is a party  to, or who is a  director  or  officer  of or has a
material  interest  in any  person  who is a party to, a  material  contract  or
transaction or proposed  material contract or transaction with our Company shall
disclose to the Company the nature and extent of his interest at the time and in
the manner  provided  by the  Ontario  Business  Corporations  Act.  The Ontario
Business  Corporations  Act  prohibits  such  a  director  from  voting  on  any
resolution  to approve  the  contract  or  transaction  unless the  contract  or
transaction:

o        is an  arrangement  by way of security for money lent to or obligations
         undertaken  by the  director  for  the  benefit  of the  Company  or an
         affiliate;

o        relates  primarily to his or her  remuneration as a director,  officer,
         employee or agent of the Company or an affiliate;

o        is for indemnity or insurance; or

o        is with an affiliate.

Our board of directors  may, on behalf of the Company and without  authorization
of our shareholders:

o        borrow money upon the credit of the Company;

o        issue,  reissue,  sell or  pledge  bonds,  debentures,  notes  or other
         evidences or indebtedness or guarantees of our Company,  either secured
         or unsecured;

o        subject to certain  disclosure  requirements  of the  Ontario  Business
         Corporations Act, give, directly or indirectly, financial assistance to

                                       36
<PAGE>

         any person by means of a loan,  a guarantee  or  otherwise on behalf of
         our   Company  to  secure   performance   or  any   present  or  future
         indebtedness, liability or obligation of any person; and

o        mortgage,  hypothecate,  pledge or otherwise create a security interest
         in all or any currently owned or subsequently acquired real or personal
         property  of our  Company,  movable  or  immovable,  including  without
         limitation book debts, rights, powers, franchises and undertakings,  to
         secure any bonds, debentures,  notes or other evidences of indebtedness
         or guarantee or any other obligation of the Company.

Common Shares

Our articles authorize the issuance of an unlimited number of common shares. The
holders of the common  shares of our Company are  entitled to receive  notice of
and to attend all meetings of the  shareholders of our Company and have one vote
for each common share held at all meetings of the  shareholders  of our Company,
except for meetings at which only holders of another  specified  class or series
of shares of the Company are entitled to vote  separately  as a class or series.
Subject to the prior rights of the holders of  preference  shares of our Company
and to any other  shares  ranking  senior to the common  shares with  respect to
priority in the payment of dividends,  the holders of common shares are entitled
to receive dividends and our Company will pay dividends, as and when declared by
our Board of  Directors,  out of moneys  properly  applicable  to the payment of
dividends,  in such amount and in such form as our Board of  Directors  may from
time to time  determine,  and all  dividends  which our Board of  Directors  may
declare on the common  shares  shall be declared  and paid in equal  amounts per
share  on all  common  shares  at the  time  outstanding.  In the  event  of the
dissolution,  liquidation  or  winding-up of the Company,  whether  voluntary or
involuntary,  or any  other  distribution  of assets  of the  Company  among its
shareholders  for the  purpose of winding up its  affairs,  subject to the prior
rights of the  holders  of  preference  shares and to any other  shares  ranking
senior to the common  shares with  respect to priority  in the  distribution  of
assets upon  dissolution,  liquidation or winding-up,  the holders of the common
shares  will be entitled to receive  the  remaining  property  and assets of the
Company.

Preference Shares

Our articles of  incorporation  authorize  the issuance of 2 million  preference
shares,  in one or more series.  The Ontario Business  Corporations Act does not
impose restrictions upon our Board of Directors issuing preference shares of the
type  authorized  by our articles of  incorporation.  Our Board of Directors may
fix,  before  issuing,  the  number of  preference  shares of each  series,  the
designation,  rights,  privileges,  restrictions and conditions attaching to the
preference  shares of each series,  including  any voting  rights,  any right to
receive  dividends  (which may be cumulative or  non-cumulative  and variable or

                                       37
<PAGE>

fixed) or the means of  determining  the  dividends,  the dates of payment,  any
terms and conditions of redemption or purchase,  any conversion  rights, and any
rights on the liquidation, dissolution or winding-up of the Company, any sinking
fund or other provisions,  the whole to be subject to the issue of a Certificate
of Amendment setting forth the designation, rights, privileges, restrictions and
conditions  attaching to the  preference  shares of the series.  Our articles of
incorporation  require that preference  shares of each series must, with respect
to the  payment of  dividends  and the  distribution  of assets or the return of
capital  in the  event of the  liquidation,  dissolution  or  winding-up  of the
Company, whether voluntary or involuntary,  rank on a parity with the preference
shares of every  other  series and be  entitled  to  preference  over the common
shares and over any other shares ranking junior to the  preference  shares.  The
preference  shares of one series shall  participate  ratably with the preference
shares of every other series in respect of all dividends and similar amounts.

Action Necessary to Change the Rights of Shareholders

In order to change  the rights of our  shareholders,  we would need to amend our
articles of incorporation to effect the change.  Such an amendment would require
the  approval  of holders of  two-thirds  of the  shares  cast at a duly  called
special  meeting.  If we wish to amend the rights of holders of a specific class
of shares,  such approval would also be required from the holders of that class.
A shareholder is entitled to dissent in respect of such a resolution and, if the
resolution is adopted and the Company implements such changes, demand payment of
the fair value of its shares.

Meetings of Shareholders

An  annual  meeting  of  shareholders  is held  each  year  for the  purpose  of
considering the financial statements and reports, electing directors, appointing
auditors and for the  transaction of other business as may be brought before the
meeting. The President or the Board of Directors has the power to call a special
meeting  of  shareholders  at any  time.  Notice  of the time and  place of each
meeting of  shareholders  must be given not less than 21 days,  nor more than 50
days,  before the date of each meeting to each  director,  to the auditor and to
each  shareholder  who at the close of business on the record date for notice is
entered in the securities  register as the holder of one or more shares carrying
the right to vote at the meeting. Notice of a meeting of shareholders called for
any other purpose other than consideration of financial statements and auditor's
report,  election of directors and reappointment of the incumbent auditor,  must
state the nature of the business in sufficient  detail to permit the shareholder
to form a reasoned judgment on and must state the text of any special resolution
or by-law to be  submitted  to the  meeting.  The only  persons  entitled  to be
present at a meeting of  shareholders  are those  entitled to vote thereat,  the
directors of the Company, the auditor of the Company and others who although not
entitled to vote are  entitled or  required  to be present at the  meeting.  Any
other  person may be  admitted  only on the  invitation  of the  chairman of the
meeting or with the consent of the meeting. If a corporation is winding-up,  the
Ontario  Business  Corporations  Act  permits  a  liquidator  appointed  by  the
shareholders,  during the  continuance  of a voluntary  winding-up,  to call and
attend meetings of the  shareholders.  In  circumstances  where a court orders a
meeting  of  shareholders,  the court may direct  how the  meeting  may be held,
including the parties entitled, or required, to attend the meeting.

                                       38
<PAGE>

Limitations on Rights to Own Securities

There is no  limitation  imposed by  Canadian  law or by the  articles  or other
charter  documents on the right of a non-resident  to hold or vote common shares
or  preference  shares  with  voting  rights,  other  than  as  provided  in the
Investment  Canada  Act, as amended by the World  Trade  Organization  Agreement
Implementation Act. The Investment Canada Act generally prohibits implementation
of a reviewable  investment  by an  individual,  government  or agency  thereof,
corporation,  partnership,  trust or joint venture that is not a "Canadian,"  as
defined in the Investment Canada Act (a "non-Canadian"),  unless,  after review,
the minister responsible for the Investment Act is satisfied that the investment
is likely to be a net benefit to Canada.

An investment in our voting shares by a non-Canadian  (other than a "World Trade
Organization  Investor,"  as  defined  below)  would  be  reviewable  under  the
Investment  Canada Act if it were an investment to acquire direct control of our
Company, and the value of our assets were $5.0 million or more. An investment in
our voting  shares by a World Trade  Organization  Investor  would be reviewable
under the  Investment  Canada Act if it were an  investment  to  acquire  direct
control of our  Company,  and the value of our assets  equaled or exceeded  $209
million.  A  non-Canadian,  whether  a  World  Trade  Organization  Investor  or
otherwise, would acquire control of us for purposes of the Investment Canada Act
if he or she acquired a majority of our voting shares.  The  acquisition of less
than a majority,  but at least one-third of our voting shares, would be presumed
to be an acquisition  of control of our Company,  unless it could be established
that we were not  controlled  in fact by the acquirer  through the  ownership of
voting shares. In general, an individual is a World Trade Organization  Investor
if he or she is a "national"  of a country  (other than Canada) that is a member
of the World Trade  Organization  ("World Trade  Organization  Member") or has a
right of permanent residence in a World Trade Organization Member. A corporation
or other  entity will be a World Trade  Organization  investor if it is a "World
Trade  Organization  investor-controlled  entity" pursuant to detailed rules set
out  in  the  Investment  Canada  Act.  The  United  States  is  a  World  Trade
Organization Member.

Certain  transactions  involving  our  voting  shares  would be exempt  from the
Investment Canada Act, including: (a) an acquisition of our voting shares if the
acquisition  were made in connection  with the person's  business as a trader or
dealer in securities; (b) an acquisition of control of our Company in connection
with  the  realization  of a  security  interest  granted  for a loan  or  other
financial  assistance  and not for any purpose  related to the provisions of the
Investment  Canada  Act;  and (c) an  acquisition  of control of our  Company by
reason of an amalgamation,  merger,  consolidation or corporate  reorganization,
following which the ultimate direct or indirect  control in fact of our Company,
through the ownership of voting interests, remains unchanged.

                                       39
<PAGE>

Change of Control

Our authorized  capital  consists of  2,000,000preference  shares.  The Board of
Directors,  without  any  further  vote  by the  common  shareholders,  has  the
authority to issue  preference  shares and to determine the price,  preferences,
rights and restrictions,  including voting and dividend rights, of these shares.
The rights of the holders of common  shares are subject to the rights of holders
of any  preference  shares that the Board of Directors  may issue in the future.
That means, for example,  that we can issue  preference  shares with more voting
rights, higher dividend payments or more favorable rights upon dissolution, than
the  common  shares.  If we issued  certain  types of  preference  shares in the
future, it may also be more difficult for a third-party to acquire a majority of
our outstanding voting shares.


C.       Material Contracts

The  following is a summary of our  company's  material  contracts  entered into
since January 1, 1999.

On December 28, 2000,  the Company  acquired  all of the  outstanding  shares of
ClubSite   Internet  Network  Inc.   ("ClubSite"),   a  privately  held  company
incorporated in Ontario in the business of providing  template-based websites to
the  fitness  club  industry.  The  transaction  has been  accounted  for by the
purchase  method,  with the  results of  operations  included  in the  financial
statements  from the date of  acquisition.  The purchase price of  approximately
$244,000  was  satisfied  by the  issuance  of  2,000,000  common  shares of the
Company.  In  addition,  the Company has  committed to the issuance of a further
2,000,000  common shares in increments  of 500,000  contingent  upon the Company
meeting   cumulative   pretax   consolidated   revenue  targets  of  $2,000,000,
$5,000,000,  $10,000,000 and $20,000,000 over the next five years. Shares issued
in connection  with the  contingent  consideration  will be valued at the market
rate when  issuable.  The purchase  price has been  allocated to goodwill and is
being amortized over two years.

On June 26,  2001,  the Company  signed a letter of intent  with Telum  Inc.,  a
Barbados based research and development  company that develops  software for the
communications and broadband industries.  Under the terms of this agreement, the
Company  will  acquire  worldwide  rights and  intellectual  property of Telum's
Mediapage  technology,  together with the first right of refusal to  exclusively
license any Telum  product.  The Company will also receive  250,000 shares and a
seat on the board of Telum.

The  consideration  comprises  an initial  payment of US.  $100,000  followed by
monthly payments totaling US $70,000 over the subsequent seven-month period, and
the issuance of up to 2,000,000  common  shares of the Company on closing of the
agreement.  Of  these  2,000,000  common  shares,  1,000,000  will  have a sales
restriction of 24 months.  In addition,  the Company will pay an ongoing royalty
of 5% of the Mediapage  related revenue.  Additional  consideration of 1,500,000
common shares in the Company is payable  contingent on the Company's gross sales
of Mediapage products exceeding US $10,000,000.

                                       40
<PAGE>

D.       Exchange Controls

There is no law,  government  decree or  regulation  in Canada  restricting  the
export or import of capital or affecting the  remittance of dividends,  interest
or other  payments  to a  non-resident  holder  of  common  shares,  other  than
withholding tax requirements.

E.       Taxation

Canadian Federal Income Tax Considerations

The  following   summary   describes   material   Canadian  federal  income  tax
consequences  generally applicable to a holder of our common shares who is not a
resident of Canada,  and who, for purposes of the Income Tax Act  (Canada),  (i)
holds such shares as capital  property  and (ii) deals at arm's  length with us.
Generally,  common  shares  will be  considered  capital  property  to a  holder
provided  that  such  holder  does not hold  such  securities  in the  course of
carrying on a business and has not acquired such  securities in a transaction or
transactions  considered  to be an  adventure  or concern in the nature of trade
which includes a transaction or  transactions of the same kind and carried on in
the same manner as a transaction or transactions of an ordinary trader or dealer
in property of the same kind.

This summary is based upon the current  provisions of the Income Tax Act and the
regulations there under and on an understanding of the published  administrative
practices of the Canadian Customs and Revenue Agency. This summary does not take
into account or anticipate  any possible  changes in law, or the  administration
thereof,  whether  by  legislative,  governmental  or  judicial  action,  except
proposals for specific  amendment thereto which have been publicly  announced by
the Canadian Minister of Finance prior to the date hereof.

This  summary  does not address all aspects of Canadian  federal  income tax law
that may be relevant to shareholders based upon their particular  circumstances,
and  does  not  deal  with   provincial,   territorial  or  foreign  income  tax
consequences,  which might  differ  significantly  from the  consequences  under
Canadian federal income tax law.

Shareholders are advised to consult their tax advisors regarding the application
of the Canadian  federal income tax law to their  particular  circumstances,  as
well as any Canadian  provincial,  territorial or other tax  consequences or any
U.S.  federal,  state or local tax  consequences  or other  foreign  income  tax
consequences of the acquisition, ownership and disposition of our common shares.

                                       41
<PAGE>

Taxation of Dividends.

A holder of a common  share who is not  resident  in Canada for  purposes of the
Income Tax Act will be subject to Canadian  withholding tax on dividends paid or
credited,  or deemed  under the  Income Tax Act to be paid or  credited,  to the
holder of the common share. The rate of withholding tax under the Income Tax Act
on  dividends  is 25% of the  amount of the  dividend.  Such rate may be reduced
under the provisions of an applicable  international  tax treaty to which Canada
is a party.  Under the tax treaty that  Canada has entered  into with the United
States, the rate of Canadian  withholding tax applicable in respect of dividends
paid or  credited by a Canadian  corporation  to a  shareholder  resident in the
United  States,  is  generally  reduced to 15%, or 5% in the case of a corporate
holder which owns 10% or more of the voting shares. A foreign tax credit for the
tax withheld may be available under applicable US tax law to a US holder against
U.S.  federal  income tax  liability.  Moreover,  pursuant to Article XXI of the
Canada-U.S.  Treaty,  an exemption  from Canadian  withholding  tax generally is
available  in respect of dividends  received by certain  trusts,  companies  and
other organizations whose income is exempt from tax under the laws of the United
States.

Disposition of common shares.

A  non-resident  holder of a common  share  will not be subject to tax under the
Income Tax Act in respect of a capital  gain  realized on the  disposition  of a
common  share  unless the common share  constitutes  or is deemed to  constitute
"taxable  Canadian  property"  as defined  in the  Income  Tax Act.  Shares of a
corporation  that are listed on a  prescribed  stock  exchange  (which  includes
shares  traded on certain  U.S.  stock  exchanges,  including  the  Nasdaq)  are
generally not considered to be taxable Canadian property.  However,  such shares
are considered  taxable Canadian property in the hands of a non-resident  holder
if, at any time during the 60-month period immediately  preceding disposition by
the  holder,  25% or more of our  issued  shares of any class  were owned by the
non-resident  holder  together with persons with whom the  non-resident  did not
deal at arm's length.

An  interest  in or  option in  respect  of  common  shares or other  securities
convertible  into or  exchangeable  for common shares could  constitute  taxable
Canadian  property if the common shares that could be acquired upon the exercise
of the  option,  the  conversion  or  exchange  rights or in which there is such
interest are themselves  taxable Canadian  property.  Taxable Canadian  property
also includes any common share held by a non-resident if the  non-resident  used
the common share in carrying on a business (other than an insurance business) in
Canada, or, if the non-resident is a non-resident insurer, any common share that
is its "designated insurance property" for the year. A non-resident whose common
shares  constitute or are deemed to constitute  taxable  Canadian  property will
realize upon the disposition or deemed  disposition of a common share, a capital
gain (or a capital  loss) to the extent  that the  proceeds of  disposition  are
greater  than (or less  than) the  aggregate  of the  adjusted  cost base to the
holder of a common share and any reasonable costs of disposition.

One-half of any capital gain realized by a holder (a taxable  capital gain) will
be included in  computing  the  holder's  income.  One-half of any capital  loss
realized by a holder may, subject to certain restrictions  applicable to holders
that are  corporations,  normally be deducted from the holder's  taxable capital
gains realized in the year of disposition, the three preceding taxation years or
any subsequent taxation years, subject to detailed rules contained in the Income
Tax Act.

                                       42
<PAGE>

A  purchase  by us of our common  shares  (other  than a purchase  of our common
shares  on the  open  market  in a manner  in which  shares  would  normally  be
purchased  by any member of the public in the open  market)  will give rise to a
deemed  dividend  under the Income Tax Act equal to the  difference  between the
amount we paid on the purchase and the paid-up capital of such shares determined
in accordance with the Income Tax Act. The paid-up capital of such shares may be
less than the cost of such shares to the  holder.  Any such  dividend  deemed to
have been  received by a  non-resident  holder  will be subject to  non-resident
withholding tax as described  above. The amount of any such deemed dividend will
reduce the  proceeds  of  disposition  of the common  share to the  non-resident
holder for the  purpose of  computing  the amount of the  non-resident  holder's
capital gain or loss under the Income Tax Act.

Even if the common shares constitute taxable Canadian property to a non-resident
holder and their  disposition  would give rise to a capital  gain,  an exemption
from tax  under  the  Income  Tax Act may be  available  under  the  terms of an
applicable  international  tax  treaty  to which  Canada  is a  party.  A holder
resident  in the United  States for  purposes  of the  Canada-U.S.  Treaty  will
generally be exempt from Canadian tax in respect of a gain on the disposition of
common  shares  provided  that the value of the  common  shares  is not  derived
principally  from real  property  situated in Canada.  Our common  shares  would
qualify for this exception,  however Article XIII paragraph 5 of the Canada-U.S.
Treaty provides that the treaty exemption does not apply where the U.S. resident
holder was an individual  who was a Canadian  resident for 120 months during any
period of 20 consecutive  years  preceding the time of the sale and was resident
in Canada at any time during the ten years  immediately  preceding  the sale. If
the  exemption  from such  Canadian tax in respect of such gain is not available
under the  Canada-U.S.  Treaty,  a foreign  tax  credit may be  available  under
applicable US tax law for U.S.  federal income tax purposes.  Non-residents  are
advised to consult  their tax  advisers  with  regard to the  availability  of a
treaty exemption.

U.S. Federal Income Tax Considerations

The  following  summary  describes  material  United States  federal  income tax
consequences  arising from the purchase,  ownership  and sale of common  shares.
This summary is based on the provisions of the Internal Revenue Code of 1986, as
amended,  final,  temporary  and proposed  United  States  Treasury  Regulations
promulgated  there under, and the  administrative  and judicial  interpretations
thereof,  all as in effect as of the date of this annual report and all of which
are subject to change,  possibly on a retroactive basis. The consequences to any
particular  investor  may differ  from those  described  below by reason of that
investor's  particular   circumstances.   This  summary  does  not  address  the
considerations  that may be applicable to any particular  taxpayer based on such
taxpayer's  particular  circumstances  (including  potential  application of the
alternative  minimum  tax),  to  particular  classes  of  taxpayers   (including
financial institutions,  broker-dealers, insurance companies, taxpayers who have
elected mark-to-market accounting, tax-exempt organizations,  taxpayers who hold
ordinary shares as part of a straddle,  "hedge" or "conversion transaction" with

                                       43
<PAGE>

other   investments,   investors  who  own  (directly,   indirectly  or  through
attribution) 10% or more of our Company's  outstanding  voting stock,  taxpayers
whose functional  currency is not the U.S. dollar,  persons who are not citizens
or residents of the United  States,  or persons which are foreign  corporations,
foreign  partnerships  or foreign  estates or trusts as to the United States) or
any aspect of state,  local or  non-United  States tax laws.  Additionally,  the
discussion does not consider the tax treatment of persons who hold common shares
through a partnership or other pass-through  entity or the possible  application
of United States federal gift or estate tax. This summary is addressed only to a
holder of common  shares who is (i) a citizen or resident  of the United  States
who owns  less  than  10% of our  Company's  outstanding  voting  stock,  (ii) a
corporation  organized  in the  United  States or under  the laws of the  United
States or any state thereof,  (iii) an estate, the income of which is includable
in gross income for United  States  federal  income tax purposes  regardless  of
source, or (iv) a trust, if a court within the United States is able to exercise
primary  supervision over the  administration  of the trust and one or more U.S.
persons have the authority to control all substantial  decisions of the trust (a
"U.S.  Holder").  This summary is for general information purposes only and does
not purport to be a comprehensive  description of all of the tax  considerations
that may be  relevant  to a decision to purchase  common  shares.  This  summary
generally  considers  only U.S.  Holders  that will own their  common  shares as
capital assets.

Each shareholder  should consult with such  shareholder's  own tax advisor as to
the particular tax consequences to such  shareholder of the purchase,  ownership
and sale of their  common  shares  including  the effects of  applicable  state,
local, foreign or other tax laws and possible changes in the tax laws.

Treatment of Dividend Distributions

Subject  to the  discussion  below  under "Tax  Status Of The  Company - Passive
Foreign Investment Companies," a distribution by our Company to a U.S. Holder in
respect  of the  common  shares  (including  the  amount of any  Canadian  taxes
withheld thereon) will generally be treated for United States federal income tax
purposes as a dividend to the extent of our  Company's  current and  accumulated
earnings and profits,  as  determined  under United  States  federal  income tax
principles.  To the  extent,  if any,  that the amount of any such  distribution
exceeds our  Company's  current and  accumulated  earnings  and  profits,  as so
computed,  it will first reduce the U.S. Holder's tax basis in the common shares
owned by him, and to the extent it exceeds such tax basis, it will be treated as
capital gain from the sale of common shares.

While  it is  not  anticipated  that  our  Company  will  pay  dividends  in the
foreseeable  future,  the gross  amount  of any  distribution  from our  Company
received  by a U.S.  Holder  which is treated as a  dividend  for United  States
federal income tax purposes  (before  reduction for any Canadian tax withheld at
source) will be included in such U.S. Holder's gross income,  will be subject to
tax at the rates  applicable to ordinary  income and generally  will not qualify
for the  dividends  received  deduction  applicable  in certain  cases to United
States corporations.  For United States federal income tax purposes,  the amount
of any dividend  paid in Canadian  dollars by our Company to a U.S.  Holder will
equal the U.S.  dollar  value of the  amount of the  dividend  paid in  Canadian

                                       44
<PAGE>

dollars,  at the  exchange  rate in  effect  on the  date  of the  distribution,
regardless of whether the Canadian  dollars are actually  converted  into United
States dollars at that time.  Canadian  dollars  received by a U.S.  Holder will
have a tax  basis  equal to the U.S.  dollar  value  thereof  determined  at the
exchange rate on the date of the  distribution.  Currency exchange gain or loss,
if any,  recognized by a U.S. Holder on the conversion of Canadian  dollars into
U.S. dollars will generally be treated as U.S. source ordinary income or loss to
such holder.  U.S. Holders should consult their own tax advisors  concerning the
treatment of foreign  currency  gain or loss,  if any, on any  Canadian  dollars
received which are converted into dollars subsequent to distribution.

A U.S.  Holder  generally will be entitled to deduct any Canadian taxes withheld
from  dividends in computing  United States  taxable  income,  or to credit such
withheld taxes against the United States federal income tax imposed on such U.S.
Holder's  dividend  income.  No  deduction  for  Canadian  taxes may be claimed,
however,  by a noncorporate  U.S. Holder that does not itemize  deductions.  The
amount of foreign  taxes for which a U.S.  Holder may claim a credit in any year
is subject to complex limitations and restrictions,  which must be determined on
an individual basis by each  shareholder.  Distributions  with respect to common
shares that are taxable as dividends  will generally  constitute  foreign source
income for  purposes of the foreign tax credit  limitation.  The  limitation  on
foreign  taxes  eligible  for credit is  calculated  separately  with respect to
specific  classes of income.  For this  purpose,  dividends  distributed  by our
Company with respect to the common  shares will  generally  constitute  "passive
income."  Foreign income taxes exceeding a shareholder's  credit  limitation for
the year of payment or accrual of such tax can be carried  back for two  taxable
years and  forward  for five  taxable  years,  subject to the credit  limitation
applicable  in each of such years.  Additionally,  the foreign tax credit in any
taxable  year may not  offset  more than 90% of a  shareholder's  liability  for
United States individual or corporate  alternative minimum tax. The total amount
of allowable  foreign tax credits in any year  generally  cannot exceed  regular
U.S. tax liability for the year attributable to foreign source taxable income. A
U.S.  Holder will be denied a foreign tax credit with respect to Canadian income
tax withheld  from  dividends  received on the common  shares to the extent such
U.S.  Holder has not held the ordinary shares for at least 16 days of the 30-day
period  beginning on the date which is 15 days before the ex-dividend date or to
the extent  such U.S.  Holder is under an  obligation  to make  certain  related
payments with respect to  substantially  similar or related  property.  Any days
during which a U.S. Holder has substantially  diminished its risk of loss on the
common shares are not counted toward meeting the 16 day holding period  required
by the statute.

Sale or Exchange of a Common Share

Subject  to the  discussion  below  under "Tax  Status Of The  Company - Passive
Foreign Investment Companies," the sale or exchange by a U.S. Holder of a common
share  generally  will  result  in the  recognition  of gain or loss by the U.S.
Holder in an amount equal to the difference  between the amount realized and the
U.S.  Holder's basis in the common share sold. Such gain or loss will be capital
gain or loss  provided  that the common share is a capital asset in the hands of
the holder.  The gain or loss realized by a noncorporate U.S. Holder on the sale
or exchange of a common share will be long-term  capital gain or loss subject to
tax at a maximum tax rate of 20% if the common share had been held for more than
one year. If the common share had been held by such noncorporate U.S. Holder for

                                       45
<PAGE>

not more than one year, such gain will be short-term capital gain subject to tax
at a maximum rate of 39.6%. Finally, gain realized by a noncorporate U.S. Holder
with respect to common shares acquired after December 31, 2000 and held for more
than five years,  shall be taxed at a maximum  rate of 18%.  Gain  realized by a
corporate  U.S.  Holder will be subject to tax at a maximum  rate of 35%.  Gains
recognized by a U.S. Holder on a sale,  exchange or other  disposition of common
shares  generally  will be treated  as United  States  source  income for United
States foreign tax credit  purposes.  A loss  recognized by a U.S. Holder on the
sale,  exchange or other  disposition of common shares generally is allocated to
U.S.  source  income  under  recently  finalized  regulations.   However,  those
regulations  require such loss to be allocated to foreign  source  income to the
extent  certain  dividends  were  received by the  taxpayer  within the 24-month
period  preceding  the date on which  the  taxpayer  recognized  the  loss.  The
deductibility  of a  capital  loss  recognized  on the sale,  exchange  or other
disposition  of common  shares is subject to  limitations.  A U.S.  Holder  that
receives  foreign  currency upon  disposition of common shares and  subsequently
converts the foreign  currency  into U.S.  dollars  generally  will have foreign
exchange gain or loss based on any  appreciation or depreciation in the value of
the foreign currency against the U.S. dollar.  U.S. Holders should consult their
own tax advisors regarding treatment of any foreign currency gain or loss on any
Canadian dollars received in respect of the sale,  exchange or other disposition
of common shares.

Tax Status of the Company

Personal  Holding  Companies.  A non-U.S.  corporation  may be  classified  as a
personal  holding  Company for United States federal income tax purposes if both
of the  following  two tests are  satisfied:  (i) if at any time during the last
half of the Company's taxable year, five or fewer individuals (without regard to
their  citizenship  or  residency)  own or are  deemed  to  own  (under  certain
attribution  rules) more than 50% of the stock of the  corporation  by value and
(ii) 60% or more of such non-U.S.  corporation's  gross income derived from U.S.
sources or effectively  connected with a U.S. trade or business, as specifically
adjusted,  is from  certain  passive  sources  such  as  dividends  and  royalty
payments. Such a corporation generally is taxed (currently at a rate of 39.6% of
"undistributed  personal holding Company income") on the amounts of such passive
source income,  after making  adjustments  such as deducting  dividends paid and
income taxes,  that are not  distributed  to  shareholders.  We believe that our
Company  was not a  personal  holding  Company  in 1999 and is not  currently  a
personal  holding Company.  However,  no assurance can be given that either test
will not be satisfied in the future.

Foreign Personal Holding Companies. A non-U.S. corporation will be classified as
a foreign personal holding Company for United States federal income tax purposes
if both of the two following tests are satisfied:  (i) five or fewer individuals
who are United  States  citizens  or  residents  own or are deemed to own (under
certain  attribution  rules) more than 50% of all  classes of the  corporation's
stock  measured by voting  power or value and (ii) the  corporation  receives at
least 60% (50% if previously an foreign  personal  holding Company) of its gross
income (regardless of source),  as specifically  adjusted,  from certain passive
sources.  If such a  corporation  is classified  as a foreign  personal  holding
Company,  a portion  of its  "undistributed  foreign  personal  holding  Company
income" (as defined for United  States  federal  income tax  purposes)  would be

                                       46
<PAGE>

imputed to all of its  shareholders who are U.S. Holders on the last taxable day
of the corporation's  taxable year, or, if earlier,  the last day on which it is
classifiable as a foreign personal holding Company. Such income would be taxable
as a  dividend,  even if no cash  dividend is actually  paid.  U.S.  Holders who
dispose  of their  shares  prior to such date  would not be subject to tax under
these rules.  We believe that our Company was not a personal  holding Company in
1999 and is not currently a personal holding Company.  However, no assurance can
be given that our Company will not qualify as a foreign personal holding Company
in the future.

Passive  Foreign  Investment  Companies.  A Company  will be a  passive  foreign
investment  Company if 75% or more of its gross income  (including  the pro rata
share of the gross income of any Company (United States or foreign) in which the
Company is  considered  to own 25% or more of the shares  (determined  by market
value)) in a taxable year is passive income. Alternatively,  the Company will be
considered  to be a passive  foreign  investment  Company if at least 50% of the
value of the Company's  assets  (averaged over the year) (including the pro rata
share  of the  value of the  assets  of any  Company  in which  the  Company  is
considered to own 25% or more of the shares  (determined  by market value)) in a
taxable year are held for the production  of, or produce,  passive  income.  For
these  purposes,  the value of our  assets  is  calculated  based on our  market
capitalization.  Passive  income  generally  includes,  among others,  interest,
dividends, royalties, rents and annuities.

If our Company is a passive foreign  investment  Company for any taxable year, a
U.S.  Holders,  in the absence of an  election by such U.S.  Holder to treat our
Company as a "qualified  electing fund" (a "QEF election"),  as discussed below,
would,  upon certain  distributions  by our Company and upon  disposition of the
common  shares  at a gain,  be  liable  to pay tax at the  highest  tax  rate on
ordinary income in effect for each period to which the income is allocated, plus
interest on the tax, as if the distribution or gain had been recognized  ratably
over the days in the U.S.  Holder's  holding period for the common shares during
which our Company was a passive foreign investment Company. Additionally, if our
Company is a passive  foreign  investment  Company,  U.S.  Holders  who  acquire
ordinary shares from decedents would be denied the normally available step-up of
the income tax basis for such common  shares to fair market value at the date of
death and  instead  would have a tax basis  equal to the  decedent's  basis,  if
lower.

If our  Company is  treated  as a passive  foreign  investment  Company  for any
taxable year, U.S.  Holders should  consider  whether to make a QEF election for
United States federal income tax purposes.  If a U.S.  Holder has a QEF election
in effect for all taxable years that such U.S. Holder has held the common shares
and our Company was a passive foreign investment Company, distributions and gain
will not be recognized  ratably over the U.S. Holder's holding period or subject
to an interest  charge,  gain on the sale of common shares will be characterized
as capital gain and the denial of basis step-up at death  described  above would
not apply. Instead, each such U.S. Holder is required for each taxable year that
our Company is a qualified  electing  fund to include in income a pro rata share
of the ordinary  earnings of our Company as ordinary income and a pro rata share
of the net capital gain of our Company as long-term  capital gain,  subject to a
separate  election to defer  payment of taxes,  which  deferral is subject to an
interest charge. Consequently, in order to comply with the requirements of a QEF
election,  a U.S. Holder must receive from our Company certain  information.  We

                                       47
<PAGE>

intend to supply U.S.  Holders with the information  needed to report income and
gain  pursuant to a QEF  election in the event our  Company is  classified  as a
passive   foreign   investment   Company.   The  QEF   election  is  made  on  a
shareholder-by-shareholder basis and can be revoked only with the consent of the
Internal  Revenue  Service.  A  shareholder  makes a QEF election by attaching a
completed IRS Form 8621 (including the passive foreign investment Company annual
information statement) to a timely filed United States federal income tax return
and  by  filing  such  form  with  the  IRS  Service  Center  in   Philadelphia,
Pennsylvania.  Even if a QEF  election is not made, a  shareholder  in a passive
foreign  investment  Company who is a U.S. Holder must file a completed IRS Form
8621 every year.

As an  alternative to making a QEF election,  a U.S.  Holder may elect to make a
mark-to-market  election  with respect to the common shares owned by him. If the
mark-to-market  election  were made,  then the rules set forth  above  would not
apply for periods  covered by the election.  Under such election,  a U.S. Holder
includes in income each year an amount  equal to fair market value of the common
shares  owned by such U.S.  Holder as of the close of the taxable  year over the
U.S. Holder's  adjusted basis in such shares.  The U.S. Holder would be entitled
to a deduction for the excess,  if any, of such U.S.  Holder's adjusted basis in
his common  shares over the fair market  value of such shares as of the close of
the taxable year; provided however,  that such deduction would be limited to the
extent  of any net  mark-to-market  gains  with  respect  to the  common  shares
included by the U.S. Holder under the election for prior taxable years. The U.S.
Holder's basis in his common shares is adjusted to reflect the amounts  included
or deducted  pursuant to this election.  Amounts  included in income pursuant to
the  mark-to-market  election,  as well as gain on the sale or  exchange  of the
common  shares,  will be treated as ordinary  income.  Ordinary  loss  treatment
applies to the deductible portion of any mark-to-market  loss, as well as to any
loss  realized on the actual sale or exchange of the common shares to the extent
that the  amount of such  loss  does not  exceed  the net  mark-to-market  gains
previously included with respect to such common shares.

The  mark-to-market  election  applies to the tax year for which the election is
made and all later tax years, unless the common shares cease to be marketable or
the IRS consents to the revocation of the election.

We do not believe our Company was a passive  foreign  investment  Company during
2000. However, there can be no assurance that our Company will not be classified
as a passive foreign  investment Company in 2001 or thereafter because the tests
for determining  passive foreign  investment Company status are applied annually
and it is difficult to make  accurate  predictions  of future income and assets,
which are relevant to this  determination.  U.S.  Holders who hold common shares
during a period when our Company is a passive foreign investment Company will be
subject  to the  foregoing  rules,  even if our  Company  ceases to be a passive
foreign investment  Company,  subject to certain exceptions for U.S. Holders who
made a QEF  election.  U.S.  Holders  are urged to  consult  with  their own tax
advisors  about  making a QEF  election  or  mark-to-market  election  and other
aspects of the passive foreign investment Company rules.

                                       48
<PAGE>

Back-Up Withholding and Information Reporting

U.S.  Holders  generally are subject to information  reporting  requirements and
back-up  withholding  with  respect to  dividends  paid in the United  States on
common shares.  Back-up  withholding will not apply if a U.S. holder provides an
IRS Form W-9 or otherwise establishes an exemption.  U.S. holders are subject to
information  reporting and back-up withholding at a rate of 31% on proceeds paid
from the  disposition of common shares unless the U.S.  holder provides IRS Form
W-9 or otherwise establishes an exemption.

Non-U.S.  holders generally are not subject to information  reporting or back-up
withholding  with  respect  to  dividends  paid  on,  or the  proceeds  from the
disposition  of, common shares,  provided that such non-U.S.  holder  provides a
taxpayer  identification  number,  certify to its foreign  status,  or otherwise
establish an exemption.

The amount of any back-up withholding will be allowed as a credit against a U.S.
or non-U.S.  holder's  U.S.  federal  income tax  liability and may entitle such
holder to a refund,  provided that certain required  information is furnished to
the IRS.

F.       Dividends and Paying Agents

         Not applicable.

G.       Statements by Experts

         Not applicable.

H.       Documents on display.

We have filed this Annual Report on Form 20-F with the  Securities  and Exchange
Commission  under the Securities  Exchange Act of 1934.  Statements made in this
annual  report as to the contents of any contract,  agreement or other  document
referred to are not  necessarily  complete.  With respect to each such contract,
agreement or other document filed as an exhibit to this annual report, reference
is made to the exhibit for a more complete  description of the matter  involved,
and each  such  statement  shall be deemed  qualified  in its  entirety  by such
reference.

We are subject to the  informational  requirements  of the Exchange Act and file
reports and other  information  with the  Securities  and  Exchange  Commission.
Reports and other  information  which we file with the  Securities  and Exchange
Commission,  including  this Annual  Report on Form 20-F,  may be inspected  and
copied  at the  public  reference  facilities  of the  Securities  and  Exchange
Commission at:

                                       49
<PAGE>

450 Fifth Street N.W.       7 World Trade Center         500 West Madison Street
Room 1024                   New York, New York 10048     Suite 1400
Washington D.C. 20549                                    Chicago, Illinois 60661

You can also obtain  copies of this  material by mail from the Public  Reference
Section of the  Securities  and Exchange  Commission,  450 Fifth  Street,  N.W.,
Washington,  D.C.  20549,  at  prescribed  rates.  Additionally,  copies of this
material may also be obtained  from the  Securities  and  Exchange  Commission's
Internet  site at  http://www.sec.gov.  The  Commission's  telephone  number  is
1-800-SEC-0330.

ITEM 11 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

(a)  Quantitative Information about Market Risk

See Item 5 - Operating  and  Financial  Review and  Prospects  -  Liquidity  and
Capital  Resources  - Foreign  Currency  Rate  Fluctuations;  Interest  Rate and
Investment Risk.

(b)  Qualitative Information about Market Risk

See Item 5 - Operating and Financial Review and Prospects -Liquidity and Capital
Resources - Foreign  Currency Rate  Fluctuations;  Interest Rate and  Investment
Risk.

ITEM 12 - DESCRIPTION OF SECURITIES OTHER THAN DEBT SECURITIES

Not applicable.




PART II

ITEM 13 - DEFAULT, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

                                       50
<PAGE>

ITEM 14 - MATERIAL  MODIFICATIONS  TO THE RIGHTS OF SECURITY  HOLDERS AND USE OF
          PROCEEDS

There were no material modifications  affecting the rights of securities holders
made during the fiscal year ended December 31, 2000.

ITEM 17-  FINANCIAL STATEMENTS

See the Index to Consolidated  Financial Statements  accompanying this report on
page F-1.

ITEM 18 - FINANCIAL STATEMENTS

Not applicable.

                                       51
<PAGE>

                      Consolidated Financial Statements
                      (Expressed in Canadian dollars)

                      ACTFIT.COM INC.

                      Years ended December 31, 2000 and 1999
<PAGE>

Auditors' Report to The SHAREHOLDERS

We have  audited  the  consolidated  balance  sheets of  ActFit.Com  Inc.  as at
December 31, 2000 and 1999 and the  consolidated  statements of  operations  and
deficit and cash flows for the years then ended. 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.
With  respect  to the  consolidated  financial  statements  for the  year  ended
December 31, 2000, we conducted our audit in accordance with Canadian  generally
accepted  auditing  standards  and United  States  generally  accepted  auditing
standards.  With respect to the consolidated  financial  statements for the year
ended  December 31, 1999,  we conducted  our audit in  accordance  with Canadian
generally accepted auditing standards.  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.
In our opinion,  these consolidated  financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2000
and 1999 and the results of its operations and its cash flows for the years then
ended in accordance  with Canadian  generally  accepted  accounting  principles.
Canadian generally accepted  accounting  principles vary in certain  significant
respects from  accounting  principles  generally  accepted in the United States.
Application  of accounting  principles  generally  accepted in the United States
would have  affected  results of  operations  for each of the years in the three
year period ended December 31, 2000 and shareholders'  deficiency as at December
31,  2000  and  1999 to the  extent  summarized  in note 16 to the  consolidated
financial statements.
The consolidated  financial  statements as of December 31, 1998 and for the year
then ended were audited by another firm of chartered  accountants  who expressed
an opinion without reservation on those statements in their report dated May 10,
1999.

By: /s/ KPMG, LLP
-----------------
        KPMG, LLP

Chartered Accountants
Toronto, Canada
July 11, 2001

COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA - U.S. REPORTING DIFFERENCE

In the United States,  reporting  standards for auditors require the addition of
an  explanatory   paragraph  when  the  financial  statements  are  affected  by
conditions and events that cast  substantial  doubt on the Company's  ability to
continue as a going concern,  such as those described in note 1 to the financial
statements.  Our report to the shareholders dated July 11, 2001, is expressed in
accordance with Canadian reporting  standards which do not permit a reference to
such events and  conditions  in the auditors'  report when these are  adequately
disclosed in the financial statements.

By: /s/ KPMG, LLP
-----------------
        KPMG, LLP

Chartered Accountants
Toronto, Canada
July 11, 2001

<PAGE>

actfit.com inc.
Consolidated Balance Sheets
(Expressed in Canadian dollars)

December 31, 2000 and 1999
------------------------------------------------  ------------- --------------
                                                      2000           1999
------------------------------------------------  ------------- --------------
Assets

Current assets:
     Cash                                         $        -    $       42,599
     Accounts receivable - trade                         28,454         73,502
     Advance receivable                                  41,639           -
     Prepaid expenses and sundry assets                     651         62,513
------------------------------------------------  ------------- --------------
                                                         70,744        178,614
Fixed assets (note 3)                                    76,201        509,466

Goodwill (note 4)                                       260,584           -
------------------------------------------------  ------------- --------------
                                                  $     407,529 $      688,080
------------------------------------------------  ============= ==============
Liabilities and Shareholders' Deficiency

Current liabilities:
     Bank indebtedness                            $       8,542 $         -
     Accounts payable and accrued liabilities           831,933        672,409
     Unpaid taxes (note 13)                             348,151        308,932
     Loans payable (note 6)                             183,491        343,587
     Current portion of long-term debt (note 7)          49,510        104,859
------------------------------------------------  ------------- --------------
                                                      1,421,627      1,429,787
Long-term debt (note 7)                                    -            15,756

Shareholders' deficiency:
     Capital stock (note 8)                          11,911,868      6,817,633
     Deficit                                        (12,925,966)    (7,575,096)
------------------------------------------------  ------------- --------------
                                                     (1,014,098)      (757,463)
Going concern (note 1)
Commitments and contingencies (note 13)
Subsequent events
(note 18)
------------------------------------------------  ------------- --------------
                                                  $     407,529 $      688,080
------------------------------------------------  ============= ==============


          See accompanying notes to consolidated financial statements.


On behalf of the Board:

                                           Director
-----------------------------------------

                                           Director
-----------------------------------------


                                       F-1
<PAGE>

actfit.com inc.
Consolidated Statements of Operations and Deficit
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999, with comparative figures for 1998
<TABLE>
<CAPTION>

------------------------------------------------  -------------  -------------  --------------
                                                      2000           1999           1998
------------------------------------------------  -------------  -------------  --------------
<S>                                               <C>            <C>            <C>
Revenue                                           $     149,378  $     290,730  $      584,259

Expenses:
     General and administrative                       1,770,262      2,129,197       1,873,580
     Corporate development (note 14)                  1,711,094        138,760         124,769
     Sales and marketing                                458,738      1,099,595         649,738
     Amortization                                       164,540        177,634         266,955
     Other                                               17,479         70,710         488,107
     Interest                                            28,220         70,602          90,180
     Product costs                                       14,785         12,694         378,309
------------------------------------------------  -------------  -------------  --------------
                                                      4,165,118      3,699,192       3,871,638
------------------------------------------------  -------------  -------------  --------------
Loss before the undernoted items                     (4,015,740)    (3,408,462)     (3,287,379)

Write-off of deferred development costs                    -           418,879          69,196
Write-off of goodwill                                      -            93,461         373,448
Write-off of publishing rights                             -              -            102,071
Write-off of Active Trainer (note 9)                    999,990           -               -
Write-down of fixed assets                              335,140           -               -
------------------------------------------------  -------------  -------------  --------------
                                                      1,335,130        512,340         544,715
------------------------------------------------  -------------  -------------  --------------
Loss for the year                                    (5,350,870)    (3,920,802)     (3,832,094)

Retained earnings (deficit), beginning of year       (7,575,096)    (3,654,294)        177,800
------------------------------------------------  -------------  -------------  --------------
Deficit, end of year                              $ (12,925,966) $  (7,575,096) $   (3,654,294)
------------------------------------------------  =============  =============  ==============
Loss per common share                             $       (0.19) $       (0.20) $        (0.29)
------------------------------------------------  =============  =============  ==============
Weighted average number
   of common shares outstanding                      28,606,483     19,668,993      13,278,649
------------------------------------------------  =============  =============  ==============
</TABLE>



          See accompanying notes to consolidated financial statements.


                                       F-2
<PAGE>

actfit.com inc.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999, with comparative figures for 1998
<TABLE>
<CAPTION>

------------------------------------------------  -------------  -------------  --------------
                                                      2000           1999           1998
------------------------------------------------  -------------  -------------  --------------
Cash flows from (used in) operating activities:
<S>                                               <C>            <C>            <C>
     Loss for the year                            $  (5,350,870) $  (3,920,802) $   (3,832,094)
     Items not involving cash:
         Amortization of fixed assets                   164,540        177,634         196,306
         Write-down of fixed assets                     335,140           -               -
         Amortization of deferred development
           costs                                           -              -             65,597
         Amortization of goodwill                          -              -              5,052
         Write-off of deferred development costs           -           418,879          69,196
         Write-off of goodwill                             -            93,461         373,448
         Write-off of publishing rights                    -              -            102,071
         Write-off of Active Trainer                    999,990           -               -
         Stock option issued for consulting
           services                                     912,083           -               -
         Capital stock issued for services              645,229        389,695         140,503
     Change in non-cash operating
       working capital (note 11)                        264,014        708,109         942,852
------------------------------------------------  -------------  -------------  --------------
                                                     (2,029,874)    (2,133,024)     (1,937,069)
Cash flows from (used in) financing activities:
     Increase (decrease) in long-term debt              (71,105)      (237,612)         95,521
     Decrease in loans receivable                          -              -            175,000
     Issuance of notes payable                           55,000        311,935            -
     Increase (decrease) in loans payable               (35,486)      (546,796)        836,630
     Issuance of capital stock, net of issue costs    2,113,729      2,863,969         270,573
------------------------------------------------  -------------  -------------  --------------
                                                      2,062,138      2,391,496       1,377,724
Cash flows from (used in) investing activities:
     Increase in deferred development costs                -              -           (148,923)
     Acquisition of Clubsite                            (17,000)          -               -
     Purchase of fixed assets                           (66,405)      (136,142)        (96,634)
------------------------------------------------  -------------  -------------  --------------
                                                        (83,405)      (136,142)       (245,557)
------------------------------------------------  -------------  -------------  --------------
Ancrease (decrease) in cash                             (51,141)       122,330        (804,902)

Cash (bank indebtedness), beginning of year              42,599        (79,731)        725,171
------------------------------------------------  -------------  -------------  --------------
Cash (bank indebtedness), end of year             $      (8,542) $      42,599  $      (79,731)
------------------------------------------------  =============  =============  ==============
</TABLE>


Supplemental cash flow information (note 11)



          See accompanying notes to consolidated financial statements.


                                       F-3
<PAGE>

--------------------------------------------------------------------------------
actfit.com inc.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999
--------------------------------------------------------------------------------

ActFit.Com  Inc. (the  "Company") is  incorporated  under the  provisions of the
Ontario Business  Corporations Act. The Company is a specialized vertical market
application   service  provider  ("ASP")  that  licenses  and  delivers  on-line
applications,   customized  programs  and  specialized   marketing  services  to
business-to-business and business-to-consumer active lifestyle organizations.

These  financial  statements are stated in Canadian  dollars except as otherwise
noted.  They have been prepared in accordance with Canadian  generally  accepted
accounting  principles  which,  except as disclosed in note 16, conform,  in all
material respects, with U.S. generally accepted accounting principles.

1.     Going concern:

       These  consolidated  financial  statements  have been prepared on a going
       concern  basis,  which  assumes the Company will continue in operation in
       the  foreseeable  future  and be  able  to  realize  assets  and  satisfy
       liabilities  in its normal  course of business.  Certain  conditions  and
       events,  as disclosed  below,  exist that cast  substantial  doubt on the
       Company's ability to continue as a going concern.

       The  Company  has  a  working   capital   deficiency  of  $1,350,883,   a
       shareholders'  deficiency  of  $1,014,098  and has  incurred  significant
       losses in recent  years.  The Company has  instituted  cost  preservation
       measures until further financing can be arranged. These cost preservation
       measures  included,   among  other  things,   non-remittance  of  payroll
       withholding taxes, suspension of employee payroll and benefits from March
       2001,  cessation of business and directors'  liability  insurance and the
       non-payment  of  creditors.  The Company  failed to file its 2000 audited
       financial  statements  with the regulatory  authorities on a timely basis
       which, on May 25, 2001,  resulted in a cease trade order from the Ontario
       Securities Commission.

       On June 15, 2001, the Company received a loan of U.S. $250,000 from three
       investors.

       Continued   operations  depend  upon  the  Company's  ability  to  attain
       profitable  operations and obtain sufficient cash from external financing
       to meet the Company's current past due liabilities and future liabilities
       as they become due. The Company is presently seeking additional financing
       to fund future  operations  and to reduce its  existing  working  capital
       deficiency. There can be no assurance that the Company will be successful
       in obtaining additional financing.


                                       F-4
<PAGE>

actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

1.     Going concern (continued):

       Should  the  Company  be unable to return  to  profitability  and  secure
       additional financing,  the application of the going concern principle for
       financial  statement  reporting  purposes  may no longer be  appropriate.
       These financial  statements do not include any adjustments related to the
       recoverability  and  classification  of  recorded  asset  amounts  or the
       amounts and  classification  of liabilities  that may be necessary should
       the Company be unable to continue as a going concern.

2.     Significant accounting policies:

       (a) Principles of consolidation:

           The results of  operations  for  acquisitions  are  included in these
           consolidated  financial  statements  from  the  date of  acquisition.
           Intercompany    transactions   and   balances   are   eliminated   on
           consolidation.

        (b)  Fixed assets:

             Fixed  assets  are  stated at cost less  accumulated  amortization.
             Amortization is provided for over the estimated useful lives of the
             assets using the following bases and annual rates:

--------------------------------------------------------------------------------
Asset                         Basis                           Rate
--------------------------------------------------------------------------------

Furniture and equipment       Declining balance                20%
Computer hardware             Declining balance                30%
Automobile                    Declining balance                30%
Computer software             Straight line                   100%
Leasehold improvements        Straight line                    20%
--------------------------------------------------------------------------------

           The Company regularly reviews the carrying values of its fixed assets
           by  comparing  the  carrying  amount  of the  asset  to the  expected
           undiscounted  future cash flows to be generated by the asset.  If the
           carrying  value  exceeds  the  undiscounted   future  cash  flows,  a
           write-down is charged to the consolidated statement of operations and
           deficit for the excess.


                                       F-5
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

2.     Significant accounting policies (continued):

       (c) Research and development costs:

           Costs  related to research,  design and  development  of products are
           charged to research and development expenses as incurred. Development
           costs  are  capitalized  beginning  when  a  product's  technological
           feasibility  has  been  established,   which  generally  occurs  upon
           completion of a working model, and ending when a product is available
           for general release to customers.  Development costs are written down
           to their fair value when declines in value are considered to be other
           than temporary in nature based upon expected future cash flows.

       (d) Goodwill:

           Goodwill  represents  the excess of the purchase  price over the fair
           market  values  of  net  assets  acquired,  and  is  amortized  on  a
           straight-line  basis over two years. On an ongoing basis,  management
           reviews the  valuation  and  amortization  of  goodwill,  taking into
           consideration any events and circumstances  which might have impaired
           the fair value.  Goodwill is written down to fair value when declines
           in value are  considered  to be other than  temporary in nature based
           upon expected future benefits.

       (e) Change in accounting policy - deferred taxes:

           In December  1997,  The Canadian  Institute of Chartered  Accountants
           issued Handbook Section 3465,  Income Taxes. The standard  required a
           change from the deferred method of accounting for income taxes to the
           asset and liability method of accounting for income taxes.  Under the
           asset and  liability  method of future  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.
           Future tax assets  and  liabilities  are  measured  using  enacted or
           substantially  enacted tax rates  expected to apply when the asset is
           realized or the liability is settled.

           The Company adopted Section 3465 in 2000. The effects of adopting the
           new standard had no effect on the recorded  amounts as the  Company's
           deferred  tax  assets  have been  completely  offset  by a  valuation
           reserve.


                                       F-6
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

2.     Significant accounting policies (continued):


       (f) Revenue recognition:

           The Company's  revenue is primarily derived from (i) the provision of
           graphics services,  (ii) website development and (iii) the sale of CD
           Rom packaged  software.  Graphic services  revenues are recognized as
           the services  are  performed.  Website  development  services,  which
           include maintenance and technical support,  training,  consulting and
           other services,  are recognized as the services are performed.  There
           are no maintenance and support  contracts with customers whereby fees
           are paid in advance.  Revenue from  product  sales is  recognized  on
           shipment of product.

       (g) Foreign currency translation:

           Monetary assets and liabilities denominated in foreign currencies are
           translated into Canadian  dollars at the prevailing rates of exchange
           at the balance sheet date. Revenue and expenses are translated at the
           exchange  rates  prevailing  on the  transaction  date.  Realized and
           unrealized exchange gains and losses are included in earnings.

       (h) Use of estimates:

           The  preparation of financial  statements in conformity with Canadian
           generally accepted accounting  principles requires management to make
           estimates and assumptions  that affect the reported amounts of assets
           and  liabilities   and  the  disclosure  of  contingent   assets  and
           liabilities at the date of the financial  statements and the reported
           amounts  of  revenue   and   expenses   during  the  year   reported.
           Specifically, management makes estimates of the recoverability of its
           intangible assets based on the underlying value of the technology and
           economic  prospect of the  tangible  product.  Actual  results  could
           differ from those estimates.

       (i) Stock-based compensation plan:

           The Company has a stock-based  compensation  plan, which is described
           in note 8. No  compensation  expense is recognized for this plan when
           stock  options are issued to  employees.  Any  consideration  paid by
           employees  on  exercise  of stock  options  or  purchase  of stock is
           credited to share capital.  If stock or stock options are repurchased
           from  employees,  the  excess  of the  consideration  paid  over  the
           carrying amount of the stock or stock option  cancelled is charged to
           retained earnings.


                                       F-7
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

2.     Significant accounting policies (continued):

       (j) Comparative figures:

           Certain  comparative  figures have been  reclassified to conform with
           the financial statement presentation adopted in the current year.

3.     Fixed assets:
------------------------------  -------------  ----------------  -------------
                                                  Accumulated       Net book
       2000                         Cost         amortization        value
------------------------------  -------------  ----------------  -------------
       Furniture and equipment  $     158,323  $        108,122  $      50,201
       Computer hardware              479,661           453,661         26,000
       Computer software               72,004            72,004           -
------------------------------  -------------  ----------------  -------------
                                $     709,988  $        633,787  $      76,201
------------------------------  =============  ================  =============

------------------------------  -------------  ----------------  -------------
                                                  Accumulated      Net book
       1999                         Cost         amortization       value
------------------------------  -------------  ----------------  -------------

       Furniture and equipment  $     511,126  $        359,011  $     152,115
       Computer hardware              449,750           207,087        242,663
       Automobile                      13,074            12,157            917
       Computer software               62,574            53,273          9,301
       Leasehold improvements         204,468            99,998        104,470

------------------------------  -------------  ----------------  -------------
                                $   1,240,992  $        731,526  $     509,466
------------------------------  =============  ================  =============

       The Company  negotiated an exit from its lease on Charlotte  Street. As a
       result,  the Company has  written-off the net book value of the leasehold
       improvements.  In addition, during the move to a new premise, the Company
       assessed  the  carrying  value of the  remaining  assets  and  recorded a
       write-down.  Total  write-down  of fixed  assets in the year  amounted to
       $335,140.  The  leasehold  improvements  and other fixed assets have been
       specifically pledged as security for loans payable and long-term debt.


                                       F-8
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

4.     Acquisition:

       Clubsite Internet Network Inc.:

       On December 28, 2000, the Company acquired all of the outstanding  shares
       of Clubsite Internet Network Inc. ("Clubsite"),  a privately held company
       incorporated  in  Ontario in the  business  of  providing  template-based
       websites to the fitness club industry. The transaction has been accounted
       for by the purchase  method,  with the results of operations  included in
       these financial  statements  from the date of  acquisition.  The purchase
       price  of  approximately  $244,000  was  satisfied  by  the  issuance  of
       2,000,000  common  shares of the Company.  In  addition,  the Company has
       committed  to the  issuance  of a  further  2,000,000  common  shares  in
       increments  of 500,000  contingent  upon the Company  meeting  cumulative
       pretax   consolidated   revenue   targets  of   $2,000,000,   $5,000,000,
       $10,000,000  and  $20,000,000  over the next five years.  The  contingent
       considerations  will be recorded as  additional  purchase  price upon the
       achievement of the contingent  events.  Shares issued in connection  with
       the  contingent  consideration  will be  valued at the  market  rate when
       issuable.  In addition,  the Company incurred $17,000 in costs related to
       the  acquisition.  As the  Company  assumed  no  identifiable  assets  or
       liabilities, the entire purchase price has been allocated to goodwill and
       is being  amortized over 2 years.  Goodwill is comprised of workforce and
       non-contractual  customer relationships.  Amortization expense of nil has
       been recorded in the year ended December 31, 2000.

5.     Deferred development costs:
<TABLE>
<CAPTION>

---------------------------------------------  ----------------  -------------  --------------
                                                    2000             1999           1998
---------------------------------------------  ----------------  -------------  --------------

<S>                                            <C>               <C>            <C>
Balance, beginning of year                     $           -     $     418,879  $     404,749
Costs deferred                                             -              -            223,259
Investment tax credit claimed on additions                 -              -            (74,336)
Costs written off                                          -          (418,879)        (69,196)
Amortization                                                              -            (65,597)

---------------------------------------------  ----------------  -------------  --------------
                                               $           -     $        -     $      418,879
---------------------------------------------  ================  =============  ==============
</TABLE>


       During  1999,  management  discontinued  the  development  of its various
       interactive  CD-Rom  products.  Accordingly,  management  has written off
       these development costs.


                                       F-9
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

6.     Loans payable:
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------  ------------  ------------
                                                                                     2000           1999
--------------------------------------------------------------------------------  ------------  ------------
<S>                                                                               <C>           <C>
       Demand loan,  bearing  interest at prime plus 2.5%,  secured by a general
         security agreement, repayable in blended interest and principal
         payments of $4,080                                                       $     98,491  $    123,277
       Note payable, bearing interest at 12% per annum,
         due on demand and unsecured                                                      -           10,700
       Note payable, non-interest bearing, due on demand
         and unsecured                                                                    -          127,993
       Note payable, non-interest bearing, due on demand
         and unsecured                                                                  30,000        81,617
       Note payable, non-interest bearing and unsecured,
         $15,000 due May 24, 2001 with the remainder
         being paid in six equal monthly instalments
         commencing November 24, 2001                                                   55,000          -
--------------------------------------------------------------------------------  ------------  ------------
                                                                                  $    183,491  $    343,587
--------------------------------------------------------------------------------  ============  ============
</TABLE>

       As at December 31, 2000,  the Company is in default on the demand loan in
       the  amount  of  $98,491.   Subsequent  to  December  31,  2000,  regular
       repayments  have not been made, and on May 4, 2001,  the lender  notified
       the  Company  of its  intention  to  enforce  security.  The  Company  is
       currently working with its lenders to extend the payment terms until such
       time as the Company is able to obtain  additional  financing  or generate
       positive cash flows from operations.


                                       F-10
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

7.     Long-term debt:
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------  ------------  ------------
                                                                                      2000          1999
--------------------------------------------------------------------------------  ------------  ------------
<S>                                                                               <C>           <C>
       Equipment  loan,  bearing  interest  at 13.6% per  annum,  secured by the
         equipment, repayable in blended monthly principal and interest payments
         of $2,089,
         due on demand                                                            $     14,567  $     32,839
       Equipment loan, bearing interest at 8.625% per annum,
         secured by the equipment, repayable in blended
         monthly principal and interest payments of $4,239,
         due on demand                                                                  26,474        60,074
       Equipment loan, bearing interest at 14.8% per annum,
         secured by the equipment, repayable in blended
         monthly principal and interest payments of $1,639,
         due on demand                                                                   8,469        27,702
--------------------------------------------------------------------------------  ------------  ------------
                                                                                        49,510       120,615

       Less current portion                                                             49,510       104,859
--------------------------------------------------------------------------------  ------------  ------------
                                                                                  $       -     $     15,756
--------------------------------------------------------------------------------  ============  ============
</TABLE>

       As at  December  31,  2000,  the  Company  is in  default  of  all of its
       long-term loans. Subsequent to December 31, 2000, regular repayments have
       not been made and, on April 16, 2001, the lender of the secured equipment
       loan with a balance  payable  of  $14,567  notified  the  Company  of its
       intention to commence  litigation  proceedings  against the Company.  The
       Company is currently working with its lenders to extend the payment terms
       until such time as the Company is able to obtain additional  financing or
       generate positive cash flows from operations.

       Given the  default  situation  as  described  above,  the total  value of
       long-term debt has been classified as current.


                                       F-11
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

8.     Capital stock:

       Authorized:
           2,000,000 preference shares
           Unlimited common shares
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------  ------------  ------------
                                                                                    Number
       Issued common shares                                                        of shares       Amount
--------------------------------------------------------------------------------  ------------  ------------
<S>                                                                               <C>           <C>
       Balance, December 31, 1998                                                   14,607,054  $  3,258,413
       Issued for exercise of Series E share purchase warrants                         766,594       574,945
       Issued for exercise of stock options                                          1,127,775       297,805
       Issued for cash from private placement,
         net of issue costs of $142,622                                              3,691,389     1,991,219
       Issued to consultants for services rendered                                   1,785,886       389,695
       Issued for conversion of debt                                                   791,123       305,556
--------------------------------------------------------------------------------  ------------  ------------
       Balance, December 31, 1999                                                   22,769,821     6,817,633
       Issued for exercise of Series E share purchase warrants                         560,000       420,000
       Issued for exercise of Series C share purchase warrants                         200,000       100,000
       Issued for exercise of stock options                                          1,527,763       480,103
       Issued to consultants for services rendered                                   1,482,220       645,229
       Issued for conversion of debt                                                 7,651,518     2,293,236
       Issued as consideration for acquisition of Clubsite (note 4)                  2,000,000       243,584
       Stock options issued to consultants                                                -          912,083
--------------------------------------------------------------------------------  ------------  ------------
       Balance, December 31, 2000                                                   36,191,322  $ 11,911,868
--------------------------------------------------------------------------------  ============  ============
</TABLE>

       There are no issued preference shares.

       During the years, the following occurred:

       1999

       (a) Common shares issued in 1999 by way of a private placement:

---------------------------------------------   --------------  -------------
                                                    Number
           Date                                    of shares    Consideration
---------------------------------------------   --------------  -------------

           March 23, 1999                              920,833  $     138,125
           May 5, 1999                                 238,095        109,524
           June 2, 1999                              1,511,629        967,442
           July 29, 1999                             1,020,832        918,750

---------------------------------------------   --------------  -------------
                                                     3,691,389  $   2,133,841
---------------------------------------------   --------------  -------------


                                       F-12
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

8.     Capital stock (continued):

       (b) During 1999, the Company issued 1,785,886 common shares in settlement
           of $389,695 for consulting services.

       (c) On March 12,  1999,  the  Company  issued  283,000  common  shares on
conversion of debt of $74,900.

       (d) On  April 7,  1999,  the  Company  issued  40,000  common  shares  on
conversion of debt of $20,000.

       (e) On July 28,  1999,  the  Company  issued  468,123  common  shares  on
conversion of debt of $210,656.

       2000

       (f) During the year ended  December 31, 2000,  the Company  issued 45,846
           common shares for legal services rendered in the amount of $18,707.

       (g) During the year ended  December 31, 2000,  the Company issued 267,533
           common shares in the settlement of $82,260 for corporate  development
           and public relations consulting services.

       (h) During the year ended December 31, 2000, the Company issued 1,168,841
           common shares as settlement of $544,262 for consulting services.

       (i) During the year,  the Company  issued  3,663,333  common shares at an
           average price of $0.274 per share in settlement  for a liability that
           arose on the acquisition of Active Trainer (note 9).

       (j) During the year ended December 31, 2000, the Company issued 3,988,185
           common shares on conversion of debt of $1,293,236.

       Stock option plan:

       The Company has a stock option plan (the "Plan") for directors, officers,
       employees,  consultants and advisors of the Company, its subsidiaries and
       affiliates.  The purpose of the Plan is to attract,  retain and  motivate
       management  and staff by  providing  them with the  opportunity,  through
       share  options,  to acquire a proprietary  interest in the Company and to
       benefit from its growth.



                                       F-13
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

8.     Capital stock (continued):

       During 2000, the Company  increased the number of common shares  reserved
       for issuance under the Plan from 11,000,000 to 18,000,000.

       No single  individual  may hold options in respect of more than 5% of the
       outstanding  common shares unless approved by the shareholders.  In 1999,
       the shareholders granted approval to an officer of the Company to receive
       the grant of options in excess of the 5% of the shares outstanding. Stock
       options  for  employees  are  exercisable  on  the  basis  of  continuing
       employment. Options given in a year are generally exercisable immediately
       or 25% for every three months of employment from the date granted.

       During  the  year,  the  Company  issued   7,258,666   stock  options  to
       consultants and contractors. The Company has recorded an expense equal to
       the intrinsic  value of the stock option on the date of grant.  The total
       expense of $912,083 has been recorded in the statement of operations as a
       corporate development expense.

       A summary of the stock option  transactions  for the years ended December
       31, 2000 and 1999 is presented below:

---------------------------------------------   --------------  --------------
                                                    Share           Average
                                                   options      exercise price
---------------------------------------------   --------------  --------------
       Balance, December 31, 1998                    1,579,875  $         0.94
       Granted                                       5,405,500            0.41
       Exercised                                    (1,127,775)           0.26
       Expired or cancelled                           (991,375)           1.31
---------------------------------------------   --------------  --------------
       Balance, December 31, 1999                    4,866,225            0.45
       Granted                                       8,672,516            0.31
       Exercised                                    (1,973,446)           0.38
       Expired or cancelled                         (1,457,262)           0.42
---------------------------------------------   --------------  --------------
       Balance, December 31, 2000                   10,108,033            0.35
---------------------------------------------   ==============  ==============

       Of the share  options  outstanding,  10,108,033  (1999 - 3,752,625)  were
fully vested and exercisable.


                                       F-14
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

8.     Capital stock (continued):
<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                                   Weighted       Weighted
                                                                    Options         average        average
       Range                                                      outstanding        life          price
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>             <C>             <C>
       $0.20 - $0.29                                                 4,664,950            1.44       $  0.22
       $0.30 - $0.39                                                 4,255,000            1.42          0.32
       $0.40 - $0.49                                                   100,000            0.50          0.47
       $0.50 - $0.59                                                   172,750            1.00          0.52
       $0.60 - $0.69                                                    25,000            1.00          0.60
       $0.70 - $0.90                                                   440,333            1.26          0.78
       $1.00 - $1.90                                                   450,000            1.10          1.39
--------------------------------------------------------------  --------------  --------------  ------------
                                                                    10,108,033
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>

       Share purchase warrants:

       The holders of the share purchase warrants entitle the holder to purchase
       one common share for each warrant held. The outstanding purchase warrants
       are as follows:
<TABLE>
<CAPTION>

---------------------------------------------   --------------  --------------  --------------  ------------
       Expiry date                              Exercise price       2000           1999           1998
---------------------------------------------   --------------  --------------  --------------  ------------
<S>                                             <C>             <C>             <C>             <C>
       March 31, 2002, Series A                         $ 1.00         500,000         500,000       500,000
       March 31, 2002, Series B                           1.50         200,000         200,000       200,000
       March 31, 2002, Series C                           0.50            -            200,000       200,000
       June 30, 2000, Series E                            0.75            -            977,500     1,744,094
       June 16, 2004, Series G                            0.80         572,000         572,000          -
       June 17, 2001, Series H                            1.10         498,265         498,265          -
---------------------------------------------   --------------  --------------  --------------  ------------
                                                                     1,770,265       2,947,765     2,644,094
---------------------------------------------   ==============  ==============  ==============  ============
</TABLE>

       During 1997, as part of the reverse  takeover  transaction  involving the
       Company,  the Company issued 11,033,532  common shares,  600,000 Series A
       purchase warrants,  200,000 Series B purchase warrants,  200,000 Series C
       purchase  warrants,  100,000  Series D purchase  warrants,  and 2,866,666
       Series E purchase warrants.

       The  Series  G and  Series  H share  purchase  warrants  were  issued  in
       conjunction with the private placements completed in June and July 1999.


                                       F-15
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

9.     Write-off of Active Trainer:

       In 1997,  the Company  sold the  ownership  rights to the Active  Trainer
       software for cash proceeds of $1,950,000 to a non-controlling shareholder
       of the Company  (the  "NCS").  The Company also entered into an exclusive
       worldwide  distributions  rights agreement with NCS to distribute  Active
       Trainer and any other derivative  products produced on the Active Trainer
       software technology.  The distribution  agreement required the Company to
       make minimum royalty  payments  amounting to $500,000 for the period from
       June 1997 to December 1998 and to make future  royalty  payments based on
       the number of CDs sold.

       In 1998, the Company  defaulted on the minimum  royalty  payments and the
       unpaid  royalties  were  converted  into a loan.  The loan was secured by
       third  parties  through  the pledge of Company  shares  held by the third
       parties.  The third  parties  were  shareholders  of the Company and also
       provided  corporate  development and investor  relations  services to the
       Company (note 14).

       In 1999,  the Company  defaulted  on the loan.  NCS claimed the  security
       under the loan agreement and the loan and ownership of the Active Trainer
       software was assumed by Cune Management Inc. In 1999, the Company settled
       the loan payable of $290,782  through the issuance of 468,124 shares.  In
       June 2000, the Company  reacquired the Active Trainer  software from Cune
       Management  Inc.  for  proceeds  of  $1,000,000  that was  settled by the
       issuance of 3,663,333 common shares of the Company at an average price of
       $0.274 per share.

       In  December  2000,  the  Company  altered its  strategic  direction  and
       discontinued  the  production  and sale of Active  Trainer  products  and
       software. As a result of this change in strategic direction,  the Company
       has written-off the value of the acquired technology.


                                       F-16
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

10.    Income taxes:


       Income tax  expense  attributable  to income from  continuing  operations
       differs from the amounts  computed by applying  the combined  federal and
       provincial income tax rate of 44 percent to pretax income from continuing
       operations as a result of the following:
<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                     2000           1999           1988
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>             <C>             <C>
       Loss from continuing operations                          $   (5,350,870) $   (3,920,802) $ (3,832,094)
--------------------------------------------------------------  --------------  --------------  ------------
       Computed "expected" tax                                  $   (2,354,383) $   (1,725,153) $ (1,686,121)
       Increase (reduction) in income taxes
         resulting from:
           Change in the beginning of year
              balance of the valuation allowance
              for future tax assets allocated to
              income tax expense                                     1,909,238       1,321,600     1,472,679
           Permanent differences                                       445,145         403,553       213,442
--------------------------------------------------------------  --------------  --------------  ------------
       Income taxes                                             $         -     $         -     $       -
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>

       The tax effects of temporary  differences  that give rise to  significant
       portions of the future tax assets and future tax  liabilities at December
       31, 2000, 1999 and 1998 are presented below:
<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                    2000            1999           1998
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>             <C>             <C>
       Future tax assets:
           Non-capital loss carryforwards                       $    4,686,842  $    2,968,240  $  1,724,800
           Plant and equipment - differences
              in deprecation and undepreciated
              capital cost                                             279,355          88,719        10,559
--------------------------------------------------------------  --------------  --------------  ------------
           Total gross future tax assets                             4,966,197       3,056,959     1,735,359

           Less valuation allowance                                  4,966,197       3,056,959     1,735,359
--------------------------------------------------------------  --------------  --------------  ------------
       Net future tax assets                                    $         -     $         -     $       -
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>



                                       F-17
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

10.    Income taxes (continued):

       At December 31, 2000, the Company and its  subsidiaries  have non-capital
       loss  carryforwards  for federal  income tax  purposes  of  approximately
       $10,936,000  which are available to offset future federal taxable income,
       if any, through 2007. The losses expire as follows:
--------------------------------------------------------------------------------

       2001                                                     $        14,000
       2002                                                              55,000
       2003                                                             250,000
       2004                                                             257,000
       2005                                                           3,323,000
       2006                                                           2,826,000
       2007                                                           4,250,000

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

       In  assessing  the  realizability  of  deferred  tax  assets,  management
       considers whether it is more likely than not that some portion of, 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 the assessment.
       In order to fully  utilize  the  future  tax  assets of  $5,000,000,  the
       Company  will need to generate  future  taxable  income of  approximately
       $11,000,000,   prior  to  the   expiration  of  the  net  operating  loss
       carryforwards in the years 2001 to 2007. Due to uncertainties  related to
       the industry in which the Company operates,  the tax benefit of the above
       carryforward   amounts  have  been  completely   offset  by  a  valuation
       allowance.


                                       F-18
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

11.    Consolidated statement of cash flows:
<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                     2000           1999            1998
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>             <C>             <C>
       Change in non-cash operating working capital:
           Decrease in accounts receivable                      $       45,048  $       43,395  $    464,268
           Increase in advances receivable                             (41,639)           -             -
           Decrease (increase) in investment
              tax credits recoverable                                     -            429,873       (74,336)
           Decrease (increase) in prepaid
              expenses and sundry assets                                61,862          (9,465)       39,021
           Decrease in inventory                                          -               -           82,412
           Increase in accounts payable and
              accrued liabilities                                      159,524         244,306       431,487
           Increase in unpaid taxes                                     39,219            -             -
--------------------------------------------------------------  --------------  --------------  ------------
                                                                $      264,014  $      708,109  $    942,852
--------------------------------------------------------------  ==============  ==============  ============
       Supplemental cash flow information:
           Interest paid                                        $       24,538  $       70,602  $     90,780
       Significant non-cash transactions:
           Issuance of stock for Clubsite
              acquisition                                              243,584            -             -
           Issuance of stock for repayment
              of loans                                                 179,610            -             -
           Issuance of stock for purchase
              of Active Trainer                                      1,000,000            -             -
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>

12.    Fair value disclosure of financial assets and financial liabilities:


       (a) Fair values:

            The carrying values of cash,  accounts  receivable - trade,  advance
            receivable,   bank   indebtedness,   accounts  payable  and  accrued
            liabilities and loans payable  approximate  their fair values due to
            the  relatively  short periods to maturity of these items or because
            they are receivable or payable on demand.

            The carrying value of long-term debt,  approximates their fair value
            as the amounts are all due on demand due to default of payments.


                                       F-19
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

12.  Fair  value  disclosure  of  financial  assets  and  financial  liabilities
(continued):

       (b) Credit risk:

            The Company does not have a significant  exposure to any  individual
customer or counterparty.

13.    Commitments and contingencies:

       (a) Unpaid taxes:

           The Company is in arrears on its payments for payroll withholdings in
           the amount of approximately $348,151. The Company has met with Canada
           Customs  and  Revenue  Agency  and is in the  process  of  agreeing a
           payment schedule to pay the outstanding balances.

       (b) Commitments:

           The Company is not committed to any long-term operating leases.

       (c) Contingencies:

           The  Company  is party to several  pending  litigations  from  unpaid
           suppliers  and  unpaid  lenders.  The  Company  is in  arrears on its
           payments due to its current working capital  deficiency.  The Company
           is working with its creditors and lenders to extend the payment terms
           until such time as the Company is able to obtain additional financing
           or generate positive cash flows from operations.


                                       F-20
<PAGE>

actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999
14.    Related party transactions:

       During the year ended December 31, 2000, the Company incurred  $1,711,094
       in corporate  development  costs. This amount includes $912,083 for stock
       based compensation costs recorded on the issuance of options to companies
       engaged by the Company as consultants.

       Several  of  the  companies  engaged  to  perform  corporate  development
       activities were also shareholders of the Company. None of these companies
       beneficially  control more than 5% of the  Company's  outstanding  common
       shares. The following sets out the transactions with these shareholders.

       On June 15, 2000, the Company entered into two-year consulting agreements
       with Cune  Management  Inc.  (Cune),  RT Management Inc. (RT), and 655947
       Ontario Limited (655947). Under the terms of the agreements,  Cune and RT
       each received  options to acquire  1,250,000 common shares in the Company
       and 655947  received  options  to  acquire  500,000  common  shares.  The
       exercise  price of the options of $0.30 was issued at a discount of $0.14
       to the market  price on the date the options  were  granted.  The Company
       recorded  a  corporate  development  expense of  $420,300  related to the
       intrinsic  value  of the  option.  At the end of the  year,  all of these
       options remain outstanding.

       On  August  1,  2000,  the  Company  entered  into  additional   one-year
       consulting  agreements with Cune, RT, Hue, Martini and Vaughan Design Inc
       (HMVD), and 655947 for the provision of consulting services in connection
       with the website development and internet marketing of the Company. Under
       the terms of the agreements,  each consultant received 500,000 options to
       acquire  common shares in the Company.  The exercise price of the options
       of $0.22 was  issued at a discount  of $0.15 to the  market  price on the
       date  the  options  were  granted.   The  Company  recorded  a  corporate
       development  expense of $290,150  related to the  intrinsic  value of the
       option. At the end of the year, all of these options remain outstanding.

       The Company also incurred fees of  approximately  $416,000,  $193,000 and
       $91,000 with Cune, RT and 655947 respectively,  which were settled by the
       issuance of common  shares at a 25%  discount to the market price and the
       cashless exercise of options and warrants.

       The  Company  also  issued  3,663,333  common  shares  to  Cune  for  the
       settlement of a $1,000,000  liability  that arose on the  acquisition  of
       Active Trainer. (note 9)


                                       F-21
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

15.    Earnings (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 options and warrants 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
       amounted to  11,878,298,  7,813,990  and  4,223,969,  for the years ended
       December 31, 2000, 1999 and 1998, respectively.

16. Differences between Canadian and United States generally accepted accounting
principles ("GAAP"):

       These  financial   statements  have  been  prepared  in  accordance  with
       generally  accepted  accounting  principles in Canada  ("Canadian  GAAP")
       which,  in  the  case  of  these  financial  statements,  conform  in all
       significant  respects  with those in the  United  States  ("U.S.  GAAP"),
       except as follows:

       (a) Adjustment to earnings:
<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                    2000            1999            1998
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>             <C>             <C>
           Loss for the year in
              accordance with
              Canadian GAAP                                     $   (5,350,870) $   (3,920,802) $ (3,832,094)
           Deferred development costs1                                    -               -         (148,923)
           Compensation expense4                                      (925,668)     (2,046,033)         -
           Deferred development
              costs written off which
              were adjusted in prior years                                -            418,879          -
           Amortization of goodwill
              on reverse takeover acquisition                             -               -            5,052
--------------------------------------------------------------  --------------  --------------  ------------
           Loss in accordance with
              U.S. GAAP                                         $   (6,276,538) $   (5,547,956) $ (3,975,965)
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>



                                      F-22
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

16. Differences between Canadian and United States generally accepted accounting
    principles ("GAAP") (continued):
<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                    2000            1999           1998
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>             <C>             <C>
           Weighted average number of
              common shares under basic EPS2                        28,606,483      19,668,993    13,278,649
--------------------------------------------------------------  ==============  ==============  ============
           Basic loss per share in accordance
              with U.S. GAAP2                                   $        (0.22) $        (0.28) $      (0.30)
--------------------------------------------------------------  ==============  ==============  ============
              common shares and their
              equivalents under the
              treasury stock method2                                30,834,245      23,245,780    14,403,954
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>

           The effect of the  conversion  of warrants and options would not have
           had a dilutive  effect and,  therefore,  no diluted loss per share is
           disclosed.

       (b) Adjustments to assets and shareholders' equity:
<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                    2000             1999           1998
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>             <C>             <C>
           Total assets in accordance
              with Canadian GAAP                                $      407,529  $      688,080  $  1,663,116
           Deferred development
              costs1                                                      -               -         (418,879)
           Goodwill on reverse
              takeover acquisition3                                       -               -          (93,461)
--------------------------------------------------------------  --------------  --------------  ------------
           Total assets in accordance with
              U.S. GAAP                                         $      407,529  $      688,080  $  1,150,776
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>



                                       F-23
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

16. Differences between Canadian and United States generally accepted accounting
    principles ("GAAP") (continued):
<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                    2000             1999          1998
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>             <C>             <C>
           Total shareholders' deficiency
           in accordance with Canadian
           GAAP                                                 $   (1,014,098) $     (757,463) $   (395,881)
           Deferred development
              costs incurred1                                             -               -         (148,923)
           Compensation expense4                                      (925,668)     (2,046,033)         -
           Deferred development costs
              written off in prior years                                  -            418,879          -
           Amortization of goodwill on
              reverse takeover
              acquisition3                                                -               -            5,052
--------------------------------------------------------------  --------------  --------------  ------------
           Total shareholders' deficiency
              in accordance with U.S. GAAP                      $   (1,939,766) $   (2,384,617) $   (539,752)
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>

       (c) Adjustments to cash flows:
<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                    2000             1999          1998
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>                             <C>
           Cash expended in investing activities
              in accordance with Canadian GAAP                  $               $     (136,142) $   (245,557)
           Deferred development costs1                                     -              -         (148,923)
           Goodwill on reverse takeover
              acquisition3                                                 -              -           93,461
--------------------------------------------------------------  --------------  --------------  ------------
           Cash expended in investing activities
              in accordance with U.S. GAAP                      $               $     (136,142) $   (301,019)
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>

           1Canadian  GAAP  permits the  capitalization  of product  development
           costs  if  certain  criteria  are  met.  Under  U.S.  GAAP,   product
           development  costs are  expensed as  incurred  unless the Company has
           established technological feasibility.



                                       F-24
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

16. Differences between Canadian and United States generally accepted accounting
    principles ("GAAP") (continued):

           2Under U.S.  GAAP,  in  accordance  with the  Statement  of Financial
           Accounting  Standards No. 128 ("SFAS No.  128"),  Earnings Per Share,
           the Company is required to disclose basic  earnings per share,  which
           is based on the weighted  average  aggregate  number of common shares
           outstanding during each year and diluted earnings per share, which is
           based on the weighted  average  aggregate number of common shares and
           their equivalents  outstanding  during each year, using the "treasury
           stock method" for the outstanding stock options and warrants.

           3Under U.S. GAAP, there is no recognition of goodwill under a reverse
takeover acquisition.

           4Under  U.S.   GAAP,  in  accordance   with  Statement  of  Financial
           Accounting  Standards  No.  123  ("SFAS  No.  123"),  Accounting  for
           Stock-based  Compensation,  the  Company  is  required  to  recognize
           stock-based compensation costs for consultants and advisors using the
           fair  value  market  method  and for  employees  using the  intrinsic
           method.

           5Accounting for employee stock options:

           U.S.  GAAP  encourages  but  does not  require  companies  to  record
           compensation  cost for stock option plans at fair value.  The Company
           has  chosen  to  continue  to  account  for stock  options  using the
           intrinsic value method as permitted under SFAS No. 123. For companies
           electing  not to adopt the fair  value  measurement  for  stock-based
           compensation,  the pronouncement requires the disclosure of pro forma
           net income (loss) and net income (loss) per share  information  as if
           the Company had  accounted for its employee  stock options  issued in
           1995 and subsequent years under the fair value method.


                                       F-25
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

16. Differences between Canadian and United States generally accepted accounting
    principles ("GAAP") (continued):

           The fair value of each option grant is estimated on the date of grant
           using  the  Black-Scholes  option-pricing  model  with the  following
           weighted average assumptions by year:
<TABLE>
<CAPTION>

------------------------------------------------------------------------------  --------------  ------------
           Assumptions                                                               2000           1999
------------------------------------------------------------------------------  --------------  ------------
<S>                                                                             <C>             <C>
           Risk-free interest rate                                                        6%             6%
           Expected life (in years)                                              1 - 2 years    1 - 2 years
           Expected volatility                                                          100%           100%

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

           Had compensation  cost for the Plan been determined based on the fair
           value at the grant dates for awards  under the Plan  consistent  with
           the method  described in SFAS No. 123, the Company's net earnings and
           net  earnings  per share  would  have been  reduced  to the pro forma
           amounts indicated below:

<TABLE>
<CAPTION>

--------------------------------------------------------------  --------------  --------------  ------------
                                                                    2000            1999           1998
--------------------------------------------------------------  --------------  --------------  ------------
<S>                                                             <C>             <C>             <C>
           Net loss:
                As reported                                     $   (6,276,538) $   (5,547,956) $ (3,975,965)
                Pro forma                                           (6,427,288)     (5,780,956)   (3,977,965)
           Basic loss per share:
                As reported                                     $        (0.22) $        (0.28) $      (0.30)
                Pro forma                                                (0.22)          (0.29)        (0.30)
--------------------------------------------------------------  ==============  ==============  ============
</TABLE>

17.    Recent accounting pronouncements:

       In June 1998, the Financial  Accounting  Standards Board issued Statement
       of Financial  Accounting  Standards No. 133,  Accounting  for  Derivative
       Instruments  and  Hedging  Activities  ("SFAS  No.  133").  SFAS No.  133
       establishes  accounting  and  reporting  standards  requiring  that every
       derivative instrument be recorded on the balance sheet as either an asset
       or  liability  measured  at its fair  value.  SFAS No.  133,  as recently
       amended,  is effective for fiscal years beginning after June 15, 2000. To
       date, the Company has not entered into derivative instruments. Management
       believes the adoption of SFAS No. 133 will not have a material  effect on
       the Company's financial position or results of operations.

                                       F-26
<PAGE>
actfit.com inc.
Notes to Consolidated Financial Statements (continued)
(Expressed in Canadian dollars)

Years ended December 31, 2000 and 1999

18.    Subsequent events:

       (a) Cease trade order:

           On May 25, 2001,  as a result of not filing  their  annual  financial
           statements  on a timely  basis,  the  Company  received a cease trade
           order from the  Ontario  Securities  Commission.  The  removal of the
           cease  trade order is  contingent  upon the  Company  satisfying  all
           requirements made by the Ontario Securities Commission.

       (b) Proposed technology acquisition:

           On June 26, 2001, the Company  executed a letter of intent with Telum
           Inc. for the  acquisition  of the worldwide  rights to  Mediapage,  a
           technology  developed  by Telum Inc.  Telum Inc. is a Barbados  based
           research and  development  company  which  develops  software for the
           communications  and broadband  industries.  Mark Vange, a director of
           the Company,  is the majority  shareholder of Telum Inc. In addition,
           the Company will be granted a right of first refusal, subordinated to
           a similar  right held by a third  party,  to license any future Telum
           products and will receive 250,000 shares of Telum Inc.

           The proposed  consideration  will be comprised of the following:  (i)
           U.S.  $100,000  on  closing;  (ii) U.S.  $10,000  per month for seven
           months  following  the  execution  of a definitive  agreement;  (iii)
           1,000,000 common shares with a yet undetermined  warrant entitlement;
           (iv)  1,000,000  common  shares  without  warrants;  (v) a continuing
           royalty of 5% of Mediapage  related  revenue  commencing  on July 26,
           2002;  and (vi) up to an  additional  1,500,000  shares  issuable  at
           500,000  for every  U.S.  $10  million  of gross  sales of  Mediapage
           products.

                                       F-27
<PAGE>

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused and  authorized  the  undersigned  to sign this
annual on its behalf.

                        ActFit.com Inc.




                        By: /s/ Robert Clapperton
                        -------------------------
                        Name:   Robert Clapperton
                        Title:  President and Chief Executive Officer

Dated: July 12, 2001


                                       52
<PAGE>