SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


(Mark One)

   [X]      Quarterly  report  under  Section  13 or  15(d)  of  the  Securities
            Exchange Act of 1934 for the  quarterly  period ended  September 30,
            2004

   [ ]      Transition report under Section 13 or 15(d) of the Exchange Act
            for the transition period from __________ to __________.


                        Commission File Number: 000-31451
                                    ---------

                                 CYBERADS, INC.
                                 --------------
        (Exact name of small business issuer as specified in its charter)



            Florida                                      65-1000634
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)



               370 Amapola Ave. # 202, Torrance, California 90501
            --------------------------------------------------------
               (Address of principal executive office) (Zip Code)

                                 (561) 672 2193
                                ----------------
                           (Issuer's telephone number)




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

                          Yes    XX                  No
                              --------                  --------

As of  September  30, 2004 , the number of  outstanding  shares of the  issuer's
common stock, $.001 par value, was 22,925,777 shares.


          TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: Yes [ ] No [X]




                                        1
<PAGE>
                                TABLE OF CONTENTS



ITEM 1.  FINANCIAL STATEMENTS ............................................... 3

         Consolidated Unaudited Balance Sheet as of September 30, 2004....... 3

         Consolidated Unaudited Statements of Operations for the
                  Quarters ended September 30, 2004 and September 30, 2003... 4

         Consolidated Unaudited Statements of Cash Flows for the
                  Quarter ended September 30, 2004........................... 5

         Notes to Consolidated Financial Statements.......................... 7


ITEM 2.  MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS .............................................. 12


ITEM 3.  CONTROLS AND PROCEDURES............................................. 14


                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8K..................................... 15


SIGNATURES................................................................... 15






























                                        2
<PAGE>

                                 CYBERADS, INC.

                           Consolidated Balance Sheets
                             See accompanying notes.
<TABLE>
<CAPTION>
                                                                            September 30,        December 31,
                                                                                2004               2003
                                                                         -----------------    ----------------
                                         Assets
<S>                                                                       <C>                 <C>
Current asset -
   Accounts receivable                                                    $             -     $        20,380

Property and equipment, net                                                        14,171              14,171

Other assets:
   Investments                                                                 10,700,000          10,700,000
   Deposits                                                                         8,585               8,585
                                                                           --------------      --------------
     Total other assets                                                        10,708,585          10,708,585
                                                                           --------------      --------------

                                                                          $    10,722,756     $    10,743,136
                                                                           ==============      ==============

                          Liabilities and Stockholders' Equity
                          ------------------------------------
Current liabilities:
   Outstanding checks in excess of cash in bank                           $        14,774     $         1,207
   Notes payable                                                                  294,192             120,000
   Accounts payable                                                               814,447             697,748
   Accounts payable to cellular phone service provider                                  -             492,423
   Accrued payroll and payroll related liabilities                                614,143             548,195
   Other accrued liabilities                                                       38,993              35,000
   Payable to related parties                                                     786,555             786,555
   Loans payable - convertible debentures                                          60,000              60,000
                                                                           --------------      --------------
     Total current liabilities                                                  2,623,104           2,741,128

Payable to stockholder                                                                  -             157,634

Stockholders' equity:
   Preferred stock; $.001 par value; authorized 5,000,000
    shares, of which 1,000,000 shares has been designated
    as Series A Convertible, shares issued and outstanding
    835,660                                                                           836                 836
   Common stock; $.001 par value; shares authorized
    50,000,000; shares issued and outstanding 22,925,777 in
    2004 (18,325,777 in 2003)                                                      22,926              18,326
   Common stock to be issued                                                    9,802,550          11,140,000
   Additional paid in capital                                                  17,450,885          15,399,238
   Retained deficit                                                          (19,177,545)         (18,714,026)
                                                                           --------------      --------------
     Total stockholders' equity                                                 8,099,652           7,844,374
                                                                           --------------      --------------

                                                                          $    10,722,756     $    10,743,136
                                                                           ==============      ==============
</TABLE>

                                        3
<PAGE>
                                 CYBERADS, INC.
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                               Three months ended                    Nine months ended
                                                  September 30                         September 30
                                        ---------------------------------  -----------------------------------
                                              2004              2003              2004               2003
                                        ---------------   ---------------  -----------------  ----------------
<S>                                      <C>                <C>              <C>               <C>
Revenues                                 $          -      $    320,700     $      303,120     $   3,897,574

Cost of revenues                                    -           162,146                  -         1,153,862
                                        ---------------   ---------------  -----------------  ----------------

Gross profit                                        -           158,554            303,120         2,743,712

Operating expenses:
   Selling                                          -           285,690                  -         1,348,577
   General and administrative                 231,482           535,796            755,824         2,173,595
                                        ---------------   ---------------  -----------------  ----------------

     Total operating expenses                 231,482           821,486            755,824         3,522,172
                                        ---------------   ---------------  -----------------  ----------------

Net loss from operations                     (231,482)         (662,932)          (452,704)         (778,460)

Other income (expenses):
   Other income (expense)                           -           (41,274)             4,847           (38,396)
   Interest expense and financing
    costs, net                                 (9,663)         (101,252)           (15,663)         (130,415)
                                        ---------------   ---------------  -----------------  ----------------

     Total other income
      (expenses)                               (9,663)         (142,526)           (10,816)         (168,811)
                                        ---------------   ---------------  -----------------  ----------------

Net loss before provision for income taxes   (241,145)         (805,458)          (463,520)         (947,271)

Provision for income taxes                          -                 -                  -                 -
                                        ---------------   ---------------  -----------------  ----------------


Net loss                                 $   (241,145)     $   (805,458)    $     (463,520)    $    (947,271)
                                        ===============   ===============  =================  ================



Net loss per common share                $      (.012)     $      (.050)    $        (.024)    $       (.066)
                                        ===============   ===============  =================  ================
</TABLE>


                                        4
<PAGE>
                                 CYBERADS, INC.
                      Consolidated Statements of Cash Flows
                               September 30, 2004
<TABLE>
<CAPTION>
                                               Three months ended                    Nine months ended
                                                  September 30                         September 30
                                        ---------------------------------  -----------------------------------
                                              2004              2003              2004               2003
                                        ---------------   ---------------  ----------------   ----------------
<S>                                      <C>                <C>              <C>               <C>
Cash flows from operating activities:
   Net loss                              $   (241,145)      $  (805,458)     $   (463,520)     $     (947,271)
   Adjustment to reconcile net
    loss to net cash used in
    operating activities:
     Provision for doubtful accounts                -                 -                 -             364,991
     Impairment of inventories                      -                                   -             120,879
     Impairment of long-lived assets                -            92,317                 -             190,962
     Depreciation                                   -                 -                 -              19,493
     Deferred financing costs                       -                 -                 -               7,015
     Common stock issued for in
      exchange for compensation
      and services                            250,000                 -           439,500                   -
     Common stock issued for
      interest                                  9,663                 -             9,663                   -
     Changes in assets and
      liabilities:
       Receivables                                  -           139,062            20,380             708,769
       Inventories                                  -            18,027                 -              35,355
       Deposits and other assets                    -           190,547                 -             167,932
       Outstanding checks in
        excess of cash in bank                      -                 -            13,567            (112,649)
       Accounts payable                       (18,518)          403,469          (190,531)         (1,372,131)
       Accrued liabilities                          -           (77,401)           69,941             134,838
                                        ---------------   ---------------  ----------------   ----------------
                                                    -           (39,437)         (101,000)           (681,817)
Cash flows from investing
 activities - capital expenditures                  -                 -                 -             (13,967)

Cash flows from financing
 activities:
  Borrowings from notes payable                     -            72,000                 -              72,000
  Principal repayments of note
   payable                                          -                 -           (11,000)                  -
  Advances from stockholder
   and related parties                              -                 -            47,000             281,100
  Proceeds from stock options
   exercised                                        -                 -            65,000
  Net borrowings from factor                        -            42,806                 -             446,662
                                        ---------------   ---------------  ----------------   ----------------
                                                    -           114,806           101,000             799,762
                                        ---------------   ---------------  ----------------   ----------------

Net increase in cash                     $          -       $    75,369      $          -      $      103,978
                                        ===============   ===============  ================   ================
</TABLE>


                             Continued on next page.
                                        5
<PAGE>
                                 CYBERADS, INC.

                Consolidated Statements of Cash Flows (continued)
                               September 30, 2004
                             See accompanying notes.

<TABLE>
<CAPTION>
                                               Three months ended                    Nine months ended
                                                  September 30                         September 30
                                        ---------------------------------  -----------------------------------
                                              2004              2003              2004               2003
                                        ---------------   ---------------  ----------------   ----------------
<S>                                      <C>                <C>              <C>               <C>
Net increase in cash                     $          -       $    75,369      $          -      $      103,978
Cash at beginning of period                         -            28,609                 -                   -
                                        ---------------   ---------------  ----------------   ----------------

Cash at end of period                    $          -       $   103,978      $          -      $      103,978
                                        ===============   ===============  ================   ================


Supplement schedule of
 noncash investing and
 financing activities:

   Common stock issued in
    exchange for payable to
    stockholder                          $    204,634       $          -     $    204,634      $            -
                                        ===============   ===============  ================   ================

   Accounts payable to supplier
    converted to note payable            $    185,192       $          -     $    185,192      $            -
                                        ===============   ===============  ================   ================
</TABLE>
























                                        6
<PAGE>
                                 CYBERADS, INC.

                   Notes to Consolidated Financial Statements
                               September 30, 2004

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         BUSINESS:  CyberAds, Inc. ("CyberAds") was incorporated in the state of
         Florida on April 12, 2000. The Company earns  commissions  from selling
         approved  contracts  to  subscribers  for cellular  telephone  service.
         Commissions  are received  either from master dealers or cellular phone
         service  providers,  not  the  subscriber.  Applications  for  cellular
         telephone  services are obtained  from  advertising  banners  placed at
         various websites. The Company does business with cellular phone service
         providers as well as master dealers that have  contracted  with various
         other carriers and with several  website hosts who receive a commission
         for each completed contract for cellular phone service. The Company has
         been  idle  during  the  three  months  ended  September  30,  2004 and
         management has devoted their attention  toward  restructuring  debt and
         seeking profitable products.

         PRINCIPLES OF CONSOLIDATION:  The accompanying  consolidated  financial
         statements  include  the  accounts of  CyberAds  and it's wholly  owned
         subsidiary IDS, Inc.  ("IDS").  All significant  intercompany  balances
         have  been  eliminated  in  consolidation.  The  operations  of IDS are
         currently idle.

         INTERIM  REPORTING:  The  Company's  year-end  for  accounting  and tax
         purposes is December 31. In the opinion of Management, the accompanying
         consolidated financial statements as of September 30, 2004 and 2003 and
         for the three and nine  months then  ended,  consisting  of only normal
         recurring  adjustments,  except as noted  elsewhere in the notes to the
         consolidated  financial  statements,  necessary  to present  fairly its
         financial  position,  results of its  operations  and cash  flows.  The
         results of operations for the three and nine months ended September 30,
         2004 and 2003  are not  necessarily  indicative  of the  results  to be
         expected for the full year.

         INVESTMENTS:  The  Company's  investments  as of September 30, 2004 and
         December 31, 2003  consisted  of a 22% interest in a limited  liability
         company  that owns real estate.  The Company uses the equity  method of
         accounting for its investment in this company.

         IMPAIRMENT   OF   LONG-LIVED   ASSETS:   The   Company   assesses   the
         recoverability of long-lived assets under SFAS 144, "Accounting for the
         Impairment or Disposal of Long-Lived Assets" by determining whether the
         depreciation and amortization of the asset's balance over its remaining
         life can be recovered through projected undiscounted future cash flows.
         The amount of  impairment,  if any, is measured based on fair value and
         charged  to  operations  in the  period  in  which  the  impairment  is
         determined  by  management.  Long-lived  assets to be  disposed  of are
         reported  at the lower of  carrying  amount or fair  value less cost to
         sell.

         The Company  recorded an impairment  loss during the three months ended
         September  30,  2003 of  $92,317  and  during  the  nine  months  ended
         September  30, 2003 of $190,962 for assets that became idle as a result
         of staff reductions.
                                        7
<PAGE>
1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         ------------------------------------------------------

         REVENUE RECOGNITION:  In 2004 and 2003, the Company recorded revenue on
         a "net" basis when  contracts  were  submitted to master  dealers.  The
         phones are shipped from the dealers to the  subscriber  and the Company
         does  not  bear  the risk of loss on the  cellular  phone.  Revenue  is
         recognized when the master dealer ships the phones to the subscriber.

         In 2003,  the Company  also  recorded  revenue on a "gross"  basis when
         contracts were submitted  directly to cellular phone service providers.
         The phones  were  shipped  from the Company to the  subscriber  and the
         Company  bore  the  risk of loss on the  cellular  phone.  Revenue  was
         recognized  when the phones were  shipped  along with  commissions  and
         related cost of goods sold for the cellular phone.

         STOCK OPTIONS AND WARRANTS:  The Company uses a fair value based method
         of accounting for stock based  compensation  to employees.  The Company
         also  accounts for stock options and warrants  issued to  non-employees
         for services under the fair value method of accounting.

         NET INCOME (LOSS) PER COMMON SHARE:  Net income (loss) per common share
         is computed  by  dividing  net income  (loss) by the  weighted  average
         number of common  shares  outstanding  during the period.  The weighted
         average  number of common stock shares  outstanding  was 20,208,386 for
         the three months ended  September 30, 2004 and  19,115,193 for the nine
         months ended September 30, 2004.

         USE OF  ESTIMATES:  The process of preparing  financial  statements  in
         conformity with accounting  principles generally accepted in the United
         States  of  America  requires  the  use of  estimates  and  assumptions
         regarding certain types of assets, liabilities,  revenues and expenses.
         Accordingly,  upon settlement, actual results may differ from estimated
         amounts.

2.       OPERATIONS
         ----------

         Management of the Company plans to continue to restructure  debt,  seek
         profitable  products,  reduce operating  expenses,  and seek additional
         capital and debt  financing  until  operations  achieve  profitability.
         Management of the Company believes the above actions,  along with other
         plans,  will allow them to continue  operations and ultimately  achieve
         profitability. Until then, the Company is dependent upon its ability to
         obtain  additional   capital  and  debt  financing.   The  consolidated
         financial   statements   as  of  September  30,  2004  do  not  reflect
         adjustments  relating to the recorded asset amounts,  or the amounts of
         liabilities  that would be necessary  should the Company not be able to
         continue in existence.










                                        8
<PAGE>
 3.      CASH FLOWS
         ----------

         Supplemental disclosure of cash flow information was as follows:

<TABLE>
<CAPTION>
                                                            Three months ended            Nine months ended
                                                               September 30                 September 30
                                                       ---------------------------   --------------------------
                                                            2004         2003             2004         2003
                                                       ------------   ------------   ------------  ------------
<S>                                                       <C>           <C>            <C>           <C>
           Cash paid during the period for -
              Interest                                    $      -      $       -      $       -     $  13,604
                                                       ============   ============   ============  ============
</TABLE>

4.       NOTES PAYABLE
         -------------

         Notes payable consisted of the following:
<TABLE>
<CAPTION>
                                                                             September 30,       December 31,
                                                                                2004               2003
                                                                         -----------------   -----------------
<S>                                                                         <C>                 <C>
           Note payable; was due in installments of $5,000 on
           January 15, 2004 and February 15, 2004 with final
           payment due March 15, 2004, plus interest at 10%
           per annum; secured by all of the Company's
           accounts receivable, inventories, and computer
           hardware and software and is personally
           guaranteed by two former officers of the Company.                $   109,000         $   120,000

           Note payable to cellular phone service provider;
           due in installments of $92,596 payable on January
           2, 2005 and August 2, 2005, plus interest at 1 1/2%
           per month.                                                           185,192                   -
                                                                         -----------------   -----------------

           Total notes payable                                              $   294,192         $   120,000
                                                                         =================   =================
</TABLE>

           The Company is currently in default with the  repayment  terms of the
           installment note.

5.       PAYABLE TO RELATED PARTIES
         --------------------------

         Advances from related parties consisted of the following:

<TABLE>
<CAPTION>
                                                                            September 30,      December 31,
                                                                                2004               2003
                                                                         -----------------   -----------------
<S>                                                                         <C>                 <C>
              Advance due to a corporation owned by a former
               officer of the Company, bearing interest at 10%
               per annum, due on demand and unsecured                       $    54,000         $    54,000
                                                                         -----------------   -----------------

                                        9
<PAGE>
5.       PAYABLE TO RELATED PARTIES (CONTINUED)
         --------------------------------------
                                                                            September 30,      December 31,
                                                                                2004               2003
                                                                         -----------------   -----------------
              Advance due to a former officer of the Company,
               bearing interest at 10% per annum, due on
               demand and unsecured                                         $   732,555         $   732,555
                                                                         -----------------   -----------------

              Total payable to related parties                              $   786,555         $   786,555
                                                                         =================   =================
</TABLE>
6.       LOANS PAYABLE - CONVERTIBLE DEBENTURES
         --------------------------------------

         Loans payable - convertible debentures consists of unsecured loans from
         two individuals  whereby the principal of the note is convertible  into
         the  Company's  common  stock at the option of the holder.  Interest on
         borrowings is payable  quarterly at a rate of 20% per annum.  The notes
         were due in  installments  of $15,000 on November 13, 2003,  $13,750 on
         December 13, 2003 and January 13, 2004, with final payment due February
         13, 2004. The Company is currently in default with the repayment  terms
         of the agreements.  The notes are convertible into the Company's common
         stock  at a  conversion  rate of 75% of the  closing  bid  price of the
         Company's common stock one trading day prior to conversion.

7.       COMMITMENTS AND CONTINGENCIES
         -----------------------------

         The Company is non-compliant  with respect to certain federal and state
         payroll related taxes.  Included in accrued payroll and payroll related
         liabilities   at   September   30,  2004  and   December  31,  2003  is
         approximately $540,800 of unpaid payroll taxes.

         In April 2004,  the Company agreed to indemnify a former officer of the
         Company  for any  loss he  sustained  in a  settlement  reached  with a
         cellular phone service provider  against IDS and him personally.  Under
         the  indemnification,  the Company was obligated to pay an aggregate of
         $72,261 in  installments of $5,000 each on or before August 1, 2004 and
         September   1,  2004  with  the  balance  due  October  1,  2004.   The
         indemnification had no effect on the accompanying  financial statements
         as  the  amount  owed  to  the  cellular  phone  service  provider  was
         previously recorded as accounts payable in the records of IDS.

         The Company is currently in  negotiations  with an  individual  who has
         threatened  a lawsuit  against  the  Company,  a former  officer  and a
         cellular phone service  provider.  The Company has offered to issue the
         individual  250,000  shares of common stock to settle any claims he may
         have against the Company.  This  individual  has verbally  accepted the
         settlement  offer.  The Company has reserved  250,000  shares of common
         stock to be issued under this settlement offer.

         A  claim  against  the  Company  of  approximately  $500,000  has  been
         threatened  by the  Creditors  Committee of World Com. The Company does
         not believe that they owe

                                       10
<PAGE>
7.       COMMITMENTS AND CONTINGENCIES (CONTINUED)
         -----------------------------------------

         the amount and intends to  vigorously  defend the claim.  The claim has
         not been recorded in the accompanying consolidated financial statements
         due to the uncertainty of the matter.

8.       COMMON STOCK TRANSACTIONS
         -------------------------

         On May 19, 2004,  the Company  issued 50,000 shares of its common stock
         to a former officer of the Company in lieu of compensation.  The shares
         were valued at $1.59,  the closing  bid price of the  Company's  common
         stock on the date of issuance.  The Company record compensation expense
         of $79,500 as a result of the issuance.

         On August 31, 2004, the Company issued  1,000,000  shares of its common
         stock to a major  shareholder  of Novanet  Media,  Inc. in exchange for
         consulting  services.  The shares  were  valued at $.25 per share which
         represented  a 12%  discount  from the  closing bid price of the common
         stock on the date of issuance.  Management of the Company estimated the
         value the shares issued based on the closing bid price of the Company's
         common  stock  at the date of  issuance,  the  historical  trend of the
         trading  prices for its common  stock and the volume of shares  traded.
         The Company recorded  professional  fees of $250,000 as a result of the
         issuance.

         On September 2, 2004, the Company issued  2,000,000 share of its common
         stock to a major  shareholder  in  exchange  for  $204,634  of  working
         capital  advances.  The  shares  were  valued at $.107 per share  which
         represented  a 68%  discount  from the  closing bid price of the common
         stock on the date of issuance.  Management of the Company estimated the
         value the shares issued based on the closing bid price of the Company's
         common  stock  at the date of  issuance,  the  historical  trend of the
         trading  prices for its common  stock and the volume of shares  traded.
         The Company also recorded imputed interest of $9,663 as a result of the
         exchange.

9.       Stock options
         -------------

         The Company's  stock option  activity for options  granted to employees
         and  non-employees  is  summarized as follows for the nine months ended
         September 30, 2004:

<TABLE>
<CAPTION>
                                                                             Fixed Plan
                                                   -----------------------------------------------------------
                                                                      Weighted                       Weighted
                                                                       average                        average
                                                                      exercise        Shares         exercise
                                                        Shares          price       exercisable        price
                                                   ---------------   -----------  ---------------  -----------
<S>                                                     <C>            <C>
           Outstanding at January 1, 2004               2,925,000      $  .48
                                                                     ===========
              Exercised                                  (500,000)        .13
                                                                     ===========
              Cancelled                                  (225,000)        .25
                                                                     ===========
              Expired                                    (300,000)       1.04
                                                                     ===========
           Outstanding at September 30, 2004            1,900,000      $  .51          1,900,000       $ .51
                                                   ===============   ===========  ===============  ===========
</TABLE>

                                       11
<PAGE>
9.       STOCK OPTIONS (CONTINUED)
         -------------------------

         The Company's stock option outstanding and exercisable at September 30,
         2004 is summarized as follows:
<TABLE>
<CAPTION>
                                                       Fixed Plan
          ----------------------------------------------------------------------------------------------------
                                Options outstanding                                 Options exercisable
          ---------------------------------------------------------------  -----------------------------------
                                                  Weighted average
                                            -----------------------------                        Weighted
               Range                           remaining      exercise                            average
             of prices          Shares           life           price           Shares        exercise price
          ---------------  ---------------  --------------  -------------  ---------------   -----------------
<S>         <C>                <C>            <C>              <C>              <C>               <C>
            $.04 - $.99        1,200,000      1 yr. 5 mo.      $   .27          1,200,000         $   .27
          ===============                   ==============  =============                    =================
           $.99 - $1.25          700,000      1 yr. 2 mo.      $  1.03            700,000         $  1.03
          ===============  ---------------  ==============  =============  ---------------   =================
           $.04 - $1.25        1,900,000      1 yr. 3 mo.      $   .51          1,900,000         $    .5
</TABLE>

10.      SETTLEMENT
         ----------

         The Company  entered into a consulting  agreement in September 2002 for
         advisory,   investor  relations  and  public  relations  services.  The
         consulting  firm and the Company have taken the position that the other
         is in default of the  agreement.  The Company and the  consulting  firm
         reached a settlement in April 2004 whereby the Company  agreed to issue
         100,000 shares of its common stock granted to the consulting firm under
         the original  consulting  agreement;  however,  the consulting firm was
         restricted from reselling the shares. Under the terms of the settlement
         agreement the consulting  firm could resell no more than 3,000 share of
         the  Company's  common  stock per week and no more than an aggregate of
         50,000  shares  over  a  period  of  120  days  from  the  date  of the
         settlement.  They were further  restricted from reselling the Company's
         common stock until  September  13, 2004 at which time they could resell
         no more than 3,000 shares of the Company's common stock per week and no
         more than an aggregate of 50,000 shares over a period of 120 days.  The
         Company recorded settlement expenses  aggregating  $110,000 as a result
         of the agreement in April 2004.

         Management of the Company  valued the shares issued at $1.10 per share,
         the closing bid price of the Company's  common stock on the date of the
         agreement.  Management  of  the  Company  estimated  the  value  of the
         Company's shares granted after  considering the historical trend of the
         trading  prices for its common  stock and the limited  volume of shares
         being traded.

         On April 27, 2004 the Company  issued 50,000 shares of its common stock
         in  accordance  with  the  terms of the  settlement.  The  Company  has
         reserved an  additional  50,000 shares of its common stock for issuance
         under the settlement.

                                       12
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Management's discussion and analysis contains various forward-looking statements
within the meaning of the Securities and Exchange Act of 1934.  These statements
consist of any statement  other than a recitation of historical  fact and can be
identified by the use of forward looking  terminology  such as "may",  "expect",
"anticipate",  "estimates", or "continue" or use of negative or other variations
of  comparable  terminology.  We  caution  that  these  statements  are  further
qualified  by  important  factors  that  could  cause  actual  results to differ
materially from those contained in our forward  looking  statements,  that these
forward looking  statements are necessarily  speculative,  and there are certain
risks and  uncertainties  that could  cause  actual  events or results to differ
materially from those referred to in our forward looking statements.

Management's  discussion  and analysis  should be read in  conjunction  with the
financial statements and the notes thereto.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 2003 AND THREE MONTHS ENDED  SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 2003:

In March 2003, the Company  changed their business model whereby  cellular phone
service providers,  or a fulfillment company, began shipping cellular telephones
directly to the Company's subscribers, rather than the Company carrying cellular
telephone inventories and shipping to the Company's subscribers.

Also,  effective  September 9, 2003, all  then-existing  officers of the Company
resigned and were replaced with new management.

Revenues were $303,120 for the nine months ended  September 30, 2004 compared to
$3,897,574 for the nine months ended September 30, 2003. The $3,594,454 decrease
reflects the impact of the change in the Company's business model. Under the new
model, the Company records revenue on a "net" basis when the master dealers ship
the phones to the subscriber.  Under the previous  business  model,  the Company
recorded  revenue on a "gross"  basis when the Company  shipped the phones.  The
decrease in revenues also reflects the impact of the elimination of unprofitable
products by new management.

The  Company had no  revenues  for the three  months  ended  September  30, 2004
compared to $320,700 for the three months ended  September 30, 2003.  Management
of the Company has devoted all of there  efforts  during the three  months ended
September 30, 2004 toward  restructuring  debt,  settling  claims and evaluating
profitable products.

There were no costs of revenues  for the nine months  ended  September  30, 2004
compared to $1,153,862 for the nine months ended  September 30, 2003.  Under the
new business model the Company no longer carries cellular telephone inventories.

There were also no selling expenses for the nine months ended September 30, 2004
compared to  $1,348,577  for the nine  months  ended  September  30,  2003.  The
decrease  reflects  the impact of the  change in the  Company's  business  model
whereby  the  service  provider  is  now  responsible  for  handling  all  order
fulfillment processes, customer service, verification and shipping.



                                       13
<PAGE>
General and  administrative  expenses  were  $755,824  for the nine months ended
September 30, 2004 compared to  $2,173,595  for the nine months ended  September
30,  2003.  The  decrease  reflects  the impact of the  change in the  Company's
business model and the impact of new management reducing overhead.  Also, losses
from  settlements of claims against the Company  aggregated  $254,500 during the
nine months ended September 30, 2004 that the Company  believes will not reoccur
along with legal costs of $37,000 relating to those settlements.

General and  administrative  expenses  were  $231,482 for the three months ended
September 30, 2004 compared to $535,796 for the three months ended September 30,
2003. The decrease  reflects the impact of the change in the Company's  business
model and the impact of new management reducing overhead.

FINANCIAL POSITION & LIQUIDITY AND CAPITAL RESOURCES

AS OF SEPTEMBER 30, 2004 COMPARED TO DECEMBER 31, 2003:

The Company had a working capital deficit of $2,623,104 as of September 30, 2004
compared to a working capital deficit of $2,720,748 as of December 31, 2003. The
decrease in the Company's working capital deficit of $97,644 was a result of the
Company  raising  $65,000  from the  exercise  of stock  options  and $47,000 of
advances from a stockholder.

Since   September  2003  when  new  management   began   operating  the  Company
approximately  $1,668,400 of accounts payable and accrued  liabilities have been
renegotiated  into term debt or converted to capital  stock of the Company.  New
management  expects to continue to improve its working capital by  restructuring
debt, seeking  profitable  products,  reducing overhead,  and seeking additional
capital  until debt can be  satisfied  and assets  recovered  through  continued
profitable operations.




























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<PAGE>
ITEM 3.  CONTROLS AND PROCEDURES

As of  September  30, 2004 the  Company  carried  out an  evaluation,  under the
supervision and with the  participation of the Company's  management,  including
the Company's Chief Executive Officer and President, of the effectiveness of the
design  and  operation  of the  Company's  disclosure  controls  and  procedures
pursuant to Rule 13a-14 of the Securities  Exchange Act of 1934. Based upon that
eva1uation,  these principal  executive officers and principal financial officer
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company,  including
its consolidated subsidiaries, required to be included in the Company's periodic
SEC filings.  There have been no significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent evaluation.













































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<PAGE>
                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8K

(a)              Exhibits.
                 --------

Exhibit
Number           Description of Document

3.1(a) Articles of Incorporation (Incorporated by reference)

3.1(b) Amendment to Articles of Incorporation (Incorporated by reference)

3.2    ByLaws (Incorporated by reference)

4.0    Description of Series A Convertible Preferred Stock (Incorporated by
       reference)

31     Rule 13a-14(a)/15d-14(a) Certification

32     Section 1350 Certification

(b)              Reports on Form 8-K.
                 -------------------
                 No reports on Form 8-K were filed during the period covered by
                 this report.


                                   SIGNATURES

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

Date: November 16, 2004          CYBERADS, INC.

                                 By: /s/ WALTER TATUM
                                 --------------------------
                                 Walter Tatum, President




















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