U.S. 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, 1999

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 FOR THE TRANSITION PERIOD FROM TO


COMMISSION FILE NUMBER:


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

DELAWARE                                                              52-2132622
(State or other                 (Primary Standard               (I.R.S. Employer
jurisdiction of             Industrial Classification        Identification No.)
incorporation or                  Code Number)
organization)

1208 Alberni Street, Suite 806,
Vancouver, British Columbia, Canada                                      V6E 4N5
(Address of principal executive offices)                              (Zip Code)

                                 (604) 664-0484
                (Issuer's Telephone Number, including Area Code)



                              Thomas E. Stepp, Jr.
                              Stepp & Beauchamp LLP
                           1301 Dove Street, Suite 460
                         Newport Beach, California 92660
                             Telephone: 949.660.9700
                             Facsimile: 949.660.9010
            (Name, Address and Telephone Number of Agent for Service)


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements  for the past 90 days.
[X] Yes [ ] No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practical date. As of September 30, 1999,  there were
18,497,500  shares of the  issuer's  $.0001 par value  common  stock  issued and
outstanding.


<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


James E. Slayton, CPA
--------------------------------------------------------------------------------
2858 WEST MARKET STREET
SUITE C
FAIRLAWN, OHIO 44333

                          INDEPENDENT AUDITORS' REPORT


Board of Directors                                            November 19, 1999
Power Direct, Inc. (the Company)

     I have audited the Balance Sheet of Power Direct, Inc. (A Development Stage
Company),  as of September 30, 1999, December 31, 1998 and December 31, 1997 and
the related  Statements of Operations,  Stockholders'  Equity and Cash Flows for
the  period  January  1, 1999 to  September  30,  1999 and the two  years  ended
December  31, 1998 and December 31, 1997.  These  financial  statements  are the
responsibility of the Company's  management.  My responsibility is to express an
opinion on these financial statements based on my audit.

     I  conducted  my audit  in  accordance  with  generally  accepted  auditing
standards.  Those standards  require that I plan and perform the audit to obtain
reasonable assurance about 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 statement  presentations.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  I  believe  that my audit  provides  a  reasonable  basis  for my
opinion.

     In my opinion,  the financial  statements referred to above present fairly,
in all  material  respects,  the  financial  position of Power  Direct,  Inc. (A
Development  Stage  Company),  at  September  30,  1999,  December  31, 1998 and
December  31,  1997,  and the results of its  operations  and cash flows for the
period  January 1, 1999 to September  30, 1999 and the two years ended  December
31, 1998 and December 31, 1997, in conformity with generally accepted accounting
principles.

     The  accompanying  financial  statements  have been  prepared  assuming the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
financial  statements.  The  Company  has  had  limited  operations  and has not
established a long term source of revenue.  This raises  substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters are also  described in Note 3.  The financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.


James E. Slayton, CPA
Ohio License ID# 04-1-15582


<PAGE>


                               Power Direct, Inc.
                          (A Development Stage Company)

                           CONSOLIDATED BALANCE SHEET


                                          September      December       December
                                          30, 1999       31, 1998       31, 1997

     ASSETS

Current Assets
Cash in Bank                              54,490.00      2,246.00           0.00
Accounts Receivable                       39,321.00          0.00           0.00
Other Current Assets                       2,000.00
                                       -----------------------------------------
Total Current Assets                      95,811.00      2,246.00           0.00


OTHER ASSETS

Other Assets                               1,123.00          0.00           0.00
Universal Resource Locator               200,000.00
Investments                            1,944,910.00
                                       -----------------------------------------
                                       2,146,033.00          0.00           0.00

TOTAL ASSETS                           2,241,844.00      2,246.00           0.00
                                       =========================================


                   See accompany notes to financial statements



<PAGE>


                               Power Direct, Inc.
                          (A Development Stage Company)

                           CONSOLIDATED BALANCE SHEET


                                         September      December       December
                                         30, 1999       31, 1998       31, 1997


     LIABILITIES & EQUITY
Current Liabilities
Accounts Payable                          4,137.00     13,042.99
                                      -----------------------------------------
Total Liabilities                         4,137.00     13,042.99           0.00


Minority interest in Subsidiary         (23,997.00)
($26,971 at time of acquisition
less income attributable to
minority interest $50,968)

     EQUITY
Common Stock, $.0001 par value,
authorized 100,000,000 common
shares; issued and outstanding at
12/31/97, 6,000,000 common shares;
issued and outstanding at 12/31/98,
6,000,000 common shares; issued and
outstanding at 09/30/99, 18,497,500       1,850.00        600.00         100.00
Additional paid in capital            2,950,150.00        400.00         900.00
Retained Earnings                      (691,296.00)   (11,796.99)     (1,000.00)

Total Stockholders' Equity            2,261,704.00    (10,796.99)          0.00
                                      -----------------------------------------
     TOTAL LIABILITIES & OWNERS
      EQUITY                          2,241,844.00      2,246.00           0.00
                                      =========================================


                   See accompany notes to financial statements


<PAGE>



                               Power Direct, Inc.
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENT OF OPERATIONS
                               FOR PERIODS ENDING

<TABLE>
<CAPTION>
                                                          Date of
                                                          inception
                                                          to
                                                          September           September            December           December
                                                          30, 1999            30, 1999             31, 1998           31, 1997
<S>                                                              <C>                 <C>                 <C>                <C>
  REVENUE                                                        0.00                0.00                0.00               0.00
Services

  COSTS AND
EXPENSES
Selling, General and Administrative                        644,868.00          633,071.00           10,797.00               0.00
Commissions                                                 99,500.00           99,500.00
                                                          ----------------------------------------------------------------------

              Total Costs and
              Expenses                                     744,368.00          732,571.00           10,797.00               0.00
                                                          ----------------------------------------------------------------------
Other Income (Expense)
  Interest Income                                            3,104.00            3,104.00
                                                          ---------------------------------------------------
  Total Other Income (Expense)                               3,104.00            3,104.00                0.00               0.00


Net Ordinary Income or (Loss) before Minority
interest                                                  (741,264.00)        (729,467.00)         (10,797.00)              0.00

                                                          ----------------------------------------------------------------------
Less: Income or (Loss) before Minority
interest                                                   (50,968.00)         (50,968.00)               0.00               0.00
                                                          ----------------------------------------------------------------------

Net Ordinary Income or (Loss)                             (690,298.00)        (678,499.00)         (10,797.00)
                                                          ======================================================================

Weighted average number of common shares
outstanding                                                13,882,778          13,882,778           6,000,000          2,000,000

  Net Loss Per Share                                           -0.053              -0.052             -0.0018                  0
</TABLE>


                  See accompany notes to financial statements

<PAGE>


                               Power Direct, Inc.
                          A Development Stage Company)

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                               FOR PERIODS ENDING
           December 31, 1997, December 31, 1998 and September 30, 1999


<TABLE>
<CAPTION>
                                                                                                          Deficit
                                                                                                        accumulated
                                                                                         Additional       during         Total
                                                            Common Stock                   paid-in      development    Stockholder's
                                                       Shares          Amount              capital         stage          Equity
                                                    --------------------------------------------------------------------------------
<S>                                                  <C>               <C>              <C>               <C>             <C>
Balance December 31, 1995                              6,000,000             600.00          400.00       (1,000.00)          0.00

Balance December 31, 1996                              6,000,000             600.00          400.00       (1,000.00)          0.00

Balance December 31, 1997                            6,000,000.00            600.00          400.00       (1,000.00)          0.00

Net loss year ended December 31, 1998                                                                    (10,797.00)     (10,797.00)
                                                    --------------------------------------------------------------------------------

Balance December 31, 1998                              6,000,000            $600.00          400.00      (11,797.00)      10,797.00
                                                    --------------------------------------------------------------------------------

January 6, 1999 issued for cash                          600,000              60.00        5,940.00                        6,000.00

January 28, 1999
Issued for consulting services                           600,000              60.00      119,940.00                      120,000.00

April 14, 1999 Issued for cash                         7,127,500             712.75      999,287.25                    1,000,000.00

On or about June 15, 1999
Issued for licensing agreement                         3,000,000             300.00    1,499,700.00                    1,500,000.00

June 15, 1999
Issued for services rendered                              20,000               2.00        4,998.00                        5,000.00

June 30, 1999
Issued for services rendered                             250,000              25.00       49,975.00                        5,000.00

July 20, 1999
Issued for cash                                          800,000              80.00      239,920.00                      240,000.00

September 15, 1999
Issued for Cash                                          100,000              10.00      29,9990.00                       30,000.00

Net loss January 1, 1999 to September
30, 1999                                                                                                (678,499.00)    (678,499.00)

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

Balance September 30, 1999                            18,497,500      $    1,849.75   $2,950,150.25      690,296.00    2,261,704.00
                                                    ================================================================================
</TABLE>


                   See accompany notes to financial statements



<PAGE>


                               Power Direct, Inc.
                         ( A Development Stage Company)

                             STATEMENT OF CASH FLOWS
                                   FOR PERIOD


<TABLE>
<CAPTION>
                                                             Date of             January 1,
                                                             Inception           1999
                                                             to                  to
                                                             September           September          December            December
                                                             30, 1999            30, 1999           31, 1998            31, 1997
<S>                                                         <C>                <C>                 <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) from operations                                   690,296.00         678,499.00      (10,797.00)             0.00
Adjustments to reconcile net income to net cash
provided

Depreciation Expense                                               0.00

Amortization of Intangible Assets (Minority
Interest)                                                     41,667.00          41,667.00

Services rendered in exchange for stock                      155,000.00         155,000.00
Increase in current assets                                   (41,321.00)        (41,321.00)
Increase(Decrease) in current
liabilities                                                    4,137.00           8,906.00       13,043.00
                                                           --------------------------------------------------------------------

Net Cash provided by Operating Activities                   (530,813.00)        (532,059.00)       2,246.00             0.00


CASH FLOWS FROM INVESTING ACTIVITIES


Purchase of Long Term Investments                            691,697.00         491,697.00


                                                           --------------------------------------------------------------------
          Net cash used by investing activities              691,697.00         691,697.00                              0.00



CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Capital Stock                                  1,277,000.00       1,276,000.00


          Net cash used by financing
          activities                                       1,277,000.00       1,276,000.00            0.00             (0.00)

          Net increase(decrease) in cash                      54,490.00          52,244.00        2,246.00              0.00
          Cash and cash equivalents, beginning
          of period                                                0.00           2,246.00            0.00              0.00
          Cash and cash equivalents, end of
          year                                                54,490.00          54,490.00        2,246.00              0.00


</TABLE>



                   See accompany notes to financial statements








<PAGE>


                               Power Direct, Inc.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 -HISTORY AND ORGANIZATION OF THE COMPANY

     The Company was organized  September 13, 1993,  under the laws of the State
of Delaware,  as Power Direct,  Inc. The Company currently has no operations and
in  accordance  with SFAS #7, the  Company is  considered  a  development  stage
company.

     On September  30, 1993,  the company  issued  10,000  Shares of its .01 par
value common stock for cash of $1,000.

     On July 30, 1998,  the State of Delaware  approved the  Company's  restated
Articles of Incorporation,  which increase its capitalization from 10,000 common
shares to  25,000,000  common  shares.  The par value was changed  form $.01 par
value to $0.0001.

     On July 30,  1998 the  Company  forward  split its common  stock 200:1 thus
increasing  the  number  of  outstanding  common  stock  shares  from  10,000 to
2,000,000 shares.

     On October 21, 1998,  the Company  forward split its common stock 3:1, thus
increasing  the number of  outstanding  common  stock  shares from  2,000,000 to
6,000,000 shares.

     On  December  16,  1998,  the Company  increased  its  capitalization  from
25,000,000  common shares to 100,000  common  shares.  The par value remained at
$0.0001.

     The Statement of  Stockholder's  equity  reflects  changes in par value and
common stock splits retroactively.

     On January 6, 1999,  the Company  issued  600,000 shares of its $0.0001 par
value common stock for $6,000.00 in cash.

     On January 28, 1999, the Company issued  6000,000 shares of its $0.0001 par
value common stock for services rendered in the amount of $120,000.00.

     On April 14, 1999 the Company  completed a Regulation D, Rule 504 offering,
issuing 7,127,500 shares of its $0.0001 par value common stock for $1,000,000 in
cash.  These shares were issued at varying prices which reflected  market prices
at time of subscription.

     On or about June 15,  1999,  the  Company  issued  3,000,000  shares of its
$0.0001  par value  common  stock for a licensing  agreement  valued at $.50 per
share,  the market price at the time the agreement was reached.  There will be a
future  exchange  of an  additional  3,000,000  shares of common  stock when the
licensing agreement is finalized.

     On June 15, 1999, the Company issued 20,000 shares of its $0.0001 par value
common stock for services rendered in the amount of $5,000.00.


<PAGE>

                               Power Direct, Inc.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1- HISTORY AND ORGANIZATION OF THE COMPANY - continued

     On June 30,  1999,  the Company  issued  250,000  shares of its $0.0001 par
value common stock for services rendered in the amount of $50,000.00.

     On July 20,  1999,  the Company  issued  800,000  shares of its $0.0001 par
value common stock for cash in the amount of  $240,000.00  and redeemed  800,000
warrants

     On September 15, 1999, the Company issued 100,000 shares of its $0.0001 par
value common  stock for cash in the amount of  $30,000.00  and redeemed  100,000
warrants

Note 2-ACCOUNTING POLICIES AND PROCEDURES

     Accounting  policies  and  procedures  have not been  determined  except as
follows:

     1. The Company uses the accrual method of accounting.

     2. Basic earnings per share is computed  using the weighted  average number
of shares of common  stock  outstanding.  Diluted  earnings  per share  were not
included as the inclusion of warrants is anti-dilutive

     3. The Company has adopted December 31 as its fiscal year end.

     4.  The  Company  has not yet  adopted  any  policy  regarding  payment  of
dividends. No dividends have been paid since inception.

     5. The company has not yet adopted all  accounting  pronouncements  issued.
The effect on the financial  statements is deemed  insignificant  and immaterial
and there were no adjustments made to the financial statements.

     6. Organization costs were expensed when incurred.

     7. The Company records its inventory at cost.

     8. The  preparation  of financial  statements in conformity  with generally
accepted  accounting  principles  requires that  management  make  estimates and
assumptions  which affect the reported  amounts of assets and  liabilities as at
the date of the  financial  statements  and revenues and expenses for the period
reported. Actual results may differ from these estimates.

     9. The  Company's  Statements  of Cash  flows is  reported  utilizing  cash
(currency on hand and demand deposits) and cash equivalents (short-term,  highly
liquid investments). The Company's Statement of Cash Flows is reported utilizing
the indirect method of reporting cash flows.


<PAGE>


                               Power Direct, Inc.
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS

     10.  The cost of plant and  equipment  is  depreciated  over the  estimated
useful life of the equipment utilizing the straight line method of depreciation.
The amount of depreciation recorded during this period was 50.00.

     11. Power Direct, Inc. purchased a majority interest in Cardstakes.com. The
Company has  accounted  for the business  combination  as a  consolidation.  All
intercompany eliminations have been made.

     12. The Company has incurred Universal Resources Locator's costs as part of
web  site  development.  The  costs of the web site  will be  amortized  over 60
months, once the development is complete and in operations.

     13. The Company  experienced  losses since its  inception on September  13,
1993 (Date of inception) to September 30, 1999. The Company will review its need
for a provision  for federal  income tax after each  operating  quarter and each
period for which a statement  of  operations  is issued.  There has not been any
deferred tax benefits recorded as management has deemed it less than likely that
the net operating losses will be utilized.  The net operating loss carryforwards
will begin to expire in 2008.

     14. The Company has purchased  interest in  Vertizonal,  Rising Phoenix and
LANSource.   Vertizonal  and  Rising  Phoenix  investments  have  been  recorded
utilizing the equity method of  accounting.  The Company  alleges that LANSource
breached the  agreement and is currently in  negotiations  to settle the alleged
breach.

NOTE 3 - GOING CONCERN

     The  Company's  financial  statemetns  are  prepared  using  the  generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business.  However,  the  Company  has no  current  source of  revenue.  Without
realization  of  additional  capital or  revenues,  it would be unlikely for the
Company  to  continue  as a  going  concern.  It is  management's  plan  to seek
additional capital through a merger with an existing operating company.

NOTE 4 - RELATED PARTY TRANSACTION

     The Company does not own any real or personal property. Office services are
provided  without  charge  by a  director.  Such  costs  are  immaterial  to the
financial  statements and,  accordingly,  have not been reflected  therein.  The
officers and directors of the Company are involved in other business  activities
and may, in the future,  become involved in other business  opportunities.  If a
specific  business  opportunity  becomes  available,  such  persons  may  face a
conflict in selecting  between the Company and their other  business  interests.
The Company has not formulated a policy for the resolution of such conflicts.


<PAGE>


                               Power Direct, Inc.
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS

NOTE 5 - WARRANTS AND OPTIONS

     On July 15, 1999, the Company issued warrants to J & S Overseas  Holding as
part of the  purchase  agreement  for URL. At  September  30,  1999,  there were
1,000,000 of these  warrants  outstanding.  The  warrants  may be exercised  one
warrant for one share of the Company's common stock and $0.25 cents per share.

     On April 30, 1999, the Company issued  warrants to Yenn Assets as part of a
Regulation S offering.  At September  30,  1999,  there were  1,000,000 of these
warrants outstanding. The warrants may be exercised one warrant for one share of
the Company's common stock and $0.30 cents per share.

     The warrants have not been assigned a value, as the monetary value of these
warrants is not readily determined since the warrants are not trading.

     The Company has options agreements with the following individuals.

          May Joan Liu                  600,000
          R. Angelo Holmes              300,000
          Jack Sha                      300,000
          Ferdinand Marchard             50,000

     The options may be exercised on a one option for one share of the Company's
common stock and $0.25 cents per share.  The options are good for a period of 18
months from grant date.

     The Company did not record any  compensation  expense at the issue of these
options for the following reasons: The options were not issued under a formal or
informal  compensation  package  or  agreement.  The  options  were  issued by a
development  stage company which exhibits a high volatility  factor exhibited by
the fluctuation in the marke prices both before and since the grant date.

     If the  Company  had  recorded  compensation  expense,  the net  loss  from
inception would have increased from ($690,296.00) to ($1,079,046.00)

NOTE 5 - LONG TERM COMMITMENTS

     The Company does not have any long term rental  agreements nor does it have
any long term debt obligations.


Item 2. Management's Discussion and Analysis or Plan of Operation

Business  of  the  Registrant.   Power  Direct,   Inc.  (the  "Registrant")  was
incorporated  in the State of Delaware on September 13, 1993,  and maintains its
principal executive offices at 1288 Alberni Street, Suite 806, Vancouver, BC V6E
4N5. The Registrant's  offices in the United States are located at 4291 Meridian
Street, Suite 29, Bellingham, WA 98226.

For purposes of  clarification,  anytime that "US$" appears in this Registration
Statement,  it means  the  currency  of the  United  States of  America,  unless
otherwise stated.  Anytime that "CDN$" appears, it means the currency of Canada,
in Canadian dollars.

The Registrant was inactive from September 13, 1993,  through  November 1, 1998.
In  November  1998 the  Registrant  began the process of  identifying  available
interests in oil and natural gas producing properties.  On January 15, 1999, the
Registrant entered into a letter of intent with Rising Phoenix Development Group
Ltd., a Canadian  corporation,  located in Vancouver,  British Columbia,  Canada
("Rising Phoenix"), to acquire all the assets of Rising Phoenix,  including that
corporation's  interest in the oil and natural gas rights on 6,360 acres located
in the Powder River Basin of eastern  Wyoming  (the  "Wyoming  Property").  That
letter of intent  specifies that the Registrant  must,  among other things,  pay
Rising Phoenix  seventy-five  thousand dollars  (US$75,000) and, further,  issue
3,800,000  shares  of its  common  stock  to  Rising  Phoenix  to  complete  the
acquisition of the assets of Rising Phoenix.  The letter of intent also provides
that the  Registrant  will  appoint no more than  three  directors  from  Rising
Phoenix's  board  of  directors  to the  Registrant's  board of  directors.  The
Registrant  paid Rising  Phoenix a prepayment  advance of  Twenty-Five  Thousand
Dollars  (US$25,000)  on January 27, 1999.  On or about  February 24, 1999,  the
Registrant  made a second  prepayment  advance to Rising Phoenix of Ten Thousand
Dollars  (US$10,000).  On or about March 29, 1999, the Registrant made the third
repayment  advance of Ten  Thousand  Dollars  (US$10,000).  On or about April 7,
1999, the fourth prepayment advance of Ten Thousand Dollars (US$10,000) was made
by the Registrant. The Registrant made the fifth payment of Ten Thousand Dollars
(US$10,000)  and the final  payment of Ten Thousand  Dollars  (US$10,000)  on or
about April 26, 1999, and on or about May 26, 1999, respectively. The Registrant
has not  transferred  any of its common stock to Rising Phoenix to complete this
transaction.  According to the letter of intent, the Registrant is to assume all
of Rising Phoenix's financial obligations  pertaining to the Wyoming Property as
of January 31, 1999.  In return,  Rising  Phoenix  agreed to deliver the Wyoming
Property in good title and assign to the Registrant its joint venture  agreement
with Derek Resources  Corporation  ("Derek  Resources").  Pursuant to that joint
venture  agreement,  Derek Resources  agreed to provide up to a maximum of Three
Million Five Hundred  Thousand  Dollars  (US$3,500,000)  of  improvements  on or
before December 31, 2000, on the Wyoming  Property in exchange for a 75% working
interest in the  Wyoming  Property.  The  Registrant  anticipates  that the site
construction  will commence  sometime early in the year 2000.  Negotiations have
begun with  Bateman  Engineering,  Inc.  and its  associate  company,  Silvertip
Project Partners, Inc., to provide development,  financing and construction of a
pilot production facility. If Derek Resources successfully meets its obligations
under  the  joint  venture  agreement,  the  Registrant  will own a 25%  working
interest  in the  Wyoming  Property.  If  Derek  Resources  fails  to  meet  its
obligations under the joint venture agreement, the Registrant will obtain a 100%
working  interest in the Wyoming  Property,  including  all of the  improvements
financed  by Derek  Resources.  There are no proven oil or gas  reserves  on the
Wyoming Property.

On  January  26,  1999,  the  Registrant  signed  a  letter  of  agreement  with
Vertizontal Energy Resources, Inc. formerly I.T.A. Enterprises, Inc. ("I.T.A."),
a Canadian  company,  to acquire and own a 42% working interest in a natural gas
project  in west  central  Alberta  (the  "Alberta  Property").  This  letter of
agreement  requires  the  Registrant  to  provide  42%  of  the  costs  for  the
three-phase  project,  which are  estimated in the letter of agreement to be Two
Hundred Thousand Dollars (CDN$200,000).  As of June 10, 1999, the Registrant had
advanced  I.T.A.  a total of Twenty  Thousand Three Hundred Ninety Three Dollars
(US$20,393)  toward the Alberta Property project.  The working interest acquired
will be  subject to a 10% gross  overriding  royalty  (that is,  4.2% of the 42%
working  interest  shall be payable


                                       2
<PAGE>


directly to Nicholas Baiton,  the royalty  holder).  To date, the Registrant has
paid a deposit of eight  thousand  four hundred  dollars  (CDN$8,400)  to I.T.A.
pursuant to the terms of the agreement.  It was agreed  between  I.T.A.  and the
Registrant  that the $8,400 deposit would be used for prospect fees and that the
Registrant  will receive a refund of any unused portion of that deposit.  Within
ten  (10)  days of  I.T.A.  providing  the  Registrant  with an  "Authority  for
Expenditures"  and a cash  call for  Phases I and II of the  development  of the
Alberta  Property,  the  Registrant  will be  required to advance  seventy  five
thousand six hundred dollars (CDN$75,600) to I.T.A., representing the balance of
the Registrant's 42% of the estimated costs.  There can be no assurance that the
Registrant will have  sufficient  funds available to meet this obligation in the
time frame  required by the letter of agreement.  There are no proven oil or gas
reserves on the Alberta Property.

Plan of Operation-Alberta  Property. The Registrant anticipates that the Alberta
Property will produce mainly  methane gas. The projected  timetable for start-up
of production on the Alberta Property is as follows: (1) In or around September,
1999, the Registrant  anticipates that Liberty Oil & Gas Ltd.  ("Liberty"),  the
company that will be operating the Alberta Property project, will receive a well
license; (2) In or around October,  1999, the testing and evaluation of the well
will be completed;  (3) Also in or around October, 1999, Liberty will design and
license  production  facilities;  (4) In or around November or December of 1999,
Liberty  expects to procure and  install  production  facilities;  and (5) In or
around  the first  quarter  of 2000,  gas  production  is  slated to begin.  The
Registrant will have a working interest in the Alberta Property but Liberty will
physically  operate the facility.  The Alberta  Property does not contain proved
oil or gas reserves at this time.

Plan of Operation-Wyoming  Property. The Registrant anticipates that the Wyoming
Property  will produce  mainly oil. As  discussed  earlier,  Derek  Resources is
solely responsible for the capital expenditures on the Wyoming Property. At this
time, the Registrant cannot guarantee or predict the timetable for completion of
the  material  steps to get the Wyoming  Property  producing  oil. As  discussed
earlier,  Derek  Resources  has until  December  31, 2000 to meet its  financial
obligations.  The Registrant  anticipates that if the Wyoming Property  produces
oil, it will be sometime  before  December 31, 2000.  As of September  14, 1999,
Derek Resources had expended  approximately  $1,000,000 on the Wyoming Property.
The Wyoming Property does not contain proved oil and gas reserves at this time.

Marketing.  The Registrant anticipates any future production will be marketed to
third parties consistent with industry practices.  Typically, oil is sold at the
wellhead at field-posted prices plus a bonus and natural gas is sold by contract
at a negotiated  price based upon factors  normally  considered in the industry,
such as  distance  from  the  well to the  pipeline,  well  pressure,  estimated
reserves,  quality of natural gas and prevailing supply/demand  conditions.  The
Registrant's  marketing  objective is to receive the highest  possible  wellhead
price for its  product.  There are a variety of factors  which affect the market
for oil and natural gas, including the extent of domestic production and imports
of oil and natural gas, the  proximity and capacity of natural gas pipelines and
other transportation  facilities,  demand for oil and natural gas, the marketing
of competitive fuels and the effects of state and federal regulations on oil and
natural gas production and sales. The Registrant does not anticipate significant
difficulties  in marketing the oil and natural gas it eventually  produces.  The
oil and natural gas industry also  competes  with other  industries in supplying
the  energy and fuel  requirements  of  industrial,  commercial  and  individual
customers.  The  availability  of a ready  market for the  Registrant's  oil and
natural gas production depends on the proximity of reserves to, and the capacity
of, oil and natural gas  gathering  systems,  pipelines and trucking or terminal
facilities.  The Registrant anticipates that it will deliver natural gas through
gas gathering  systems and gas pipelines that it does not own. Federal and state
regulation of natural gas and oil production and transportation,  tax and energy
policies, changes in supply and demand and general economic conditions all could
adversely  affect the  Registrant's  ability  to produce  and market its oil and
natural gas. The  Registrant  anticipates  it will take the  necessary  steps to
attempt to control price risk. Even if the Registrant takes the proper steps, it
will  remain  subject to price  fluctuations  for  natural  gas sold in the spot
market due  primarily  to  seasonality  of demand and other  factors  beyond the
Registrant's control. Domestic oil prices generally follow worldwide oil prices,
which are subject to price  fluctuations  resulting from changes in world supply
and demand.  The Registrant  believes that it will be able to reduce these risks
by entering into, and expects to enter into, hedge transactions in future years.

On February 15, 1999,  the  Registrant  signed a letter of intent to acquire and
own up to a 51% ownership interest in LANSource  Technologies,  Inc., a Canadian
company  ("LANSource").  LANSource is a developer of fax and data


                                       3
<PAGE>


communications   software.   LANSource's   primary   products  are  WINport,   a
modem-sharing application and FAXport, a group of software products which allows
users to send and receive  faxes from their  desktop  computer or through  their
e-mail system.  WINport,  FAXport,  and other LANSource products are distributed
through Tech Data US, Tech Data Canada,  Ingram Micro Canada, Ingram USA, Ingram
UK,  Ingram  Italy,  EMJ Date  Systems  Canada,  EMJ USA,  Merisel  US and Micro
Central.  WINport is  currently  available in 12  languages  and is  distributed
worldwide. In order to purchase the first 12.5% ownership interest in LANSource,
the  Registrant  was  required  to make,  on or before  March 1,  1999,  a total
non-refundable  deposit of three hundred thousand dollars  (CDN$300,000),  which
payment was timely made to  LANSource  by the  Registrant.  The letter of intent
contemplated  that, on or before March 31, 1999,  the  Registrant  and LANSource
would enter into a formal  Purchase and Sale  Agreement.  Upon the  execution of
that  agreement,  the  Registrant  would  be  required  to  make  an  additional
non-refundable deposit of two hundred thousand dollars (CDN$200,000). The letter
of intent also stated that in the event that the parties,  for whatever  reason,
were unable to finalize the Purchase and Sale Agreement by March 31, 1999,  than
the whole  transaction  between the Registrant and LANSource would be considered
null and void and LANSource would be entitled to retain all deposits. Because of
delays by LANSource in preparing the formal Purchase and Sale  Agreement,  as of
April  8,  1999,  the  Registrant  and  LANSource  had not  finalized  a  formal
agreement.  On or about April 15, 1999,  a Statement of Claim,  on behalf of the
Company as Plaintiff, was issued by the Ontario Court, General Division. Also on
or about  April  15,  1999,  that  Statement  of Claim was  served on  Defendant
LANSource.  As described  in Item 1,  LANSource  and the Company  entered into a
letter  agreement  whereby  the  Company  was to  purchase a 12.5%  interest  in
LANSource  with an option to purchase an  additional  38.5%  interest.  A formal
agreement was to be finalized on or before March 31, 1999. The letter  agreement
provided that in the event a formal  agreement was not  consummated by March 31,
1999,  the  letter  agreement  would be null and  void  and  LANSource  would be
permitted to retain all deposits made by the Company.  The Company  alleges that
LANSource  agreed  that its  counsel  would  draft  the  final  agreement  in an
expeditious  manner.  The Company further alleges that counsel for LANSource did
not  produce  an  agreement  for review by the  Company  until  March 25,  1999.
Moreover,  the Company alleges that,  prior to its receipt of the proposed final
agreement from counsel for LANSource,  the proposed  agreement had not been read
or  approved  by  LANSource,  the  agreement  was  incomplete  and  in  need  of
substantial  revisions,  and that LANSource  failed and neglected to provide the
essential  information  necessary for a meaningful  review of the proposed final
agreement.

The Company has alleged that it has been damaged in the amount of  $1,000,000 in
that LANSource  breached its agreement with the Company,  breached its fiduciary
duty to the Company and breached its duty of good faith. In the alternative, the
Company has asked that the Court  either:  (i) compel  LANSource  to perform its
obligations  under the agreement;  (ii) order  LANSource to pay into the Court a
total of  $300,000  representing  the  deposit  money paid to  LANSource  by the
Company,  declare  that the  agreement  between  the Company  and  LANSource  is
rescinded and return the deposit  amount to the Company;  declare that LANSource
has  breached the  agreement  and proceed to trial to  determine  the  Company's
damages;  or issue an order  requiring  LANSource to disgorge to the Company any
and all profits  earned by  LANSource as a result of its breach.  Moreover,  the
Company has alleged punitive damages in the amount of $100,000. While the action
is pending,  the Company has asked the Ontario Court to enjoin  LANSource  from:
(i)  transferring  or disposing of, in any manner,  its assets;  (ii)  borrowing
funds  except in the usual  course of  business;  (iii)  granting  any  license,
franchise  or similar  arrangement  to any person  relating to its  intellectual
property or potential  intellectual  property;  (iv)  issuing,  distributing  or
transferring  in any way  shares,  warrants,  options or other  securities;  (v)
redeeming or purchasing any of the company's shares;  (vi) taking or instituting
proceedings  to alter its  corporate  structure in any way;  (vii)  amending its
Bylaws,  Articles  or any  material  agreements;  or  (viii)  taking  action  to
materially  change the nature of its business in any way.  The Company  plans to
vigorously prosecute its claim against LANSource.

On or  about  June 18,  1999,  the  Registrant  entered  into an Asset  Purchase
Agreement ("J&S Agreement") with J&S Overseas Holdings,  of Grand Cayman, Cayman
Islands ("J&S Overseas").  Pursuant to the J&S Agreement,  the Registrant agreed
to  purchase  from  J&S  Overseas,  and J&S  Overseas  agreed  to  sell,  an URL
registered as  "CardStakes.com".  In exchange for the URL, the Registrant agreed
to pay  US$240,000  and grant to J&S Overseas  the rights to purchase  1,000,000
shares of the  Registrant's  $.0001 par value  common  stock.  These  rights are
exercisable at a purchase price of US$0.30 per share,  and all shares  purchased
will be "restricted  securities"  subject to the  limitations  and  restrictions
regarding  resale and  distribution  specified by Rule 144. As of September  15,
1999,  The  Registrant  had met all of its financial  obligations  under the J&S
Agreement.


                                       4
<PAGE>


On or about  September 1, 1999,  the  Registrant  entered into an Asset Purchase
Agreement ("Holm  Agreement") with Holm Investment Ltd., a Canadian  corporation
("Holm"). Pursuant to the Holm Agreement, the Registrant agreed to purchase from
Holm, and Holm agreed to sell to the  Registrant,  three (3) Universal  Resource
Locators ("URL's") registered as "GREETINGCARDLOTTO.NET",  "E-CARDLOTTO.NET" and
"CARDLOTTO.NET".  In exchange for the 3 URL's,  the  Registrant  agreed to issue
Holm  1,000,000  warrants to purchase the  Registrant's  $.0001 par value common
stock at a purchase price of US$0.25 per share. The warrants are exercisable for
a period  of two (2)  years  from  the date of  issuance  and all  common  stock
purchased pursuant to those warrants will be "restricted  securities" subject to
the limitations and restrictions  regarding resale and distribution specified by
Rule 144. The warrants have not been issued. The Registrant anticipates that the
sale will close in or around November of 1999.

Business of Registrant's Subsidiary. On February 19, 1999, the Registrant caused
PDTech.com,  a  Nevada  corporation,  to  be  formed  as  a  subsidiary  of  the
Registrant.   On  or  about  June  8,  1999,  PDTech.com  changed  its  name  to
CardStakes.com.  The Registrant  anticipates that  CardStakes.com will invest in
Internet  companies and related  technology,  and further  anticipates  that the
Registrant's  interest in  LANSource,  when and if acquired as specified  below,
will be transferred to this new subsidiary.

On or about April 28, 1999,  the Registrant  entered into a licensing  agreement
("Compte  Agreement")  with Compte De Sierge  Accomodative  Corp., a corporation
incorporated  in Panama  City,  Panama  ("Compte De  Sierge").  Compte De Sierge
worked in association with a group of programmers doing business as E-Card.  The
Compte Agreement  specifies,  among other things,  that the Registrant will have
the worldwide right to utilize and commercially exploit certain software systems
and related  proprietary  technology  relating to the  operation of the Greeting
Card Lotto,  hereinafter  referred to as  "CardStakes.com".  The  CardStakes.com
technology  was developed and designed by Mr. Conrado  Beckerman,  a director of
Compte  De  Sierge,   and  a  team  of  programmers  hired  by   CardStakes.com.
CardStakes.com has not produced any historical revenue upon which an estimate of
potential revenue can be determined.

The Compte  Agreement also provides for three equal cash payments of CDN$100,000
to Compte by the  Registrant  as partial  consideration  pursuant  to the Compte
Agreement.  The  first  such  payment  was  due  upon  execution  of the  Compte
Agreement;  the second  payment  is due upon  completion  of the first  phase of
testing;  and the third  payment is due upon  completion  of the second phase of
testing.  The Compte  Agreement  also provides that the  Registrant  shall issue
6,000,000  shares of its $.0001 par value common stock in two separate  issuance
transactions,  each of 3,000,000  shares.  All such shares shall be  "restricted
shares"  subject  to the  limitations  and  restrictions  regarding  resale  and
distribution  specified  by Rule  144.  The  first  issuance  was to occur  upon
execution of the Compte Agreement,  and the second issuance shall occur upon the
commencement  of  operations  of  CardStakes.com,  as  specified  in the  Compte
Agreement.  As of May 13, 1999, the Registrant had paid  CDN$100,000  and issued
3,000,000  shares of the  Registrant's  $.0001 par value common stock as per the
Compte  Agreement.  On July 6, 1999,  with the  completion of the first phase of
testing,  the Registrant made the second payment of CDN$100,000  pursuant to the
Compte Agreement.  As of September 15, 1999, the second phase of testing had not
been  completed.  As such,  the Registrant had not yet paid Compte De Sierge the
third CDN$100,000  installment or issued the final 3,000,000 shares. On or about
August 16,  1999,  with the  completion  of the  second  phase of  testing,  the
Registrant requested that Compte De Sierge provide the Registrant with duplicate
copies  of  all  Compact  Discs  and  files   necessary  for  the  operation  of
CardStakes.com. E-Card had custody and control of those items requested by Power
Direct.  On or about August 23, 1999,  Compte De Sierge denied the  Registrant's
request  stating  that a conflict  among its  programmers  and E-Card  prevented
delivery of such items. This denial by Compte De Sierge effectively  negated any
and all contractual obligations the Registrant had to Compte De Sierge under the
Compte Agreement.  On or about August 30, 1999, a meeting between the principals
of Compte De Sierge and the Registrant was held, whereby Compte De Sierge agreed
to discontinue  any further  association or involvement  with E-Card.  Compte De
Sierge  also agreed to retain new  programmers.  Compte De Sierge also agreed to
revise  and amend the April 28,  1999  agreement  to reflect  the above  change.
Compte De Sierge and the Registrant  agreed to change the title of the agreement
to the "Proprietary  Technology Usage - License Agreement".  As of September 30,
1999,  Power  Direct has met all of its  financial  obligations  pursuant to the
Compte Agreement.  Except for the contractual  relationship between Power Direct
and Compte De Sierge  memorialized in the Compte  Agreement,  and the consulting
services  provided  to  CardStakes.com  by


                                       5
<PAGE>


Mr. Beckerman,  there are no other affiliations or relationships  between either
the Registrant and Compte De Sierge or CardStakes.com and Compte De Sierge.

On or about May 5, 1999, the  Registrant  agreed to enter into an Asset Purchase
Agreement ("On-line  Agreement") with On-line Asset Courtesy Inc., a corporation
incorporated  in  Panama  City,  Panama  ("On-line").  Pursuant  to the  On-line
Agreement, The Registrant agreed to purchase from On-Line, and On-line agreed to
sell, an Universal Resource Locator (URL) registered as "GREETINGCARDLOTTO.COM",
as well as associated URLs registered as "E-CARDLOTTO.COM"  and "CARDLOTTO.COM".
An URL is the address of a page on the World Wide Web. Every web page has an URL
that  identifies it uniquely,  and which  provides  enough  information  for any
computer  connected  to the Internet to locate it. In exchange for the three (3)
URL's, the Registrant agreed to issue to On-line 2,000,000  warrants to purchase
the  Registrant's  $.0001 par value common stock at a purchase  price of US$0.25
per share.  The warrants  were to be  exercisable  for a period of two (2) years
from the date of  issuance  and all common  stock  purchased  pursuant  to those
warrants  will  be  "restricted  securities"  subject  to  the  limitations  and
restrictions  regarding resale and distribution  specified by Rule 144. However,
because the On-line  Agreement was never executed by all parties,  the 2,000,000
warrants were never issued,  and the On-Line never  delivered the right to the 3
URL's.  The Registrant and On-line have since mutually agreed to terminate their
relationship   due  to  On-line's   nonperformance.   Except  for  the  proposed
contractual  relationship between the Registrant and On-line, there are no other
relationships  or  affiliations  between  either the  Registrant  and On-line or
CardStakes.com and On-line.

The Compte Agreement provides that the Registrant may grant sublicenses to third
parties on terms  agreeable to Compte De Sierge with respect to the  proprietary
technology.  On or about June 15, 1999, CardStakes.com became such a third party
licensee. On or about that date, the Registrant and CardStakes.com  entered into
a licensing  agreement whereby  CardStakes.com  acquired 51% of the Registrant's
rights,  title and  interest  under the  Compte  Agreement.  The  result is that
CardStakes.com  has the  right  to  utilize  and  commercially  exploit  certain
software and related proprietary  technology allowing for the marketing and sale
of greeting  cards over the  Internet.  The  technology  licensed from Compte De
Sierge  also  allows  CardStakes.com  to conduct a scratch  and win  whereby the
winners are awarded cash prizes and  coupons.  In exchange for the rights in the
Compte Agreement,  CardStakes.com  issued to the Registrant  9,106,123 shares of
CardStakes.com's   $.0001  par  value   common   stock.   The   Registrant   and
CardStakes.com  valued  those  assets at  $1,470,000  based on the  Registrant's
historical cost basis.  Any and all assets acquired by  CardStakes.com  from the
Registrant  will be recorded in  CardStakes.com's  financial  statements  at the
Registrant's  historical cost basis.  On or about August 16, 1999,  Power Direct
distributed  2,199,779 shares of the Registrant's  $.0001 par value common stock
to Power Direct shareholders as dividends.

The URL,  Cardstakes.com  (http://www.cardstakes.com),  is a  website  featuring
electronic  greeting cards and retail merchandise link. The electronic  Greeting
Card is sent to the  recipient  via  e-mail  enabling  the  recipient  to play a
"Scratch and Win" ticket for cash,  prizes and coupons.  The retail  merchandise
links allow the sender to purchase a gift if the sender so desires.

Liquidity.  The  Registrant  had cash  resources of  US$2,246.00 at December 31,
1998. At September 30, 1999, the Registrant had cash resources of  US$54,490.00.
The influx of cash for the period ended  September 30 1999,  resulted  primarily
from the  Registrant's  sale of its $.0001 par value common stock.  At September
30, 1999,  the Registrant  had total current  assets of  US$95,811.00  and total
current liabilities of US$4,137.00.  At September 30, 1999, total current assets
exceeded total current  liabilities by  US$91,674.00.  The cash and  equivalents
constitute  the  Registrant's  present  internal  sources of liquidity.  Because
neither the Registrant  nor its  subsidiaries  are  generating  any  significant
royalty revenues, the Registrant's only external source of liquidity is the sale
of its capital stock.

Results of  Operations.  The  Registrant  has not yet realized  any  significant
revenue from operations,  nor does it expect to in the foreseeable  future. Loss
from operations  increased from $0.00 in 1997 to US$10,796.99 in 1998 due to the
Registrant's  renewed activities in locating and evaluating suitable gas and oil
leases and the general, selling, and administrative amortization of organization
costs. For the nine months ended September 30, 1999, the Registrant  experienced
a net loss of  US$676,499.00  which  resulted  primarily as a result of selling,
general and administrative expenses and commissions.


                                       6
<PAGE>


The Registrant may require additional cash to implement its business strategies,
including cash for (i) payment of increased  operating expenses and (ii) further
implementation of those business strategies. No assurance can be given, however,
that the Registrant  will have access to the capital  markets in the future,  or
that  financing  will be  available  on  acceptable  terms to  satisfy  the cash
requirements  of the  Registrant  to  implement  its  business  strategies.  The
inability of the Registrant to access the capital  markets or obtain  acceptable
financing could have a material  adverse effect on the results of operations and
financial conditions of the Registrant.

The  Registrant's  forecast of the period of time  through  which its  financial
resources  will be  adequate  to support  its  operations  is a  forward-looking
statement that involves risks and  uncertainties,  and actual results could vary
as a result of a number of factors.

The Registrant  anticipates that it will need to raise additional capital within
the next 12 months in order to  develop,  promote,  produce and  distribute  its
proposed  products.  Such  additional  capital may be raised through  additional
public or private financings,  as well as borrowings and other resources. To the
extent  that  additional  capital  is  raised  through  the  sale of  equity  or
equity-related  securities,  the  issuance of such  securities  could  result in
dilution  of the  Registrant's  stockholders.  There  can be no  assurance  that
additional  funding will be available on favorable terms, if at all. If adequate
funds  are not  available  within  the next 12  months,  the  Registrant  may be
required to curtail its  operations  significantly  or to obtain  funds  through
entering  into  arrangements  with  collaborative  partners  or others  that may
require the Registrant to relinquish  rights to certain of its products that the
Registrant would not otherwise relinquish.

The Registrant does not anticipate any material  expenditures within the next 12
months.  The  Registrant  does  not  anticipate  any  significant  research  and
development within the next 12 months,  nor does the Registrant  anticipate that
it will lease or purchase any significant  equipment  within the next 12 months.
The  Registrant  does not  anticipate a significant  change in the number of its
employees within the next 12 months.

The  Registrant  anticipates  that it will begin to  realize a positive  revenue
stream  beginning  in or about the second  quarter  of 2000,  as a result of the
activities of its subsidiary, CardStakes.com, Inc. Specifically, the Registrant,
as a holder of 59% of  CardStakes.com's  issued and outstanding stock,  believes
that  CardStakes.com,  Inc.'s  greeting  card/scratch  and win business,  having
recently completed its beta testing, will generate a positive revenue stream for
the Registrant.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

None




                                       7
<PAGE>




                                   SIGNATURES

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

Dated:   February 16, 2000              POWER DIRECT, INC.


                                        By:  /s/ Jack Sha
                                             -----------------------
                                             Jack Sha

                                        Its: President




                                       8