<PAGE>

                     U.S. Securities and Exchange Commission
                             WASHINGTON, D.C. 20549

                                  Form 10-QSB/A

 X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
               1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

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

                           Commission file no. 0-25359

                                  CMERUN CORP.
                                  ------------
                 (Name of Small Business Issuer in its Charter)

                    Delaware                                  91-2013692
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or           (I.R.S. Employer
                  organization)                            Identification No.)

                        One Cabot Road, Hudson, MA                01749
--------------------------------------------------------------------------------
               (Address of principal executive offices)         (Zip Code)

                    Issuer's telephone number: (978) 567 6800

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

  Title of each class                 Name of each exchange on which registered

        None                                            None
--------------------------------------------------------------------------------
           Securities to be registered under Section 12(g) of the Act:

                     Common Stock, $.001 par value per share
                     ---------------------------------------
                                (Title of class)

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:                No:      X

As of March 31, 2000, there were 3,001,000 shares of Common Stock of the
registrant issued and outstanding.

<PAGE>

                         PART I -- Financial Information

Item 1.                 Consolidated Financial Statements (Unaudited)


cMeRun Corp.
(A Development Stage Company)


Consolidated Balance Sheet (As Restated - Note 11)

(unaudited)

At March 31, 2000


<TABLE>
<S>                                                                    <C>
ASSETS
Current assets:
Cash and cash equivalents                                              $  3,462,008
Restricted cash                                                           1,775,000
Employee advances                                                            83,333
Related party prepaid expenses                                              450,000
Prepaid expenses and other current assets                                   371,044
                                                                       ------------

                                                                          6,141,385

Property and Equipment:
Leasehold improvements                                                      108,811
Office furniture and equipment                                               33,506
Computer equipment                                                          715,433
                                                                       ------------

                                                                            857,750
Less: Accumulated depreciation and amortization                              75,660
                                                                       ------------

                                                                            782,090

Other Assets:
Employee advances                                                           170,199
Security deposits                                                           181,370
                                                                       ------------

                                                                            351,569
                                                                       ------------

Total assets                                                           $  7,275,044
                                                                       ------------

LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable                                                       $    608,987
Due to related party                                                        281,160
Accrued issuance costs                                                      150,000
Accrued leasehold improvements                                               90,000
Accrued marketing costs                                                      75,000
Accrued payroll and related costs                                            46,965
Other accrued expenses                                                       35,000
                                                                       ------------

                                                                          1,287,112

Commitments and contingencies: (Note 6)

Redeemable series A convertible preferred stock
(Aggregate redemption value of $1,041,425)                                1,019,594
Redeemable series B convertible preferred stock
(Aggregate redemption value of $7,289,972)                                3,374,764
Redeemable series B convertible preferred stock
subscribed and fully paid (Aggregate
redemption value of $1,523,781)                                           1,378,026


                                      -2-
<PAGE>

Stockholders' equity:
Common stock of $.001 par value; 50,000,000 shares
authorized, 3,001,000 issued and outstanding                                  3,001
Common stock subscribed                                                         700
Additional paid-in capital                                                9,734,248
Unearned compensation                                                    (5,848,900)
Deficit accumulated during the development stage                         (3,673,501)
                                                                       ------------

Total stockholders' equity                                                  215,548
                                                                       ------------

Total liabilities and stockholders' equity                               $7,275,044
                                                                       ------------
</TABLE>


See notes to unaudited consolidated financial statements.


                                      -3-
<PAGE>


cMeRun Corp.
(A Development Stage Company)


Consolidated Statement of Operations (As Restated - Note 11)

(unaudited)

For the three months ended March 31, 2000 and cumulative from November 8,1999
(date of inception) to March 31, 2000


<TABLE>
<CAPTION>
                                                                                      Cumulative
                                                                                         from
                                                                                     November 8,1999
                                                                     Three months   (date of inception)
                                                                         Ended              to
                                                                     March 31, 2000    March 31, 2000
                                                                      ------------      ------------
<S>                                                                   <C>               <C>
Revenues                                                                       $--               $--
                                                                      ------------      ------------

Operating expenses
Development costs (including $82,554 of non-cash compensation)             238,137           251,164
General and administrative (including $559,996 and $589,366
 of non-cash compensation)                                               1,827,784         2,116,181
Marketing and promotion (including $389,410
 of non-cash compensation)                                               1,245,749         1,322,022
                                                                      ------------      ------------

                                                                         3,311,670         3,689,367

Interest income                                                             15,847            15,866

Income tax expense (benefit)                                                  --                --
                                                                      ------------      ------------
Net loss                                                                (3,295,823)       (3,673,501)

Beneficial conversion feature on
convertible preferred stock and warrants
Series A convertible preferred stock and warrants                         (976,425)         (976,425)
Series B convertible preferred stock and warrants                       (4,122,036)       (4,122,036)

Accretion of convertible preferred stock to
redemption value
Series A convertible preferred stock                                       (14,795)          (14,795)
Series B convertible preferred stock                                      (112,055)         (112,055)

Accretion of convertible preferred stock
issuance costs
Series A convertible preferred stock                                        (1,744)           (1,744)
Series B convertible preferred stock                                      (317,000)         (317,000)

Accretion of convertible preferred stock
dividends
Series A convertible preferred stock                                       (26,630)          (26,630)
Series B convertible preferred stock                                      (201,699)         (201,699)
                                                                      ------------      ------------
Net loss attributable to common
stockholders                                                           $(9,068,207)      $(9,445,885)
                                                                      ------------      ------------

Basic and diluted net loss per common share

Loss per common share - basic and diluted                                    (3.02)            (3.15)

Basic and diluted weighted-average                                       3,001,000         3,001,000
shares outstanding
</TABLE>


See notes to unaudited consolidated financial statements.

                                      -4-
<PAGE>


cMeRun Corp.
(A Development Stage Company)


Consolidated Statement of Changes in Stockholders' Deficit
(As Restated - Note 11)
(unaudited)

For the three months ended March 31, 2000 and cumulative from November 8, 1999
(date of inception) to March 31, 2000


<TABLE>
<CAPTION>
                                                                                                                      Additional
                                                                     Common Stock         Common Stock Subscribed      Paid-in
                                                           No. of Shares     Par Value   No. of Shares    Par Value    Capital
                                                           -------------     ---------   -------------    ---------   ---------

<S>                                                      <C>                <C>         <C>               <C>       <C>
Issuance of founders' stock                                   1,000          $    1                                   $    999
Issuance of stock options to employees and non-employee
members of the board of directors                                                                                      203,500
Common stock subscribed                                                                    700,000           700
Stock-based compensation
                                                           ---------         --------    ----------       --------    ---------
Net loss

Balance at December 31, 1999                                  1,000               1        700,000           700       204,499

Merger of Fundae Acquisition Corp and
C Me Run Corp and cancellation
of 4,000,000 outstanding shares                           3,000,000           3,000                                     (3,000)
Beneficial conversion feature related to
Series A convertible preferred stock
and warrants                                                                                                           976,425
Accretion of beneficial conversion feature
related to Series A convertible preferred stock
and warrants                                                                                                          (976,425)
Beneficial conversion feature related to
Series B convertible preferred stock
and warrants                                                                                                         2,772,036
Accretion of beneficial conversion feature
related to Series B convertible preferred stock
and warrants                                                                                                        (2,772,036)
Beneficial conversion feature related to Series B
convertible preferred stock subscribed and fully paid                                                                1,350,000
Accretion of beneficial conversion feature related to
Series B convertible preferred stock subscribed and
fully paid                                                                                                          (1,350,000)
Accretion of Series A convertible preferred stock
to redemption value                                                                                                    (14,795)
Accretion of Series B convertible preferred stock
to redemption value                                                                                                   (103,562)
Accretion of Series B convertible preferred stock
subscribed and fully paid
to redemption value                                                                                                     (8,493)
Accretion of Series A convertible preferred stock
issuance costs                                                                                                          (1,744)
Issuance of warrants to purchase common stock
to placement agent in connection with sale
of Series B convertible preferred stock                                                                              3,499,942
Accretion of Series B convertible preferred stock
issuance costs                                                                                                        (312,753)
Accretion of Series B convertible preferred stock
subscribed and fully paid issuance costs                                                                                (4,247)
Dividends accrued on Series A convertible
preferred stock                                                                                                        (26,630)
Dividends accrued on Series B convertible
preferred stock                                                                                                       (186,411)
Dividends accrued on Series B convertible
preferred stock subscribed and fully paid                                                                              (15,288)
Issuance of stock options to employees and non-employee
members of the board of directors                                                                                    3,312,250
Stock-based compensation
Issuance of common stock subscriptions
in connection with advertising services                                                                                500,000
Issuance of warrants to purchase common
stock in connection with financial advisory services                                                                   926,582

<CAPTION>
                                                                                    Deficit
                                                                                   Accumulated
                                                                                   During the
                                                                    Unearned       Development
                                                                   Compensation       Stage
                                                                   ------------    -----------

<S>                                                                <C>             <C>
Issuance of founders' stock
Issuance of stock options to employees and non-employee
members of the board of directors                                    $(203,500)
Stock-based compensation                                                29,370

Net loss                                                                              $(377,678)
                                                                    ------------   --------------
Balance at December 31, 1999                                          (174,130)        (377,678)

Merger of Fundae Acquisition Corp and
C Me Run Corp and cancellation
of 4,000,000 outstanding shares
Beneficial conversion feature related to
Series A convertible preferred stock
and warrants
Accretion of beneficial conversion feature
related to Series A convertible preferred stock
and warrants
Beneficial conversion feature related to
Series B convertible preferred stock
and warrants
Accretion of beneficial conversion feature
related to Series B convertible preferred stock
and warrants
Beneficial conversion feature related to Series B
convertible preferred stock subscribed and fully paid
Accretion of beneficial conversion feature related to
Series B convertible preferred stock subscribed and
fully paid
Accretion of Series A convertible preferred stock
to redemption value
Accretion of Series B convertible preferred stock
to redemption value
Accretion of Series B convertible preferred stock
subscribed and fully paid
to redemption value
Accretion of Series A convertible preferred stock
issuance costs
Accretion of Series B convertible preferred stock
issuance costs
Issuance of warrants to purchase common stock
to placement agent in connection with sale
of Series B convertible preferred stock
Accretion of Series B convertible preferred stock
issuance costs - warrants issued to
placement agent
Accretion of Series B convertible preferred stock
subscribed and fully paid issuance costs
Dividends accrued on Series A convertible
preferred stock
Dividends accrued on Series B convertible
preferred stock
Dividends accrued on Series B convertible
preferred stock subscribed and fully paid
Issuance of stock options to employees and non-employee
members of the board of directors                                   (3,312,250)
Stock-based compensation                                               279,755
Issuance of common stock subscriptions
in connection with advertising services                               (500,000)
Issuance of warrants to purchase common
stock in connection with financial advisory services                  (926,582)
</TABLE>


                                      -5-
<PAGE>


<TABLE>
<S>                                                           <C>             <C>          <C>        <C>        <C>
Amortization of unearned compensation
Change in market value of common stock subscriptions
and warrants issued in connection with
advertising and financial advisory services,                                                                          1,967,898
Net Loss
                                                                ---------         ------    ---------    -------    -----------
Balance at March 31, 2000                                       3,001,000         $3,001     700,000       $700      $9,734,248
                                                                ---------         ------    ---------    -------    -----------
</TABLE>



<TABLE>
<S>                                                        <C>                 <C>
Amortization of unearned compensation                           752,205
Change in market value of common stock subscriptions
and warrants issued in connection with
advertising and financial advisory services,                 (1,967,898)
Net Loss                                                                         (3,295,823)
                                                            ------------        -------------

Balance at March 31, 2000                                   $(5,848,900)        $(3,673,501)
                                                            ------------        -------------
</TABLE>


See notes to unaudited consolidated financial statements.


                                      -6-
<PAGE>


cMeRun Corp.
(A Development Stage Company)


Consolidated Statement of Cash Flows (As Restated - Note 11)
(unaudited)

For the three months ended March 31, 2000 and cumulative from November 8,1999
(date of inception) to March 31, 2000


<TABLE>
<CAPTION>
                                                                              Cumulative
                                                                                 from
                                                                             November 8, 1999
                                                           Three months    (date of inception)
                                                              Ended               to
                                                           March 31, 2000    March 31, 2000
                                                            ------------      ------------

<S>                                                         <C>               <C>
Cash flows from operating activities:
Net loss                                                     $(3,295,823)      $(3,673,501)
Adjustments to reconcile net loss to net
cash used in operating activities:
                Depreciation and amortization                     60,202            75,660
                Amortization of unearned compensation            752,205           752,205
                  Stock-based compensation                       279,755           309,125
Changes in operating assets and liabilities:
Employee Advances                                                (83,333)          (83,333)
Related party prepaid expenses                                   180,000          (450,000)
Prepaid expenses and other current assets                       (114,960)         (371,044)
Accounts payable                                                 364,689           608,987
Accrued leasehold improvements                                    90,000            90,000
Accrued marketing costs                                           75,000            75,000
Accrued payroll and related costs                                 45,644            46,965
Accrued expenses                                                 (10,387)           35,000
Other assets                                                    (151,569)         (351,569)
                                                            ------------      ------------

Net cash used in operating activities                         (1,808,577)       (2,936,505)

Cash flows used in investing activities:
Additions to property and equipment                             (313,086)         (857,750)
                                                            ------------      ------------

Net cash used for investing activities                          (313,086)         (857,750)

Cash flows from financing activities:
Restricted cash                                               (1,775,000)       (1,775,000)
Advances from related party                                      673,390         2,374,011
Repayment of advances from related party                      (2,092,151)       (2,092,151)
Proceeds from issuance of common stock                                 0             1,000
Proceeds from issuance of series A preferred stock, net          976,425           976,425
of issuance costs
Proceeds from issuance of series B preferred stock, net        6,271,978         6,271,978
of issuance costs
Proceeds from preferred stock subscription                     1,500,000         1,500,000
                                                            ------------      ------------

Net cash provided by financing activities                      5,554,642         7,256,263

Increase in cash and cash equivalents                          3,432,979         3,462,008

Cash and cash equivalents at beginning of period                  29,029                 0
                                                            ------------      ------------

Cash and cash equivalents at end of period                  $  3,462,008      $  3,462,008
                                                            ------------      ------------
Summary of noncash financing and investing activities:

Issuance of common stock subscriptions in connection
with advertising services                                   $  1,118,750      $  1,118,750
                                                            ------------      ------------
Issuance of common stock warrants in connection
with financial advisory services                            $  2,275,730      $  2,275,730
                                                            ------------      ------------
Issuance of common stock warrants in connection
with fee for Series B convertible preferred stock           $  3,499,942      $  3,499,942
                                                            ------------      ------------
Issuance of stock options to employees,
officers and directors                                      $  3,312,250      $  3,515,750
                                                            ------------      ------------
</TABLE>


See notes to unaudited consolidated financial statements.

                                      -7-
<PAGE>


cMeRun Corp.
(A Development Stage Company)


Notes to Consolidated Financial Statements for the three months ended March 31,
2000 and for the period November 8, 1999 (date of inception) to March 31, 2000

1. NATURE OF BUSINESS, PRINCIPLES OF CONSOLIDATION, AND BASIS OF PRESENTATION

Nature of Business


cMeRun Corp. (the "Company") is an application service provider whose
strategy is to operate internet computing whereby consumers will be able to
access brand-name software and store files via a secure web browser through
their favorite Internet Service Provider ("ISP") or using almost any
internet-ready device.


Principles of Consolidation


The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary, C Me Run Acquisition Corp., ("CAC"). All
intercompany accounts and transactions have been eliminated in consolidation.



The Company was incorporated under the name Fundae Corporation ("Fundae") on
March 16, 1995 under the laws of the State of Florida. From inception to
December 1999, the Company conducted minimal business operations except for
organizational and capital raising activities.



On December 2, 1999, Fundae changed its name to cmerun, Inc. in anticipation of
a potential transaction with a privately held applications service provider, C
Me Run Corp. On December 29, 1999, the Company reincorporated in the State of
Delaware through the merger of the Company with and into its wholly-owned
subsidiary, Fundae Acquisition Corporation.



On January 31, 2000, Fundae Merger Sub, Inc., a wholly owned subsidiary of
the Company, merged with and into C Me Run Corp. The merger was a
stock-for-stock transaction accounted for as a reverse merger in which the
shareholders of C Me Run Corp. received an aggregate of 1,000 shares of
common stock, 2,000,000 shares of Series A Convertible Preferred Stock and
2,333,333 shares of Series B Convertible Preferred Stock. Prior to the
merger, the Company had 7,000,000 shares of common stock outstanding. In
connection with the merger, the Company exercised a right to purchase for
cancellation, 4,000,000 shares of its common stock for a total consideration
of $1.00 with a resulting 3,001,000 shares of common stock issued and
outstanding.



On February 2, 2000, C Me Run Corp. merged with and into the Company and in
connection with the merger, the Company changed its name C Me Run Corp.


                                      -8-
<PAGE>

Basis of Presentation

The Company currently has not commenced its principal operations and in
accordance with Statement of Financial Accounting Standards (SFAS) No. 7
"Accounting and Reporting by Development Stage Enterprises," is considered a
development stage company for financial reporting purposes.


Since inception, the Company has had limited operations and incurred a net
loss of $(3,295,823) for the quarter ended March 31, 2000 as restated and a
cumulative net loss of $(3,673,501) from November 8, 1999 (date of inception)
to March 31, 2000 as restated. Funding of these losses to date was provided
principally by the proceeds from the sale of the Series A and Series B
Convertible Preferred Stock.


Since inception, the Company has focused its efforts on building an
infrastructure, marketing efforts, and service development. The Company is
refining its service offering and building an infrastructure to prepare for the
anticipated rapid growth to meet its expected customer needs. In addition, with
the Company's unique approach of offering its programs, significant expenditures
were incurred relating to promoting its services and its potential benefits.


At March 31, 2000, the Company had available cash of approximately $3,500,000
and restricted cash of $1,775,000. Management anticipates that pending the
issuance of the Series B Convertible Preferred Stock that is subscribed and
fully paid, $1,500,000 of the restricted cash will be available for its
capital needs. Based upon the current level of expenditures, management
expects that additional financing will be required after year-end to continue
operations.


In order to meet its cash requirements through the end of the fiscal year and
for the next twelve months, management intends to seek financing from a number
of sources. With the expected registration of additional shares of its common
stock, a significant number of warrants currently outstanding could be exercised
for the purchase of common stock. Depending upon the number of warrants
exercised, this could provide up to an additional $5,500,000 of cash to the
Company. In conjunction with its equipment requirements, management is in
discussion with certain vendors to provide an equity investment in the Company.

In addition to these sources, management is considering alternative sources
including additional private debt or equity capital or a potential sale of
public equity.

The accompanying financial statements have been prepared on a going-concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has yet to generate
revenues, and accordingly, is subject to a number of risks. Principal among
these risks are the successful development and marketing of its service,
competition from other companies, and the ability to raise additional financing
as required. These factors, among others, raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

2. SIGNIFICANT ACCOUNTING POLICIES


The unaudited consolidated financial statements of the Company have been
prepared in accordance with accounting principles generally accepted in the
United States of America. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary for a fair
presentation of the interim financial statements have been included.


Fiscal Year

The Company's fiscal year ends September 30.

Use of Estimates

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of
three months or less at the date of purchase to be cash equivalents. The Company
invests its


                                      -9-
<PAGE>

excess cash in money market funds, which invest in U.S. Government securities
and are subject to minimal credit and market risk.

Prepaid Expenses

Prepaid expenses are carried at cost and consist principally of advance payments
for trade shows and license agreements which benefit more than one period. The
amounts are charged to expense when the trade show takes place and for the
license agreements over the term of the agreement.

Property and Equipment


Property and equipment is carried at cost. Depreciation and amortization is
computed using the straight-line method over the estimated useful lives of
the related assets. The estimated useful life for leasehold improvements is
five years or the remaining life of the lease, whichever is shorter and the
estimated useful life for furniture and equipment and computer equipment is
three years. Maintenance and repair costs are expensed as incurred.


Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109
"Accounting for Income Taxes". Under SFAS No. 109, deferred tax liabilities and
assets are recognized for the estimated tax effects of temporary differences
between the carrying amounts and tax bases of assets and liabilities and for
loss carryforwards based on enacted tax law and rates.

Net Loss Per Common Share


Basic loss per share is computed using the weighted-average number of common
shares outstanding. Shares issued in the reverse acquisition have been
treated as outstanding since inception. Diluted loss per common share
reflects the potential dilution if common equivalent shares outstanding
(preferred shares, warrants and options) were exercised or converted into
common stock unless the effects are antidilutive. All common stock
equivalents (4,833,333 preferred shares, 2,915,000 warrants to purchase
common stock, 50,000 shares of common stock subscribers and 1,713,500 options
to purchase common stock, and 700,000 shares of common stock subscribed at
March 31, 2000 that were outstanding for the periods presented were not
included in the computation of loss per common share due to a net loss on all
periods presented, and, therefore, their effect would be antidilutive.


Concentration of Credit Risk


Financial instruments, which potentially subject the Company to significant
concentration of credit risk, consist of cash and cash equivalents. The Company
places its investments in highly rated financial institutions which are
backed by the U.S. Government.


Long-lived assets

On an ongoing basis, the Company evaluates the carrying value of its long-lived
assets based upon estimated future non-discounted cash flows relying on a number
of factors, including operating results, business plans and certain economic
projections. In addition, the Company's evaluation considers non-financial data
such as changes in the operating environment, competitive information, market
trends and business relationships.


Advertising Costs

The Company accounts for advertising costs in accordance with Statement of
Position 93-7 "Reporting on Advertising Costs." Accordingly, advertising
costs are expenses as incurred.



Web Site Development Costs

The Company accounts for web site development costs in accordance with
Emerging Issues Task Force Statement No. 00-2 "Accounting For Web Site
Development Costs." Accordingly, costs incurred to date relating to web site
development have been expensed.

                                      -10-
<PAGE>

Comprehensive Income

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130
"Reporting Comprehensive Income," which requires companies to report the changes
in their net assets during the period from nonowner sources by major components
and as a single total. The Company had no reportable comprehensive income items
to report, other than net loss, for the three months ended March 31, 2000 and
for the period November 8, 1999 (date of inception) to March 31, 2000.

Stock based compensation


The Company is subject to the provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"). Under the provisions of this
standard, employee and director stock-based compensation expense is measured
using either the intrinsic-value method as prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"), or the fair value method described in SFAS 123. Companies
choosing the intrinsic value method are required to disclose the pro forma
impact of the fair value method on net income. The Company has elected to
account for its employee and director stock-based awards under the provisions
of APB 25. Under APB 25, compensation cost for stock options is measured as
the excess, if any, of the fair value of the underlying common stock on the
date of grant over the exercise price of the stock option. The Company has
disclosed the required pro forma effect on the net loss in Note 9.


The Company accounts for stock options granted to consultants, independent
representatives and other non-employees in accordance with SFAS No. 123 and EITF
96-18, "Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services."

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which defines
derivatives, requires that all derivatives be carried at fair value, and
provides for hedge accounting when certain conditions are met. The Company is
required to adopt this statement effective January 1, 2001. Management does not
expect the implementation to have a significant impact on the consolidated
financial statements of the Company.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin 101, "Revenue Recognition in Financial Statements" ("SAB
101") which provides guidance related to revenue recognition based on
interpretations and practices followed by the SEC. SAB 101A was released on
March 24, 2000 and deferred the effective date to no later than the second
fiscal quarter beginning after December 15, 1999. In June 2000, the SEC issued
SAB 101B which delays the implementation date of SAB 101 until no later than the
fourth fiscal quarter of fiscal years beginning after December 15, 1999. SAB 101
requires companies to report any changes in revenue recognition as a cumulative
change in accounting principle at the time of implementation in accordance with
Accounting Principles Board Opinion No. 20, "Accounting Changes". Management
does not expect the implementation to have a significant impact on the
consolidated financial statements of the Company.

In March 2000, the Finanical Accounting Standards Board ("FASB") issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation - an Interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44 is
generally effective for transactions occurring after July 1, 2000 but applies to
repricings and some other transactions after December 15, 1998. The Company
believes this interpretation will not have a significant effect on its
consolidated financial statements.

3. RESTRICTED CASH


In March, 2000, the Company received $1,500,000 in connection with the sale
of 500,000 shares of Series B Convertible Preferred Stock (the "Series B
Stock"). At March 31, 2000 the issuance had not been completed, pending
certain actions to be completed by the Company. Accordingly, the funds
received have been classified in restricted cash. In addition, at March 31,
2000, the landlord of a facility held $200,000 in a bank in the name of the
Company and accordingly this amount has been classified as restricted cash.
Restricted cash also includes $75,000 to secure a leasing line of credit with
a bank. No amounts were outstanding under this line at March 31, 2000.


4. EMPLOYEE ADVANCES


In connection with their employment agreements, the Company granted three
officers non-interest bearing loans. Two of the loans which aggregate $17,420
are payable on demand. The third loan of $250,000 will be forgiven in equal
amounts over a three-year period on the condition that employment continues.
Approximately $13,900 was included in general and administrative expenses for
the period ended March 31, 2000.


5. REDEEMABLE PREFERRED STOCKS

Series A Convertible Preferred Stock


On January 12, 2000, the Company issued 2,000,000 shares of Series A
Convertible Preferred Stock ("Series A Stock"), par value $.001 per share,
for $1,000,000. Issuance costs of $23,575 are being accreted to the carrying
value of the Series A Stock over the period to the stock's scheduled
redemption date of January 11, 2003. The Company is authorized to issue
10,000,000 shares of preferred stock.


                                      -11-
<PAGE>

Series B Convertible Preferred Stock



On January 28, 2000, the Company issued 2,333,333 shares of Series B
Convertible Preferred Stock ("Series B Stock"), par value $.001 per share,
for $6,999,999. Issuance costs of $4,227,963 include $3,499,942 related to
warrants to purchase 400,000 shares of common stock at a price of $2.50 per
common share, and legal and brokerage fees of $728,021 which are being
accreted to the carrying value of the Series B stock over the period to the
stock's scheduled redemption date of January 11, 2003.



The rights and preferences of each of the classes of preferred stock are as
follows:

Liquidation - In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, before any
distributions are made to the holders of any classes of stock ranking junior to
the Series A and Series B Stock, the Series A shareholders will be entitled to
be paid an amount equal to the preference value of $.50 per share and the Series
B shareholders will be entitled to be paid an amount equal to the preference
value of $3.00 per share. After such distribution, any remaining assets
available for distribution shall be distributed to the holders of shares of
Series A Stock and Series B Stock and holders of Common Stock pro rata based on
the total number of shares held by each holder on a fully-converted basis. If
the assets are not sufficient to generate cash sufficient to pay in full the
Series A and Series B preference values, then the Series A and Series B
shareholders will be entitled to share ratably in any distribution of cash
generated by assets in accordance with the respective amounts that would have
been payable in such distribution if the amounts to which the holders of the
Series A and Series B Stock are paid in full.

Conversion - The Series A Stock has a preference value of $.50 per share and is
convertible at the option of the holder at any time prior to the redemption date
into the number of shares of common stock of the Company as determined by
dividing the preference value by the conversion price then in effect. The Series
B Stock has a preference value of $3.00 per share and is convertible at the
option of the holder at any time prior to the redemption date into the number of
shares of common stock of the Company as is determined by dividing the
preference value by the conversion price then in effect.

Dividends - The holders of the Series A and Series B Stock are entitled to
receive cumulative dividends at the rate of 12% of the preference value per
share payable in quarterly installments in cash or shares of common stock.

Voting Rights - The holders of the Series A and Series B Stock and the holders
of the common stock shall be entitled to vote as a single class. Each holder of
Series A or Series B Stock shall have one vote for each full share of common
stock into which the Series A and Series B Stock would be convertible on the
record date for the vote.


                                      -12-
<PAGE>

Redemption - If not converted to common stock by the holders prior to the
redemption date of January 11, 2003, the Series A and Series B Stock shall be
redeemed by the Company at a redemption price of 120% of the preference value,
plus all accumulated and unpaid dividends accrued as of the redemption date.


Beneficial Conversion Feature - The entire value of the Series A Stock was
allocated to the beneficial conversion feature based on the difference
between the conversion price of $.50 per share and the estimated fair value
of the common stock of approximately $2.9 million at the date that the
preferred stock was issued. This amount, however, was limited to the value of
the proceeds received from issuing the beneficial convertible security. As
the Series A Stock is immediately convertible, the Company also recorded
accretion of the entire amount to additional paid-in capital. Similarly, the
entire value of the Series B Stock was allocated to the beneficial conversion
feature based on the difference between the conversion price of $3.00 per
share and the estimated fair value of the common stock of approximately $16.3
million at the date that the preferred stock was issued. This amount,
however, was limited to the value of the proceeds received from issuing the
beneficial convertible security. As the Series B Stock is immediately
convertible, the Company also recorded accretion of the entire amount to
additional paid-in capital.

The Company allocated $976,425 and $2,772,036, to the beneficial conversion
feature of the Series A Stock and warrants and Series B Stock and warrants,
respectively, net of issuance costs. The Company allocated $1,350,000 to the
beneficial conversion feature of the Series B Stock subscribed and fully paid.


Preferred Stock Subscribed

During the period, the Company received $1,500,000 in connection with the
issuance of an additional 500,000 shares of the Series B Stock. At March 31,
2000, the shares have not been issued, pending the issuance of the Series B
share certificates. Accordingly, the funds received have been classified in
restricted cash and the shares have been recorded as fully paid and subscribed
in the accompanying financial statements. Issuance costs of $150,000 have been
recorded as a reduction of the proceeds from the sale.

Registration Rights Agreements


The registration rights agreements between the Company and the Series A and
Series B shareholders require the Company to register common stock underlying
the convertible preferred stock prior to May 19, 2000 (the "Registration
Date") in the form of a registration statement and to keep the registration
statement continuously effective for a period of the earlier of two years or
until there are no additional securities required to be registered. In the
event that the Company does not file a registration statement prior to the
30th day following the Registration Date, or if any registration statement
has not been declared effective on or prior to the 120th day following the
Registration Date, the Company will be required to pay liquidated damages in
the amount of 2% per month of the proceeds from the sale of the preferred
stock, or approximately $190,000 per month. The Company has received a waiver
from certain of the Series A and Series B shareholders, representing 60% of
the total preferred shares, amending the Registration Date to August 19, 2000.

                                      -13-
<PAGE>

6.  COMMITMENTS

The Company leases certain property and equipment under operating leases
expiring at various dates through 2005. At March 31, 2000, future minimum
payments under non-cancelable operating leases are as follows:

March 31, 2000 - September 30, 2000                                  $177,370
October 1, 2000 - September 30, 2001                                  354,740
October 1, 2001 - September 30, 2002                                  363,499
October 1, 2002 - September 30, 2003                                  372,258
October 1, 2003 - September 30, 2004                                  372,258
October 1, 2004 and thereafter                                        186,129
                                                                      -------

                                                                   $1,826,254
                                                                   ==========

Rent expense was $54,063 for the three months ended March 31, 2000 and $78,063
for the period from November 8, 1999 (date of inception) to March 31, 2000. The
lease for the Company's facility in Hudson, Massachusetts expires on March 31,
2005. The Company has the option to extend the term for an additional five years
at a fair market value rate.

A settlement agreement and release relating to a lawsuit in which the Company
was named was entered into on April 3, 2000. The settlement agreement provides
that the named defendants in the suit pay to the plaintiffs a sum of $400,000.
The sum was paid in its entirety by a defendant, other than the Company, on
behalf of all named defendants to the suit.


Certain employees of the Company are under employment agreements that provide
for compensation in the event of voluntary or involuntary termination. Terms
under these arrangements range from three to twelve months with aggregate
compensation of $629,750. Total salaried compensation on an annual basis for
those employees that are under employment agreements at March 31, 2000 is
$877,000.


7.  RELATED PARTY TRANSACTIONS

From the date of incorporation through the sale of its convertible preferred
stock, the working capital requirements of the Company were financed principally
by Chell.com Inc., a Calgary, Alberta based incubator of internet related
companies. The Chairman of Chell.com is also the Chairman of the Company. During
this period, Chell.com advanced approximately $1,654,000 to the Company of which
approximately $281,160 is still outstanding at March 31, 2000.

On November 15, 1999, Chell.com Inc. and the Company entered into a consulting
agreement whereby Chell.com Inc. would supply certain services in the areas of
corporate strategy, human resources, corporate finance, communications and
hiring outside consultants to the Company for a one-year period. The fee for
this service was $720,000 per annum payable in advance of which $180,000 was
expensed for the three months ended March 31, 2000 and $270,000 for the period
from November 8, 1999 to March 31, 2000. At March 31, 2000, a balance of
$450,000 is included in prepaid expenses related to the remaining contract term.


The Series B Stock was sold to an entity in which the Vice Chairman, a
principal shareholder of the Company, has an ownership interest.


8.  INCOME TAXES

The income tax benefit differs from the amount computed by applying the U. S.
federal statutory tax rate and effective state tax rate (39%) to the loss before
income taxes for the following reasons:


<TABLE>
<CAPTION>
                                                                          Cumulative From
                                                 Three Months             November 8, 1999
                                                     Ended            (date of inception) to
                                                 March 31, 2000             March 31, 2000
                                                 --------------             --------------

<S>                                                  <C>                         <C>
Income tax benefit at U. S. statutory rate           $3,163,978                  $3,229,818
Change in deferred tax valuation allowance            3,163,978                   3,229,818
                                                      ---------                   ---------

Income tax benefit                                           $0                          $0
</TABLE>


                                      -14-
<PAGE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amount used for income tax purposes. The components of the
Company's deferred tax assets are as follows:

Deferred tax assets:


<TABLE>
<CAPTION>
                                                                                 Cumulative From
                                                Three Months                     November 8, 1999
                                                    Ended                    (date of inception) to
                                                March 31, 2000                     March 31, 2000
                                                --------------                     --------------

<S>                                                <C>                            <C>
Stock-based compensation                           $ 2,281,071                     $ 2,281,071
Start-up costs                                           9,750                           9,750
Operating loss carryforwards                           873,157                       1,008,997
----------------------------                         ---------                       ---------

Net deferred tax assets                              3,163,978                       3,299,818
Valuation allowance                                 (3,163,978)                     (3,299,818)
                                                    ----------                       ---------

Net deferred tax assets                                      0                               0
</TABLE>


The Company has provided a valuation allowance for the full amount of the
deferred tax assets as it is not more likely than not that this asset will be
realized.


The Company has a net operating loss carryforward of $2,587,171 which expires
in 2020.


9.  STOCKHOLDERS' EQUITY

Common Stock


On January 31, 2000, Fundae Merger Sub, Inc., a wholly owned subsidiary of
the Company, merged with and into C Me Run Corp. The merger was a
stock-for-stock transaction accounted for as a reverse merger in which the
shareholders of C Me Run Corp. received an aggregate of 1,000 shares of
common stock, 2,000,000 shares of Series A Convertible Preferred Stock and
2,333,333 shares of Series B Convertible Preferred Stock. Prior to the
merger, the Company had 7,000,000 shares of common stock outstanding. In
connection with the merger, the Company exercised a right to purchase for
cancellation, 4,000,000 shares of its common stock for a total consideration
of $1.00 with a resulting 3,001,000 shares of common stock issued and
outstanding.


                                      -15-
<PAGE>


On January 28, 2000, the Company entered into an advertising agency agreement
to promote public awareness of the Company. As consideration for such
services, the Company will grant the advertising agency 50,000 restricted
shares of common stock of which 25,000 will have piggyback registration
rights. The term of the agreement is six months with an option to renew by
the Company. In connection with this agreement, the Company recorded a
noncash charge of $500,000 to unearned compensation to be expensed over the
term of the agreement. The Company has not yet issued the common stock and as
such has remeasured the value of the common stock as of March 31, 2000 and
has increased unearned compensation expense by $618,750 for the period ended
March 31, 2000. For the period ended March 31, 2000, $372,917 was amortized
and recorded in selling expenses.


Common Stock Warrants


In connection with the issuance of 2,000,000 shares of Series A Stock, the
Company issued warrants to purchase 1,000,000 shares of the Company's common
stock at a price of $1.00 per share. Such warrants have a term of 48 months
and are exercisable immediately.

In connection with the issuance of 2,333,333 shares of Series B Stock, the
Company issued warrants to purchase 1,400,000 shares of the Company's common
stock at a price of $2.50 per share. Such warrants have a term of 48 months
and are exercisable immediately.



On February 1, 2000, the Company entered into an agreement with a firm to
provide general corporate financial advisory and investor and media relations
needs. As consideration for these services, the Company will grant the firm
warrants to purchase 115,000 shares of common stock at $5.00 per share with
registration for 50% of the warrants originally scheduled for June 30, 2000
and the remaining 50% by December 31, 2000. The agreement also provides for a
retainer of $9,000 per month and a percentage fee of up to 5% of the value
level of certain transactions involving business development and technology
licensing, and mergers and acquisitions completed by the Company and a
success fee of 7% (plus warrant coverage, at sale price of the common stock,
of 10%) for advising the Company with respect to financing strategy,
including public and private equity and debt. The term of the agreement is
one year with an option to renew by the Company. In connection with this
agreement, the Company recorded a noncash charge of $926,582 to unearned
compensation to be expensed over the term of the agreement. The Company has
not yet issued the warrants and as such has remeasured the value of the
warrants as of March 31, 2000 and has increased unearned compensation expense
by $1,349,148 for the period ended March 31, 2000. For the period ended March
31, 2000 $379,288 was amortized and recorded in general and administrative
expenses.



In connection with the sale of the Series B Stock, the selling agent received
warrants to purchase 400,000 shares of the Company's common stock at $2.50 per
share which expire in January, 2004. The estimated fair market value of the
warrant of $3,499,942 has been recorded as a reduction of the proceeds from the
sale of the Series B Stock. The warrants are exercisable immediately and,
accordingly, the Company also recorded accretion of the entire amount to the
carrying value of the Series B stock. The registration rights agreement between
the Company and the selling agent requires the Company to register common stock
underlying the warrants prior to May 19, 2000 (the "Registration Date") in the
form of a registration statement and to keep the registration statement
continuously effective for a period of the earlier of two years or until there
are no additional securities required to be registered. In the event that the
Company does not file a registration statement prior to the 30th day following
the Registration Date, or if any registration statement has not been declared
effective on or prior to the 120th day following the Registration Date, the
Company will be required to pay liquidated damages in the amount of 2% per month
of the aggregate proceeds to the Company upon conversion of the warrants, or
approximately $20,000 per month. The Company has received a waiver from the
selling agent, amending the Registration Date to August 19, 2000.



Common Stock Subscribed

In November and December 1999, two of the Company's founders entered into
agreements under which they were to receive 700,000 shares of common stock at
par value. As these shares have not yet been issued, they are reported as
common stock subscribed in the accompanying financial statements.


STOCK OPTIONS


The Company has granted options to purchase its common stock under board
resolutions.


The Company has computed the value of all compensatory options granted as
prescribed by SFAS No. 123, using the Black-Scholes option-pricing model for pro
forma disclosure purposes.

The following assumptions were used to value grants issued:


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                     Three Months Ended March 31, 2000    Cumulative from November 8, 1999 (date of inception) to
                                                                          March 31, 2000
---------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                  <C>
Risk-free interest rate (range)      5.09% - 5.71%                        5.09% - 5.71%
---------------------------------------------------------------------------------------------------------------------------------
Expected dividend yield              0.0%                                 0.0%
---------------------------------------------------------------------------------------------------------------------------------
Expected lives                       1 - 3 years                          1 - 3 years
---------------------------------------------------------------------------------------------------------------------------------
Expected stock volatility            186.78%                              186.78%
---------------------------------------------------------------------------------------------------------------------------------

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

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


Had compensation costs for compensatory options been determined consistent with
SFAS No. 123, the Company's net loss and loss per share information reflected in
the accompanying consolidated statements of operations would have been reduced
to the following pro forma amounts:


<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------------------
                                                  Three Months Ended March 31, 2000    Cumulative from November 8, 1999 (date of
                                                                                       inception) to March 31, 2000
---------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                                  <C>

Net loss attributable to common shareholders:
---------------------------------------------------------------------------------------------------------------------------------





<PAGE>


  As reported (as restated)                         $(9,068,207)                                  $(9,445,885)
---------------------------------------------------------------------------------------------------------------------------------
  Pro forma                                          (9,400,269)                                   (9,876,901)
----------------------------------------------------------------------------------------------------------------------------------
Net loss per common share:
----------------------------------------------------------------------------------------------------------------------------------
  As reported (as restated)                               (3.02)                                        (3.15)
----------------------------------------------------------------------------------------------------------------------------------
  Pro forma                                               (3.13)                                        (3.29)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>



A summary of the status of the Company's stock option plans as of March 31, 2000
and changes during the three-month period ended March 31, 2000 is presented
below:



<TABLE>
<CAPTION>

                                                         ----------------------- ----------------------- -----------------------
                                                                                       Weighted                Weighted
                                                                                        Average                 Average
                                                                                       Exercise                  Fair
                                                                  Number of              Price                   Value
                                                                   Shares                  $                       $
                                                          ----------------------- ----------------------- -----------------------

<S>                                                          <C>                        <C>                    <C>

       Options outstanding, beginning of period                           -                 -                       -

       Granted                                                    1,713,500               4.88                    5.23
       Cancelled
                                                         -----------------------

       Options outstanding, end of period                         1,713,500

                                                         =======================

       Options exercisable, end of period                                 -

                                                         =======================

</TABLE>


The following table summarises outstanding and exercisable options as of March
31, 2000:


<TABLE>
<CAPTION>


       ----------------------------------------------------------------------------------------------------------------------
                                               Total Options Outstanding                          Options Exercisable
       ----------------------------------------------------------------------------------------------------------------------
                                                        Weighted
                                                         Average             Weighted                          Weighted
                                  Number                Remaining             Average          Number           Average
            Range of            Outstanding            Contractual           Exercise        Exercisable       Exercise
        Exercise Prices          March 31,                 Life                Price          March 31,          Price
                                   2000                  (Years)                                2000
               $                                                                  $                                 $
       ------------------------------------------------------------------------------------------------------------------------
<S>      <C>               <C>                          <C>                   <C>              <C>              <C>
              1.00                 50,000                  9.79                  1.00             -                 -
              5.00              1,663,500                  9.73                  5.00             -                 -
                           ---------------------                                        -------------------
           1.00 to 5.00         1,713,500                  9.73                  4.88             -                 -
                           =====================                                        ===================
</TABLE>


            DEFERRED STOCK COMPENSATION


As discussed in Note 1, the Company accounts for its stock-based awards to
employees using the intrinsic value method in accordance with APB No. 25.
Accordingly, the Company recorded deferred compensation expense equal to the
difference between the grant price and deemed fair value of the Company's
common stock for options granted. Such deferred compensation expense
aggregated $279,755 and $309,125 for the three months ended March 31, 2000
and for the period November 8, 1999 (date of inception) to March 31, 2000,
respectively, and is being amortized to expense over the service period
associated with the options.


10.            ALBERTA TRANSACTION


On February 2, 2000, C Me Run Corp. merged with and into the Company, and in
connection with the merger, the Company changed its name to cMeRun Corp.

As a result of the merger, the Company became obligated to acquire C Me Run
Alberta, Ltd. ("Alberta") pursuant to the terms of an acquisition agreement
between the Company, Alberta and CAC (the "Alberta Agreement").

Alberta was incorporated in Canada in November, 1999 in anticipation of the
merger of C Me Run Corp. and Fundae Merger Sub, Inc. Alberta was established
as a mechanism to transfer equity in the Company, following the merger, to
certain of C Me Run Corp.'s Canadian founders and other Canadian individuals
in consideration of tax consequences.

The Alberta Agreement provided that the Company would become obligated to
issue (i) upon exchange of certain exchangeable shares of CAC, an aggregate
of 2,650,000 shares of common stock and to certain employees and other
parties options to purchase an aggregate of 325,000 shares of common stock
with an exercise price of $1.00 per share, and (ii) options to purchase an
aggregate of 1,295,000 shares of common stock with an exercise price of $5.00
per share. The Alberta Agreement expressly provided that the Company had the
right to terminate the agreement if the merger was not consummated by April
30, 2000.

On November 6, 2000, the Company terminated the Alberta Agreement and
subsequently entered into a settlement agreement whereby the Company agreed
to grant to Alberta options to purchase 1,100,000 shares of common stock,
vesting in equal annual amounts over 3 years, at an exercise price equal to
the fair market value of the stock. In exchange for the foregoing, the
Company received, among other things, a release from Alberta and certain
other parties.

Under separate agreements, the Company agreed to issue to certain of the
Company's employees, officers and directors that were to receive
consideration upon the acquisition of Alberta options to purchase 50,000
shares of common stock with an exercise price of $1.00 per share, and options
to purchase an aggregate of 845,000 shares of common stock with an exercise
price of $5.00 per share and options to purchase an aggregate of 725,000
shares of common stock with a nominal exercise price.



11.         RESTATEMENT





Subsequent to the issuance of the Company's March 31, 2000 consolidated
financial statements and filing of its form 10-QSB, management determined
that certain options granted to employees and officers should have been
recorded as compensation costs during the period. Also, the Company accreted
the cost of warrants related to its Series B convertible preferred stock
immediately to additional paid-in capital as the warrant was exercisable
immediately. Management determined that such cost should be accreted over the
period to the stock's scheduled redemption date of January 11, 2003.


<PAGE>





In addition, in accordance with accounting principles generally accepted in the
United States, quoted market prices, if available, should be used for purposes
of recording equity issuances and determining compensation costs relating to
stock option grants. During the period ended March 31, 2000, the Company had
previously recorded certain equity transactions using the opening quoted market
price of its stock ($16.00) on what it believed was the first trade date
(February 3, 2000) after the merger on January 31, 2000. The actual first
trade date was February 1, 2000 and the opening quoted price was $10.00.



In November and December 1999, two of the Company's founders entered
agreements under which they were to receive 700,000 shares of common stock.
These shares were not originally reported and are included in the
accompanying financial statement.




Therefore the accompanying March 31, 2000 consolidated financial statements
have been restated from the amounts previously reported to provide additional
disclosures and reflect the recording of certain non-cash equity
transactions. A summary of the significant effects of the restatement is as
follows:


AS OF MARCH 31, 2000


<TABLE>
<CAPTION>
                                                AS PREVIOUSLY                      AS
                                                  REPORTED                      RESTATED
<S>                                             <C>                           <C>
Common stock subscribed                                   --                   $      700
Additional paid-in-capital                       $ 2,715,761                   $9,734,247
Unearned  Compensation                            (2,410,937)                  (5,848,900)
Accumulated deficit                               (3,321,109)                  (3,673,501)
</TABLE>



FOR THE THREE MONTHS ENDED MARCH 31, 2000


<TABLE>
<S>                                             <C>                          <C>
Development costs                               $   (155,583)                 $  (238,137)
General and administrative expenses               (1,973,726)                  (1,827,784)
Marketing and promotion                             (856,339)                  (1,245,749)
Operating loss                                    (2,985,648)                  (3,311,670)
Net loss                                          (2,969,801)                  (3,295,823)
Net loss attributable to common shareholders     (11,970,368)                  (9,068,207)
Net loss per common share - basic and diluted          (3.99)                       (3.02)
</TABLE>


CUMULATIVE FROM NOVEMBER 8, 1999 (date of inception) TO MARCH 31, 2000


<TABLE>
<S>                                             <C>                          <C>
Development costs                               $   (168,611)                 $  (251,164)
General and administrative expenses               (2,232,752)                  (2,116,181)
Marketing and promotion                             (932,612)                  (1,322,022)
Operating loss                                    (3,333,975)                  (3,689,367)
Net loss                                          (3,318,109)                  (3,673,501)
Net loss attributable to common shareholders     (12,318,676)                  (9,445,885)
Net loss per common share - basic and diluted          (4.10)                       (3.15)
</TABLE>





<PAGE>

ITEM 2.   Management's Discussion and Analysis of Plan of Operation,
          Financial Condition and Results of Operation



Overview

The Company was incorporated under the name Fundae Corporation ("Fundae") on
March 16, 1995 under the laws of the state of Florida. From inception to
December 1999, the Company conducted minimal business operations except for
organizational and capital raising activities.

On December 2, 1999, Fundae changed its name to cmerun, Inc. in anticipation of
a potential transaction with a privately held applications service provider, C
Me Run Corp. On December 29, 1999, the Company reincorporated in the state of
Delaware through the merger of the Company with and into its wholly-owned
subsidiary, Fundae Acquisition Corporation.


On January 31, 2000, Fundae Merger Sub, Inc., a wholly-owned subsidiary of
the Company, merged with and into C Me Run Corp. The merger was a
stock-for-stock transaction accounted for as a reverse merger in which the
shareholders of C Me Run Corp. received an aggregate of 1,000 shares of
common stock, 2,000,000 shares of Series A Convertible Preferred Stock and
2,333,333 shares of Series B Convertible Preferred Stock. Prior to the
merger, the Company had 7,000,000 shares of common stock outstanding. In
connection with the merger, the Company exercised a right to purchase for
cancellation, 4,000,000 shares of its common stock for a total consideration
of $1.00 with a resulting 3,001,000 shares of common stock issued and
outstanding.





The Company's consolidated financial statements have been prepared on a
going-concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has
yet to generate revenues, and accordingly, is subject to a number of risks.
Principal among these risks are the successful development and marketing of its
service, competition from other companies, and the ability to raise additional
financing as required. These factors, among others, raise substantial doubt
about the Company's ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

Forward-Looking Statements


This Form 10-QSB/A includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future are forward-looking
statements. Such forward-looking statements are subject to risks and
uncertainties, including, without limitation:


              -         limited or delayed client acquisition or increases in
                        client acquisition costs;


<PAGE>


              -         the Company's ability to obtain adequate capital to
                        affect its operations, marketing and acquisition
                        strategies;

              -         the Company's ability to retain clients, sellers and
                        suppliers and attract new clients, sellers and
                        suppliers cost-effectively;


              -         changes in the Company's pricing policies or those of
                        its competitors or suppliers;

              -         the Company's ability to introduce new services;

              -         delays in developing and introducing new products or
                        enhanced capabilities for existing products;

              -         introduction of new services by the Company's
                        competitors;

              -         the Company's ability to adequately supply services to
                        its clients; and

              -         changes in accounting standards, including standards
                        relating to revenue recognition, business combinations
                        and stock-based compensation.

Consequently, there can be no assurance that the actual results or developments
anticipated by the Company will be realized or, even if substantially realized,
that they will have the expected consequence to or effects on the Company or its
business or operations. The Company assumes no obligations to update any
forward-looking statements made herein.

Plan of Operation


The Company's plans for the next 12 months include the establishment of a fully
operational pilot program which will enable it to test certain critical
assumptions. This program includes offering its services to at least two service
providers for either no cost or minimal cost who will then make the services
available to their subscribers. This testing will allow the Company to
corroborate such matters as concurrency rates among subscribers, software
preferences, speed and ease of use, and software scaling capabilities. The
Company anticipates that this testing will begin at the end of June 2000 and
continue through July 2000. Building on the results, the Company expects to roll
out a full-scale revenue-generating program in the January and February 2001
time period and will continue to expand its customer base. Management expects
that the Company will continue to incur losses until late in fiscal year 2002
while it continues to increase its subscriber base to cover the significant
fixed costs involved in its operations.


As the Company's customer base grows, significant expansion will be required
both in terms of its equipment and workforce. The Company's current workforce of
17 (including its officers) is expected to increase to more than 90 during the
next 12 months. As the number of subscribers' increases, the Company expects
significant additions to its hardware requirements, primarily in the form of
various servers that would provide user applications and service the data
storage requirements of the subscribers. The Company anticipates that servers
will be obtained through equipment leasing arrangements. In addition, data
storage needs will be met through a combination of equipment leasing
arrangements and third party solutions.

Results of Operation


For the three months ended March 31, 2000, the Company had no revenues and
incurred a net loss of $(3,295,823) as restated. During this time the Company
focused its efforts on building an infrastructure, marketing efforts, and
service development. The Company is refining its service offering and
building an infrastructure to prepare for the anticipated rapid growth to
meet its expected customer needs. In addition, with the Company's unique
approach of offering its programs, significant expenditures were incurred
relating to promoting its services and its potential benefits.


Liquidity and Capital Resources


At March 31, 2000, the Company had available cash of approximately $3,500,000
and restricted cash of $1,775,000. Management anticipates that pending the
issuance of the Series B Stock that is subscribed and fully paid
$1,500,000 of the restricted cash will be available for its capital needs.
Based upon the current level of expenditures, management expects that
additional financing will be required after year-end to continue operations.


In order to meet its cash requirements through the end of the fiscal year and
for the next twelve months, management intends to seek financing from a number
of sources. With the expected registration of additional shares of its common
stock, a significant number of warrants currently outstanding could be exercised
for the purchase of common stock. Depending upon the number of warrants
exercised, this could provide up to an additional $5,500,000 of cash to the
Company. In conjunction with its equipment requirements, management is in
discussion with certain vendors to provide an equity investment in the Company.

In addition to these sources, management is considering alternative sources
including additional private debt or equity capital or a potential sale of
public equity.

Merger with C Me Run Corp.



<PAGE>


On January 31, 2000, Fundae Merger Sub, Inc., a wholly-owned subsidiary of
the Company, merged with and into C Me Run Corp., an applications service
provider. The merger was a stock-for-stock transaction accounted for as a
reverse merger in which the shareholders of C Me Run Corp. received an
aggregate of 3,000,000 shares of common stock, 2,000,000 shares of Series A
Convertible Preferred Stock and 2,333,333 shares of Series B Convertible
Preferred Stock. Prior to the merger, the Company had 7,000,000 shares of
common stock outstanding. In connection with the merger, the Company
exercised a right to purchase for cancellation, 4,000,000 shares of its
common stock for a total consideration of $1.00 with a resulting 3,001,000
shares of common shares issued and outstanding.


In addition, the Company assumed the obligation to issue common stock upon the
exercise of warrants to purchase 1,000,000 shares of common stock with an
exercise price of $1.00 per share, and warrants to purchase 1,800,000 shares of
common stock with an exercise price of $2.50.



On February 2, 2000, C Me Run Corp. merged with and into the Company and
changed its name to cMeRun Corp.

As a result of the merger, the Company became obligated to acquire C Me Run
Alberta, Ltd. ("Alberta") pursuant to the terms of the acquisition agreement
between the Company, Alberta and CAC (the "Alberta Agreement").

Alberta was incorporated in Canada in November, 1999 in anticipation of the
merger of C Me Run Corp. and Fundae Merger Sub, Inc. Alberta was established
as a mechanism to transfer equity in the Company, following the merger, to
the Canadian founders in consideration of tax consequences.

The Alberta Agreement provided that the Company would become obligated to
issue, upon exchange, an aggregate of 2,650,000 shares of common stock and to
certain employees and other parties options to purchase an aggregate of
325,000 shares of common stock with an exercise price of $1.00 per share, and
options to purchase an aggregate of 1,296,000 shares of common stock with an
exercise price of $5.00 per share. The Alberta Agreement expressly provided
that the Company had the right to terminate the agreement if the merger was
not consummated by April 30, 2000.

On November 6, 2000, the Company terminated the Alberta Agreement and
subsequently entered into a settlement agreement whereby the Company agreed
to grant to Alberta options to purchase 1,100,000 shares of common stock,
vesting in equal annual amounts over 3 years at an exercise price equal to
the fair market value of the stock. In exchange for the foregoing, the
Company received, among other things, a release from Alberta and certain
other parties.

Under separate agreements, the Company agreed to issue to certain of the
Company's employees, officers and directors that were to receive
consideration upon the acquisition of Alberta options to purchase 50,000
shares of common stock with an exercise price of $1.00 per share, and options
to purchase an aggregate of 845,000 shares of common stock with an exercise
price of $5.00 per share and options to purchase an aggregate of 725,000
shares of common stock with a nominal exercise price.



                           PART II - Other Information

Item 1.                 Legal Proceedings

The Company was served with a lawsuit by FutureLink Corp., FutureLink
Distribution Corp. and FutureLink Micro Visions Corp. (collectively,
"FutureLink"). The FutureLink lawsuit, which was filed on January 20, 2000 in
the Court of Queen's Bench Alberta, Judicial District of Calgary, Action
#0001-01111, alleged that certain employees of C Me Run Corp. (prior to its
acquisition by the Company) had conspired to appropriate a corporate opportunity
from FutureLink and use it to their own advantage. FutureLink alleged that C Me
Run Corp. was the same business concept, which was developed by the individuals
named in the lawsuit while they were at FutureLink, using its facilities. The
Plaintiff was seeking a permanent injunction restraining C Me Run Corp. and its
subsidiaries from carrying on business related to the project. As well, the
Plaintiff was seeking a judgment in the amount of CDN $80,000,000 and the
ownership of all shares of C Me Run held by the Defendants. The Company defended
FutureLink's lawsuit and had filed a counterclaim against FutureLink, for CDN
$126M (approximately US $88M).

A settlement agreement and release relating to the lawsuit in which the Company
was named was entered into on April 3, 2000. The settlement agreement provides
that the named defendants in the suit pay to the plaintiffs a sum of $400,000.
The sum was paid in its entity by a defendant, other than the Company, on behalf
of all named defendants to the suit.

Item 2.                 Change in Securities and Use of Proceeds

On January 31, 2000, a subsidiary of the Company was merged with and into C Me
Run Corp. Pursuant to the merger, in exchange for their interests in C Me Run
Corp., the Company issued 1,000 shares of common stock to Cameron Chell,
2,000,000 shares of Series A Stock to Hammock Group Ltd. ("Hammock") and
2,333,333 shares of Series B Stock to VC Advantage Limited Partnership
("VCALP"). The terms of the Series A Stock and the Series B Stock are set forth
in exhibits 4.1 and 4.2 to this Form 10-QSB.

In addition, in exchange for outstanding options and warrants of C Me Run Corp.,
the Company issued (i) to Hammock a warrant to purchase 1,000,000 shares of
common stock with an exercise price of $1.00 per share, (ii) to VCALP a warrant
to purchase 1,400,000 shares of common


<PAGE>


stock with an exercise price of $2.50, and (iii) to Thomson Kernaghan & Co.
Limited a warrant to purchase 400,000 shares with an exercise price of $2.50.


The Company's issuance of common stock, Series A Stock, Series B Stock, and
warrants and options to purchase common stock was exempt from registration under
the Securities Act of 1933 by virtue of Regulation D promulgated thereunder or
Section 4(2) thereof.

ITEM 3.                 DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.                 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

ITEM 5.                 OTHER INFORMATION

None

ITEM 6.                 EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

See the attached exhibit list following the Company's signature for a list of
exhibits filed herewith.

(b)      Reports on Form 8-K


<TABLE>
<CAPTION>

                  Date Filed                       Items Reported
                  ----------                       --------------
               <S>                                 <C>

               January 19, 2000                    Item 5:       Reincorporation in Delaware
               January 27, 2000                    Item 5:       Press release concerning Futurelink litigation
               March 15, 2000                      Item 5:       Increase in size of Board and election of directors

</TABLE>



<PAGE>


                                   SIGNATURES

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

Date: December 6, 2000                           By: /s/ Gerald J. McGovern
                                                 --------------------------

                                                 Its: Chief Financial Officer



<PAGE>


                                  EXHIBIT INDEX



<TABLE>
<CAPTION>

EXHIBIT
NO.                        DESCRIPTION
<S>      <C>
10.1     Master Agreement to Lease Equipment dated March 30, 2000 by and between
         Cisco Systems Capital Corporation and cMeRun Corp.

10.2     Citrix iBusiness Application Service Provider Agreement by and between
         Citrix Systems, Inc. and cMeRun Corp.

10.3     Eggrock eco-Share Agreement dated March 7, 2000 by and between Eggrock
         Partners, Inc. and cMeRun Corp.

10.4     Master Services Agreement dated December 17, 1999 by and between Exodus
         Communications, Inc. and cMeRun Corp.

10.5     Employment Agreement made as of January 3, 2000 with James S. Lovie

10.6     Employment Agreement made as of February 21, 2000 with Paula M. Hunter

10.7     Employment Agreement made as of December 1, 1999 with Colin Curwen

10.8     Employment Agreement made as of November 12, 2000 with Warren Talbot

27.1     Financial Data Schedule

</TABLE>