UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

[X]  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended DECEMBER 31, 1999

[ ]  Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of
     1934

      For the transition period from __________ to __________

      Commission File Number 0-26535

                            VIAVID BROADCASTING, INC.

        (Exact name of Small Business Issuer as specified in its charter)


NEVADA                                                       98-020-6168
---------------------------                                  -----------
(State or other jurisdiction of                              (IRS Employer
incorporation )                                              Identification No.)

3955 GRAVELEY STREET, BURNABY, BRITISH COLUMBIA              V5C 3T4
-----------------------------------------------              -------
(Address of principal executive offices)                     (Zip Code)

Issuer's telephone number, including area code               604-669-0047
                                                             ------------

Indicate by a check mark  whether the issuer (1) has filed all reports  required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the issuer was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days [ X ] Yes [ ] No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                                                     Outstanding as of
               Class                                 January 28, 2000
               -----                                 -----------------
               Common Stock                          6,546,000 shares



<PAGE>



                         PART 1 B FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

GENERAL

The Company's unaudited financial statements for the nine months ending December
31, 1999 are included with this Form 10-QSB. The unaudited financial  statements
for the nine months ending December 31, 1999 include:

     (a)  Consolidated Balance Sheet as of December 31, 1999 and March 31, 1999;

     (b)  Consolidated  Statement of Operations - Nine months ended December 31,
          1999 and period from January 20, 1999, the date of  incorporation,  to
          March 31, 1999;

     (c)  Consolidated  Statement of Shareholders'  Equity for the period ending
          December 31, 1999;

     (d)  Consolidated  Statement of Cash Flows - Nine months ended December 31,
          1999 and period from January 20, 1999, the date of  incorporation,  to
          March 31, 1999;

     (e)  Notes to Consolidated Financial Statements.

The unaudited  financial  statements  have been prepared in accordance  with the
instructions to Form 10-QSB and,  therefore,  do not include all information and
footnotes  necessary  for a complete  presentation  of the  financial  position,
results of operations,  cash flows, and stockholders'  equity in conformity with
generally  accepted  accounting  principles.  In the opinion of management,  all
adjustments  considered  necessary  for a fair  presentation  of the  results of
operations  and financial  position have been included and all such  adjustments
are of a normal recurring  nature.  Operating  results for the nine months ended
December  31, 1999 are not  necessarily  indicative  of the results  that can be
expected for the year ending March 31, 2000.


                              FINANCIAL STATEMENTS


                                       2

<PAGE>










                            VIAVID BROADCASTING INC.
                          (A DEVELOPMENT STAGE COMPANY)


                        CONSOLIDATED FINANCIAL STATEMENTS
                      (EXPRESSED IN UNITED STATES DOLLARS)
                      (UNAUDITED - PREPARED BY MANAGEMENT)


                                DECEMBER 31, 1999







                                       3

<PAGE>



VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)

<TABLE>
<CAPTION>
===========================================================================================================================
                                                                                               December 31,       March 31,
                                                                                                       1999            1999
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>              <C>
ASSETS

CURRENT
    Cash                                                                                   $       81,872   $      163,406
    Accounts receivable                                                                             9,830            6,841
                                                                                           --------------   --------------

                                                                                                   91,702          170,247

CAPITAL ASSETS (Note 4)                                                                           155,623           17,510
                                                                                           --------------   --------------

                                                                                           $      247,325   $      187,757
===========================================================================================================================


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT
    Accounts payable and accrued liabilities                                               $       15,502   $        6,866
    Due to related parties                                                                             62            8,459
                                                                                           --------------   --------------

                                                                                                   15,564           15,325
                                                                                           --------------   --------------

SHAREHOLDERS' EQUITY
    Capital stock
       Authorized
              25,000,000  common shares with a par value of $0.001 per share
       Issued
               6,421,000  common shares (5,884,000 at March 31, 1999)                                                5,884
                                                                                                    6,421

    Additional paid-in capital                                                                    774,679          238,216
    Deficit accumulated during the development stage                                             (549,339)         (71,668)
                                                                                           --------------   --------------

                                                                                                  231,761          172,432
                                                                                           --------------   --------------

                                                                                           $      247,325   $      187,757
===========================================================================================================================
</TABLE>

NATURE AND CONTINUANCE OF OPERATIONS (Note 1)




        The accompanying notes are an integral part of these consolidated
                              financial statements.



                                       4
<PAGE>



VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)

<TABLE>
<CAPTION>
==============================================================================================================================
                                                                                                                  Period From
                                                                                                                Incorporation
                                                                               Cumulative                                  on
                                                                                     From         Nine Month      January 20,
                                                                            Incorporation       Period Ended          1999 to
                                                                          to December 31,       December 31,        March 31,
                                                                                     1999               1999             1999
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                <C>              <C>
REVENUE                                                                          $  25,543          $  22,107        $   3,436
                                                                                 ---------          ---------        ---------

EXPENSES
    Consulting                                                                     200,201            163,387           36,814
    Depreciation                                                                    45,758             37,709            8,049
    Internet, website and graphics                                                  70,203             70,203               --
    Office and miscellaneous                                                        68,827             61,718            7,109
    Professional fees                                                               61,023             51,092            9,931
    Rent                                                                            44,375             36,577            7,798
    Salary and benefits                                                             56,096             51,807            4,289
    Telephone                                                                        9,827              8,713            1,114
    Travel and entertainment                                                        18,572             18,572               --
                                                                                 ---------          ---------        ---------

                                                                                   574,882            499,778           75,104
                                                                                 ---------          ---------        ---------

LOSS FOR THE PERIOD                                                              $(549,339)         $(477,671)       $ (71,668)
==============================================================================================================================

LOSS PER SHARE                                                                   $   (0.09)         $   (0.08)       $   (0.01)
LOSS PER SHARE, FULLY DILUTED                                                    $   (0.07)         $   (0.06)       $   (0.01)
==============================================================================================================================
</TABLE>








        The accompanying notes are an integral part of these consolidated
                              financial statements.



                                       5
<PAGE>



VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)

<TABLE>
<CAPTION>
==============================================================================================================================
                                                                                                      Deficit
                                                        Common Stock                              Accumulated
                                                ------------------------------     Additional      During the
                                                        Number                        Paid-in     Development
                                                     of Shares         Amount         Capital           Stage           Total
------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>            <C>             <C>             <C>             <C>
Issued shares for acquisition (Note 3)                5,100,000      $   5,100       $      --       $      --       $   5,100

Issued shares for cash at $0.01 per share               500,000            500           4,500              --           5,000

Issued shares for cash at $0.50 per share               100,000            100          49,900              --          50,000

Issued shares for cash at $1.00 per share               184,000            184         183,816              --         184,000

Loss for the period                                          --             --              --         (71,668)        (71,668)
                                                      ---------      ---------       ---------       ---------       ---------

Balance at March 31, 1999                             5,884,000          5,884         238,216         (71,668)        172,432

Issued shares for cash at $1.00 per share               537,000            537         536,463              --         537,000

Loss for the period                                          --             --              --        (477,671)       (477,671)
                                                      ---------      ---------       ---------       ---------       ---------

Balance at December 31, 1999                          6,421,000      $   6,421       $ 774,679       $(549,339)      $ 231,761
==============================================================================================================================
</TABLE>






        The accompanying notes are an integral part of these consolidated
                              financial statements.


                                       6
<PAGE>



VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)

<TABLE>
<CAPTION>
==============================================================================================================================
                                                                                                                  Period From
                                                                               Cumulative                       Incorporation
                                                                                     From         Nine Month       on January
                                                                            Incorporation       Period Ended      20, 1999 to
                                                                          to December 31,       December 31,        March 31,
                                                                                     1999               1999             1999
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                <C>              <C>
CASH PROVIDED BY (USED IN):

OPERATING ACTIVITIES
    Loss for the period                                                         $(549,339)         $(477,671)       $ (71,668)
    Items not affecting cash
       Depreciation                                                                40,323             37,709            2,614
       Write-down of goodwill                                                       5,435                 --            5,435

    Changes in non-cash working capital items
       Increase in accounts receivable                                             (9,830)            (2,989)          (6,841)
       Increase in accounts payable                                                15,502              8,636            6,866
                                                                                ---------          ---------        ---------

    Net cash used in operating activities                                        (497,909)          (434,315)         (63,594)
                                                                                ---------          ---------        ---------

INVESTING ACTIVITIES
    Acquisition of capital assets                                                (195,946)          (175,822)         (20,124)
    Acquisition of subsidiary                                                        (335)                --             (335)
                                                                                ---------          ---------        ---------

    Net cash used in investing activities                                        (196,281)          (175,822)         (20,459)
                                                                                ---------          ---------        ---------

FINANCING ACTIVITIES
    Proceeds from common shares                                                   776,000            537,000          239,000
    Loans from related parties                                                         62             (8,397)           8,459
                                                                                ---------          ---------        ---------

    Net cash provided by financing activities                                     776,062            528,603          247,459
                                                                                ---------          ---------        ---------

CHANGE IN CASH FOR THE PERIOD                                                      81,872            (81,534)         163,406

CASH, BEGINNING OF PERIOD                                                              --            163,406               --
                                                                                ---------          ---------        ---------

CASH, END OF PERIOD                                                             $  81,872          $  81,872        $ 163,406
==============================================================================================================================


SUPPLEMENTAL DISCLOSURE FOR NON-CASH OPERATING, INVESTING, AND
FINANCING ACTIVITIES
    Shares for purchase of subsidiary                                           $      --          $      --        $   5,100
    Cash paid during the period for interest                                          222                222               --
    Cash paid during the period for income taxes                                       --                 --               --
==============================================================================================================================
</TABLE>




        The accompanying notes are an integral part of these consolidated
                              financial statements.


                                       7
<PAGE>



VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
DECEMBER 31, 1999
--------------------------------------------------------------------------------

1.   NATURE AND CONTINUANCE OF OPERATIONS

     ViaVid Broadcasting Inc., a Nevada corporation, was incorporated on January
     20, 1999. On January 27, 1999,  the Company  completed the  acquisition  of
     ViaVid  Broadcasting  Corp.,  a Canadian  company  operating in  Vancouver,
     British Columbia, Canada.

     The Company was  incorporated  in order to create a global  internet  video
     broadcasting  company  that  offers a network of video  services  utilizing
     streaming video  technology.  ViaVid's VBC News 1 Channel  provides viewers
     with interviews from company officials across the United States and Canada.
     Broadcasts  on ViaVid are produced live and to tape and are archived on the
     ViaVid site for instant on demand video.  Interviews  can also be linked to
     other company's sites allowing ViaVid to gain additional viewers from other
     sites.  ViaVid has also launched other Channels such as the  Entertainment,
     Health & Lifestyles and Sports.

     ViaVid moved to its new studio and production facility in Burnaby,  British
     Columbia in November 1999 and has been producing  live internet  broadcasts
     since December 1999.

     The Company's financial statements have been presented on the basis that it
     is a going concern,  which  contemplates  the realization of assets and the
     satisfaction  of liabilities in the normal course of business.  The Company
     incurred a loss of $549,339  for the period from  inception to December 31,
     1999. The Company anticipates expending  approximately  $1,000,000 over the
     next twelve month period in pursuing its  anticipated  plan of  operations.
     The Company  anticipates  covering  these costs by  operating  revenues and
     additional  equity  financing.  If the  Company is unable to  complete  its
     financing requirements or achieve revenue as projected, it will then modify
     its  expenditures  and plan of  operations  to  coincide  with  the  actual
     financing completed and actual operating revenues. The financial statements
     do  not  include  any  adjustments   relating  to  the  recoverability  and
     classification of recorded asset amounts or the amounts and  classification
     of  liabilities  that might be  necessary  should the  Company be unable to
     continue in existence.

     The  Company is  currently  receiving  revenues  for video  production  and
     hosting services.

2.   SIGNIFICANT ACCOUNTING POLICIES

     In preparing  these  financial  statements,  management is required to make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities  as of the date of the balance  sheet and revenues and expenses
     for the period.  Actual  results in future  periods could be different from
     these estimates made in the current  period.  The following is a summary of
     the significant accounting policies of the Company:

     PRINCIPLES OF CONSOLIDATION

     These consolidated financial statements include the accounts of the Company
     and its wholly-owned subsidiary,  ViaVid Broadcasting Corp. All significant
     inter-company balances and transactions have been eliminated.

     START-UP AND DEVELOPMENT COSTS

     Since  inception,  certain  expenditures  have been incurred  primarily for
     product development, business development, market development and financing
     purposes.  While these expenditures are intended to benefit future periods,
     the Company  follows the  accounting  policy of expensing as incurred those
     expenditures not identified with specific projects or financing activities.


                                       8
<PAGE>



VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
DECEMBER 31, 1999
--------------------------------------------------------------------------------

2.   SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)

     CAPITAL ASSETS

     Capital assets are recorded at cost and are  depreciated  over their useful
     lives on the declining balance method at the following rates:

          Computer equipment                  30%
          Office furniture                    20%
          Telephone equipment                 20%
          Video equipment                     20%

     FINANCIAL INSTRUMENTS

     The Company's financial  instruments consist of cash, accounts  receivable,
     accounts payable and due to related parties.  Unless otherwise noted, it is
     management's  opinion  that  the  Company  is not  exposed  to  significant
     interest,   currency  or  credit  risks   arising   from  these   financial
     instruments.  The fair  value of these  financial  instruments  approximate
     their carrying values, unless otherwise noted.

     REVENUE RECOGNITION

     Revenue is recognized once the filming and editing has been completed.

     FOREIGN CURRENCY TRANSLATION

     Financial  statements of the Company's  Canadian  subsidiary are translated
     using the temporal  method whereby all monetary  assets and liabilities are
     translated  into U.S.  dollars at the rate of exchange at the balance sheet
     date.  Non-monetary assets and liabilities are translated at exchange rates
     prevailing at the transaction  date.  Income and expenses are translated at
     rates,  which approximate those in effect on transactions  dates. Gains and
     losses arising from  restatement of foreign  currency  monetary  assets and
     liabilities at each period end are included in earnings.

     LOSS PER SHARE

     Loss per share is calculated  using the weighted  average  number of shares
     allotted during the period.

     SEGMENTED INFORMATION

     The Company conducts  substantially  all of its operations in Canada in one
     business segment.

3.   ACQUISITION OF VIAVID BROADCASTING CORP.

     On January  27,  1999,  the Company  completed  the  acquisition  of ViaVid
     Broadcasting  Corp.  ("VBC"), a related company having common directors and
     officers.  VBC is a Canadian company incorporated under the laws of British
     Columbia  on July 26,  1994.  VBC was  inactive  from  incorporation  until
     October 30, 1998 when it changed its name from 477504 British Columbia Ltd.
     to ViaVid Broadcasting Corp.

     The Company acquired VBC pursuant to a share exchange agreement whereby the
     Company agreed to issue 5,100,000  common shares to the shareholders of VBC
     in exchange for their 3,000 common  shares.  The Company has  accounted for
     this transaction as a capital  transaction.  For accounting  purposes,  the
     financial  statements of the Company and its  subsidiary are deemed to have
     been combined for the prior and current accounting  periods. As of the date
     of  acquisition,  VBC held no significant  assets and  liabilities  and the
     accumulated losses to January 27, 1999 was $355.


                                       9
<PAGE>



VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1999
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

4.   CAPITAL ASSETS

<TABLE>
<CAPTION>
=======================================================================================================================
                                                                                                Net Book Value
                                                                                       --------------------------------
                                                                           Accumulated      December 31,      March 31,
                                                                  Cost    Depreciation              1999           1999
-----------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>             <C>             <C>               <C>
Computer equipment                                     $      117,931  $       27,933  $       89,998    $       10,229
Office furniture                                               17,441           3,084          14,357             4,953
Telephone equipment                                             2,723             582           2,141             1,834
Video equipment                                                57,851           8,724          49,127               494
                                                       --------------  --------------  --------------    --------------
                                                       $      195,946  $       40,323  $      155,623    $       17,510
=======================================================================================================================
</TABLE>

5.   CAPITAL STOCK

     The Company  granted  950,000  stock  options to directors and employees on
     November 24,  1999.  Each stock  option is  exercisable  at $1.00 per share
     expiring on November 24, 2003.

     Subsequent to December 31, 1999,  525,000 of the stock options  referred to
     above were terminated and the Company issued 125,000 shares on the exercise
     of stock options.

6.   RELATED PARTY TRANSACTIONS

     During  the nine month  period,  the  Company  entered  into the  following
     transactions with related parties:

     a)   Paid consulting fees as follows:

          -    $96,734  (March 31,  1999 - $20,074)  to three  directors  of the
               Company

          -    $22,911 (March 31, 1999 - $6,574) to an officer of the Company

          -    $Nil (March 31, 1999 - $1,673) to a director of the subsidiary

     b)   Paid salary of $25,526  (March 31, 1999 - $4,015) to an officer of the
          Company.

7.   INCOME TAXES

     The  Canadian  operating  loss for the period to date of  $549,339,  may be
     carried forward and applied against taxable income in future years.  Future
     tax  benefits  which may arise as a result  of these  losses  have not been
     recognized  in these  financial  statements.  The Company has not commenced
     operations in the U.S.A., therefore, there is no income or loss to report.

8.   UNCERTAINTY DUE TO THE YEAR 2000 ISSUE

     The Year 2000 Issue arises because many computerized systems use two digits
     rather than four to identify a year. Date-sensitive systems may incorrectly
     recognize  the year 2000 as some  other  date,  resulting  in  errors.  The
     effects  of the Year 2000  Issue may be  experienced  before,  on, or after
     January  1, 2000 and,  if not  addressed,  the  impact  on  operations  and
     financial  reporting  may range from minor  errors to  significant  systems
     failure



                                       10
<PAGE>



     which  could  affect  an  entity's   ability  to  conduct  normal  business
     operations.  It is not  possible to be certain that all aspects of the Year
     2000 Issue affecting the Company, including those related to the efforts of
     customers, suppliers, or other third parties, will be fully resolved.

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

GENERAL

ViaVid   provides  its  customers  with  video   production  and  Internet  news
broadcasting  and  dissemination  services.  The  Company  broadcasts  news  and
corporate  information for its customers over the Internet  through its Web site
at http://www.viavid.com.

The Company is a development  stage  company  which has only recently  commenced
business and has earned minimal  revenues to date. Its business  objective is to
develop an internet  video  broadcasting  company  that offers a wide variety of
video services utilizing streaming video technology.

The Company  completed the move of its head office and production  facilities to
3955 Graveley Street, Burnaby, British Columbia, Canada V5C 3T4 in the beginning
of November,  1999. The Company remains obligated under the lease for its former
premises at Suite 520, 625 Howe Street, Vancouver,  British Columbia, Canada V6C
2T6 until February 29, 2000.

RESULTS OF OPERATIONS

Sales.  ViaVid's revenues were $22,107 for the nine month period ending December
31,  1999,  compared to revenues of $3,436 for the period from January 20, 1999,
the date of its incorporation,  to March 31, 1999. The Company achieved revenues
of $6,554 for the quarter ended  December 31, 1999 as compared to $9,785 for the
quarter ended  September 30, 1999.  The decrease in revenues for this quarter is
due to the Company's  move into it's new  facilities  and its  concentration  on
providing live broadcasts.  ViaVid's revenues were achieved primarily from video
production  and  Internet  broadcast  services  provided to its  customers.  The
Company also achieved revenues from hosting services provided to customers

Revenue.  The  Company's  revenues are minimal in  comparison  to its  operating
expenses as the Company is currently in the  start-up  phase of its  operations.
The Company is attempting to increase its future revenues by completing its plan
of operations,  as discussed  below. In addition,  the Company  commenced "live"
Internet  broadcasts  in  December,  1999.  ViaVid's  objective  is  to  attract
corporate sponsorship and advertising for these "live" Internet broadcasts.

Operating Expenses. ViaVid's operating expenses were $499,778 for the nine month
period ending December 31, 1999,  compared to operating  expenses of $75,104 for
the period from January 20, 1999 to March 31, 1999.  ViaVid's operating expenses
for the quarter  ended  December 31, 1999 were  $239,963 as compared to $153,304
for the quarter  ended  September 30, 1999.  The increase in operating  expenses
during this quarter was due to the move to the new production facilities and the
additional  expenses  incurred to run a live feed from the  studio.  The Company
will incur  additional  operating  expenses  as it  continues  to  provide  live
broadcast feeds of its productions on the Internet. The Company will continue to
have  operating  expenses in connection  with the continued  up-grade of its Web
site. The Company also anticipates that operating  expenses will



                                       11
<PAGE>



increase  as the number of video  productions  which the  Company  produces  and
broadcasts for its customers increases.

Net Loss.  ViaVid's  net loss was  $477,671,  or $0.08 per  share,  for the nine
months ending  December 31, 1999.  Fully  diluted loss per share $0.06.  Its net
loss was  $71,668,  or $0.01 per share,  for the period from January 20, 1999 to
March 31, 1999.  ViaVid's net loss for the quarter  ended  December 31, 1999 was
$233,409 as compared to $143,519 for the quarter ended  September 30, 1999.  Its
net loss reflects the fact that the Company has not earned significant  revenues
to date.

LIQUIDITY AND CAPITAL RESOURCES

The Company's  operations  have been financed  principally  through sales of the
Company's equity securities.

The  Company had cash of $81,872 as of December  31,  1999,  compared to cash of
$163,406 as of March 31, 1999.

The Company  realized  net  proceeds  of  $537,000  from the sales of its equity
securities  during the nine month ending December 31, 1999.  These proceeds were
used to finance the Company's operating activities.

The Company plans on meeting its operating  expenses  during the next quarter by
focussing on generating revenues through  advertisements on the live broadcasts,
video productions for broadcast on its website and hosting of video productions.

PLAN OF OPERATIONS

The Company  currently intends to pursue the following plan of operations during
the next twelve months:

A.   The  Company  will  continue  to  develop a  customer  base of  public  and
     financial companies who will use its services for digital video productions
     and  Internet  broadcasting.  The  Company  anticipates  that it will spend
     approximately $100,000 on this marketing expense over the next twelve month
     period;

B.   The Company will  continue to develop the VBC News 1 Channel for  broadcast
     from its Web site.  The  Company  anticipates  it will spend  approximately
     $350,000 on this development expense over the next twelve month period;

C.   The Company will evaluate  additional  channels for broadcast  from its Web
     site,  depending on market  demand.  The Company  anticipates it will spend
     approximately  $50,000 on  additional  channels  over the next twelve month
     period;

D.   The Company will evaluate whether to set up an additional office or offices
     in  additional  cities in order to expand its  business  and meet  customer
     demand.  The Company  anticipates it will spend  approximately  $150,000 on
     additional  offices over the next twelve month period if it  determines  to
     proceed with an additional office;


                                       12
<PAGE>



E.   The  Company  will  expand its Web site to  attempt  to  extract  marketing
     information  and data from  users in order to  obtain a basis  for  earning
     advertising  revenue.  The Company  anticipates it will spend approximately
     $10,000 on expansion of its Web site over the next twelve month period;

F.   The Company will purchase additional  equipment to expand its digital video
     production   studio  and  video   production   capabilities.   The  Company
     anticipates it will spend approximately  $250,000 on additional  production
     equipment over the next twelve month period.

In sum, the Company anticipates it will spend approximately  $1,000,000 over the
next twelve  month period in pursuing  its stated plan of  operations.  Of these
anticipated  expenditures,  the Company anticipates that approximately  $514,000
will be spent on its plan of operations in the next six months.  Of this amount,
the Company  anticipates  that  $105,000 will be paid from  operating  revenues,
approximately  $80,000 will be paid from existing cash reserves from  previously
completed  equity  financings  and  approximately  $329,000  will be  raised  by
additional  equity  financings.  ViaVid  does  not  have  any  present  plans or
commitments to raise this additional  capital.  ViaVid's actual expenditures and
business plan may differ from this stated plan of  operations.  Although  ViaVid
has no present plans or proposals  pending, a strategic alliance relating to one
aspect of  streaming  content or encoding  may cause the Board of  Directors  to
modify its plans. In addition, ViaVid may modify its plan of operations based on
the  available  amounts  of  financing  in the event  that it cannot  obtain the
required equity  financings to complete its plan of operations.  ViaVid does not
have any  arrangement  in place for any debt or  equity  financing  which  would
enable it to meet its plan of operations.

In the event the Company is not  successful  in arranging  any further  sales of
common  stock,  the  Company  anticipates  that it could  sustain  its  business
operations for  approximately  six months without  additional  equity  financing
based on its current cash position and revenues.

The Company is currently  receiving  revenues from video  production and hosting
services.  The  Company  anticipates  an increase  in revenue  from  production,
advertising  and hosting  video  footage and Web content if it is  successful in
increasing its customer base over the next twelve months.

Notwithstanding  the above plan of operations,  the Company  anticipates it will
have continuing  operating losses in the foreseeable  future.  The Company bases
this expectation in part on the following:

A.   The Company will incur substantial  marketing expense in order to advertise
     and promote its Web site,  to establish a customer base and to increase the
     usage of its Web site.

B.   Increased  usage of  ViaVid's  Web site  will lead to  increased  operating
     expenses  and  require  additional  capital  expenditures  on new  computer
     equipment, software and technology.

C.   ViaVid's  operating  expenses  will  continue to increase as it expands the
     technical capabilities of its Web site.

D.   ViaVid's   operating  expenses  will  increase  as  it  solicits  potential
     customers and completes  video  productions for customers for broadcast via
     its Web site.

E.   ViaVid's   operating  expenses  will  increase  as  it  solicits  potential
     advertisers  and attempts to enter into  agreements for  advertising on its
     Web site.


                                       13
<PAGE>



F.   ViaVid's  operating  expenses  will  increase as it undertakes to implement
     programs to monitor usage of its Web site and develop customer  profiles of
     its users.


RISKS

YEAR 2000 ISSUE

At the end of 1999 there was a concern that computer systems, software packages,
and  microprocessor  dependent  equipment  would  cease to  function or generate
erroneous  data when the Year 2000  arrived.  The problem was  anticipated  with
those  systems or products that were  programmed  to accept a two-digit  code in
date code fields.  To  correctly  identify the Year 2000, a four digit date code
field was required to be what is commonly termed "Year 2000 compliant".

We completed an assessment of all internal  systems and  operations to determine
Year 2000 compliance. Our assessment included an assessment of computer hardware
systems  and Web site  operations  systems.  We  determined  that  our  internal
computer  hardware  systems and Web site operations  systems and operations were
Year 2000 compliant.

We completed an upgrade of all third party licensed software to ensure Year 2000
compliance.  We implemented all Year 2000 software patches for the software used
by us in our operations,  including software patches for our Microsoft operating
system.  We also  investigated the Year 2000 compliance of all computer hardware
purchased  by us since  commencement  of  operations.  We made  inquiries of our
Internet  service  provided,  AT&T Corp.,  as to the year 2000 compliance of the
Internet service provider's systems and operations and representations were made
that our systems and operations are Year 2000 compliant.

We did not  experience  any  problems  with  our  computer  system  or Web  site
operations as a result of Year 2000 problems.  Our Web site and computer systems
were  able  to  continue  operations  without   experiencing  any  down-time  or
interruptions.

We estimate that our total  internal cost for ensuring Year 2000  compliance for
all internal systems to be less than $10,000. We did not incur any external cost
in ensuring Year 2000  compliance in view of the fact that we have only recently
commenced  operations and purchased  computer hardware and software on the basis
of representations by manufacturers as to Year 2000 compliance.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR' PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1996

With the exception of historical  matters,  the matters  discussed in this 10QSB
are "forward-looking statements" as defined under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, that involve risks
and uncertainties.  Forward-looking  statements made herein include, but are not
limited to, the statements in this report  regarding the plans and objectives of
management for our future operations,  including plans or objectives relating to
our intentions to provide  Internet news  broadcasting  and other  dissemination
services and other products or services,  as well as any  prospective  financial
information  concerning  us.  Forward-looking  statements  made in  this  report
include the assumptions  made by management as to the future growth and business
direction of the Internet, e-commerce through the facilities of the Internet and
the role of video production and Internet news  broadcasting  and  dissemination
services on the Internet.  They also include our beliefs as to the importance of
privacy to users, their willingness to divulge certain  demographic  information
regarding  themselves,  to view our news


                                       14
<PAGE>



broadcasting  services  and  programs,  as  well as our  plans  to  improve  the
capabilities of our servers and facilities.  They also include our beliefs as to
the willingness of small-cap  public  companies to broadcast  corporate news and
information  on the internet and for us to derive  revenues from  providing this
service.  We cannot assure you that our  assumptions in this regard or our views
as to the commercial viability of our business plans discussed herein will prove
to be accurate.  Likewise,  we cannot  assure you that we will be  successful in
growing our user and customer base as we plan,  attracting  companies to use our
Internet  based  broadcast   services  for  the   dissemination  of  their  news
information,  realizing  material  amounts of  advertising  or other revenues or
achieving any commercial  advantage  relative to other Internet  companies.  Our
ability to realize  revenues from the business plans discussed  herein cannot be
assured.  If our  assumptions  are incorrect or our advertising and other growth
plans or plans to realize  revenues fail to materialize,  we may be unsuccessful
in developing as a viable  business  enterprise.  Under such  circumstance  your
entire investment will be in jeopardy and may be lost. Our inability to meet our
goals and  objectives or the  consequences  to us from adverse  developments  in
general  economic  or  capital  market  conditions  and our  inability  to raise
additional  capital could have a material  adverse  effect on us. We caution you
that various risk factors  accompany  those forward  looking  statements and are
described, among other places, under the caption "Risk Factors" herein. They are
also described in our Registration  Statement on Form 10-SB, as amended,  in our
Quarterly  Reports  on Form  10-QSB,  our  Current  Reports  on Form 8-K and our
Registration  Statement  SB-2.  These risk  factors  could  cause our  operating
results,  financial  condition  and  ability  to  fulfill  our  plans to  differ
materially from those expressed in any  forward-looking  statements made in this
report and could  adversely  affect our  financial  condition and our ability to
pursue our business strategy and plans.


                                  RISK FACTORS

RISKS APPLICABLE TO OUR BUSINESS

EXTREMELY LIMITED OPERATING HISTORY; HISTORY OF NET LOSSES

We have had an extremely limited operating history. Our business was established
in January  1999 and our Web site began  operations  on the Internet in February
1999. Our total revenues since inception through December 31, 1999 were $25,543.
An investor  must  consider  the risks,  expenses  and  difficulties  frequently
encountered by companies such as ours, in the early stages of their  development
particularly  in the new and  rapidly  evolving  market for  Internet  products,
content  and  services.  We  cannot  assure  you that we will be  successful  in
addressing  such  risks.  We  cannot  assure  you that  our  revenue  will  grow
sufficiently  to  assure  our  future  success.  New  companies,  such as  ours,
experience  expenses,  difficulties and unforeseen problems that create a higher
risk of business failure.  If we are not successful in overcoming these expenses
and difficulties, our business may fail.

FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING

The  report  of our  independent  auditors  on  their  audit  of  our  financial
statements as of March 31, 1999 contains an explanatory paragraph that describes
an  uncertainty  as to our  ability to  continue  as a going  concern due to our
recurring losses and the necessity to obtain additional financing. At both March
31,  1999 and  December  31,  1999,  we did not have  available  to us the funds
necessary to meet our  anticipated  capital needs.  At December 31, 1999, we had
cash of $81,872. We anticipate that our expenses for the quarter ended March 31,
2000  will  exceed  this  amount.  Accordingly,  in  order  to meet  our plan of
operations,  we will need to raise additional  capital. We have no present plans
or commitments to raise this additional capital.  There can be no assurance that
any additional  financing will be available to us on favorable terms, or at all.
If adequate funds


                                       15
<PAGE>



are not available or not available on  acceptable  terms,  we may not be able to
fund our business plans as we desire, or, develop or enhance services or respond
to  competitive  pressures.  Any such  inability  could have a material  adverse
effect  on  our  business,   results  of  operations  and  financial  condition.
Additional  funds  raised  through the  issuance of equity or  convertible  debt
securities, will result in reducing the percentage ownership of our stockholders
and, our stockholders may experience additional dilution and such securities may
have  rights,  preferences  or  privileges  senior to those of the rights of our
Common Stock.

As a  result  of  our  limited  Internet  operating  history,  we  have  limited
meaningful  historical  financial data upon which our planned operating expenses
can be based.  Accordingly,  our  anticipated  expense  levels in the future are
based in part on our  expectations  as to future  revenue and will become,  to a
large extent, fixed. Revenues and operating results generally will depend on the
volume of, timing of and ability to complete  transactions,  which are difficult
to forecast.

In  addition,  there  can be no  assurance  that we  will be able to  accurately
predict our revenue,  particularly  in light of the unproven  manner in which we
intend to derive our Internet revenue,  the intense  competition for the sale of
products and  services on the Web,  revenue-sharing  opportunities,  our limited
operating history and the uncertainty as to the broad acceptance of the Web as a
news  broadcasting  medium.  We may be unable to adjust our spending in a timely
manner to compensate  for  disappointing  results of our  marketing  efforts and
efforts to develop Internet revenue,  any unexpected  revenue shortfall or other
unanticipated  changes in the Internet industry.  Our failure to accurately make
such  predictions or  adjustments in our spending would have a material  adverse
effect on our business, results of operations and financial condition.

POSSIBLE INABILITY TO IMPLEMENT OUR BUSINESS STRATEGY

Our business strategy includes completion of the following business objectives:

o    Attracting public companies and other financial  industry customers who are
     prepared  to pay for  having  us  prepare  digital  video  productions  and
     broadcast  these video  productions  on our Web site. We have only recently
     begun to seek payment from customers for these video productions;

o    Continuing to expand the usage of our Web site by attracting both financial
     industry customers and viewers;

o    Expanding the functionality and capability of our Web site;

o    Attracting  advertising  to our Web site  and  establishing  other  revenue
     generating opportunities for our Web site;

o    Responding to competitive developments;

o    Implementing and executing our business strategy successfully; and

o    Continuing to develop and upgrade our technologies and our Web site.

If we are not successful in implementing all components of our business strategy
successfully,  our operating  results and financial  condition may be harmed and
our business may fail.


                                       16
<PAGE>



POSSIBLE INABILITY TO GENERATE REVENUES AND PROFITABLE OPERATIONS

We have earned minimal revenues to date and we are presently not profitable. Our
business and  marketing  strategy  contemplates  that we will earn revenues from
public  customers who pay for the broadcast of digital video  productions on the
Internet via our Web site and through  advertising posted on our Web site. If we
are not able to  generate  revenues  from these  activities  or if the  revenues
generated do not exceed the operating  costs of our business,  then our business
will not be profitable and our business may fail.

ANTICIPATED LOSSES IN FUTURE PERIODS

We incurred a loss of $71,668 for our first fiscal period ending March 31, 1999.
We incurred a loss of $477,671  for the nine month  period  ending  December 31,
1999.  We expect that our  operating  expenses will increase as we implement our
business and marketing strategy due to the following factors:

o    We will  incur  substantial  marketing  expense in order to  advertise  and
     promote our Web site, to establish a customer base and to increase usage of
     our Web site.

o    We expect  that  increased  usage of our Web site  will  lead to  increased
     operating  expenses  and require  additional  capital  expenditures  on new
     computer equipment, software and technology.

o    We expect our operating expenses will continue to increase as we expand the
     technical capabilities of our Web site.

o    We expect our  operating  expenses  will  increase as we solicit  potential
     customers and complete  video  productions  for customers for broadcast via
     our Web site.

o    We expect our  operating  expenses  will  increase as we solicit  potential
     advertisers and attempt to enter into agreements for advertising on our Web
     site.

o    We expect our operating expenses will increase as we undertake to implement
     programs to monitor usage of our Web site and develop customer  profiles of
     Web site users.

If our operating  expenses  increase as anticipated,  we will realize losses for
the foreseeable future.

LOCAL NATURE OF OUR PRESENT OPERATIONS

We focused our operations  initially on public  companies  located in Vancouver,
British Columbia.  We are able to provide services to companies located in other
markets, but our ability to provide on-location productions has been constrained
by financial and manpower  limitations.  At present, we have produced only a few
events outside the Vancouver area. Our objective is to expand production of news
and information  throughout the United States and Canada,  as well as elsewhere.
This sort of expansion, however, is subject to available funding and our ability
to market our services in diverse areas.  There can be no assurance that we will
be successful in developing our business plan throughout these areas.


                                       17
<PAGE>



DEPENDENCE ON ADVERTISING REVENUE

We  intend to derive  the  principal  portion  of our  revenue  from the sale of
advertising on our Internet site,  and we intend that  advertising  revenue will
continue to be the principal source of our revenue in the foreseeable future.

Our  ability to generate  advertising  revenue  will depend on several  factors,
including:

     o    the continued development of the Internet as an advertising medium,

     o    the pricing of advertising on other Internet sites,

     o    the amount of traffic on our site,

     o    pricing pressures, delays and new product launches,

     o    our ability to achieve,  demonstrate  and maintain  user  demographics
          attractive to advertisers, and

     o    our ability to develop and retain a skilled advertising sales force.

Others  engaged  in  seeking  to  attract  users to their  Internet  sites  have
significantly  greater assets and substantially  larger advertising budgets than
we  have.  These  limitations  on our  advertising  budget  can be  expected  to
adversely affect our ability to attract users to our site.

We believe  Internet  advertising  typically  slows in the first  quarter of the
year.   Seasonality  and  cyclicality  in  the  level  of  Internet  advertising
expenditures  generally  could  become  more  pronounced  in the  future  as the
Internet becomes more accepted as an advertising vehicle.

MANAGEMENT OF GROWTH AND RELATIONSHIPS;  BRIEF TENURE OF MANAGEMENT;  DEPENDENCE
ON KEY PERSONNEL

In  developing  our business  plan,  we expect to be required to  establish  and
manage  multiple  relationships  with various  strategic  providers of services,
technology licensors, marketers and other third parties. To date, only a limited
number of such relationships have been established.  These requirements to enter
into these relationships will be exacerbated in the event of our material growth
or in the number of third  party  relationships,  and there can be no  assurance
that our  systems,  procedures  or  controls  will be  adequate  to enable us to
establish and enter into these relationships,  to support any substantial growth
in our operations or that our management will be able to implement or manage any
growth effectively.

To  effectively  manage  growth,  we  must  establish,   implement  and  improve
operational,  financial and management information systems and expand, train and
manage  our  employee  base.  Our   development  is  and  will  continue  to  be
substantially  dependent  on the  abilities  and  performance  of our  executive
officers  and  other  key  employees.  The  loss of the  services  of any of our
executive  officers or other key employees could have a material  adverse effect
on our prospects,  business development, and results of operations and financial
condition.  Competition for senior  management,  experienced sales and marketing
personnel,  qualified Web  engineers  and other  employees is and is expected to
continue to be intense.  There can be no assurance that we will be successful in
attracting and retaining such  personnel.  There can be no assurance that we may
not  experience  difficulty  from  time to  time in  hiring  and  retaining  the
personnel  necessary  to support  the


                                       18
<PAGE>



growth of our  business.  Our  failure  to  successfully  manage  our  personnel
requirements  would have a material  adverse effect on our business,  results of
operations and financial condition.

Our  performance  is  substantially  dependent  on the  continued  services  and
performance of our senior  management and other key personnel,  including  Brian
Kathler,  President and a Director,  Paul Watkins,  a Director,  Robert Gamon, a
Director, David Formosa, a Director, James King, a Director, and Cheryl Watkins,
Secretary and Treasurer.  Cheryl Watkins is the wife of Paul Watkins.  We do not
have long-term employment  agreements with any of our key personnel and maintain
no "key person" life insurance policies.  Our future success also depends on our
ability to identify,  attract,  retain and motivate highly  skilled,  technical,
managerial,  sales,  marketing and customer service  personnel.  Competition for
such persons is intense. We cannot assure you that we will be able to attract or
retain such personnel. The failure to do so could have a material adverse effect
on our business, financial condition and results of operations.

DEPENDENCE ON THIRD PARTIES FOR INTERNET TRAFFIC

We believe that traffic originating from links we intend to seek to establish on
other  Internet  sites  (particularly  search  engines,  directories  and  other
navigational  tools  managed  by  Internet  service  providers  and Web  browser
companies)  will be an important  segment of the overall traffic on our Internet
site. These linking  arrangements are expected to be either short-term contracts
and/or be able to be terminated with little notice. There is intense competition
for these  types of  linking  arrangements.  We  cannot  assure  you that  these
arrangements  will be able to be  created or that  advertising  or links will be
available on reasonable  commercial terms or at all. Likewise,  we cannot assure
you  that any such  relationships,  once  established,  will be  maintained  and
continued.  Our failure to  establish  and retain these links can be expected to
adversely affect our ability to attract persons to our site.

DEPENDENCE ON LICENSED TECHNOLOGY

We rely on certain  technology  licensed from third parties for use in operating
and managing  our  Internet  site and  providing  related  services to users and
advertisers.  We  cannot  assure  you  that  such  technology  licenses  will be
available at all, that they will be available on reasonable  commercial terms or
that they will operate as intended.


RISKS APPLICABLE TO INTERNET BUSINESS ACTIVITIES

UNPREDICTABILITY  OF  FUTURE  REVENUE;   POTENTIAL   FLUCTUATIONS  IN  QUARTERLY
OPERATING RESULTS

As a result of the evolving  nature of the  Internet  and our limited  operating
history, we cannot accurately  forecast our revenue.  Current and future expense
levels are based principally on anticipated  future revenues and, as we increase
the scope of our activities,  these expenses,  to a large extent,  will increase
and become fixed. Accordingly, we may be unable to adjust spending to compensate
for shortfalls in our anticipated  revenues.  If our revenues do not materialize
as  anticipated,  this could have an immediate  material  adverse  effect on our
business,  financial  condition and results of operations which could lead to an
investor's loss of his investment in our company.

Our quarterly operating results may fluctuate significantly because of a variety
of factors, many of which are outside our control, including:

o    overall usage levels of the Internet and of our sites in particular,


                                       19
<PAGE>



o    demand for Internet advertising and the loss of advertisers,

o    seasonal trends in Internet use and advertising,

o    the amount and timing of our capital expenditures,

o    costs relating to the expansion of our operations and the  introduction  of
     new sites and services and Channels,

o    price competition or pricing changes in Internet advertising, and

o    costs relating to technical difficulties or system downtime.

Quarterly  comparisons  of our results of  operations  are not  expected to be a
reliable indication of our future performance.

DEPENDENCE  ON GROWTH IN  INTERNET  USE AND  ACCEPTANCE  AS AN  ADVERTISING  AND
COMMERCE MEDIUM

Our future revenue will depend  largely on the widespread  acceptance and use of
the  Internet  as an  information  source  and as an  advertising  and  commerce
vehicle. Rapid growth in Internet use is a recent trend and market acceptance of
the Internet as an advertising and commercial  medium is highly  uncertain.  The
Internet may not be accepted as a viable  advertising  and  commerce  medium for
distribution  of  information  and engaging in commerce for a number of reasons,
including:

     o    inadequate development of the network infrastructure,

     o    inadequate development of enabling technologies,

     o    insufficient commercial support for Internet advertising,

     o    concerns about privacy and security among users, and

     o    lack of widely accepted  standards for measuring the  effectiveness of
          advertising on the Internet.

RAPID TECHNOLOGICAL CHANGE

The  market  for  Internet  products  and  services  is  characterized  by rapid
technological  developments,  frequent  new product  introductions  and evolving
industry standards.  We will be required to continually improve the performance,
features and reliability of our infrastructure  and Internet site,  particularly
in response to competition and changing customer  demands.  We cannot assure you
that we will be successful in responding rapidly, cost-effectively or adequately
to such developments.

COMPETITION

The business of broadcasting  news through the Internet is new, rapidly evolving
and  extremely  competitive.  We compete with a variety of other  companies  who
offer competing means of broadcasting  financial news and corporate  information
through  the  Internet,  substantially  all of


                                       20
<PAGE>



whom are larger and more well established than we are. We expect new competitors
to enter  into this  market  due to the  expansion  of use of the  Internet  and
changes in  technology  that will increase the ability of companies to use video
streaming  technology  on  the  Internet.   Substantially  all  of  our  current
competitors have significantly greater financial, technical, marketing and other
resources than we do. If we experience increased  competition in the business of
broadcasting news and video  productions on the Internet,  our ability to obtain
customers and achieve  revenues for our services  will be limited.  In addition,
the  potential  rates that we may be able to charge for  advertising  on our Web
site may decrease if the growth of the Internet and electronic  commerce  brings
increased competition.

Competition among Internet content providers,  including news  broadcasters,  is
intense and is expected to increase  significantly in the future. The market for
Internet  content  sites is  rapidly  evolving  and  barriers  to entry are low,
enabling  newcomers  to launch  competitive  sites at  relatively  low cost.  We
believe we compete most directly with Pseudo  Programs,  Inc.  However,  we also
generally  compete  for users and  advertisers  with a large  number of Internet
portals, search sites and content aggregators, general news sites (such as those
provided by CNN and ABC) and general  purpose online service  providers (such as
America Online and MSN). In addition,  we compete with traditional media content
businesses  such as newspapers,  magazines,  radio and  television.  In order to
compete successfully and attract users,  advertisers and strategic partners,  we
must  provide  high  quality,  engaging  content in a timely and  cost-effective
manner. We cannot assure you that we will be able to do so. Moreover,  increased
competition could result in price reductions,  reduced margins or loss of market
share,  any of which  could  have a  material  adverse  effect on our  business,
financial condition and results of operations.

NEW SERVICE RISKS

Our future success may depend in part on our ability to expand our Internet site
to include new subject  matters and services  and other  Internet  sites.  Costs
related to  developing  new content  areas and services are expensed as they are
incurred while revenue related to these new content areas and services typically
builds over time and,  accordingly,  our profitability  from year to year may be
adversely  affected by the number and timing of new  launches.  In addition,  we
cannot  assure you that any new areas or services  will be developed in a timely
or cost-effective manner or that they will be successful.

RISKS ASSOCIATED WITH BRAND DEVELOPMENT

We believe  brand  identity is important to  attracting  and  expanding our user
base,  Internet traffic and advertising and commerce  relationships.  We believe
the  significance of brand and name  recognition will intensify as the number of
Internet sites increases.  We cannot assure you that we will be able to continue
to develop our brand.

RISK OF CAPACITY CONSTRAINTS AND SYSTEM DISRUPTIONS

The performance and reliability of our Internet site and network  infrastructure
are  critical  to our  reputation  and  ability  to attract  and  retain  users,
advertisers and strategic partners. Any system error or failure, or a sudden and
significant  increase in traffic,  may result in the  unavailability of our site
and  significantly  delay  response  times.  Individual,  sustained  or repeated
occurrences  could result in a loss of potential or existing users,  advertisers
or strategic partners. In addition,  because our advertising revenue is expected
to directly relate to the number of advertisements  we deliver to users,  system
interruptions  or delays would reduce the number of  impressions  delivered  and
thereby reduce our revenue.


                                       21
<PAGE>



Our systems and operations are vulnerable to  interruption or malfunction due to
certain   events   beyond   our   control,    including    natural    disasters,
telecommunications  failures and computer hacking.  We also rely on Web browsers
and online service  providers to provide Internet access to our sites. We cannot
assure you that we will be able to expand  our  network  infrastructure,  either
internally or through use of third-party  hosting systems or service  providers,
on a timely basis  sufficient to meet demand.  We presently  have only a limited
amount of redundant  facilities or systems, no formal disaster recovery plan and
no sufficient business interruption  insurance to compensate for losses that may
occur.  Any  interruption  to our  systems or  operations  could have a material
adverse effect on our business, financial condition and results of operations.

Substantially  all of our  communications  hardware  and  computer  hardware  is
located at a leased facility in Burnaby,  British Columbia,  Canada. Our systems
are  vulnerable  to  damage  from   earthquake,   fire,   floods,   power  loss,
telecommunications  failures,  break-ins and similar events. We do not presently
have fully  redundant  systems and have not yet completed  implementing a formal
disaster recovery plan. Despite our implementation of network security measures,
our servers are also  vulnerable  to computer  viruses,  physical or  electronic
break-ins,  attempts by third parties deliberately to exceed the capacity of our
systems and similar disruptive problems. If our computer systems fail to operate
for any of these  reasons,  then we will not be able to operate  our Web site or
achieve revenues from customers and advertisers and our business will be harmed.

SECURITY RISKS

Our system may be vulnerable to unauthorized access,  computer viruses and other
security problems. A user who circumvents security measures could misappropriate
proprietary   information  or  cause   interruptions   or  malfunctions  in  our
operations.  We may be  required  to expend  significant  resources  to  protect
against the threat of such security breaches or to alleviate  problems caused by
such  breaches.  Although we intend to continue to  implement  industry-standard
security measures, such measures may be inadequate.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES

We are not  currently  subject to direct  regulation by any  government  agency,
other than regulations  applicable to businesses generally.  There are currently
few laws or  regulations  directly  applicable  to access to or  commerce on the
Internet.  However, due to the increasing  popularity and use of the Internet, a
number of legislative and regulatory  proposals are under  consideration by U.S.
and  Canadian  federal,  state,  provincial,   local  and  foreign  governmental
organizations.  It is  possible  that a  number  of laws or  regulations  may be
adopted with respect to the  Internet  relating to such issues as user  privacy,
user  screening to prevent  inappropriate  uses of the Internet by, for example,
minors  or  convicted  criminals,  taxation,   infringement,   pricing,  content
regulation, quality of products and services and intellectual property ownership
and infringement.  The adoption of any such laws or regulations may decrease the
growth in the use of the Internet, which could, in turn, decrease the demand for
our community, increase our cost of doing business, or otherwise have a material
adverse effect on our business, results of operations and financial condition.

Moreover,  the  applicability  to the Internet of existing laws governing issues
such as property ownership, copyright, trademark, trade secret, obscenity, libel
and  personal  privacy is  uncertain  and  developing.  Any new  legislation  or
regulation,  or application  or  interpretation  of existing laws,  could have a
material  adverse  effect on our business,  results of operations  and financial
condition. There can be no assurance that any legislation will not be enacted in
the future that could expose us to substantial liability. Legislation could also
dampen the growth in the use of the Web generally and decrease the acceptance of
the Web as a communications and commercial  medium.  The result could,  thereby,
have a  material  adverse  effect on our  business,  results of  operations  and
financial condition.


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<PAGE>



It is also possible that our use of "cookies" to track  demographic  information
and user  preferences  and to target  advertising  may  become  subject  to laws
limiting or prohibiting their use. A "cookie" is a bit of information keyed to a
specific server,  file pathway or directory  location that is stored on a user's
hard drive,  possibly without the user's knowledge.  A user is generally able to
remove  cookies.  Germany,  for example,  has imposed  laws  limiting the use of
cookies,  and a number of  Internet  commentators,  advocates  and  governmental
bodies in the United States and other  countries  have urged the passage of laws
limiting or abolishing the use of cookies.  Limitations on or elimination of our
use of cookies  could limit our  effectiveness  in targeting of  advertisements,
which  could  have a  material  adverse  effect  on  our  business,  results  of
operations and financial condition.

In addition,  a number of  legislative  proposals have been made at the U.S. and
Canadian federal, state, provincial and local level that would impose additional
taxes  on the  sale  of  goods  and  services  over  the  Internet  and  certain
jurisdictions have taken measures to tax Internet-related  activities.  The U.S.
Congress  enacted the Internet Tax Freedom Act on October 21, 1998 which imposes
a national  moratorium in the United States on state and local taxes on Internet
access  services,  on-line  services,  and multiple or  discriminatory  taxes on
electric  commerce  effective  October 1, 1998 and ending  three years after its
enactment.  There can be no assurance that, once such moratorium is lifted, some
type of U.S. federal and/or state taxes will be imposed upon Internet  commerce,
and there  can be no  assurance  that  such  legislation  or other  attempts  at
regulating  commerce over the Internet will not substantially  impair the growth
of commerce on the Internet and as a result, our opportunity to derive financial
benefit from these activities may be adversely affected.

In addition to the foregoing  areas of recent  legislative  activities,  several
telecommunications  carriers are  currently  seeking to have  telecommunications
over the Web regulated by the U.S. Federal Communications Commission (the "FCC")
in the same manner as other  telecommunications  services. In addition,  because
the  growing   popularity  and  use  of  the  Web  have  burdened  the  existing
telecommunications infrastructure and many areas with high Web use have begun to
experience  interruptions  in  phone  service,  local  telephone  carriers  have
petitioned  the FCC to  regulate  ISPs  and  OSPs in a  manner  similar  to long
distance  telephone  carriers and to impose access fees on the ISPs and OSPs. If
either of these petitions is granted, or the relief sought is otherwise granted,
the costs of communicating on the Web could increase substantially,  potentially
slowing growth in use of the Web. This could,  in turn,  decrease demand for our
services or increase our cost of doing business.

Due to  the  global  nature  of the  Web,  it is  possible  that,  although  our
transmissions over the Internet originate primarily in British Columbia, Canada,
the  governments  of various  states in the United States and foreign  countries
might attempt to regulate our  transmissions  or prosecute us for  violations of
their laws.  There can be no assurance that violations of local laws will not be
alleged  or  charged  by  state  or  foreign  governments,  that  we  might  not
unintentionally violate such laws or that such laws will not be modified, or new
laws  enacted,  in the future.  Any of the foregoing  developments  could have a
material  adverse  effect on our business,  results of operations  and financial
condition.

In addition, as our services are available over the Internet in multiple foreign
countries,  provinces,  states and other  jurisdictions,  such jurisdictions may
claim that we are required to qualify to do business as a foreign corporation in
each of those  jurisdictions.  We are  qualified to do business  only in British
Columbia,  and our failure to qualify as a foreign corporation in a jurisdiction
where we are required to do so could subject us to taxes and penalties and could
result in our inability to enforce contracts in such jurisdictions. Any such new
legislation  or  regulation,  the  application  of  laws  and  regulations  from
jurisdictions  whose  laws  do  not  currently  apply  to our  business,  or the


                                       23
<PAGE>



application  of existing laws and  regulations  to the Internet and other online
services  could  have a  material  adverse  effect on our  business,  results of
operations and financial condition.

LIABILITY FOR INFORMATION RETRIEVED FROM THE WEB; ABSENCE OF LIABILITY INSURANCE

Because  materials may be  downloaded by users of our Web site and  subsequently
distributed to others,  there is a potential that claims will be made against us
for defamation, negligence, copyright or trademark infringement, personal injury
or other theories based on the nature, content,  publication and distribution of
these materials,  including financial and other information  disseminated by use
of our Web site by the small-cap public  companies that are our customers.  Such
claims have been brought, and sometimes  successfully pressed,  against OSPs for
example,  in the past. We have received  inquiries  from time to time from third
parties regarding such matters,  all of which have been resolved to date without
any payments or other material adverse effect on us.

In addition,  the increased  attention focused upon liability issues as a result
of these lawsuits and  legislative  proposals could impact the overall growth of
Internet use. We could also be exposed to liability with respect to the offering
of third party content that may be  accessible  through our Web site, or through
content and materials  that may be posted by Members on their personal Web sites
or chat rooms, or on-line  discussions offered by us. Such claims might include,
among others,  that by directly or indirectly  hosting the personal Web sites of
third parties, we are liable for copyright or trademark  infringement,  or other
wrongful actions by such third parties through such Web sites.

It is also possible that if any third party content information  provided on our
web site contains errors,  third parties could make claims against us for losses
incurred in reliance on such information. Even to the extent that such claims do
not result in liability to us, we could incur significant costs in investigating
and defending against such claims.  The imposition on us of potential  liability
for information carried on or disseminated  through our systems could require us
to  implement  measures  to reduce our  exposure  to such  liability,  which may
require the expenditure of substantial resources and limit the attractiveness of
our services to Members and visitors.

Currently,  we do not carry general liability  insurance  intended to protect us
from  any  liability  arising  out of the  foregoing.  In  any  event,  however,
insurance may not cover all potential  claims to which we are exposed or may not
be  adequate  to  indemnify  us for  all  liability  that  may be  imposed.  Any
imposition of liability  that is not covered by insurance or is in excess of our
insurance coverage would have a material adverse effect on our business, results
of operations  and financial  condition.  In addition,  the increased  attention
focused upon  liability  issues as a result of these  lawsuits  and  legislative
proposals could impact the overall growth of Internet use.

RELIANCE ON INTELLECTUAL PROPERTY RIGHTS

To  establish  and protect our  trademark,  service  mark and other  proprietary
rights in its products and services, we rely on a combination of:

     o    copyright,  unfair  competition,  trademark,  service  mark and  trade
          secret laws and

     o    confidentiality  agreements with our licensees and other third parties
          and confidentiality agreements and policies covering its employees.

We cannot assure you that these measures will be adequate,  that we will be able
to secure  registrations for all of our marks in the U.S. or  internationally or
that third  parties will not infringe  upon or  misappropriate  our  proprietary
rights.  Any  infringement  or  misappropriation,   or  litigation


                                       24
<PAGE>



relating to intellectual  property rights, may have a material adverse effect on
our business, financial condition and results of operations.

We have  applied to the United  States  Trademark  office  for  registration  of
"ViaVid" as a trademark in the United States. We have also applied to the Canada
Patent and  Trademark  Office for  registration  of "ViaVid"  as a trademark  in
Canada.  No  trademark  has been issued to us for  "ViaVid" in either the United
States or Canada.  We are not aware of any other  companies  currently using the
name  "ViaVid".  We have conducted  searches of trademark  databases in both the
United  States  and  Canada  and have not  found  any  registration  of the name
"ViaVid" as a  trademark.  There is no  assurance  that we will be able obtain a
trademark  for the  "ViaVid"  name,  or that once  obtained  it will stand up to
objections by others who have made prior use of the name.  Also, there can be no
assurance  that we will obtain any  significant  commercial  advantage from this
trademark if granted or that we will have the financial resources to protect our
rights in the name through legal  proceedings or otherwise.  It is also possible
that our  competitors  or others will adopt  product or service names similar to
"ViaVid" or other similar  service  marks or  trademarks,  thereby  impeding our
ability to build brand identity and possibly leading to customer confusion.  Our
inability to protect the name "ViaVid"  adequately could have a material adverse
effect on our business, results of operations and financial condition.

Legal standards relating to the validity, enforceability and scope of protection
of certain  proprietary  rights in  Internet-related  business are uncertain and
evolving. In particular,  new registration and ownership priority procedures may
be adopted which may make it more difficult for us to retain or obtain desirable
domain names.

CONTROL BY PRINCIPAL STOCKHOLDERS AND POTENTIAL CONFLICTS OF INTEREST

Our officers and Directors own  approximately  79% of our outstanding  shares of
Common  Stock.  As a result,  such  persons  could  elect all the members of our
Board.  Such persons could also control those actions  requiring the approval of
the  holders of a majority  of our voting  stock,  including  amendments  to our
Articles  of  Incorporation   and  any  business   combinations.   Such  persons
concentration of ownership could prevent a change in control of our company that
might otherwise be beneficial to stockholders.

DIFFICULTIES IN CREATING AWARENESS OF OUR WEB SITE

We believe  that  development  and  awareness of our Web site is critical to our
success in attracting  consumers  and  advertisers.  The  importance of customer
awareness will increase as low barriers to entry encourage the  proliferation of
Web sites. We intend to increase our marketing and advertising spending in order
to attract  and  retain  users and  advertisers,  and to  promote  and  maintain
awareness  of our Web  site in  response  to  competitive  pressures.  If we are
unsuccessful in building strong recognition of our Web site and if our marketing
efforts are not  successful,  we will not be successful in attracting  customers
for our Web site and earning revenues from our Web site with the result that our
business will be harmed.

The success of our business will depend on acceptance of our business  format by
customers of the video production and Internet  broadcast service that we offer.
There is no assurance that potential customers will accept the format of our Web
site.  Potential  customers  have a  variety  of  competing  means  for which to
disseminate  corporate  information  and news, both via the Internet and through
traditional  commercial means. If we are not successful in creating an awareness
of our Web  site  and  attracting  users  to our Web  site,  then we will not be
successful in achieving revenues and our business will be harmed.


                                       25
<PAGE>



EXPENSE OF TECHNOLOGICAL DEVELOPMENTS AND EQUIPMENT UPGRADES

The  market  for  Internet  products  and  services  is  characterized  by rapid
technological developments, evolving industry standards and consumer demands. It
is possible that the  introduction  of new technology  could render our existing
Web site technology and the services we offer  obsolete.  We anticipate that the
introduction of new technology will require us to continually upgrade and change
our Web site technology in order to maintain our competitive  position and offer
competitive  services.  We anticipate that the  incorporation  of new technology
into our Web site will result in us incurring increased  operating expenses.  If
we are  required to incur these  expenses  and  increased  revenues do not match
these  expenses,  our  business  will be harmed.  If we do not  incorporate  new
technology into our Web site operations,  then our competitive  position and our
ability to attract customers and advertisers may be harmed.

RISKS APPLICABLE TO THE MARKET FOR OUR COMMON STOCK

NO ACTIVE PRIOR PUBLIC  MARKET FOR COMMON  STOCK;  POSSIBLE  VOLATILITY OF STOCK
PRICE

Prior to  January  4,  2000,  there was no active  public  market for our Common
Stock.  Since then, our Common Stock has been quoted on the OTC Bulletin  Board.
There can be no  assurance  that an active  trading  market for our Common Stock
will be  sustained or that the market price of our Common Stock will not decline
based upon market or other conditions. The market price may bear no relationship
to our revenues,  earnings, assets or potential and may not be indicative of our
future business performance.  The trading price of our Common Stock has been and
can be expected to be subject to wide  fluctuations in response to variations in
our quarterly results of operations,  the gain or loss of significant  strategic
relationships,  unanticipated delays in our development, changes in estimates by
analysts,  announcements of technological  innovations or new solutions by us or
our competitors,  general  conditions in the technology and Internet sectors and
in Internet-related industries, other matters discussed elsewhere in this report
and other events or factors, many of which are beyond our control.

In addition, the stock market in general and the technology and Internet sectors
in particular have experienced  extreme price and volume fluctuations which have
affected the market price for many companies in industries similar or related to
us  and  which  have  been  unrelated  to the  operating  performance  of  these
companies. These market fluctuations, as well as general economic, political and
market conditions, may have a material adverse effect on the market price of our
Common Stock.

In the past,  following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted against
such companies. Such litigation, if instituted,  and irrespective of the outcome
of such  litigation,  could  result  in  substantial  costs and a  diversion  of
management's  attention and resources and have a material  adverse effect on our
business, results of operations and financial condition.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of  significant  amounts of our Common  Stock in the public  market or the
perception  that such sales will or could occur could  materially  and adversely
affect the  market  price of our  Common  Stock or our  future  ability to raise
capital through an offering of our equity securities.  We had, as of January 26,
2000,  6,546,000 shares of common stock outstanding.  Of such shares,  5,120,000
shares were held by officers and Directors of the Company.  The 5,120,000 shares
held by officers and directors, together with an additional 1,017,000 shares, or
an aggregate of 6,137,000  shares,  are "restricted  securities" as such term is
defined in Rule 144 under the Securities Act. Restricted


                                       26
<PAGE>



securities  may be sold in the  public  market  only  if  registered  or if they
qualify  for an  exemption  from  registration  under  Rules 144,  144(k) or 701
promulgated under the Securities Act. Approximately 409,000 shares of our Common
Stock are freely transferable under U.S. Federal securities laws.

In addition, a Registration Statement on Form SB-2 was filed on February 3, 2000
to enable  the public  offer and sale of  1,017,000  shares  sold in 1999 in the
private sale of our securities.  These shares are included among the "restricted
securities"  described  above.  The sale of these shares or the perception  that
such sales will or could occur could  materially and adversely affect the market
price for our Common Stock.

On January 27, 2000,  Kathler  Holdings Inc.,  Paul Watkins,  Cheryl Watkins and
549419 BC Ltd., our principal shareholders, notified us that they sold or intend
to sell an  aggregate of 195,000  shares of Common  Stock  pursuant to Rule 144.
Subsequent to the sale of those shares,  the shares become freely  transferrable
under U.S.  Federal  securities laws. The sale of these shares or the perception
that such sales will or could occur could  materially  and adversely  affect the
market price for our common stock.

We have filed a Form S-8  registration  statement  under the  Securities  Act to
register all shares of Common Stock issuable pursuant to outstanding options and
all shares of Common Stock  reserved  for  issuance  under our 1999 Stock Option
Plan. Such  registration  statement became effective  immediately upon filing in
December 1999 and the shares  issuable on exercise of options  granted under the
1999 Stock Option Plan are covered by that  registration  statement.  The shares
issuable  on exercise of the options  granted  under the Plan are  eligible  for
sale,  subject to Rule 144 limitations  applicable to affiliates.  As of January
26,  2000,  we have  options  outstanding  under the 1999 Stock  Option  Plan to
purchase  300,000  shares at a price of $1.00 per share and 407,000  shares at a
price of $3.50 per share. An aggregate of 125,000 shares were issued on exercise
of options granted under the 1999 Stock Option Plan on January 5 and 6, 2000 and
are included in the shares described above that are freely  transferrable  under
U.S. Federal securities laws. In addition, there are 243,000 shares reserved for
the future grant of options  under the Plan.  We intend to attract  employees to
work for us through the grant of options to purchase these shares. These options
granted to attract additional  employees may be immediately  exercisable and the
shares freely  transferrable.  The sale of these shares or the  preception  that
such  shares will be sold could have an adverse  effect on the market  price for
our Common Stock.


                           PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

There are no legal proceedings pending or threatened against the Corporation.

Item 2.   Changes in Securities and Use of Proceeds

The  Registrant  completed the issue of 497,000  common shares to a total of six
(6)  purchasers  pursuant to  Regulation S during the period from May 15 through
October 7, 1999. Each purchaser represented to the Registrant that the purchaser
was a "Non-U.S.  Person".  The Registrant did not engage in distribution of this
offering in the United States.  Each purchaser  represented  their  intention to
acquire  the  securities  for  investment  only  and not  with a view  to  their
distribution.  The Registrant made a  determination  that each of the purchasers
was a  sophisticated  purchaser.  Appropriate  legends were affixed to the stock
certificates issued in accordance with Regulation S. All purchasers had adequate
access to  sufficient  information  about  the  Registrant  to make an  informed
investment decision. None of the securities were sold through an underwriter and
accordingly, there were no underwriting discounts or commissions involved.


                                       27
<PAGE>



The  Registrant  completed the issue of 35,000 common shares to a total of three
(3)  purchasers  pursuant to  Regulation  D of the Act on  November 8, 1999.  An
additional  5,000 shares were issued to one purchaser on December 1, 1999.  Each
purchaser  represented to the  Registrant  that the purchaser was an "accredited
investor".  Each purchaser represented their intention to acquire the securities
for  investment  only  and not with a view to  their  distribution.  Appropriate
legends  were  affixed  to the  stock  certificates  issued in  accordance  with
Regulation D. All purchasers had adequate access to sufficient information about
the Registrant to make an informed investment  decision.  None of the securities
were sold through an underwriter  and  accordingly,  there were no  underwriting
discounts or commissions involved.

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

               Exhibit Number      Description

               27.1                Financial Data Schedule

          (b)  Reports on Form 8-K

               The  Registrant  did not file  any  current  reports  on Form 8-K
               during the quarter ended December 31, 1999.


                                   SIGNATURES

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

Date:    January 28, 2000                   By: /s/ Brian Kathler
                                                -------------------------------
                                                President
                                                (Principal Executive Officer and
                                                Principal Accounting Officer)




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