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 JUNE 30, 2000

[ ] 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                            August 16, 2000
                           ---------------                  ------------------
                           Common Stock                      6,907,000 shares

                                       1
<PAGE>

                         PART 1 B FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

GENERAL

The Company's  unaudited  financial  statements for the three months ending June
30, 2000 are included with this Form 10-QSB. The unaudited financial  statements
for the three months ending June 30, 2000 include:

         (a)      Consolidated  Balance  Sheet as of June 30, 2000 and March 31,
                  2000;

         (b)      Consolidated   Statement  of  Operations  -  Cumulative   from
                  Incorporation  to June 30,  2000,  Three months ended June 30,
                  2000 and June 30, 1999;

         (c)      Consolidated  Statement of Shareholders' Equity for the period
                  ending June 30, 2000;

         (d)      Consolidated   Statement  of  Cash  Flows  -  Cumulative  from
                  Incorporation  to June 30,  2000,  Three months ended June 30,
                  2000 and June 30, 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 three months ended
June 30, 2000 are not necessarily indicative of the results that can be expected
for the year ending March 31, 2001.

                              FINANCIAL STATEMENTS

                                       2
<PAGE>














                            VIAVID BROADCASTING INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        CONSOLIDATED FINANCIAL STATEMENTS
                      (EXPRESSED IN UNITED STATES DOLLARS)
                                   (UNAUDITED)

                                  JUNE 30, 2000

                                       3
<PAGE>


VIAVID BROADCASTING INC.

(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
==============================================================================================================

                                                                                     June 30,       March 31,
                                                                                         2000            2000
--------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>            <C>

ASSETS

CURRENT
    Cash                                                                        $      97,960  $      134,540
    Accounts receivable                                                                 9,601           6,164
    Prepaid                                                                            10,391          13,045
                                                                                -------------  --------------

                                                                                      117,952         153,749

CAPITAL ASSETS (Note 5)                                                               175,295         183,740
                                                                                -------------  --------------

                                                                                $     293,247  $      337,489
==============================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT
    Accounts payable and accrued liabilities                                    $      26,707  $       31,794
    Due to related parties                                                             10,830          17,780
                                                                                -------------  --------------

                                                                                       37,537          49,574
                                                                                -------------  --------------
SHAREHOLDERS' EQUITY
    Capital stock (Note 6)
       Authorized
              25,000,000  common shares with a par value of $0.001 per share
       Issued
               6,832,000  common shares (6,652,000 at March 31, 2000)                   6,832           6,652
    Additional paid-in capital                                                      1,555,184       1,358,077
    Deficit accumulated during the development stage                               (1,306,306)     (1,076,814)
                                                                                -------------  --------------

                                                                                      255,710         287,915
                                                                                -------------  --------------

                                                                                $     293,247  $      337,489
==============================================================================================================
NATURE OF OPERATIONS (Note 1)

</TABLE>
              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)
<TABLE>
=================================================================================================
                                                    Cumulative
                                                          From      Three Month      Three Month
                                                 Incorporation     Period Ended     Period Ended
                                                   to June 30,         June 30,         June 30,
                                                          2000             2000             1999
-------------------------------------------------------------------------------------------------
<S>                                             <C>              <C>              <C>
REVENUE

    Broadcast and web income                    $       52,769  $         4,689  $         5,768
    Interest income                                      7,911            2,407               -
                                                --------------  ---------------  --------------

                                                        60,680            7,096            5,768
                                                --------------  ---------------  ---------------


EXPENSES
    Amortization                                        51,516           11,967            4,094
    Consulting                                         388,414           81,986           39,917
    Equipment rental                                     8,680              916               -
    Foreign exchange                                    11,698            7,676               -
    Internet, website and graphics                      68,879           15,713           16,632
    Office and miscellaneous                            79,668           16,864           13,098
    Professional fees                                  124,893           11,241           11,986
    Rent                                                66,812           11,506            8,510
    Salary and benefits                                149,014           46,250            8,800
    Stock based compensation                           354,916           17,287               -
    Travel and entertainment                            62,496           15,182            3,474
                                                --------------  ---------------  ---------------

                                                     1,366,986          236,588          106,511
                                                --------------  ---------------  ---------------

LOSS FOR THE PERIOD                             $   (1,306,306) $      (229,492) $      (100,743)
=================================================================================================
BASIC LOSS PER SHARE                                            $        (0.03)  $        (0.02)
=================================================================================================
WEIGHTED AVERAGE SHARES OUTSTANDING                                   6,772,000        5,884,000
=================================================================================================
</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)
<TABLE>
==============================================================================================================================

                                                                                                      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 4)               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

Shares issued for cash                                 768,000            768         782,232              -          783,000

Stock-based compensation for options

Loss for the year                                           -              -               -       (1,005,146)     (1,005,146)
                                                --------------  -------------  --------------  --------------  --------------

Balance at March 31, 2000                            6,652,000          6,652       1,358,077      (1,076,814)        287,915

Stock-based compensation for options

Issued shares for cash at $1.00 per share              180,000            180         179,820              -          180,000

Loss for the period                                         -              -               -         (229,492)       (229,492)
                                                --------------  -------------  --------------  --------------  --------------

Balance at June 30, 2000                             6,832,000  $       6,832  $    1,555,184  $   (1,306,306) $      255,710
==============================================================================================================================
</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)
<TABLE>
==============================================================================================================================
                                                                                 Cumulative
                                                                                       From      Three Month      Three Month
                                                                              Incorporation     Period Ended     Period Ended
                                                                                to June 30,         June 30,         June 30,
                                                                                       2000             2000             1999
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>             <C>               <C>

CASH FLOWS FROM OPERATING ACTIVITIES
    Loss for the period                                                      $   (1,306,306) $      (229,492) $      (100,743)
    Items not affecting cash:
       Amortization                                                                  51,516           11,967            4,094
       Stock based compensation                                                     354,916           17,287             -

    Changes in non-cash working capital items:
       Increase in accounts receivable                                               (9,601)          (3,437)          (4,531)
       Increase (decrease) in accounts payable                                       26,707           (5,087)           1,562
       (Increase) decrease in prepaid                                               (10,391)           2,654               -
                                                                             --------------  ---------------  --------------

    Net cash used in operating activities                                          (893,159)        (206,108)         (99,618)
                                                                             --------------  ---------------  ---------------


CASH FLOWS FROM INVESTING ACTIVITIES
    Acquisition of capital assets                                                  (221,376)          (3,522)         (81,795)
    Acquisition of subsidiary                                                          (335)              -                -
                                                                             --------------  ---------------  --------------

    Net cash used in investing activities                                          (221,711)          (3,522)         (81,795)
                                                                             --------------  ---------------  ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from common shares                                                   1,202,000          180,000          100,000
    Loans from related parties                                                       10,830           (6,950)              -
                                                                             --------------  ---------------  --------------

    Net cash provided by financing activities                                     1,212,830          173,050          100,000
                                                                             --------------  ---------------  ---------------

CHANGE IN CASH FOR THE PERIOD                                                        97,960          (36,580)         (81,413)

CASH, BEGINNING OF PERIOD                                                                -           134,540          163,406
                                                                             --------------  ---------------  ---------------

CASH, END OF PERIOD                                                          $       97,960  $        97,960  $        81,993
==============================================================================================================================
</TABLE>

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 10)


              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)
JUNE 30, 2000

1.       NATURE 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.

2.       GOING CONCERN

         As at  June  30,  2000,  the  Company  has an  accumulated  deficit  of
         $1,306,306.  The  Company's  ability to continue as a going  concern is
         dependent on continued  financial support in the form of loans from its
         shareholders and other related  parties,  the ability of the Company to
         raise equity  financing,  and the attainment of profitable  operations.
         Management is of the opinion that  sufficient  working  capital will be
         obtained  from external  financing and further share  issuances to meet
         the Company's liabilities as they become due.

         These consolidated  financial  statements have been prepared on a going
         concern basis,  which assumes the realization of assets and liquidation
         of  liabilities  in the normal course of business.  They do not include
         any adjustments to the  recoverability  and  classification of recorded
         asset  amounts  and  liabilities  that  might be  necessary  should the
         Company be unable to continue as a going concern.

3.       SIGNIFICANT ACCOUNTING POLICIES

         In preparing these consolidated financial statements in conformity with
         generally accepted  accounting  principles,  management was required to
         make  estimates  and  assumptions  that affect the reported  amounts of
         assets  and  liabilities  and  disclosure  of  contingent   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.

         REPORTING ON COSTS OF START-UP ACTIVITIES

         In April 1998, the American Institute of Certified Public  Accountant's
         issued  Statement of Position 98-5  "Reporting on the Costs of Start-Up
         Activities"  ("SOP  98-5")  which  provides  guidance on the  financial
         reporting of start-up costs and  organization  costs. It requires costs
         of  start-up  activities  and  organization  costs  to be  expensed  as
         incurred.  SOP 98-5 is  effective  for  fiscal  years  beginning  after
         December  15, 1998 with  initial  adoption  reported as the  cumulative
         effect of a change in  accounting  principle.  The Company  adopted SOP
         98-5 during the last period.

                                       8
<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000

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

         CAPITAL ASSETS

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

             Computer equipment                             30%
             Office furniture                               20%
             Telephone and video equipment                  20%

         FINANCIAL INSTRUMENTS

         The  Company's   financial   instruments   consist  of  cash,  accounts
         receivable, accounts payable and accrued liabilities 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 of a project has
         been completed.

         FOREIGN CURRENCY TRANSLATION

         The Company accounts for foreign currency  transactions and translation
         of foreign currency  financial  statements under Statement of Financial
         Accounting  Standards No. 52,  "Foreign  Currency  Translation"  ("SFAS
         52").   Transaction  amounts  denominated  in  foreign  currencies  are
         translated at exchange rates prevailing at transaction dates.  Carrying
         values of monetary  assets and liabilities are adjusted at each balance
         sheet  date to reflect  the  exchange  rate at that date.  Non-monetary
         assets and  liabilities  are  translated  at the  exchange  rate on the
         original transaction date. Gains and losses from restatement of foreign
         currency monetary and non-monetary  assets and liabilities are included
         in  income.  Revenues  and  expenses  are  translated  at the  rates of
         exchange prevailing on the dates such items are recognized in earnings.

         SEGMENTED INFORMATION

         In June 1997, the Financial  Accounting Standards Board ("FASB") issued
         SFAS No. 131,  "Disclosures About Segments of an Enterprise and Related
         Information."  SFAS No.  131  establishes  standards  for the manner in
         which public companies report  information about operating  segments in
         annual and interim financial statements. The statement is effective for
         fiscal years beginning after December 15, 1997.

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

         LOSS PER SHARE

         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement of Financial  Accounting  Standards  No. 128,  "Earnings  Per
         Share" ("SFAS  128").  Under SFAS 128,  basic and diluted  earnings per
         share are to be  presented.  Basic  earnings  per share is  computed by
         dividing  income  available  to  common  shareholders  by the  weighted
         average  number  of common  shares  outstanding  in the  year.  Diluted
         earnings per share takes into  consideration  common shares outstanding
         (computed  under basic  earnings  per share) and  potentially  dilutive
         common shares.
                                       9
<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000

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

         INCOME TAXES

         Income taxes are  provided in  accordance  with  Statement of Financial
         Accounting Standards No. 109, "Accounting for Income Taxes". A deferred
         tax  asset or  liability  is  recorded  for all  temporary  differences
         between   financial  and  tax   reporting   and  net   operating   loss
         carryforwards.  Deferred  tax expenses  (benefit)  results from the net
         change during the year of deferred tax assets and liabilities.

         Deferred tax assets are reduced by a valuation  allowance  when, in the
         opinion of management,  it is more likely than not that some portion or
         all of the  deferred  tax assets  will not be  realized.  Deferred  tax
         assets and  liabilities  are adjusted for the effects of changes in tax
         laws and rates on the date of enactment.

         STOCK-BASED COMPENSATION

         Statement of Financial  Accounting  Standards No. 123,  "Accounting for
         Stock-Based  Compensation," encourages, but does not require, companies
         to record compensation cost for stock-based employee compensation plans
         at fair  value.  The  Company  has  chosen to account  for  stock-based
         compensation   using  Accounting   Principles  Board  Opinion  No.  25,
         "Accounting  for Stock Issued to Employees."  Accordingly  compensation
         cost for stock options is measured as the excess, if any, of the quoted
         market price of the  Company's  stock at the date of the grant over the
         amount an employee is required to pay for the stock.

         ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

         In June 1998, the Financial Accounting Standards Board issued Statement
         of Financial  Accounting  Standards No. 133  "Accounting for Derivative
         Instruments  and Hedging  Activities"  ("SFAS  133") which  establishes
         accounting and reporting  standards for derivative  instruments and for
         hedging  activities.  SFAS 133 is effective for all fiscal  quarters of
         fiscal  years  beginning  after June 15, 1999.  In June 1999,  the FASB
         issued  SFAS  137 to defer  the  effective  date of SFAS 133 to  fiscal
         quarters of fiscal years  beginning  after June 15,  2000.  The Company
         does not  anticipate  that the  adoption of the  statement  will have a
         significant impact on its financial statements.

         COMPREHENSIVE INCOME

         In June 1997,  the FASB issued SFAS No. 130,  "Reporting  Comprehensive
         Income".  SFAS No. 130  establishes  standards  for the  reporting  and
         display of comprehensive income and its components (revenue,  expenses,
         gains and losses). The purpose of reporting  comprehensive income is to
         present a measure of all  changes in  stockholders'  equity that result
         from  recognized  transactions  and other economic  events of the year,
         other than transactions  with owners in their capacity as owners.  SFAS
         No. 130 is  effective  for  financial  statements  issued  for  periods
         beginning  after  December  15,  1997.  The adoption of SFAS 130 had no
         impact on total stockholders' equity during the current period.

4.       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.

                                       10

<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000

4.       ACQUISITION OF VIAVID BROADCASTING CORP. (cont'd.....)

         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
         $335.

5.       CAPITAL ASSETS

<TABLE>
==============================================================================================
                                                                        Net Book Value
                                                                ------------------------------
                                                    Accumulated       June 30,       March 31,
                                           Cost    Amortization           2000            2000
----------------------------------------------------------------------------------------------
<S>                             <C>             <C>             <C>            <C>
Computer equipment              $      132,737  $       31,990  $      100,747 $      106,508
Office furniture                        11,104           2,507           8,597          8,675
Telephone and video equipment           77,535          11,584          65,951         68,557
                                --------------  --------------  -------------- --------------

                                $      221,376  $       46,081  $      175,295 $      183,740
==============================================================================================
</TABLE>

6.       CAPITAL STOCK

         The  Company  issued  shares  of  common  stock  for  the  period  from
         incorporation on January 20, 1999 to March 31, 1999 as follows:

             In January  1999,  in  connection  with the  acquisition  of ViaVid
             Broadcasting  Corp.,  the Company issued 5,100,000 shares of common
             stock under Regulation D, subject to Rule 144 of the Securities Act
             of 1933, as amended, with a value of $5,100.

             In  February  1999,  the Company  completed  an offering of 500,000
             shares of common stock under  Regulation  D, subject to Rule 504 of
             the  Securities Act of 1933, as amended,  and realized  proceeds of
             $5,000.

             In  February  1999,  the Company  completed  an offering of 100,000
             shares of common stock under  Regulation  D, subject to Rule 504 of
             the  Securities Act of 1933, as amended,  and realized  proceeds of
             $50,000.

             In  February  1999,  the Company  completed  an offering of 184,000
             shares of common stock under  Regulation  D, subject to Rule 504 of
             the  Securities Act of 1933, as amended,  and realized  proceeds of
             $184,000.

         The Company  issued  shares of common stock during the year ended March
         31, 2000 as follows:

             In October 1999,  the Company issued 295,000 shares of common stock
             under  Regulation S of the Securities Act of 1933, as amended,  and
             realized proceeds of $295,000.

             In November 1999, the Company issued 202,000 shares of common stock
             under  Regulation S of the Securities Act of 1933, as amended,  and
             realized proceeds of $202,000.

                                       11
<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000

6.       CAPITAL STOCK (cont'd...)

             In December  1999, the Company issued 40,000 shares of common stock
             under  Regulation D, subject to Rule 504 of the  Securities  Act of
             1933, as amended, and realized proceeds of $40,000.

             In January 2000,  the Company issued 225,000 shares of common stock
             on the exercise of stock options and realized proceeds of $225,000.

             In March 2000,  the Company  issued 6,000 shares of common stock on
             the exercise of stock options and realized proceeds of $21,000.

         The Company issued shares of common stock during the three month period
         ended June 30, 2000 as follows:

             In April 2000, the Company issued 180,000 shares of common stock on
             the exercise of stock options and realized proceeds of $180,000.

7.       RELATED PARTY TRANSACTIONS

         The  Company  entered  into the  following  transactions  with  related
         parties:

         a) Paid or accrued consulting fees totalling $45,418 (1999 - $20,598 to
         two directors) to three directors of the Company

         b) Paid salary  totalling  $8,074  (1999 - $8,239) to an officer of the
         Company.

8.       INCOME TAXES

         The Company's total deferred tax asset is as follows:

=============================================================================
Net operating loss carry forward                              $      441,170
Valuation allowance                                                 (441,170)
                                                              --------------
                                                              $           -
=============================================================================

         The  Company  has  an  operating  loss  carryforward  of  approximately
         $451,365  which  expires in the year 2019.  The  Company's  subsidiary,
         ViaVid  Broadcasting  Corp., has Canadian operating losses carryforward
         of  approximately  $625,488  which expire in the year 2007. The Company
         provided a full  valuation  allowance on the deferred tax asset because
         of the uncertainty regarding realizability.

9.       STOCK-BASED COMPENSATION EXPENSE

         Statement of Financial  Accounting  Standards No. 123,  "Accounting for
         Stock-Based Compensation", encourages but does not require companies to
         record compensation cost for stock-based employee compensation plans at
         fair  value.   The  Company  has  chosen  to  account  for  stock-based
         compensation   using  Accounting   Principles  Board  Opinion  No.  25,
         "Accounting for Stock Issued to Employees".  Accordingly,  compensation
         cost for stock  options is measured  as the  excess,  if any, of quoted
         market  price of the  Company's  stock  at the  date of grant  over the
         option price. No stock based  compensation has resulted from the use of
         this standard.

                                       12
<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000

9.       STOCK-BASED COMPENSATION EXPENSE (cont'd...)

         Following is a summary of the status of the plan during 2000:

         ==================================================================
                                                                  Weighted
                                                                   Average
                                                    Number        Exercise
                                                 of Shares           Price
         ------------------------------------------------------------------
         Outstanding at March 31, 2000             642,000  $         1.49
             Granted                               390,000            1.00
             Forfeited                             (15,000)           1.00
             Exercised                            (180,000)           1.00
                                              ------------

         Outstanding at June 30, 2000              837,000            1.37
         ==================================================================


         On June 7, 2000,  302,000 stock options were  re-priced  from $3.50 per
         share to $1.00 per share.  The re-pricing  changed the weighted average
         at March 31, 2000 from $2.72 to $1.49.

         The weighted  average fair value of options to non-employees as at June
         30, 2000 is approximately $1.45 per share.

         Following is a summary of the status of options outstanding at June 30,
         2000:
================================================================================

                        Outstanding Options                  Exercisable Options
                     --------------------------------       -------------------
                                 Weighted
                                  Average      Weighted               Weighted
                                Remaining       Average                Average
                              Contractual      Exercise               Exercise
Exercise Price      Number           Life         Price      Number      Price
-------------------------------------------------------------------------------
$    1.00           20,000          2.5        $    1.00     20,000   $  1.00
     1.00          252,000          2.6             1.00    210,000      1.00
     1.00           50,000          2.7             1.00     50,000      1.00
     3.50           25,000          9.9             3.50     25,000      3.50
     3.50          100,000          2.9             3.50     50,000      3.50
     1.00           50,000          2.9             1.00     50,000      1.00
     1.00          170,000          2.9             1.00    170,000      1.00
     1.00           20,000          3.0             1.00     20,000      1.00
     1.00          150,000          3.0             1.00    150,000      1.00
===============================================================================

                                       13

<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000

9.       STOCK-BASED COMPENSATION EXPENSE (cont'd...)

         NON-VESTED STOCK OPTIONS

         The Company has granted  options to employees to purchase 36,000 shares
         of common  stock  exercisable  at $1.00 per share  that vest and become
         exercisable in allotments of 18,000 shares on July 19, 2000 and October
         19, 2000.

         The Company  has  granted  options to  consultants  to purchase  56,000
         shares of common  stock  exercisable  at $1.00 and $3.50 per share that
         vest in  allotments  of 3,000  shares  at $1.00 per share and of 25,000
         shares at $3.50 per share at various dates  commencing July 19, 2000 to
         December 13, 2000.

         COMPENSATION

         Had  compensation  cost for employees  been  recognized on the basis of
         fair value pursuant to Statement of Financial  Accounting Standards No.
         123, net loss and loss per share would have been adjusted as follows:

==============================================================
NET LOSS
    As reported                                $    (229,492)
                                               ===============
    Pro forma                                  $    (249,886)
                                               ===============

BASIC AND DILUTED LOSS PER SHARE
    As reported                                $       (0.04)
                                               ===============
    Pro forma                                  $       (0.04)
==============================================================

         The fair  value of each  option  granted is  estimated  using the Black
         Scholes Model.  The assumptions  used in calculating  fair value are as
         follows:

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

Risk-free interest rate                     5.554% - 6.484%%
Expected life of the options                         2 years
Expected volatility                                      50%
Expected dividend yield                                   -
=============================================================


         The Company  accounts for stock issued to  non-employees  in accordance
         with the  provisions  of SFAS 123 and the  emerging  issues  task force
         consensus in issued No. 96 - 18 "Accounting for Equity Instruments that
         are Issued to Other Than Employees for Acquiring or in Conjunction with
         Selling, Goods or Services".

         The Company granted 390,000 options to third party  consultants  during
         the current period. The stock based compensation recognized,  using the
         Black Scholes Option pricing  model,  is $138,300.  This amount will be
         amortized  to expense  over a two year period at $17,287  per  quarter.
         This  amount  can be  allocated  to  another  expense  category  in the
         accompanying consolidated statements of operations as consulting fees.

                                       14
<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000

10.      SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

================================================================================
                                     Cumulative
                                           From    Three Month      Three Month
                                  Incorporation   Period Ended     Period Ended
                                    to June 30,       June 30,         June 30,
                                           2000           2000             1999
--------------------------------------------------------------------------------

Cash paid for income taxes      $            -  $           -   $            -
================================================================================

Cash paid for interest          $            -  $           -   $            -
================================================================================

         There were no non-cash operating,  investing and financing transactions
         during the three month periods ended June 30, 2000 and 1999.

         The following non-cash operating,  investing and financial transactions
         occurred during the period from date of incorporation to June 30, 2000:

             The Company  issued  5,100,000  shares of common  stock at a deemed
             value of $5,100 for the acquisition of ViaVid Broadcasting Corp.

11.      SUBSEQUENT EVENT

         Subsequent to June 30, 2000,  the Company agreed to issue 75,000 shares
         of the common stock as consideration for consulting services rendered.

                                       15
<PAGE>





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

GENERAL

         We are in the business of providing  digital  streaming  technology  to
create, develop and offer live event coverage,  participant interviews, news and
information   and  video  and  audio  feeds  through  our  website   located  at
www.viavid.com  and other  syndicated  distribution  sites.  We deliver live and
archived available on-demand video content across a variety of digital platforms
from narrow band Internet to broadband Internet.  We offer a technology platform
to capture an Internet  audience when traditional  media broadcast  coverage may
not be available.

         We have  only  recently  commenced  business  and we have  earned  only
minimal revenues to date. There can be no assurance that our business plans will
be  successful.  Our  business  is still in the  development  stage.  We started
development  of our  business in January,  1999.  We  established  the  Business
Channel, VBC News 1 Channel in January, 1999 and commenced commercial operations
in March,  1999.  Over the past year, we have been producing and  broadcasting a
variety of new programs and special events over the Internet.

         Our  business  objective is to develop an Internet  video  broadcasting
company that offers a wide variety of video services  utilizing  streaming video
technology.  We have established Channels to provide viewers with access to news
and information relating to such topics as business,  entertainment,  health and
lifestyles and sports.  There can be no assurance that we will be able to attain
our business objective.

RESULTS OF OPERATIONS

REVENUES.  Our revenues  were $7,096 for the three month period  ending June 30,
2000,  compared to revenues  of $5,768 for the period  from June 30,  1999.  Our
revenues  for the year ended  March 31, 2000 were  $50,148.  Our  revenues  were
achieved  primarily  from  video  production  and  Internet  broadcast  services
provided to our  customers.  We also  achieved  revenues  from hosting  services
provided to customers

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

OPERATING  EXPENSES.  Our  operating  expenses were $236,588 for the three month
period ending June 30, 2000,  compared to operating expenses of $106,511 for the
quarter  ending June 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.  We will incur additional
operating  expenses  as we  continue  to  provide  live  broadcast  feeds of our
productions  on the  Internet.  We will continue to have  operating  expenses in
connection with the continued  up-grade of our Web site. We also anticipate that
operating  expenses  will increase as the number of video  productions  which we
produce and broadcast for our customers increases.

                                       16
<PAGE>

NET LOSS.  Our net loss was $229,492,  or $0.03 per share,  for the three months
ending June 30, 2000.  Our net loss was  $100,743,  or $0.02 per share,  for the
quarter  ended June 30,  1999.  Our net loss  reflects the fact that we have not
earned significant revenues to date.

LIQUIDITY AND CAPITAL RESOURCES AND PLAN OF OPERATIONS

         Our  operations  have been  financed  principally  through sales of our
equity securities.

         We had cash of $97,960 as of June 30, 2000 compared to cash of $134,540
as of March 31, 2000.

         We  realized  net  proceeds  of  $180,000  from the sales of our equity
securities during the three months ended June 30, 2000. These proceeds were used
to finance our operating activities.

         We plan on meeting our operating  expenses  during the year by focusing
on  generating   revenues  through   advertisements   and  sponsorship  on  live
broadcasts,  video productions for broadcast on our website and hosting of video
productions as well as from  additional  capital  intended to be provided by the
proposed sale of equity securities.

         We are currently  seeking  additional equity financing in the amount of
up to  approximately  $2,000,000.  These funds, if obtained,  will be applied to
meet our Plan of Operations described below. There can be no assurance that this
additional capital can be raised or, if equity securities are sold, the terms of
any such transaction.  If we are successful in obtaining this financing, we will
allocate the funds substantially as stated below.

         Subject to the availability of sufficient funds, we currently intend to
pursue the following Plan of Operations during the next twelve months:

o          Continue to develop a customer base of public and financial companies
           to use our  services  for  digital  video  productions  and  Internet
           broadcasting.  We anticipate we will spend approximately  $100,000 on
           this marketing expense over the twelve-month period;

o          Continue to develop the Business  Channel for broadcast  from our Web
           site.  We  anticipate  we will spend  approximately  $200,000 on this
           development expense over the twelve-month period;

o          Develop  additional  programming  for our Sports,  Entertainment  and
           Health  and  Lifestyles   Channels.   We  anticipate  we  will  spend
           approximately  $500,000  on  various  programs  for these  additional
           channels over the twelve-month period;

o          Evaluate  whether  to set  up an  additional  office  or  offices  in
           additional  cities in order to expand our business and meet  customer
           demand. If we proceed to establish  additional offices, we anticipate
           we will  spend  approximately  $50,000  for  this  purpose  over  the
           twelve-month period;

o          Expand our Web site to attempt to extract  marketing  information and
           data from  users in order to obtain a basis for  earning  advertising
           revenue.  We  anticipate  we  will  spend  approximately  $50,000  on
           expansion of our Web site over the twelve-month period;

o          Purchase additional  equipment to expand our digital video production
           studio and video production capabilities. We anticipate we will spend
           approximately  $250,000 on additional

                                       17
<PAGE>


           production equipment over the twelve-month period.

     Accordingly,  subject to the  availability  of funds, we anticipate that we
will spend approximately $1,150,000 over the twelve-month period in pursuing our
Plan of Operations  described above.  Substantially all these funds will need to
be obtained from additional  equity financings to be completed in the future. In
the event we are unable to obtain these funds from these sources, our ability to
pursue our business plan will be adversely affected.

     Our actual  expenditures and business plan may differ from this stated Plan
of  Operations.  Although  we have no  present  plans or  proposals  pending,  a
strategic  alliance  relating to one aspect of streaming content or encoding may
cause our Board of Directors to modify our plans. In addition, we may modify our
Plan of Operations based on the available amounts of financing in the event that
we  cannot  obtain  the  required  equity  financings  to  pursue  our  Plan  of
Operations.  We do not have any  arrangement  in  place  for any debt or  equity
financing which would enable us to meet our Plan of Operations.

     In the event we are not successful in raising  additional  capital  through
sales of our common stock or otherwise  raising  additional  equity capital,  we
anticipate that we could sustain our business  operations  through September 30,
2000, based on our current cash position and revenues.

     We are currently receiving revenues from video production , advertising and
hosting  services.  We  anticipate  an  increase  in  revenue  from  production,
advertising,  sponsorship  and hosting  video  footage and web content if we are
successful in increasing our customer base over the next twelve months.

     Notwithstanding  the  above  Plan  of  Operations,  we  anticipate  we will
experience  continuing  operating losses in the foreseeable future. We base this
expectation in part on the following:

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

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

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

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

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

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

                                       18
<PAGE>

statements made herein  include,  but are not limited to, the statements in this
report  regarding  our  plans  and  objectives  of  management  for  our  future
operations,  including plans or objectives relating to our intentions to provide
digital streaming  technology to create,  develop and offer live event coverage,
participant  interviews,  news and  information,  and other content  through our
Website,  Internet news broadcasting and other dissemination  services and other
products or services,  our plans and objectives  regarding revenues and expenses
in  future  periods,  our  plans and  objectives  and needs to raise  additional
capital,  the terms on which such  capital can be raised,  the period over which
any capital available currently to us or raised in the future will be sufficient
to meet our current  level of operating  expenses,  and our plans  regarding the
uses of that capital,  as well as any other  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 view our 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,  achieving any commercial  advantage  relative to
other Internet or other financial news dissemination  media companies or raising
the  additional  capital  required  to support our  operations  or the terms and
conditions on which such capital can be raised.  Our ability to realize revenues
and raise additional  capital 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  or  raise  additional  capital  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,  beginning on page 19. They are
also  described in our Annual  Report on Form 10KSB,  Quarterly  Reports on Form
10-QSB,  and our Current Reports on Form 8-K. 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

         An investment  in shares of our Common Stock  involves a high degree of
risk.  You should  consider  the  following  factors,  in  addition to the other
information  contained in this report,  in evaluating  our business and proposed
activities  before you purchase any shares of our common stock.  You should also
see the "Cautionary  Statement for Purposes of the Safe Harbor Provisions of the
Private   Securities   Litigation  Reform  Act  of  1996"  regarding  risks  and
uncertainties relating to us and to forward looking statements in this report.

                                       19
<PAGE>


                        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 June 30, 2000 were
$60,680.  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, 2000 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 June 30,
2000,  we did  not  have  available  to us  the  funds  necessary  to  meet  our
anticipated  capital needs. At June 30, 2000 we had cash of $97,960. In order to
meet our Plan of Operations,  we will need to raise additional  capital.  We are
currently  seeking 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 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.

                                       20
<PAGE>

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, as well as seeking
         out potential  advertisers and sponsors who are willing to advertise or
         sponsor  various  programs on our Web site. We have only recently begun
         to seek payment from customers for these services;

o        Continuing  to  expand  the  usage of our Web site by  attracting  both
         financial  industry  customers  and a variety of viewers  for our other
         programs;

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.

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, through  advertising posted on our
Web site and  sponsorship.  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

         During the quarter  ended June 30, 2000, we incurred a loss of $229,492
compared to a loss of $100,743 for the quarter  ended June 30,  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.

                                       21
<PAGE>

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  additional
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 personnel  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.

DEPENDENCE ON ADVERTISING AND SPONSORSHIP REVENUE

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

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

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

o        the pricing of advertising and sponsorship 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 sponsors, and

o        our  ability  to develop  and retain a skilled  advertising/sponsorship
         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.

                                       22
<PAGE>

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  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, 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 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

                                       23
<PAGE>

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,

o        demand  for  Internet  advertising  and  sponsorship  and  the  loss of
         advertisers or sponsors,

o        seasonal trends in Internet use and advertising and sponsors,

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,

                                       24
<PAGE>

o        insufficient commercial support for Internet advertising or sponsors,

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 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

                                       25
<PAGE>

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.

         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 Vancouver,  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.

                                       26
<PAGE>

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.

         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

                                       27
<PAGE>

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  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.

         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.

                                       28
<PAGE>

         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  its  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
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  71% 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

                                       29
<PAGE>

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.  Subject to the availability of funds, 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.

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.

                                       30
<PAGE>

         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 August
16,  2000,  6,907,000  shares  of  common  stock  outstanding.  Of such  shares,
4,911,800  shares  were held by  officers  and  Directors  of the  Company.  The
4,911,800  shares held by officers and Directors are "restricted  securities" as
such term is defined in Rule 144 under the  Securities  Act. In addition,  as of
August 16, 2000, an  additional  75,000 shares issued in July 2000 may be deemed
"restricted  securities".Restricted  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 and the offer and sale of 1,017,000  shares has been registered
under the Securities Act and,  subject to the requirements of the Securities Act
for the selling  securityholders  to deliver a current  prospectus in connection
with a sale of those shares,  can be sold in the  over-the-counter  market.  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.  (now 595781 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.

         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 August
10,  2000,  we have  options  outstanding  under the 1999 Stock  Option  Plan to
purchase  712,000  shares at a price of $1.00 per share and 125,000  shares at a
price of $3.50 per share. An aggregate of 186,000 shares were issued on exercise
of options  granted  under the 1999 Stock  Option Plan on March 14 and April 12,
2000  and  are  included  in  the  shares   described   above  that  are  freely
transferrable under U.S. Federal securities laws. In addition, there are 113,000
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  under the Securities Act. 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.

                                       31
<PAGE>

         On June 7,  2000,  302,000  options  issued to a Director  and  certain
employees and  consultants  were repriced from $3.50 to $1.00.  These shares are
reflected in the 712,000 shares listed above at $1.00.


                           PART II - OTHER INFORMATION

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 June 30, 2000.

                                   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:    August 16, 2000          By:     /s/ Brian Kathler
                                          -------------------------------
                                          President
                                          (Principal Executive Officer and
                                          Principal Accounting Officer)