<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                  FORM 10-KSB/A
                                (Amendment No. 1)


                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                      For Fiscal Year Ended: March 31, 1999
                       Commission File Number:33-38511-FW

                         CHEQUEMATE INTERNATIONAL, INC.
             -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Utah                                       76-0279816
          ---------------------------------------------------------
         (State or other jurisdiction           (I.R.S. Employer
         of incorporation or organization)      Identification No.)


          330 Washington Boulevard, Suite 507; Marina Del Rey, Ca 90292
          -------------------------------------------------------------
                    (Address of principal executive offices)

                                 (310) 305-3659
                                 --------------
                           (Issuer's Telephone Number)

Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirement for the past 90 days. YES  X   No
                                                            -----   -----
         State issuer's revenues for
         Its most recent fiscal year:                $1,091,794

         As of July 7, 1998, the aggregate market value of the voting stock
held by non-affiliates Computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of a
specified date within the past 60 days: $13,783,460

         State the number of shares outstanding of each of the issuer's
common equity, as of the latest practicable date: 23,866,834 (October 25,
1999)

Transitional Small Business Format:   YES       NO   X
                                         -----     -----

<PAGE>

                                     PART II

<TABLE>
<S>                                                             <C>
ITEM 7.  FINANCIAL STATEMENTS

Independent Auditors' Report .......................................... 3

Consolidated Balance Sheets ........................................... 4

Consolidated Statements of Operations ................................. 6

Consolidated Statements of Stockholders' Equity ....................... 7

Consolidated Statements of Cash Flows ................................. 8

Notes to Consolidated Financial Statements ........................... 10

</TABLE>

                                        2

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Chequemate International, Inc. and Subsidiaries
(dba C3-D Digital)
Salt Lake City, Utah

We have audited the accompanying consolidated balance sheets of Chequemate
International, Inc. and Subsidiaries (dba C3-D Digital) as of March 31, 1999
and 1998 and the related consolidated statements of operations, stockholders'
equity, and cash flows for the years ended March 31, 1999, 1998 and 1997.
These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Chequemate International, Inc. and Subsidiaries (dba C3-D Digital) as of
March 31, 1999 and 1998 and the consolidated results of their operations and
their cash flows for the years ended March 31, 1999, 1998 and 1997 in
conformity with generally accepted accounting principles.


Jones, Jensen & Company
Salt Lake City, Utah
June 30, 1999

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                           Consolidated Balance Sheets

                                      ASSETS

<TABLE>
<CAPTION>
                                                                       March 31,
                                                           --------------------------------
                                                               1999                1998
                                                           ------------        ------------
<S>                                                        <C>                 <C>
CURRENT ASSETS
  Cash                                                     $  1,732,199        $    220,840
  Accounts receivable - net of allowances of $53,820
   and $115,000 in 1999 and 1998, respectively                  197,922              24,305
  Inventory (Note 2)                                          3,115,763           2,684,378
  Prepaid expenses                                              198,349              11,259
                                                           ------------        ------------
     Total Current Assets                                     5,244,233           2,940,782
                                                           ------------        ------------
PROPERTY AND EQUIPMENT (Note 3)                                 622,717             200,335
                                                           ------------        ------------
OTHER ASSETS

  Notes receivable                                               65,000              -
  Organization costs and product rights (Note 1)              2,534,532           2,657,296
  Secured interest (Note 15)                                  1,198,530              -
  Refundable deposits                                            15,704               8,053
  Investments                                                     3,000               3,000
                                                           ------------        ------------
     Total Other Assets                                       3,816,766           2,668,349
                                                           ------------        ------------
     TOTAL ASSETS                                          $  9,683,716        $  5,809,466
                                                           ============        ============

</TABLE>

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

                                        4

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                     Consolidated Balance Sheets (Continued)


                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                       March 31,
                                                           --------------------------------
                                                               1999                1998
                                                           ------------        ------------
<S>                                                        <C>                 <C>
CURRENT LIABILITIES
  Accounts payable                                         $    871,116        $  1,584,576
  Related party accounts payable (Note 16)                       25,292              42,034
  Customer deposits                                              -                   54,724
  Accrued expenses                                               38,672              43,339
  Income tax payable (Note 18)                                      500                 500
  Accrued interest - related party (Note 5)                      79,943              65,903
  Accrued interest payable                                       39,791              -
  Current portion related party (Note 5)                        140,000             156,802
  Current portion long-term debt (Note 6)                       227,610              50,080
  Current portion capital lease (Note 7)                         13,602               4,989
                                                           ------------        ------------
     Total Current Liabilities                                1,436,526           2,002,947
                                                           ------------        ------------
LONG-TERM LIABILITIES

  Long-term debt (Note 6)                                     3,190,000              11,976
  Capital lease obligations (Note 7)                             -                    2,788
                                                           ------------        ------------
     Total Long-Term Liabilities                              3,190,000              14,764
                                                           ------------        ------------
     Total Liabilities                                        4,626,526           2,017,711
                                                           ------------        ------------
COMMITMENTS AND CONTINGENCIES (Note 10)

STOCKHOLDERS' EQUITY

  Common stock, $.0001 par value, 500,000,000 shares
   authorized, 22,358,646 and 14,088,650 shares
   outstanding at 1999 and 1998, respectively                     2,236               1,409
  Capital in excess of par                                   24,461,440          18,983,753
  Accumulated deficit                                       (19,406,486)        (15,193,407)
                                                           ------------        ------------
     Total Stockholders' Equity                               5,057,190           3,791,755
                                                           ------------        ------------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $  9,683,716        $  5,809,466
                                                           ============        ============

</TABLE>

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

                                        5

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                             For the Years Ended March 31,
                                                 ----------------------------------------------------
                                                     1999                1998                1997
                                                 ------------        ------------        ------------
<S>                                              <C>                 <C>                 <C>
REVENUES
  Sales - products                               $    682,760        $  1,091,794        $    776,963
                                                 ------------        ------------        ------------
COST OF SALES
  Product, supplies and materials                     631,132             849,919             291,072
                                                 ------------        ------------        ------------
GROSS MARGIN                                           51,628             241,875             485,891
                                                 ------------        ------------        ------------
EXPENSES

  Impairment of product rights (Note 14)               -                3,133,333              -
  Bad debt expense                                     53,820             138,259               6,465
  Selling expenses                                    851,339           1,639,806             630,207
  General and administrative                        3,074,839           3,430,005           1,338,066
                                                 ------------        ------------        ------------
     Total Expenses                                 3,979,998           8,341,403           1,974,738
                                                 ------------        ------------        ------------
OPERATING LOSS                                     (3,928,370)         (8,099,528)         (1,488,847)
                                                 ------------        ------------        ------------
OTHER INCOME (EXPENSE)

  Loss from discontinued operations                   (40,859)             -                   -
  Interest income                                      11,265              24,152               7,018
  Interest expense                                    (93,779)            (18,478)            (20,344)
  Gain (loss) on sale of equipment                   (160,836)             70,309              -
                                                 ------------        ------------        ------------
     Total Other Income (Expense)                    (284,209)             75,983             (13,326)
                                                 ------------        ------------        ------------
LOSS BEFORE INCOME TAXES                           (4,212,579)         (8,023,545)         (1,502,173)

INCOME TAX PROVISION (Note 18)                            500                 500                 400
                                                 ------------        ------------        ------------
NET LOSS                                         $ (4,213,079)       $ (8,024,045)       $ (1,502,573)
                                                 ============        ============        ============
BASIC LOSS PER SHARE                             $      (0.23)       $      (0.59)       $      (0.12)
                                                 ============        ============        ============
FULLY DILUTED LOSS PER SHARE                     $      (0.23)       $      (0.59)       $      (0.12)
                                                 ============        ============        ============
WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                                17,984,186          13,568,845          12,891,947
                                                 ============        ============        ============

</TABLE>

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

                                       6

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Consolidated Statements of Stockholders' Equity
                For the Years Ended March 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                         Total                        Capital                             Total
                                         Shares        Common        in Excess       Accumulated       Stockholders'
                                         Issued         Stock         of Par           Deficit            Equity
                                       ----------     ---------     -----------     -------------     -------------
<S>                                    <C>            <C>           <C>             <C>               <C>
Balance, March 31,1996                 12,666,053     $   1,267     $ 5,785,695     $ (5,666,789)     $     120,173

Shares issued through
 stock offering                           450,788            44       1,816,307             --            1,546,351
Shares issued for services                  1,000             1           3,499             --                3,500
Subscribed stock                             --            --             --                --              270,000
Net loss                                     --            --             --          (1,502,573)        (1,502,573)
                                       ----------     ---------     -----------     ------------      -------------
Balance, March 31, 1997                13,117,841         1,312       7,605,501       (7,169,362)           437,451

Shares issued through
 stock offering                           379,000            38       4,756,682             --            4,756,720
Shares issued for cash                    315,142            31          67,355             --               67,386
Shares issued in exchange
 for services                             256,667            26         387,474             --              387,500
Shares issued for debt                     20,000             2          85,494             --               85,496
Option issued for
 compensation                                --            --            81,247             --               81,247
Options issued for rights                    --            --         6,000,000             --            6,000,000
Net loss                                     --            --              --         (8,024,045)        (8,024,045)
                                       ----------     ---------     -----------     ------------      -------------
Balance, March 31, 1998                14,088,650         1,409      18,983,753      (15,193,407)         3,791,755

Shares issued through
 stock offering                         6,085,430           609       3,770,925             --            3,771,534
Shares issued for assets                  583,333            58       1,532,942             --            1,533,000
Shares issued for cash                    371,800            37           3,681             --                3,718
Correction of an error                     50,000             5            --               --                    5
Shares issued in exchange
 for services                           1,094,810           109          43,338             --               43,447
Shares issued for debt                     84,623             9         126,801             --              126,810
Net loss                                     --            --              --         (4,213,079)        (4,213,079)
                                       ----------     ---------     -----------     ------------      -------------
Balance, March 31, 1999                22,358,646     $   2,236     $24,461,440     $(19,406,486)     $   5,057,190
                                      ===========     =========     ===========     ============      =============

</TABLE>

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

                                       7

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                              For the Years Ended March 31,
                                                                ----------------------------------------------------
                                                                    1999                1998                1997
                                                                ------------        ------------        ------------
<S>                                                             <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net loss                                                      $ (4,213,079)       $ (8,024,045)       $ (1,502,573)
  Adjustments to reconcile net loss to
    net cash used by operating activities:
   Amortization                                                      314,873             427,575              62,183
   Depreciation                                                       79,599              70,209              41,549
   Loss on sale of assets                                            160,836              -                   -
   Allowance for bad debts                                            53,820             107,480               4,602
   Reduction in product rights valuation                              -                3,133,333              -
   Common stock and options issued for services rendered             448,547             651,517              -
  (Increase) decrease in:
   Accounts receivable                                              (227,437)            (92,933)              9,546
   Prepaid expenses                                                 (187,090)             (2,756)             (1,859)
   Inventory                                                         275,246          (2,498,860)           (101,637)
   Note receivable                                                  (530,530)             -                   -
   Deposits                                                           (7,651)              7,514               2,862
  Increase (decrease) in:
   Accounts payable                                                 (730,202)          1,448,879              94,038
   Accrued interest payable                                           53,831              -                   (7,000)
   Customer deposits                                                 (54,724)             54,724              -
   Short-term note payable                                            -                 (300,000)             -
   Accrued expenses                                                   (4,667)            (60,213)             81,056
   Income taxes payable                                               -                      100                 400
                                                                ------------        ------------        ------------
     NET CASH USED BY OPERATING ACTIVITIES                        (4,568,628)         (5,077,476)         (1,316,833)
                                                                ------------        ------------        ------------
CASH FLOWS FROM INVESTING ACTIVITIES

  Proceeds from sale of fixed assets                                  -                  375,000              -
  Purchase or development of intangibles                            (128,021)             -                 (222,706)
  Equipment purchases                                               (198,736)           (194,392)           (101,121)
  Collection on notes receivable                                      -                   -                    1,380
                                                                ------------        ------------        ------------
     NET CASH PROVIDED (USED) BY
       INVESTING ACTIVITIES                                         (326,757)            180,608            (322,447)
                                                                ------------        ------------        ------------
CASH FLOWS FROM FINANCING ACTIVITIES

  Issuance of common stock                                         3,502,167           4,824,204           1,719,951
  Minority interest                                                   -                   -                  100,000
  Issuance of notes payable                                        3,043,409             135,000              -
  Payments made on notes payable                                    (138,832)             (7,032)            (45,415)
                                                                ------------        ------------        ------------
     NET CASH PROVIDED BY FINANCING ACTIVITIES                  $  6,406,744        $  4,952,172        $  1,774,436
                                                                ============        ============        ============

</TABLE>

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

                                        8

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                Consolidated Statements of Cash Flows (Continued)

<TABLE>
<CAPTION>
                                                                              For the Years Ended March 31,
                                                                ----------------------------------------------------
                                                                    1999                1998                1997
                                                                ------------        ------------        ------------
<S>                                                             <C>                 <C>                 <C>
NET INCREASE (DECREASE) IN CASH                                 $  1,511,359        $     55,304        $    135,156
CASH AT BEGINNING OF YEAR                                            220,840             165,536              30,380
                                                                ------------        ------------        ------------
CASH AT END OF YEAR                                             $  1,732,199        $    220,840        $    165,536
                                                                ============        ============        ============

</TABLE>

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

                                        9

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The Company's accounting policies reflect practices of the
         software sales, 3-D electronic devices and services industries and
         conform to generally accepted accounting principles. Certain prior
         year amounts have been reclassified to be consistent with the
         March 31, 1999 presentation. The following policies are considered
         to be significant:

         PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of the
         Company and its subsidiaries, Chequemate Electronic, Inc.,
         Families in Focus, Inc., AC&T Direct, AC&T and Chequemate
         Tele-Services, Inc. All significant intercompany accounts and
         transactions have been eliminated.

         REVENUE RECOGNITION

         Revenue is recognized on an accrual basis upon deliver of the
         software or product. Revenue consists of software sales, product
         sales, license fees, and monthly service fees.

         ORGANIZATION COSTS AND PRODUCT RIGHTS

         Organization and production costs have been capitalized and
         amortized over five years using a straight line method. The total
         amortization of organization and production costs for the years
         ended March 31, 1999, 1998 and 1997 amounted to $314,873, $427,575
         and $62,183, respectively.

         PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost with depreciation and
         amortization computed on the straight line method. Property and
         equipment are depreciated over the following estimated useful
         lives:

<TABLE>
<CAPTION>
                                                                Years
                                                                -----
<S>                                                             <C>
              Office equipment                                    5
              Office furniture                                   5-7
              Machinery and equipment                             5
              Leasehold improvements                             3-5
              Capital leases                                     3-5
</TABLE>

          ORGANIZATION COSTS AND PRODUCT RIGHTS

<TABLE>
<CAPTION>
                                                                                        Net Book Value
                                                                                ---------------------------
                                     Term          Cost        Amortization         1999             1998
                                 ---------     -----------     ------------     -----------     -----------
<S>                              <C>           <C>             <C>              <C>             <C>
          Product rights         4-5 years     $ 3,093,087     $    669,688     $ 2,423,399     $ 2,580,574
          Contract/movie
             rights                2 years         129,022           17,889         111,133          76,722
          Organization cost        5 Years          17,261           17,261          -               -
                                 ---------     -----------     ------------     -----------     -----------
                                               $ 3,134,610     $    695,436     $ 2,534,532     $ 2,657,296
                                               ===========     ============     ===========     ===========

</TABLE>
                                       10

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         ORGANIZATION COSTS AND PRODUCT RIGHTS (Continued)

         The Company evaluates the recoverability of intangibles and
         reviews the amortization period on an annual basis. Several
         factors are used to evaluate intangibles. Including, but not
         limited to, management's plans for future operations, recent
         operating results and projected, undiscounted cash flows.

         BASIC LOSS PER SHARE

         Basic loss per share is calculated using a weighted average for
         common stock.

         CASH FLOWS

         For purposes of reporting cash flows, cash and cash equivalents
         include cash on hand and cash on deposit with banks.

         INCOME TAXES

         The Company's tax basis is the same as the Company's financial
         statement basis. The Company has net operating loss carryforwards
         of approximately $19,000,000 available to offset future federal
         and state income tax through 2014. The Company has not recorded a
         tax benefit attributable to the carryforwards because realization
         of such has been offset by a valuation allowance for the same
         amount.

         COMPUTER SOFTWARE COSTS

         The Company classifies the costs of planing, designing and
         establishing the technological feasibility of computer software
         product as software development costs and charges those costs to
         expense when incurred. Costs incurred for duplicating computer
         software from product masters, documentation and training
         materials and packaging costs are capitalized as inventory and
         charged to cost of sales when revenue is recognized. Costs of
         maintenance and customer support are charged to expense when costs
         are incurred.

         ADVERTISING

         The Company follows the policy of charging the costs of
         advertising to expense as incurred.

         ESTIMATES

         The preparation of financial statements in conformity with
         generally accepted accounting principles requires management to
         make estimates and assumptions that affect the reported amounts of
         assets and liabilities and disclosure of contingent assets and
         liabilities at the date of the financial statements and the
         reported amounts of revenues and expenses during the reporting
         period. Actual results could differ from those estimates.

                                       11
<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         CHANGE IN ACCOUNTING PRINCIPLES

         The Company adopted Statement of Financial Accounting Standards
         (SFAS) No. 128, "Earnings Per Share" during the year ended March
         31, 1999. In accordance with SFAS No. 128, diluted earnings per
         share must be calculated when an entity has convertible
         securities, warrants, options, and other securities that represent
         potential common shares. The purpose of calculating diluted
         earnings (loss) per share is to show (on a pro forma basis) per
         share earnings or losses assuming the exercise or conversion of
         all securities that are exercisable or convertible into common
         stock and that would either dilute or not affect basis of EPS. As
         permitted by SFAS No. 128, the Company has retroactively applied
         the provisions of this new standard by showing the fully diluted
         loss per common share for all years presented.

         The Company adopted Statement of Financial Accounting Standards
         "Accounting for Stock-Based Compensation" ("SFAS No. 123"), which
         requires the Company to determine compensation costs for the
         Company's stock option plans and other stock awards in accordance
         with the fair value based method prescribed in SFAS No. 123. The
         Company recognized approximately $405,100 and $-0- of a
         stock-based compensation expense for the years ended March 31,
         1999 and 1998, respectively.

         The Company also adopted Statement of Financial Accounting
         Standards (SFAS) No. 130, "Reporting Comprehensive Income" during
         the year ended March 31, 1999, SFAS No. 130 established standards
         for reporting and display of comprehensive income (loss) and its
         components (revenues, expenses, gains and losses) in a full set of
         general purpose financial statements. This statement requires that
         an enterprise classify items of other comprehensive income by
         their nature in a financial statement and display the accumulated
         balance of other comprehensive income separately from retained
         earnings and additional paid-in capital in the equity section of a
         balance sheet. The adaption of SFAS 130 had no material effect on
         the Company's financial statements.

         PRIOR PERIOD RECLASSIFICATION

         Certain 1998 balances have been reclassified to conform to the
         presentation of the 1999 consolidated financial statements.

NOTE 2 - INVENTORY

<TABLE>
<CAPTION>
                                               March 31,
                                       --------------------------
                                           1999           1998
                                       -----------    -----------
<S>                                    <C>            <C>
              Finished goods           $ 1,035,682    $ 1,238,258
              WIP                        1,076,880        124,243
              Raw goods                  1,003,201      1,321,877
                                       -----------    -----------
                                       $ 3,115,763    $ 2,684,378
                                       ===========    ===========

</TABLE>

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

                                       12
<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 2 - INVENTORY (Continued)

         The Company inventories are stated at the lower of cost or market,
         using the first-in, first-out (FIFO) method. Inventories consist
         mainly of components related to the 3-D electronic devices product
         and pay-per-view operations.

NOTE 3 - PROPERTY AND EQUIPMENT

         Property and equipment as of March 31, 1999 and 1998 are detailed
         in the following summary:

<TABLE>
<CAPTION>
                                                                                Net Book Value
                                                          Accumulated      -------------------------
                                              Cost        Depreciation        1999           1998
                                            ---------     ------------     ----------     ----------
<S>                                         <C>           <C>              <C>            <C>
         Office furniture and fixtures      $  62,427     $     38,107     $   24,320     $   33,237
         Machinery and equipment              739,541          170,053        569,488        161,464
         Capital leases                        29,895            2,990         26,905          2,707
         Leasehold improvements                 4,581            2,577          2,004          2,927
                                            ---------     ------------     ----------     ----------
              Total                         $ 836,444     $    213,727     $  622,717     $  200,335
                                            =========     ============     ==========     ==========
</TABLE>

         Depreciation expense is computed principally on the straight line
         method in amounts sufficient to write off the cost of depreciable
         assets over their estimated useful lives. Depreciation expense for
         the years ended March 31, 1999, 1998 and 1997 amounted to $79,599,
         $70,209 and $41,549, respectively.

NOTE 4 - STOCKHOLDERS' EQUITY

         The Company is authorized to issue 500,000,000 shares of common
         stock, par value $.0001. As of March 31, 1999, the Company has
         issued 22,358,646 shares of common stock.

         The Company continued the placement of Regulation S stock in the
         year ended March 31, 1999 and issued 2,729,526 shares to non U.S.
         persons. The Company's plans are to continue placing common stock
         through private placements to fund the growth requirements of the
         Company.

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

                                       13

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 5 - RELATED PARTIES

         Notes payable to related parties as of March 31, 1999 and 1998 are
         detailed in the following summary:

<TABLE>
<CAPTION>
                                                                         1999           1998
                                                                     -----------     -----------
<S>                                                                  <C>             <C>
         Note payable to CEO; due on demand, with an
          interest rate of 10.4%; unsecured; accrued

          interest of $79,943 is due on demand.                      $   140,000     $   135,000

         Note payable to CEO; unsecured, due in monthly
          interest installments of $930 with an interest rate
          of 12%; due December 31, 1998.                                    -             21,802
                                                                     -----------     -----------
              Total related party notes payable                          140,000         156,802

              Less: current portion                                     (140,000)       (156,802)
                                                                     -----------     -----------
              Long-term portion                                      $      -        $      -
                                                                     ============    ===========

</TABLE>

         Maturities of the related party notes payable are as follows:

<TABLE>
<S>                                                             <C>
              Period ending March 31, 2000                      $  140,000
                                      2001                            -
                                                                ----------
                                      Total                     $  140,000
                                                                ==========

</TABLE>

NOTE 6 - LONG-TERM DEBT

         Notes payable as of March 31, 1999 and 1998 are detailed in the
following summary:

<TABLE>
<CAPTION>
                                                                         1999           1998
                                                                     -----------     -----------
<S>                                                                  <C>             <C>
              Note payable to a company; due in monthly
              installments of $3,244 which includes
              interest at 8%; due July, 1999, unsecured.             $    53,907     $    62,056

              Convertible debentures to a company; due
              December 22, 2001, which includes interest
              at 8%.                                                     750,000          -

              Convertible debentures to a company; due

              February 22, 2002, which includes interest at 8%.        2,000,000          -
                                                                     -----------     -----------
              Balance Forward                                        $ 2,803,907     $    62,056
                                                                     -----------     -----------
</TABLE>

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

                                       14

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 6 - LONG-TERM DEBT (Continued)

<TABLE>
<S>                                                                  <C>             <C>
         Balance Forward                                             $ 2,803,907     $    62,056

         Note   payable to a company; due June 8, 2000,
         interest at 10% due monthly, secured by
         equipment and inventory.                                        440,000             -

         Note payable to a company; unsecured, due in
         monthly installments of $19,654, which includes
         interest at 6%; due October 1999.                               173,703             -
                                                                     -----------     -----------
              Total long-term debt                                     3,417,610          62,056

              Less: current portion                                     (227,610)        (50,080)
                                                                     -----------     -----------
              Long-term portion                                      $ 3,190,000     $    11,976
                                                                     ===========     ===========

</TABLE>

         Maturities of long-term debt are summarized below:

<TABLE>
<S>                                                    <C>
              Period ending March 31, 2000             $    227,610
                                      2001                  440,000
                                      2002                2,750,000
                                      2003                   -
                                      2004                   -
                                                       ------------
                                      Total            $  3,417,610
                                                       ============

</TABLE>

NOTE 7 - LEASES

         All noncancelable leases with an initial term greater than one
         year have been categorized as capital or operating leases in
         conformity with the definitions in Financial Accounting Standards
         Board Statement No. 13, "Accounting for Leases".

         The following analysis represents property under capital lease at
         March 31, 1999 and 1998.

<TABLE>
<CAPTION>
                                                                         1999           1998
                                                                     -----------     -----------
<S>                                                                  <C>             <C>
                      Equipment                                      $    29,895     $    26,877
                      Less: accumulated depreciation                      (2,990)        (24,170)
                                                                     -----------     -----------
                      Net property under capital lease               $    26,905     $     2,707
                                                                     ===========     ===========

</TABLE>

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

                                       15

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 7 - LEASES (Continued)

         At March 31, 1999, the Company is liable under the terms of
         non-cancelable leases for the following minimum lease commitments:

<TABLE>
<CAPTION>
                                                                  Capital        Operating
                                                                  Leases          Leases
                                                                -----------     ----------
<S>                                                             <C>             <C>
         Period ended March 31,
             2000                                               $    22,744     $  147,099
             2001                                                     -             113,987
             2002                                                     -              76,687
             2003                                                     -              -
             later years                                              -              -
                                                                -----------     ----------
         Total minimum lease payments                                22,744     $  337,773
                                                                                ==========
             Less: interest                                           9,142
                                                                -----------
             Present value of net minimum lease payment              13,602
             Less: current portion                                   13,602
                                                                -----------

             Capital lease obligations payable long-term        $     -
</TABLE>

         Rental expense for the years ended March 31, 1999, 1998 and 1997
         amounted to $135,580, $187,961 and $86,094, respectively.

NOTE 8 - CASH FLOW AND NON CASH INVESTING AND FINANCING ACTIVITIES

         CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                          March 31,
                                                             --------------------------------
                                                               1999         1998        1997
                                                             --------     --------    --------
<S>                                                          <C>          <C>         <C>
         Interest paid                                       $ 34,535     $ 18,478     $  24,230

         Income taxes paid                                   $    500     $    400     $     300

</TABLE>

         NON-CASH INVESTING AND FINANCING ACTIVITIES

         For the years ending March 31, 1999 and 1998, the Company incurred
         the following non-cash investing and financing activities.

<TABLE>
<CAPTION>
                                                                            March 31,
                                                             --------------------------------------
                                                                1999           1998           1997
                                                             -----------     ----------    ----------
<S>                                                          <C>             <C>           <C>
         Capital lease obligations incurred                  $    29,895     $    -        $    -
         Issuance of stock and options for services
          rendered                                           $   448,547     $ 651,517     $    -
         Issuance of stock for assets                        $ 1,533,000     $    -        $    -
         Increase in debt for assets                         $   440,000     $    -        $    -

</TABLE>

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

                                       16

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 9 -  FINANCIAL INSTRUMENTS

          CONCENTRATIONS OF CREDIT RISK

          Financial instruments which potentially subject the Company to
          concentrations of credit risk consist principally of trade
          receivables. The Company provides credit to its customers in the
          normal course of business. However, the Company performs ongoing
          credit evaluations of its customers and maintains allowances for
          potential credit losses. The Company places its temporary cash
          with high quality financial institutions. At times such cash
          accounts may be in excess of the FDIC insurance limit.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

          The Company has entered into an agreement to maintain a satellite
          transponder and uplink for broadcasting its three dimensional
          cable channel. The agreement requires the Company to make monthly
          payments of $100,000 to retain these services.

          The Company is the defendant in a pending lawsuit. The ultimate
          outcome of this litigation is unknown at the present time.
          Accordingly, no provision for any liability that might result has
          been made in the accompanying financial statements. In the opinion
          of management, the existing litigation is not considered to be
          material in relation to the Company's financial position.

NOTE 11 - ACQUISITIONS

          On February 27, 1997, the Company established Chequemate
          Tele-Services, Inc. (CTS) along with another individual and
          received fifty-one percent (51%) of the company. CTS then entered
          into an asset purchase agreement to acquire all of the assets of
          Quality Products Distribution, Inc. The assets consisted mainly of
          credit card processing software and certain intangibles. In
          November of 1997, the Company sold the processing software and
          related intangibles.

          In December 1998, the Company purchased assets to supplement the
          hotel movie pay-per- view operations. The assets included existing
          contracts with several hotels to provide pay- per-view movies. The
          Company issued 250,000 shares of common stock, a convertible note
          and cash for the assets.

NOTE 12 - GOING CONCERN

          The Company's financial statements are prepared using generally
          accepted accounting principles applicable to a going concern which
          contemplates the realization of assets and liquidation of
          liabilities in the normal course of business. The Company has
          incurred losses from its inception through March 31, 1999. The
          Company does not have an established source of revenues sufficient
          to cover its operating costs. It is the intent of the Company to
          seek additional financing through private placements of its common
          stock.

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

                                       17

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 12 - GOING CONCERN (Continued)

          Management has formulated a plan to raise additional funding
          through stock issuances and increase in debt. In addition, the
          Company's projected increase in revenue from the establishment of
          its three dimensional cable channel will provide sufficient
          capital for operations. Subsequent to year end, the Company had
          raised approximately $966,000 through common stock and debt
          issuances.

NOTE 13 - COMMON STOCK AND WARRANTS

          Effective May 17, 1995, the stockholders approved an Incentive
          Stock Option Plan granting to key employees options to purchase
          Company common stock over a ten year period, at the fair market
          value at time of grant. The aggregate number of common shares of
          the Company which may be granted under the plan is 800,000 shares.
          The plan expires on March 23, 2004.


          The convertible debentures entered into by the Company carry
          warrants allowing the debtor to acquire stock. The convertible
          debentures of $750,000 are in $250,000 incremental units and carry
          warrants equal to 24,753 shares per unit, with an exercise price
          of $3.64 per share. The convertible debentures of $2,000,000 are
          in $250,000 increments and carry warrants equal to 8,475 shares
          per unit.

          Activity regarding stock options is summarized as follows:

<TABLE>
<CAPTION>
                                                                      Number of Shares
                                            -------------------------------------------------------------
                                               1999            Price            1998            Price
                                            ---------      -------------     ----------     -------------
<S>                                         <C>            <C>               <C>            <C>
          Options Granted:
               Beginning of year            2,354,800      $  .01 - 7.00        354,800     $ 3.50 - 7.00
               Additional granted              64,000         .01 - 3.64      2,000,000               .01
               Canceled                      (252,800)         3.50-7.00         -                 -
                                            ---------                        ----------
               End of year                  2,166,000                         2,354,800
                                            =========                        ==========
          Options Exercised:
               Beginning of year              283,242      $  .01 - 7.00            100              3.50
               Additional exercised         1,074,810              .01          283,142               .01
               Expired                         -                -                -                 -
                                            ---------                        ----------
               End of year                  1,358,052                           283,242
                                            =========                        ==========
          Options Outstanding at End
            of Year                           807,948                         2,071,558
                                            =========                        ==========

</TABLE>

          Option prices range from $0.01 to $7.00 per share. In May 1997,
          the Company granted 2,000,000 common stock options to the owners
          of the intellectual property for $0.01 per share. The Company
          granted several stock options to various individuals for service
          performed or for future services. The option price for the
          services performed was stated at $5.00 per share on 4,000 shares.

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

                                       18
<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 14 - ACQUISITION OF TECHNOLOGY

          In May of 1997, the Company formed the wholly-owned subsidiary,
          Chequemate Electronic, Inc. (formerly Chequemate Third Dimension,
          Inc,) (CEI). CEI then entered into an agreement to acquire
          technology relating to certain intellectual property from Advanced
          Technology Group, LLC (LLC). Pursuant to the agreement, the
          Company contributed to CEI three million dollars within sixty (60)
          days of signing. In addition, the Company established a
          non-qualified stock option for certain members of the LLC.

          In May 1997, the Company granted 2,000,000 common stock options to
          the owners of ATG in exchange for the exclusive rights to
          specified intellectual property. Under APB 17, the transactions
          were recorded using the fair market value of the stock upon the
          date of the grant, which was determined to be $3.00 per share
          based upon the current trading value of the stock and the time
          delay before the shares could be exercised. At March 31, 1998,
          the Company's projected cash flows indicated that the recoverability
          of the asset may be impaired. Revaluation of the projected cash
          flow associated with this technology was determined to be
          approximately $2,500,000. Under FASB 121 an adjustment of
          $3,133,333 for impairment of the asset was recognized. At
          March 31, 1999, the Company's projected cash inflows from this
          technology exceeded the carry value of the asset.

NOTE 15 - ACQUISITION OF SECURED INTEREST

          In December 1998, the Company purchased from a financing
          institution the secured interest on a line of credit against
          Strata, Inc. (Strata). The Company continued to advance credit to
          Strata and as of March 31, 1999 have recorded a note receivable of
          $465,530. Also, on March 31, 1999, the Company obtained the secure
          interests of several other promissory notes held by several
          investors against Strata by exchanging stock for the notes. The
          Company exchanged 333,333 shares, at $3.00 per share, of common
          stock for the notes. The above notes hold a secured interest in
          the tangible assets, accounts receivable, intellectual property
          and other assets of Strata. Strata is in the business of providing
          3D centric graphical software applications. Subsequent to year
          end, the Company foreclosed upon Strata and acquired all of the
          assets of Strata.

NOTE 16 - RELATED PARTY TRANSACTIONS

          The Company owes certain officers and directors royalties from the
          revenue of book sales. In addition, the Company owes a major
          shareholder royalties on active users of the Chequemate product.
          The total amount owing to these individuals as of March 31, 1999
          and 1998 was $25,292 and $42,034, respectively.

NOTE 17 - MARKETING DEVELOPMENT AGREEMENT

          In December 1996, the Company entered into a venture with an
          individual to enhance and improve its marketing capacity as well
          as to strengthen its in-house administrative capacity. The Company
          has incurred monthly expenses of approximately $10,000 on this
          venture. The alliance between the parties indicates that the
          individual will earn 50% of all net profits directly generated
          from revenues created specifically and exclusively by this
          agreement. Upon termination of this alliance, the specific
          revenues will revert back to the individual.

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

                                       19

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 18 - PROVISION FOR INCOME TAXES

          The provision for income taxes for the years ended March 31, 1999
          and 1998 consists of the following:

<TABLE>
<CAPTION>
                                                Current      Deferred       Total
                                               ---------     --------     ---------
<S>                                            <C>           <C>          <C>
          Year ended March 31, 1999
               U.S. Federal                    $     -       $     -      $     -
               State and local                       500           -            500

                                               $     500     $     -      $     500

          Year ended March 31, 1998
               U.S. Federal                    $     -       $     -      $     -
               State and local                       500           -            500

                                               $     500     $     -      $     500

</TABLE>

          Income tax expense was $500 and $500 for each of the years ended
          March 31, 1999 and 1998, respectively, and differed from the
          amounts computed by applying the U.S. Federal income tax rate of
          34 percent to loss from operations before provision for income
          taxes and extraordinary item as a result of the following:

<TABLE>
<CAPTION>
                                                                         1999               1998
                                                                     -------------     -------------
<S>                                                                  <C>               <C>
          Computed "expected" benefit                                $  (1,552,274)    $  (2,728,005)
          Increase (reduction) in income taxes resulting from:
               Change in valuation allowance for deferred
                 tax assets                                              1,542,774         2,722,639
               Non-deductible expenses                                       9,000             4,866
                                                                     -------------     -------------
                    Income tax provision                             $         500     $         500
                                                                     =============     =============

</TABLE>

          The tax effects of temporary differences that give rise to
          significant portions of the deferred tax assets at March 31, 1999
          are presented below:

<TABLE>
<S>                                                                  <C>               <C>
          Deferred tax assets:
               Net operating loss carryforwards
                    Total deferred tax assets                        $   5,656,774     $   4,114,000
                    Less valuation allowance                            (5,656,774)       (4,114,000)
                                                                     -------------     -------------
                    Net deferred tax assets                          $          -      $          -

</TABLE>

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

                                       20

<PAGE>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                   Notes to Consolidated Financial Statements
                             March 31, 1999 and 1998

NOTE 19 - SUBSEQUENT EVENTS

          Subsequent to year end, the Company acquired assets to enhance its
          hotel pay-per-view operations by issuing 125,000 shares of common
          stock and $150,000 of cash. The Company increased its debt
          position by borrowing an additional $500,000 in convertible
          debentures.

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

                                       21

<PAGE>

         ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)    Exhibits

<TABLE>
<CAPTION>
         NO.    DESCRIPTION                                                         PAGE
         ---    -----------                                                         ----
<S>             <C>                                                                 <C>
         23     Consent of Jones, Jensen & Co.......................................  24

         24     Power of Attorney (Incorporated by reference from initial
                Form 10-KSB, film No. 99664721, filed by the Company with
                the Commission on July 15, 1999)

         27     Financial Data Schedule (for SEC use only)..........................  25

</TABLE>

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

                                       22

<PAGE>

                                   SIGNATURES

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


CHEQUEMATE INTERNATIONAL, INC.


/s/ J. Michael Heil                              Date January 13, 2000
-------------------------------------                 ----------------
J. Michael Heil
Chief Executive and Financial Officer


              In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

/s/ J. Michael Heil                                        January 13, 2000
--------------------------------------
J. Michael Heil, Chairman of the Board
and Principal Accounting Officer


/s/ J. Michael Heil, for                                   January 13, 2000
--------------------------------------
John Bartholomew, Director


                                                           January 13, 2000
--------------------------------------
Hal Glick, Director


/s/ J. Michael Heil, for                                   January 13, 2000
--------------------------------------
Andre Peterson, Director


/s/ J. Michael Heil, for                                   January 13, 2000
--------------------------------------
Robert E. Warfield, Director


/s/ Daniel R. Thompson                                     January 13, 2000
--------------------------------------
Daniel R. Thompson, Director


                                       23