UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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
                                 MARCH 31, 2001

                        Commission File Number: 000-30211

                                MINDFULEYE, INC.
                            (FORMERLY, RABATCO, INC.)
             (Exact name of registrant as specified in its charter)

                  NEVADA                                87-0616344
                -----------                         ------------------
         (Place of Incorporation)                 (IRS Employer ID Number)

         SUITE 300- 355 BURRARD ST. VANCOUVER, BRITISH COLUMBIA V6C 2G6
         --------------------------------------------------------------
              (Address of registrant's principal executive office)

                                  604-638-6800
                         (Registrant's telephone number)


       -------------------------------------------------------------------
             (Former name or address, if changed since last report)

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

         Number of Shares of Common Stock, $0.001 Par Value, Outstanding
                          at March 31, 2001: 14,415,000

<PAGE>

                                MINDFULEYE, INC.
                              FOR THE QUARTER ENDED
                                 MARCH 31, 2001
                              INDEX TO FORM 10-QSB

                                                                            PAGE
                                                                            ----

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS:

Consolidated Balance Sheets ..............................................    3

Consolidated Statements of Operations:
  For the Three Months Ended March 31, 2001 ..............................    4

Consolidated Statements of Cash Flow:
  For the Three Months Ended March 31, 2001 ..............................    5

Consolidated Statements of Stockholders Equity:
  For the Three Months Ended March 31, 2001 ..............................    6

Notes to Financial Statements ............................................    7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS .............................   16

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS ...............................................   20

ITEM 2.  CHANGES IN SECURITIES ...........................................   20

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES .................................   20

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS ...............   20

ITEM 5.  OTHER INFORMATION ...............................................   20

ITEM 6.  EXHIBITS AND REPORTS ON FROM 8-K ................................   20

SIGNATURES ...............................................................   22

                                        2
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Consolidated Balance Sheet
(Expressed in United States Dollars)
(Unaudited)
================================================================================
                                                  March 31,        December 31,
                                                    2001                2000
--------------------------------------------------------------------------------

ASSETS

CURRENT
  Cash and cash equivalents                      $   164,379      $   345,897
  Accounts receivable                                 11,253           11,906
  Prepaid expenses                                     7,426            7,808
--------------------------------------------------------------------------------

                                                     183,058          365,611

CAPITAL ASSETS (note 5)                              223,184          239,848
--------------------------------------------------------------------------------

                                                 $   406,242      $   605,459
================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT
  Accounts payable and accrued liabilities       $   159,934      $    67,949
  Promissory note payable (note 6)                   250,000               --
--------------------------------------------------------------------------------

                                                     409,934           67,949
--------------------------------------------------------------------------------

SHAREHOLDERS' EQUITY

CAPITAL STOCK (note 8)
  Authorized
         100,000,000 common shares with a
         par value of $0.001

  Issued and outstanding
         14,415,000 common shares                     14,415           14,415

ADDITIONAL PAID-IN CAPITAL                         2,523,189        2,472,764

DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE  (2,541,296)      (1,949,669)
--------------------------------------------------------------------------------

                                                      (3,692)         537,510
--------------------------------------------------------------------------------

                                                 $   406,242      $   605,459
================================================================================

HISTORY AND ORGANIZATION OF THE COMPANY (note 1)

COMMITMENTS (note 13)

SUBSEQUENT EVENTS (note 15)

                                        3
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Consolidated Statement of Operations
(Expressed in United States Dollars)
(Unaudited)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                      Cumulative
                                                    Amounts from
                                                        July 21,
                                                            1999
                                                        (Date of          Three Month          Three Month
                                                  Incorporation)         Period Ended         Period Ended
                                                    to March 31,            March 31,            March 31,
                                                            2001                 2001                 2000
-----------------------------------------------------------------------------------------------------------
<S>                                               <C>                   <C>                   <C>
REVENUE                                           $        6,328        $      6,328          $       --
-----------------------------------------------------------------------------------------------------------

OPERATING EXPENSES
  Amortization                                            58,441              16,664               6,954
  Consulting fees                                        363,062               4,317              30,138
  Contract work                                            1,279                  --                  --
  Foreign exchange loss (gain)                             7,511              (2,010)             (4,335)
  Insurance                                               21,229               8,496                  --
  Interest and bank charges                               14,287               2,429               5,747
  Investor relations                                     101,637              54,207                  --
  Legal and audit fees                                   238,849              56,898              27,179
  Marketing and brand development                        175,787              19,144                  --
  Merger costs                                            92,040              92,040                  --
  Newsalert and other infeed services                     50,786              11,827                  --
  Office and miscellaneous                               145,907              13,166              23,578
  Rent and utilities                                     105,708              23,423              19,485
  Stock based compensation expense                       156,719              50,425                  --
  Telephone and communications                            63,291              10,390               9,138
  Wages and benefits                                     992,991             238,521             108,239
-----------------------------------------------------------------------------------------------------------

                                                       2,589,524             599,937             226,123
-----------------------------------------------------------------------------------------------------------

LOSS BEFORE OTHER ITEM                                (2,583,196)           (593,609)           (226,123)

OTHER ITEM
  Interest income                                         41,900               1,982               4,116
-----------------------------------------------------------------------------------------------------------

LOSS FOR THE PERIOD                               $   (2,541,296)        $  (591,627)         $ (222,007)
===========================================================================================================


BASIC AND DILUTED LOSS PER SHARE                                        $      (0.04)         $    (0.03)
===========================================================================================================


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                             14,415,000           8,754,945
===========================================================================================================
</TABLE>

                                        4
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Expressed in United States Dollars)
(Unaudited)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                 Cumulative
                                                               Amounts from
                                                                   July 21,
                                                                       1999
                                                                   (Date of          Three Month          Three Month
                                                             Incorporation)         Period Ended         Period Ended
                                                               to March 31,            March 31,            March 31,
                                                                       2001                 2001                 2000
----------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Loss for the period                                        $  (2,541,296)      $    (591,627)     $     (222,007)
  Items not affecting cash:
    Amortization                                                    58,441              16,664               6,954
    Stock based compensation expense                               156,719              50,425                  --

  Changes in non-cash working capital items
    Increase in accounts receivable                                (11,253)                653              (7,214)
    Increase in prepaid expenses                                    (7,426)                382              (8,225)
    Increase in due to related parties                                  --                  --              16,240
    Increase in accounts payable and accrued liabilities           156,434              91,985             (16,670)
----------------------------------------------------------------------------------------------------------------------

                                                                (2,188,381)           (431,518)           (230,922)
----------------------------------------------------------------------------------------------------------------------


CASH FLOWS FROM INVESTING ACTIVITIES
  Acquisition of capital assets                                   (281,625)                 --            (131,968)
  Cash acquired on acquisition of subsidiary                     2,257,500                  --           2,257,500
----------------------------------------------------------------------------------------------------------------------

                                                                 1,975,875                  --           2,125,532
----------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of common stock                           300,001                  --                  --
  Due to related parties                                          (173,116)                 --             (50,000)
  Advance (repayment) of promissory note                           250,000             250,000            (214,093)
----------------------------------------------------------------------------------------------------------------------

                                                                   376,885             250,000            (264,093)
----------------------------------------------------------------------------------------------------------------------

INCREASE IN CASH AND CASH EQUIVALENTS FOR THE PERIOD               164,379            (181,518)          1,630,517

CASH AND CASH EQUIVALENTS, beginning of period                          --             345,897               6,520
----------------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, end of period                     $     164,379       $     164,379       $   1,637,037
======================================================================================================================
</TABLE>

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (note 11)

                                        5
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Consolidated Statement of Shareholders' Equity
(Expressed in United States Dollars)
(Unaudited)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Deficit
                                                                                                 Accumulated
                                                                              Additional          During the              Total
                                                                                 Paid-In         Development      Shareholders'
                                              Shares            Amount           Capital               Stage             Equity
--------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>               <C>              <C>               <C>               <C>
BALANCE, July 21, 1999                            --         $      --        $       --        $         --      $        --

  Common stock issued                            160                 1                --                  --                1

  Loss for the period                             --                --                --            (200,991)        (200,991)
--------------------------------------------------------------------------------------------------------------------------------

BALANCE, December 31, 1999                       160                 1                --            (200,991)        (200,990)

  Common stock issued                             53                --                --                  --               --
--------------------------------------------------------------------------------------------------------------------------------

BALANCE, March 13, 2000                          213                 1                --            (200,991)        (200,990)

  Capital stock of Mindfuleye.com
    at March 13, 2000                          (213)                (1)                1                  --               --

  Capital stock of Mindfuleye, Inc.
    at March 13, 2000                      6,905,000                --                --                  --               --

  Shares issued to acquire
  MindfulEye.com                           6,910,000             6,910         2,073,974                  --        2,080,884

  Adjustment to par value                         --             6,905            (6,905)                 --               --

  Common stock issued
    November 1, 2000
    $0.50 per share                          300,000               300           149,700                  --          150,000

  Common stock issued
    November 12, 2000
    $0.50 per share                          300,000               300           149,700                  --          150,000

  Stock based
    compensation expense                          --                --           106,294                  --          106,294

  Loss for the year                               --                --                --          (1,748,678)      (1,748,678)
--------------------------------------------------------------------------------------------------------------------------------

BALANCE, December 31, 2000                14,415,000            14,415         2,472,764          (1,949,669)         537,510

STOCK BASED COMPENSATION                          --                --            50,425                  --           50,425
  EXPENSE

LOSS FOR THE PERIOD                               --                --                --            (591,627)        (591,627)
--------------------------------------------------------------------------------------------------------------------------------

BALANCE, March 31, 2001                   14,415,000         $  14,415        $2,523,189        $ (2,541,296)     $    (3,692)
================================================================================================================================
</TABLE>

                                        6
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in United States Dollars)
March 31, 2001
(Unaudited)
--------------------------------------------------------------------------------
1.       HISTORY AND ORGANIZATION OF THE COMPANY

         The Company was incorporated under the laws of the state of Nevada on
         June 16, 1977 under the name Rabatco, Inc. and changed its name to
         Mindfuleye, Inc. ("Mindfuleye") on May 12, 2000. The original
         authorized share capital consisted of 100,000 common shares with par
         value of $0.25 per share. On June 20, 1998, the authorized share
         capital was increased to 100,000,000 common shares with a par value of
         $0.001 per share and the Company completed a forward stock split of one
         share of its outstanding share capital for five shares.

         The Company has been in the development stage since its inception and
         had been primarily engaged in the business of developing mining
         properties. During 1982, the Company abandoned its remaining assets and
         settled its liabilities and since that date remained inactive until
         March 2000.

         Effective March 13, 2000, the Company acquired all of the issued and
         outstanding common stock of Mindfuleye.com Systems, Inc.
         ("Mindfuleye.com"). The consolidated Company's date of incorporation is
         considered to be July 21, 1999, the date of incorporation of
         Mindfuleye.com. Mindfuleye.com is in the development stage and is
         currently developing subscription-based services for the retail and
         institutional investment community that delivers proprietary content
         directly to subscribers by wireless devices, fax, e-mail and the web.


2.       GOING CONCERN

         The Company's financial statements are prepared using United States
         generally accepted accounting principles applicable to a going concern,
         which contemplates the realization of assets and liquidation of
         liabilities in the normal course of business. However, the Company has
         no current source of revenue. Without realization of additional
         capital, it would be unlikely for the Company to continue as a going
         concern. It is management's plan in this regard to obtain additional
         working capital through equity financings.

<TABLE>
<CAPTION>
                                                                March 31,       December 31,
                                                                     2001               2000
         -------------------------------------------------------------------------------------
<S>                                                              <C>            <C>
         Deficit accumulated during the development stage        $(2,541,296)   $(1,949,669)
         ======================================================================================
         Working capital surplus (deficiency)                    $  (226,876)   $   297,662
         ======================================================================================
</TABLE>


3.       BASIS OF PRESENTATION

         These financial statements contain the financial statements of
         Mindfuleye and Mindfuleye.com presented on a consolidated basis. On
         March 13, 2000, Mindfuleye acquired all of the issued and outstanding
         share capital of MindfulEye.com by issuing 6,910,000 common shares
         (Note 7). As a result of the share exchange, control of the combined
         companies passed to the former shareholders of Mindfuleye.com. For
         accounting purposes, this acquisition has been treated as a
         recapitalization of the Company. The accounting for this
         recapitalization is similar to a reverse take-over in which the
         financial statements presented include the accounts of MindfulEye.com
         since incorporation (July 21, 1999) and the accounts of

                                        7
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in United States Dollars)
March 31, 2001
(Unaudited)
--------------------------------------------------------------------------------

         the Company since the date of acquisition (March 13, 2000) to March 31,
         2001. The number of shares outstanding at March 31, 2001 as presented
         are those of Mindfuleye.

4.       SIGNIFICANT ACCOUNTING POLICIES

         PRINCIPLES OF CONSOLIDATION
         ---------------------------

         The consolidated financial statements include Mindfuleye, Inc. and
         Mindfuleye.com Systems, Inc. All significant intercompany balances and
         transactions have been eliminated upon consolidation.

         USE OF ESTIMATES
         ----------------

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

         CASH AND CASH EQUIVALENTS
         -------------------------

         Cash and cash equivalents include highly liquid investments with
         original maturities of three months or less.

         LOSS PER SHARE
         --------------

         In February 1997, the Financial Accounting Standards Board ("FASB")
         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 period. Diluted
         earnings per share takes into consideration common shares outstanding
         (computed under basic earnings per share) and potentially dilutive
         common shares.

         INCOME TAXES
         ------------

         Income taxes are provided in accordance with Statement of Financial
         Accounting Standards No. 109 ("SFAS 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) result 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.

                                        8
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in United States Dollars)
March 31, 2001
(Unaudited)
--------------------------------------------------------------------------------

4.       SIGNIFICANT ACCOUNTING POLICIES  (Cont'd)

         STOCK BASED COMPENSATION
         ------------------------

         Statement of Financial Accounting Standards No. 123 ("SFAS 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.

         The Company accounts for stock-based compensation issued to
         non-employees in accordance with the provisions of SFAS 123 and the
         Emerging Issues Task Force consensus in Issue No. 96-18 (EITF 96-18"),
         "Accounting for Equity Instruments that are Issued to Other Than
         Employees for Acquiring or in Conjunction with Selling, Goods or
         Services".

         FOREIGN CURRENCY TRANSLATION
         ----------------------------

         Translation amounts, denominated in foreign currencies, are translated
         into United States currency at exchanges rates prevailing at
         transactions dates. Carrying values of monetary assets and liabilities
         are adjusted at each balance sheet date to reflect the exchange rate at
         that date. Gains and losses from restatement of foreign currency
         monetary assets and liabilities are included in income.

         CAPITAL ASSETS AND AMORTIZATION
         -------------------------------

         Capital assets are recorded at cost less accumulated amortization.
         Amortization is being provided for annually, using the declining
         balance method at the following rates:

              Computer software                        100%
              Computer hardware                         30%
              Furniture and equipment                   20%

           Leasehold improvements are amortized over the period of the lease.

         DISCLOSURE ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
         ------------------------------------------------------------------

         Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "
         Disclosure About Segments of an Enterprise and Related information"
         requires use of the management approach model for segment reporting.
         The management approach model is based on the way a company's
         management organizes segments within the company for making operating
         decisions and assessing performance. Reporting segments are based on
         products and services, geography, legal structure, management
         structure, or any other manner in which the management disaggregates a
         company. Currently, SFAS 131 has no effect on the company's financial
         statements as substantially all of the company's operations are
         conducted in one industry segment in Canada.

                                        9
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in United States Dollars)
March 31, 2001
(Unaudited)
--------------------------------------------------------------------------------

4.       SIGNIFICANT ACCOUNTING POLICIES  (Cont'd)

         FINANCIAL INSTRUMENTS
         ---------------------

         a)       Fair Value Disclosures

                  The carrying value of cash and cash equivalents, trade
                  receivable and accounts payable and accrued liabilities
                  approximate their fair values due to the relatively short
                  periods to maturity of the instruments.

         b)       Foreign Currency Risk

                  The Company operates internationally, which gives rise to the
                  risk that cash flows may be adversely impacted by exchange
                  rate fluctuations.

                  The Company has not entered into contracts for foreign
                  exchange hedges.


5.       CAPITAL ASSETS

<TABLE>
<CAPTION>
                                                                          Net Book Value
                                                               ------------------------------------
                                                                     March 31,         December 31,
                                    Cost      Amortization            2001                 2000
---------------------------------------------------------------------------------------------------
<S>                             <C>           <C>              <C>                    <C>
Computer hardware               $ 180,646     $    38,318      $   142,328            $  153,868
Computer software                  10,563           7,729            2,834                 3,779
Leasehold improvements              9,231           1,846            7,385                 7,846
Furniture and equipment            81,185          10,548           70,637                74,355
---------------------------------------------------------------------------------------------------

                                $ 281,625     $    58,441      $   223,184            $  239,848
===================================================================================================
</TABLE>


6.       PROMISSORY NOTE PAYABLE

<TABLE>
<CAPTION>
                                                                                       March 31,        December 31,
                                                                                            2001                2000
         ---------------------------------------------------------------------- ---------------- -------------------
<S>                                                                             <C>              <C>
         Promissory Note payable to Netcurrents, Inc. (refer to note 16) bearing
             interest at 10% per annum on the principal amount outstanding
             having a maturity date of the earlier of i) August 21, 2001, ii)
             the closing of the acquisition of the Company by Netcurrents, Inc.
             or iii) closing of any funding in the event the acquisition does
             not close.
             Principal amount advanced to date                                  $       250,000  $         --
         ====================================================================== ================ ===================
</TABLE>

                                       10
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in United States Dollars)
March 31, 2001
(Unaudited)
--------------------------------------------------------------------------------

7.       RECAPITALIZATION

         On March 13, 2000, the Company issued 6,910,000 common shares to
         acquire 100% of the issued and outstanding shares of Mindfuleye.com at
         a deemed value of $2,080,884.

         As a result of this transaction the former shareholders of
         Mindfuleye.com acquired control over a majority of shares of the
         Company. Accordingly, the transaction has been treated for accounting
         purposes as a recapitalization of the Company and, therefore, these
         financial statements represent a continuation of the legal subsidiary,
         Mindfuleye.com, not the Company, as the parent for accounting purposes.
         In accounting for this transaction:

         i)   Mindfuleye.com is deemed to be the purchaser and parent company
              for accounting purposes. Accordingly, its net assets are included
              in the consolidated balance sheet at their historical book values;

         ii)  The deemed acquisition of the Company has been accounted for by
              the purchase method with the net assets of the Company recorded at
              fair market value at the date of acquisition. The fair market
              value acquired is as follows:

                  Cash and cash equivalents                     $2,257,500
                  Due to related parties                         (173,116)
                  Accounts payable and accrued liabilities         (3,500)
                  ---------------------------------------------------------

                                                                $2,080,884
                  =========================================================

         iii) Historical cost financial statements presented are those of
              Mindfuleye.com, with equity amounts of Mindfuleye.com restated to
              reflect the number of shares received in the business combination.

         iv)  The consolidated statements of operations and cash flows include
              Mindfuleye.com's results of operations and cash flows from July
              21, 1999 (date of incorporation) and the Company's results of
              operations from March 13, 2000 (date of acquisition).


8.       CAPITAL STOCK

         a)   As a result of the recapitalization described in Note 7,
              Mindfuleye.com was deemed to be the acquirer for accounting
              purposes. However, the number of common shares issued and
              outstanding of 6,905,000 are the Company's.

              As consideration to acquire 100% of the outstanding shares of
              Mindfuleye.com, the Company issued 6,910,000 shares at a deemed
              value of $2,080,884.

         b)   On November 1, 2000, the Company completed a private placement
              whereby it issued 300,000 shares for cash proceeds of $150,000.

         c)   On November 12, 2000, the Company completed a private placement
              whereby it issued 300,000 shares for cash proceeds of $150,000.

                                       11
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in United States Dollars)
March 31, 2001
(Unaudited)
--------------------------------------------------------------------------------

9.       STOCK OPTIONS AND WARRANTS

         Under the company's stock option plan, incentive and non-qualified
         options may be granted to directors, officers, employees and
         consultants to acquire up to 3,000,000 authorized but unissued common
         shares of the company. No stock option granted under the stock option
         plan is transferable by the optionee other than by will or the laws of
         descent and distributions.

         The exercise price of each option granted to an optionee may not be
         less than the market price of the fair market value of the common share
         on the date of the grant, and in respect of each stock option granted
         to a greater-than ten percent shareholder, the exercise price shall not
         be less than 110% of the fair market value of the common share on the
         date of the grant.

         The term of the option granted may not exceed 10 year from the date of
         the grant, and in the case of greater-than ten percent shareholders,
         the term may not exceed 5 years from the date of the grant. Options
         granted under the plan generally vest over a two-year period, with
         one-quarter becoming exercisable at the end of every six months
         following the date of grant. The plan administrator may accelerate the
         vesting of options at its sole discretion.

         The following stock options were outstanding at March 31, 2001.

                        Number                Exercise
                     Of shares                  Price      Expiry date
--------------------------------------------------------------------------------
                     1,287,500                $  3.50     June 7, 2010
                        95,000                   3.50     July 28, 2010
                         6,500                   3.50     September 29, 2010
                       412,000                   0.75     November 24, 2010
                        50,000                   0.38     December 22, 2010
                        20,000                   0.23     January 8, 2011
================================================================================

         The following warrants were outstanding at March 31, 2001.

                        Number                Exercise
                     Of shares                  Price      Expiry date
--------------------------------------------------------------------------------
                       537,500                $ 2.50      March 20, 2002
================================================================================


10.      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.

         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 Issue No. 96-18, "Accounting for Equity Instruments that
         are Issued to Other Than Employees for Acquiring or in Conjunction with
         Selling Goods or Services".

                                       12
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in United States Dollars)
March 31, 2001
(Unaudited)
--------------------------------------------------------------------------------

10.      STOCK BASED COMPENSATION EXPENSE  (Cont'd)

         Following is a summary of the stock option activity:


                                                                Period Ended
                                                                   March 31,
                                                                        2001
         -----------------------------------------------------------------------
         Outstanding, at December 31, 2000                         1,963,750
         Granted                                                      20,000
         Forfeited                                                  (112,750)
         Exercised                                                        --
         -----------------------------------------------------------------------
         Outstanding, at March 31, 2001                            1,871,000
         =======================================================================

         WEIGHTED AVERAGE EXERCISE PRICES

         Outstanding, beginning of period                          $    2.83
         =======================================================================
         Granted                                                   $     .23
         =======================================================================
         Forfeited                                                 $    3.25
         =======================================================================
         Outstanding, end of period                                $    2.78
         =======================================================================
         Weighted average fair value of options granted
         during the period                                         $    0.23
         =======================================================================

         Following is a summary of the status of the options outstanding at
         March 31, 2001:

<TABLE>
<CAPTION>
                                     Outstanding Options                         Exercisable Options
                        -----------------------------------------------     -------------------------------
                                       Weighted
                                        Average         Weighted                         Weighted
                                       Remaining         Average                          Average
                                      Contractual        Exercise                        Exercise
         Exercise Price                 Number             Life          Price             Number        Price
         ---------------------------------------------------------------------------------------------------------
<S>                                   <C>                  <C>          <C>               <C>           <C>
         $3.50                        1,389,000            9.19         $  3.50           389,000       $  3.50
         $0.75 to $0.23                 482,000            9.26         $  0.69            76,500       $  0.74
         =========================================================================================================
</TABLE>

         COMPENSATION
         ------------

         At March 31, 2001, the Company has 184,000 options granted to
         consultants. These options are accounted for under the Emerging Issues
         Task Force Consensus in issue No. 96-18. Accordingly, using the
         Black-Scholes option pricing model, the options are marked to fair
         value through charges to operations as stock-based compensation. Stock
         based compensation recognized pursuant to EITF 96-18 during the three
         months ended March 31, 2001 was $50,425.

                                       13
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in United States Dollars)
March 31, 2001
(Unaudited)
--------------------------------------------------------------------------------

10.      STOCK BASED COMPENSATION EXPENSE  (Cont'd)

         The Company applies Accounting Principles Board Opinion No, 25
         "Accounting for Stock Issued to Employees" in accounting for its stock
         option plan. Had compensation expense relating to the remaining
         1,687,000 options granted to employees been recognized on the basis of
         fair value pursuant to Statement of Financial Accounting Standard No.
         123, net loss and loss per share would have been adjusted as follows:

<TABLE>
<CAPTION>
                                                            Period From        Period From        Period From
                                                               July 21,         January 1,          January 1
                                                                1999 to           2001 to             2000 to
                                                              March 31,         March 31,           March 31,
                                                                   2001              2001                2000
         -----------------------------------------------------------------------------------------------------
<S>                                                          <C>                <C>              <C>
         LOSS FOR THE PERIOD
            As reported                                      $  (2,541,296)     $ (591,627)      $  (222,007)
         =====================================================================================================
            Pro forma                                        $  (3,365,495)     $ (782,811)      $  (222,007)
         =====================================================================================================
         BASIC AND DILUTED LOSS PER SHARE
            As reported                                      $          --      $    (0.04)      $     (0.03)
         =====================================================================================================
            Pro forma                                        $          --      $    (0.05)      $     (0.03)
         =====================================================================================================
</TABLE>

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

                                                  Period from        Period from
                                                    January 1,        January 1,
                                                      2001 to            2000 to
                                                    March 31,          March 31,
                                                         2001               2000
         -----------------------------------------------------------------------

         Risk free interest rate                      6.054%               --
         Expected life of the options             9.50 years               --
         Expected volatility                        169.996%               --
         Expected dividend yield                          --               --
         ======================================================================


11.      SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

         No non-cash transactions occurred during the period from January 1,
         2001 to March 31, 2001.

         The following non-cash transaction occurred during the twelve month
         period ended December 31, 2000:

         The company issued 6,910,000 shares at a deemed value of $2,080,884 to
         acquire 100% of the outstanding shares of MindfulEye.com (Note 7).

                                       14
<PAGE>

MINDFULEYE, INC.
(formerly Rabatco, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in United States Dollars)
March 31, 2001
(Unaudited)
--------------------------------------------------------------------------------

12.      RELATED PARTY TRANSACTIONS

         The Company entered into the following transactions with related
         parties during the period ended March 31, 2001, as follows:

         a)   Paid or accrued $Nil to directors and an officer for consulting
              fees (March 31, 2000 - $27,296).

         b)   Included in accounts payables and accrued liabilities is an amount
              of $23,755 (March 31, 2000 - $Nil) which is payable to management
              relating to deferred salaries.


13.      COMMITMENTS

         The Company leases office premises pursuant to an operating lease,
         which expires in March 2005. Future annual lease payments are as
         follows:

                  2002                             $  92,529
                  2003                                99,089
                  2004                                99,089
                  2005                                99,089
                  --------------------------------------------

                                                   $ 389,796
                  ============================================


14.      INCOME TAXES

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

<TABLE>
<CAPTION>
                                                            March 31,           December 31,
                                                                 2001                   2000
         -------------------------------------------------------------------------------------
<S>                                                         <C>                 <C>
         Tax benefit of net operating loss carry forward    $  863,600          $   663,000
         Valuation allowance                                  (863,600)            (663,000)
         -------------------------------------------------------------------------------------

                                                            $       --          $        --
         =====================================================================================
</TABLE>

         The Company has a net operating loss carry forward of approximately
         $2,540,000, which expires in 2007 and 2008 fiscal years. The Company
         provides a full valuation allowance on the deferred tax asset because
         of the uncertainty regarding realizability.


15.      SUBSEQUENT EVENT

         The President of the Company left effective April 20, 2001. The Company
         believes the maximum obligation under the employment contract would be
         an amount equal to one year's salary ($63,400).


16.      OTHER MATERIAL EVENTS

         On February 28, 2001, the Company entered into a formal letter of
         intent with Netcurrents, Inc. ("Netcurrents") whereby Netcurrents
         intends to acquire the company in a stock for stock transaction. The
         closing proposed stock offer is subject to reciprocal due diligence,
         applicable corporate and regulatory approvals of the successful
         negotiation and execution of a definitive agreement

                                       15
<PAGE>

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

Except for disclosures that report the Company's historical results, the
statements set forth in this section contain forward-looking statements. Words
or phrases "will likely result", "are expected to", "will continue", "is
anticipated", "estimate", "project or projected", or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995.

Actual results could differ materially from those projected in forward-looking
statements. Additional information and factors that could cause actual results
to differ materially from those in the forward-looking statements are set forth
in this Form 10-QSB and the Company's Form 10SB, as amended, filed with the
Securities and Exchange Commission. The Company desires to take advantage of
certain provisions in the Private Securities Litigation Reform Act of 1995,
which provide a safe harbor for forward-looking statements made by or on behalf
of the Company. The Company hereby cautions stockholders, prospective investors
in the Company, and other readers to not place undue reliance on these
forward-looking statements, which can only address known events as of the date
of this report.

GENERAL OVERVIEW

MindfulEye, Inc. (formerly Rabatco, Inc.) (the "Company" or "MindfulEye"), was
incorporated under the laws of the State of Nevada on June 16, 1977. From the
Company's inception in 1977 through 1982, the Company was primarily engaged in
the business of mineral resource exploration. The Company remained inactive from
1982 to 1998. On March 13, 2000, the Company completed the acquisition of
MindfulEye.com Systems, Inc., a company engaged in the business of Internet
software and technology research and development. On May 12, 2000, the Company
changed its name to MindfulEye, Inc.

MindfulEye has developed a new category of technologies that can mine raw text
content from digital sources including the Internet and can, through the use of
our proprietary artificial intelligence technology known as Lexant(TM), extract
and deliver to our customers information that affects organizations in which
they may have interest.

MindfulEye's technologies are designed to:

     o   Monitor Internet content such as Internet Relay Chat (IRC) channels,
         Web-based discussion forums, editorial Web sites, and other sources of
         digital content such as newswire and other electronic data feeds in
         near real-time for specific types of information;

     o   Match text information to specific types of search criteria such as
         stock ticker symbols;

     o   Rank texts for sentiment, classify texts by topic, summarize texts, and
         rank texts for relevance using a branch of Artificial Intelligence (AI)
         technology known as Natural Language Processing (NLP); and

     o   Deliver information to customers in a variety of vertical markets using
         a variety of delivery methods including the World Wide Web, e-mail, and
         wireless.

Our technologies are built on leading edge software from Microsoft. In 2000,
MindfulEye entered into a strategic partnership with Microsoft that provides us
with special access to Microsoft services and software.

MindfulEye used its technologies to develop two software applications for
segments in the financial sector. In November, 2000, the company launched a
service for individuals in the investor relations profession known as MindfulEye
Surveillance. This monitoring service tracks online content published about
public companies, alerting investor relations professionals to events that could
affect their companies' interest. Version 1.2 of MindfulEye Surveillance was
launched on January 2, 2001. This version added new features and enhanced the
performance. MindfulEye Surveillance is distributed in Canada exclusively by
Canada NewsWire, the leading Canadian corporate disclosure newswire service and
media service provider. To date, MindfulEye has not entered agreements with
third parties to distribute this service outside of Canada.

While MindfulEye may continue to develop our own applications for various
vertical markets, we expect to aggressively pursue opportunities to co-develop
and license "private-label" applications of our technology with third

                                       16
<PAGE>

parties in a variety of vertical markets. Those markets include the financial
sector, the entertainment industry, the polling and public relations markets,
consumer products marketing, customer relationship management (CRM), the risk
management and credit rating sector, the healthcare market, and the markets for
Internet content management and Internet search services.

On January 8, 2001, MindfulEye announced a co-branding agreement with Business
Television (BTV). Under the terms of the agreement, the MindfulEye will provide
BTV with MindfulEye Mood reports that will appear on the BTV program. Select
companies appearing on BTV will have access to MindfulEye Mood Reports. Under
the deal, BTV and MindfulEye will jointly produce a segment on the BTV
television show about hot topics and rumors heard online. MindfulEye will be
able to demonstrate the value of its Internet monitoring service to featured
companies, who will be encouraged to subscribe.

On March 14, 2001, MindfulEye announced a technology development agreement
between its subsidiary, MindfulEye.com Systems Inc. and the Ontario Securities
Commission. Under the terms of the agreement, the Commission will receive access
to MindfulyEye's real-time artificial intelligence technology for monitoring the
Internet. In exchange, the securities regulator will provide market intelligence
and assist MindfulEye in developing features for its surveillance products.

On March 16, 2001, MindfulEye developed and launched an application of our
technology known as InvestorLite. InvestorLite is designed to serve retail
investors in the financial sector. This application is distributed directly by
MindfulEye via the Internet and is intended to provide retail investors with
access to information that may affect the stock price of companies that interest
them.

On February 28, 2001, we entered into a non-binding letter of intent to merge
our operations with NetCurrents, Inc (NetCurrents). NetCurrents, through its
subsidiary, NetCurrents Services Corporation (NSC) assists corporations and
individuals in the achievement of their strategic business goals through the
management of Internet-based information. The closing of the acquisition is
subject to, among other customary closing conditions, reciprocal due diligence,
applicable corporate and regulatory approvals and the negotiation and execution
of a definitive merger agreement. Using FIRST (Fast Internet Real Time Search
Technology), NSC's proprietary, patent pending, real-time search technology,
NetCurrents monitors sources of information ranging from thousands of
e-publications, Internet sites and message boards, from an extensive universe of
targeted Internet locations which are monitored in real-time, 24 hours a day,
seven days a week. NSC provides its clients with critical information and
strategic counsel in a broad range of areas which assist, among other things, in
improving corporate performance, protecting and enhancing their corporate and
personal images, measuring a wide range of perceptions, providing competitive
intelligence, countering misinformation and fraud on the Internet, providing due
diligence support, and optimizing shareholder value.

The following discussion and analysis explains MindfulEye's results of
operations for the quarter ended March 31, 2001 compared with the quarter ended
March 31, 2000. You should review the discussion and analysis of financial
condition in conjunction with MindfulEye's financial statements and the related
notes, as well as statements detailed in MindfulEye's Securities and Exchange
Commission filings.

RESULTS OF OPERATIONS

FISCAL QUARTER ENDED MARCH 31, 2001 COMPARED TO QUARTER ENDED MARCH 31, 2000

REVENUES. The company had revenues of $6,328 for the quarter ended March 31,
2001 compared to nil revenue for the quarter ended March 31, 2000. MindfulEye
had interest income of $1,982 for the quarter ended March 31, 2001 compared to
$4,116 for the quarter ended March 31, 2000.

         EXPENSES. During the quarter ended March 31, 2001, MindfulEye incurred
         total expenses of $599,937 compared to $226,123 for the quarter ended
         March 31, 2000: related primarily to: (i) research and developing its
         web technologies; (ii) marketing and brand development; (iii)
         professional and legal fees relating to its Securities and Exchange
         Commission reports and (iv) general overhead and administrative
         expenses. During the quarter ended March 31, 2001, MindfulEye paid
         consulting fees in the amount of $4,317 compared to $30,138 for the
         quarter ended March 31, 2000. MindfulEye paid legal and accounting fees
         of $56,898 for the quarter ended March 31, 2001 related to preparation
         of its filings with the Securities and Exchange Commission, patent
         searches and other corporate and accounting matters compared to

                                       17
<PAGE>

         $27,179 for the quarter ended March 31, 2000. MindfulEye incurred other
         expenses, including amortization expenses of $16,664 for the quarter
         ended March 31, 2001 compared to $6,954 for the quarter ended March 31,
         2000, foreign exchange gain of $2,010 for the quarter ended March 31,
         2001 compared to a foreign exchange gain of $4,335 for the quarter
         ended March 31, 2000, insurance expense of $8,496 for the quarter ended
         March 31, 2001 compared to nil for the quarter ended March 31, 2000,
         interest and bank charges expenses of $2,429 for the quarter ended
         March 31, 2001 compared to $5,747 for the quarter ended March 31, 2000,
         investor relations expenses of $54,207 for the quarter ended March 31,
         2001compared to nil for the quarter ended March 31, 2000 , marketing
         and brand development expenses of $19,144 compared to nil for the
         quarter ended March 31, 2000, infeed services expenses of $11,827 for
         the quarter ended March 31, 2001 compared to nil for the quarter ended
         March 31, 2000, office and miscellaneous expenses of $13,166 for the
         quarter ended March 31, 2001 compared to $23,578 for the quarter ended
         March 31, 2000, rent and utilities expenses of $23,423 compared to
         $19,485 for the quarter ended March 31, 2000, telephone and
         communication expenses of $10,390 for the quarter ended March 31, 2001
         compared to $9,138 for the quarter ended March 31, 2000, wages and
         salary expenses of $238,521 for the quarter ended March 31, 2001
         compared to $108,239 for the quarter ended March 31, 2000, merger
         expenses of $92,040 for the quarter ended March 31, 2001 compared to
         nil for the quarter ended March 31, 2000. Merger costs included legal
         fees, professional fees, travel and communications costs relating to
         the proposed merger announced on February 28, 2001. Non-cash stock
         based compensation expenses of $50,425 for the quarter ended March 31,
         2001 compared to nil for the quarter ended March 31, 2000.

NET LOSS. MindfulEye had a net loss of $591,627 or basic and diluted loss of
$0.04 per share for the quarter ended March 31, 2001 compared to a net loss of
$222,007 or basic and diluted loss of $0.03 per share for the quarter ended
March 31, 2000.

PLAN OF OPERATION

Our plan of operation is based on the operating history of MindfulEye, our
experience in the industry, and our discussions with third parties, the SEC
filings of our competitors and the decisions of our management. Set out below is
a summary of our plan of operation for the twelve-month period commencing on
April 1, 2001.

Subsequent to our fiscal year end of December 31, 2000, we continue experiencing
delays in raising additional financing. This has resulted in the delay in the
development of our technologies and our inability to intensify our marketing and
promotional efforts to secure strategic relationships. Our ability to develop
new applications of our technology and to continue as a going concern will
depend on our ability to obtain future financing.

We have generated sales of $3,976 from our Surveillance service for the quarter
ended March 31, 2001, which has been distributed exclusively by Canada Newswire
in Canada. We anticipate that the sales from our Surveillance product will
increase in the third and the forth quarter of 2001as the economy recovers. We
anticipate we will have sales in the third quarter of 2001 of our InvestorLite
service, launched on March 16, 2001, which is being sold directly by us. We
anticipate we will have sales of our technology platform and related technology
consulting and development services in the fourth quarter of 2001. We anticipate
our operating activities during the next few months will focus primarily on our
efforts to:

     a.  Secure additional financing for general working capital purposes and
         for our efforts to begin the initial implementation of our marketing
         plan;
     b.  Generate revenues from licensing Lexant(TM)and developing
         "private-label" applications of our technologies;
     c.  Generate revenues from our Surveillance, and InvestorLite products;
         promoting our products and obtaining subscribers for our Investor
         product;
     d.  Establish additional strategic relationships with the existing and
         other internet providers, investment houses, and regulatory bodies;
     e.  Continue developing and enhancing our artificial intelligent
         technology, Lexant;
     f.  Developing, testing and expanding our current service offerings.
     g.  Hiring and training customer support personnel as soon as revenue start
         to generate.
     h.  Successfully complete the proposed merger announced on February 28,
         2001.

                                       18
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

As at March 31, 2001, MindfulEye had working capital deficit in the amount of
$226,876. MindfulEye had cash or cash equivalents of $164,379, accounts
receivables of $11,253 and prepaid expenses and deposits in the amount of
$7,426. MindfulEye had accounts payable and accrued liabilities in the amount of
$159,934 and a short term promissory note payable to NetCurrents, Inc. of up to
$375,000 of which $250,000 is currently outstanding. This short term debt
facility from NetCurrents, Inc. is secured by a General Security Agreement and
bears interest at 10% per annum on the principal amount outstanding. Both the
principal and any interest accrued are due and payable in a single installment
the earlier of i) August 21, 2001, ii) the closing of the acquisition of the
Company by Netcurrents, Inc. or iii) closing of any funding in the event the
acquisition does not close. The Company anticipates that the debt facility from
NetCurrents, Inc. will enable the Company to satisfy its cash requirements until
June 30, 2001.

MindfulEye anticipates that it will be required to raise at least $2,000,000 to
$3,000,000 to meet its anticipated cash requirements for planned expansion of
the Company's operations for marketing, development technology, applications and
products during the remainder of the year 2001. As at March 31, 2001, MindfulEye
has no arrangements of financing, and there can be no assurance that it will be
successful in acquiring sufficient financing to fund its plan of operation on
terms acceptable to MindfulEye, if at all. Any inability to obtain additional
financing, when needed, will have a material adverse effect on the company,
requiring the company to significantly curtail or possibly cease its operations.
In addition, any additional equity financing may involve substantial dilution to
the interests of the Company's then existing shareholders.

While MindfulEye believes its capital requirement estimates are reasonable, such
estimates can change for many different reasons, some of which are beyond
MindfulEye's control. MindfulEye is a development stage company, which means
that it is in the process of developing its technologies and that it currently
has very little revenues from its operations. MindfulEye currently has no
significant subscribers and no significant customers who have licensed its
platform technologies and related services. MindfulEye does not believe it will
receive any significant revenue from its subscription services or from
technology platform licensing until at least 2002. There can be no assurance
that a sufficient number of subscribers will subscribe to MindfulEye's services
or a sufficient number of licensees will license our platform technologies and
associated services to make them commercially viable.

MindfulEye does not anticipate it will acquire or dispose of any significant
equipment in the second quarter of 2001.

PERSONNEL

For the quarter ended March 31, 2001, MindfulEye had 19 full-time employees.
This included 4 on management, 11 programmers and developers, who assist in
development of the Company's internal operating and information systems and
technologies, and 4 employees who are engaged in general and administrative and
marketing functions.

MindfulEye also engages independent consultants to assist in the development of
its technologies and applications, for public relations services, NLP (natural
language processing) development, marketing services and communication
consulting. MindfulEye may also engage additional consultants in the future to
assist it with the development of software and information systems and
implementation of its business plan.

MindfulEye's success will depend in large part on its ability to attract and
retain skilled and experienced employees and consultants. MindfulEye does not
anticipate any of its employees will be covered by a collective bargaining
agreement. MindfulEye does not currently maintain key man life insurance on any
of its directors or executive officers.

INFLATION

MindfulEye's results of operations have not been affected by inflation and
management does not expect inflation to have a significant effect on the
Company's operations in the future.

DIVIDENDS

The Company has not paid any dividends on its stock.

                                       19
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On February 15, 2001 action was commenced and filed in the Supreme
         Court of British Columbia against the Company by Capital Idea Financial
         specifying $28,000 for non-payment of a debt for services rendered
         pursuant to a Investor relations and Marketing Agreement dated
         September 12, 2000. We believe the claim is without merit since we
         terminated the Agreement due to non-performance of services outlined in
         Section III of the said agreement and we intend to vigorously defend
         against it. Accordingly, we have filed the statement of Defense. This
         action has yet been set for trial.


ITEM 2.  CHANGES IN SECURITIES

         Subsequent to March 31, 2001, the Company has issued, in the aggregate,
         2,832,744 fully paid and non-assessable shares of common stock to
         certain advisors, consultants and employees as compensation for
         contractual services rendered. All such shares were issued in "offshore
         transactions" within the meaning of Rule 902(h) under the Securities
         Act to persons who are not "U.S. Persons" within the meaning of Rule
         902(k) under the Securities Act. Following such issuances, the Company
         has 17,247,744 shares of common stock issued and outstanding.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION

         On April 3, 2001 Praveen Varshney tendered his resignation as a
         director.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

         2.1 (1)  Articles of Incorporation of Mindfuleye, Inc.

         2.2 (1)  Certificate of Amendment to Articles of Incorporation

         2.3 (2) Certificate of Amendment to Articles of Incorporation Dated May
         12, 2000

         2.4 (2) Amended and Restated Bylaws, effective May 26, 2000

         6.1 (1) Share Exchange Agreement dated March 13, 2000

         6.2 (1) Lease Agreement dated February 28, 2000

         6.3 (1) Form of Employment Agreement

                                       20
<PAGE>

         6.4 (2) 2000 Stock Option Plan

         6.5 (2) Form of Stock Exchange Agreement

         (1) Previously filed on April 4, 2000 on Form 10-SB
         (2) Previously filed on June 2, 2000 on Form 10-SB12G/A

         (b) Reports on Form 8-K

         The Company filed no reports on Form 8-K during the quarter ended March
         31, 2001.





                                       21
<PAGE>

                                   SIGNATURES

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


Date: May 15, 2001


                                       MINDFULEYE, INC.

                                       /s/ Amanda Kerr
                                       ----------------------------------------
                                       Amanda Kerr, Secretary


                                       22