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

                                   FORM 10K-SB

(Mark One)

(X)  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the Fiscal Year Ended December 31, 1999.

( )  Transition Report under Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the Transaction Period from ______ to ________.

Commission File Number       000-24957


                             PUSH ENTERTAINMENT INC.
                 (Name of Small Business Issuer in its Charter)

           Delaware                                        51-0384101
(State or other  jurisdiction                  (IRS Employee Identification No.)
of Incorporation or organization)

                                    Suite 600
                               520 - 5th Avenue SW
                        Calgary, Alberta, Canada T2P 3R7
                    (Address of Principal executive Offices)

                                 (403) 297-1055
                          (Issuer's Telephone Number:)

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:

                    Common Shares, $.001 par value per share

Check  whether  the  issuer:  (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or such shorter period that
the registrant  was required to file such reports),  and (2) has been subject to
such filing requirements for the past 90 days.

                  Yes                   No     X
                     ----------           ----------

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. (X)

State issuer's revenues for its most recent fiscal year: Nil

<PAGE>

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days (see  definition  of  affiliate  in Rule
12b-2 of the  Exchange  Act.):  $9,715,337  as at December 31, 2000 based on the
Company's last offering price of its common shares of $0.65 per share.

                   (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                           DURING THE PAST FIVE YEARS)

     Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the  distribution of
securities under a plan confirmed by a court.

                  Yes: ________             No: _________

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest  practicable  date:  20,084,642 shares of common
stock were outstanding as at December 31, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

     If the following documents are incorporated by reference,  briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated:  (1) any annual report to security  holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities  Act"). The listed
documents should be clearly described for identification  purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).

                                      None.

     Transitional Small Business Disclosure Format (check one):

                  Yes                       No      X
                      -------------            ------------


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<PAGE>


                                TABLE OF CONTENTS

                                     PART I

                                                                           PAGE

Item 1.  Description of Business                                             4

Item 2.  Description of Property                                            10

Item 3.  Legal Proceedings                                                  10

Item 4.  Submissions of Matters to a Vote of Security Holders               10


                                     PART II


Item 5.  Market For Common Equity and Related Stockholder Matters           11

Item 6.  Management's Discussion and Analysis or Plan of Operation          12

Item 7.  Financial Statements                                               14

Item 8.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosures                                          24


                                    PART III

Item 9.  Directors, Executive Officers, Promoter and Control Persons;
         Compliance with Section 16(a) of the Exchange Act                  24

Item 10. Executive Compensation                                             27

Item 11. Security Ownership of Certain Beneficial Owners and Management     28

Item 12. Certain Relationships and Related Transactions                     29

Item 13. Exhibits and Reports on Form 8K                                    30


                                       3
<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

A. The Company

     Push  Entertainment,  Inc. was incorporated  under the laws of the State of
Delaware  on  January 7, 1998.  Our  address is Suite 600,  520 - 5th Avenue SW,
Calgary,  Alberta,  Canada,  T2P 3R7.  Our  registered  office  in the  State of
Delaware is 1209 Orange Street, Wilmington, Delaware 19801. Our telephone number
is (403) 297-1055 and our facsimile number is (403) 297-1059.

     On January 7, 1998, we acquired all of the issued and  outstanding  capital
stock of Push  Technologies  Inc.  (formerly  736145  Alberta  Inc.) an Alberta,
Canada corporation incorporated on April 21, 1997 (our "Subsidiary").

     Our Subsidiary  entered into an Agreement  dated August 4, 1997 with E-Zone
Networks  Inc., a Delaware  Corporation,  (the "E-Zone  Agreement")  pursuant to
which it agreed to purchase certain technology and intellectual property,  which
we  refer to as the  "Technology,"  from  E-Zone  in  consideration  for (1) the
payment  of  $200,000  on or  before  March  31,  1998;  and (2)  payment  of an
additional $160,500 for improvements made to the Technology.

     On January 27, 1998, our Subsidiary  assigned to us all of its right, title
and interest in and to the E-Zone  Agreement,  and in and to the Technology.  We
have discharged the obligations of our Subsidiary  under the terms of the E-Zone
Agreement.

     The Technology  consists of a suite of processes and  proprietary  software
which will  facilitate the conversion of existing 2D film and video content to a
3D format. See "Item 1. Description of Business - Our Business."

     As at December 31, 1999 we had a total of seven full time personnel, all of
which were  contracted  consultants.  We currently have a total of six full time
personnel, of which three are employees and three are contracted consultants.

B. Our Business

     Following our  acquisition of the  Technology,  we have continued to expend
resources on (1) the development and enhancement of the Technology ($304,661 for
the year ended  December 31, 1998 and $304,855 for the year ending  December 31,
1999);  and (2)  implementing  limited  business  and  channel  (e.g.  potential
markets)  development  for the Technology  ($184,005 for the year ended December
31, 1998 and $101,023 for the year ended  December 31,  1999).  To date, we have
not yet  generated  any  revenues  as a result  of these  business  and  channel
expenditures. E-Zone, the initial developer of the Technology, had not generated
any revenues from the Technology  prior to its  acquisition by us. Funds for the
activities mentioned above were obtained by us through the sale of shares of our
common stock.

1. The Technology

         The  Technology   includes  the  3D   Professional   Workstation   (the
"Workstation")   which   consists  of  a  suite  of   functions   designed   for
post-production  and  digital  imaging   professionals.   We  believe  that  the
Workstation   significantly   improves  the  production   process  for  creating
stereoscopic 3D video,  and when complete,  will generate high quality 3D moving
images from existing 2D content.


                                       4
<PAGE>

     The output  processed by the  Technology  is  compatible  with,  and can be
delivered on film, videotape, digital versatile disk ("DVD") and CD-ROM. We have
completed  feasibility  studies of the 3D  conversion  process and have produced
demonstration  segments based on the current  revision of the  Workstation.  The
Workstation is currently  functional and we are continuing to refine and further
develop the Technology.

     The  Technology  does  not  require  any  "raw"  materials  (e.g.  computer
hardware,  disks,  etc.)  that are not  widely and  generally  available  from a
variety of different sources at competitive rates.

2. Intellectual Property

     We have been  assigned  the rights in and to a certain  patent  application
pertaining  to  specific  aspects  of the  Technology;  and we  intend  to  file
additional  patent, as well as copyright,  applications for our technologies and
processes as and when our management deems such applications timely,  necessary,
and/or  advantageous.  From our inception in 1997 through  December 31, 1999, we
have spent approximately $970,016 on research and development activities.

3. Competitive Products

     Although there is a history of real time 2D to 3D conversion processes such
as those  being  developed  by the Sanyo  Corporation,  we are aware of only one
other mature technology development company, Dynamic Digital Depth, Inc. ("DDD")
(formerly,  Xenotech Ltd.) attempting to develop a post production 3D conversion
process. While we and DDD are developing similar and competitive  processes,  we
believe that the Technology will offer greater flexibility than the DDD process.
The DDD process has been in development for a longer period of time and has been
made available to developers.  However, we believe that the Technology will gain
greater  acceptance  because of its  ability  to give the user a wider  range of
artistic control.

     Moreover,  the  entertainment,  film,  video and  software  industries  are
intensely  competitive.  We compete,  and will compete,  with  companies  having
greater financial and technical  resources.  Therefore to the extent that we are
able to establish sales, revenues and profits there is no assurance that we will
be able to sustain such sales, revenues and profits. In addition, although not a
major factor  today,  if and when we begin  achieving  our  objectives,  larger,
better  financed  companies  in  peripheral  businesses  may be attracted to our
markets. They may be prepared to spend large sums quickly to develop competitive
products  and  to  mount  major  marketing  campaigns.  We  are  aware  of  this
possibility  and hope to establish  ourselves  early in the industry.  Timing is
critical.  Therefore, prompt development of our financing and marketing programs
are essential to minimizing this risk.

4. Advantages of the Technology

     The  current  revision  of  the  Technology   incorporates  certain  unique
features,  and  when  fully  developed,  will  have  the  following  significant
advantages:

     (a)  The Technology  will allow the processing of film,  video for HDTV and
          large  format  films,  such  as  IMAX,  without  distortion   normally
          associated with less  sophisticated  solutions,  and will enable us to
          pursue the market for commercial quality off-line processing;

     (b)  the  automated  image object  tracking  capability  of the  Technology
          speeds  up  the   extraction   of  images   from  within  a  scene  by
          automatically tracking the image forward and backward in time;


                                       5
<PAGE>

     (c)  the Technology has been designed to aid in enhancement and production,
          and to  become a factor  in the  creative  aspects  of film and  video
          making. It will provide the editor with the unique ability to generate
          the desired final product.  For example,  in order to give an object a
          3D effect, shading,  texturing,  rotations and other manipulations can
          be controlled and combined into a dynamic operation; and

     (d)  the Technology  automatically  fills background  information  after an
          object has been  extracted or moved when  creating  left eye and right
          eye 3D images.

5. Post Production

     The Technology has the capability of carrying out special  effects film and
video editing by object  manipulation and image  enhancement.  Images which have
been captured on film or video, such as a person or an object,  can be extracted
on a scene by scene or a frame-by-frame  basis.  Through object  recognition and
tracking,  the desired  elements  are  extracted  from the  source,  replicated,
rotated  and  positioned  in  the  appropriate  stereoscopic  perspective.   The
Technology  also allows the extracted  objects to be manipulated in a variety of
methods, which, in addition to allowing the image to be converted from 2D to 3D,
can be used to remove objects such as props or add special effects.

6. Potential Market, Sales Plans and Strategies

     3D  attractions,  such  as  "Terminator  II 3D" and  "Honey  I  Shrunk  the
Audience"  located at Universal  Studios  Theme Parks,  are viewed by 80% of the
patrons(*). In addition, IMAX has experienced substantial growth by deploying 3D
content in its  theaters(**).  We believe  that video and DVD rentals  will soon
include 3D titles,  thereby  providing  a market  for 3D  enhanced  productions,
including new releases and re-released existing products.  We also believe there
will be a market for our  technology  in the  multi-media  and  computer  gaming
industries, and for use in upscale, sophisticated corporate presentations.

     We believe that  revenues can be achieved from  post-production  conversion
services,  box office  percentages  and  royalties,  license  fees,  and sale of
technology and/or its applications. Initially we intend to use the Technology to
provide editing  services  directly to customers;  however,  if we believe it is
appropriate,  we will attempt to establish  industry  alliances  with  potential
industry  partners  for  product  and  process  development,   production,   and
distribution  agreements and to formalize those alliances as may be advantageous
to us.  We plan  to  provide  conversion  services  to the  film  industry  on a
combination of fixed fee, income  sharing,  and royalty basis for the conversion
of existing film libraries; however, no pricing policy has been established. For
corporate  presentations,  we may become involved  directly on a "for fee" basis
for larger  presentations;  we may also license advertising  agencies the use of
the  processes or form business  alliances to implement  our business  strategy.
Currently, we do not have any such alliances.

C. Risk Factors Associated with Us and Our Business

     We are engaged in the business of developing  and marketing the  Technology
which was acquired by our  Subsidiary.  As no market for the Technology has been
developed  and as the  Technology  remains  under  development,  our business is
characterized by a number of significant risks which are set forth below.


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

(*)  As published in the  Hollywood  Reporter,  dated May 28, 1996 in an article
     entitled "T2 Goes Back to the Future."
(**) Based upon  information  derived from the IMAX website.


                                       6
<PAGE>

1. We are a recently  organized  company with no  operating  history and limited
assets.

     We have  limited  assets  and  operating  history.  We have  no  record  of
commercial  production,  earnings  or sales;  therefore,  we must be  considered
promotional  and in our  early  formative  and  development  stage.  There is no
assurance that the Technology will achieve commercial acceptance or, if it does,
that a functionally equivalent product will not be developed by competitors with
access to significantly greater resources to devote to research, development and
marketing.  There is nothing at this time upon which to base an assumption  that
our business plan will prove successful,  and there is no assurance that we will
be able to operate profitably.

2. We have not generated any revenues from operations.

     We do not have any sales,  revenues  from  operations.  Accordingly,  it is
impossible  to predict the timing of receipt or the  magnitude of  revenues,  if
any,  from the  marketing of the  Technology,  or whether such  revenues will be
realized.  Any material  delay in bringing the Technology to market could result
in  significant   delays  in  the  generation  of  revenues.   In  view  of  the
uncertainties  that exist  concerning  the ability of the  Technology to achieve
commercial  acceptance,  there can be no assurance  that we will be able to ever
achieve or sustain sales and/or profitability.

3. Since we have no cash flow from  operations,  we may need to seek  additional
funding from other sources.

     We have limited  financial  resources and no cash flow from operations.  To
date,  we have  funded  our  operations  primarily  by  issuing  equity and from
shareholder  advances.  There is no assurance  that we will  continue to receive
such  support from our  shareholders.  To the extent that  additional  funds are
required  to  implement  our  business  plan,  we will seek to obtain such funds
through equity and/or debt  offerings.  There is no assurance that if additional
funding is needed, it will be available to us on terms and conditions acceptable
to us.  Failure  to obtain  such  additional  funding  could  result in delay or
indefinite  postponement  of the  introduction  of the  Technology to the market
place or the  ability to supply  sufficient  product  to the  market  place on a
continual and profitable basis.  Reference should be made to Page 1 of the Notes
to the Consolidated  Financial Statements,  which state that "the Corporation is
in the  development  stage  and has no  history  of  generating  cash  flow from
operations  which  raises  substantial  doubt about its ability to continue as a
going concern." See also the Independent  Auditor's  Report to the  Consolidated
Financial Statements.

4. We face competition from larger and better financed companies.

     The  entertainment,  film,  video and  software  industries  are  intensely
competitive  and we compete,  and will compete,  with  companies  having greater
financial and technical resources.  Therefore, to the extent that we are able to
establish  sales,  revenues and profits,  there is no assurance  that we will be
able to sustain such sales, revenues and profits. Moreover, although not a major
factor today,  if and when we begin  achieving our  objectives,  larger,  better
financed  companies in  peripheral  businesses  may be attracted to our markets.
They may be prepared to spend large sums quickly to develop competitive products
and to mount major marketing  campaigns.  Timing is critical to our success, and
the  implementation  of our financing  and  marketing  programs are essential to
minimize this risk.

5. Our  products and  services  may become  obsolete as  competing  technologies
continue to be developed and enhanced.

     The entertainment, film, video and software industries are characterized by
rapid and significant technological change, and the introduction of new products
and new services.  The introduction of


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<PAGE>

products embodying new technologies,  the emergence of new industry standards or
changes in these  industries may adversely affect our ability to market and sell
the  Technology.  Our  ability to  anticipate  changes in  technology,  industry
standards  and needs and to develop  and  introduce  new (or  enhance  existing)
processes  and  products on a timely basis will be a  significant  factor in our
competitive position and growth prospects.

6. We lack a sales and distribution network.

     We have not yet established a significant distribution and support network.
If  we  fail  to  put  into  place  an  experienced   and  effective   marketing
infrastructure   in  a  timely  manner,   there  could  be  a  substantial   and
indeterminate delay in the realization of anticipated revenues.

7. Our success will depend on the market acceptance of our products.

     Our  success  is  largely  dependent  upon  the  market  acceptance  of the
conversion  of  existing 2D content  into 3D.  There is no  assurance  that this
process  will  attain a level of  market  acceptance  which  will  allow for the
continuation and growth of our business operations. In addition, we believe that
we will need to develop new processes and products to maintain our operations in
the longer term.  The  development  and launching of such processes and products
may involve  significant  expenditures.  There can be no assurance  that we will
have  sufficient  financial  resources  to fund such  programs  and whether such
undertakings will be commercially successful.

8. In the  future,  if a public  trading  market for our shares were to develop,
potential sales of issued and outstanding  shares under Rule 144 could adversely
affect the price of our shares.

     Of the 50,000,000 authorized shares of our common stock, as at December 31,
1999, there were issued and outstanding  19,128,567 shares; all of which, except
for 2,522,581 shares, were "restricted securities" as that term is defined under
the  Securities  Act of  1933,  as  amended,  and in the  future  may be sold in
compliance  with Rule 144 of the  Securities  Act,  pursuant  to a  registration
statement  filed under the Securities Act, or other  applicable  exemptions from
registration  thereunder.  Rule 144 provides,  in essence, that a person holding
restricted  securities  for a period of one year may sell  those  securities  in
unsolicited brokerage transactions or in transactions with a market maker, in an
amount equal to one percent of our outstanding  common stock every three months.
Additionally,  Rule 144 requires  that an issuer of  securities  make  available
adequate current public information with respect to the issuer. Such information
is deemed  available  if the issuer  satisfies  the  reporting  requirements  of
Sections 13 or 15(d) of the Exchange Act and of Rule  15c2-11  thereunder.  Rule
144 also permits,  under certain  circumstances,  the sale of shares by a person
who is not our affiliate and who has satisfied a two year holding period without
any  quantity  limitation  and whether or not there is adequate  current  public
information  available.  Investors should be aware that sales under Rule 144, or
pursuant to a registration  statement filed under the Securities Act, may have a
depressive effect on the market price of our common stock in any market that may
develop for such shares. As at December 31, 1999, 16,227,524 shares were subject
to possible  resale  pursuant to Rule 144; an additional  378,462  shares became
available for resale on April 1, 2000.

9.  Stockholders may have difficulty  transferring or selling shares since there
is no market for our common  stock;  and,  because of the  applicability  of the
Penny Stock Rules to any purported sale.

     There is no current  trading  market for the shares of our common stock and
there can be no  assurance  that a trading  market will  develop,  or, if such a
trading  market does develop,  that it will be  sustained.  To the extent that a
market develops for the shares of our common stock at all, of which there can be
no assurance,  it will likely appear on the NASD Bulletin Board, which may limit
the  marketability and liquidity of our shares.  Thus,  stockholders may find it
difficult to sell their  shares.  To date,  neither


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<PAGE>

we nor anyone acting on our behalf has taken any affirmative steps to request or
encourage  any  broker/dealer  to act as a market  maker for our  common  stock.
Further,  there  have been no  discussions  or  understandings,  preliminary  or
otherwise,  between  us or anyone  acting on our  behalf  and any  market  maker
regarding  the  participation  of any such  market  maker in the future  trading
market, if any, for our common stock.

     Under  Rule  15g-9 of the  Exchange  Act, a broker or dealer may not sell a
"penny stock" to, or effect the purchase of a penny stock by, any person unless:

     (a)  such sale or purchase is exempt from Rule 15g-9;

     (b)  prior to the  transaction  the broker or dealer has (1)  approved  the
          person's  account for  transactions in penny stocks in accordance with
          Rule 15g-9,  and (2) received  from the person a written  agreement to
          the  transaction  setting forth the identity and quantity of the penny
          stock to be purchased; and

     (c)  the purchaser has been provided an appropriate disclosure statement as
          to penny stock investment.

     The United States Securities and Exchange  Commission  adopted  regulations
that  generally  define a penny  stock to be any  equity  security  other than a
security excluded from such definition by Rule 3a51-1.  Such exemptions include,
but are not limited to (1) an equity  security  issued by an issuer that has (i)
net  tangible  assets  of at  least  $2,000,000,  if  such  issuer  has  been in
continuous  operations for at least three years,  (ii) net tangible assets of at
least $5,000,000,  if such issuer has been in continuous operation for less than
three years, or (iii) average  revenue of at least  $6,000,000 for the preceding
three  years;  (2) except for  purposes of Section  7(b) of the Exchange Act and
Rule 419,  any  security  that has a price of $5.00 or more;  and (3) a security
that is  authorized  or approved for  authorization  upon notice of issuance for
quotation on the NASDAQ Stock Market,  Inc.'s Automated  Quotation System. It is
likely  that  shares of our  common  stock,  assuming  a market  were to develop
therefor, will be subject to the regulations on penny stocks; consequently,  the
market  liquidity  for  our  common  stock  may be  adversely  affected  by such
regulations  limiting the ability of broker/dealers to sell common stock and the
ability of stockholders to sell their securities in the secondary market.

     Moreover, our shares may only be sold or transferred by our stockholders in
those jurisdictions in which an exemption for such "secondary trading" exists or
in which the shares may have been registered.

10. We are dependent on the protection afforded by intellectual property laws in
order to ensure that others do not infringe on our rights.

     We have been  assigned  the  rights in and to certain  patent  applications
pertaining to the Technology  and intend to file such other patent  applications
with  respect  to the  Technology  as our  management  may  deem  advisable.  No
assurance  can be given  that  the  patents  will be  granted  or that,  even if
granted,  that the Technology  does not infringe upon the patents of others.  In
the event of infringement, the consequences to us could be materially adverse.

11. Our future  success is dependent on the  availability  of an adequate  labor
supply as well as the retention of key personnel.

     We depend  upon the  continued  recruiting  and  maintenance  of  qualified
personnel to staff our operations.  We believe that such personnel are currently
available at reasonable salaries and wages. There can be no assurance,  however,
that such  personnel  will always be  available  in the future.  The


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<PAGE>

continuing  development of the Technology has been almost entirely  dependent on
the skills of our  management  and  certain key  employees  with whom we have no
employment  agreements.  Loss of the  services  of any of this  management  team
and/or key employees could have a materially adverse effect upon our operations.

12. Some of our  officers and  directors  may serve in similar  capacities  with
other companies and their  responsibilities  and time  commitments to such other
companies may limit the amount of time that they have available to attend to our
business activities.

     From time to time certain of our directors and executive officers may serve
as directors or executive  officers of other  companies  and, to the extent that
such  other  companies  may  participate  in  the  industries  in  which  we may
participate,  such directors may have a conflict of interest.  In addition,  our
dependence on directors and officers who devote time to other business interests
may create  conflicts of interest,  i.e.  that the fiduciary  obligations  of an
individual  to the  other  company  conflict  with  the  individual's  fiduciary
obligations  to us and vice versa.  Directors and officers  must exercise  their
judgment to resolve all conflicts of interest in a manner  consistent with their
fiduciary  duties to us. In the event that such a conflict of interest arises at
a meeting of the directors, a director who has such a conflict will abstain from
voting for or against the  approval of such a  participation  or such terms.  In
appropriate  cases,  we  will  establish  a  special  committee  of  independent
directors to review matters on which several directors, or management,  may have
a conflict.  We are not aware of the  existence  of any  conflict of interest as
described herein.

13. Our corporate activities are effectively controlled by our management.

     Our  current  officers  and  directors,  as a group,  currently  own and/or
control  5,137,970  or 25.58% of the current  issued and  outstanding  shares of
common  stock  and,  accordingly,  may be  able  to  influence  and/or  exercise
effective  control over our affairs,  including but not limited to, the election
of directors and other matters which may be subject to shareholder vote.

     Our officers and  directors  as at December  31,  1999,  as a group,  owned
and/or controlled  5,217,970 or 27.78% of the then issued and outstanding shares
of common  stock  and,  accordingly,  were  able to  influence  and/or  exercise
effective control over our affairs.

ITEM 2. DESCRIPTION OF PROPERTY

     All of our tangible  assets have been acquired by us since January 1998 and
were new at the time of acquisition. We currently sub-lease 4,925 square feet of
office  and  research  premises,  located  at Suite  600,  520 - 5th  Avenue SW,
Calgary,  Alberta,  Canada from a third party, Paradigm  Geophysical.  Our basic
annual rent is $54,175Cdn. ($4,515Cdn. monthly). In addition, we are responsible
for the payment of additional  rent for operating costs in the current amount of
$40,631Cdn.  annually. Our lease expires on March 31, 2001 and we have an option
to extend the lease through February 28, 2002.

ITEM 3. LEGAL PROCEEDINGS

     We are not a party to any legal  proceeding,  and have no  knowledge of any
threatened or pending legal proceeding against us.

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

         No matters were submitted to a vote of security holders during the last
quarter of the fiscal year ended December 31, 1999.


                                       10
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     There is no public  trading market for our common stock and there can be no
assurance that a trading market will develop,  or, if such a trading market does
develop, that it will be sustained. To the extent that a market develops for our
common stock at all, of which there can be no  assurance,  it will likely appear
on the NASD Bulletin Board,  which may limit the  marketability and liquidity of
our common stock. Thus, stockholders may find it difficult to sell their shares.
To date,  neither we, nor anyone acting on our behalf has taken any  affirmative
steps to request or encourage any broker/dealer to act as a market maker for our
common  stock.  Further,  there  have  been no  discussions  or  understandings,
preliminary  or  otherwise,  between  us or anyone  acting on our behalf and any
market maker regarding the  participation of any such market maker in the future
trading market,  if any, for our common stock.  See "Part I. Item 1. Description
of Business - Risk Factors Associated with the Us and Our business."

     Of the 50,000,000 authorized shares of our common stock, as at December 31,
1999, there were issued and outstanding  19,128,567 shares; all of which, except
for 2,522,581 shares, were "restricted securities" as that term is defined under
the  Securities  Act of 1933,  as  amended,  and in the future  could be sold in
compliance  with Rule 144 of the  Securities  Act,  pursuant  to a  registration
statement  filed under the Securities Act, or other  applicable  exemptions from
registration  thereunder.  Specifically,  as at December  31,  1999,  16,227,524
shares were  subject to  possible  resale  pursuant  to Rule 144; an  additional
378,462 shares became available for resale on April 1, 2000.

     As at December 31, 1999, there were approximately 180 holders of our common
stock.

Recent sales of unregistered securities:

     Since inception through December 31, 1999, we sold securities in the manner
set forth  below  without  registration  under the  Securities  Act of 1933,  as
amended.

1. In January 1998, we offered and sold an aggregate of 16,027,524 shares of our
common stock for an aggregate  consideration  of $37,907.  We believe that these
transactions  were  exempt  from  registration   under  the  Securities  Act  in
accordance  with   exemptions   afforded  by,  and  the  rules  and  regulations
promulgated under the Securities Act, including,  but not limited to, Regulation
S and  Section  4(2),  as  transactions  by an issuer not  involving  any public
offering.

2. From May through  August 1998,  we offered and sold  2,522,581  shares of our
common stock for an aggregate  cash  consideration  of $861,290 to 30 persons in
accordance  with  the  exemption  from  registration  afforded  by  Rule  504 of
Regulation D.

3. During  November  1998, we offered and sold to two non US Persons (as defined
in Regulation S) 200,000 shares of our common stock for aggregate  consideration
of $100,000.  We believe that these  transactions  were exempt from registration
under the Securities Act in accordance with an exemption  afforded by Regulation
S.

4. In May 1999,  we offered  and sold  378,462  shares of our  common  stock for
aggregate  cash  consideration  of  $246,000  to a non US Person (as  defined in
Regulation  S). We believe that such  transaction  was exempt from  registration
under the Securities Act under an exemption afforded by Regulation S.


                                       11
<PAGE>

     We have not declared any  dividends  since  inception,  and have no present
intention of paying any cash  dividends  on our common stock in the  foreseeable
future.  The  payment of  dividends,  if any, in the  future,  rests  within the
discretion of our Board of Directors and will depend,  among other things,  upon
our earnings,  our capital requirements and our financial condition,  as well as
other relevant facts.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

A. Operations To Date

     Our Subsidiary  entered into the E-Zone Agreement dated August 4, 1997 with
E-Zone Networks Inc., a Delaware  Corporation  ("E-Zone")  pursuant to which our
Subsidiary agreed to purchase the Technology from E-Zone in consideration of (1)
the  payment of  $200,000  on or before  March 31,  1998;  and (2) payment of an
additional $160,500 for improvements made to the Technology.

     Pursuant  to an  Assignment  Agreement  dated  January  27,  1998  (1)  our
Subsidiary  assigned  to us all of its right  title and  interest  to the E-Zone
Agreement  and in and to the  Technology;  and (2), we agreed to  discharge  the
obligations of our Subsidiary under the terms of the E-Zone Agreement.

     From inception  through  December 31, 1999, we had expended (1) $360,500 in
satisfying our Subsidiary's obligation under the E-Zone Agreement;  (2) $609,516
on the  development  and  enhancement of the  Technology  ($304,855 of which was
expended during the year ended December 31, 1999);  (3) $285,028 on implementing
business  and channel  development  for the  Technology  ($101,023  of which was
expended  during the year ended  December  31,  1999),  and (4) $104,462 for the
acquisition of capital assets including  computer  hardware,  office furnishings
and equipment  ($15,982 of which was expended during the year ended December 31,
1999).

B. Plan of Operation

     During  2000,  we  continued  to enhance  and pursue  various  channels  to
commercialize  the  Technology.  We plan for the  Technology to be ready for the
first commercial  application during 2001. We intend to pursue various potential
revenue streams,  including the conversion of all film formats. In addition,  we
intend to pursue other potential  applications for the Technology  including the
conversion of simulator ride videos and music videos.

     We will continue to enhance the Technology  through 2001 but the main focus
of our efforts and expenditure of resources through December 31, 2001 will be on
commercializing the Technology. Accomplishment of this plan will depend in great
part on our  ability  to  finance  these  efforts  and  our  ability  to  secure
commercial contracts.

     At December 31, 1999, we were still in the development  stage and we had no
history of generating cash flow or revenues from operations.

     As at December 31, 1999, we had a working  capital  deficiency of $379,662,
an  increase  of $266,213  or 235% from our  working  capital  deficiency  as of
December  31,  1998.  This  increase in our working  capital  deficiency  can be
attributed  to (i) our reduction in cash by 82%, from $29,623 for the year ended
December 31, 1998 to $5,381 for the year ended  December  31,  1999,  (ii) a 34%
reduction in our accounts  receivables  from $11,640 for the year ended December
31, 1998 to $7,736 for the year ended  December 31, 1999, as well as (iii) a 56%
increase in our accounts payable and accrued liabilities  (including amounts due
to related  parties)  from  $105,708  for the year ended  December  31,  1998 to
$164,651  for the year  ended  December  31,  1999 and (iv) a 366%  increase  in
shareholder  advances  from  $49,004  for the year ended  December  31,  1998 to
$228,128 for the year ended December 31, 1999.


                                       12
<PAGE>

     Our  activities  to date have been  financed from the proceeds of the offer
and sale of our common stock and from shareholder and other advances. During the
year ended  December 31, 1999, we continued to fund  ourselves on this basis and
sold  378,462  shares of our  common  stock for an  aggregate  consideration  of
$246,000 and received additional  shareholder advances aggregating $179,124. The
balance of our funding for the year ended  December 31, 1999 was financed by the
increase in our working capital deficiency discussed above, the most significant
component  being the 366% increase in shareholder  advances from $49,004 for the
year ended  December 31, 1998 to $228,128 for the year ended  December 31, 1999.
We  anticipate  that  funding of future  operations  will be provided by further
private placements and additional shareholder advances.

     We funded our activities for the year ended December 31, 2000 through sales
of  956,075  shares  of our  common  stock  for an  aggregate  consideration  of
$621,448.  However, we will require additional funding,  effected through equity
and/or debt financing,  in order to meet our projected cash requirements through
December 2001. We have no understandings or agreements with any person regarding
any such equity and/or debt financing and no assurance can be given that we will
be able to obtain such  additional  financing on terms that we deem  acceptable.
See "Part I. Item 1. Descriptions of Business - Risk Factors  Associated with Us
and Our Business."

     Our primary focus in 2001 will be on continued research and development, as
well as  increased  business  development  activities  so as to achieve  initial
revenues. No assurance can be given that the amount budgeted for such activities
will be  sufficient to achieve our goals.  If  additional  funds are required we
will need to explore the  availability  of such funds either through the sale of
equity  and/or debt  securities or  borrowings.  To the extent that we engage in
such  financing  activities,  our existing  stockholders  and/or  management may
participate.

     As at December 31, 1999,  we had seven full time  personnel who were all in
house consultants.  We currently have six full time personnel (3 employees and 3
in house consultants) and anticipate hiring additional employees during the year
ending December 31, 2001 as our needs and resources permit.

     There can be no  assurance  of our ability to continue as a going  concern.
Our success in  continuing  as a going  concern is  dependent  on the  continued
support of our  shareholders,  our ability to raise new capital and to achieve a
commercial level of production and sales from profitable operations.

C. Forward Looking Statements

     This report  includes  "Forward-Looking  Statements"  within the meaning of
Section  27A of the  Securities  Act and Section 21E of the  Exchange  Act.  Any
statements  that express or involve  discussions  with  respect to  predictions,
expectations,  beliefs, plans,  projections,  objectives,  assumptions or future
events or  performance  (often,  but not always,  using words or phrases such as
"expects"  or "does  not  expect",  "is  expected",  "anticipates"  or "does not
anticipate", "plans", "estimates" or "intends", or stating that certain actions,
events or results "may", "could",  "would", "might" or "will" be taken, occur or
be  achieved)  are not  statements  of  historical  fact  and may be  considered
"forward  looking  statements".  These types of statements  are included,  among
other places in this report, in the sections entitled  "Management's  Discussion
and Analysis or Plan of Operation,"  "Description of Business" and  "Description
of Property."  Forward-looking  statements are based on expectations,  estimates
and  projections  at the time the  statements  are made that involve a number of
risks and  uncertainties  which could cause  actual  results or events to differ
materially from those presently anticipated. See "Part I. Item 1. Description of
Business-Risk  Factors Associated with Us and Our Business." Although we believe
that  the  expectations   reflected  in  such  forward-looking   statements  are
reasonable,  we can give no assurance that such  expectations will prove to have
been correct.


                                       13
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

                                                                          Page

    Independent Auditors' Report dated May 23, 2000                        15

    Consolidated Balance Sheets as at December 31, 1999
             And 1998                                                      16

    Consolidated  Statements of Operations  and Deficit
             For the years ended December 31, 1999 and 1998
             And for the Period from Commencement of
             Operations on April 21, 1997 to December 31, 1997
             And for the Period from Commencement of
             Operations on April 21, 1997 to December 31, 1999             17

    Consolidated  Statements of Cash Flows for the years ended
             December 31, 1999 and 1998 and for the Period from
             Commencement of Operations on April 21, 1997 to
             December 31, 1997 and for the Period from
             Commencement of Operations on April 21, 1997 to
             December 31, 1999                                             18

    Notes to Consolidated Financial Statements                             19


                                       14
<PAGE>

INDEPENDENT AUDITORS' REPORT

We  have  audited  the   accompanying   consolidated   balance  sheets  of  Push
Entertainment  Inc. (a Development Stage Enterprise) as at December 31, 1999 and
1998 and the related consolidated statements of operations and deficit, and cash
flows for the years  ended  December  31,  1999 and 1998 and the period from the
date of commencement of operations on April 21, 1997 to December 31, 1997. These
financial statements are the responsibility of the Corporation's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in  accordance  with United  States  generally  accepted
auditing  standards.  Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the 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 financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Push  Entertainment  Inc. (a
Development  Stage Enterprise) as at December 31, 1999 and 1998, and the results
of its  operations  and its cash flows for the years ended December 31, 1999 and
1998 and the period from the date of  commencement  of  operations  on April 21,
1997 to December 31, 1997 in conformity  with United States  generally  accepted
accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Corporation  will  continue as a going  concern.  As  discussed in note 1 to the
financial  statements,  the  Corporation  has  incurred  recurring  losses  from
operations and has a net capital  deficiency that raises substantial doubt about
its  ability to  continue as a going  concern.  Management's  plans in regard to
these matters are  disclosed in note 1. The financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.



Signed "KPMG LLP"

Chartered Accountants

Calgary, Canada
May 23, 2000


                                       15
<PAGE>

PUSH ENTERTAINMENT INC.
(A Development Stage Enterprise)
Consolidated Balance Sheets

December 31, 1999 and 1998
(Expressed in United States Dollars)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                                                     1999               1998
----------------------------------------------------------------------------------------------

Assets
<S>                                                             <C>                <C>
Current assets:
     Cash                                                       $     5,381        $    29,623
     Accounts receivable                                              7,736             11,640
----------------------------------------------------------------------------------------------
                                                                     13,117             41,263

Capital assets (note 3)                                              72,264             77,492

----------------------------------------------------------------------------------------------
                                                                $    85,381        $   118,755
----------------------------------------------------------------------------------------------

Liabilities and Stockholders' Deficiency

Current liabilities:
     Accounts payable                                           $    92,230        $    34,060
     Accrued liabilities                                             10,926             61,820
     Amounts due to related parties                                  61,495              9,828
     Shareholder advances                                           228,128             49,004
----------------------------------------------------------------------------------------------
                                                                    392,779            154,712

Stockholders' deficiency:
     Share capital (note 5)                                       1,255,888            986,128
     Deficit accumulated during the development stage            (1,563,286)        (1,022,085)
----------------------------------------------------------------------------------------------
                                                                   (307,398)           (35,957)

Future operations (note 1)

Subsequent event (note 10)

----------------------------------------------------------------------------------------------
                                                                $    85,381        $   118,755
----------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.


                                       16
<PAGE>

PUSH ENTERTAINMENT INC.
(A Development Stage Enterprise)
Consolidated Statements of Operations and Deficit

(Expressed in United States Dollars)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                              Period from         Period from
                                                                             commencement         commencement
                                                                           of operations on     of operations on
                                               Years ended December 31,    April 21, 1997 to   April 21, 1997 to
                                           ------------------------------     December 31,        December 31,
                                                1999           1998              1997                 1999
----------------------------------------------------------------------------------------------------------------
<S>                                        <C>              <C>               <C>                 <C>
Expenses:
     Technology and product development    $   304,855     $   304,661        $ 360,500           $   970,016
     Business and channel development          101,023         184,005               --               285,028
     General and administration                114,113         161,931               --               276,044
     Depreciation                               21,210          10,988               --                32,198
-------------------------------------------------------------------------------------------------------------
                                               541,201         661,585          360,500             1,563,286

-------------------------------------------------------------------------------------------------------------
Net loss                                       541,201         661,585          360,500             1,563,286

Deficit, beginning of period                 1,022,085         360,500               --                    --

-------------------------------------------------------------------------------------------------------------
Deficit, end of period                     $ 1,563,286     $ 1,022,085        $ 360,500           $ 1,563,286
-------------------------------------------------------------------------------------------------------------

Loss per share                             $      0.03     $      0.04        $      --           $      0.09
-------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                       17
<PAGE>


PUSH ENTERTAINMENT INC.
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows

(Expressed in United States Dollars)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Period from         Period from
                                                                                                commencement of      commencement of
                                                                                                 operations on       operations on
                                                                 Years ended December 31,      April 21, 1997 to   April 21, 1997 to
                                                               ---------------------------        December 31,        December 31,
                                                                  1999               1998            1997                1999
------------------------------------------------------------------------------------------------------------------------------------

Cash provided by (used in):
<S>                                                           <C>                <C>             <C>                <C>
Operations:
     Net loss                                                 $  (541,201)       $  (661,585)    $  (360,500)       $(1,563,286)
     Item not involving cash:
         Depreciation                                              21,210             10,988              --             32,198
     Net changes in non-cash working capital:
         Accounts receivable                                        3,904            (11,640)             --             (7,736)
         Accounts payable                                          58,170             34,060              --             92,230
         Accrued liabilities                                      (50,894)            61,820              --             13,525
         Amounts due to related parties                            51,667              9,828              --             58,896
     --------------------------------------------------------------------------------------------------------------------------
                                                                 (457,144)          (556,529)       (360,500)        (1,374,173)

Financing activities:
     Issuance of share capital                                    269,760            986,128               1          1,255,889
     Shareholder advances                                         179,124             49,004              --            228,128
     Due to company under common control                               --           (360,500)        360,500                 --
     --------------------------------------------------------------------------------------------------------------------------
                                                                  448,884            674,632         360,501          1,484,017

Investing activities:
     Acquisition of capital assets                                (15,982)           (88,480)             --           (104,462)
     Acquisition of subsidiary                                         --                 (1)             --                 (1)
     --------------------------------------------------------------------------------------------------------------------------
                                                                  (15,982)           (88,481)             --           (104,463)

     --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalent                   (24,242)            29,622               1              5,381

Cash and cash equivalents, beginning of period                     29,623                  1              --                 --

-------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                      $     5,381        $    29,623     $         1        $     5,381
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements


                                       18
<PAGE>

PUSH ENTERTAINMENT INC.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements

Years ended December 31, 1999 and 1998 and for the period from  commencement  of
operations  on April 21, 1997 to December 31, 1997  (Expressed  in United States
Dollars)

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

Incorporation and basis of presentation:

     Push Entertainment Inc. (the "Corporation") was incorporated under the laws
     of the State of Delaware on January 7, 1998.  Effective January 7, 1998 the
     Corporation  acquired  for  cash  consideration  of $1,  all of the  issued
     outstanding  capital stock of Push  Technologies  Inc.  ("PTI"),  a company
     incorporated  under the laws of the  Province of Alberta,  Canada.  PTI was
     incorporated  as 736145  Alberta  Inc.  on April 21,  1997 with all capital
     stock  being  issued  to  a  provisional  shareholder  to  hold  until  the
     incorporation of its ultimate shareholder, which was to be the Corporation.
     As a result, the Corporation has accounted for the operations of PTI on the
     continuity  of  interests  basis,  as if PTI had  always  been owned by the
     Corporation.  The Corporation is in the business of developing technologies
     for the conversion of 2D film and video images into 3D content.

     The  consolidated   financial   statements  include  the  accounts  of  the
     Corporation and its wholly-owned subsidiary PTI.

     These consolidated  financial statements are presented in U.S. Dollars, and
     are prepared in accordance with accounting principles generally accepted in
     the United States.

1.   Future operations:

     These  financial  statements  have been prepared on the basis of accounting
     principles applicable to a going concern, which assume that the Corporation
     will continue in operation for the  foreseeable  future and will be able to
     realize its assets and  discharge its  obligations  in the normal course of
     operations.

     At December 31, 1999 the Corporation is in the development stage and has no
     history of generating  cash flow from operations  which raises  substantial
     doubt about its ability to continue as a going concern.  The Corporation is
     actively pursuing various  initiatives,  most particularly the development,
     marketing and production of its products and  capabilities so as to achieve
     a commercial level of operations, and the sourcing of additional financing.

     During its  development  stage,  the  Corporation  has funded its operating
     activities primarily by issuing equity and from shareholder  advances.  The
     Corporation  anticipates that funding of future operations will be provided
     by further private placements (see note 10).

     There can be no  assurance  of the  Corporation's  ability to continue as a
     going concern.  The  application of the going concern  concept is dependent
     upon the Corporation  receiving the continued  support of its shareholders,
     its ability to raise new  capital  and its ability to achieve a  commercial
     level of  production  and sales and  profitable  operations.  The financial
     statements  do not  include  any  adjustments  that might  result  from the
     outcome of this uncertainty.


                                       19
<PAGE>

2.   Significant accounting policies:

     (a) Capital assets:

         Capital assets are recorded at cost.  Depreciation is provided over the
         estimated  useful lives of the assets using the  following  methods and
         annual rates:

<TABLE>
<CAPTION>
         ------------------------------------------------------------------------------------
         Assets                                               Basis                 Rate
         ------------------------------------------------------------------------------------
         <S>                                      <C>                                <C>
         Furniture and equipment                  Declining balance                  20%
         Computer equipment                       Declining balance                  30%
         ------------------------------------------------------------------------------------
</TABLE>

     (b) Technology and product development costs:

         Costs  incurred  in the  development  of new  technology  and  software
         products are capitalized once technological and commercial  feasibility
         has been  established,  and are amortized  over the life of the product
         once the product is available for general  release to customers.  There
         have been no costs capitalized to date.

     (d) Cash and cash equivalents:

         The Corporation's  cash equivalents are deposits which have an original
         maturity of less than three months.  Cash  equivalents  are recorded at
         cost which approximates current market value.

     (e) Income taxes:

         The  Corporation  uses the liability  method of  accounting  for income
         taxes under which  deferred tax assets and  liabilities  are recognized
         for the estimated future tax  consequences  attributable to differences
         between the financial statement carrying amounts of existing assets and
         liabilities  and their  respective  tax bases.  Deferred tax assets and
         liabilities are measured using enacted tax rates in effect for the year
         in which those  temporary  differences  are expected to be recovered or
         settled.  The effect on deferred tax assets and liabilities of a change
         in tax rates is recognized as part of the provision for income taxes in
         the period that includes the enactment date.

     (f) 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  amounts  of  assets  and
         liabilities and disclosure of contingent  assets and liabilities at the
         date of the financial  statements and the reported  amounts of expenses
         during the  reported  period.  Actual  results  could differ from these
         estimates.


                                       20
<PAGE>

3.   Capital assets:

<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------------
                                                        Accumulated           Net book
     December 31, 1999                     Cost        depreciation              value
     ---------------------------------------------------------------------------------
     <S>                              <C>               <C>                <C>
     Furniture and equipment          $  50,839         $  13,786          $    37,053
     Computer equipment                  53,623            18,412               35,211

     ---------------------------------------------------------------------------------
                                      $ 104,462         $  32,198          $    72,264
     ---------------------------------------------------------------------------------

<CAPTION>

     ---------------------------------------------------------------------------------
                                                        Accumulated           Net book
     December 31, 1998                     Cost        depreciation              value
     ---------------------------------------------------------------------------------

     <S>                              <C>               <C>                <C>
     Furniture and equipment          $  47,697         $    4,921         $    42,776
     Computer equipment                  40,783              6,067              34,716

     ---------------------------------------------------------------------------------
                                      $  88,480         $   10,988         $    77,492
     ---------------------------------------------------------------------------------
</TABLE>

4.   Related party transactions:

     (a)  During 1999 the Corporation was charged $29,000 (1998 - $87,000;  1997
          - $nil) for technology and product development expenditures by related
          parties.

     (b)  During 1999 the Corporation was charged $55,000 (1998 - $77,000;  1997
          - $nil) for business and channel  development  expenditures by related
          parties.

     (c)  During 1999 the  corporation  was charged $3,500 (1998 - $nil;  1997 -
          $nil) for general and administrative expenses by related parties.

     (d)  During the period from the  commencement  of  operations  on April 21,
          1997 to December  31, 1997 the  Corporation  was charged  $360,500 for
          technology  and product  development  expenditures  by a company under
          common control.

     Related parties include directors, officers and significant shareholders of
     the Corporation and companies under their control.


                                       21
<PAGE>

5.   Share capital:

     (a) Authorized:

         50,000,000 common shares with a par value of $.001 per share
         5,000,000 preferred shares with a par value of $.001 per share

     (b) Common shares issued and to be issued:

<TABLE>
<CAPTION>
         ----------------------------------------------------------------------
                                                    Number
                                                  of Shares              Amount
         ----------------------------------------------------------------------
         <S>                                    <C>                 <C>
         Balance, January 7, 1998                       --          $        --

         Issued:
              For cash                          18,750,105              999,198
              Less share issue costs                    --              (13,070)

         ----------------------------------------------------------------------
         Balance, December 31, 1998             18,750,105              986,128

         Issued:
              For cash                             378,462              269,760

         ----------------------------------------------------------------------
         Balance, December 31, 1999             19,128,567          $ 1,255,888
         ----------------------------------------------------------------------
</TABLE>

     (c)  On December 15, 1999, the Corporation entered into an Agency Agreement
          with Rogers & Partners  Securities  Inc.,  for the private  placement,
          pursuant  to  an  Offering  Memorandum  of  the  same  date,  of up to
          2,500,000  common shares of the  Corporation at $0.65 per share. As at
          December 31, 1999,  no shares had been sold  pursuant to this Offering
          Memorandum (see note 10).

6.   Commitments:

     Minimum  future annual lease  commitments  in respect of office rent are as
follows:

<TABLE>
<CAPTION>
     --------------------------------------------------------------------------
     <S>                                                            <C>
     2000                                                           $    59,900
     2001                                                                18,000
     --------------------------------------------------------------------------
</TABLE>

7.   Fair value of financial assets and liabilities:

     The fair value of the Corporation's  financial assets and liabilities as at
     December 31, 1999 and 1998 approximate their carrying amounts, due to their
     short terms to maturity.


                                       22
<PAGE>

8.   Income taxes:

     The tax  effects of  temporary  differences  that give rise to  significant
     portions of future income tax assets are approximately as follows:

<TABLE>
<CAPTION>
     -----------------------------------------------------------------------------------------
                                                  1999              1998               1997
     -----------------------------------------------------------------------------------------
     <S>                                      <C>               <C>                <C>
     Future income tax assets:

         Income tax losses                    $  698,000        $   479,000        $   161,000
         Less:  valuation allowance             (698,000)          (479,000)          (161,000)

     -----------------------------------------------------------------------------------------
     Net future tax assets                    $       --        $        --        $        --
     -----------------------------------------------------------------------------------------
</TABLE>

     The Corporation has  approximately  $1,563,000  (1998 - $1,075,000;  1997 -
     $360,500) of income tax losses and pools,  which begin expiring in 2004 and
     are  available to reduce future  periods'  taxable  income.  No benefit for
     these losses and pools has been recognized in these financial statements.

     The  income tax  losses  are  subject  to review by the  United  States and
     Canadian taxation authorities.

9.   Loss per share:

<TABLE>
<CAPTION>
     -----------------------------------------------------------------------------------------
                                                                    1999                 1998
     -----------------------------------------------------------------------------------------
     <S>                                                        <C>                <C>
     Net loss                                                   $   541,201        $   661,585
     Weighted average common shares                              18,892,028         17,040,295
     -----------------------------------------------------------------------------------------

     Loss per common share                                      $      0.03        $      0.04
     -----------------------------------------------------------------------------------------
</TABLE>

10.  Subsequent event:

     Subsequent  to the year end,  the  Corporation  has issued  871,960  common
     shares for gross cash  proceeds of  $566,744  (net  proceeds  of  $543,223)
     pursuant to the December 15, 1999 Offering Memorandum.


                                       23
<PAGE>

ITEM 8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

     There have been no  changes  in or  disagreement  with our  accountants  on
accounting and financial disclosures.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

     The following persons are our current directors and executive officers:


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Name                 Age      Position Held                                            Term
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
<S>                  <C>      <C>                                                  <C>
Danny D. Lowe        52       Director, Chairman of the Board, and President       Since 1/7/98
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Todd G. Simpson      35       Director & Vice President                            Since 1/7/98
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Mark H. Holden       43       Director & Vice President                            Since 1/7/98
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Ian T. Tweedie       52       Director & Chief Financial Officer                   Since 3/4/98
-------------------------------------------------------------------------------------------------
</TABLE>


     Norman R. Hess  served  from  January  7,  1998 to August  30,  1999 as the
Secretary,  Treasurer and a Director.  On August 30, 1999,  Mr. Hess resigned in
order to pursue an appointment to the Provincial Court of Calgary.

     Dan Matthew served as a Director from March 4, 1998 to December 8, 1999. On
December 8, 1999, Mr. Matthews resigned in order to pursue other interests.

     All of our  directors  and officers  are elected  annually to serve for one
year or until their successors are duly elected and qualified.

     We currently  have six full time  personnel and are supported to the extent
required by outside consultants.  Additional staff will be recruited as required
to support  our growth and  development.  Three of the full time  personnel  are
employees and three are contracted  consultants.  Key personnel also have equity
positions  and have executed  confidentiality  and  non-competition  agreements.
Compensation  levels are, and will  continue to be,  commensurate  with industry
standards with incentive programs extended to the key personnel.

Danny D. Lowe
Director, Chairman of the Board and President

     From January 7, 1998 to the present,  Mr. Lowe has held several  offices in
our  company  including  Director,  Chairman  of the Board and  President.  From
January,  1996 to December 2000, Mr. Lowe worked with E-Zone Networks,  Inc. and
its subsidiary,  E-Zone Research and  Development,  Inc. At various times during
that period,  he held the offices of  director,  President  and Chief  Executive
Officer of


                                       24
<PAGE>

those  companies.  Mr. Lowe co-founded  QSound Labs,  Inc.  (NASDAQ) in 1988 and
served as an officer and director thereof until January,  1996. Mr. Lowe was the
inventor of QSound's  proprietary 3D audio  technology,  widely  recognized as a
standard in 3D audio.  QSound's  technology has been licensed by Intel, Sega and
NEC and used by such recording artists as Sting,  Madonna and Pink Floyd. E-Zone
provides a closed  television  network  designed  specifically  for the  fitness
industry to alleviate the boredom associated with the use of stationary exercise
equipment.  E-Zone  systems  have been  deployed in over 300  facilities  in the
United  States with a membership of 1.5 million  consumers.  Mr. Lowe was one of
our co-founders.

Todd G. Simpson, Ph.D.
Director and Vice President - Technical Direction & Intellectual Property

     Dr.  Simpson's  career has been  exclusively  in Calgary,  Alberta.  He was
employed  on a full time  basis by  Alberta  Government  Telephones  (now  Telus
Corporation) as a Research Analyst between 1991 and 1993. For the period of 1992
through  1995 Dr.  Simpson  held the part  time  position  of an  Instructor  in
programming  and  system  design  courses  with  Continuing   Education  at  the
University  of Calgary.  From 1993 through 1995,  Dr.  Simpson was employed full
time at  QSound  Labs Inc.  as a Project  Leader  and from 1995  through  to the
present,  Dr.  Simpson has held the position of Vice  President,  Engineering at
E-Zone  Networks Inc. Dr.  Simpson was the President of Push  Technologies  Inc.
until August 1, 2000 and since 1997 has been one of our directors and officers.

Mark Holden
Director and Vice President- Film & Video Acquisition

     Mr. Holden  co-founded  Tanisys  Technologies  Inc. in  Vancouver,  British
Columbia in 1990 where he was employed  until 1994. In 1994, Mr. Holden became a
self-employed  consultant to Rainmaker Digital Imaging Inc. and between 1995 and
1998 he  consulted  to E-Zone  Networks  Inc.  Mr.  Holden  provides  consulting
services to us, on an as need basis.

Ian T. Tweedie, C.A.
Director and Chief Financial Officer

     From October 1996 to August 1999,  Mr. Tweedie was a Director and President
of Digital  Armor Inc.  (NASD  OTC).  Prior to October  1996,  Mr.  Tweedie  was
President and a Director of Virtual Universe Corporation, a public company whose
shares  trade on the  Canadian  Venture  Exchange.  Mr.  Tweedie  has  served as
Director  and Chief  Financial  Officer of our  company  since March 4, 1998 and
became a full time consultant to our company in December 1999.

     The following individuals, although not officers or directors, are expected
to make a significant contribution to our business:

David Spooner, Ph.D.
Senior Software Engineer

     Dr. Spooner, age 37, has 13 years of experience in software engineering and
design.  Dr.  Spooner has  consulted  to us as senior  software  engineer  since
January 1998.  From 1995 to 1997, Dr. Spooner  consulted to E-Zone  Research and
Development,  Inc. and prior thereto,  consulted to Shell Canada.  Dr. Spooner's
Ph.D. was granted in computer  science and his thesis was related to programming
language  semantics.  Dr. Spooner's  responsibilities  include the architectural
design and implementation of the Technology.


                                       25
<PAGE>

Len Bruton, Ph.D.
Technical Consultant

     Dr.  Bruton,  age 57, has been a Professor in the Faculty of Engineering at
the University of Calgary since 1970.  During this period he also served as Head
of Electrical and Computer Engineering, Dean of Engineering, and Vice President,
Research.  In addition to his academic  responsibilities  Dr. Bruton  carries on
research  in the  areas of  digital  video  and 3D  filtering.  Dr.  Bruton  has
published  extensively and is recognized worldwide for his work in filter design
and intellectual property.

     Our consultants have entered into agreements with us, which provide in part
for the description of the services to be provided by them, the  compensation to
be paid  for  their  services  and the  reservation  by us of all  existing  and
developed  intellectual  property.  Each  of the  consulting  agreements  can be
terminated  by  us  or  the  consultant  upon  thirty  (30)  days  notice.   The
non-disclosure/non-competition  agreements  which  we  have  with  each  of  the
consultants  provides in part that the consultants  will not disclose or utilize
our intellectual property and that the intellectual property will be kept in the
strictest confidence. The non-disclosure/non-competition agreements also provide
that the consultants will not compete,  either directly or indirectly with us or
carry on a business  similar to that  carried on by us for a period of three (3)
years from the  termination of the consulting  agreements.  We acknowledge  that
such agreements are not strictly enforced by the courts in the United States and
Canada and may be enforced in part only and in some cases not at all.

     Except  as  described  below,  during  the  past  five  years  none  of our
directors, executive officers, promoters or control persons were:

     (1) the subject of any bankruptcy petition filed by or against any business
of which such person was a general  partner or executive  officer  either at the
time of the bankruptcy or within two years prior to that time;

     (2) convicted in a criminal  proceeding or is subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);

     (3) subject to any order,  judgment, or decree, not subsequently  reversed,
suspended or vacated,  of any court of competent  jurisdiction,  permanently  or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities; or

     (4) found by a court of competent  jurisdiction  (in a civil  action),  the
Commission  or the  Commodity  Futures  Trading  Commission  to have  violated a
federal or state securities or commodities law.

     Messrs. Lowe and Simpson were officers of E-Zone Networks,  Inc. ("E-Zone")
and its Canadian  subsidiary,  E-Zone Research and  Development,  Inc.  ("E-Zone
Canada") until December 2000. In addition, Mr. Lowe served as Director of E-Zone
until June 2000.  In September  2000,  E-Zone and E-Zone Canada were acquired by
Netpulse Communications,  Inc. ("Netpulse").  In January 2001, Netpulse,  E-Zone
and E-Zone Canada filed a petition for  bankruptcy  under Chapter 7. At the time
of such filing, neither of Messrs. Lowe or Simpson were officers or directors of
E-Zone or E-Zone Canada.


                                       26
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth  information  concerning the compensation of
the named executive  officers and directors from April 21, 1997 through December
31, 1999.


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                   Annual Compensation                         Long-Term Compensation
                                          ------------------------------------------------------------------------------------------
                                                                                           Awards                   Payments
                                                                                 ---------------------------------------------------

                                                                      Other                       Securities                  All
                                  Year                                Annual       Restricted       Under-                   other
            Name And               or                                 Compen-         Stock         Lying        LTIP       Compen-
       Principal Position        Period     Salary      Bonuses       sation         Award(s)      Options/     Payouts     sation
                                 Ended       ($)          ($)          ($)             ($)           SARs         ($)         ($)
------------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>             <C>          <C>       <C>               <C>            <C>         <C>         <C>
Danny D. Lowe                 12/31/97        --           --            --            --             --          --          --
                              ------------------------------------------------------------------------------------------------------
President/Director            12/31/98        --           --        55,879(1)         --             --          --          --
                              ------------------------------------------------------------------------------------------------------
                              12/31/99        --           --        21,037(1)         --             --          --          --
------------------------------------------------------------------------------------------------------------------------------------
Todd G. Simpson Ph.D.         12/31/97        --           --            --            --             --          --          --
                              ------------------------------------------------------------------------------------------------------
Vice President/Director       12/31/98        --           --        50,303(2)         --             --          --          --
                              ------------------------------------------------------------------------------------------------------
                              12/31/99        --           --        19,084(2)         --             --          --          --
------------------------------------------------------------------------------------------------------------------------------------
Mark Holden                   12/31/97        --           --            --            --             --          --          --
                              ------------------------------------------------------------------------------------------------------
Vice President/Director       12/31/98        --           --        37,086(3)         --             --          --          --
                              ------------------------------------------------------------------------------------------------------
                              12/31/99        --           --        33,659(3)         --             --          --          --
------------------------------------------------------------------------------------------------------------------------------------
Norman R. Hess                12/31/97        --           --            --            --             --          --          --
                              ------------------------------------------------------------------------------------------------------
Secretary/Treasurer/Director  12/31/98        --           --        20,736(4)         --             --          --          --
                              ------------------------------------------------------------------------------------------------------
                              12/31/99        --           --        10,659(4)         --             --          --          --
------------------------------------------------------------------------------------------------------------------------------------
Dan Matthews                  12/31/97        --           --            --            --             --          --          --
                              ------------------------------------------------------------------------------------------------------
Director                      12/31/98        --           --            --            --             --          --          --
                              ------------------------------------------------------------------------------------------------------
                              12/31/99        --           --            --            --             --          --          --
------------------------------------------------------------------------------------------------------------------------------------
Ian Tweedie                   12/31/97        --           --            --            --             --          --          --
                              ------------------------------------------------------------------------------------------------------
Chief Financial               12/31/98        --           --            --            --             --          --          --
                              ------------------------------------------------------------------------------------------------------
Officer/Director              12/31/99        --           --         3,366(5)         --             --          --          --
------------------------------------------------------------------------------------------------------------------------------------
     Total                                    --           --       251,809            --             --          --          --
====================================================================================================================================
</TABLE>


     (1)  Paid to T.I. - The Idea Company  Ltd.,  a  corporation  controlled  by
          Danny D. Lowe.

     (2)  Paid to Quadri Inc., a corporation controlled by Todd G. Simpson.

     (3)  Paid to M. Holden  Productions Ltd., a corporation  controlled by Mark
          Holden.


                                       27
<PAGE>

     (4)  Paid  to  Norman  R.  Hess  Professional  Corporation,  a  corporation
          controlled by Norman Hess. Mr. Hess resigned on August 30, 1999.

     (5)  Paid to Barracuda Financial Corp., a corporation  controlled by Ian T.
          Tweedie.

     No officer or director was paid more than $100,000 in 1998 or 1999. We made
additional payments to our officers and directors, totaling $60,000 for the year
ending  December  31, 2000.  We do not have any  employee  stock option or other
compensatory plans, however it is our intention to implement such a plan.

     There are no standard or other arrangements pursuant to which directors are
compensated  for any  services  provided as a director or for which any director
was compensated during 1999 for any service provided as a director.

     There  are no  employment  contracts  between  us and any  named  executive
officers.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain  information as of December 31, 1999
regarding the  beneficial  ownership of the common stock of, (1) each person who
was known by us to own  beneficially  more than  five  percent  (5%) of our then
outstanding  common stock; (2) each of the directors and officers as at December
31, 1999;  and (3) all of the directors and officers as at December 31, 1999, as
a group.

<TABLE>
<CAPTION>
                                                                       Shares of          Approximate
                                                                        Common             Percentage
                                                                         Stock           of Issued and
Name and Address of                                                   Beneficially     Outstanding as at
Beneficial Owner                                                         Owned         December 31, 1999


Directors and Officers:
----------------------
<S>                                                                  <C>                     <C>
  Danny Lowe                                                         1,799,990(1)(3)         9.41%
  37 Woodhaven View SW
  Calgary, Alberta, Canada
  T2W 5P6

  Todd Simpson                                                       1,517,990(1)(2)(4)(8)   7.94%
  133 Edgebrook Crescent NW
  Calgary, Alberta, Canada
  T3A 5A4

  Mark Holden                                                        1,799,990(1)(5)         9.41%
  2397 Palmerston Avenue
  West Vancouver, BC, Canada
  V7V 2W2

  Ian Tweedie                                                          100,000(2)(7)         0.52%
  3922 - 4th Street SW
  Calgary, Alberta, Canada
  T2S 1Y5
</TABLE>


                                       28
<PAGE>

<TABLE>

<S>                                                                  <C>                     <C>
  5% Stockholders:
  ----------------
   Abacus (Nominees) Limited(6)                                      1,779,990(1)            9.41%
   Buchaneer Holdings Ltd.(9)                                        1,290,000(1)            6.74%

Directors and Officers as a Group (4 persons)                        5,217,970              27.28%
</TABLE>


(1)  Direct ownership.

(2)  Beneficial ownership.

(3)  Does not include 1,290,000 shares owned by a Bahamian corporate foundation,
     as to which Mr. Lowe  disclaims any direct or beneficial  interest but from
     which  certain  members of Mr.  Lowe's  family and other third  parties may
     benefit.

(4)  Does not include 750,000 shares owned by a Bahamian corporate foundation as
     to which Dr. Simpson  disclaims any direct or beneficial  interest but from
     which members of Dr. Simpson's family and other third parties may benefit.

(5)  Does not include 535,500 shares owned by a Bahamian corporate foundation as
     to which Mr. Holden  disclaims  any direct or beneficial  interest but from
     which members of Mr. Holden's family and other third parties may benefit.

(6)  Abacus  (Nominees)  Limited - M1636, is a corporation  which is trustee for
     the Matthews Family Trust of which Mr. Matthews, a former director,  is one
     of the discretionary beneficiaries.  Mr. Matthews resigned as a director on
     December 8, 1999.

(7)  These shares are  registered in the name of Barracuda  Financial  Corp.,  a
     private Alberta, Canada corporation controlled by Mr. Tweedie.

(8)  Includes  18,000 shares which are  registered in the name of Quadri Inc., a
     private Alberta, Canada corporation controlled by Dr. Simpson.

(9)  Buchaneer Holdings Ltd. is a Bahamian corporate  foundation whose principal
     is Richard W. DeVries of Calgary, Alberta, Canada.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  Technology  was acquired from E-Zone by our  subsidiary in August 1997
and  subsequently  assigned to us. Mr. Lowe and Dr. Simpson are stockholders and
at that time were also  officers  and  directors  of E-Zone.  Mr. Hess, a former
director  who resigned on August 30, 1999,  is a  stockholder  of E-Zone and was
also an officer of E-Zone at that time.

     In  December,  1998,  we entered  into a  sub-lease  agreement  with E-Zone
Canada, a wholly owned subsidiary of E-Zone.  The sub-lease provided for payment
of basic and  additional  rent of  $52,888Cdn.  annually.  We  believe  that the
sublease, which expired on February 28, 2000, was on terms and conditions as, or
more favorable than, we could have been obtained from unrelated third parties.

     Through December 31, 1999  corporations  controlled by certain officers and
directors received fees aggregating $251,809.  See "Part III. Item 10. Executive
Compensation."

     We have not formulated any policy towards entering into future transactions
with related parties.

     In 2000, Mr. Lowe, our President and Director, transferred 1,709,990 shares
to a Canadian  spousal trust for the benefit of Mr.  Lowe's wife,  Dian Lowe. In
2000, Mr. Lowe also transferred 90,000 shares to Katana Trading  Corporation,  a
Bahamian  corporation,  in  consideration  for establishing and maintaining such
trust.

                                       29
<PAGE>

     In 2000, Mr. Holden, our Vice-President and Director, transferred 1,709,990
shares to a Canadian spousal trust for the benefit of his wife, Debra Holden. In
2000, Mr. Holden also transferred 90,000 shares to Katana Trading Corporation, a
Bahamian  corporation,  in  consideration  for establishing and maintaining such
trust.

     In 2000,  100,000  shares  were sold to Mr.  Tweedie,  our Chief  Financial
Officer and  Director,  from Mr. Mike Lowe in  consideration  for the payment of
$0.003 per share or $334.00 in the aggregate.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8K.

     (a) Exhibits: Exhibit 21- Subsidiaries

     (b) Reports on Form 8K:  No  reports  were filed on Form 8K during the last
                              quarter of the  fiscal  year  ended  December  31,
                              1999.


                                       30
<PAGE>

                                   SIGNATURES

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

Dated:   February 27, 2001                  Push Entertainment Inc.



                                            By: /s/ Danny D. Lowe
                                            Danny D. Lowe, President


                                            By: /s/ Ian Tweedie
                                            Ian Tweedie, Chief 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.


By: /s/ Danny D. Lowe                                February 27, 2001
-------------------------------------------------
Danny D. Lowe, President and Director

By: /s/ Todd G. Simpson                              February 27, 2001
-------------------------------------------------
Todd G. Simpson, Vice President and Director

By: /s/ Ian Tweedie                                  February 27, 2001
-------------------------------------------------
Ian Tweedie, Chief Financial Officer and Director


                                       31