United States Securities and Exchange Commission
  Washington, D.C. 20549

**Form 10-QSB**

> (Mark One)
>     [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
>     ACT OF 1934

For the quarterly period ended September 30, 2002

> [   ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE
>     ACT

For the transition period from _________ to __________________

Commission File Number: 0-29285**ONLINE INNOVATION, INC.**
  (Name of Small Business Issuer in its charter)

|**Delaware**                            |  | **52-2058364**            
|--------------------------------------- |  | --------------------------
|(state or other jurisdiction
        of |  | (I.R.S. Employer I.D. No.)
|incorporation or organization)          |  |                           

**1118 Homer Street, #118, Vancouver,
  British Columbia V6B 6L5**(Address of principal executive offices)

**(604) 669-7564**
  Issuers telephone number

_________________________________________________________________
  Former name, former address, and former fiscal year, if changed since last report

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

Yes [X]  No [  ]

**APPLICABLE ONLY TO ISSUERS INVOLVED IN
  BANKRUPTCY** **PROCEEDINGS DURING THE PRECEDING FIVE YEARS:**

Check whether the registrant 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  [  ]   **N/A**

**APPLICABLE ONLY TO CORPORATE ISSUERS**

State the number of shares outstanding of each
  of the issuers classes of common equity, as of the latest practicable
  date:

As of November 12, 2002, the registrants
  outstanding common stock consisted of 15,230,000 shares.

Transitional Small Business Disclosure Format
  (Check one): YES [  ]  NO [X]





---

**ONLINE INNOVATION, INC.**

INDEX TO FORM 10QSB

|PART I  FINANCIAL INFORMATION | PAGE NO.                          
|------------------------------ | ----------------------------------
|                               |                                   
|Item 1.                        | Financial Statements              
|                               |                                   
|Item 2.                        | Management Discussion and Analysis
|                               | or Plan of Operation              
|                               |                                   
|Item 3.                        | Controls and Procedures           
|                               |                                   
|PART II  OTHER INFORMATION    |                                   
|                               |                                   
|Item 1.                        | Legal Proceedings                 
|                               |                                   
|Item 2.                        | Changes in Securities             
|                               |                                   
|Item 3.                        | Defaults Upon Senior Securities   
|                               |                                   
|Item 4.                        | Submission of Matters to a Vote   
|                               | of Securities Holders             
|                               |                                   
|Item 5.                        | Other Information                 
|                               |                                   
|Item 6.                        | Exhibits and Reports on Form 8-K  
|                               |                                   
|                               |                                   
|SIGNATURES                     |                                   
|                               |                                   
|CERTIFICATIONS                 |                                   
|                               |                                   
|EXHIBITS                       |                                   



---

**PART 1  FINANCIAL INFORMATION**

**Item 1  Financial Statements**

Attached are the registrants unaudited
  financial statements for the three month period ended September 30, 2002, with
  comparative figures for the three month period ended September 30, 2001, and
  the Independent Accountants Report thereon.



---

**MOEN AND COMPANY**
  **CHARTERED ACCOUNTANTS**

|PO Box 10129                         |  | Telephone: | (604) 662-8899              
|------------------------------------ |  | ---------- | ----------------------------
|Suite 1400  701 West Georgia Street |  | Fax:       | (604) 662-8809              
|Vancouver, BC V7Y 1C6                |  | Email:     | moenandcompany@attcanada.net
|                                    

**INDEPENDENT ACCOUNTANTS REPORT**

To the Directors and Shareholders ofOnline Innovation, Inc. (A Delaware Corporation)
  (A Development Stage Company)

We have reviewed the accompanying Balance Sheets
  of Online Innovation, Inc. (A Delaware Corporation) (A Development Stage Company)
  as of September 30, 2002 and September 30, 2001, and the Statements of Income,
  Retained Earnings (Deficit), Cash Flows and Stockholders Equity for the
  three month periods then ended. These financial statements are the responsibility
  of the Companys management.

We conducted our review in accordance with standards
  established by the American Institute of Certified Public

Accountants. A review of interim financial information
  consists principally of applying analytical procedures to financial data and
  making inquiries of persons responsible for financial and accounting matters.
  It is substantially less in scope than an audit conducted in accordance with
  generally accepted auditing standards, the objective of which is the expression
  of an opinion regarding the financial statements taken as a whole. Accordingly,
  we do not express such an opinion.

Based on our review, we are not aware of any
  material modifications that should be made to the accompanying financial statements
  for them to be in conformity with U.S. generally accepted accounting principles.

|                                    | Moen and Company   
|----------------------------------- | ---------------------
|                                    |                      
|                                    |                      
|                                    | Chartered Accountants
|                                    |                      
|Vancouver, British Columbia, Canada |                      
|November 9, 2002                    |                      



---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)
  Balance Sheet
  September 30, 2002
  (In U.S. Dollars)****(With Comparative Figures at September 30, 2001)****(Unaudited)**

**ASSETS**

|                                                                         |   | September 30, | 
|------------------------------------------------------------------------ | - | ------------- | 
|                                                                         |   |               | 
|                                                                         |   | 2002          | 
|                                                                         |   |               | 
|**Current Assets**                                                       |   |               | 
|Cash                                                                     | $ | 24,097        | 
|Prepaid expense                                                          |   | 2,209         | 
|                                                                         |   |               | 
|                                                                         |   | 26,306        | 
|**Deferred tax asset (Note 12(b) and 13(c))**                            |   | 52,500        | 
|**Fixed assets**                                                         |   |               | 
|Computer equipment,
      at cost less accumulated depreciation (Note 5) |   | 42,787        | 
|**Computer software development (Note 6(b))**                            |   |               | 
|Application development
      stage costs                                |   | 325,000       | 
|                                                                         |   |               | 
|                                                                         | $ | 446,593       | 
|                                                                         |   |               | 

**LIABILITIES AND STOCKHOLDERS' EQUITY**

|**Current Liabilities**                                      |   |            |   |   |            |  
|------------------------------------------------------------ | - | ---------- | - | - | ---------- | -
|Accounts
        payable                                     |   | 28,035     |   |   | 39,675     |  
|Management
        fees payable (Note 4(a))                  |   | 55,000     |   |   | 15,000     |  
|Due
        to related parties (Notes 4(c))                  |   | 30,000     |   |   | 30,000     |  
|Loans
        payable (Note 15)                              |   |            |   |   | 30,000     |  
|                                                             |   |            |   |   |            |  
|                                                             |   | 113,035    |   |   | 114,675    |  
|                                                             |   |            |   |   |            |  
|**Stockholders' Equity**                                     |   |            |   |   |            |  
|Capital Stock
      (Note 3)                                 |   |            |   |   |            |  
|Authorized:                                                  |   |            |   |   |            |  
|75,000,000
      common shares at $0.001 par value per share |   |            |   |   |            |  
|Issued
      and outstanding - 15,230,000 common shares      |   |            |   |   |            |  
|(2001
      - 14,420,000 common shares)                      |   | 15,230     |   |   | 14,420     |  
|Paid
      in capital in excess of par value of stock        |   | 2,460,620  |   |   | 2,218,430  |  
|Deficit accumulated
      during development stage (note 1)  |   | (2,143,692 | ) |   | (1,895,085 | )
|Cumulative translation
      adjustment (Note 2(b))          |   | 1,400      |   |   | 80         |  
|                                                             |   |            |   |   |            |  
|                                                             |   | 333,558    |   |   | 337,845    |  
|                                                             |   |            |   |   |            |  
|                                                             |   |            |   |   |            |  
|                                                             | $ | 446,593    |   | $ | 452,520    |  
|                                                             |   |            |   |   |            |  

**Approved on Behalf of the Board**

/s/ Chad D. Lee , Director

/s/ Marlene C. Schluter, Director

**See Accompanying Notes and Independent
  Accountants' Review Report**

---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)
  Statement of Income
  (In U.S. Dollars)
  (Unaudited)**

|                                          |   | Cumulative From  |   |   |                    |  |   |         |  
|----------------------------------------- | - | ---------------- | - | - | ------------------ |  | - | ------- | -
|                                          |   | Inception Date   |   |   |                    |  |   |         |  
|                                          |   | on Aug 1, 1997   |   |   | Three Months Ended | 
|                                          |   | to September 30, |   |   | September 30,      | 
|                                          |   |                  |   |   |                    | 
|                                          |   | 2002             |   |   | 2002               |  |   | 2001    |  
|                                          |   |                  |   |   |                    |  |   |         |  
|**Administration Costs**                  |   |                  |   |   |                    |  |   |         |  
|Compensation on stock option              | $ | 150,000          |   | $ | --                 |  | $ | --      |  
|Funding agreement commitment
      costs  |   | 345,600          |   |   | --                 |  |   | --      |  
|Depreciation                              |   | 73,867           |   |   | 3,469              |  |   | 4,584   |  
|Filing and transfer agent
      fees      |   | 20,892           |   |   | 548                |  |   | 1,109   |  
|Financing costs                           |   | 22,550           |   |   | --                 |  |   | --      |  
|Interest on loans                         |   | 4,851            |   |   | 4,851              |  |   | --      |  
|Management and consulting
      fees      |   | 533,599          |   |   | 25,806             |  |   | 15,000  |  
|Office expenses, net                      |   | 163,898          |   |   | 12,101             |  |   | 6,018   |  
|Option payment, mineral properties        |   | 30,000           |   |   |                    |  |   |         |  
|Professional fees                         |   | 211,386          |   |   | 2,203              |  |   | 12,726  |  
|Promotion, investor relations,            |   |                  |   |   |                    |  |   |         |  
|and
      investor communications         |   | 84,604           |   |   | --                 |  |   | 227     |  
|Computer technology and                   |   |                  |   |   |                    |  |   |         |  
|software
      development-preliminary    |   |                  |   |   |                    |  |   |         |  
|development
      stage costs             |   | 321,847          |   |   | 32,176             |  |   | (73,179 | )
|Website marketing/Banner                  |   |                  |   |   |                    |  |   |         |  
|advertising
      costs                   |   | 201,068          |   |   | 4,324              |  |   | 5,663   |  
|Travel expenses                           |   | 32,030           |   |   | --                 |  |   | --      |  
|                                          |   |                  |   |   |                    |  |   |         |  
|                                          |   | 2,196,192        |   |   | 85,478             |  |   | (27,852 | )
|**Deferred income taxes**                 |   | (52,500          | ) |   | --                 |  |   | --      |  
|                                          |   |                  |   |   |                    |  |   |         |  
|                                          |   |                  |   |   |                    |  |   |         |  
|**Net loss (profit) for the period**      | $ | 2,143,692        |   | $ | 85,478             |  | $ | (27,852 | )
|                                          |   |                  |   |   |                    |  |   |         |  
|                                          |   |                  |   |   |                    |  |   |         |  
|                                          |   |                  |   |   |                    |  |   |         |  
|**Net loss per share, basic and diluted** |   |                  |   | $ | 0.01               |  | $ | (0.00   | )
|                                          |   |                  |   |   |                    |  |   |         |  

**See Accompanying Notes and Independent Accountants' Review Report**

---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)
  Statement of Cash Flows
  (In U.S. Dollars)
  (Unaudited)**

|                                                   |   | Cumulative From  |   |   |                    |   |   |         |  
|-------------------------------------------------- | - | ---------------- | - | - | ------------------ | - | - | ------- | -
|                                                   |   | Inception Date   |   |   |                    |   |   |         |  
|                                                   |   | on Aug 1, 1997   |   |   | Three Months Ended |  
|                                                   |   | to September 30, |   |   | September 30,      |  
|                                                   |   |                  |   |   |                    |  
|                                                   |   | 2002             |   |   | 2002               |   |   | 2001    |  
|                                                   |   |                  |   |   |                    |   |   |         |  
|**Cash Provided by (Used for)**                    |   |                  |   |   |                    |   |   |         |  
|**Operating Activities**                           |   |                  |   |   |                    |   |   |         |  
|Net profit (loss) for the
      period             | $ | (2,143,692       | ) | $ | (85,478            | ) | $ | 27,852  |  
|Items not requiring use of
      cash:             |   |                  |   |   |                    |   |   |         |  
|Shares
      issued for funding agreement          |   |                  |   |   |                    |   |   |         |  
|commitment
      costs                             |   | 345,600          |   |   | --                 |   |   | --      |  
|Shares
      issued for services,                  |   |                  |   |   |                    |   |   |         |  
|(shares
      cancelled)                           |   | 11,750           |   |   | --                 |   |   | (82,250 | )
|Depreciation                                       |   | 73,867           |   |   | 3,469              |   |   | 4,584   |  
|Compensation
      on stock options                |   | --               |   |   | --                 |   |   | --      |  
|Cumulative
      translation adjustment            |   | 1,400            |   |   | 1,126              |   |   | --      |  
|Changes in non-cash working
      capital items    |   |                  |   |   |                    |   |   |         |  
|Deferred
      income tax                          |   | (52,500          | ) |   | --                 |   |   | --      |  
|Prepaid
      expense                              |   | (2,209           | ) |   | --                 |   |   | --      |  
|Accounts
      payable and management fees payable |   | 83,035           |   |   | (15,992            | ) |   | 25,452  |  
|Agreement
      payable                            |   | --               |   |   | --                 |   |   | (75,000 | )
|                                                   |   |                  |   |   |                    |   |   |         |  
|                                                   |   | (1,682,749       | ) |   | (96,875            | ) |   | (99,362 | )
|                                                   |   |                  |   |   |                    |   |   |         |  
|**Investing Activities**                           |   |                  |   |   |                    |   |   |         |  
|Computer software development                      |   |                  |   |   |                    |   |   |         |  
|Application
      development stage costs          |   | (325,000         | ) |   | --                 |   |   | 75,000  |  
|Fixed assets purchased                             |   | (116,654         | ) |   | --                 |   |   | (2,019  | )
|                                                   |   |                  |   |   |                    |   |   |         |  
|                                                   |   | (441,654         | ) |   | --                 |   |   | 72,981  |  
|                                                   |   |                  |   |   |                    |   |   |         |  
|**Financing Activities**                           |   |                  |   |   |                    |   |   |         |  
|Capital stock subscribed                           |   | 2,118,500        |   |   | 243,000            |   |   | --      |  
|Loan payable (repayment)                           |   |                  |   |   | (85,000            | ) |   | 30,000  |  
|Loan from Fusion Capital
      (repayment)         |   | --               |   |   | (50,000            | ) |   | --      |  
|Due to related parties                             |   | 30,000           |   |   | --                 |   |   | --      |  
|                                                   |   |                  |   |   |                    |   |   |         |  
|                                                   |   | 2,148,500        |   |   | 108,000            |   |   | 30,000  |  
|                                                   |   |                  |   |   |                    |   |   |         |  
|                                                   |   |                  |   |   |                    |   |   |         |  
|                                                   |   |                  |   |   |                    |   |   |         |  
|**Cash increase during the period**                |   | 24,097           |   |   | 11,125             |   |   | 3,619   |  
|                                                   |   |                  |   |   |                    |   |   |         |  
|**Cash, Beginning of period**                      |   | --               |   |   | 12,972             |   |   | 12,838  |  
|                                                   |   |                  |   |   |                    |   |   |         |  
|**Cash, End of period**                            | $ | 24,097           |   | $ | 24,097             |   | $ | 16,457  |  
|                                                   |   |                  |   |   |                    |   |   |         |  

**See Accompanying Notes and Independent
  Accountants' Review Report**

---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)
  Statement of Retained Earnings (Deficit)
  (In U.S. Dollars)
  (Unaudited)**

|                                           |   | Cumulative From  |   |   |                    |   |   |            |  
|------------------------------------------ | - | ---------------- | - | - | ------------------ | - | - | ---------- | -
|                                           |   | Inception Date   |   |   |                    |   |   |            |  
|                                           |   | of Aug 1, 1997   |   |   | Three Months Ended |  
|                                           |   | to September 30, |   |   | September 30,      |  
|                                           |   |                  |   |   |                    |  
|                                           |   | 2002             |   |   | 2002               |   |   | 2001       |  
|                                           |   |                  |   |   |                    |   |   |            |  
|                                           |   |                  |   |   |                    |   |   |            |  
|**Balance (deficit), beginning of period** | $ | --               |   | $ | (2,058,214         | ) | $ | (1,922,937 | )
|                                           |   |                  |   |   |                    |   |   |            |  
|**Net profit (loss) for the period**       |   | (2,143,692       | ) |   | (85,478            | ) |   | 27,852     |  
|                                           |   |                  |   |   |                    |   |   |            |  
|                                           |   |                  |   |   |                    |   |   |            |  
|**Balance (deficit), end of period**       | $ | (2,143,692       | ) | $ | (2,143,692         | ) | $ | (1,895,085 | )
|                                           |   |                  |   |   |                    |   |   |            |  





**See Accompanying Notes and Independent
  Accountants' Review Report**

---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)
  Statement of Stockholders' Equity From Date of Inception on August 1, 1997 to September 30, 2002
  (In U.S. Dollars)
  (Unaudited)**

|                                                             |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|------------------------------------------------------------ | ---------- | - | - | ------ | - | - | ---------- | - | - | --------- | - | - | ---------- | - | - | ----------- | - | - | ------------- | -
|                                                             |           
|                                                             | Number of  |   |   |        |   |   | Additional |   |   | Total     |   |   | Retained   |   |   |             |   |   | Total         |  
|                                                             | Common     |   |   | par    |   |   | Paid-in    |   |   | Capital   |   |   | Earnings   |   |   | Cumulative  |   |   | Stockholders' |  
|                                                             | Shares     |   |   | Value  |   |   | Capital    |   |   | Stock     |   |   | (Deficit)  |   |   | Translation |   |   | Equity        |  
|                                                             |            |  
|Net
        loss for eleven month period ended June 30, 1998 |            |   |   |        |   |   |            |   |   |           |   | $ | (144,175   | ) |   |             |   |   | (144,175      | )
|Issued
        for cash, @0.01                               |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|October
        23, 1997                                     | 1,500,000  |   |   |        |   | $ | 13,500     |   | $ | 15,000    |   |   |            |   |   |             |   |   | 15,000        |  
|Issued
        for cash, @0.001                              |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|May
        8, 1997                                          | 500,000    |   |   | 500    |   |   |            |   |   | 500       |   |   |            |   |   |             |   |   | 500           |  
|Issued
        for assignment of option on                   |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|mineral
        properties, @0.0035                          |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|September
        30, 1997                                   | 8,500,000  |   |   | 8,500  |   |   | 21,500     |   |   | 30,000    |   |   |            |   |   |             |   |   | 30,000        |  
|                                                             |            |  
|                                                             | 10,500,000 |   |   | 10,500 |   |   | 35,000     |   |   | 45,500    |   |   | (144,175   | ) |   |             |   |   | (98,675       | )
|Shares
        subscribed and fully paid and issued, @$ 0.50 |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|                                                             |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|April
        6, 1999                                        | 85,000     |   |   | 85     |   |   | 42,415     |   |   | 42,500    |   |   |            |   |   |             |   |   | 42,500        |  
|                                                             |           
|Balance, June 30, 1998                                       | 10,585,000 |   |   | 10,585 |   |   | 77,415     |   |   | 88,000    |   |   | (144,175   | ) |   |             |   |   | (56,175       | )
|Net loss for year ended June 30,
      1999                  |            |   |   |        |   |   |            |   |   |           |   |   | (478,497   | ) |   |             |   |   | (478,497      | )
|Compensation on stock options                                |            |   |   |        |   |   | 120,000    |   |   | 120,000   |   |   |            |   |   |             |   |   | 120,000       |  
|Cumulative translation adjustment                            |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   | (1,055      | ) |   | (1,055        | )
|Issued for cash, @$0.50                                      |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|April 6, 1999                                                | 20,000     |   |   | 20     |   |   | 9,980      |   |   | 10,000    |   |   |            |   |   |             |   |   | 10,000        |  
|Issued for cash, @$0.50                                      |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|April 6, 1999                                                | 100,000    |   |   | 100    |   |   | 49,900     |   |   | 50,000    |   |   |            |   |   |             |   |   | 50,000        |  
|Issued for private business(note
      7), @$0.50            |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|April 2, 1999                                                | 400,000    |   |   | 400    |   |   | 199,600    |   |   | 200,000   |   |   |            |   |   |             |   |   | 200,000       |  
|Issued for cash(note 14), @$0.50                             |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|April 15, 1999                                               | 1,600,000  |   |   | 1,600  |   |   | 798,400    |   |   | 800,000   |   |   |            |   |   |             |   |   | 800,000       |  
|                                                             |            |  
|Balance, June 30, 1999                                       | 12,705,000 |   |   | 12,705 |   |   | 1,255,295  |   |   | 1,268,000 |   |   | (622,672   | ) |   | (1,055      | ) |   | 644,273       |  
|Cumulative translation adjustment                            |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   | 543         |   |   | 543           |  
|Shares subscribed and fully paid,
      @$0.50               |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|January 4, 2000                                              | 450,000    |   |   | 450    |   |   | 224,550    |   |   | 225,000   |   |   |            |   |   |             |   |   | 225,000       |  
|Net loss for year                                            |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|ended June 30, 2000                                          |            |   |   |        |   |   |            |   |   |           |   |   | (503,489   | ) |   |             |   |   | (503,489      | )
|Issued for exercise of                                       |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|option
      @ $0.50                                         |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|March 13, 2000                                               | 100,000    |   |   | 100    |   |   | 49,900     |   |   | 50,000    |   |   |            |   |   |             |   |   | 50,000        |  
|Compensation on stock options                                |            |   |   |        |   |   | 30,000     |   |   | 30,000    |   |   |            |   |   |             |   |   | 30,000        |  
|Exercise of warrants @$0.50                                  |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|May 9, 2000                                                  | 50,000     |   |   | 50     |   |   | 24,950     |   |   | 25,000    |   |   |            |   |   |             |   |   | 25,000        |  
|Exercise of warrants @$0.60                                  |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|June 16, 2000                                                | 66,667     |   |   | 67     |   |   | 39,933     |   |   | 40,000    |   |   |            |   |   |             |   |   | 40,000        |  
|                                                             |            |  
|Balance, June 30, 2000                                       | 13,371,667 |   |   | 13,372 |   |   | 1,624,628  |   |   | 1,638,000 |   |   | (1,126,161 | ) |   | (512        | ) |   | 511,327       |  
|Exercise of warrants @$0.60                                  |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|August 17, 2000                                              | 83,333     |   |   | 83     |   |   | 49,917     |   |   | 50,000    |   |   |            |   |   |             |   |   | 50,000        |  
|Exercise of warrants @$0.60                                  |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|Februay 9, 2001                                              | 250,000    |   |   | 250    |   |   | 149,750    |   |   | 150,000   |   |   |            |   |   |             |   |   | 150,000       |  
|Issued for services at an ascribed                           |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|price of $0.47 per share on                                  |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|June 11, 2001                                                | 200,000    |   |   | 200    |   |   | 93,800     |   |   | 94,000    |   |   |            |   |   |             |   |   | 94,000        |  
|Issue for cash, @$0.75                                       |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|June 19, 2001                                                | 50,000     |   |   | 50     |   |   | 37,450     |   |   | 37,500    |   |   |            |   |   |             |   |   | 37,500        |  
|Issued as commitment shares at an
      ascribed             |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|price of $0.54 per share on                                  |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|June 25, 2001                                                | 640,000    |   |   | 640    |   |   | 344,960    |   |   | 345,600   |   |   |            |   |   |             |   |   | 345,600       |  
|Net loss for year ended June 30,
      2001                  |            |   |   |        |   |   |            |   |   |           |   |   | (796,776   | ) |   |             |   |   | (796,776      | )
|Cumulative translation adjustment                            |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   | 592         |   |   | 592           |  
|                                                             |            |  
|Balance, June 30, 2001                                       | 14,595,000 |   |   | 14,595 |   |   | 2,300,505  |   |   | 2,315,100 |   |   | (1,922,937 | ) |   | 80          |   |   | 392,243       |  
|Cancellation of 175,000 shares on                            |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|August 23, 2001                                              | (175,000   | ) |   | (175   | ) |   | (82,075    | ) |   | (82,250   | ) |   |            |   |   |             |   |   | (82,250       | )
|Cumulative translation adjustment                            |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   | 194         |   |   | 194           |  
|Net income for period ended June
      30, 2002              |            |   |   |        |   |   |            |   |   |           |   |   | (135,277   | ) |   |             |   |   | (135,277      | )
|                                                             |            |  
|Balance, June 30, 2002                                       | 14,420,000 |   | $ | 14,420 |   | $ | 2,218,430  |   | $ | 2,232,850 |   | $ | (2,058,214 | ) | $ | 274         |   | $ | 174,910       |  
|Issued for cash @$0.30                                       |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|July 22, 2002                                                | 100,000    |   |   | 100    |   |   | 29,900     |   |   | 30,000    |   |   |            |   |   |             |   |   | 30,000        |  
|Issued for cash @$0.30                                       |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|July 26, 2002                                                | 600,000    |   |   | 600    |   |   | 179,400    |   |   | 180,000   |   |   |            |   |   |             |   |   | 180,000       |  
|Issued for loan payable @$0.30                               |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   |             |   |   |               |  
|August 31, 2002                                              | 110,000    |   |   | 110    |   |   | 32,890     |   |   | 33,000    |   |   |            |   |   |             |   |   | 33,000        |  
|Cumulative translation adjustment                            |            |   |   |        |   |   |            |   |   |           |   |   |            |   |   | 1,126       |   |   | 1,126         |  
|Net loss for period ended September
      30, 2002           |            |   |   |        |   |   |            |   |   |           |   |   | (85,478    | ) |   |             |   |   | (85,478       | )
|                                                             |            |  
|Balance, September 30, 2002                                  | 15,230,000 |   | $ | 15,230 |   | $ | 2,460,620  |   | $ | 2,475,850 |   | $ | (2,143,692 | ) | $ | 1,400       |   | $ | 333,558       |  
|                                                             |            |  

**See Accompanying Notes and Independent
  Accountants' Review Report**

---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)Notes to Financial Statements
  September 30, 2002
  (In U.S. Dollars)
  (Unaudited)**

|Note 1. |    | BUSINESS OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                              
|------- | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | a) | The
        Company was incorporated on May 7, 1997 under the Company Act of the State
        of Delaware, U.S.A.and commenced inception of business
        on August 1, 1997. The Company changed its name from MicroMillennium,
        Inc. to Sinaloa Gold Corp. on October 16, 1997 and subsequently changed
        its name fromSinaloa Gold Corp. to Online Innovation,
        Inc. on April 8, 1999.
|        |   
|        |   
|        |   
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | b) | The Company
        is in its development stage in the internet/e-commerce industry as a website
        development company and was previously in the mining resource industry
        and has not generated any revenues from its planned operations. The deficit
        has been accumulated during the development stage.                                                                                   
|        |   
|        |   
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|Note 2. |    | SIGNIFICANT
        ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                          
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | a) | Administration
        Costs                                                                                                                                                                                                                                                                                                                                                                                     
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | Administration
        costs are written off to operations when incurred.                                                                                                                                                                                                                                                                                                                                        
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | b) | Translation
        of Foreign Currency                                                                                                                                                                                                                                                                                                                                                                          
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | The
        functional currency of the Company is the Canadian Dollar and the reporting
        currency is the United States Dollar.                                                                                                                                                                                                                                                                            
|        |   
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | The
        assets, liabilities, and operations of the Company are expressed in the
        functional currency of the Company, the Canadian Dollar, in conformity
        with US GAAP, before they are translated into the reporting currency,
        the United States Dollar.                                                                                                                               
|        |   
|        |   
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | Monetary assets
        and liabilities are translated at the current rate of exchange.                                                                                                                                                                                                                                                                                                                          
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | The
        weighted average exchange rate for the period is used to translate revenue,
        expenses, and gains orlosses from the functional
        currency to the reporting currency.                                                                                                                                                                                                                     
|        |   
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | The
        gain or loss on translation is reported as a separate component of stockholders
        equity and notrecognized in net income. Gains or
        losses on remeasurement are recognized in current net income.                                                                                                                                                                                      
|        |   
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | Gains or losses
        from foreign currency transactions are recognized in current net income.                                                                                                                                                                                                                                                                                                                 
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | Fixed assets
        are measured at historical exchange rates that existed at the time of
        the transaction.                                                                                                                                                                                                                                                                                              
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | Depreciation
        is measured at historical exchange rates that existed at the time the
        underlying related assetwas acquired.                                                                                                                                                                                                                                                                         
|        |   
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |    | An
        analysis of the changes in the cumulative translation adjustment as disclosed
        as part of stockholdersequity, is as follows:                                                                                                                                                                                                                                                                  
|        |   
|        |    |                                                                                                                                                                                                                                                                                                                                                                                                                  

| |                                           |   | Quarter Ended
| | ----------------------------------------- | - | -------------
| |                                           |   | September 30,
| |                                           |   |              
| |                                           |   | 2002         
| |                                           |   |              
| | Beginning balance, June 30, 2002 & 2001   | $ | 274          
| | Changes during the period                 |   | 1,126        
| |                                           |   |              
| | Ending balance, September 30, 2002 & 2001 | $ | 1,400        
| |                                           |   |              



---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)Notes to Financial Statements
  September 30, 2002
  (In U.S. Dollars)
  (Unaudited)**

|Note 2. |     | SIGNIFICANT ACCOUNTING POLICIES (contd)                                                                                                                                                                                                                                                                                                                                                                                            
|------- | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |     |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        |     | Capital
        accounts are translated at their historical exchange rates when the capital
        stock is issued.The effect of exchange rate changes
        oncash balances is reported in the statement of cash
        flows as aseparate part of the reconciliation of
        change in cash and cash equivalents during the year.                                                                                          
|        |    
|        |    
|        |    
|        |     |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | (c) | Amortization of Computer Software                                                                                                                                                                                                                                                                                                                                                                                                   
|        |     | Development
         Application Development Stage CostsThe company is in the application development stage
        relating to the development of computer software,and
        accordingly, costs are capitalized.When the company
        is in the post-implementation / operationstage, costs
        will be expensed as incurred.                                                                                           
|        |    
|        |    
|        |    
|        |    
|        |     |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        |     | Amortization
        of computer software costs of $325,000 will commence when the software
        service is available to be marketed.The amortization period is for twenty-six
        months on a straight-line basis. The software is not available to be marketed
        as at September 30, 2002, and therefore no amortization of this cost has
        been charged to operations for the period ended September 30, 2002.
|        |    
|        |    
|        |    
|        |     |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 3. |     | CAPITAL STOCK                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |     |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | a)  | Authorized: 75,000,000 common shares at $0.001
      par value per share.                                                                                                                                                                                                                                                                                                                                                           
|        |     |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | b)  | Common shares issued and outstanding are as follows:                                                                                                                                                                                                                                                                                                                                                                                
|        |     |                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                       | Shares     |  |   | $        
| | ------------------------------------- | ---------- |  | - | ---------
| |                                       |            |  |   |          
| | Balance, June 30, 2002                | 14,420,000 |  | $ | 2,232,850
| | Issued for cash during period         | 700,000    |  |   | 210,000  
| | Issued for loan payable during period | 110,000    |  |   | 33,000   
| |                                       |            |  |   |          
| | Balance, September 30, 2002           | 15,230,000 |  | $ | 2,475,850
| |                                       |            |  |   |          

|        | c)                                 |                                                                                                                                                        | Options for Fordee Management
        Company and National Financial Communication Group. (See Note 13(a)and Note (14), respectively.                                                                                                                                                                                                                                                                             
|------- | ---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                    |                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |                                    |                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                   
|Note 4. | RELATED PARTY
        TRANSACTIONS
|        |                                    |                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | (a)                                | (i)                                                                                                                                                    | Pursuant
        to a management agreement effective November 1, 1998, the company pays
        $2,500 per month to MCS Management Ltd., a company wholly owned by Ms.
        Marlene C. Schluter,Director, Secretary, and Treasurer
        of the Company, for management services provided to theCompany
        by MCS Management Ltd.Unpaid management fees, as at
        September 30, 2002, total$30,000.
|        |                                    |                                                                                                                                                       
|        |                                    |                                                                                                                                                       
|        |                                    |                                                                                                                                                       
|        |                                    |                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |                                    | (ii)                                                                                                                                                   | Pursuant to
        a managementagreement effective July 1, 1999, the
        Company pays $2,500 permonth
        to Netgain Management Solutions Inc., a company wholly owned by Mr. Chad
        D. Lee,President, Chief Financial Officer,CEO,
        and Director of the Company. Unpaidmanagementfees,
        as at September 30, 2002, total $25,000                                                     
|        |                                    |                                                                                                                                                       
|        |                                    |                                                                                                                                                       
|        |                                    |                                                                                                                                                       
|        |                                    |                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | (b)                                | Directors and
        Officers of the Company ar ebeneficial owners of common
        shares of theCompany, as follows, at September 30,
        2002:
|        |                                    |                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                   

| | Chad D. Lee         | 5,500,000 common
        shares
| | ------------------- | -------------------------------
| | Marlene C. Schluter | 2,500,000
        common shares
| |                     | 8,000,000                      



---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)Notes to Financial Statements
  September 30, 2002
  (In U.S. Dollars)
  (Unaudited)**

|Note 4. | RELATED PARTY TRANSACTIONS (contd)
|------- | -----------------------------------
|        |                                    
|        | (c)                                
|        |                                    

| | Chad D. Lee         | $ | 20,000 | 
| | ------------------- | - | ------ | 
| | Marlene C. Schluter |   | 10,000 | 
| |                     |   |        | 
| |                     | $ | 30,000 | 
| |                     |   |        | 
| |                     |   |        | 

|        |                                                                                                                     | These loans are non interest bearing, are unsecured,
      and have no specific terms of repayment.
|------- | ------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------
|        |                                                                                                                     |                                                                                                    
|        |                                                                                                                     |                                                                                                    
|Note 5. | FIXED ASSETS - COMPUTER EQUIPMENT                                                                                  
|        |                                                                                                                     |                                                                                                    
|        | The Company depreciates its computer
      equipment using the declining-balance basis at the rate of 30% perannum.
|        |                                                                                                                     |                                                                                                    
|        | The cost and accumulated depreciation are as
      follows:                                                        

| |                          |   | September 30, |  
| | ------------------------ | - | ------------- | -
| |                          |   |               |  
| |                          |   | 2002          |  
| |                          |   |               |  
| | Cost                     | $ | 116,654       |  
| | Accumulated depreciation |   | (73,867       | )
| |                          |   |               |  
| | Net balance              | $ | 42,787        |  
| |                          |   |               |  
| |                          |   |               |  

|Note 6. | COMPUTER TECHNOLOGY AND
        WEBSITE COSTS
|------- | ---------------------------------------------
|        |                                              
|        | a)                                           
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        | b)                                           
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              
|        |                                              



---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)Notes to Financial Statements
  September 30, 2002
  (In U.S. Dollars)
  (Unaudited)**

|Note 7.  | LEASE OBLIGATIONS                                                                                                                                                                                                                                                                                                                                                                                   
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Lease of Premises                                                                                                                                                                                                                                                                                                                                                                                   
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 8.  | COMPENSATION/STOCK OPTION/DEFERRED COMPENSATION
      ARRANGEMENT                                                                                                                                                                                                                                                                                                                                   
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         | a)                                                                                                                                                                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         | b)                                                                                                                                                                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 9.  | NET LOSS PER SHARE                                                                                                                                                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Net loss per common
        share is computed by dividing net loss by the weighted average of shares
        outstandingduring the period.                                                                                                                                                                                                                                                          
|        
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 10. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         | The Company has
        losses carried forward to future years of$2,143,692.
        The potential tax benefit has not beenrecorded, as
        an equivalent reserve has been provided due to uncertainty of application
        of the losses.                                                                                                                                                    
|        
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 11. | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                               
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         | The Companys
        financial instrumentsconsist of cash,accounts
        payable, loans payable, and due to relatedparties.
        It is managements opinion that the Company is not exposed to significant
        interest, currency or creditrisks arising from these
        financial instruments.The fair value of these financial
        instruments approximates theircarrying values.
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 12  | CONSULTING AGREEMENTS                                                                                                                                                                                                                                                                                                                                                                               
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         | National Financial Communications Corp.                                                                                                                                                                                                                                                                                                                                                             
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         | (a)                                                                                                                                                                                                                                                                                                                                                                                                 
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                     

---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)Notes to Financial Statements
  September 30, 2002
  (In U.S. Dollars)
  (Unaudited)**



|Note 12. | CONSULTING AGREEMENTS (contd)
|-------- | ------------------------------
|         |                               
|         | (b)                           

| | Option price of 50,000 shares at $2.00 per share                          | $ | 100,000 | 
| | ------------------------------------------------------------------------- | - | ------- | 
| | Market price at date of issuance of option - 50,000 shares
      at $2.60 |   | 130,000 | 
| |                                                                           |   |         | 
| | Compensation added to paid-in capital                                     | $ | 30,000  | 
| |                                                                           |   |         | 
| | Deferred income tax  35% of $30,000                                      | $ | 10,500  | 
| |                                                                           |   |         | 

|Note 13. | FORDEE MANAGEMENT COMPANY
|-------- | -------------------------
|         |                          
|         | a)                       
|         |                          
|         |                          
|         |                          
|         | b)                       
|         |                          
|         | c)                       
|         |                          

| | Option price of 400,000 shares at $0.20 per share  | $ | 80,000  | 
| | -------------------------------------------------- | - | ------- | 
| | Market price at date of issuance of option 400,000 |   |         | 
| | shares at $0.50 per share                          |   | 200,000 | 
| |                                                    |   |         | 
| | Compensation added to paid-in capital              | $ | 120,000 | 
| |                                                    |   |         | 
| | Deferred income tax  35% of $ 120,000             | $ | 42,000  | 
| |                                                    |   |         | 

|Note 14. |    | COMMON STOCK PURCHASE AGREEMENT WITH FUSION CAPITAL
      FUND II, LCC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-------- | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         |    | On June 25, 2001, as disclosed
        in the Companys Form 8K dated July 6, 2001, Online Innovation, Inc.
        enteredintoaCommon
        StockPurchase Agreement with Fusion Capital Fund
        II, LLC, a Chicagobased institutionalinvestor.Pursuant tothe Agreement, and
        subject to certain terms and conditions, Fusionhas
        agreed topurchase $6,000,000 of the Company's common
        stock.Under the Agreement, the Company is not able
        to commence sales of its common stock to Fusion, and Fusionis
        not obligated to make any purchases of the Company's common stock, until
        the Company has filed aregistration statement under
        the Securities Act of 1933 with the Securities and Exchange Commission.
        TheCompany has not filed a registration statement
        surrounding the Common Stock Purchase Agreement becauseof
        the current market conditions but will do so when management deems it
        to be appropriate.
|         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         |    | The 640,000 commitment shares
        issued pursuant to the Agreement are recorded as issued at an ascribed
        priceof $0.54 per share for $345,600, during the
        fiscal year ended June 30, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Note 15. |    | LOANS PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         | a) | The Company received Convertible
      Bridge Financing from Progressive Contracting Ltd. of $30,000 and this loan
      is secured bya Promissory Note dated August 29, 2001,
      with interest payable of10% per annum, secured by maturing
      August 29, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |   
|         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)Notes to Financial Statements
  September 30, 2002
  (In U.S. Dollars)
  (Unaudited)**

|Note 15.LOANS PAYABLE (contd) |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|------------------------------ | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | 
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|                               |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | After August 29, 2002
      (the Maturity Date), Progressive Contracting Ltd. shall have
      the right,athis option, on orafter the Maturity Date toconvert theprincipalamount of this Note,together
      with all accruedinterest thereon inaccordancewith theprovisions of
      and uponsatisfaction of the conditions contained in
      this Note, into fully paid and nonassessable sharesofthe CompanysCommon Stock
      at a conversionprice of $0.30 per
      share (the ConversionShares).
|                              
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|                               |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | On August 31, 2002, Progressive Contracting
      Ltd. exercised their right to convert the principalamount
      and accruedinterest of the Note into fullypaid
      andnon-assessable shares of theCompanys
      Common Stock at a conversion price of $0.30 per share (the Conversion
      Shares).OnAugust 31, 2002
      thecompany issued 110,000shares
      toretirethisNote
      that represents$30,000 in principal plus $3,000 accrued
      interest.                                      
|                              
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                               |     | The directors and officers of Progressive Contracting
      Ltd. are arms length third parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|                               | b)  | The Company received
      Convertible Bridge Financing from CK Dragon Trust. of $30,000 and this loanwas secured by a Promissory Note dated November 7, 2001, with interest payable
      of 10% per annum,maturing May 7th, 2002. On May 24,
      2002, the Company reapaid $15,000 of the Note plus accruedinterest
      of$1500.00. On July 23, 2002 the Company repaid the
      remaining balance of $15,000 plus accruedinterest of$255 to retire the debt.                                                                                                                        
|                               |    
|                               |    
|                               |    
|                               |    
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|                               | c)  | TheCompany
      receivedConvertible Bridge Financing from Richard L.
      Coglon of $40,000 and this loanwassecuredby a PromissoryNote dated
      January 10, 2002,withinterestpayableof 7% per annum,maturingJanuary 10, 2003. OnAugust 7, 2002 theCompanyrepaid $40,000plusaccrued interest of$1,596
      to retire the debt.                                                                                                                                                                                                                                                         
|                               |    
|                               |    
|                               |    
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|Note 16.CONSULTING AGREEMENT  
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|                               | (a) | A consulting agreement betweenFortune CapitalManagementandtheCompany is effective on August 1, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|                               |     | Term
        ofthe this Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                               |    
|                               |     | The termof this Agreement isfor a period of 12 monthsfromthedatehereof,and thereafter shallcontinueinfull force and effectfrom month to month, at aremunerationagreedupon between
      theparties asdescribed inCompensation
      to the Consultant,unlessterminatedaccording to termsprescribed in this Agreement.                                                                                                                                                                                                                                                                     
|                               |    
|                              
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|                               |     | Compensation
        to the Consultant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|                               |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
|                               |     | For theConsultants
      servicesunder this Agreement, theCompany shallpaythe Consultant
      aconsulting fee in the amount of $2,500
      per month.In addition to the payment of the fee, the
      Companyshall reimburse the consultant for all previously
      authorized expenses actually and properly incurred bythe
      Consultant on behalf of the Company in carrying out its duties and performing
      its functions underthis Agreement and for all such
      expenses the Consultant shallfurnish statements and
      vouchers to theCompany prior to reimbursement.
|                               |    
|                               |    
|                               |    
|                               |    
|                               |    

---

**ONLINE INNOVATION, INC.****(A Delaware Corporation)
  (A Development Stage Company)Notes to Financial Statements
  September 30, 2002
  (In U.S. Dollars)
  (Unaudited)**

|Note 16(a)CONSULTING AGREEMENT
      (contd)               
|------------------------------------------------------------
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|Note 17.LOAN PAYABLE TO
      FUSION CAPITAL FUND II, L.L.C.
|                                                            
|                                                            
|                                                            

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**Item 2  Plan of Operation**

**General**

The Company's business is conducted through its
  website, www.VirtuallyDating.com. The primary focus of the www.VirtuallyDating.com
  website is matchmaking. In addition to providing matchmaking services for single
  adults through a specialized search engine for members, the site provides various
  interactive, entertainment related components that facilitate social interaction
  between members. The website was operational for beta testing in February, 2000
  and became operational in July 2000. At that time the website was only operational
  in terms of limited member services, however. The e-commerce portion of the
  website and key value added components were not yet operational. Since the e-commerce
  portion of the website includes the payment infrastructure for merchandise and
  membership fees, the Company did not initially charge membership fees.

The e-commerce
  and other remaining components of the Companys website have since been
  completed and the website became fully operational on September 3, 2002. Prior
  to full launch the website was available for use free of charge and had developed
  an established user base of approximately 39,000 members. Members who registered
  prior full launch were given 30 days to determine whether to continue as members
  and pay to use the site. The Company is currently offering free 10-day trials
  and an introductory special in which users may purchase a 1-year membership
  for $19.95. This introductory offer was originally made for a 30 day period
  but has been extended by the Company for an indefinite period. The Company intends
  to continue the introductory offer until it has been able to carry out marketing
  activities to promote the website. After the introductory offer has been completed,
  memberships will be available for $10.95 per month, $29.95 for three months,
  $49.95 for 6 months and $79.95 for 1 year.

With the full launch of the website the Company
  now intends to focus its energies on marketing the website in order to develop
  a paying member base and generate revenues. The Company is not currently certain,
  however, exactly what resources will be devoted to marketing or what steps will
  be taken in this area. The Companys current financial resources are limited.
  The Company will, therefore, initially be working towards securing financing
  on favorable terms. Once the Companys financial situation is clearer to
  management, management will make the necessary strategic decisions respecting
  marketing efforts and other uses of financial resources. Over the next 12 months,
  depending on resources available, management anticipates that administrative
  expenses, ongoing website maintenance costs, development costs (related to proposed
  new products) and marketing will be the Companys primary expenses. Specific
  marketing strategies are listed below. The Company will implement these strategies
  based on cost-effectiveness as resources become available.

**Forward Looking Statements**

All statements, other than statements of historical
  facts, included in this report that address activities, events or developments
  that the Company expects, believes, intends or anticipates will or may occur
  in the future, are forward-looking statements. Forward-looking statements are
  inherently subject to risks and uncertainties, many of which cannot be predicted
  with accuracy and some of which might not even be anticipated. Future events
  and actual results, financial and otherwise, could differ materially from those
  set forth in or contemplated by the forward-looking statements herein. These
  risks and uncertainties include, but are not limited to, the Company's reliance
  on current revenues; the uncertainties associated with the introduction of new
  products/services; management of growth, including the ability to attract and
  retain qualified employees; the ability to integrate acquisitions

---

made by the Company and the costs associated
  with such acquisitions; dependence on its principal executive officer; substantial
  competition from larger companies with greater financial and other resources
  than the Company; the success of its marketing strategy; its dependence on suppliers
  for some of its products; currency fluctuations and other risks associated with
  foreign sales and foreign operations; quarterly fluctuations in revenues, income
  and overhead expense; and potential product liability risk associated with its
  existing and future products. Readers are cautioned not to put undue reliance
  on forward-looking statements. The Company disclaims any intent or obligation
  to update publicly these forward-looking statements, whether as a result of
  new information, future events or otherwise.

**Marketing Strategies**

> General

Management believes that marketing will be the
  key to the Company's success in the short term and in the long term. As a result,
  management intends to focus as much of its energies as possible in the upcoming
  12 months on marketing activities. The Company intends to advertise online,
  through print media and possibly, depending on the resources available, through
  television, radio and billboards. The Companys goal is to capture 50,000
  subscribing members in each of the three years following the launch of the website,
  for a total of 150,000 members within three years of launch. The target market
  for the Company's service is a single adult, aged 18-49, with basic computer
  skills and access to the Internet. The Company intends to focus on the North
  American market in the short term and consider other markets at a later date.

As indicated above, the website was launched
  in July 2000, but the e-commerce component of the website, which includes the
  fee payment infrastructure, was not operational until September 3, 2002. Prior
  to September 3, 2002, memberships were offered free of charge. Registered members
  as of September 3, 2002 were given 30 days to decide whether to continue as
  members and pay membership fees. The Company is currently offering free 10-day
  trials and an introductory special in which users may purchase a 1-year membership
  for $19.95. As of November 12, 2002, the website had 40,959 registered members.
  The Company hopes to increase this number once it has secured the financing
  necessary to undertake more intensive marketing activities. The Companys
  inability to secure adequate financing over the past fiscal year has limited
  its ability to spend money on marketing. The Companys ability to undertake
  marketing activities in the upcoming 12 months will be dependent on its ability
  to secure financing. Readers should refer to the section entitled Cash
  Requirements for a discussion of the Companys attempts to raise
  capital in the past quarter and its plans to raise capital in the upcoming year.

> Online Advertising

Online advertising can take a number of different
  forms. Banner advertising is the most common form. Banner advertisements are
  small banners which appear on the perimeter of another Company's website and
  provide information about the advertising company. Generally, a link to the
  advertising company's website will be provided. The Company intends to place
  banner advertisements on those websites which management believes will enable
  the Company to most effectively reach its target market.

Affiliations with other websites also provide
  an avenue for marketing for Internet companies. Companies with similar markets
  can form various types of strategic alliances to promote one

---

another's products and services. The key component
  is usually a link to the affiliate company's website. In the upcoming 12 months,
  the Company will continue with its efforts to forge strategic partnerships with
  key industry players. The Company hopes that by doing so it will be able to
  increase traffic on its website.

Another form of online advertising being considered
  by the Company involves sponsoring e-mails or newsletters sent by other Internet
  companies. Through payment of a sponsorship fee, the Company would be shown
  as the sponsor of a particular e-mail or newsletter sent by an entity to its
  members. By selecting an entity with a large membership, the Company can reach
  large target markets. A message identifying the sponsor and a link to the sponsor's
  website are provided.

Management is exploring the various forms of
  online advertising available and intends to focus its initial energy on this
  sector because of the relatively low cost and the ability to reach its target
  market (i.e. personal computer users) effectively. It will, however, assess
  other marketing tools and utilize those which it feels will enable it to reach
  its target market in the most efficient and cost effective manner.

> Print Media, T.V., Radio and Billboards

While manage ment is of the view that online
  advertising is the most cost-effective marketing tool, it also believes that
  other, more traditional methods of marketing will be effective and must be developed
  to the fullest extent possible. Management envisions placing advertisements
  in the personals sections of major newspapers and in high circulation magazines
  with general readership to brand the VirtuallyDating name and to expose the
  Company to a wider audience. Determination as to whether these types of advertisements
  will be placed will depend on funds available in the upcoming 12 months. In
  addition, advertisements on television, radio and on billboards will be considered
  and utilized if the Company has the capital available to purchase advertising
  space/time from these sources.

> Current Marketing Efforts

On August 1, 2002, the Company entered into an
  agreement with Fortune Capital Management (USA) Inc. (Fortune),
  pursuant to which Fortune has agreed to provide sales and marketing services
  the Company. Under the terms of the agreement, Fortune is to provide marketing
  concepts for the VirtuallyDating website, explore strategic partnerships for
  the website and provide conceptual design for marketing materials to advertise
  the website. The Company will pay $2,500 per month to Fortune and reimburse
  Fortune for expenses incurred in carrying out its duties under the agreement.
  The Agreement is for a term of 12 months.

**Additional Website Development**

The Company retains
  the services of 4 web-programming consultants to perform maintenance and additional
  development work. The consultants work under the Companys direct supervision
  and are paid by the Company on a monthly basis. Payment is tied to and based
  on the completion of specific tasks. The Company currently intends to continue
  to develop new features which will make the website more attractive to prospective
  members. Proposed features may include a WebPage entitled "Hey Bartender" which
  will provide recipes for alcoholic cocktails. Members will be invited to post
  their own favorite recipes on the page. Another section entitled "Postcards

---

From Stanley" may be created. This section would feature travel
  reviews of destinations geared towards singles.

In addition to the foregoing, on July 15, 2002,
  the Company entered into a consulting agreement with Jon Wiggens, pursuant to
  which Mr. Wiggens has agreed to provide graphic design services to the Company
  for both the VirtuallyDating website and the Companys corporate website.
  In addition, Mr. Wiggens will provide the Company with graphic design services
  in connection with its ongoing marketing efforts, in the areas of both print
  media and online marketing. The agreement is for a term of 3 months. The Company
  is required to pay Mr. Wiggens a monthly fee of $3,000 (CDN) for services performed
  under the agreement and to reimburse Mr. Wiggens for expenses incurred in carrying
  out his duties under the agreement.

**Purchase of Equipment**

At this time, the Company does not anticipate the purchase of
  any significant equipment.

**Employees**

The Company currently has no full or part time
  employees. The Company retains consultants to provide it with services related
  to the administration, management and development of the Company. At this time,
  the Company does not anticipate any significant changes in staffing.

**Cash Requirements**

The Company currently
  has sufficient working capital to meet its operating requirements until December
  31,2002. In order to fund business activity beyond this date, the Company will
  need to arrange additional financing. Website development and marketing efforts
  will be dependent on the Companys ability to raise such additional financing.
  Specific plans related to marketing and any additional website development which
  may occur in the upcoming months will be devised once financing has been completed
  and management knows what funds will be available for these purposes.

On June 25, 2001, as disclosed in the Companys
  Form 8K dated July 6, 2001, Online Innovation, Inc. entered into a Common Stock
  Purchase Agreement with Fusion Capital Fund II, LLC, a Chicago based institutional
  investor. Pursuant to the Agreement, and subject to certain terms and conditions,
  Fusion has agreed to purchase $6,000,000 of the Company's common stock. Under
  the Agreement, the Company is not able to commence sales of its common stock
  to Fusion, and Fusion is not obligated to make any purchases of the Company's
  common stock, until the Company has filed a registration statement under the
  Securities Act of 1933 with the Securities and Exchange Commission. The Company
  has not filed a registration statement surrounding the Common Stock Purchase
  Agreement because of the current market conditions but will do so when management
  deems it to be appropriate.

On April 30, 2002, the Company received an interest
  free loan from Fusion Capital in the amount of $50,000. This loan was repaid
  in whole to Fusion Capital on August 7, 2002.

During the period covered by this report the
  Company conducted an equity financing pursuant to which it raised $210,000.
  The Company sold a total of 700,000 units to two separate purchasers under the
  financing. Each unit consisted of one common share and one share purchase warrant.

---

Each warrant entitles the purchaser to purchase
  one additional share of the Companys common stock at a price of $0.30
  at any time during the first year after the purchase of the units or at a price
  of $0.40 at any time during the second year after the purchase of the units.
  The warrants are exercisable for a period of two years after the purchase of
  the units.

The funds raised under the unit financing were
  used to repay three separate outstanding debts of the Company, including the
  $50,000 debt owed to Fusion. In addition to this debt, on May 24, 2002 and July
  23, 2003, the Company repaid $30,000 loaned to it by the CK Dragon Trust and
  secured by a convertible promissory note dated November 7, 2001. The Company
  also paid $1,755 in accrued interest on this debt. On August 7, 2002, the Company
  repaid $40,000 loaned to it by Richard Coglon and secured by a convertible promissory
  note dated January 10, 2002. The Company also paid $1,596 in accrued interest
  on this debt. All of the aforementioned debts were repaid in cash. The Company
  repaid an additional debt owed to Progressive Contracting Ltd. by issuing 110,000
  shares of its common stock to Progressive Contracting Ltd. The shares were issued
  pursuant conversion terms contained in a convertible promissory note dated August
  29, 2001, which note secured the funds loaned to the Company by Progressive
  Contracting Ltd. The aggregate amount of the debt repaid was $30,000 plus $3,000
  of accrued interest, with the shares issued in repayment of said debt being
  issued at a deemed price of $0.30 per share.

The Company intends to use available finances
  to fund ongoing operations. Funds will be utilized for general and administrative
  expenses, website maintenance and development, marketing and expenses related
  to the filing and preparation of a registration statement respecting the stock
  to be issued under the Stock Purchase Agreement.

**Item 3  Controls And Procedures**

The Company is managed exclusively by its principal
  executive officer and principal financial officer. The Company does not have
  management or employees which are separate from these 2 individuals. As a result,
  all disclosure decisions are made directly by the principal executive officer
  and principal financial officer of the Company and are based on direct knowledge
  of the Companys affairs held by them. These individuals also carry out
  all bookkeeping and other record keeping activities undertaken by the Company
  and make all business decisions for the Company. While the Company retains the
  services of a small number of consultants, none of these individuals has control
  over formal disclosure decisions or disclosure contained in documents such as
  press releases and financial reports. All formal disclosure documents are reviewed
  and approved by the Companys principal executive officer and principal
  financial officer and are based on first hand knowledge of these individuals
  (as opposed to knowledge derived from reports from employees, consultants or
  managers). As a consequence, the Companys principal executive officer
  and principal financial officer are of the view that the Companys disclosure
  controls and procedures are effective and result in full and true disclosure
  of material facts related to the Companys affairs.

There were no significant changes in the Companys
  internal controls or in other factors that could significantly affect these
  controls subsequent to the date of their evaluation, including any significant
  deficiencies or material weaknesses of internal controls that would require
  corrective action.

---

**PART II  OTHER INFORMATION**

**Item 1  Legal Proceedings**

There are no legal proceedings reportable pursuant
  to this section. As of the date of this report, the Company has not been served
  with notice of any legal proceedings and does not contemplate undertaking any
  legal proceedings.

**Item 2 -Change in Securities**

No instruments defining the rights of the holders
  of any class of registered securities were modified during the period covered
  by this report. No rights evidenced by any class of registered securities were
  materially limited or qualified by the issuance or modification of any other
  class of securities during the period covered by this report.

On July 16, 2002, the Company completed a sale
  of issued 700,000 units at a price of $0.30 per unit for aggregate cash proceeds
  of $210,000. A total of 100,000 units were issued to Mr. Gary Carson Delf for
  an aggregate purchase price of $30,000. A total of 600,000 units were issued
  to SKN Holdings, Ltd. for an aggregate purchase price of $180,000. Each unit
  consisted of one share of the Companys common stock and one share purchase
  warrant. Each warrant entitles the purchaser to purchase one additional share
  of the Companys common stock at a price of $0.30 at any time during the
  first year after the purchase of the units or at a price of $0.40 at any time
  during the second year after the purchase of the units. The warrants are exercisable
  for a period of two years after the purchase of the units. The units were issued
  without registration under the Securities Act in reliance on the safe harbor
  provisions of Regulation S promulgated under the Securities Act. Neither of
  the purchasers of the securities was a U.S. person as that term
  is defined in Rule 902(o) of Regulation S and the sale of the securities constituted
  an offshore transaction as that term is defined in Rule 902(i) of
  Regulation S.

On August 30, 2002, the Company issued 110,000
  shares of its common stock to ProgressiveContracting Ltd.
  to repay a $30,000 loan made by Progressive Contracting Ltd. to the Company.
  The loan was secured by a convertible promissory note issued by the Company
  to Progressive Contracting Ltd. on August 29, 2001. The debt represented by
  the convertible note, together with outstanding interest, were converted into
  shares of the Companys common stock at a deemed price of $0.30 per share,
  pursuant to the terms of the note. The shares were issued without registration
  under the Securities Act in reliance on the safe harbor provisions of Regulation
  S promulgated under the Securities Act. The noteholder was not a U.S.
  person as that term is defined in Rule 902(o) of Regulation S and the
  sale of the securities constituted an offshore transaction as that
  term is defined in Rule 902(i) of Regulation S.

**Item 3  Defaults Upon Senior Securities**

There have been no material defaults in the payment
  of principal, interest, sinking or purchase fund installments or any other material
  defaults with respect to indebtedness of the Company exceeding 5% of the total
  assets of the Company. No material arrearage in the payment of dividends and
  no delinquency with respect to any preferred stock of the Company has occurred.

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I**tem 4  Submission of Matters to a Vote of Security
  Holders**

No matters have been submitted to a vote of security
  holders during the period covered by this through the solicitation of proxies
  or otherwise.

**Item 5  Other Information**

There is no information reportable pursuant to this section.

**Item 6 - Exhibits and Reports on Form 8-K**

|(a) |  | Exhibits |                                                                                  
|--- |  | -------- | ---------------------------------------------------------------------------------
|    |  |          |                                                                                  
|    |  | 15       | Letter on Unaudited
        Financial Information                                
|    |  |          |                                                                                  
|    |  | 99.1     | Certificate
        of Principal Executive Officer                               
|    |  |          |                                                                                  
|    |  | 99.2     | Certificate
        of Principal Financial Officer                               
|    |  |          |                                                                                  
|(b) |  |          | No reports on form 8-K were filed during the
      period covered by this report.



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**SIGNATURES**

In accordance with the requirements of 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.

|Date: | November 14, 2002 |  | **ONLINE INNOVATION, INC.**
|----- | ----------------- |  | ---------------------------
|      |                   |  |                            
|      |                   |  |                            
|      |                   |  |                            
|      |                   |  | By:                        
|      |                   |  |                            
|      |                   |  |                            
|      |                   |  |                            
|      |                   |  |                            
|      |                   |  |                            
|      |                   |  | By:                        
|      |                   |  |                            
|      |                   |  |                            
|      |                   |  |                            

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/ Chad D. Lee
  Chad D. Lee, President, Director,
  Principal Executive Officer

Date: November 14, 2002

By: /s/ Marlene C. Schluter
  Marlene C. Schluter, Director,
  Principal Financial Officer

Date: November 14, 2002

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**CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER**

I, Chad D. Lee certify that:

|1 | . | I have reviewed
        this quarterly report on Form 10-QSB of Online Innovation, Inc. (theCompany);                                                                                                                                                                                                                                                                    
|- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|2 | . | Based
        on my knowledge, this quarterly report does not contain any untrue statement
        of amaterial fact or omit to state a material fact
        necessary to make the statements made, inlight of
        the circumstances under which such statements were made, not misleading
        withrespect to the period covered by this quarterly
        report;
|  |  
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|3 | . | Based
        on my knowledge, the financial statements, and other financial information
        included in this quarterly report, fairly present in all material respects
        the financialcondition, results of operations and
        cash flows of the Company as of, and for, the periodspresented
        in this quarterly report;                             
|  |  
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|4 | . | The
        registrants other certifying officers and I are responsible for
        establishing andmaintaining disclosure controls and
        procedures (as defined in Exchange Act Rules 13a-14
        and 15d-14) for the registrant and have:                                                                                                                      
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|  |   | a) designed such disclosure controls
          and procedures to ensure that material information relating to the registrant,
          including its consolidated subsidiaries, is madeknown
          to us by others within those entities, particularly during the period
          in whichthe quarterly report is being prepared;                                    
|  |  
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|  |   | b) evaluated the effectiveness of the
          registrants disclosure controls and procedures asof
          a date within 90 days prior to the filing date of this quarterly report
          (the"Evaluation Date"); and                                                                                                                                               
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|  |   | c) presented in this quarterly report
          our conclusions about the effectiveness of thedisclosure
          controls and procedures based on our evaluation of the Evaluation Date;                                                                                                                                                                                 
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|5 | . | The
        registrants other certifying officers and I have disclosed, based
        on our most recentevaluation, to the registrants
        auditors and the audit committee of registrants board ofdirectors
        (or persons performing the equivalent function):                                                                                               
|  |  
|  |  
|  |   | a) all significant deficiencies in the
          design or operation of internal controls whichcould
          adversely affect the registrants ability to record, process, summarize
          and reportfinancial data and have identified for
          the registrants auditors any material weaknessin
          internal controls; and                             
|  |  
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|  |   | b) any fraud, whether or not material,
          that involves management or other employeeswho
          have a significant role in the registrants internal controls;
          and                                                                                                                                                                                     
|  |  

---





|6 | . | The registrants
        other certifying officers and I have indicated in this quarterly reportwhether or not there were significant changes in internal
        controls or in other factors thatcould significantly
        affect internal controls subsequent to the date of our most recentevaluation,
        including any corrective actions with regard to significant deficiencies
        andmaterial weaknesses.
|- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  
|  |  
|  |  
|  |  



Date: November 14, 2002



/s/ Chad D. Lee
  Chad D. Lee, President, Director,
  Principal Executive Officer

---

CERTIFICATION BY PRINCIPAL FINANCIAL OFFICER

I, Marlene C. Schluter certify that:

|1 | . | I have reviewed
        this quarterly report on Form 10-QSB of Online Innovation, Inc. (theCompany);                                                                                                                                                                                                                                                                    
|- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|2 | . | Based
        on my knowledge, this quarterly report does not contain any untrue statement
        of amaterial fact or omit to state a material fact
        necessary to make the statements made, inlight of
        the circumstances under which such statements were made, not misleading
        withrespect to the period covered by this quarterly
        report;
|  |  
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|3 | . | Based
        on my knowledge, the financial statements, and other financial information
        included in this quarterly report, fairly present in all material respects
        the financialcondition, results of operations and
        cash flows of the Company as of, and for, the periodspresented
        in this quarterly report;                             
|  |  
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|4 | . | The
        registrants other certifying officers and I are responsible for
        establishing andmaintaining disclosure controls and
        procedures (as defined in Exchange Act Rules 13a-14
        and 15d-14) for the registrant and have:                                                                                                                      
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|  |   | a) designed such disclosure controls
          and procedures to ensure that material information relating to the registrant,
          including its consolidated subsidiaries, is madeknown
          to us by others within those entities, particularly during the period
          in whichthe quarterly report is being prepared;                                    
|  |  
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|  |   | b) evaluated the effectiveness of the
          registrants disclosure controls and procedures asof
          a date within 90 days prior to the filing date of this quarterly report
          (the"Evaluation Date"); and                                                                                                                                               
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|  |   | c) presented in this quarterly report
          our conclusions about the effectiveness of thedisclosure
          controls and procedures based on our evaluation of the Evaluation Date;                                                                                                                                                                                 
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|5 | . | The
        registrants other certifying officers and I have disclosed, based
        on our most recentevaluation, to the registrants
        auditors and the audit committee of registrants board ofdirectors
        (or persons performing the equivalent function):                                                                                               
|  |  
|  |  
|  |   | a) all significant deficiencies in the
          design or operation of internal controls whichcould
          adversely affect the registrants ability to record, process, summarize
          and reportfinancial data and have identified for
          the registrants auditors any material weaknessin
          internal controls; and                             
|  |  
|  |  
|  |   |                                                                                                                                                                                                                                                                                                                                                                            
|  |   | b) any fraud, whether or not material,
          that involves management or other employeeswho
          have a significant role in the registrants internal controls;
          and                                                                                                                                                                                     
|  |  

---





|6 | . | The
        registrants other certifying officers and I have indicated in this
        quarterly reportwhether or not there were significant
        changes in internal controls or in other factors thatcould
        significantly affect internal controls subsequent to the date of our most
        recentevaluation, including any corrective actions
        with regard to significant deficiencies andmaterial
        weaknesses.
|- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  
|  |  
|  |  
|  |  





Date: November 14, 2002



/s/ Marlene C. Schluter
  Marlene C. Schluter, Director,
  Principal Financial Officer



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CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, 
  AS ADOPTED PURSUANT TO SECTION 906
  OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Online Innovation,
  Inc. (the "Company") on Form 10-QSB for the period ending
  September 30, 2002 as filed with the Securities and Exchange Commission (the
  "Report"), I, Chad D. Lee, Principal Executive Officer of the Company, certify,
  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with
  the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
  1934; and

(2)  The information contained in the
  Report fairly presents, in all material respects, the financial condition and
  results of operations of the Company.



Date: November 14, 2002



/s/ Chad D. Lee
  Chad D. Lee, President, Director,
  Principal Executive Officer



---

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
  1350, 
  AS ADOPTED PURSUANT TO SECTION 906
  OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Online Innovation,
  Inc. (the "Company") on Form 10-QSB for the period ending September 30, 2002
  as filed with the Securities and Exchange Commission (the "Report"), I, Marlene
  C. Schluter, Principal Financial Officer of the Company, certify, pursuant to
  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002, that:



(1)   The Report fully complies with
  the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
  1934; and

(2)  The information contained in the
  Report fairly presents, in all material respects, the financial condition and
  results of operations of the Company.





Date: November 14, 2002



/s/ Marlene C. Schluter
  Marlene C. Schluter, Director,
  Principal Financial Officer



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